CREDIT AGREEMENT
Dated as of January 31, 2005
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, N.A.
as the Agent
and
CENTRAL FREIGHT LINES, INC.
as the Borrower
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TABLE OF CONTENTS
Section Page
ARTICLE 1 LOANS AND LETTERS OF CREDIT.............................................................................1
1.1 Total Facility..................................................................................1
1.2 Revolving Loans.................................................................................1
1.3 Letters of Credit...............................................................................4
1.4 Bank Products...................................................................................7
ARTICLE 2 INTEREST AND FEES.......................................................................................7
2.1 Interest........................................................................................7
2.2 Continuation and Conversion Elections...........................................................8
2.3 Maximum Interest Rate...........................................................................9
2.4 Arrangement Fee.................................................................................9
2.5 Unused Line Fee.................................................................................9
2.6 Letter of Credit Fee...........................................................................10
2.7 Vehicle Maintenance Fee........................................................................10
ARTICLE 3 PAYMENTS AND PREPAYMENTS...............................................................................10
3.1 Revolving Loans................................................................................10
3.2 Termination of Facility........................................................................10
3.3 Repayments of Obligations......................................................................11
3.4 LIBOR Revolving Loan Prepayments...............................................................11
3.5 Payments by the Borrower.......................................................................11
3.6 Payments as Revolving Loans....................................................................12
3.7 Apportionment, Application and Reversal of Payments............................................12
3.8 Indemnity for Returned Payments................................................................12
3.9 Agent's and Lenders' Books and Records; Monthly Statements.....................................13
3.10 Collection of Accounts.........................................................................13
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY.................................................................14
4.1 Taxes..........................................................................................14
4.2 Illegality.....................................................................................14
4.3 Increased Costs and Reduction of Return........................................................15
4.4 Funding Losses.................................................................................15
4.5 Inability to Determine Rates...................................................................16
4.6 Certificates of Agent..........................................................................16
4.7 Survival.......................................................................................16
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES......................................................16
5.1 Books and Records..............................................................................16
5.2 Financial Information..........................................................................16
5.3 Notices to the Lenders.........................................................................19
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ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS.................................................................21
6.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents...........21
6.2 Validity and Priority of Security Interest.....................................................21
6.3 Organization and Qualification.................................................................22
6.4 Corporate Name; Prior Transactions.............................................................22
6.5 Subsidiaries and Affiliates....................................................................22
6.6 Financial Statements and Projections...........................................................22
6.7 Capitalization.................................................................................22
6.8 Solvency.......................................................................................23
6.9 Debt...........................................................................................23
6.10 Distributions..................................................................................23
6.11 Real Estate; Leases............................................................................23
6.12 Proprietary Rights.............................................................................23
6.13 Trade Names....................................................................................23
6.14 Litigation.....................................................................................23
6.15 Labor Disputes.................................................................................24
6.16 Environmental Laws.............................................................................24
6.17 No Violation of Law............................................................................25
6.18 No Default.....................................................................................25
6.19 ERISA Compliance...............................................................................25
6.20 Taxes..........................................................................................26
6.21 Regulated Entities.............................................................................26
6.22 Use of Proceeds; Margin Regulations............................................................26
6.23 Copyrights, Patents, Trademarks and Licenses, etc..............................................26
6.24 No Material Adverse Change.....................................................................27
6.25 Full Disclosure................................................................................27
6.26 Material Agreements............................................................................27
6.27 Bank Accounts..................................................................................27
6.28 Governmental Authorization.....................................................................27
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS.....................................................................27
7.1 Taxes and Other Obligations....................................................................27
7.2 Legal Existence and Good Standing..............................................................28
7.3 Compliance with Law and Agreements; Maintenance of Licenses....................................28
7.4 Maintenance of Property; Inspection of Property................................................28
7.5 Insurance......................................................................................28
7.6 Insurance and Condemnation Proceeds............................................................29
7.7 Environmental Laws.............................................................................29
7.8 Compliance with ERISA..........................................................................30
7.9 Mergers, Consolidations or Sales...............................................................30
7.10 Distributions; Capital Change; Restricted Investments..........................................30
7.11 Transactions Affecting Collateral or Obligations...............................................30
7.12 Guaranties.....................................................................................30
7.13 Debt...........................................................................................30
7.14 Prepayment.....................................................................................31
7.15 Transactions with Affiliates...................................................................31
7.16 Investment Banking and Finder's Fees...........................................................31
7.17 Business Conducted.............................................................................31
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7.18 Liens..........................................................................................31
7.19 Sale and Leaseback Transactions................................................................31
7.20 Subsidiaries...................................................................................32
7.21 Fiscal Year....................................................................................32
7.22 Capital Expenditures...........................................................................32
7.23 Fixed Charge Coverage Ratio/Minimum EBITDA.....................................................32
7.24 Use of Proceeds................................................................................33
7.25 Further Assurances.............................................................................34
7.26 Collateral.....................................................................................34
7.27 Tax Shelter Regulations........................................................................34
7.28 Permitted Acquisitions.........................................................................35
7.29 Appraisals.....................................................................................36
7.30 Post Closing Agreements........................................................................36
7.31 Solvency.......................................................................................36
ARTICLE 8 CONDITIONS OF LENDING..................................................................................37
8.1 Conditions Precedent to Making of Loans on the Closing Date....................................37
8.2 Conditions Precedent to Each Loan..............................................................38
ARTICLE 9 DEFAULT; REMEDIES......................................................................................39
9.1 Events of Default..............................................................................39
9.2 Remedies.......................................................................................41
ARTICLE 10 TERM AND TERMINATION..................................................................................42
10.1 Term and Termination...........................................................................42
ARTICLE 11 AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS..........................................43
11.1 Amendments and Waivers.........................................................................43
11.2 Assignments; Participations....................................................................44
ARTICLE 12 THE AGENT.............................................................................................46
12.1 Appointment and Authorization..................................................................46
12.2 Delegation of Duties...........................................................................46
12.3 Liability of Agent.............................................................................46
12.4 Reliance by Agent..............................................................................47
12.5 Notice of Default..............................................................................47
12.6 Credit Decision................................................................................47
12.7 Indemnification................................................................................48
12.8 Agent in Individual Capacity...................................................................48
12.9 Successor Agent................................................................................48
12.10 Withholding Tax................................................................................49
12.11 Collateral Matters.............................................................................50
12.12 Restrictions on Actions by Lenders; Sharing of Payments........................................51
12.13 Agency for Perfection..........................................................................51
12.14 Payments by Agent to Lenders...................................................................51
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12.15 Settlement.....................................................................................52
12.16 Letters of Credit; Intra-Lender Issues.........................................................54
12.17 Concerning the Collateral and the Related Loan Documents.......................................56
12.18 Field Audit and Examination Reports; Disclaimer by Lenders.....................................56
12.19 Relation Among Lenders.........................................................................57
ARTICLE 13 MISCELLANEOUS.........................................................................................57
13.1 No Waivers; Cumulative Remedies................................................................57
13.2 Severability...................................................................................57
13.3 Governing Law; Choice of Forum; Service of Process.............................................58
13.4 WAIVER OF JURY TRIAL...........................................................................58
13.5 Survival of Representations and Warranties.....................................................59
13.6 Other Security and Guaranties..................................................................59
13.7 Fees and Expenses..............................................................................59
13.8 Notices........................................................................................60
13.9 Waiver of Notices..............................................................................61
13.10 Binding Effect.................................................................................61
13.11 Indemnity of the Agent and the Lenders by the Borrower.........................................61
13.12 Limitation of Liability........................................................................62
13.13 Final Agreement................................................................................62
13.14 Counterparts...................................................................................62
13.15 Captions 62
13.16 Right of Setoff................................................................................63
13.17 Confidentiality................................................................................63
13.18 Conflicts with Other Loan Documents............................................................63
13.19 USA PATRIOT Act Notice.........................................................................64
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
EXHIBIT A - FORM OF REVOLVING LOAN NOTE
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - LEFT INTENTIONALLY BLANK
EXHIBIT D - FORM OF NOTICE OF BORROWING
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.2 - LENDERS' COMMITMENTS (ANNEX A - DEFINED TERMS)
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - PRIOR TRANSACTIONS
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.9 - DEBT AND EXISTING LETTERS OF CREDIT
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16 - ENVIRONMENTAL LAW
SCHEDULE 6.19 - ERISA COMPLIANCE
SCHEDULE 6.26 - MATERIAL AGREEMENTS
SCHEDULE 6.27 - BANK ACCOUNTS
SCHEDULE 7.9 - REAL PROPERTY HELD FOR SALE OR OTHER DISPOSITION
SCHEDULE 7.30(c) -REAL PROPERTY COLLATERAL
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CREDIT AGREEMENT
This Credit Agreement, dated as of January 31, 2005, (this "Agreement")
among the financial institutions from time to time parties hereto (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), Bank of America, N.A. with an office at 901 Main Street, 22nd
Floor, Dallas, Texas 75202, as agent for the Lenders (in its capacity as agent,
the "Agent"), and Central Freight Lines, Inc., a Texas corporation, with offices
at 5601 West Waco Drive, Waco, Texas 76710 (the "Borrower").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested the Lenders to make available to the
Borrower a revolving line of credit for loans and letters of credit in an amount
not to exceed $70,000,000, which extensions of credit the Borrower will use for
the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings ascribed thereto in Annex A which is attached
hereto and incorporated herein; the rules of construction contained therein
shall govern the interpretation of this Agreement, and all Annexes, Exhibits and
Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a total credit facility of up to
$70,000,000 (the "Total Facility") to the Borrower from time to time during the
term of this Agreement. The Total Facility shall be composed of a revolving line
of credit consisting of Revolving Loans and Letters of Credit.
1.2 Revolving Loans.
(a) (i) Amounts. Subject to the satisfaction of the conditions
precedent set forth in Article 8, each Lender severally, but not jointly,
agrees, upon the Borrower's request from time to time on any Business Day
during the period from the Closing Date to the Termination Date, to make
revolving loans (the "Revolving Loans") to the Borrower in amounts not to
exceed such Lender's Pro Rata Share of Availability, except for Non-Ratable
Loans and Agent Advances. The Lenders, however, in their unanimous
discretion, may elect to make Revolving Loans or issue or arrange to have
issued Letters of Credit in excess of the Borrowing Base on one or more
occasions, but if they do so, neither the Agent nor the Lenders shall be
deemed thereby to have changed the limits of the Borrowing Base or to be
obligated to exceed such limits on any other occasion. If the Aggregate
Revolver Outstandings would exceed Availability after giving effect to any
Borrowing, the Lenders may refuse to make or may otherwise restrict the
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making of Revolving Loans as the Lenders determine until such excess has
been eliminated, subject to the Agent's authority, in its sole discretion,
to make Agent Advances pursuant to the terms of Section 1.2(i).
(ii) Upon the request of any Lender, Borrower shall execute and
deliver to such Lender a note to evidence the Revolving Loan of that
Lender. Each note shall be in the principal amount of the Lender's Pro Rata
Share of the Revolving Loan Commitments, dated the date hereof and
substantially in the form of Exhibit A (each a "Revolving Loan Note" and,
collectively, the "Revolving Loan Notes"). Each Revolving Loan Note shall
represent the obligation of Borrower to pay the amount of Lender's Pro Rata
Share of the Revolving Loan Commitments, or, if less, such Lender's Pro
Rata Share of the aggregate unpaid principal amount of all Revolving Loans
to Borrower together with interest thereon as prescribed in Section 1.2.
The entire unpaid balance of the Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Termination Date.
(b) Procedure for Borrowing.
(1) Each Borrowing shall be made upon the Borrower's irrevocable
written notice delivered to the Agent in the form of a notice of borrowing
("Notice of Borrowing"), which must be received by the Agent prior to (i)
11:00 a.m. (Central Standard Time) three Business Days prior to the
requested Funding Date, in the case of LIBOR Revolving Loans and (ii) 11:00
a.m. (Central Standard Time) on the requested Funding Date, in the case of
Base Rate Revolving Loans, specifying:
(A) the amount of the Borrowing, which in the case of a LIBOR
Revolving Loan must equal or exceed $2,000,000 (and increments of $500,000
in excess of such amount);
(B) the requested Funding Date, which must be a Business Day;
(C) whether the Revolving Loans requested are to be Base Rate
Revolving Loans or LIBOR Revolving Loans (and if not specified, it shall be
deemed a request for a Base Rate Revolving Loan); and
(D) the duration of the Interest Period for LIBOR Revolving Loans (and
if not specified, it shall be deemed a request for an Interest Period of
one month);
provided, however, that with respect to the Borrowing to be made on the
Closing Date, such Borrowing will consist of Base Rate Revolving Loans
only.
(2) In lieu of delivering a Notice of Borrowing, the Borrower may give
the Agent telephonic notice of such request for advances to the Designated
Account on or before the deadline set forth above. The Agent at all times
shall be entitled to rely on such telephonic notice in making such
Revolving Loans, regardless of whether any written confirmation is
received.
(3) The Borrower shall have no right to request a LIBOR Revolving Loan
while a Default or Event of Default has occurred and is continuing.
(c) Reliance upon Authority. Prior to the Closing Date, the Borrower
shall deliver to the Agent, a notice setting forth the account of the
Borrower (including any account which Borrower may from time to time
designate in writing to Agent as a successor account, the "Designated
Account") to which the Agent is authorized to transfer the proceeds of the
Revolving Loans requested hereunder. The Borrower may designate a
replacement account from time to time by written notice. All such
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Designated Accounts must be reasonably satisfactory to the Agent. The Agent
is entitled to rely conclusively on any person's request for Revolving
Loans on behalf of the Borrower, so long as the proceeds thereof are to be
transferred to the Designated Account. The Agent has no duty to verify the
identity of any individual representing himself or herself as a person
authorized by the Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to the
Borrower as a result of acting upon any notice referred to in Sections
1.2(b) and (c), which the Agent believes in good faith to have been given
by an officer or other person duly authorized by the Borrower to request
Revolving Loans on its behalf. The crediting of Revolving Loans to the
Designated Account conclusively establishes the obligation of the Borrower
to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice
in lieu thereof) made pursuant to Section 1.2(b) shall be irrevocable. The
Borrower shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of Borrowing
(or telephonic notice in lieu thereof), the Agent shall elect to have the
terms of Section 1.2(g) or the terms of Section 1.2(h) apply to such
requested Borrowing. If the Bank declines in its sole discretion to make a
Non-Ratable Loan pursuant to Section 1.2(h), the terms of Section 1.2(g)
shall apply to the requested Borrowing.
(g) Making of Revolving Loans. If Agent elects to have the terms of
this Section 1.2(g) apply to a requested Borrowing, then promptly after
receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the
Agent shall notify the Lenders by telecopy, telephone or e-mail of the
requested Borrowing. Each Lender shall transfer its Pro Rata Share of the
requested Borrowing available to the Agent in immediately available funds,
to the account from time to time designated by Agent, not later than 12:00
noon (Central Standard Time) on the applicable Funding Date. After the
Agent's receipt of all proceeds of such Revolving Loans, the Agent shall
make the proceeds of such Revolving Loans available to the Borrower on the
applicable Funding Date by transferring same day funds to the Designated
Account; provided, however, that the amount of Revolving Loans so made on
any date shall not exceed the Availability on such date.
(h) Making of Non-Ratable Loans.
(A)......If Agent elects, with the consent of the Bank, to have the
terms of this Section 1.2(h) apply to a requested Borrowing, the Bank shall
make a Revolving Loan in the amount of that Borrowing available to the
Borrower on the applicable Funding Date by transferring same day funds to
Borrower's Designated Account. Each Revolving Loan made solely by the Bank
pursuant to this Section is herein referred to as a "Non-Ratable Loan", and
such Revolving Loans are collectively referred to as the "Non-Ratable
Loans." Each Non-Ratable Loan shall be subject to all the terms and
conditions applicable to other Revolving Loans except that all payments
thereon shall be payable to the Bank solely for its own account. The
aggregate amount of Non-Ratable Loans outstanding at any time shall not
exceed $10,000,000. The Agent shall not request the Bank to make any
Non-Ratable Loan if (1) the Agent has received written notice from any
Lender that one or more of the applicable conditions precedent set forth in
Article 8 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (2) the requested Borrowing would exceed
Availability on that Funding Date.
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(B)......The Non-Ratable Loans shall be secured by the Agent's Liens
in and to the Collateral and shall constitute Base Rate Revolving Loans, or
LIBOR Revolving Loans, as requested by Borrower, and shall be Obligations
hereunder.
(i) Agent Advances.
(A)......Subject to the limitations set forth below, the Agent is
authorized by the Borrower and the Lenders, from time to time in the
Agent's sole discretion, (A) after the occurrence of a Default or an Event
of Default, or (B) at any time that any of the other conditions precedent
set forth in Article 8 have not been satisfied, to make Base Rate Revolving
Loans to the Borrower on behalf of the Lenders in an aggregate amount
outstanding at any time not to exceed 10% of the Borrowing Base which the
Agent, in its reasonable business judgment, deems necessary or desirable
(1) to preserve or protect the Collateral, or any portion thereof, (2) to
enhance the likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations, or (3) to pay any other amount chargeable to
the Borrower pursuant to the terms of this Agreement, including costs, fees
and expenses as described in Section 13.7 (any of such advances are herein
referred to as "Agent Advances"); provided, that the Majority Lenders may
at any time revoke the Agent's authorization to make Agent Advances. Any
such revocation must be in writing and shall become effective prospectively
upon the Agent's receipt thereof.
(B)......The Agent Advances shall be secured by the Agent's Liens in
and to the Collateral and shall constitute Base Rate Revolving Loans and
Obligations hereunder.
1.3 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the terms and
conditions of this Agreement, the Agent agrees (i) to cause the Letter of
Credit Issuer to issue for the account of the Borrower one or more
commercial/documentary and standby letters of credit (each a "Letter of
Credit" and collectively, the "Letters of Credit") and/or (ii) to provide
credit support or other enhancement to a Letter of Credit Issuer acceptable
to Agent, which issues a Letter of Credit for the account of the Borrower
(any such credit support or enhancement being herein referred to as a
"Credit Support") from time to time during the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to issue or cause to be issued any Letter of Credit or to
provide Credit Support for any Letter of Credit at any time if: (i) the
maximum face amount of the requested Letter of Credit is greater than the
Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn
amount of the requested Letter of Credit and all commissions, fees, and
charges due from the Borrower in connection with the opening thereof would
exceed Availability at such time; or (iii) such Letter of Credit has an
expiration date less than 30 days prior to the Stated Termination Date or
more than 12 months from the date of issuance for standby letters of credit
and 180 days for documentary letters of credit. With respect to any Letter
of Credit which contains any "evergreen" or automatic renewal provision,
each Lender shall be deemed to have consented to any such extension or
renewal unless any such Lender shall have provided to the Agent, written
notice that it declines to consent to any such extension or renewal at
least thirty (30) days prior to the date on which the Letter of Credit
Issuer is entitled to decline to extend or renew the Letter of Credit. If
all of the requirements of this Section 1.3 are met and no Default or Event
of Default has occurred and is continuing, no Lender shall decline to
consent to any such extension or renewal. Unless otherwise consented to by
Agent, all Letters of Credit must call for sight drafts to be drawn, and
must be issued in Dollars.
(c) Other Conditions. In addition to conditions precedent contained in
Article 8, the obligation of the Agent to issue or to cause to be issued
10
any Letter of Credit or to provide Credit Support for any Letter of Credit
is subject to the following conditions precedent having been satisfied in a
manner satisfactory to the Agent in its sole discretion:
(1) The Borrower shall have delivered to the Letter of Credit Issuer,
at such times and in such manner as such Letter of Credit Issuer may
prescribe, an application in form and substance satisfactory to such Letter
of Credit Issuer and reasonably satisfactory to the Agent for the issuance
of the Letter of Credit and such other documents as may be required
pursuant to the terms thereof, and the form, terms and purpose of the
proposed Letter of Credit shall be reasonably satisfactory to the Agent and
the Letter of Credit Issuer; and
(2) As of the date of issuance, no order of any court, arbitrator or
Governmental Authority shall purport by its terms to enjoin or restrain
money center banks generally from issuing letters of credit of the type and
in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall
prohibit, or request that the proposed Letter of Credit Issuer refrain
from, the issuance of letters of credit generally or the issuance of such
Letter of Credit.
(d) Issuance of Letters of Credit.
(1) Request for Issuance. Borrower must notify the Agent of a
requested Letter of Credit at least three (3) Business Days prior to the
proposed issuance date. Such notice shall be irrevocable and must specify
the maximum face amount of the Letter of Credit requested, the Business Day
of issuance of such requested Letter of Credit, whether such Letter of
Credit may be drawn in a single or in partial draws, the Business Day on
which the requested Letter of Credit is to expire, the purpose for which
such Letter of Credit is to be issued, and the beneficiary of the requested
Letter of Credit. The Borrower shall attach to such notice the proposed
form of the Letter of Credit.
(2) Responsibilities of the Agent; Issuance. As of the Business Day
immediately preceding the requested issuance date of the Letter of Credit,
the Agent shall determine the amount of the applicable Unused Letter of
Credit Subfacility and Availability. If (i) the maximum face amount of the
requested Letter of Credit is less than the Unused Letter of Credit
Subfacility and (ii) the amount of such requested Letter of Credit and all
commissions, fees, and charges due from the Borrower in connection with the
opening thereof would not exceed Availability, the Agent shall cause the
Letter of Credit Issuer to issue the requested Letter of Credit on the
requested issuance date so long as the other conditions hereof are met.
(3) No Extensions or Amendment. The Agent shall not be obligated to
cause the Letter of Credit Issuer to extend or amend any Letter of Credit
issued pursuant hereto unless the requirements of this Section 1.3 are met
as though a new Letter of Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrower agrees to
reimburse immediately the Letter of Credit Issuer for any draw under any
Letter of Credit and the Agent for the account of the Lenders upon any
payment pursuant to any Credit Support, and to pay the Letter of Credit
Issuer the amount of all other charges and fees payable to the Letter of
Credit Issuer in connection with any Letter of Credit immediately when due,
irrespective of any claim, setoff, defense or other right which the
Borrower may have at any time against the Letter of Credit Issuer or any
other Person. Each drawing under any Letter of Credit shall constitute a
request by the Borrower to the Agent for a Borrowing of a Base Rate
Revolving Loan in the amount of such drawing. The Funding Date with respect
to such borrowing shall be the date of such drawing.
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(f) Indemnification; Exoneration; Power of Attorney.
(1) Indemnification. In addition to amounts payable as elsewhere
provided in this Section 1.3, the Borrower agrees to protect, indemnify,
pay and save the Letter of Credit Issuer, the Lenders and the Agent
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender or the Agent (other than a Lender in its
capacity as Letter of Credit Issuer) may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of Credit or
the provision of any Credit Support or enhancement in connection therewith.
The Borrower's obligations under this Section shall survive payment of all
other Obligations.
(2) Assumption of Risk by the Borrower. As among the Borrower, the
Lenders, the Letter of Credit Issuer, and the Agent, the Borrower assumes
all risks of the acts and omissions of, or misuse of any of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Lenders and the
Agent shall not be responsible for and the Borrower shall not be relieved
of any of its obligations hereunder on account of: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and issuance
of and presentation of drafts with respect to any of the Letters of Credit,
even if it should prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective
for any reason; (C) the failure of the beneficiary of any Letter of Credit
to comply duly with conditions required in order to draw upon such Letter
of Credit; (D) errors, omissions, interruptions, or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation of technical
terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or
of the proceeds thereof; (G) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such Letter of
Credit; (H) any consequences arising from causes beyond the control of the
Lenders or the Agent, including any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental
Authority or (I) the Letter of Credit Issuer's honor of a draw for which
the draw, any certificate, or any other document fails to comply in any
respect with the terms of the Letter of Credit. None of the foregoing shall
affect, impair or prevent the vesting of any rights or powers of the Agent
or any Lender under this Section 1.3(f).
(3) Exoneration. Without limiting the foregoing, no action or omission
whatsoever by Agent, any Lender, or the Letter of Credit Issuer shall
result in any liability of Agent, any Lender, or the Letter of Credit
Issuer to the Borrower, or relieve the Borrower of any of its obligations
hereunder to any such Person.
(4) Rights Against Letter of Credit Issuer. Nothing contained in this
Agreement is intended to limit the Borrower's rights, if any, with respect
to the Letter of Credit Issuer which arise as a result of the letter of
credit application and related documents executed by and between the
Borrower and the Letter of Credit Issuer.
(5) Account Party. The Borrower hereby authorizes and directs any
Letter of Credit Issuer to name the Borrower as the "Account Party" therein
and to deliver to the Agent all instruments, documents and other writings
and property received by the Letter of Credit Issuer pursuant to the Letter
of Credit, and to accept and rely upon the Agent's instructions and
agreements with respect to all matters arising in connection with the
Letter of Credit or the application therefor.
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(g) Supporting Letter of Credit; Cash Collateral. If, notwithstanding
the provisions of Section 1.3(b) and Section 10.1, any Letter of Credit or
Credit Support is outstanding upon the termination of this Agreement, then
upon such termination the Borrower shall, at the request of Agent in its
sole discretion, either: (A) deposit with the Agent, for the ratable
benefit of the Agent and the Lenders, with respect to each Letter of Credit
or Credit Support then outstanding (the "Remaining Letter of Credit
Obligations"), a standby letter of credit (a "Supporting Letter of Credit")
in form and substance satisfactory to the Agent, issued by an issuer
satisfactory to the Agent in an amount equal to 110% of the greatest amount
for which such Letter of Credit or such Credit Support may be drawn, under
which Supporting Letter of Credit the Agent is entitled to draw amounts
necessary to reimburse the Agent and the Lenders for payments to be made by
the Agent and the Lenders under such Letter of Credit or Credit Support and
any fees and expenses associated with such Letter of Credit or Credit
Support. Such Supporting Letter of Credit shall be held by the Agent, for
the ratable benefit of the Agent and the Lenders, as security for, and to
provide for the payment of, the aggregate undrawn amount of such Letters of
Credit or such Credit Support remaining outstanding, or (B) pledge or
deposit with or deliver to Agent, for the benefit of the Letter of Credit
Issuer, the Agent, and the Lenders, as collateral for the Remaining Letter
of Credit Obligations, cash or deposit account balances in the amount of
110% of the Remaining Letter of Credit Obligations, pursuant to
documentation in form and substance satisfactory to the Agent and the
Letter of Credit Issuer (which documents are hereby consented to by the
Lenders). The Borrower hereby grants to the Agent, for the benefit of the
Agent, the Letter of Credit Issuer, and the Lenders, a security interest in
all such cash, deposit accounts, and all balances therein, and all proceeds
of the foregoing. Cash Collateral shall be maintained in blocked,
non-interest bearing deposit accounts at Bank of America, N.A..
1.4 Bank Products. The Borrower may request and the Agent may, in its
sole and absolute discretion, arrange for the Borrower to obtain from the
Bank or the Bank's Affiliates Bank Products although the Borrower is not
required to do so. If Bank Products are provided by an Affiliate of the
Bank, the Borrower agrees to indemnify and hold the Agent, the Bank and the
Lenders harmless from any and all costs and obligations now or hereafter
incurred by the Agent, the Bank or any of the Lenders which arise from any
indemnity given by the Agent to its Affiliates related to such Bank
Products; provided, however, nothing contained herein is intended to limit
the Borrower's rights, with respect to the Bank or its Affiliates, if any,
which arise as a result of the execution of documents by and between the
Borrower and the Bank which relate to Bank Products. The agreement
contained in this Section shall survive termination of this Agreement. The
Borrower acknowledges and agrees that the obtaining of Bank Products from
the Bank or the Bank's Affiliates (a) is in the sole and absolute
discretion of the Bank or the Bank's Affiliates, and (b) is subject to all
rules and regulations of the Bank or the Bank's Affiliates.
ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest on
the unpaid principal amount thereof (including, to the extent permitted by
law, on interest thereon not paid when due) from the date made until paid
in full in cash at a rate determined by reference to the Base Rate or the
LIBOR Rate plus the Applicable Margins as set forth below, but not to
exceed the Maximum Rate. If at any time Loans are outstanding with respect
to which the Borrower has not delivered to the Agent a notice specifying
the basis for determining the interest rate applicable thereto in
accordance herewith, those Loans shall bear interest at a rate determined
by reference to the Base Rate until notice to the contrary has been given
to the Agent in accordance with this Agreement and such notice has become
effective. Except as otherwise provided herein, the outstanding Obligations
shall bear interest as follows:
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(i) For all Base Rate Revolving Loans and other Obligations (other
than LIBOR Revolving Loans) at a fluctuating per annum rate equal to the
lesser of : (A) the Maximum Rate, and (B) the Base Rate plus the Applicable
Margin; and
(ii) For all LIBOR Revolving Loans at a per annum rate equal to the
lesser of : (A) the Maximum Rate, and (B) the LIBOR Rate plus the
Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate
applicable to Base Rate Revolving Loans as of the effective date of such
change. All interest charges shall be computed on the basis of a year of
360 days and actual days elapsed. The Borrower shall pay to the Agent, for
the ratable benefit of Lenders, interest accrued on all Base Rate Revolving
Loans in arrears on the first day of each month hereafter and on the
Termination Date. The Borrower shall pay to the Agent, for the ratable
benefit of Lenders, interest on all LIBOR Revolving Loans in arrears on
each LIBOR Interest Payment Date.
(b) Default Rate. If any Default or Event of Default occurs and is
continuing and the Agent or the Required Lenders in their discretion so
elect, then, while any such Default or Event of Default is continuing, all
of the Obligations shall bear interest at the lesser of (i) the Maximum
Rate, and (ii) the Default Rate applicable thereto.
2.2 Continuation and Conversion Elections.
(a) The Borrower may:
(i) elect, as of any Business Day, in the case of Base Rate Revolving
Loans to convert any Base Rate Revolving Loans (or any part thereof in an
amount not less than $2,000,000, or that is in an integral multiple of
$500,000 in excess thereof) into LIBOR Revolving Loans; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Revolving Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than $2,000,000, or that is
in an integral multiple of $500,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Revolving Loans
in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof to be less than $500,000, such LIBOR Revolving
Loans shall automatically convert into Base Rate Revolving Loans; provided
further that if the notice shall fail to specify the duration of the
Interest Period, such Interest Period shall be one month.
(b) The Borrower shall deliver a notice of continuation/conversion
("Notice of Continuation/Conversion") to the Agent not later than 11:00
a.m. (Central Standard Time) at least three (3) Business Days in advance of
the Continuation/Conversion Date, if the Loans are to be converted into or
continued as LIBOR Revolving Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be converted or renewed;
(iii) the type of Loans resulting from the proposed conversion or
continuation; and
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(iv) the duration of the requested Interest Period, provided, however,
the Borrower may not select an Interest Period that ends after the Stated
Termination Date.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Revolving Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to LIBOR Revolving Loans or if any Default or Event
of Default then exists, the Borrower shall be deemed to have elected to
convert such LIBOR Revolving Loans into Base Rate Revolving Loans effective
as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Continuation/Conversion. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts
of the Loans with respect to which the notice was given held by each
Lender.
(e) There may not be more than six (6) different LIBOR Revolving Loans
in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder (including any fees or other compensation which are
deemed or determined to be interest) exceed the maximum rate legally
chargeable by any Lender under applicable law for such Lender with respect
to loans of the type provided for hereunder (the "Maximum Rate"). If, in
any period, any interest, absent such limitation, would have exceeded the
Maximum Rate, then the interest rate for that period shall be the Maximum
Rate, and, if in future periods, that interest rate would otherwise be less
than the Maximum Rate, then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder equals the
amount of interest which would have been paid if the same had not been
limited by the Maximum Rate. In the event that, upon payment in full of the
Obligations, the total amount of interest paid or accrued under the terms
of this Agreement is less than the total amount of interest which would,
but for this Section 2.3, have been paid or accrued if the interest rate
otherwise set forth in this Agreement had at all times been in effect, then
the Borrower shall, to the extent permitted by applicable law, pay the
Agent, for the account of the Lenders, an amount equal to the excess of (a)
the lesser of (i) the amount of interest which would have been charged if
the Maximum Rate had, at all times, been in effect or (ii) the amount of
interest which would have accrued had the interest rate otherwise set forth
in this Agreement, at all times, been in effect over (b) the amount of
interest actually paid or accrued under this Agreement. If the Agent and/or
any Lender has received interest and other charges hereunder in excess of
the Maximum Rate, such excess shall be deemed received on account of, and
shall automatically be applied to reduce, the Obligations other than
interest, and if there are no Obligations outstanding, the Agent and/or
such Lender shall refund to the Borrower such excess.
2.4 Arrangement Fee. The Borrower agrees to pay the Agent on the
Closing Date an arrangement fee (the "Arrangement Fee") as set forth in the
letter dated January 14, 2005, between the Agent and Borrower, as amended.
2.5 Unused Line Fee. On the first day of each month hereafter and on
the Termination Date the Borrower agrees to pay to the Agent, for the
account of the Lenders, in accordance with their respective Pro Rata
Shares, an unused line fee (the "Unused Line Fee") equal to the Applicable
Margin for the Unused Line Fee times the amount by which the Maximum
Revolver Amount exceeded the sum of the average daily outstanding amount of
Revolving Loans and the average daily undrawn face amount of outstanding
Letters of Credit, during the immediately preceding month or shorter period
if calculated for the first month hereafter or on the Termination Date. The
Unused Line Fee shall be computed on the basis of a 360-day year for the
actual number of days elapsed. All principal payments received by the Agent
shall be deemed to be credited to the Borrower's Loan Account immediately
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upon receipt for purposes of calculating the Unused Line Fee pursuant to
this Section 2.5.
2.6 Letter of Credit Fee. The Borrower agrees to pay (a) to the Agent,
for the account of the Lenders, in accordance with their respective Pro
Rata Shares, for each Letter of Credit, a per annum fee (the "Letter of
Credit Fee") equal to the Applicable Margin with respect to Letters of
Credit multiplied by the maximum stated amount of each Letter of Credit,
(b) to Agent for the benefit of the Letter of Credit Issuer, a fronting fee
of one-quarter of one percent (0.25%) per annum (the "Fronting Fee") of the
undrawn maximum face amount of each Letter of Credit, and (c) on the date
of issuance, increase, and/or extension, including, without limitation, any
automatic extension of any Letter of Credit, to the Letter of Credit
Issuer, all out-of-pocket costs, fees and expenses incurred by the Letter
of Credit Issuer in connection with the application for, processing of,
issuance of, or amendment to any Letter of Credit, which costs, fees and
expenses shall include a "fronting fee" payable to the Letter of Credit
Issuer. The Letter of Credit Fee and the Fronting Fee shall be payable
monthly in arrears on the first day of each month following any month in
which a Letter of Credit is outstanding and on the Termination Date. The
Letter of Credit Fee and the Fronting Fee shall be computed on the basis of
a 360-day year for the actual number of days elapsed.
2.7 Vehicle Maintenance Fee. At Agent's sole and absolute discretion,
Agent may retain any third party servicer ("Title Servicer") to house,
maintain, service, release, perfect, and perform other matters relating to
the certificates of title relating to the Rolling Stock. The Borrower
agrees to pay all fees and expenses of such Title Servicer on demand.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans. The Borrower shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid
interest thereon, on the Termination Date. The Borrower may prepay
Revolving Loans at any time, and reborrow subject to the terms of this
Agreement. In addition, and without limiting the generality of the
foregoing, upon demand the Borrower shall pay to the Agent, for account of
the Lenders, the amount, without duplication, by which the Aggregate
Revolver Outstandings exceeds the lesser of the Borrowing Base or the
Maximum Revolver Amount.
3.2 Termination of Facility. The Borrower may terminate this Agreement
upon at least ten (10) Business Days' notice to the Agent and the Lenders,
upon (a) the payment in full of all outstanding Revolving Loans, together
with accrued interest thereon, and the cancellation and return of all
outstanding Letters of Credit, (b) the payment in full in cash of all
reimbursable expenses and other Obligations, and (c) with respect to any
LIBOR Revolving Loans prepaid, payment of the amounts due under Section
4.4, if any. If this Agreement is terminated at any time prior to the First
Anniversary Date, whether pursuant to this Section or pursuant to Section
9.2, the Borrower shall pay to the Agent, for the account of the Lenders,
an early termination fee equal to 1.0% of the Maximum Revolver Amount.
3.3 Repayments of Obligations.
(a) Immediately upon receipt by Borrower or its Subsidiaries of
proceeds of any asset disposition or any sale of the stock of any
Subsidiary, Borrower shall prepay the Loans in an amount equal to all such
proceeds, net of (A) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such
transaction and payable by Borrower in connection therewith (in each case,
paid to non-Affiliates), (B) transfer taxes, (C) amounts payable to holders
of senior Liens (to the extent such Liens constitute Permitted Liens under
subpart (j) of the definition of Permitted Liens), if any, and (D) an
appropriate reserve for income taxes in accordance with GAAP in connection
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therewith ("Net Proceeds"). Any such prepayment shall be applied in
accordance with Section 3.3(b).
(b) Prepayments from Net Proceeds shall be applied as follows: first,
to accrued interest with respect to the Base Rate Revolving Loans, second,
to pay the principal of the Base Rate Revolving Loans, and third to cash
collateralize outstanding Letters of Credit. So long as no Default or Event
of Default has occurred and is continuing, the Borrower may at its
election, prepay interest and principal of any LIBOR Rate Loan or direct
the Agent to hold such proceeds as Collateral for the Obligations.
Notwithstanding the foregoing, any prepayments made following the
occurrence and during the continuation of any Default or Event of Default
shall be applied to the Obligations in any order the Agent elects.
(c) No provision contained in this Section 3.3 shall constitute a
consent to an asset disposition that is otherwise not permitted by the
terms of this Agreement.
3.4 LIBOR Revolving Loan Prepayments. In connection with any
prepayment, if any LIBOR Revolving Loans are prepaid prior to the
expiration date of the Interest Period applicable thereto, the Borrower
shall pay to the Lenders the amounts described in Section 4.4.
3.5 Payments by the Borrower.
(a) All payments to be made by the Borrower shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrower shall be made to the Agent for the
account of the Lenders, at the account designated by the Agent and shall be
made in Dollars and in immediately available funds, no later than 12:00
noon (Central Standard Time) on the date specified herein. Any payment
received by the Agent after such time shall be deemed (for purposes of
calculating interest only) to have been received on the following Business
Day and any applicable interest shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period", whenever any payment is due on a day other than a Business Day,
such payment shall be due on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or
fees, as the case may be.
3.6 Payments as Revolving Loans. At the election of Agent, all
payments of principal, interest, reimbursement obligations in connection
with Letters of Credit and Credit Support for Letters of Credit, fees,
premiums, reimbursable expenses and other sums payable hereunder, may be
paid from the proceeds of Revolving Loans made hereunder. The Borrower
hereby irrevocably authorizes the Agent to charge the Loan Account for the
purpose of paying all amounts from time to time due hereunder and agrees
that all such amounts charged shall constitute Revolving Loans (including
Non-Ratable Loans and Agent Advances).
3.7 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according
to the unpaid principal balance of the Loans to which such payments relate
held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders, except for fees payable solely to
Agent and the Letter of Credit Issuer and except as provided in Section
11.1(b). All payments shall be remitted to the Agent and all such payments
not relating to principal or interest of specific Loans, or not
constituting payment of specific fees, and all proceeds of Accounts or
other Collateral received by the Agent, shall be applied, ratably, subject
17
to the provisions of this Agreement, first, to pay any fees, indemnities or
expense reimbursements including any amounts relating to Bank Products then
due to the Agent from the Borrower; second, to pay any fees or expense
reimbursements then due to the Lenders from the Borrower; third, to pay
interest due in respect of all Loans, including Non-Ratable Loans and Agent
Advances; fourth, to pay or prepay principal of the Non-Ratable Loans and
Agent Advances; fifth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement
obligations in respect of Letters of Credit; sixth, to pay an amount to
Agent equal to all outstanding Letter of Credit Obligations to be held as
cash collateral for such Obligations; and seventh, to the payment of any
other Obligation due to the Agent or any Lender by the Borrower.
Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrower, or unless an Event of Default has
occurred and is continuing, neither the Agent nor any Lender shall apply
any payments which it receives to any LIBOR Revolving Loan, except (a) on
the expiration date of the Interest Period applicable to any such LIBOR
Revolving Loan, or (b) in the event, and only to the extent, that there are
no outstanding Base Rate Revolving Loans and, in any event, the Borrower
shall pay LIBOR breakage losses in accordance with Section 4.4. The Agent
and the Lenders shall have the continuing and exclusive right to apply and
reverse and reapply any and all such proceeds and payments to any portion
of the Obligations.
3.8 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Agent, any Lender, the Bank or any Affiliate of the Bank is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible
setoff, or a diversion of trust funds, or for any other reason, then the
Obligations or part thereof intended to be satisfied shall be revived and
continued and this Agreement shall continue in full force as if such
payment or proceeds had not been received by the Agent or such Lender and
the Borrower shall be liable to pay to the Agent and the Lenders, and
hereby does indemnify the Agent and the Lenders and hold the Agent and the
Lenders harmless for the amount of such payment or proceeds surrendered.
The provisions of this Section 3.8 shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent
or any Lender in reliance upon such payment or application of proceeds, and
any such contrary action so taken shall be without prejudice to the Agent's
and the Lenders' rights under this Agreement and shall be deemed to have
been conditioned upon such payment or application of proceeds having become
final and irrevocable. The provisions of this Section 3.8 shall survive the
termination of this Agreement.
3.9 Agent's and Lenders' Books and Records; Monthly Statements. The
Agent shall record the principal amount of the Loans owing to each Lender,
the undrawn face amount of all outstanding Letters of Credit and the
aggregate amount of unpaid reimbursement obligations outstanding with
respect to the Letters of Credit from time to time on its books. In
addition, each Lender may note the date and amount of each payment or
prepayment of principal of such Lender's Loans in its books and records.
Failure by Agent or any Lender to make such notation shall not affect the
obligations of the Borrower with respect to the Loans or the Letters of
Credit. The Borrower agrees that the Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this
Agreement and the other Loan Documents shall be admissible in any action or
proceeding arising therefrom, and shall constitute rebuttably presumptive
proof thereof, irrespective of whether any Obligation is also evidenced by
a promissory note or other instrument. The Agent will provide to the
Borrower a monthly statement of Loans, payments, and other transactions
pursuant to this Agreement. Such statement shall be deemed correct,
accurate, and binding on the Borrower and an account stated (except for
reversals and reapplications of payments made as provided in Section 3.7
and corrections of errors discovered by the Agent), unless the Borrower
notifies the Agent in writing to the contrary within thirty (30) days after
such statement is rendered. In the event a timely written notice of
objections is given by the Borrower, only the items to which exception is
expressly made will be considered to be disputed by the Borrower.
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3.10 Collection of Accounts. Borrower shall at all times after
February 28, 2005 maintain lockboxes ("Lockboxes") and shall, on or before
February 28, 2005, instruct all Account Debtors with respect to Accounts
and General Intangibles of Borrower to remit all Collections in respect
thereof to such Lockboxes or local deposit accounts at financial
institutions acceptable to the Agent. Borrower, Agent and the Lockbox Banks
shall enter into the Lockbox Agreements, which among other things shall
provide for the opening of a Lockbox Account for the deposit of Collections
at a Lockbox Bank. Borrower agrees that: (a) all good funds on deposit in
each local collection account (other than a local collection account which
is subject to a Control Agreement) in excess of $25,000 per account shall
be swept pursuant to standing instructions (by wire transfer or ACH
transaction) on a daily basis to a Lockbox Account; and (b) all Collections
and other amounts received by Borrower from any Account Debtor or any other
source immediately upon receipt shall be deposited into a Lockbox Account.
No Lockbox Agreement or arrangement contemplated thereby shall be modified
by Borrower without the prior written consent of the Agent. All amounts
received in each Lockbox Account shall be wired each Business Day into an
account ("Agent's Account") with the Agent. If at any one time Borrower's
Availability has been $30,000,000 or more for at least the last thirty
consecutive Business Days (for the purposes of this Section 3.10,
Availability shall not be deemed to be reduced by the reduction of
Availability attributed to the issuance of any Replacement Letters of
Credit), then, upon Borrower's request, Agent shall give the relevant
Lockbox Bank an instruction permitting Borrower to direct the disbursement
of funds on deposit in such Lockbox Account. If at any time thereafter
either: (x) Borrower's Availability is less than $30,000,000 on any
Business Day, or (y) the occurrence of an Event of Default, then all
amounts received in each Lockbox Account shall be wired each Business Day
into the Agent's Account and Borrower shall thereafter no longer be
permitted to direct disbursement of any funds in deposit in such Lockbox
Account.
ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by the Borrower to each Lender or the Agent
under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for any Taxes. In addition,
the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each Lender and
the Agent for the full amount of Taxes or Other Taxes (including any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by any Lender or the Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date such Lender or the Agent makes written
demand therefor.
(c) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made;
(ii) the Borrower shall make such deductions and withholdings;
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(iii) the Borrower shall pay the full amount deducted or withheld to
the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Borrower shall also pay to each Lender or the Agent for the
account of such Lender, at the time interest is paid, all additional
amounts which the respective Lender specifies as necessary to preserve the
after-tax yield such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) At the Agent's request, within 30 days after the date of any
payment by the Borrower of Taxes or Other Taxes, the Borrower shall furnish
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Agent.
(e) If the Borrower is required to pay additional amounts to any
Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 Illegality.
(a) If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation
or administration of any Requirement of Law, has made it unlawful, or that
any central bank or other Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable lending office to make LIBOR
Revolving Loans, then, on notice thereof by that Lender to the Borrower
through the Agent, any obligation of that Lender to make LIBOR Revolving
Loans shall be suspended until that Lender notifies the Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Revolving Loan, the Borrower shall, upon its receipt of notice of such fact
and demand from such Lender (with a copy to the Agent), prepay in full such
LIBOR Revolving Loans of that Lender then outstanding, together with
interest accrued thereon and amounts required under Section 4.4, either on
the last day of the Interest Period thereof, if that Lender may lawfully
continue to maintain such LIBOR Revolving Loans to such day, or
immediately, if that Lender may not lawfully continue to maintain such
LIBOR Revolving Loans. If the Borrower is required to so prepay any LIBOR
Revolving Loans, then concurrently with such prepayment, the Borrower shall
borrow from the affected Lender, in the amount of such repayment, a Base
Rate Revolving Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction
of or any change in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining any LIBOR Revolving Loans, then the
Borrower shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Agent), pay to the Agent for
the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
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(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or
(iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or
would affect the amount of capital required or expected to be maintained by
such Lender or any corporation or other entity controlling such Lender and
(taking into consideration such Lender's or such corporation's or other
entity's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitments, loans, credits or
obligations under this Agreement, then, upon demand of such Lender to the
Borrower through the Agent, the Borrower shall pay to such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increase.
4.4 Funding Losses. The Borrower shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any payment
of principal of any LIBOR Revolving Loan;
(b) the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Revolving Loans on a day that is not the last day of
the relevant Interest Period;
including any such loss of anticipated profit and any loss or expense
arising from the liquidation or reemployment of funds obtained by it to
maintain its LIBOR Revolving Loans or from fees payable to terminate the
deposits from which such funds were obtained. Borrower shall also pay any
customary administrative fees charged by any Lender in connection with the
foregoing.
4.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR
Revolving Loan, or that the LIBOR Rate for any requested Interest Period
with respect to a proposed LIBOR Revolving Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Loan, the Agent will
promptly so notify the Borrower and each Lender. Thereafter, the obligation
of the Lenders to make or maintain LIBOR Revolving Loans hereunder shall be
suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Borrower may revoke any Notice of Borrowing or Notice of
Continuation/Conversion then submitted by it. If the Borrower does not
revoke such Notice, the Lenders shall make, convert or continue the Loans,
as proposed by the Borrower, in the amount specified in the applicable
notice submitted by the Borrower, but such Loans shall be made, converted
or continued as Base Rate Revolving Loans instead of LIBOR Revolving Loans.
4.6 Certificates of Agent. If any Lender claims reimbursement or
compensation under this Article 4, Agent shall determine the amount thereof
and shall deliver to the Borrower (with a copy to the affected Lender) a
certificate setting forth in reasonable detail the amount payable to the
affected Lender, and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.
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4.7 Survival. The agreements and obligations of the Borrower in this
Article 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records. The Borrower shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct
and timely entries are made of its transactions in accordance with GAAP
applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 5.2(a). The Borrower shall, by means of
appropriate entries, reflect in such accounts and in all Financial
Statements proper liabilities and reserves for all taxes and proper
provision for depreciation and amortization of property and bad debts, all
in accordance with GAAP. The Borrower shall maintain at all times books and
records pertaining to the Collateral in such detail, form and scope as the
Agent or any Lender shall reasonably require, including, but not limited
to, records of (a) all payments received and all credits and extensions
granted with respect to the Accounts; and (b) all other dealings affecting
the Collateral.
5.2 Financial Information. The Borrower shall promptly furnish to each
Lender, all such financial information as the Agent shall reasonably
request. Without limiting the foregoing, the Borrower will furnish to the
Agent, in sufficient copies for distribution by the Agent to each Lender,
in such detail as the Agent or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety (90)
days after the close of each Fiscal Year, consolidated audited balance
sheets, and income statements, cash flow statements and changes in
stockholders' equity for the Parent and its Subsidiaries for such Fiscal
Year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous Fiscal Year, all in reasonable
detail, fairly presenting the financial position and the results of
operations of the Parent and its consolidated Subsidiaries as at the date
thereof and for the Fiscal Year then ended, and prepared in accordance with
GAAP. Such statements shall be examined in accordance with generally
accepted auditing standards by and, in the case of such statements
performed on a consolidated basis, accompanied by: (i) a report thereon
from Parent's Registered Public Accounting Firm selected by the Parent and
reasonably satisfactory to the Agent, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and
applicable Securities Laws and shall not be subject to any "going concern"
or like qualification or exception or any qualification or exception as to
the scope of such audit, and (ii) with respect to statements for fiscal
year 2005 and thereafter, an attestation report of such Registered Public
Accounting Firm as to the Parent's internal controls pursuant to Section
404 of Sarbanes-Oxley expressing a conclusion to which the Agent does not
reasonably object, and in all cases, such consolidated statements to be
certified by a Responsible Officer of the Borrower to the effect that such
statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of the Parent and its
Subsidiaries. The Borrower and the Parent, simultaneously with retaining
such independent public accountants to conduct such annual audit, shall
send a letter to such accountants, with a copy to the Agent and the
Lenders, notifying such accountants that one of the primary purposes for
retaining such accountants' services and having audited financial
statements prepared by them is for use by the Agent and the Lenders. The
Borrower and the Parent hereby authorize the Agent to communicate directly
with their Registered Public Accountants and, by this provision, authorize
those accountants to disclose to the Agent any and all financial statements
and other supporting financial documents and schedules relating to the
Borrower and the Parent and to discuss directly with the Agent the finances
and affairs of the Borrower and the Parent.
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(b) As soon as available, but in any event not later than the earlier
of: (i) the filing thereof with the SEC, and (ii) forty-five (45) days
after the last day of the first three fiscal quarters of each Fiscal Year,
consolidated unaudited balance sheets and income statements, and
consolidated cash flow statements and changes in stockholders' equity, for
Parent and its Subsidiaries for such fiscal quarter and for the period from
the beginning of the then current fiscal year to such last day. The
Borrower shall certify by a certificate signed by a Responsible Officer of
Borrower that all such statements have been prepared in accordance with
GAAP and present fairly the financial position for the Parent and its
Subsidiaries as at the dates thereof and its results of operations for the
periods then ended, subject to normal year-end adjustments and the absence
of applicable footnotes.
(c) As soon as available, but in any event not later than thirty (30)
days after the end of each fiscal month, consolidated unaudited balance
sheets of the Parent and its consolidated Subsidiaries as at the end of
such fiscal month, and consolidated unaudited income statements and cash
flow statements for the Parent and its consolidated Subsidiaries for such
fiscal month and for the period from the beginning of the Fiscal Year to
the end of such fiscal month, all in reasonable detail, fairly presenting
the financial position and results of operations of the Parent and its
consolidated Subsidiaries as at the date thereof and for such periods, and,
in each case, in comparable form, figures for the corresponding period in
the prior Fiscal Year, and prepared in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 5.2(a). The Borrower shall certify by a certificate
signed by its chief financial officer that all such statements have been
prepared in accordance with GAAP and present fairly the Borrower's
financial position as at the dates thereof and its results of operations
for the periods then ended, subject to normal year-end adjustments and the
absence of applicable footnotes.
(d) With each of the audited Financial Statements delivered pursuant
to Section 5.2(a), a certificate of the independent Registered Public
Accountants that examined such statement to the effect that they have
reviewed and are familiar with this Agreement and that, in examining such
Financial Statements, they did not become aware of any fact or condition
which then constituted a Default or Event of Default with respect to a
financial covenant, except for those, if any, described in reasonable
detail in such certificate.
(e) With each of the annual audited Financial Statements delivered
pursuant to Section 5.2(a), and within thirty (30) days after the end of
each fiscal month, and within forty-five (45) days after the end of each
fiscal quarter, a certificate of the chief financial officer of the
Borrower setting forth in reasonable detail the calculations required to
establish that the Borrower was in compliance with the covenants set forth
in Sections 7.22 and 7.23 during the period covered in such Financial
Statements and as at the end thereof. Within thirty (30) days after the end
of each fiscal month, a certificate of the chief financial officer of the
Borrower stating that, except as explained in reasonable detail in such
certificate, (A) all of the representations and warranties of the Borrower
contained in this Agreement and the other Loan Documents are correct and
complete in all material respects as at the date of such certificate as if
made at such time, except for those that speak as of a particular date, (B)
the Borrower is, at the date of such certificate, in compliance in all
material respects with all of its respective covenants and agreements in
this Agreement and the other Loan Documents, and (C) no Default or Event of
Default then exists or existed during the period covered by the Financial
Statements for such fiscal month. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant
has not been complied with, or that a Default or Event of Default existed
or exists, such certificate shall set forth what action the Borrower has
taken or proposes to take with respect thereto.
(f) No less than fifteen (15) days prior to the beginning of each
Fiscal Year, annual forecasts (to include forecasted consolidated balance
sheets, income statements and cash flow statements) for the Parent and its
Subsidiaries as at the end of and for each quarter of such Fiscal Year.
23
(g) Promptly after filing with the PBGC and the IRS, a copy of each
annual report or other filing filed with respect to each Plan of the
Borrower or the Parent.
(h) Promptly upon the filing thereof, copies of all reports, if any,
to or other documents filed by the Parent or any of its Subsidiaries with
the SEC under the Exchange Act, and all reports, notices, or statements
sent or received by the Parent or any of its Subsidiaries to or from the
holders of any equity interests of the Parent (other than routine
non-material correspondence sent by shareholders of the Parent to the
Parent) or any such Subsidiary or of any Debt of the Parent or any of its
Subsidiaries registered under the Securities Act of 1933 or to or from the
trustee under any indenture under which the same is issued.
(i) As soon as available, but in any event not later than 15 days
after the Borrower's or the Parent's receipt thereof, a copy of all
management reports and management letters prepared for the Borrower or the
Parent by any Registered Public Accountants of the Borrower or the Parent.
(j) Promptly after their preparation, copies of any and all proxy
statements, financial statements, and reports which the Parent makes
available to its shareholders.
(k) If at any time Availability is less than $20,000,000, at the sole
discretion of the Agent, either: (a) daily, or (b) weekly as soon as
available, but in such case by the second Business Day of each week for the
prior week ending on the last Business Day of such prior week; in either
case, in form and substance reasonably satisfactory to the Agent: (i) a
schedule of the Borrower's Accounts created, credit memoranda, and
collections for the applicable week, together with a reconciliation of the
Borrower's Accounts created, credit memos, collections and other
adjustments to Accounts since the last such weekly reconciliation and a
Borrowing Base Certificate; (ii) a summary of each credit memorandum in
excess of $250,000; and (iii) with the delivery of each of the foregoing, a
certificate executed by a Responsible Officer on behalf of the Borrower
certifying as to the accuracy and completeness of the foregoing.
(l) As soon as available, but in any event within fifteen (15) days
after the end of each fiscal month or more frequently if requested by the
Agent to determine Availability or otherwise, each in form and substance
reasonably satisfactory to the Agent: (i) a reconciliation of the
Borrower's Accounts created, credit memoranda, collections and other
adjustments to Accounts since the last such monthly reconciliation and (for
such month) a Borrowing Base Certificate; (ii) an aging of the Borrower's
Accounts together supporting information in accordance with a
reconciliation to the previous fiscal month end's accounts receivable
balance of the Borrower's Accounts and to its general ledger; (iii) an
aging of the Borrower's accounts payable; (iv) a detailed calculation of
Eligible Accounts and Eligible Rolling Stock; (v) upon the Agent's
reasonable request, copies of invoices in connection with the Borrower's
Accounts, customer statements, credit memos, remittance advices and
reports, deposit slips, and shipping and delivery documents in connection
with the Borrower's Accounts; (vi) a summary of all Rolling Stock disposed
of or acquired during such period, including the amount of proceeds
therefor or the purchase price thereof, as applicable; (vii) such other
reports as to the Collateral as the Agent shall reasonably request from
time to time; and (viii) with the delivery of each of the foregoing, a
certificate executed by a Responsible Officer on behalf of the Borrower
certifying as to the accuracy and completeness of the foregoing. If the
Borrower's records or reports of the Collateral are prepared by an
accounting service or other agent, the Borrower hereby authorizes such
service or agent to deliver such records, reports, and related documents to
the Agent for distribution to the Lenders.
(m) Such additional information as the Agent and/or any Lender may
from time to time reasonably request regarding the financial and business
affairs of the Borrower or any Subsidiary.
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5.3 Notices to the Lenders. The Borrower shall notify the Agent and
the Lenders in writing of the following matters at the following times:
(a) Immediately after becoming aware of any Default or Event of
Default;
(b) Immediately after becoming aware of the assertion by the holder of
any capital stock of the Borrower or of any Subsidiary or the holder of any
Debt of the Borrower or any Subsidiary in a face amount in excess of
$100,000 that a default exists with respect thereto or that the Borrower or
such Subsidiary is not in compliance with the terms thereof, or the threat
or commencement by such holder of any enforcement action because of such
asserted default or non-compliance;
(c) Immediately after becoming aware of any event or circumstance
which could have a Material Adverse Effect;
(d) Immediately after becoming aware of any pending or threatened
action, suit, or proceeding, by any Person, or any pending or threatened
investigation by a Governmental Authority, which could reasonably be
expected to have a Material Adverse Effect;
(e) Immediately after becoming aware of any pending or threatened
strike, work stoppage, unfair labor practice claim, or other labor dispute
affecting the Borrower or any of its Subsidiaries in a manner which could
reasonably be expected to have a Material Adverse Effect;
(f) Immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting the
Borrower or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect;
(g) Immediately after receipt of any notice of any violation by the
Borrower or any of its Subsidiaries of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect;
(h) Immediately after receipt of any written notice that the Borrower
or any of its Subsidiaries is or may be liable to any Person as a result of
the Release or threatened Release of any Contaminant or that the Borrower
or any Subsidiary is subject to investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to the Release
or threatened Release of any Contaminant which, in either case, is
reasonably likely to give rise to liability in excess of $1,000,000;
(i) Immediately after receipt of any written notice of the imposition
of any Environmental Lien against any property of the Borrower or any of
its Subsidiaries;
(j) Any change in the Borrower's name, state of organization,
locations of Collateral, or form of organization, trade names under which
the Borrower will create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto;
(k) Within ten (10) Business Days after the Borrower or any ERISA
Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the
DOL or the PBGC with respect thereto;
25
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within
three (3) Business Days after the filing thereof with the PBGC, the DOL or
the IRS, as applicable, copies of the following: (i) each annual report
(form 5500 series), including Schedule B thereto, filed with the PBGC, the
DOL or the IRS with respect to each Plan, (ii) a copy of each funding
waiver request filed with the PBGC, the DOL or the IRS with respect to any
Plan and all communications received by the Borrower or any ERISA Affiliate
from the PBGC, the DOL or the IRS with respect to such request, and (iii) a
copy of each other filing or notice filed with the PBGC, the DOL or the
IRS, with respect to each Plan by either the Borrower or any ERISA
Affiliate;
(m) Upon request, copies of each actuarial report for any Plan or
Multi-employer Plan and annual report for any Multi-employer Plan; and
within three (3) Business Days after receipt thereof by the Borrower or any
ERISA Affiliate, copies of the following: (i) any notices of the PBGC's
intention to terminate a Plan or to have a trustee appointed to administer
such Plan; (ii) any favorable or unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Code;
or (iii) any notice from a Multi-employer Plan regarding the imposition of
withdrawal liability;
(n) Within three (3) Business Days after the occurrence thereof: (i)
any changes in the benefits of any existing Plan which increase the
Borrower's annual costs with respect thereto by an amount in excess of
$1,000,000, or the establishment of any new Plan or the commencement of
contributions to any Plan to which the Borrower or any ERISA Affiliate was
not previously contributing; or (ii) any failure by the Borrower or any
ERISA Affiliate to make a required installment or any other required
payment under Section 412 of the Code on or before the due date for such
installment or payment; or
(o) Within three (3) Business Days after the Borrower or any ERISA
Affiliate knows or has reason to know that any of the following events has
or will occur: (i) a Multi-employer Plan has been or will be terminated;
(ii) the administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a
Multi-employer Plan.
Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the
Borrower, its Subsidiary, or any ERISA Affiliate, as applicable, has taken
or proposes to take with respect thereto.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Required
Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. The Borrower has the power and authority to execute,
deliver and perform this Agreement and the other Loan Documents to which it
is a party, to incur the Obligations, and to grant to the Agent Liens upon
and security interests in the Collateral. The Borrower has taken all
necessary action (including obtaining approval of its stockholders if
necessary) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents to which it is a party. This
Agreement and the other Loan Documents to which it is a party have been
26
duly executed and delivered by the Borrower, and constitute the legal,
valid and binding obligations of the Borrower, enforceable against it in
accordance with their respective terms. The Borrower's execution, delivery,
and performance of this Agreement and the other Loan Documents to which it
is a party do not and will not conflict with, or constitute a violation or
breach of, or result in the imposition of any Lien upon the property of the
Borrower or any of its Subsidiaries, by reason of the terms of (a) any
contract, mortgage, lease, agreement, indenture, or instrument to which the
Borrower is a party or which is binding upon it, (b) any Requirement of Law
applicable to the Borrower or any of its Subsidiaries, or (c) the
certificate or articles of incorporation or by-laws or the limited
liability company or limited partnership agreement of the Borrower or any
of its Subsidiaries.
6.2 Validity and Priority of Security Interest. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all
the Collateral in favor of the Agent, for the ratable benefit of the Agent
and the Lenders, and such Liens constitute perfected and continuing Liens
on all the Collateral, having priority over all other Liens on the
Collateral, except for those Liens identified in clauses (c), (d) and (e)
of the definition of Permitted Liens securing all the Obligations, and
enforceable against the Borrower and all third parties.
6.3 Organization and Qualification. The Borrower (a) is duly organized
or incorporated and validly existing in good standing under the laws of the
state of its organization or incorporation, (b) is qualified to do business
and is in good standing in the jurisdictions set forth on Schedule 6.3
which are the only jurisdictions in which qualification is necessary in
order for it to own or lease its property and conduct its business, and (c)
has all requisite power and authority to conduct its business and to own
its property.
6.4 Corporate Name; Prior Transactions. The Borrower has not, during
the past five (5) years, been known by or used any other corporate or
fictitious name, or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or acquired
any of its property outside of the ordinary course of business, except as
described on Schedule 6.4 attached hereto.
6.5 Subsidiaries and Affiliates. Schedule 6.5 is a correct and
complete list of the name and relationship to the Parent of each and all of
the Parent's Subsidiaries. Each Subsidiary is (a) duly incorporated or
organized and validly existing in good standing under the laws of its state
of incorporation or organization set forth on Schedule 6.5, and (b)
qualified to do business and in good standing in each jurisdiction in which
the failure to so qualify or be in good standing could reasonably be
expected to have a material adverse effect on any such Subsidiary's
business, operations, prospects, property, or condition (financial or
otherwise) and (c) has all requisite power and authority to conduct its
business and own its property.
6.6 Financial Statements and Projections.
(a) The Borrower has delivered to the Agent and the Lenders the
audited balance sheet and related statements of income, retained earnings,
cash flows, and changes in stockholders equity for the Parent and its
consolidated Subsidiaries as of December 31, 2003, and for the Fiscal Year
then ended, accompanied by the report thereon of the Parent's Registered
Public Accountants, KPMG LLP. The Borrower has also delivered to the Agent
and the Lenders the unaudited balance sheet and related statements of
income and cash flows for the Parent and its consolidated Subsidiaries as
of October 2, 2004. All such financial statements have been prepared in
accordance with GAAP and present accurately and fairly in all material
respects the financial position of the Borrower and its consolidated
Subsidiaries as at the dates thereof and their results of operations for
the periods then ended.
(b) The Latest Projections when submitted to the Lenders as required
herein represent the Borrower's best estimate of the future financial
performance of the Borrower and its consolidated Subsidiaries for the
27
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Borrower believes are
fair and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lenders.
6.7 Capitalization. The Borrower's authorized capital stock consists
of 20,000,000 shares of common stock, par value $0.001 per share, of which
10,945,794 shares are validly issued and outstanding, fully paid and
non-assessable and are owned beneficially and of record by Parent.
6.8 Solvency. The Borrower is Solvent prior to and after giving effect
to the Borrowings to be made on the Closing Date and the issuance of the
Letters of Credit to be issued on the Closing Date.
6.9 Debt. After giving effect to the making of the Revolving Loans to
be made on the Closing Date and the application of the proceeds thereof,
including the repayment of the Existing SunTrust Debt, the Borrower and its
Subsidiaries have no Debt, except (a) the Obligations, and (b) Debt
described on Schedule 6.9.
6.10 Distributions. Since December 31, 2003 no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrower or any of its Subsidiaries.
6.11 Real Estate; Leases. Schedule 6.11 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by the Borrower
and all Real Estate owned by any of its Subsidiaries, all leases and
subleases of real or personal property held by the Borrower as lessee or
sublessee (other than leases of computer equipment and copiers) and all
leases and subleases of real or personal property held by the Borrower as
lessor, or sublessor. Each of such leases and subleases is valid and
enforceable in accordance with its terms and is in full force and effect,
and no default by any party to any such lease or sublease exists. The
Borrower has good and marketable title in fee simple to the Real Estate
identified on Schedule 6.11 as owned by the Borrower, or valid leasehold
interests in all Real Estate designated therein as "leased" by the Borrower
and the Borrower has good, indefeasible, and merchantable title to all of
its other property reflected on the October 2, 2004 Financial Statements
delivered to the Agent and the Lenders, except as disposed of in the
ordinary course of business since the date thereof, free of all Liens
except Permitted Liens.
6.12 Proprietary Rights. Schedule 6.12 sets forth a correct and
complete list of all of the Borrower's Proprietary Rights, which consist of
patents, trademarks, service marks, or copyrights. None of the Proprietary
Rights is subject to any licensing agreement or similar arrangement except
as set forth on Schedule 6.12. To the best of the Borrower's knowledge,
none of the Proprietary Rights infringes on or conflicts with any other
Person's property, and no other Person's property infringes on or conflicts
with the Proprietary Rights. The Proprietary Rights described on Schedule
6.12 constitute all of the property of such type necessary to the current
conduct of the Borrower's business.
6.13 Trade Names. All trade names or styles under which the Borrower
or any of its Subsidiaries will create Accounts, or to which instruments in
payment of Accounts may be made payable, are listed on Schedule 6.13.
6.14 Litigation. Except as set forth on Schedule 6.14, there is no
pending, or to the best of the Borrower's knowledge threatened, action,
suit, proceeding, or counterclaim by any Person, or to the best of the
Borrower's knowledge, investigation by any Governmental Authority, or any
basis for any of the foregoing, which could reasonably be expected to have
a Material Adverse Effect.
28
6.15 Labor Disputes. Except as set forth on Schedule 6.15, as of the
Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of the Borrower or any of its Subsidiaries, (b)
no such collective bargaining agreement or other labor contract is
scheduled to expire during the term of this Agreement, (c) to the best of
Borrower's knowledge, no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees
of the Borrower or any of its Subsidiaries or for any similar purpose, and
(d) there is no pending or (to the best of the Borrower's knowledge)
threatened, strike, work stoppage, material unfair labor practice claim, or
other material labor dispute against or affecting the Borrower or its
Subsidiaries or their employees.
6.16 Environmental Laws. Except as otherwise disclosed on Schedule
6.16 and except as could not reasonably be expected to have a Material
Adverse Effect:
(a) The Borrower and its Subsidiaries have complied in all material
respects with all Environmental Laws and neither the Borrower nor any
Subsidiary nor any of its presently owned real property or presently
conducted operations, nor its previously owned real property or prior
operations, is subject to any enforcement order from or liability agreement
with any Governmental Authority or private Person respecting (i) compliance
with any Environmental Law or (ii) any potential liabilities and costs or
remedial action arising from the Release or threatened Release of a
Contaminant.
(b) The Borrower and its Subsidiaries have obtained all permits
necessary for their current operations under Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are
in compliance with all material terms and conditions of such permits.
(c) Neither the Borrower nor any of its Subsidiaries, nor, to the best
of the Borrower's knowledge, any of its predecessors in interest, has in
violation of applicable law stored, treated or disposed of any hazardous
waste.
(d) Neither the Borrower nor any of its Subsidiaries has received any
summons, complaint, order or similar written notice indicating that it is
not currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or
may be liable to any other Person as a result of a Release or threatened
Release of a Contaminant.
(e) To the best of the Borrower's knowledge, none of the present or
past operations of the Borrower and its Subsidiaries is the subject of any
investigation by any Governmental Authority evaluating whether any remedial
action is needed to respond to a Release or threatened Release of a
Contaminant.
(f) There is not now, nor to the best of the Borrower's knowledge has
there ever been on or in the Real Estate:
(1) any underground storage tanks or surface impoundments,
(2) any asbestos-containing material, or
(3) any polychlorinated biphenyls (PCBs) used in hydraulic oils,
electrical transformers or other equipment.
(g) Neither the Borrower nor any of its Subsidiaries has filed any
notice under any requirement of Environmental Law reporting a spill or
accidental and unpermitted Release or discharge of a Contaminant into the
environment.
29
(h) Neither the Borrower nor any of its Subsidiaries has entered into
any negotiations or settlement agreements with any Person (including the
prior owner of its property) imposing material obligations or liabilities
on the Borrower or any of its Subsidiaries with respect to any remedial
action in response to the Release of a Contaminant or environmentally
related claim.
(i) None of the products manufactured, distributed or sold by the
Borrower or any of its Subsidiaries contain asbestos containing material.
(j) No Environmental Lien has attached to the Real Estate.
6.17 No Violation of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could
reasonably be expected to have a Material Adverse Effect.
6.18 No Default. Neither the Borrower nor any of its Subsidiaries is
in default with respect to any note, indenture, loan agreement, mortgage,
lease, deed, or other agreement to which the Borrower or such Subsidiary is
a party or by which it is bound, which default could reasonably be expected
to have a Material Adverse Effect.
6.19 ERISA Compliance. Except as specifically disclosed in Schedule
6.19:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best
knowledge of the Borrower, nothing has occurred which would cause the loss
of such qualification. The Borrower and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to
any Plan.
(b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably
be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected
to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007
of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability (and no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would result
in such liability) under Section 4201 or 4243 of ERISA with respect to a
Multi-employer Plan; and (v) neither the Borrower nor any ERISA Affiliate
has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
6.20 Taxes. The Borrower and its Subsidiaries have filed all federal
and other tax returns and reports required to be filed, and have paid all
federal and other taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise
due and payable unless such unpaid taxes and assessments would constitute a
Permitted Lien.
30
6.21 Regulated Entities. None of the Borrower, any Person controlling
the Borrower, or any Subsidiary, is an "Investment Company" within the
meaning of the Investment Company Act of 1940. The Borrower is not subject
to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities
code or law, or any other federal or state statute or regulation limiting
its ability to incur indebtedness.
6.22 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely (a) to refinance existing Debt, (b) to pay the costs
and expenses related to this Agreement, (c) for working capital purposes,
and (d) for general corporate purposes. None of such proceeds will be used
for the purpose of purchasing or carrying any "margin stock" as defined in
Regulations T, U, or X of the Board of Governors of the Federal Reserve
System or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of such Regulations. No part of the
proceeds of the Loan will be used for any purpose which violates, or is
inconsistent with, the provisions of Regulation X. Neither the Borrower nor
any Subsidiary is engaged in the business of purchasing or selling Margin
Stock or extending credit for the purpose of purchasing or carrying Margin
Stock. Following the application of the proceeds of each Loan or drawing
under each Letter of Credit, not more than 25% of the value of the assets
of the Borrower or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any
Lender relating to Debt will be Margin Stock.
6.23 Copyrights, Patents, Trademarks and Licenses, etc. The Borrower
owns or is licensed or otherwise has the right to use all of the patents,
trademarks, service marks, trade names, copyrights, contractual franchises,
licenses, rights of way, authorizations and other rights that are
reasonably necessary for the operation of its businesses, without conflict
with the rights of any other Person. To the best knowledge of the Borrower,
no slogan or other advertising device, product, process, method, substance,
part or other material now employed, or now contemplated to be employed, by
the Borrower or any Subsidiary infringes upon any rights held by any other
Person. No claim or litigation regarding any of the foregoing is pending or
to the best of Borrower's knowledge, threatened, and no patent, invention,
device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Borrower, proposed,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.24 No Material Adverse Change. No Material Adverse Effect has
occurred since the latest date of the Financial Statements delivered to the
Lenders.
6.25 Full Disclosure. None of the representations or warranties made
by the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of the Borrower or any Subsidiary in connection
with the Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Borrower to the Lenders prior to the
Closing Date), contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.
6.26 Material Agreements. Schedule 6.26 hereto sets forth as of the
Closing Date all material agreements and contracts to which the Borrower or
any of its Subsidiaries is a party or is bound as of the date hereof.
6.27 Bank Accounts. Schedule 6.27 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by the Borrower
with any bank or other financial institution.
31
6.28 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower or any of its Subsidiaries of this Agreement or any
other Loan Document, except for filings necessary to perfect security
interests and the payment of fees related thereto. Borrower is authorized
to perform all services under its carriage agreements, has all permits and
licenses issued by the U.S. Department of Transportation, or its successor,
the Surface Transportation Board, or by all applicable state or local
regulatory agencies necessary to conduct its business. Borrower is
authorized to transport, as a motor contract carrier, freight of all kinds
in interstate and intrastate commerce from, to, and between all points and
places in the United States.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that so long as any of
the Obligations remain outstanding or this Agreement is in effect:
7.1 Taxes and Other Obligations. The Borrower shall, and shall cause
each of its Subsidiaries to, (a) file when due all tax returns and other
reports which it is required to file; (b) pay, or provide for the payment,
when due, of all taxes, fees, assessments and other governmental charges
against it or upon its property, income and franchises, make all required
withholding and other tax deposits, and establish adequate reserves for the
payment of all such items, and provide to the Agent and the Lenders, upon
request, satisfactory evidence of its timely compliance with the foregoing;
and (c) pay when due all Debt owed by it and all claims of materialmen,
mechanics, carriers, warehousemen, landlords, processors and other like
Persons, and all other indebtedness owed by it and perform and discharge in
a timely manner all other obligations undertaken by it; provided, however,
so long as the Borrower has notified the Agent in writing, neither the
Borrower nor any of its Subsidiaries need pay any tax, fee, assessment, or
governmental charge (i) it is contesting in good faith by appropriate
proceedings diligently pursued, (ii) as to which the Borrower or its
Subsidiary, as the case may be, has established proper reserves as required
under GAAP, and (iii) the nonpayment of which does not result in the
imposition of a Lien (other than a Permitted Lien).
7.2 Legal Existence and Good Standing. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain its legal existence and its
qualification and good standing in all jurisdictions in which the failure
to maintain such existence and qualification or good standing could
reasonably be expected to have a Material Adverse Effect.
7.3 Compliance with Law and Agreements; Maintenance of Licenses. The
Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the
Federal Fair Labor Standards Act and all Environmental Laws), except for
such non-compliance as would not have a Material Adverse Effect. The
Borrower shall, and shall cause each of its Subsidiaries to, obtain and
maintain all licenses, permits, franchises, and governmental authorizations
necessary to own its property and to conduct its business as conducted on
the Closing Date. The Borrower shall not modify, amend or alter its
certificate or articles of incorporation, or its limited liability company
operating agreement or limited partnership agreement, as applicable, other
than in a manner which does not adversely affect the rights of the Lenders
or the Agent.
32
7.4 Maintenance of Property; Inspection of Property.
(a) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain all of its property necessary and useful in the conduct of its
business, in good operating condition and repair, ordinary wear and tear
excepted.
(b) The Borrower shall permit representatives and independent
contractors of the Agent (at the expense of the Borrower not to exceed four
(4) times per year unless an Event of Default has occurred and is
continuing) to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or
abstracts therefrom and to discuss its affairs, finances and accounts with
its directors, officers and independent public accountants, at such
reasonable times during normal business hours and as soon as may be
reasonably desired, upon reasonable advance notice to the Borrower;
provided, however, when an Event of Default exists, the Agent or any Lender
may do any of the foregoing at the expense of the Borrower at any time
during normal business hours and without advance notice.
7.5 Insurance.
(a) The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers
having a rating of at least A or better by Best Rating Guide, insurance
against loss or damage by fire with extended coverage; theft, burglary,
pilferage and loss in transit; public liability and third party property
damage; larceny, embezzlement or other criminal liability; business
interruption; public liability and third party property damage; and such
other hazards or of such other types as is customary for Persons engaged in
the same or similar business, as the Agent, in its discretion, or acting at
the direction of the Required Lenders, shall specify, in amounts, and under
policies acceptable to the Agent and the Required Lenders
(b) The Borrower shall cause the Agent, for the ratable benefit of the
Agent and the Lenders, to be named as secured party or mortgagee and sole
loss payee or additional insured, in a manner acceptable to the Agent. Each
policy of insurance shall contain a clause or endorsement requiring the
insurer to give not less than thirty (30) days' prior written notice to the
Agent in the event of cancellation of the policy for any reason whatsoever
and a clause or endorsement stating that the interest of the Agent shall
not be impaired or invalidated by any act or neglect of the Borrower or any
of its Subsidiaries or the owner of any Real Estate for purposes more
hazardous than are permitted by such policy. All premiums for such
insurance shall be paid by the Borrower when due, and certificates of
insurance and, if requested by the Agent or any Lender, photocopies of the
policies, shall be delivered to the Agent, in each case in sufficient
quantity for distribution by the Agent to each of the Lenders. If the
Borrower fails to procure such insurance or to pay the premiums therefor
when due, the Agent may, and at the direction of the Required Lenders
shall, do so from the proceeds of Revolving Loans.
7.6 Insurance and Condemnation Proceeds.The Borrower shall promptly
notify the Agent and the Lenders of any loss, damage, or destruction to the
Collateral, exceeding $250,000, whether or not covered by insurance. The
Agent is hereby authorized to collect all insurance and condemnation
proceeds in respect of Collateral directly and to apply them, after
deducting from such proceeds the reasonable expenses, if any, incurred by
the Agent in the collection or handling thereof, ratably, to the reduction
of the Obligations in the order provided for in Section 3. 3.
7.7 Environmental Laws.
(a) The Borrower shall, and shall cause each of its Subsidiaries to,
33
conduct its business in compliance with all Environmental Laws applicable
to it, including those relating to the generation, handling, use, storage,
and disposal of any Contaminant, except where such non-compliance would not
have a Material Adverse Effect. The Borrower shall, and shall cause each of
its Subsidiaries to, take prompt and appropriate action to respond to any
non-compliance with Environmental Laws and shall regularly report to the
Agent on such response.
(b) Without limiting the generality of the foregoing, the Borrower
shall submit to the Agent and the Lenders annually, commencing on the first
Anniversary Date, and on each Anniversary Date thereafter, an update of the
status of each material environmental compliance or liability issue. The
Agent or any Lender may request copies of technical reports prepared by the
Borrower and its communications with any Governmental Authority to
determine whether the Borrower or any of its Subsidiaries is proceeding
reasonably to correct, cure or contest in good faith any alleged
non-compliance or environmental liability. The Borrower shall, at the
Agent's or the Required Lenders' request and at the Borrower's expense, (i)
retain an independent environmental engineer acceptable to the Agent to
evaluate the site, including tests if appropriate, where the material
non-compliance or alleged material non-compliance with Environmental Laws
has occurred and prepare and deliver to the Agent, in sufficient quantity
for distribution by the Agent to the Lenders, a report setting forth the
results of such evaluation, a proposed plan for responding to any
environmental problems described therein, and an estimate of the costs
thereof, and (ii) provide to the Agent and the Lenders a supplemental
report of such engineer whenever the scope of the environmental problems,
or the response thereto or the estimated costs thereof, shall increase in
any material respect.
7.8 Compliance with ERISA. The Borrower shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and
other federal or state law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (c) make all
required contributions to any Plan subject to Section 412 of the Code; (d)
not engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; and (e) not engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
7.9 Mergers, Consolidations or Sales. Except as permitted by Section
7.28, neither the Borrower nor any of its Subsidiaries shall enter into any
transaction of merger, reorganization, or consolidation, or transfer, sell,
assign, lease, or otherwise dispose of all or any part of its property, or
wind up, liquidate or dissolve, or agree to do any of the foregoing, except
for: (i) sales or other dispositions of real property described on Schedule
7.9 attached hereto, or otherwise consented to by Agent; and (ii) sales or
other dispositions of Rolling Stock and other Equipment in the ordinary
course of business in accordance with standard business practices. The
Borrower shall apply the proceeds of all sales of real property, Rolling
Stock, and other Equipment to the Loans in accordance with Sections 3.3(b).
7.10 Distributions; Capital Change; Restricted Investments. Neither
the Borrower nor any of its Subsidiaries shall (i) directly or indirectly
declare or make, or incur any liability to make, any Distribution, except
Distributions to the Borrower by its Subsidiaries, (ii) make any change in
its capital structure which could have a Material Adverse Effect or (iii)
make any Restricted Investment.
7.11 Transactions Affecting Collateral or Obligations. Neither the
Borrower nor any of its Subsidiaries shall enter into any transaction which
would be reasonably expected to have a Material Adverse Effect.
7.12 Guaranties. Neither the Borrower nor any of its Subsidiaries
shall make, issue, or become liable on any Guaranty, except Guaranties of
the Obligations in favor of the Agent.
34
7.13 Debt. Neither the Borrower nor any of its Subsidiaries shall
incur or maintain any Debt, other than: (a) the Obligations; (b) Debt
described on Schedule 6.9; (c) Capital Leases of Equipment and purchase
money secured Debt incurred to purchase Equipment and Debt secured by real
property described in Schedule 7.30(c), provided that (i) Liens securing
the same attach only to the Equipment acquired by the incurrence of such
Debt, or in the case of the real property Liens, such real property, and
(ii) the aggregate amount of such Debt (including Capital Leases)
outstanding does not exceed $50,000,000 at any time; (d) other Debt not
exceeding $100,000 in aggregate outstanding principal amount; and (e) Debt
evidencing a refunding, renewal or extension of the Debt described on
Schedule 6.9; provided that (i) the principal amount thereof is not
increased, (ii) the Liens, if any, securing such refunded, renewed or
extended Debt do not attach to any assets in addition to those assets, if
any, securing the Debt to be refunded, renewed or extended, (iii) no Person
that is not an obligor or guarantor of such Debt as of the Closing Date
shall become an obligor or guarantor thereof, and (iv) the terms of such
refunding, renewal or extension are no less favorable to the Borrower, the
Agent or the Lenders than the original Debt.
7.14 Prepayment. Neither the Borrower nor any of its Subsidiaries
shall voluntarily prepay any Debt, except the Existing SunTrust Debt and
the Obligations in accordance with the terms of this Agreement, except as
otherwise approved by the Agent in writing.
7.15 Transactions with Affiliates. Except as set forth below, neither
the Borrower nor any of its Subsidiaries shall, sell, transfer, distribute,
or pay any money or property, including, but not limited to, any fees or
expenses of any nature (including, but not limited to, any fees or expenses
for management services), to any Affiliate, or lend or advance money or
property to any Affiliate, or invest in (by capital contribution or
otherwise) or purchase or repurchase any stock or indebtedness, or any
property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, and except as permitted by Section 7.19
hereof, while no Event of Default has occurred and is continuing, the
Borrower and its Subsidiaries may engage in transactions with Affiliates in
the ordinary course of business consistent with past practices, in amounts
and upon terms fully disclosed to the Agent and the Lenders, and no less
favorable to the Borrower and its Subsidiaries than would be obtained in a
comparable arm's-length transaction with a third party who is not an
Affiliate.
7.16 Investment Banking and Finder's Fees. Neither the Borrower nor
any of its Subsidiaries shall pay or agree to pay, or reimburse any other
party with respect to, any investment banking or similar or related fee,
underwriter's fee, finder's fee, or broker's fee to any Person in
connection with this Agreement, except for fees payable to Agent and its
Affiliates. The Borrower shall defend and indemnify the Agent and the
Lenders against and hold them harmless from all claims of any Person that
the Borrower is obligated to pay for any such fees, and all costs and
expenses (including attorneys' fees) incurred by the Agent and/or any
Lender in connection therewith.
7.17 Business Conducted. The Borrower shall not and shall not permit
any of its Subsidiaries to, engage directly or indirectly, in any line of
business that is substantially different than the businesses in which the
Borrower is engaged on the Closing Date.
7.18 Liens. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any property now
owned or hereafter acquired by any of them, except Permitted Liens, and
Liens, if any, in effect as of the Closing Date described in Schedule 6.9
securing Debt described in Schedule 6.9 and Liens securing Capital Leases
and purchase money Debt and Debt secured by certain real property permitted
in Section 7.13.
35
7.19 Sale and Leaseback Transactions. Neither the Borrower nor any of
its Subsidiaries shall, directly or indirectly, enter into any arrangement
with any Person providing for the Borrower or such Subsidiary to lease or
rent property that the Borrower or such Subsidiary has sold or will sell or
otherwise transfer to such Person, other than the Southwest Sale/Leaseback,
the GE Capital Sale/Leaseback, and any sale and leaseback of any real
property of Borrower described in Schedule 7.30, or all or any of the 2005
Sterling tractors, upon terms and conditions in accordance with standard
business practices.
7.20 Subsidiaries. Except as permitted by Section 7.28, the Borrower
shall not, directly or indirectly, organize, create, acquire or permit to
exist any Subsidiary. Within two Business Days of the Closing Date,
Borrower shall cause Central Receivables, Inc. to be merged into Borrower
and shall provide Agent with written evidence of such merger.
7.21 Fiscal Year. The Borrower shall not change its Fiscal Year.
7.22 Capital Expenditures. Neither the Borrower nor any of its
Subsidiaries shall make or incur any Capital Expenditure if, after giving
effect thereto, the aggregate amount of all Capital Expenditures by the
Borrower and its Subsidiaries on a consolidated basis would exceed
$10,000,000 in the Fiscal Year ending December 31, 2005, and thereafter as
follows:
- ----------------------------------------------------------------------------------------------------------------------
Capital Expenditures
- --------------------------- ------------------------------------------------- ----------------------------------------
Fiscal Year Ending If Fixed Charge Coverage Ratio If Fixed Charge Coverage
------------------
< 1.0 to 1.0 after giving effect to such Ratio > 1.0 to 1.0 after
Capital Expenditure giving effect to such Capital
- ------------------- Expenditure
-----------
- --------------------------- ------------------------------------------------- ----------------------------------------
December 31, 2006 $7,000,000 After giving effect to such Capital
- --------------------------- ------------------------------------------------- Expenditure(s), Availability shall be
December, 31, 2007 $7,000,000 greater than $30,000,000 for a period
- --------------------------- ------------------------------------------------- of at least 60 days after such Capital
December 31, 2008 $7,000,000 Expenditure
- --------------------------- -------------------------------------------------
7.23 Fixed Charge Coverage Ratio/Minimum EBITDA. At all times from the
earlier of: (i) delivery by the Borrower to the Agent of the April, 2005
financial statements in compliance with Section 5.2(c), and (ii) May 30,
2005, until the earlier of: delivery by the Borrower to the Agent of the
May, 2006 financial statements in compliance with Section 5.2(c), and (ii)
June 30, 2006, as of the last day of each fiscal month of the Borrower set
forth below, the fiscal year-to-date (fiscal year-to-date in fiscal year
2005 shall mean fiscal year-to-date, and with respect to each month in
fiscal year 2006, shall mean the immediately preceding twelve fiscal
months) EBITDA of Parent and its Subsidiaries shall not be less than the
amount set forth opposite each date. During any period commencing on the
date that Availability exceeds $15,000,000 for at least 60 consecutive
Business Days, and ending on any date on which Availability is less than
$15,000,000, Borrower shall not be required to maintain the Minimum
Year-to-Date EBITDA set forth below. For purposes of this Section 7.23,
Availability shall not be deemed to be reduced by the reduction of
Availability attributed to the issuance of any Replacement Letters of
Credit. Commencing on and after the earlier of: (i) August 15, 2006, and
(ii) the delivery of the June, 2006 quarterly financial statements in
compliance with Section 5.2(b), on any date Availability is less than
36
$15,000,000, the Borrower will maintain a Fixed Charge Coverage Ratio for
each period of four consecutive fiscal quarters ended on the last day of
each fiscal quarter of not less than 1.0 to 1.0. For purposes of this
Section 7.23, on any date compliance hereunder is required, compliance
shall commence on such date with reference to then most recently previously
reported monthly or quarterly financial information, as the case may be.
- ------------------------------------------------------------ ---------------------------------------------------------
Fiscal Month Ending on Minimum Year-to-Date EBITDA
- ------------------------------------------------------------ ---------------------------------------------------------
April 30, 2005 ($585,000)
- ------------------------------------------------------------ ---------------------------------------------------------
May 31, 2005 $143,000
- ------------------------------------------------------------ ---------------------------------------------------------
June 30, 2005 $1,177,000
- ------------------------------------------------------------ ---------------------------------------------------------
July 31, 2005 $2,651,000
- ------------------------------------------------------------ ---------------------------------------------------------
August 31, 2005 $4,794,000
- ------------------------------------------------------------ ---------------------------------------------------------
September 30, 2005 $7,174,000
- ------------------------------------------------------------ ---------------------------------------------------------
October 31, 2005 $9,896,000
- ------------------------------------------------------------ ---------------------------------------------------------
November 30, 2005 $11,665,000
- ------------------------------------------------------------ ---------------------------------------------------------
December 31, 2005 $14,130,000
- ------------------------------------------------------------ ---------------------------------------------------------
January 31, 2006 $15,764,000
- ------------------------------------------------------------ ---------------------------------------------------------
February 28, 2006 $17,590,000
- ------------------------------------------------------------ ---------------------------------------------------------
March 31, 2006 $19,494,000
- ------------------------------------------------------------ ---------------------------------------------------------
April 30, 2006 $20,882,000
- ------------------------------------------------------------ ---------------------------------------------------------
May 31, 2006 $22,359,000
- ------------------------------------------------------------ ---------------------------------------------------------
June 30, 2006 $25,000,000
- ------------------------------------------------------------ ---------------------------------------------------------
7.24 Use of Proceeds. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Borrower or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (iv) to acquire any security in
any transaction that is subject to Section 13 or 14 of the Exchange Act.
7.25 Further Assurances. The Borrower shall execute and deliver, or
cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions,
as the Agent or any Lender may, from time to time, request to carry out the
terms and conditions of this Agreement and the other Loan Documents.
37
7.26 Collateral. To secure the full and complete payment and
performance of the Obligations, Borrower shall (and shall cause each
Subsidiary to) enter into Loan Documents (in form and substance acceptable
to the Agent) pursuant to which, among other things, each such entity
shall, to the extent permitted by applicable law, grant, pledge, assign,
and create first priority Agent's Liens (except to the extent Permitted
Liens affect such priority) in and to all Collateral owned by such entity.
Borrower agrees that all Rolling Stock (other than Rolling Stock subject to
Permitted Liens under subpart (j) of the definition of Permitted Liens, but
only so long as such Permitted Liens exist) shall be subject to Agent's
Liens, and Borrower shall deliver all original certificates of title
relating thereto to the Agent, together with any necessary releases of
Liens, lien documents, powers of attorney, or other certificates,
instruments, documents, odometer readings, and other matters so that the
Agent shall at all times on and after March 31, 2005 have a perfected,
first priority Agent's Lien on all Rolling Stock (other than Rolling Stock
subject to Permitted Liens under subpart (j) of the definition of Permitted
Liens, but only so long as such Permitted Liens exist), and other than the
Rolling Stock described on Schedule 7.30(a) hereto. Borrower agrees that
upon the occurrence of any Default or Event of Default hereunder, Agent
may, but shall not be required to perfect its liens on the Rolling Stock
described on Schedule 7.30(a) hereto. Borrower also agrees to execute,
deliver, and record mortgages and/or deeds of trust on each of the real
properties described in Schedule 7.30(c) attached hereto, creating valid,
perfected, first priority Agent's Liens on such real property, subject only
to such exceptions as are acceptable to Agent, all in form and substance
acceptance to Agent on or before February 28, 2005. In the event Borrower
creates any investment accounts, it agrees to enter into a control
agreement, in form and substance acceptable to Agent, executed and
delivered by Borrower, Agent, and the applicable broker, bank, or
investment house with respect to such investment account.
7.27 Tax Shelter Regulations.
(a) The Borrower does not intend to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such intention, it
will promptly notify the Agent thereof. If the Borrower so notifies the
Agent, the Borrower acknowledges that one or more of the Lenders may treat
its Loans and/or its interest in Non-Ratable Loans and/or Agent Advances
and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such
Treasury Regulation.
(b) Neither the Agent nor any Lender intends to treat the Loans and/or
Letters of Credit and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4).
In the event the Agent or any Lender determines to take any action
inconsistent with this intention, such person will so notify Borrower. If
the Agent or any Lender so notifies Borrower, the Agent and such Lender
acknowledge that the Borrower may treat any Loans and/or Letter of Credit
as part of a transaction that is subject to Treasury Regulation Section
301.6112-1, and the Borrower will maintain the lists and other records
required by such Treasury Regulation.
7.28 Permitted Acquisitions. The Borrower may consummate Acquisitions,
so long as:
(a) the Acquisition by the Borrower is of a Person or assets which are
in substantially the same lines of business as the business conducted by
the Borrower on the date hereof, or any other business reasonably related
thereto;
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(b) as of the closing thereof, each Acquisition has been approved and
recommended by the board of directors (or equivalent body) of the Person to
be acquired or from which such business or asset is to be acquired;
(c) prior to the closing of such Acquisition (other than an
Acquisition of assets), the Person to be acquired is Solvent;
(d) as of the closing of the Acquisition, after giving effect thereto,
the Borrower must be Solvent and the Borrower and its Subsidiaries, on a
consolidated basis, must be Solvent;
(e) as of the closing of any such Acquisition, (i) such Acquisition is
structured as a merger, a Borrower or a wholly-owned Subsidiary must be the
surviving entity after giving effect to such merger; and (ii) if such
Acquisition is structured as a stock/equity acquisition, the Borrower shall
own not less than a 100% interest in the entity being acquired and such
acquired entity will be a domestic company that is or becomes a borrower or
a guarantor hereunder and grants a lien on its assets to Agent for the
benefit of the Agent and the Lenders, all in a manner satisfactory to
Agent, as set forth in subparagraph (g) below;
(f) as of the closing of any Acquisition, no Default or Event of
Default shall exist or occur as a result thereof, and after giving effect
thereto;
(g) if the Acquisition target is to be a Subsidiary or if the survivor
is a Subsidiary, then Borrower shall cause such Subsidiary to deliver
articles of incorporation, bylaws, and resolutions (or other corresponding
constituent documents) and such opinions as the Agent shall require and to
execute a joinder agreement, guaranty, a security agreement, and pledge
agreement (if applicable) as shall be required by the Agent, for the
benefit of the Agent and the Lenders, in such Subsidiary's assets, to
secure the Obligations;
(h) the absence of action, suit, investigation, or proceeding pending
or threatened in a any court or before any arbitrator or Governmental
Authority that affects the target or the proposed Acquisition, which could
reasonably be expected to have a Material Adverse Effect on the target or
the Loan Parties;
(i) no Acquisition results in the formation or Acquisition of a
Foreign Subsidiary of the Borrower;
(j) the Purchase Price for such Acquisition, when aggregated with the
Purchase Price of all other Acquisitions consummated during such Fiscal
Year, does not exceed $5,000,000 in the aggregate;
(k) immediately prior to such Acquisition and after giving effect to
any Revolving Loans to be made in connection therewith, (A) there is at
least $30,000,000 of Availability, and (B) the Fixed Charge Coverage Ratio
for the most-recently ended four fiscal quarters after giving pro forma
effect to the transaction, is at least 1.00 to 1.00; for purposes hereof,
EBITDA for any period shall include on a pro forma basis all EBITDA for the
Parent and its Subsidiaries for such period relating to assets acquired
(including any Subsidiaries formed or acquired) in accordance with this
Agreement during such period, but shall exclude on a pro forma basis all
EBITDA for the Parent and its Subsidiaries for such period relating to any
such assets disposed of in accordance with this Agreement during such
period; and
39
(l) for the purposes of calculating Availability under this Section
7.28, no assets of the Person to be acquired or the assets to be acquired
shall be included in the Borrowing Base unless such assets are acceptable
to the Agent in its sole discretion.
7.29 Appraisals. Upon Agent's request, Agent may require annually, on
or before January 31 of each year, commencing January 31, 2006, an updated
appraisal of the Eligible Rolling Stock, performed by an appraiser
acceptable to Agent, and in form and substance acceptable to Agent
("Required Appraisal"). Notwithstanding the foregoing, in the event
Availability on any day is equal to or less than $25,000,000, but greater
than $20,000,000 Agent may request two Required Appraisals during the
twelve months following such request. Further notwithstanding the
foregoing, in the event the Availability on any day is equal to or less
than $20,000,000 Agent may request four Required Appraisal during the
twelve months following such request. Borrower shall cooperate with all
reasonable requests and do all acts reasonably required by the Agent and
any Persons employed by it as appraisers to assure the timely completion of
such new appraisals, and Borrower shall pay to Agent the actual charges
paid or incurred therefor.
7.30 Post Closing Agreements.
(a) Borrower agrees that it shall cause the Agent's Lien on all
Rolling Stock owned by the Borrower as of the Closing Date (other than
Rolling Stock which is subject to a perfected Lien in favor of a third
party as of the Closing Date and as of March 31, 2005 and the Rolling Stock
described on a list furnished by Borrower to Agent on the Closing Date) to
be properly perfected on or before March 31, 2005; provided that the
failure of the Agent to receive a certificate of title noting the Agent's
Lien thereon from the applicable Governmental Authority prior to March 31,
2005 shall not constitute a breach of this Section 7.30(a) so long as the
Borrower has taken all action necessary to obtain such certificate of title
with the Agent's Lien noted thereon.
(b) Borrower will cause each of its principal depository accounts,
including operating, administrative, cash management, collection, and other
deposit accounts to be maintained with Agent (unless Agent otherwise agrees
in writing) to be maintained at the Agent, on or before March 31, 2005.
(c)......Borrower agrees to execute, deliver, and record mortgages
and/or deeds of trust on all of the Borrower's owned real properties,
including, without limitation, those described in Schedule 7.30(c) attached
hereto, creating valid, perfected, first priority Agent's Liens on such
real property, subject only to such exceptions as are acceptable to Agent,
all in form and substance acceptance to Agent on or before February 28,
2005.
7.31 Solvency. The Borrower shall at all times be Solvent, including
prior to and after giving effect to the Borrowings and the issuance of the
Letters of Credit hereunder.
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the
Closing Date, and the obligation of the Agent to cause the Letter of Credit
Issuer to issue any Letter of Credit on the Closing Date, are subject to
the following conditions precedent having been satisfied in a manner
satisfactory to the Agent and each Lender:
40
(a) This Agreement and the other Loan Documents shall have been
executed by each party hereto and thereto and the Borrower shall have
performed and complied with all covenants, agreements and conditions
contained herein and in the other Loan Documents which are required to be
performed or complied with by the Borrower before or on such Closing Date.
(b) Upon making the Revolving Loans (including such Revolving Loans
made to finance the Closing Fee or otherwise as reimbursement for fees,
costs and expenses then payable under this Agreement) and with all its
obligations current, the Borrower shall have Availability of at least
$14,000,000 (without giving effect to the deduction required by subpart (d)
of the definition of Availability).
(c) All representations and warranties made hereunder and in the other
Loan Documents shall be true and correct as if made on such date.
(d) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of
Credit to be issued on the Closing Date.
(e) The Agent and the Lenders shall have received such opinions of
counsel for the Borrower and its Subsidiaries as the Agent or any Lender
shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel.
(f) The Agent shall have received:
(i) acknowledgment copies of proper financing statements, duly filed
on or before the Closing Date under the UCC of all jurisdictions that the
Agent may deem necessary or desirable in order to perfect the Agent's
Liens;
(ii) duly executed documents acceptable in form and substance to Agent
to perfect Agent's Liens on the Rolling Stock (other than Rolling Stock
which is subject to a perfected Lien in favor of a third party as of the
Closing Date and as of March 31, 2005 and the Rolling Stock described on
Schedule 7.30 attached hereto);
(iii) original titles to all Rolling Stock other than Rolling Stock
which is subject to a perfected Lien in favor of a third party as of the
Closing Date; and
(iv) duly executed UCC-3 Termination Statements and such other
instruments, in form and substance satisfactory to the Agent, as shall be
necessary to terminate and satisfy all Liens on the Property of the
Borrower and its Subsidiaries except Permitted Liens.
(g) The Borrower shall have paid all fees and expenses of the Agent
and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent invoiced.
(h) The Agent shall have received evidence, in form, scope, and
substance, reasonably satisfactory to the Agent, of all insurance coverage
as required by this Agreement.
(i) The Agent and the Lenders shall have had an opportunity, if they
so choose, to examine the books of account and other records and files of
the Borrower and to make copies thereof, and to conduct a pre-closing audit
which shall include, without limitation, verification of Rolling Stock,
41
Accounts, and the Borrowing Base, and the results of such examination and
audit shall have been satisfactory to the Agent and the Lenders in all
respects.
(j) All proceedings taken in connection with the execution of this
Agreement, all other Loan Documents and all documents and papers relating
thereto shall be satisfactory in form, scope, and substance to the Agent
and the Lenders.
(k) The Agent shall have received an appraisal, satisfactory in form
and substance to Agent, of all Rolling Stock included in the Borrowing
Base.
(l) Borrower shall have established all of its deposit accounts at the
Bank or shall have entered into Blocked Account Agreements or control
agreements (on terms acceptable to the Agent) with respect to all deposit
accounts not established at the Bank, for which the Agent has requested
such Blocked Account Agreements.
(m) Without limiting the generality of the items described above, the
Borrower and each Person guarantying or securing payment of the Obligations
shall have delivered or caused to be delivered to the Agent (in form and
substance reasonably satisfactory to the Agent), the financial statements,
instruments, resolutions, documents, agreements, certificates, opinions,
pay off letters, and other items set forth on the "Closing Checklist"
delivered by the Agent to the Borrower prior to the Closing Date.
The acceptance by the Borrower of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and
warranty made by the Borrower to the effect that all of the conditions
precedent to the making of such Loans or the issuance of such Letters of
Credit have been satisfied, with the same effect as delivery to the Agent
and the Lenders of a certificate signed by a Responsible Officer of the
Borrower, dated the Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 8.1 have been fulfilled to the
satisfaction of such Lender, (ii) the decision of such Lender to execute
and deliver to the Agent an executed counterpart of this Agreement was made
by such Lender independently and without reliance on the Agent or any other
Lender as to the satisfaction of any condition precedent set forth in this
Section 8.1, and (iii) all documents sent to such Lender for approval
consent, or satisfaction were acceptable to such Lender.
8.2 Conditions Precedent to Each Loan. The obligation of the Lenders
to make each Loan, including the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer
to issue any Letter of Credit shall be subject to the further conditions
precedent that on and as of the date of any such extension of credit:
(a) The following statements shall be true, and the acceptance by the
Borrower of any extension of credit shall be deemed to be a statement to
the effect set forth in clauses (i), (ii) and (iii) with the same effect as
the delivery to the Agent and the Lenders of a certificate signed by a
Responsible Officer, dated the date of such extension of credit, stating
that:
(i) The representations and warranties contained in this Agreement and
the other Loan Documents are correct in all material respects on and as of
the date of such extension of credit as though made on and as of such date,
other than any such representation or warranty which relates to a specified
prior date and except to the extent the Agent and the Lenders have been
notified in writing by the Borrower that any representation or warranty is
42
not correct and the Required Lenders have explicitly waived in writing
compliance with such representation or warranty; and
(ii) No event has occurred and is continuing, or would result from
such extension of credit, which constitutes a Default or an Event of
Default; and
(iii) No event has occurred and is continuing, or would result from
such extension of credit, which has had or would have a Material Adverse
Effect.
(b) No such Borrowing shall exceed Availability, provided, however,
that the foregoing conditions precedent are not conditions to each Lender
participating in or reimbursing the Bank or the Agent for such Lenders' Pro
Rata Share of any Non-Ratable Loan or Agent Advance made in accordance with
the provisions of Sections 1.2(h) and (i).
ARTICLE 9
DEFAULT; REMEDIES
9.1 Events of Default. It shall constitute an event of default ("Event
of Default") if any one ----------------- or more of the following shall
occur for any reason:
(a) any failure by the Borrower to pay the principal of or interest or
premium on any of the Obligations or any fee or other amount owing
hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the Borrower
in this Agreement or by the Borrower or any of its Subsidiaries in any of
the other Loan Documents, any Financial Statement, or any certificate
furnished by the Borrower or any of its Subsidiaries at any time to the
Agent or any Lender shall prove to be untrue in any material respect as of
the date on which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or performance of
any of the covenants and agreements contained in Sections 5.2(k), 7.2, 7.5,
7.9-7.27, or Section 11 of the Security Agreement, (ii) any default shall
occur in the observance or performance of any of the covenants and
agreements contained in Sections 5.2 (other than 5.2(k) or 5.3) and such
default shall continue for three (3) days or more; or (iii) any default
shall occur in the observance or performance of any of the other covenants
or agreements contained in any other Section of this Agreement or any other
Loan Document, any other Loan Documents, or any other agreement entered
into at any time to which the Borrower or any Subsidiary and the Agent or
any Lender are party (including in respect of any Bank Products) and such
default shall continue for fifteen (15) days or more;
(d) any default shall occur with respect to any Debt (other than the
Obligations) of the Borrower or any of its Subsidiaries in an outstanding
principal amount which individually or in the aggregate exceeds $500,000,
or under any agreement or instrument under or pursuant to which any such
Debt may have been issued, created, assumed, or guaranteed by the Borrower
or any of its Subsidiaries, and such default shall continue for more than
the period of grace, if any, therein specified, if the effect thereof (with
or without the giving of notice or further lapse of time or both) is to
accelerate, or to permit the holders of any such Debt to accelerate, the
maturity of any such Debt; or any such Debt shall be declared due and
payable or be required to be prepaid (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof;
43
(e) the Borrower or any of its Subsidiaries shall (i) file a voluntary
petition in bankruptcy or file a voluntary petition or an answer or
otherwise commence any action or proceeding seeking reorganization,
arrangement or readjustment of its debts or for any other relief under the
federal Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing, or
consent to, approve of, or acquiesce in, any such petition, action or
proceeding; (ii) apply for or acquiesce in the appointment of a receiver,
assignee, liquidator, sequestrator, custodian, monitor, trustee or similar
officer for it or for all or any part of its property; (iii) make an
assignment for the benefit of creditors; or (iv) be unable generally to pay
its debts as they become due;
(f) an involuntary petition shall be filed or an action or proceeding
otherwise commenced seeking reorganization, arrangement, consolidation or
readjustment of the debts of the Borrower or any of its Subsidiaries or for
any other relief under the federal Bankruptcy Code, as amended, or under
any other bankruptcy or insolvency act or law, state or federal, now or
hereafter existing and such petition or proceeding shall not be dismissed
within thirty (30) days after the filing or commencement thereof or an
order of relief shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for the Borrower or any of its
Subsidiaries or for all or any part of its property shall be appointed or a
warrant of attachment, execution or similar process shall be issued against
any part of the property of the Borrower or any of its Subsidiaries;
(h) the Borrower or any of its Subsidiaries shall file a certificate
of dissolution under applicable state law or shall be liquidated, dissolved
or wound-up or shall commence or have commenced against it any action or
proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property of the Borrower or any of
its Subsidiaries shall be nationalized, expropriated or condemned, seized
or otherwise appropriated, or custody or control of such property or of the
Borrower or such Subsidiary shall be assumed by any Governmental Authority
or any court of competent jurisdiction at the instance of any Governmental
Authority, except where contested in good faith by proper proceedings
diligently pursued where a stay of enforcement is in effect;
(j) any Loan Document shall be terminated, revoked or declared void or
invalid or unenforceable or challenged by the Borrower or any other
obligor;
(k) one or more judgments, orders, decrees or arbitration awards is
entered against the Borrower involving in the aggregate liability (to the
extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related or unrelated
series of transactions, incidents or conditions, of $500,000 or more, and
the same shall remain unsatisfied, unvacated and unstayed pending appeal
for a period of thirty (30) days after the entry thereof;
(l) any loss, theft, damage or destruction of any item or items of
Collateral or other property of the Borrower or any Subsidiary occurs which
could reasonably be expected to cause a Material Adverse Effect and is not
adequately covered by insurance;
(m) there is filed against the Borrower or any of its Subsidiaries any
action, suit or proceeding under any federal or state racketeering statute
(including the Racketeer Influenced and Corrupt Organization Act of 1970),
which action, suit or proceeding (i) is not dismissed within one hundred
twenty (120) days, and (ii) could reasonably be expected to result in the
confiscation or forfeiture of any material portion of the Collateral;
44
(n) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens,
pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or any Lien with respect to any material portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid,
perfected and prior to all other Liens (other than Permitted Liens) or is
terminated, revoked or declared void;
(o) (i) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension
Plan, Multi-employer Plan or the PBGC in an aggregate amount in excess of
$250,000 ; (ii) the aggregate amount of Unfunded Pension Liability among
all Pension Plans at any time exceeds $250,000; or (iii) the Borrower or
any ERISA Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multi-employer
Plan in an aggregate amount in excess of $250,000;
(p) there occurs a Change of Control; or
(q) there occurs an event having a Material Adverse Effect.
9.2 Remedies.
(a) If a Default or an Event of Default exists, the Agent may, in its
discretion, and shall, at the direction of the Required Lenders, do one or
more of the following at any time or times and in any order, without notice
to or demand on the Borrower: (i) reduce the Maximum Revolver Amount, or
the advance rates against Eligible Accounts and/or Eligible Rolling Stock
used in computing the Borrowing Base, or reduce one or more of the other
elements used in computing the Borrowing Base; (ii) restrict the amount of
or refuse to make Revolving Loans; and (iii) restrict or refuse to provide
Letters of Credit or Credit Support. If an Event of Default exists, the
Agent shall, at the direction of the Required Lenders, do one or more of
the following, in addition to the actions described in the preceding
sentence, at any time or times and in any order, without notice to or
demand on the Borrower: (A) terminate the Commitments and this Agreement;
(B) declare any or all Obligations to be immediately due and payable;
provided, however, that upon the occurrence of any Event of Default
described in Sections 9.1(e), 9.1(f), 9.1(g), or 9.1(h), the Commitments
shall automatically and immediately expire and all Obligations shall
automatically become immediately due and payable without notice or demand
of any kind; (C) require the Borrower to cash collateralize all outstanding
Letter of Credit Obligations; and (D) pursue its other rights and remedies
under the Loan Documents and applicable law.
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have for the benefit of the Lenders, in addition to all other
rights of the Agent and the Lenders, the rights and remedies of a secured
party under the Loan Documents and the UCC; (ii) the Agent may, at any
time, take possession of the Collateral and keep it on the Borrower's
premises, at no cost to the Agent or any Lender, or remove any part of it
to such other place or places as the Agent may desire, or the Borrower
shall, upon the Agent's demand, at the Borrower's cost, assemble the
Collateral and make it available to the Agent at a place reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise,
at such prices and upon such terms as the Agent deems advisable, in its
sole discretion, and may, if the Agent deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place
of sale or of such postponed or adjourned sale without giving a new notice
of sale. Without in any way requiring notice to be given in the following
manner, the Borrower agrees that any notice by the Agent of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable
notice to the Borrower if such notice is mailed by registered or certified
mail, return receipt requested, postage prepaid, or is delivered personally
against receipt, at least five (5) Business Days prior to such action to
the Borrower's address specified in or pursuant to Section 13.8. If any
Collateral is sold on terms other than payment in full at the time of sale,
no credit shall be given against the Obligations until the Agent or the
Lenders receive payment, and if the buyer defaults in payment, the Agent
45
may resell the Collateral without further notice to the Borrower. In the
event the Agent seeks to take possession of all or any portion of the
Collateral by judicial process, the Borrower irrevocably waives: (A) the
posting of any bond, surety or security with respect thereto which might
otherwise be required; (B) any demand for possession prior to the
commencement of any suit or action to recover the Collateral; and (C) any
requirement that the Agent retain possession and not dispose of any
Collateral until after trial or final judgment. The Borrower agrees that
the Agent has no obligation to preserve rights to the Collateral or marshal
any Collateral for the benefit of any Person. The Agent is hereby granted a
license or other right to use, without charge, the Borrower's labels,
patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrower's rights under all
licenses and all franchise agreements shall inure to the Agent's benefit
for such purpose. The proceeds of sale shall be applied first to all
expenses of sale, including attorneys' fees, and then to the Obligations.
The Agent will return any excess to the Borrower and the Borrower shall
remain liable for any deficiency.
(c) If an Event of Default occurs, the Borrower hereby waives all
rights to notice and hearing prior to the exercise by the Agent of the
Agent's rights to repossess the Collateral without judicial process or to
reply, attach or levy upon the Collateral without notice or hearing.
ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date unless sooner terminated in accordance with the
terms hereof. The Agent upon direction from the Required Lenders may
terminate this Agreement without notice upon the occurrence of an Event of
Default. Upon the effective date of termination of this Agreement for any
reason whatsoever, all Obligations (including all unpaid principal, accrued
and unpaid interest and any early termination or prepayment fees or
penalties) shall become immediately due and payable and the Borrower shall
immediately arrange for the cancellation and return of Letters of Credit
then outstanding. Notwithstanding the termination of this Agreement, until
all Obligations are indefeasibly paid and performed in full in cash, the
Borrower shall remain bound by the terms of this Agreement and shall not be
relieved of any of its Obligations hereunder or under any other Loan
Document, and the Agent and the Lenders shall retain all their rights and
remedies hereunder (including the Agent's Liens in and all rights and
remedies with respect to all then existing and after-arising Collateral).
ARTICLE 11
AMENDMENTS; WAIVERs; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent with respect to any departure by the
Borrower therefrom, shall be effective unless the same shall be in writing
and signed by the Required Lenders (or by the Agent at the written request
of the Required Lenders) and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the
Lenders and the Borrower and acknowledged by the Agent, do any of the
following:
46
(i) increase or extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(iii) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under
any other Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or
any of them to take any action hereunder;
(v) increase any of the percentages set forth in the definition of the
Borrowing Base;
(vi) amend this Section or any provision of this Agreement providing
for consent or other action by all Lenders;
(vii) release any Guaranties of the Obligations or release Collateral
other than as permitted by Section 12.11;
(viii) change the definitions of "Majority Lenders" or "Required
Lenders"; or
(ix) increase the Maximum Revolver Amount, the Maximum Rolling Stock
Loan Amount, and Letter of Credit Subfacility;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (v) and (ix) above and any other terms of this
Agreement, make Agent Advances in accordance with Section 1.2(i) and, provided
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document and provided further, that Schedule 1.2
hereto (Commitments) may be amended from time to time by Agent alone to reflect
assignments of Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at Agent's
election, such fees may be paid only to those Lenders that agree to such
amendments, waivers or consents within the time specified for submission
thereof.
(c) If, in connection with any proposed amendment, waiver or consent :
(i) requiring the consent of all Lenders, the consent of Required
Lenders is obtained, but the consent of other Lenders is not obtained (any
such Lender whose consent is not obtained as described in this clause (i)
and in clause (ii) below being referred to as a "Non-Consenting Lender"),
or
(ii) requiring the consent of Required Lenders, the consent of
Majority Lenders is obtained,then, so long as the Agent is not a
47
Non-Consenting Lender, at the Borrower's request, the Agent or an Eligible
Assignee shall have the right (but not the obligation) with the Agent's
approval, to purchase from the Non-Consenting Lenders, and the
Non-Consenting Lenders agree that they shall sell, all the Non-Consenting
Lenders' Commitments for an amount equal to the principal balances thereof
and all accrued interest and fees with respect thereto through the date of
sale pursuant to Assignment and Acceptance Agreement(s), without premium or
discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent (which
consent shall not be unreasonably withheld), assign and delegate to one or
more Eligible Assignees (provided that no consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitments and the other rights and obligations of
such Lender hereunder, in a minimum amount of $5,000,000; (provided that,
unless an assignor Lender has assigned and delegated all of its Loans and
Commitments, no such assignment and/or delegation shall be permitted
unless, after giving effect thereto, such assignor Lender retains a
Commitment in a minimum amount of $5,000,000; provided, however, that the
Borrower and the Agent may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have
been given to the Borrower and the Agent by such Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to the Borrower and
the Agent an Assignment and Acceptance in the form of Exhibit F
("Assignment and Acceptance") together with any note or notes subject to
such assignment and (iii) the assignor Lender or Assignee has paid to the
Agent a processing fee in the amount of $3,500. The Borrower agrees to
promptly execute and deliver new promissory notes and replacement
promissory notes as reasonably requested by the Agent to evidence
assignments of the Loans and Commitments in accordance herewith.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations,
including, but not limited to, the obligation to participate in Letters of
Credit and Credit Support have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan
Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document furnished pursuant hereto or the attachment,
perfection, or priority of any Lien granted by the Borrower to the Agent or
any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under this Agreement or any other
Loan Document furnished pursuant hereto; (iii) such Assignee confirms that
it has received a copy of this Agreement, together with such other
48
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such Assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers,
including the discretionary rights and incidental power, as are reasonably
incidental thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of Section
11.2(a), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and
the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of the Borrower (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i)
the originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for
the performance of such obligations, (iii) the Borrower and the Agent shall
continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant has rights
to approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document except the matters set forth in
Section 11.1(a) (i), (ii) and (iii), and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent and subject to the same limitation as if
the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Board or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints Bank as its Agent under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto. The Agent agrees to act as such on the express conditions
contained in this Article 12. The provisions of this Article 12 are solely
49
for the benefit of the Agent and the Lenders and the Borrower shall have no
rights as a third party beneficiary of any of the provisions contained
herein. Notwithstanding any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Document or otherwise exist against the Agent. Without limiting
the generality of the foregoing sentence, the use of the term "agent" in
this Agreement with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties. Except
as expressly otherwise provided in this Agreement, the Agent shall have and
may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights or taking or refraining from taking any
actions which the Agent is expressly entitled to take or assert under this
Agreement and the other Loan Documents, including (a) the determination of
the applicability of ineligibility criteria with respect to the calculation
of the Borrowing Base, (b) the making of Agent Advances pursuant to Section
1.2(i), and (c) the exercise of remedies pursuant to Section 9.2, and any
action so taken or not taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects as long as such selection was made without
gross negligence or willful misconduct.
12.3 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in
any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Loan Document, or for any failure of the Borrower or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or
any of the Borrower's Subsidiaries or Affiliates.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against any
50
and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or all Lenders if so required by Section
11.1) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
12.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
unless the Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The Agent
will notify the Lenders of its receipt of any such notice. The Agent shall
take such action with respect to such Default or Event of Default as may be
requested by the Required Lenders in accordance with Section 9; provided,
however, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
12.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and
that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower and its Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and its
Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of any
of the Agent-Related Persons.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), in
accordance with their Pro Rata Shares, from and against any and all
Indemnified Liabilities as such term is defined in Section 13.11; provided,
however, that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent
upon demand for its Pro Rata Share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. The Bank and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
51
from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Borrower and its Subsidiaries and Affiliates as though the Bank were not
the Agent hereunder and without notice to or consent of the Lenders. The
Bank or its Affiliates may receive information regarding the Borrower, its
Affiliates and Account Debtors (including information that may be subject
to confidentiality obligations in favor of the Borrower or such Subsidiary)
and acknowledge that the Agent and the Bank shall be under no obligation to
provide such information to them. With respect to its Loans, the Bank shall
have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" include the Bank in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon at least 30
days' prior notice to the Lenders and the Borrower, such resignation to be
effective upon the acceptance of a successor agent to its appointment as
Agent. In the event the Bank sells all of its Commitment and Revolving
Loans as part of a sale, transfer or other disposition by the Bank of
substantially all of its loan portfolio, the Bank shall resign as Agent and
such purchaser or transferee shall become the successor Agent hereunder.
Subject to the foregoing, if the Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders. If no successor agent is appointed prior to the effective date
of the resignation of the Agent, the Agent may appoint, after consulting
with the Lenders and the Borrower, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 12 shall continue to inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code,
such Lender agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States of America tax treaty, properly
completed IRS Forms W-8BEN and W-8ECI before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Lender claims that interest paid under this Agreement is
exempt from United States of America withholding tax because it is
effectively connected with a United States of America trade or business of
such Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States of America as a condition to exemption
from, or reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
52
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States of America tax treaty by providing IRS Form
W-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender,
such Lender agrees to notify the Agent of the percentage amount in which it
is no longer the beneficial owner of Obligations of the Borrower to such
Lender. To the extent of such percentage amount, the Agent will treat such
Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
Agent may withhold from any interest payment to such Lender not providing
such forms or other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States of America or other jurisdiction asserts a claim that the Agent did
not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its option
and in its sole discretion, to release any Agent's Liens upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Loans and reimbursement obligations
in respect of Letters of Credit and Credit Support, and the termination of
all outstanding Letters of Credit (whether or not any of such obligations
are due) and all other Obligations; (ii) constituting property being sold
or disposed of if the Borrower certifies to the Agent that the sale or
disposition is made in compliance with Section 7.9 (and the Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Borrower owned no interest at the time
the Lien was granted or at any time thereafter; or (iv) constituting
property leased to the Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement. Any other sale,
lease, sale/leaseback, or mortgaging of any collateral shall be solely
subject to the Agent's consent.
(b) Upon receipt by the Agent of any authorization required pursuant
to Section 12.11(a) from the Lenders of the Agent's authority to release
Agent's Liens upon particular types or items of Collateral, and upon at
least five (5) Business Days prior written request by the Borrower, the
Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of the
Agent's Liens upon such Collateral; provided, however, that (i) the Agent
53
shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Borrower in respect
of) all interests retained by the Borrower, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by the Borrower or
is cared for, protected or insured or has been encumbered, or that the
Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any
duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Agent pursuant
to any of the Loan Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto,
the Agent may act in any manner it may deem appropriate, in its sole
discretion given the Agent's own interest in the Collateral in its capacity
as one of the Lenders and that the Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express
consent of all Lenders, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of all Lenders, set off against the
Obligations, any amounts owing by such Lender to the Borrower or any
accounts of the Borrower now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically
requested to do so by the Agent, take or cause to be taken any action to
enforce its rights under this Agreement or against the Borrower, including
the commencement of any legal or equitable proceedings, to foreclose any
Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrower to such Lender
arising under, or relating to, this Agreement or the other Loan Documents,
except for any such proceeds or payments received by such Lender from the
Agent pursuant to the terms of this Agreement, or (ii) payments from the
Agent in excess of such Lender's ratable portion of all such distributions
by the Agent, such Lender shall promptly (1) turn the same over to the
Agent, in kind, and with such endorsements as may be required to negotiate
the same to the Agent, or in same day funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance
with the applicable provisions of this Agreement, or (2) purchase, without
recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received
shall be applied ratably as among the Lenders in accordance with their Pro
Rata Shares; provided, however, that if all or part of such excess payment
received by the purchasing party is thereafter recovered from it, those
purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor
shall be returned to such purchasing party, but without interest except to
the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
12.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC can be
54
perfected only by possession. Should any Lender (other than the Agent)
obtain possession of any such Collateral, such Lender shall notify the
Agent thereof, and, promptly upon the Agent's request therefor shall
deliver such Collateral to the Agent or in accordance with the Agent's
instructions.
12.14 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds to each Lender pursuant to wire
transfer instructions delivered in writing to the Agent on or prior to the
Closing Date (or if such Lender is an Assignee, on the applicable
Assignment and Acceptance), or pursuant to such other wire transfer
instructions as each party may designate for itself by written notice to
the Agent. Concurrently with each such payment, the Agent shall identify
whether such payment (or any portion thereof) represents principal, premium
or interest on the Revolving Loans or otherwise. Unless the Agent receives
notice from the Borrower prior to the date on which any payment is due to
the Lenders that the Borrower will not make such payment in full as and
when required, the Agent may assume that the Borrower has made such payment
in full to the Agent on such date in immediately available funds and the
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrower has not made such
payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata
Share of the outstanding Revolving Loans. Notwithstanding such agreement,
the Agent, the Bank, and the other Lenders agree (which agreement shall not
be for the benefit of or enforceable by the Borrower) that in order to
facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Revolving Loans, the Non-Ratable
Loans and the Agent Advances shall take place on a periodic basis in
accordance with the following provisions:
(ii) The Agent may request settlement ("Settlement") with the Lenders
on at least a weekly basis, or on a more frequent basis at Agent's
election, (A) on behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and
(C) with respect to collections received, in each case, by notifying the
Lenders of such requested Settlement by telecopy, telephone or other
similar form of transmission, of such requested Settlement, no later than
12:00 noon (Central Standard Time) on the date of such requested Settlement
(the "Settlement Date"). Each Lender (other than the Bank, in the case of
Non-Ratable Loans and the Agent in the case of Agent Advances) shall
transfer the amount of such Lender's Pro Rata Share of the outstanding
principal amount of the Non-Ratable Loans and Agent Advances with respect
to each Settlement to the Agent, to Agent's account, not later than 2:00
p.m. (Central Standard Time), on the Settlement Date applicable thereto.
Settlements may occur during the continuation of a Default or an Event of
Default and whether or not the applicable conditions precedent set forth in
Article 8 have then been satisfied. Such amounts made available to the
Agent shall be applied against the amounts of the applicable Non-Ratable
Loan or Agent Advance and, together with the portion of such Non-Ratable
Loan or Agent Advance representing the Bank's Pro Rata Share thereof, shall
constitute Revolving Loans of such Lenders. If any such amount is not
transferred to the Agent by any Lender on the Settlement Date applicable
thereto, the Agent shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal Funds Rate for
the first three (3) days from and after the Settlement Date and thereafter
at the Interest Rate then applicable to the Revolving Loans (A) on behalf
of the Bank, with respect to each outstanding Non-Ratable Loan, and (B) for
itself, with respect to each Agent Advance.
55
(iii) Notwithstanding the foregoing, not more than one (1) Business
Day after demand is made by the Agent (whether before or after the
occurrence of a Default or an Event of Default and regardless of whether
the Agent has requested a Settlement with respect to a Non-Ratable Loan or
Agent Advance), each other Lender (A) shall irrevocably and unconditionally
purchase and receive from the Bank or the Agent, as applicable, without
recourse or warranty, an undivided interest and participation in such
Non-Ratable Loan or Agent Advance equal to such Lender's Pro Rata Share of
such Non-Ratable Loan or Agent Advance and (B) if Settlement has not
previously occurred with respect to such Non-Ratable Loans or Agent
Advances, upon demand by Bank or Agent, as applicable, shall pay to Bank or
Agent, as applicable, as the purchase price of such participation an amount
equal to one-hundred percent (100%) of such Lender's Pro Rata Share of such
Non-Ratable Loans or Agent Advances. If such amount is not in fact made
available to the Agent by any Lender, the Agent shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the Federal Funds Rate for the first three (3) days from and
after such demand and thereafter at the Interest Rate then applicable to
Base Rate Revolving Loans.
(iv) From and after the date, if any, on which any Lender purchases an
undivided interest and participation in any Non-Ratable Loan or Agent
Advance pursuant to clause (iii) above, the Agent shall promptly distribute
to such Lender, such Lender's Pro Rata Share of all payments of principal
and interest and all proceeds of Collateral received by the Agent in
respect of such Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, the Agent, to the extent no Agent
Advances are outstanding, may pay over to the Bank any payments received by
the Agent, which in accordance with the terms of this Agreement would be
applied to the reduction of the Revolving Loans, for application to the
Bank's Revolving Loans including Non-Ratable Loans. If, as of any
Settlement Date, collections received since the then immediately preceding
Settlement Date have been applied to the Bank's Revolving Loans (other than
to Non-Ratable Loans or Agent Advances in which such Lender has not yet
funded its purchase of a participation pursuant to clause (iii) above), as
provided for in the previous sentence, the Bank shall pay to the Agent for
the accounts of the Lenders, to be applied to the outstanding Revolving
Loans of such Lenders, an amount such that each Lender shall, upon receipt
of such amount, have, as of such Settlement Date, its Pro Rata Share of the
Revolving Loans. During the period between Settlement Dates, the Bank with
respect to Non-Ratable Loans, the Agent with respect to Agent Advances, and
each Lender with respect to the Revolving Loans other than Non-Ratable
Loans and Agent Advances, shall be entitled to interest at the applicable
rate or rates payable under this Agreement on the actual average daily
amount of funds employed by the Bank, the Agent and the other Lenders.
(vi) Unless the Agent has received written notice from a Lender to the
contrary, the Agent may assume that the applicable conditions precedent set
forth in Article 8 have been satisfied and the requested Borrowing will not
exceed Availability on any Funding Date for a Revolving Loan or Non-Ratable
Loan.
(b) Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is
understood that (i) no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any Revolving Loans
hereunder, nor shall any Commitment of any Lender be increased or decreased
as a result of any failure by any other Lender to perform its obligation to
make any Revolving Loans hereunder, (ii) no failure by any Lender to
perform its obligation to make any Revolving Loans hereunder shall excuse
any other Lender from its obligation to make any Revolving Loans hereunder,
and (iii) the obligations of each Lender hereunder shall be several, not
joint and several.
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(c) Defaulting Lenders. Unless the Agent receives notice from a Lender
on or prior to the Closing Date or, with respect to any Borrowing after the
Closing Date, at least one Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when required
hereunder to the Agent that Lender's Pro Rata Share of a Borrowing, the
Agent may assume that each Lender has made such amount available to the
Agent in immediately available funds on the Funding Date. Furthermore, the
Agent may, in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If any Lender has not transferred its
full Pro Rata Share to the Agent in immediately available funds and the
Agent has transferred corresponding amount to the Borrower on the Business
Day following such Funding Date that Lender shall make such amount
available to the Agent, together with interest at the Federal Funds Rate
for that day. A notice by the Agent submitted to any Lender with respect to
amounts owing shall be conclusive, absent manifest error. If each Lender's
full Pro Rata Share is transferred to the Agent as required, the amount
transferred to the Agent shall constitute that Lender's Revolving Loan for
all purposes of this Agreement. If that amount is not transferred to the
Agent on the Business Day following the Funding Date, the Agent will notify
the Borrower of such failure to fund and, upon demand by the Agent, the
Borrower shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the
time to the Revolving Loans comprising that particular Borrowing. The
failure of any Lender to make any Revolving Loan on any Funding Date (any
such Lender, prior to the cure of such failure, being hereinafter referred
to as a "Defaulting Lender") shall not relieve any other Lender of its
obligation hereunder to make a Revolving Loan on that Funding Date. No
Lender shall be responsible for any other Lender's failure to advance such
other Lenders' Pro Rata Share of any Borrowing.
(d) Retention of Defaulting Lender's Payments. The Agent shall not be
obligated to transfer to a Defaulting Lender any payments made by Borrower
to the Agent for the Defaulting Lender's benefit; nor shall a Defaulting
Lender be entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or retained by the
Agent. In its discretion, the Agent may loan Borrower the amount of all
such payments received or retained by it for the account of such Defaulting
Lender. Any amounts so loaned to the Borrower shall bear interest at the
rate applicable to Base Rate Revolving Loans and for all other purposes of
this Agreement shall be treated as if they were Revolving Loans, provided,
however, that for purposes of voting or consenting to matters with respect
to the Loan Documents and determining Pro Rata Shares, such Defaulting
Lender shall be deemed not to be a "Lender". Until a Defaulting Lender
cures its failure to fund its Pro Rata Share of any Borrowing (A) such
Defaulting Lender shall not be entitled to any portion of the Unused Line
Fee and (B) the Unused Line Fee shall accrue in favor of the Lenders which
have funded their respective Pro Rata Shares of such requested Borrowing
and shall be allocated among such performing Lenders ratably based upon
their relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no
longer be in default of any of its obligations under this Agreement. The
terms of this Section shall not be construed to increase or otherwise
affect the Commitment of any Lender, or relieve or excuse the performance
by the Borrower of its duties and obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrower's request, the Agent
or an Eligible Assignee reasonably acceptable to the Agent and the Borrower
shall have the right (but not the obligation) to purchase from any
Defaulting Lender, and each Defaulting Lender shall, upon such request,
sell and assign to the Agent or such Eligible Assignee, all of the
Defaulting Lender's outstanding Commitments hereunder. Such sale shall be
consummated promptly after Agent has arranged for a purchase by Agent or an
Eligible Assignee pursuant to an Assignment and Acceptance, and at a price
equal to the outstanding principal balance of the Defaulting Lender's
Loans, plus accrued interest and fees, without premium or discount.
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12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date the
Agent shall notify each Lender of the issuance of all Letters of Credit
since the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of any
Letter of Credit in accordance with Section 1.4(d), each Lender shall be
deemed to have irrevocably and unconditionally purchased and received
without recourse or warranty, an undivided interest and participation equal
to such Lender's Pro Rata Share of the face amount of such Letter of Credit
or the Credit Support provided through the Agent to the Letter of Credit
Issuer, if not the Bank, in connection with the issuance of such Letter of
Credit (including all obligations of the Borrower with respect thereto, and
any security therefor or guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever the Agent
receives a payment from the Borrower on account of reimbursement
obligations in respect of a Letter of Credit or Credit Support as to which
the Agent has previously received for the account of the Letter of Credit
Issuer thereof payment from a Lender, the Agent shall promptly pay to such
Lender such Lender's Pro Rata Share of such payment from the Borrower. Each
such payment shall be made by the Agent on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender, the Agent shall
furnish to such Lender copies of any Letter of Credit, Credit Support for
any Letter of Credit, reimbursement agreements executed in connection
therewith, applications for any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender to make
payments to the Agent with respect to any Letter of Credit or with respect
to their participation therein or with respect to any Credit Support for
any Letter of Credit or with respect to the Revolving Loans made as a
result of a drawing under a Letter of Credit and the obligations of the
Borrower for whose account the Letter of Credit or Credit Support was
issued to make payments to the Agent, for the account of the Lenders, shall
be irrevocable and shall not be subject to any qualification or exception
whatsoever, including any of the following circumstances:
(1) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;
(2) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), any Lender, the Agent, the issuer of
such Letter of Credit, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transactions between
the Borrower or any other Person and the beneficiary named in any Letter of
Credit);
(3) any draft, certificate or any other document presented under the
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;
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(4) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;
(5) the occurrence of any Default or Event of Default; or
(6) the failure of the Borrower to satisfy the applicable conditions
precedent set forth in Article 8.
(c) Recovery or Avoidance of Payments; Refund of Payments In Error. In
the event any payment by or on behalf of the Borrower received by the Agent
with respect to any Letter of Credit or Credit Support provided for any
Letter of Credit and distributed by the Agent to the Lenders on account of
their respective participations therein is thereafter set aside, avoided or
recovered from the Agent in connection with any receivership, liquidation
or bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay
to the Agent their respective Pro Rata Shares of such amount set aside,
avoided or recovered, together with interest at the rate required to be
paid by the Agent upon the amount required to be repaid by it. Unless the
Agent receives notice from the Borrower prior to the date on which any
payment is due to the Lenders that the Borrower will not make such payment
in full as and when required, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the extent
the Borrower has not made such payment in full to the Agent, each Lender
shall repay to the Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from
the date such amount is distributed to such Lender until the date repaid.
(d) Indemnification by Lenders. To the extent not reimbursed by the
Borrower and without limiting the obligations of the Borrower hereunder,
the Lenders agree to indemnify the Letter of Credit Issuer ratably in
accordance with their respective Pro Rata Shares, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys' fees) or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Letter of Credit Issuer in any way relating to or arising out
of any Letter of Credit or the transactions contemplated thereby or any
action taken or omitted by the Letter of Credit Issuer under any Letter of
Credit or any Loan Document in connection therewith; provided that no
Lender shall be liable for any of the foregoing to the extent it arises
from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse the Letter of Credit Issuer promptly upon demand for its Pro Rata
Share of any costs or expenses payable by the Borrower to the Letter of
Credit Issuer, to the extent that the Letter of Credit Issuer is not
promptly reimbursed for such costs and expenses by the Borrower. The
agreement contained in this Section shall survive payment in full of all
other Obligations.
12.17 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into the other Loan
Documents, for the ratable benefit and obligation of the Agent and the
Lenders. Each Lender agrees that any action taken by the Agent, Majority
Lenders or Required Lenders, as applicable, in accordance with the terms of
this Agreement or the other Loan Documents, and the exercise by the Agent,
the Majority Lenders, or the Required Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other
powers that are reasonably incidental thereto, shall be binding upon all of
the Lenders. The Lenders acknowledge that the Revolving Loans, Agent
Advances, Non-Ratable Loans, Hedge Agreements, Bank Products and all
interest, fees and expenses hereunder constitute one Debt, secured pari
passu by all of the Collateral.
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12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared
by or on behalf of the Agent;
(b) expressly agrees and acknowledges that neither the Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or the Bank or other
party performing any audit or examination will inspect only specific
information regarding the Borrower and will rely significantly upon the
Borrower's books and records, as well as on representations of the
Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and
any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may
reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to the
Borrower, or the indemnifying Lender's participation in, or the
indemnifying Lender's purchase of, a loan or loans of the Borrower; and
(ii) to pay and protect, and indemnify, defend and hold the Agent and any
such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses and other amounts (including
Attorney Costs) incurred by the Agent and any such other Lender preparing a
Report as the direct or indirect result of any third parties who might
obtain all or part of any Report through the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of,
or (except as otherwise set forth herein in case of the Agent) authorized
to act for, any other Lender.
ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or
among the Borrower and the Agent and/or any Lender, or delay by the Agent
or any Lender in exercising the same, will operate as a waiver thereof. No
waiver by the Agent or any Lender will be effective unless it is in
writing, and then only to the extent specifically stated. No waiver by the
Agent or the Lenders on any occasion shall affect or diminish the Agent's
and each Lender's rights thereafter to require strict performance by the
Borrower of any provision of this Agreement. The Agent and the Lenders may
proceed directly to collect the Obligations without any prior recourse to
the Collateral. The Agent's and each Lender's rights under this Agreement
will be cumulative and not exclusive of any other right or remedy which the
Agent or any Lender may have.
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13.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any Loan Document or any instrument or agreement
required hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process.
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES
WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE
OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF
TEXAS; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
OR OF THE UNITED STATES OF AMERICA LOCATED IN DALLAS COUNTY, TEXAS, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND
THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE
AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON
THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE
PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN
THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE
U.S. MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT
OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER
PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT
EACH IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND
61
THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the Borrower's
representations and warranties contained in this Agreement shall survive
the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
13.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting the Borrower's obligations hereunder, from
time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and
exchange, enforce or release such collateral or any part thereof; and (b)
accept and hold any endorsement or guaranty of payment of all or any part
of the Obligations and release or substitute any such endorser or
guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any
other Person in any way obligated to pay all or any part of the
Obligations.
13.7 Fees and Expenses. The Borrower agrees to pay to the Agent, for
its benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of
the other Loan Documents, including: (a) Attorney Costs; (b) costs and
expenses (including attorneys' and paralegals' fees and disbursements) for
any amendment, supplement, waiver, consent, or subsequent closing in
connection with the Loan Documents and the transactions contemplated
thereby; (c) costs and expenses of lien and title searches and title
insurance; (d) taxes, fees and other charges for recording the Mortgages,
filing financing statements and continuations, and other actions to
perfect, protect, and continue the Agent's Liens (including costs and
expenses paid or incurred by the Agent in connection with the consummation
of Agreement); (e) sums paid or incurred to pay any amount or take any
action required of the Borrower under the Loan Documents that the Borrower
fails to pay or take; (f) costs of appraisals, inspections, and
verifications of the Collateral, including travel, lodging, and meals for
inspections of the Collateral and the Borrower's operations by the Agent
plus the Agent's then customary charge for field examinations and audits
and the preparation of reports thereof (such charge is currently [$750] per
day (or portion thereof) for each Person retained or employed by the Agent
with respect to each field examination or audit); and (g) costs and
expenses of forwarding loan proceeds, collecting checks and other items of
payment, and establishing and maintaining Payment Accounts and lock boxes,
and costs and expenses of preserving and protecting the Collateral. In
addition, the Borrower agrees to pay costs and expenses incurred by the
Agent (including Attorneys' Costs) to the Agent, for its benefit, on
demand, and to the other Lenders for their benefit, on demand, and all
reasonable fees, expenses and disbursements incurred by such other Lenders
for one law firm retained by such other Lenders, in each case, paid or
incurred to obtain payment of the Obligations, enforce the Agent's Liens,
sell or otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to defend any claims made or
threatened against the Agent or any Lender arising out of the transactions
contemplated hereby (including preparations for and consultations
concerning any such matters). The foregoing shall not be construed to limit
any other provisions of the Loan Documents regarding costs and expenses to
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be paid by the Borrower. All of the foregoing costs and expenses shall be
charged to the Borrower's Loan Account as Revolving Loans as described in
Section 3.7.
13.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any
other shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a)
upon personal delivery thereof, including, but not limited to, delivery by
overnight mail and courier service, (b) four (4) days after it shall have
been mailed by United States mail, first class, certified or registered,
with postage prepaid, or (c) in the case of notice by such a
telecommunications device, when properly transmitted, in each case
addressed to the party to be notified as follows:
If to the Agent or to the Lender:
Bank of America, N.A.
901 Main Street, 22nd Floor
Mailcode: TX1-492-22-13
Dallas, Texas 75202
Attention: Joy L. Bartholomew
Telecopy No.: 214.209.4766
with copies to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, TX 75202
Attention: Sue P. Murphy
Telecopy No.: 214.200.0565
If to the Borrower:
Central Freight Lines, Inc.
5601 West Waco Drive
Waco, TX 76710
Attention: Steve Owen
Telecopy No.: 254.741.5337
with copies to:
Scudder Law Firm, P.C. L.L.O.
411 South 13th St., Second Floor
Lincoln, Nebraska 68508
Attention: Mark Scudder
Telecopy No.: 402.435.4239
or to such other address as each party may designate for itself by like
notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the
persons designated above to receive copies shall not adversely affect the
effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
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13.9 Waiver of Notices. Unless otherwise expressly provided herein,
the Borrower waives presentment, and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the
Obligations and notice of acceleration of the Obligations, as well as any
and all other notices to which it might otherwise be entitled. No notice to
or demand on the Borrower which the Agent or any Lender may elect to give
shall entitle the Borrower to any or further notice or demand in the same,
similar or other circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrower without prior written
consent of the Agent and each Lender. The rights and benefits of the Agent
and the Lenders hereunder shall, if such Persons so agree, inure to any
party acquiring any interest in the Obligations or any part thereof.
13.11 Indemnity of the Agent and the Lenders by the Borrower.
(a) THE BORROWER AGREES TO DEFEND, INDEMNIFY AND HOLD THE
AGENT-RELATED PERSONS, AND EACH LENDER AND EACH OF ITS RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS AND
ATTORNEYS-IN-FACT (EACH, AN "INDEMNIFIED PERSON") HARMLESS FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES AND DISBURSEMENTS (INCLUDING
ATTORNEY COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME
(INCLUDING AT ANY TIME FOLLOWING REPAYMENT OF THE LOANS AND THE
TERMINATION, RESIGNATION OR REPLACEMENT OF THE AGENT OR REPLACEMENT OF ANY
LENDER) BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON IN
ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED BY OR REFERRED TO HEREIN, OR THE TRANSACTIONS CONTEMPLATED
HEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY SUCH PERSON UNDER OR IN
CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH RESPECT TO ANY
INVESTIGATION, LITIGATION OR PROCEEDING (INCLUDING ANY INSOLVENCY
PROCEEDING OR APPELLATE PROCEEDING) RELATED TO OR ARISING OUT OF THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE LOANS OR THE USE OF THE PROCEEDS
THEREOF, WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO (ALL THE
FOREGOING, COLLECTIVELY, THE "INDEMNIFIED LIABILITIES"); PROVIDED, THAT THE
BORROWER SHALL HAVE NO OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES RESULTING SOLELY FROM THE WILLFUL
MISCONDUCT OF SUCH INDEMNIFIED PERSON. THE AGREEMENTS IN THIS SECTION SHALL
SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS.
(b) THE BORROWER AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE
AGENT AND THE LENDERS FROM ANY LOSS OR LIABILITY DIRECTLY OR INDIRECTLY
ARISING OUT OF THE USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE,
RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL OR PRESENCE OF A HAZARDOUS
SUBSTANCE RELATING TO THE BORROWER'S OPERATIONS, BUSINESS OR PROPERTY. THIS
INDEMNITY WILL APPLY WHETHER THE HAZARDOUS SUBSTANCE IS ON, UNDER OR ABOUT
THE BORROWER'S PROPERTY OR OPERATIONS OR PROPERTY LEASED TO THE BORROWER.
THE INDEMNITY INCLUDES BUT IS NOT LIMITED TO ATTORNEYS COSTS. THE INDEMNITY
EXTENDS TO THE AGENT AND THE LENDERS, THEIR PARENTS, AFFILIATES,
SUBSIDIARIES AND ALL OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
64
SUCCESSORS, ATTORNEYS AND ASSIGNS. "HAZARDOUS SUBSTANCES" MEANS ANY
SUBSTANCE, MATERIAL OR WASTE THAT IS OR BECOMES DESIGNATED OR REGULATED AS
"TOXIC," "HAZARDOUS," "POLLUTANT," OR "CONTAMINANT" OR A SIMILAR
DESIGNATION OR REGULATION UNDER ANY FEDERAL, STATE OR LOCAL LAW (WHETHER
UNDER COMMON LAW, STATUTE, REGULATION OR OTHERWISE) OR JUDICIAL OR
ADMINISTRATIVE INTERPRETATION OF SUCH, INCLUDING PETROLEUM OR NATURAL GAS.
THIS INDEMNITY WILL SURVIVE REPAYMENT OF ALL OTHER OBLIGATIONS.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY THE BORROWER,
ANY LENDER OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES,
AGENTS OR ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF
CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND THE
BORROWER AND EACH LENDER HEREBY WAIVE, RELEASE AND AGREE NOT TO SUE UPON
ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.
13.13 Final Agreement. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES. No modification, rescission, waiver, release, or amendment of
any provision of this Agreement or any other Loan Document shall be made,
except by a written agreement signed by the Borrower and a duly authorized
officer of each of the Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should
not be construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to
time, without prior notice to the Borrower, any such notice being waived by
the Borrower to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by,
such Lender or any Affiliate of such Lender to or for the credit or the
account of the Borrower against any and all Obligations owing to such
Lender, now or hereafter existing, irrespective of whether or not the Agent
or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off
65
and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE
ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT
ACCOUNT OR PROPERTY OF THE BORROWER HELD OR MAINTAINED BY SUCH LENDER
WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
13.17 Confidentiality.
(a) The Borrower hereby consents that the Agent and each Lender may
issue and disseminate to the public general information describing the
credit accommodation entered into pursuant to this Agreement, including the
name and address of the Borrower and a general description of the
Borrower's business and may use the Borrower's name in advertising and
other promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrower and
provided to the Agent or such Lender by or on behalf of the Borrower, under
this Agreement or any other Loan Document, except to the extent that such
information (i) was or becomes generally available to the public other than
as a result of disclosure by the Agent or such Lender, or (ii) was or
becomes available on a nonconfidential basis from a source other than the
Borrower, provided that such source is not bound by a confidentiality
agreement with the Borrower known to the Agent or such Lender; provided,
however, that the Agent and any Lender may disclose such information (1) at
the request or pursuant to any requirement of any Governmental Authority to
which the Agent or such Lender is subject or in connection with an
examination of the Agent or such Lender by any such Governmental Authority;
(2) pursuant to subpoena or other court process; (3) when required to do so
in accordance with the provisions of any applicable Requirement of Law; (4)
to the extent reasonably required in connection with any litigation or
proceeding (including, but not limited to, any bankruptcy proceeding) to
which the Agent, any Lender or their respective Affiliates may be party;
(5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (6) to the Agent's
or such Lender's independent auditors, accountants, attorneys and other
professional advisors; (7) to any prospective Participant or Assignee under
any Assignment and Acceptance, actual or potential, provided that such
prospective Participant or Assignee agrees to keep such information
confidential to the same extent required of the Agent and the Lenders
hereunder; (8) as expressly permitted under the terms of any other document
or agreement regarding confidentiality to which the Borrower is party or is
deemed party with the Agent or such Lender, and (9) to its Affiliates.
13.18 Conflicts with Other Loan Documents. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific
reference to the applicable provision contained in this Agreement), if any
provision contained in this Agreement conflicts with any provision of any
other Loan Document, the provision contained in this Agreement shall govern
and control.
13.19 USA PATRIOT Act Notice. Each Lender that is subject to the Act
(as hereinafter defined) and the Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies the Borrower and the Parent, which information
includes the name and address of the Borrower and the Parent and other
information that will allow such Lender or the Agent, as applicable, to
identify the Borrower and the Parent in accordance with the Act.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
"BORROWER"
CENTRAL FREIGHT LINES, INC., a Texas corporation
By:
Title:
"AGENT"
Bank of America, N.A., as Agent
By:
Joy L. Bartholomew, Senior Vice President
"LENDERS"
Bank of America, N.A., as a Lender
By:
Joy L. Bartholomew, Senior Vice President
"PARENT"
CENTRAL FREIGHT LINES, INC., a Nevada corporation
By:
Title: _____________________________
67
ANNEX A
to
Credit Agreement
Definitions
Capitalized terms used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein), and all section
references in the following definitions shall refer to sections of the
Agreement:
"Account Debtor" means each Person obligated in any way on or in
connection with an Account, Chattel Paper, or General Intangible
(including, without limitation, any payment intangible).
"Accounts" means all of the Borrower's now owned or hereafter acquired
or arising accounts, as defined in the UCC, including any rights to payment
for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.
"ACH Transactions" means any cash management or related services
including the automatic clearing house transfer of funds by the Bank for
the account of the Borrower pursuant to agreement or overdrafts.
"Acquisition" means any transaction or series of related transactions
for the purpose of, or resulting in, directly or indirectly, (a) the
acquisition by the Borrower of all or substantially all of the assets of a
Person or of any business or division of a Person; (b) the acquisition by
the Borrower of more than 50% of any class of Voting Stock (or similar
ownership interests) of any Person; or (c) a merger, consolidation,
amalgamation, or other combination by the Borrower with another Person if
the Borrower is the surviving entity.
"Adjusted Net Earnings from Operations" means, with respect to any
fiscal period of the Parent, the Parent's net income after provision for
income taxes for such fiscal period, as determined in accordance with GAAP
and reported on the Financial Statements for such period, excluding any and
all of the following included in such net income: (a) gain or loss arising
from the sale of any capital assets; (b) gain arising from any write-up in
the book value of any asset; (c) earnings of any Person, substantially all
the assets of which have been acquired by the Parent or any of its
Subsidiaries in any manner, to the extent realized by such other Person
prior to the date of acquisition; (d) earnings of any Person in which the
Parent or any of its Subsidiaries has an ownership interest unless (and
only to the extent) such earnings shall actually have been received by the
Parent or any of its Subsidiaries in the form of cash distributions; (e)
earnings of any Person to which assets of the Parent or any of its
Subsidiaries shall have been sold, transferred or disposed of, or into
which the Parent or any of its Subsidiaries shall have been merged, or
which has been a party with the Parent or any of its Subsidiaries to any
consolidation or other form of reorganization, prior to the date of such
transaction; (f) gain arising from the acquisition of debt or equity
securities of the Parent or any of its Subsidiaries or from cancellation or
forgiveness of Debt; and (g) gain arising from extraordinary items, as
determined in accordance with GAAP, or from any other non-recurring
transaction.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or indirectly, five
percent (5%) or more of the outstanding equity interest of such Person. A
Person shall be deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.
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"Agent" means the Bank, solely in its capacity as agent for the
Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 1.2(i).
"Agent's Liens" means the Liens in the Collateral granted to the
Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its Affiliates,
and the officers, directors, employees, counsel, representatives, agents
and attorneys-in-fact of the Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any date of determination,
and without duplication: the sum of (a) the unpaid balance of Revolving
Loans, (b) the aggregate amount of Pending Revolving Loans, (c) one hundred
percent (100%) of the greater of : (i) the aggregate undrawn maximum face
amount and (ii) the maximum undrawn available amount of all outstanding
Letters of Credit, and (d) the aggregate amount of any unpaid reimbursement
obligations in respect of Letters of Credit.
"Agreement" means the Credit Agreement to which this Annex A is
attached, as from time to time amended, modified or restated.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means:
(i) with respect to Base Rate Revolving Loans and all other
Obligations (other than LIBOR Revolving Loans), .25%;
(ii) with respect to LIBOR Revolving Loans, 2.0%; and
(iii) with respect to Letters of Credit, 1.75%.
The Applicable Margins shall be adjusted (up or down) prospectively on
a quarterly basis as determined by the Parent's consolidated financial
performance, commencing with the earliest of: (x) June 30, 2005, (y) the
date a Person (other than Bank of America, N.A.) becomes a Lender under the
Agreement; and (z) upon the occurrence and during the continuation of a
Default or an Event of Default (the "Rate Adjustment Date"). Adjustments in
Applicable Margins shall be determined by reference to the following grids:
- ------------------------------------------ ------------------------------------
If Average Quarterly Level of
Availability is: Applicable Margins:
- ------------------------------------------ ------------------------------------
< $20,000,000 Level I
- ------------------------------------------ ------------------------------------
> $20,000,000, but < $30,000,000 Level II
- - -
- ------------------------------------------ ------------------------------------
> $30,000,000, but < $40,000,000 Level III
-
- ------------------------------------------ ------------------------------------
> $40,000,000, but < $50,000,000 Level IV
-
- ------------------------------------------ ------------------------------------
> $50,000,000, but < $55,000,000 or the Level V
-
Fixed Charge Coverage Ratio is > 1.25 to
1.0, but < 1.5 to 1.0
-
- ------------------------------------------ ------------------------------------
> $55,000,000 or the Fixed Charge Coverage Level VI
Ratio is > 1.5 to 1.0
- ------------------------------------------ ------------------------------------
69
- ------------------------------- -------------------------------------------------------------------------------------
Applicable Margins
- ------------------------------- ------------ ----------- ---------------- ------------- ------------ ----------------
Level I Level II Level III Level IV Level V Level VI
- ------------------------------- ------------ ----------- ---------------- ------------- ------------ ----------------
Base Rate Revolving Loans 1.00% .75% .50% 0.25% 0.0% 0.0%
- ------------------------------- ------------ ----------- ---------------- ------------- ------------ ----------------
LIBOR Revolving Loans 2.75% 2.50% 2.25% 2.00% 1.75% 1.50%
- ------------------------------- ------------ ----------- ---------------- ------------- ------------ ----------------
Applicable L/C Margin 2.50% 2.25% 2.00 1.75% 1.50% 1.25%
- ------------------------------- ------------ ----------- ---------------- ------------- ------------ ----------------
The Applicable Margin with respect to the Unused Line Fee shall be
.375% per annum with respect to any month in which the average Aggregate
Revolver Outstandings are less than $30,000,000, and in all other cases
shall be .25% per annum.
All adjustments in the Applicable Margins commencing on the Rate
Adjustment Date shall be implemented quarterly on a prospective basis in a
two step process, provided that in the event the Rate Adjustment Date
occurs prior to June 30, 2005, the Average Quarterly Availability shall be
calculated as the Average Daily Availability and the Rate Adjustment shall
remain in effect until the first day of the next fiscal quarter. First,
calculations based on Average Quarterly Availability shall be made and be
effective as of the first day of each fiscal quarter. With respect to the
adjustments based on Levels V and VI, an additional adjustment shall be
made, if warranted by the calculation of the Fixed Charge Coverage Ratio,
for any calendar month commencing at least 5 days after the date of
delivery to the Lenders of quarterly unaudited or annual audited (as
applicable) Financial Statements evidencing the need for an adjustment and
shall become effective as of the first day of such month. Concurrently with
the delivery of those Financial Statements, the Borrower shall deliver to
the Agent and the Lenders a certificate, signed by its chief financial
officer, setting forth in reasonable detail the basis for the continuance
of, or any change in, the Applicable Margins. Failure to timely deliver
such Financial Statements shall, in addition to any other remedy provided
for in this Agreement, result in an increase in the Applicable Margins to
the highest level set forth in the foregoing grid, until the first day of
the first calendar month following the delivery of those Financial
Statements demonstrating that such an increase is not required. If a
Default or Event of Default has occurred and is continuing at the time any
reduction in the Applicable Margins is to be implemented, no reduction may
occur until the first day of the first calendar month following the date on
which such Default or Event of Default is waived or cured.
"Arrangement Fee" has the meaning specified in Section 2.4.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in Section
11.2(a).
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other counsel engaged by the Agent, the
reasonably allocated costs and expenses of internal legal services of the
Agent.
"Availability" means, at any time (a) the lesser of (i) the Maximum
Revolver Amount or (ii) the Borrowing Base, minus (b) Reserves other than
Reserves deducted in the calculation of the Borrowing Base, minus (c) in
each case, the Aggregate Revolver Outstandings, minus (d) $5,000,000 until
the earlier of: (i) the delivery by Borrower to Agent of its April, 2005
monthly financials in compliance with Section 5.2(c), and (ii) May 30, 2005
"Average Daily Availability" means as of any date of determination,
(a) the average Borrowing Base, less (b) the average Daily Aggregate
70
Revolver Outstandings from the Closing Date to the Rate Adjustment Date.
For purposes of determining Average Daily Availability, Aggregate Revolver
Outstandings shall not include any Replacement Letters of Credit.
"Average Quarterly Availability" means as of any date of
determination, (a) the average Borrowing Base, less (b) the average Daily
Aggregate Revolver Outstandings during the immediately preceding fiscal
quarter. For purposes of determining Average Quarterly Availability,
Aggregate Revolver Outstandings shall not include any Replacement Letters
of Credit.
"Bank" means Bank of America, N.A., a national banking association, or
any successor entity thereto.
"Bank Product Reserves" means all reserves which the Agent from time
to time establishes in its reasonable discretion for the Bank Products then
provided or outstanding.
"Bank Products" means any one or more of the following types of
services or facilities extended to the Borrower by the Bank or any
affiliate of the Bank in reliance on the Bank's agreement to indemnify such
affiliate: (i) credit cards; (ii) ACH Transactions; (iii) cash management,
including controlled disbursement services; and (iv) Hedge Agreements.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
ss. 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by the Bank in Charlotte,
North Carolina as its "prime rate" (the "prime rate" being a rate set by
the Bank based upon various factors including the Bank's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or
below such announced rate). Any change in the prime rate announced by the
Bank shall take effect at the opening of business on the day specified in
the public announcement of such change. Each Interest Rate based upon the
Base Rate shall be adjusted simultaneously with any change in the Base
Rate.
"Base Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"Blocked Account Agreement" means an agreement among the Borrower, the
Agent and a Clearing Bank, in form and substance reasonably satisfactory to
the Agent, concerning the collection of payments which represent the
proceeds of Accounts or of any other Collateral.
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrower or by Bank in the case
of a Borrowing funded by Non-Ratable Loans or by the Agent in the case of a
Borrowing consisting of an Agent Advance, or the issuance of Letters of
Credit hereunder.
"Borrowing Base" means, at any time, an amount equal to (a) the sum of
(A) up to eighty-five percent (85%) of the Net Amount of Eligible Accounts;
plus (B) the sum of (i) up to eighty-five percent (85%) of the Net Orderly
Liquidation Value of Eligible Rolling Stock adjusted for monthly
depreciation and for any dispositions of Rolling Stock, and (ii) up to
eighty-five percent (85%) of the cost of Eligible Rolling Stock acquired
after the Closing Date (excluding sales tax, delivery charges or other soft
costs) and adjusted for monthly depreciation, but in no event shall the sum
of (i) and (ii) exceed 90% of the net book value of such Eligible Rolling
Stock; minus (b) Reserves from time to time established by the Agent in its
reasonable credit judgment; provided that the aggregate Revolving Loans
advanced against Eligible Rolling Stock shall not exceed the Maximum
Rolling Stock Loan Amount, and provided further that the aggregate
71
Revolving Loans advanced against Eligible Unbilled Accounts shall not
exceed $5,000,000. For the purposes hereof, depreciation shall be
calculated based upon the average remaining life of the Eligible Rolling
Stock as shown on the then most recent appraisal.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of the Borrower, substantially in the form of Exhibit B (or another
form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in
such detail as shall be reasonably satisfactory to the Agent. All
calculations of the Borrowing Base in connection with the preparation of
any Borrowing Base Certificate shall originally be made by the Borrower and
certified to the Agent; provided, that the Agent shall have the right to
review and adjust, in the exercise of its reasonable credit judgment, any
such calculation (1) to reflect its reasonable estimate of declines in
value of any of the Collateral described therein, and (2) to the extent
that such calculation is not in accordance with this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Dallas, Texas, Pasadena, California, or Charlotte,
North Carolina are required or permitted to be closed, and (b) with respect
to all notices, determinations, fundings and payments in connection with
the LIBOR Rate or LIBOR Revolving Loans, any day that is a Business Day
pursuant to clause (a) above and that is also a day on which trading in
Dollars is carried on by and between banks in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Capital Expenditures" means all payments due (whether or not paid
during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those
costs arising in connection with the direct or indirect acquisition of such
asset by way of increased product or service charges or in connection with
a Capital Lease.
"Capital Lease" means any lease of property by the Borrower which, in
accordance with GAAP, should be reflected as a capital lease on the balance
sheet of the Borrower.
"Change of Control" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a
single transaction or a series of related transactions) of all or
substantially all of the assets of the Borrower or Parent to any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder in effect on the
date hereof), (b) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Unrelated 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 30% or more of the outstanding shares of the voting stock of
Parent; or (c) occupation of a majority of the seats (other than vacant
seats) on the board of directors of Parent by Persons who were neither (i)
nominated or appointed by the current board of directors or (ii) nominated
or appointed by directors so nominated or appointed. For purposes of this
definition, "Unrelated Person" means any Person or "group" (within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder in effect on the date hereof)
other than: (1) Jerry Moyes and his spouse, lineal descendants and spouses
of his lineal descendents; (2) the estates of Persons described in clause
(1); (3) trusts established for the benefit of any Person or Persons
described in clause (1); (4) corporations, limited liability companies,
partnerships or similar entities 75% or more owned by any Person or Persons
described in clauses (1) through (3); (5) the Moyes Children's Trust; (6)
72
the Moyes Family Trust; and (7) Ronald Moyes. For purposes of calculating
the number of outstanding shares of the voting stock of Parent beneficially
owned by any "group" (within the meaning of the Exchange Act and the rules
of the SEC thereunder in effect on the date hereof), shares beneficially
owned by Persons described in clauses (1) through (7) of the preceding
sentence shall be excluded from such calculation.
"Chattel Paper" means all of the Borrower's now owned or hereafter
acquired chattel paper, as defined in the UCC, including electronic chattel
paper.
"Clearing Bank" means the Bank or any other banking institution with
whom a Payment Account has been established pursuant to a Blocked Account
Agreement.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all of the Borrower's personal property and all
other assets of any Person from time to time subject to Agent's Liens
securing payment or performance of the Obligations.
"Collections" means all cash, checks, notes, instruments, and other
items of payment (including, without limitation, insurance proceeds,
proceeds of sales, rental proceeds, and tax refunds).
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on Schedule 1.2 attached to the Agreement or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became
a Lender hereunder in accordance with the provisions of Section 11.2, as
such Commitment may be adjusted from time to time in accordance with the
provisions of Section 11.2, and "Commitments" means, collectively, the
aggregate amount of the commitments of all of the Lenders.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated
biphenyls ("PCBs"), or any constituent of any such substance or waste.
"Continuation/Conversion Date" means the date on which a Loan is
converted into or continued as a LIBOR Revolving Loan.
"Control Agreement" means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by Borrower, Agent, and the
applicable bank with respect to a deposit account.
"Credit Support" has the meaning specified in Section 1.3(a).
"Daily Aggregate Revolver Outstandings" means the amount of the
Aggregate Revolver Outstandings at the end of a given day.
"Debt" means, without duplication, all liabilities, obligations and
indebtedness of the Borrower to any Person, of any kind or nature, now or
hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, consisting of indebtedness for borrowed
73
money or the deferred purchase price of property, excluding trade payables,
but including (a) all Obligations; (b) all obligations and liabilities of
any Person secured by any Lien on the Borrower's property, even though the
Borrower shall not have assumed or become liable for the payment thereof;
provided, however, that all such obligations and liabilities which are
limited in recourse to such property shall be included in Debt only to the
extent of the book value of such property as would be shown on a balance
sheet of the Borrower prepared in accordance with GAAP; (c) all obligations
or liabilities created or arising under any Capital Lease or conditional
sale or other title retention agreement with respect to property used or
acquired by the Borrower, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are
limited in recourse to such property shall be included in Debt only to the
extent of the book value of such property as would be shown on a balance
sheet of the Borrower prepared in accordance with GAAP; (d) all obligations
and liabilities under Guaranties and (e) the present value (discounted at
the implied interest rate under such synthetic lease) of lease payments due
under synthetic leases. "Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not cured,
waived, or otherwise remedied during such time) constitute an Event of
Default.
"Default Rate" means a fluctuating per annum interest rate at all
times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%) per annum. Each Default Rate shall be adjusted
simultaneously with any change in the applicable Interest Rate. In
addition, the Default Rate shall result in an increase in the Letter of
Credit Fee by two (2) percentage points per annum.
"Defaulting Lender" has the meaning specified in Section 12.15(c).
"Designated Account" has the meaning specified in Section 1.2(c).
"Distribution" means, in respect of any corporation: (a) the payment
or making of any dividend or other distribution of property in respect of
capital stock (or any options or warrants for, or other rights with respect
to, such stock) of such corporation, other than distributions in capital
stock (or any options or warrants for such stock) of the same class; or (b)
the redemption or other acquisition by such corporation of any capital
stock (or any options or warrants for such stock) of such corporation.
"Documents" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title,
now owned or hereafter acquired by the Borrower.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States. Unless otherwise specified, all payments under the Agreements shall
be made in Dollars.
"EBITDA" means, with respect to any fiscal period of the Parent,
Adjusted Net Earnings from Operations, plus, to the extent deducted in the
determination of Adjusted Net Earnings from Operations for that fiscal
period, interest expenses, Federal, state, local and foreign income taxes,
depreciation, amortization, and non-cash stock option expense.
"Eligible Accounts" means the Accounts which the Agent in the exercise
of its reasonable judgment, in good faith and consistent with its standard
lending procedures, determines to be Eligible Accounts. Without limiting
the discretion of the Agent to establish other criteria of ineligibility,
Eligible Accounts shall not, unless the Agent in its sole discretion
elects, include any Account:
74
(a) with respect to which more than 90 days have elapsed since the
date of the original invoice therefor;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Agreement are incorrect
or have been breached;
(c) with respect to which Account (or any other Account due from such
Account Debtor), in whole or in part, a check, promissory note, draft,
trade acceptance or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or as
to which the Borrower has extended the time for payment without the consent
of the Agent; for the purposes hereof, "progress billing" means any invoice
for goods sold or leased or services rendered under a contract or agreement
pursuant to which the Account Debtor's obligation to pay such invoice is
conditioned upon the Borrower's completion of any further performance under
the contract or agreement;
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: death or judicial
declaration of incompetency of an Account Debtor who is an individual; the
filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication
as a bankrupt, winding-up, or other relief under the bankruptcy,
insolvency, or similar laws of the United States, any state or territory
thereof, or any foreign jurisdiction, now or hereafter in effect; the
making of any general assignment by the Account Debtor for the benefit of
creditors; the appointment of a receiver or trustee for the Account Debtor
or for any of the assets of the Account Debtor, including, without
limitation, the appointment of or taking possession by a "custodian," as
defined in the Federal Bankruptcy Code; the institution by or against the
Account Debtor of any other type of insolvency proceeding (under the
bankruptcy laws of the United States or otherwise) or of any formal or
informal proceeding for the dissolution or liquidation of, settlement of
claims against, or winding up of affairs of, the Account Debtor; the sale,
assignment, or transfer of all or any material part of the assets of the
Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor
as a going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States of America or Canada (other than the
Province of Newfoundland); or (ii) is not organized under the laws of the
United States of America or Canada or any state or province thereof; or
(iii) is the government of any foreign country or sovereign state, or of
any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof; except to the extent that such Account is secured or payable by a
letter of credit satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of the
Borrower; other than any Accounts owed to Borrower by Swift Transportation
Co., Inc.;
(i) except as provided in clause (k) below, with respect to which
either the perfection, enforceability, or validity of the Agent's Liens in
such Account, or the Agent's right or ability to obtain direct payment to
the Agent of the proceeds of such Account, is governed by any federal,
state, or local statutory requirements other than those of the UCC;
75
(j) owed by an Account Debtor to which the Borrower or any of its
Subsidiaries, is indebted in any way, or which is subject to any right of
setoff or recoupment by the Account Debtor, unless the Account Debtor has
entered into an agreement acceptable to the Agent to waive setoff rights;
or if the Account Debtor thereon has disputed liability or made any claim
with respect to any other Account due from such Account Debtor; but in each
such case only to the extent of such indebtedness, setoff, recoupment,
dispute, or claim;
(k) owed by the government of the United States of America, or any
department, agency, public corporation, or other instrumentality thereof,
unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C.
ss. 3727 et seq.), and any other steps necessary to perfect the Agent's
Liens therein, have been complied with to the Agent's satisfaction with
respect to such Account;
(l) owed by any state, municipality, or other political subdivision of
the United States of America, or any department, agency, public
corporation, or other instrumentality thereof and as to which the Agent
determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a bill-and-hold, guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return
basis;
(n) which is evidenced by a promissory note or other instrument or by
chattel paper;
(o) if the Agent believes, in the exercise of its reasonable judgment,
that the prospect of collection of such Account is impaired or that the
Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar
report in order to permit the Borrower to seek judicial enforcement in such
State of payment of such Account, unless such Borrower has qualified to do
business in such state or has filed a Notice of Business Activities Report
or equivalent report for the then current year;
(q) which arises out of a sale not made in the ordinary course of the
Borrower's business;
(r) with respect to which the delivery of goods giving rise to such
Account have not been shipped and delivered to and accepted by the intended
recipient;
(s) owed by an Account Debtor which is obligated to the Borrower
respecting Accounts the aggregate unpaid balance of which exceeds fifteen
percent (15%), or in the case of Dell, Inc., which exceeds twenty percent
(20%) of the aggregate unpaid balance of all Accounts owed to the Borrower
at such time by all of the Borrower's Account Debtors, and in the case of
any other Account Debtor, a percentage approved by the Agent, but only to
the extent of such excess;
(t) which is subject to any payments to any interline carrier, but in
each case only to the extent of the amount owed to such interline carrier;
(u) on and after a Default, Event of Default, or during the periods in
which Agent has full dominion over the Borrower's accounts pursuant to
Section 3.10, with respect to which the Agent does not have control of the
Payment Accounts;
76
(v) which is not subject to a first priority and perfected security
interest in favor of the Agent for the benefit of the Lenders; and
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible
Accounts, until such time as it again becomes an Eligible Account.
"Eligible Assignee" means (a) a commercial bank, commercial finance
company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this
Agreement; (c) any Affiliate of any Lender; and (d) if an Event of Default
has occurred and is continuing, any Person reasonably acceptable to the
Agent.
"Eligible Rolling Stock" means Rolling Stock, which the Agent, in its
reasonable judgment, in good faith and consistent with its standard lending
procedures, determines to be Eligible. Without limiting the discretion of
the Agent to establish other criteria of ineligibility, Eligible Rolling
Stock shall not, unless the Agent in its sole discretion elects, include
any Rolling Stock:
(a) that is not owned by the Borrower;
(b) that is not subject to the Agent's Liens, which are perfected as
to such Rolling Stock, or that are subject to any other Lien whatsoever;
(c) that is not in good condition, is unmerchantable, or does not meet
all standards imposed by any Governmental Authority, having regulatory
authority over such Rolling Stock and their use;
(d) that is not currently either usable or salable;
(e) that is obsolete;
(f) that is located outside the United States of America or Canada; or
(g) that contains or bears any Proprietary Rights licensed to the
Borrower by any Person, if the Agent is not satisfied that it may sell or
otherwise dispose of such Rolling Stock in accordance with the terms of the
Security Agreement and Section 9.2 without infringing the rights of the
licensor of such Proprietary Rights or violating any contract with such
licensor (and without payment of any royalties other than any royalties due
with respect to the sale or disposition of such Rolling Stock pursuant to
the existing license agreement), and, as to which the Borrower has not
delivered to the Agent a consent or sublicense agreement from such licensor
in form and substance acceptable to the Agent if requested
If any Rolling Stock at any time ceases to be Eligible Rolling Stock,
such Rolling Stock shall promptly be excluded from the calculation of
Eligible Rolling Stock, until such time as it again becomes Eligible
Rolling Stock.
"Eligible Unbilled Account' means an Account which would otherwise be
an Eligible Account except that it has not been billed by the Borrower and
it is less than ten days from completion of service by the Borrower.
77
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Compliance Reserve" means any reserve which the Agent
establishes in its reasonable discretion after prior written notice to the
Borrower from time to time for amounts that are reasonably likely to be
expended by the Borrower in order for the Borrower and its operations and
property (a) to comply with any notice from a Governmental Authority
asserting material non-compliance with Environmental Laws, or (b) to
correct any such material non-compliance identified in a report delivered
to the Agent and the Lenders pursuant to Section 7.7.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages
arising from, or costs incurred by such Governmental Authority in response
to, a Release or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrower's now owned and hereafter
acquired Rolling Stock, wheels, tires, navigational equipment, satellite
units, or tracking units installed on Rolling Stock, or otherwise,
machinery, equipment, furniture, furnishings, fixtures, and other tangible
personal property (except Inventory), including embedded software, motor
vehicles with respect to which a certificate of title has been issued,
aircraft, dies, tools, jigs, molds and office equipment, as well as all of
such types of property leased by the Borrower and all of the Borrower's
rights and interests with respect thereto under such leases (including,
without limitation, options to purchase); together with all present and
future additions and accessions thereto, replacements therefor, component
and auxiliary parts and supplies used or to be used in connection
therewith, and all substitutes for any of the foregoing, and all manuals,
drawings, instructions, warranties and rights with respect thereto;
wherever any of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
or a cessation of operations which is treated as such a withdrawal under
Section 4062(e) of ERISA, (c) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multi-employer Plan or notification
that a Multi-employer Plan is in reorganization, (d) the filing of a notice
of intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multi-employer Plan, (e) the
occurrence of an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or
Multi-employer Plan, or (f) the imposition of any liability under Title IV
78
of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Letters of Credit" means the letters of credit described on
Schedule 6.9 hereto, each issued by SunTrust Bank, for the account of
Borrower.
"Existing SunTrust Debt" means all amounts owed by the Borrower
pursuant to (i) that certain First Amended and Restated Revolving Credit
Loan Agreement, dated as of July 28, 2004, by and between the Borrower and
SunTrust Bank, as amended, and (ii) that certain Loan Agreement dated April
30, 2002, by and among Central Receivables, Inc., Three Pillars Funding
Corporation, and SunTrust Capital Markets, Inc., as agent.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Bank on such day on such
transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Financial Statements" means, according to the context in which it is
used, the financial statements referred to in Sections 5.2 and 6.6 or any
other financial statements required to be given to the Lenders pursuant to
this Agreement.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on
December 31, 2005.
"Fixed Assets" means the Equipment and Real Estate of the Borrower.
"Fixed Charge Coverage Ratio" means, with respect to any fiscal period
of Borrower, the ratio of EBITDA to Fixed Charges.
"Fixed Charges" means, with respect to any fiscal period of the
Borrower on a consolidated basis, without duplication, the sum of: (a) Net
Unfinanced Capital Expenditures; (b) interest expense to the extent
actually paid during such period, (c) principal payments of Debt either
scheduled to be made or actually made during such period, and (d) Federal,
state, local and foreign income taxes, excluding deferred taxes, to the
extent actually paid during such period.
79
"Foreign Subsidiary" of any Person means a Subsidiary of such Person
that is organized or incorporated under the laws of a jurisdiction other
than a jurisdiction of the United States.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices
set forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature
and authority within the U.S. accounting profession), which are applicable
to the circumstances as of the Closing Date.
"GE Capital Sale/Leaseback" means the agreement between the Borrower
and General Electric Capital Corporation for the sale and leaseback of
certain Rolling Stock.
"General Intangibles" means all of the Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of
action and all other intangible personal property of the Borrower of every
kind and nature (other than Accounts), including, without limitation, all
contract rights, payment intangibles, Proprietary Rights, corporate or
other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks,
trade names, trade secrets, goodwill, copyrights, computer software,
customer lists, registrations, licenses, franchises, tax refund claims, any
funds which may become due to the Borrower in connection with the
termination of any Plan or other employee benefit plan or any rights
thereto and any other amounts payable to the Borrower from any Plan or
other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, property, casualty or any similar type of insurance and
any proceeds thereof, proceeds of insurance covering the lives of key
employees on which the Borrower is beneficiary, rights to receive
dividends, distributions, cash, Instruments and other property in respect
of or in exchange for pledged equity interests or Investment Property and
any letter of credit, guarantee, claim, security interest or other security
held by or granted to the Borrower.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or
in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the
"guaranteed obligations"), or assure or in effect assure the holder of the
guaranteed obligations against loss in respect thereof, including any such
obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance
sheet condition; or (c) to lease property or to purchase any debt or equity
securities or other property or services.
"Hedge Agreement" means any and all transactions, agreements or
documents now existing or hereafter entered into, which provides 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 similar transactions, for the purpose of hedging the Borrower's
exposure to fluctuations in interest or exchange rates, loan, credit
exchange, security or currency valuations or commodity prices.
"Instruments" means all instruments as such term is defined in the
UCC, now owned or hereafter acquired by the Borrower.
"Interest Period" means, as to any LIBOR Revolving Loan, the period
commencing on the Funding Date of such Loan or on the
Continuation/Conversion Date on which the Loan is converted into or
continued as a LIBOR Revolving Loan, and ending on the date one, two, or
three months thereafter as selected by the Borrower in its Notice of
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Borrowing, in the form attached hereto as Exhibit D, or Notice of
Continuation/Conversion, in the form attached hereto as Exhibit E, provided
that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Revolving Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated Termination
Date.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 2.1.
"Inventory" means all of the Borrower's now owned and hereafter
acquired inventory, goods and merchandise, wherever located, to be
furnished under any contract of service or held for sale or lease, all
returned goods, raw materials, work-in-process, finished goods (including
embedded software), other materials and supplies of any kind, nature or
description which are used or consumed in the Borrower's business or used
in connection with the packing, shipping, advertising, selling or finishing
of such goods, merchandise, and all documents of title or other Documents
representing them.
"Investment Property" means all of the Borrower's right title and
interest in and to any and all: (a) securities whether certificated or
uncertificated; (b) securities entitlements; (c) securities accounts; (d)
commodity contracts; or (e) commodity accounts.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and thereafter
until the Agent receives new projections pursuant to Section 5.2(e), the
projections of the Borrower's financial condition, results of operations,
and cash flows, for the period commencing on January 1, 2005 and ending on
December 31, 2006 and delivered to the Agent prior to the Closing Date; and
(b) thereafter, the projections most recently received by the Agent
pursuant to Section 5.2(f).
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent
Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall
be taken into account in determining any Lender's Pro Rata Share.
81
"Letter of Credit" has the meaning specified in Section 1.4(a).
"Letter of Credit Fee" has the meaning specified in Section 2.6.
"Letter of Credit Issuer" means the Bank, any affiliate of the Bank or
any other financial institution that issues any Letter of Credit pursuant
to this Agreement.
"Letter of Credit Subfacility" means $40,000,000.
"LIBOR Interest Payment Date" means, with respect to a LIBOR Revolving
Loan, the first day of each month hereafter, the last day of each Interest
Period applicable to such Loan, and the Termination Date.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR
Revolving Loans, the rate of interest per annum determined pursuant to the
following formula:
LIBOR Rate = Offshore Base Rate
--------------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the Offshore Base Rate shall
be, for any Interest Period, the rate per annum appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable
to such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates. If for any reason none of the
foregoing rates is available, the Offshore Base Rate shall be, for any
Interest Period, the rate per annum determined by Agent as the rate of
interest at which dollar deposits in the approximate amount of the
LIBOR Revolving Loan comprising part of such Borrowing would be
offered by the Bank's London Branch to major banks in the offshore
dollar market at their request at or about 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/8th of 1%) in effect on such day
applicable to member banks under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Offshore Rate for each
outstanding LIBOR Revolving Loan shall be adjusted automatically as of
the effective date of any change in the Eurodollar Reserve Percentage.
"LIBOR Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute, or contract, and
82
including a security interest, charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes;
(b) to the extent not included under clause (a), any reservation,
exception, encroachment, easement, right-of-way, covenant, condition,
restriction, lease or other title exception or encumbrance affecting
property; and (c) any contingent or other agreement to provide any of the
foregoing.
"Loan Account" means the loan account of the Borrower, which account
shall be maintained by the Agent.
"Loan Documents" means this Agreement, the Trademark Security
Agreement, the Security Agreement, the Parent Pledge Agreement, the Parent
Guaranty, and any other agreements, instruments, and documents heretofore,
now or hereafter evidencing, securing, guaranteeing or otherwise relating
to the Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided for in
Article 1.
"Lockbox Account" means a depository account established pursuant to
one of the Lockbox Agreements.
"Lockbox Agreement" means those certain lockbox operating procedural
agreements and those certain depository account agreements, in form and
substance satisfactory to Agent each of which is among Borrower, Agent, and
a Lockbox Bank.
"Lockbox Bank" means Bank of America, N.A, or any other financial
institution mutually acceptable to Borrower and Agent.
"Majority Lenders" means at any date of determination Lenders whose
Pro Rata Shares aggregate more than 50%.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, or
condition (financial or otherwise) of the Borrower, the Collateral or any
guarantor of the Obligations; (b) a material impairment of the ability of
the Borrower or any Affiliate of Borrower to perform under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Borrower
of any Loan Document to which it is a party.
"Maximum Revolver Amount" means $70,000,000.
"Maximum Rolling Stock Loan Amount" means $30,000,000.
"Multi-employer Plan" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the
Borrower or any ERISA Affiliate.
"Net Amount of Eligible Accounts" means, at any time, the gross amount
of Eligible Accounts less sales, excise or similar taxes, and less returns,
83
discounts, claims, credits, allowances, accrued rebates, offsets,
deductions, counterclaims, disputes and other defenses of any nature at any
time issued, owing, granted, outstanding, available or claimed.
"Net Orderly Liquidation Value" shall mean (a) the "net orderly
liquidation value" determined by a valuation company acceptable to the
Agent after performance of a Rolling Stock valuation to be done at the
Agent's request and the Borrower's expense, less the amount estimated by
such valuation company for marshalling, reconditioning, carrying, and sales
expenses designed to maximize the resale value of such Rolling Stock and
assuming that the time required to dispose of such Rolling Stock is [six
(6) months]; or (b) if no such Rolling Stock valuation has been requested
by the Agent, the value customarily attributed to Rolling Stock in the
appraisal industry for Rolling Stock of similar quality and quantity, and
similarly dispersed (under similar and relevant circumstances under
standard asset-based lending procedures), at the time of the valuation,
less the amount customarily estimated in the appraisal industry at the time
of any determination for marshalling, recondition, carrying, and sales
expenses designed to maximize the resale value of such Rolling Stock and
assuming that the time required to dispose of such Rolling Stock is [six
(6) months].
"Net Proceeds" has the meaning specified in Section 3.4(b).
"Net Unfinanced Capital Expenditures" for any period means the sum of:
(a) Capital Expenditures made during such period, less (b) the net cash
proceeds received by Borrower during such period from the sale, lease or
other disposition of any capital assets, less (c) cash proceeds received by
Borrower during such period from any financed purchase of any capital
assets.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
in Section 1.2(h).
"Notes" means Revolving Loan Notes.
"Notice of Borrowing" has the meaning specified in Section 1.2(b).
"Notice of Continuation/Conversion" has the meaning specified in
Section 2.2(b).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the
Borrower to the Agent and/or any Lender, arising under or pursuant to this
Agreement or any of the other Loan Documents, whether or not evidenced by
any note, or other instrument or document, whether arising from an
extension of credit, opening of a letter of credit, acceptance, loan,
guaranty, indemnification or otherwise, whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, as
principal or guarantor, and including all principal, interest, charges,
expenses, fees, attorneys' fees, filing fees and any other sums chargeable
to the Borrower hereunder or under any of the other Loan Documents.
"Obligations" includes, without limitation, (a) all debts, liabilities, and
obligations now or hereafter arising from or in connection with the Letters
of Credit and (b) all debts, liabilities and obligations now or hereafter
arising from or in connection with Bank Products.
"Other Taxes" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other
Loan Documents.
"Parent" means Central Freight Lines, Inc., a Nevada corporation.
84
"Parent Guaranty" means that certain Guaranty of the Obligations
executed by the Parent for the benefit of the Agent and the other Lenders.
"Parent Pledge Agreement" means that certain Pledge Agreement executed
by the Parent for the benefit of the Agent and the other Lenders.
"Participant" means any Person who shall have been granted the right
by any Lender to participate in the financing provided by such Lender under
this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Payment Account" means each bank account established pursuant to the
Security Agreement, to which the proceeds of Accounts and other Collateral
are deposited or credited, and which is maintained in the name of the Agent
or the Borrower, as the Agent may determine, on terms acceptable to the
Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received
by the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Borrower sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or
in the case of a Multi-employer Plan has made contributions at any time
during the immediately preceding five (5) plan years.
"Permitted Liens" means:
(a) Liens for taxes not delinquent or statutory Liens for taxes in an
amount not to exceed $100,000 provided that the payment of such taxes which
are due and payable is being contested in good faith and by appropriate
proceedings diligently pursued and as to which adequate financial reserves
have been established on Borrower's books and records and a stay of
enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under
worker's compensation, unemployment insurance, social security and other
similar laws, or to secure the performance of bids, tenders or contracts
(other than for the repayment of Debt) or to secure indemnity, performance
or other similar bonds for the performance of bids, tenders or contracts
(other than for the repayment of Debt) or to secure statutory obligations
(other than liens arising under ERISA or Environmental Liens) or surety or
appeal bonds, or to secure indemnity, performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons, provided that if
any such Lien arises from the nonpayment of such claims or demand when due,
such claims or demands do not exceed $100,000 in the aggregate;
85
(e) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with
the land, and other similar title exceptions or encumbrances affecting any
Real Estate; provided that they do not in the aggregate materially detract
from the value of the Real Estate or materially interfere with its use in
the ordinary conduct of the Borrower's business;
(f) Liens on Rolling Stock or other Equipment created under
Capitalized Leases which attach only to the Rolling Stock or other
Equipment subject to the Capital Lease Liens and Liens on Rolling Stock or
other Equipment to secure purchase money security interests therein so long
as such Liens solely secure the purchase price of such Rolling Stock or
other Equipment, and such Debt does not exceed the purchase price of such
Rolling Stock or other Equipment; and
(g) Liens arising from judgments and attachments in connection with
court proceedings provided that the attachment or enforcement of such Liens
would not result in an Event of Default hereunder and such Liens are being
contested in good faith by appropriate proceedings, adequate reserves have
been set aside and no material Property is subject to a material risk of
loss or forfeiture and the claims in respect of such Liens are fully
covered by insurance (subject to ordinary and customary deductibles) and a
stay of execution pending appeal or proceeding for review is in effect.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated
organization, association, corporation, Governmental Authority, or any
other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Borrower sponsors or maintains or to which the Borrower
makes, is making, or is obligated to make contributions and includes any
Pension Plan.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts
of all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount
of Obligations owed to such Lender and the denominator of which is the
aggregate amount of the Obligations owed to the Lenders, in each case
giving effect to a Lender's participation in Non-Ratable Loans and Agent
Advances.
"Proprietary Rights" means all of the Borrower's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents,
patent rights, copyrights, works which are the subject matter of
copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service mark applications, and all licenses and rights
related to any of the foregoing, including those patents, trademarks,
service marks, trade names and copyrights set forth on Schedule 6.12
hereto, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of
any of the foregoing, and all rights to sue for past, present and future
infringement of any of the foregoing.
"Real Estate" means all of the Borrower's now or hereafter owned or
leased estates in real property, including, without limitation, all fees,
leaseholds and future interests, together with all of the Borrower's now or
hereafter owned or leased interests in the improvements thereon, the
fixtures attached thereto and the easements appurtenant thereto.
"Registered Public Accounting Firm" has the meaning specified in the
Securities Laws and shall be independent of the Borrower and the Parent as
86
prescribed by the Securities Laws. Registered Public Accountants shall mean
the accountants in such Registered Public Accounting Firm.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
of a Contaminant into the indoor or outdoor environment or into or out of
any Real Estate or other property, including the movement of Contaminants
through or in the air, soil, surface water, groundwater or Real Estate or
other property.
"Replacement Letters of Credit" means any Letter of Credit issued, in
part to replace the Letter of Credit issued by Fleet National Bank on the
Closing Date, in the maximum stated amount of $20,753,426 to Sun Trust
Bank.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata Shares
aggregate more than 66-2/3%.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Reserves" means reserves that limit the availability of credit
hereunder, consisting of reserves against Availability, Eligible Accounts
or Eligible Rolling Stock, established by Agent from time to time in
Agent's reasonable credit judgment. Without limiting the generality of the
foregoing, the following reserves shall be deemed to be a reasonable
exercise of Agent's credit judgment: (a) Bank Product Reserves, (b) a
reserve for accrued, unpaid interest on the Obligations, (c) reserves for
rent at leased locations subject to statutory or contractual landlord
liens, (d) Environmental Compliance Reserves, (e) insurance reserves, (f)
dilution, (g) litigation reserves, and (h) reserves for amounts due to any
Person with whom the Borrower has a transportation alliance.
"Responsible Officer" means the chief executive officer, the
president, or any executive vice president, senior vice president, or vice
president-finance of the Borrower, or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants and the preparation of the Borrowing
Base Certificate, the chief financial officer or the treasurer of the
Borrower, or any other officer having substantially the same authority and
responsibility.
"Restricted Investment" means, as to the Borrower, any acquisition of
property by the Borrower in exchange for cash or other property, whether in
the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other property, or a
loan, advance, capital contribution, or subscription, except the following:
(a) acquisitions of Equipment to be used in the business of the Borrower so
long as the acquisition costs thereof constitute Capital Expenditures
permitted hereunder; (b) acquisitions of Rolling Stock in the ordinary
course of business of the Borrower; (c) acquisitions of current assets
acquired in the ordinary course of business of the Borrower; (d) direct
obligations of the United States of America, or any agency thereof, or
obligations guaranteed by the United States of America, provided that such
obligations mature within one year from the date of acquisition thereof;
(e) acquisitions of certificates of deposit maturing within one year from
the date of acquisition, bankers' acceptances, Eurodollar bank deposits, or
overnight bank deposits, in each case issued by, created by, or with a bank
or trust company organized under the laws of the United States of America
or any state thereof having capital and surplus aggregating at least
$100,000,000; (f) acquisitions of commercial paper given a rating of "A2"
87
or better by Standard & Poor's Corporation or "P2" or better by Moody's
Investors Service, Inc. and maturing not more than 90 days from the date of
creation thereof; (g) Hedge Agreements; (h) investments made in connection
with Acquisitions permitted by Section 7.28; (i) investments constituting
Debt permitted by Section 7.13; (j) investments in securities of Account
Debtors received pursuant to any plan or reorganization or similar
arrangement upon the bankruptcy or insolvency of such Account Debtors, so
long as Agent has a valid, perfect first priority lien therein; and (k)
loans or advances to employees, officers, or directors of the Borrower or
the Parent in the ordinary course of business for travel, relocation,
entertainment and related expenses not to exceed $50,000 at any time.
"Revolving Loan Note" and "Revolving Loan Notes" have the meanings
specified in Section 1.2(a)(ii).
"Revolving Loans" has the meaning specified in Section 1.2 and
includes each Agent Advance and Non-Ratable Loan.
"Rolling Stock" means any interest in any tractor, trailer, or other
vehicle now or hereafter owned by the Borrower.
"Rolling Stock Capital Expenditure" means any Capital Expenditure made
with respect to Rolling Stock.
"Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002.
"SEC" means the Securities and Exchange Commission or any Governmental
Authority succeeding to the functions thereof.
"Securities Laws" means the Securities Act of 1933, the Securities
Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and
auditing principles, rules, standards and practices promulgated, approved
or incorporated by the SEC or the Public Company Accounting Oversight
Board, as each of the foregoing may be amended and in effect on any
applicable date hereunder.
"Security Agreement" means the Security Agreement of even date
herewith between Borrower and Agent for the benefit of Agent and other
Lenders.
"Settlement" and "Settlement Date" have the meanings specified in
Section 12.15(a)(ii).
"Solvent" means, when used with respect to any Person, that at the
time of determination:
(a) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including contingent liabilities); and
(b) the present fair saleable value of its assets is greater than its
probable liability on its existing debts as such debts become absolute and
matured; and
(c) it is then able and expects to be able to pay its debts (including
contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
88
For purposes of determining whether a Person is Solvent, the amount of
any contingent liability shall be computed as the amount that, in light of
all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Southwest Sale/Leaseback" means the agreement between the Borrower
and Southwest Premier Properties, L.L.C. for the sale and leaseback of the
land, structures, and improvements of certain of the Borrower's terminals.
"Stated Termination Date" means January 31, 2009.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than fifty percent (50%) of the voting stock or other
equity interests (in the case of Persons other than corporations), is owned
or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"Supporting Obligations" means all supporting obligations as such term
is defined in the UCC.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured
by the Agent's or each Lender's net income in any jurisdiction (whether
federal, state or local and including any political subdivision thereof).
"Termination Date" means the earliest to occur of (i) the Stated
Termination Date, (ii) the date the Total Facility is terminated either by
the Borrower pursuant to Section 3.2 or by the Required Lenders pursuant to
Section 9.2, and (iii) the date this Agreement is otherwise terminated for
any reason whatsoever pursuant to the terms of this Agreement.
"Total Facility" has the meaning specified in Section 1.1.
"Trademark Agreements" means the Trademark Security Agreement, dated
as of the date hereof, executed and delivered by the Borrower to the Agent
to evidence and perfect the Agent's security interest in the Borrower's
present and future patents, trademarks, and related licenses and rights,
for the benefit of the Agent and the Lenders.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of Texas or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"Unused Letter of Credit Subfacility" means an amount equal to
$40,000,000 minus the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit plus, without duplication, (b) the aggregate
unpaid reimbursement obligations with respect to all Letters of Credit.
89
"Unused Line Fee" has the meaning specified in Section 2.5.
"Voting Stock" of any Person as of any date means the capital stock of
such Person that is at the time entitled to vote in the election of the
board of directors of such Person.
Accounting Terms. Any accounting term used in the Agreement shall
have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
in the Agreement shall be computed, unless otherwise specifically provided
therein, in accordance with GAAP as consistently applied and using the same
method for valuations as used in the preparation of the Financial
Statements.
Interpretive Provisions. (a) The meanings of defined terms are equally
applicable to the ------------------------ singular and plural forms of the
defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to the Agreement as a whole and not to any particular provision of the
Agreement; and Subsection, Section, Schedule and Exhibit references are to
the Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including without
limitation."
(iii) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including," the words
"to" and "until" each mean "to but excluding" and the word "through" means
"to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including the Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of the Agreement and other Loan
Documents are for convenience of reference only and shall not affect the
interpretation of the Agreement.
(f) The Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each
be performed in accordance with their terms.
(g) For purposes of Section 9.1, a breach of a financial covenant
contained in Sections 7.22-7.26 shall be deemed to have occurred as of any
date of determination thereof by the Agent or as of the last day of any
specified measuring period, regardless of when the Financial Statements
reflecting such breach are delivered to the Agent.
(h) The Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the
Borrower and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent
merely because of the Agent's or Lenders' involvement in their preparation.
90
EXHIBIT A
FORM OF REVOLVING LOAN NOTE
$-------------------- ---------- --, -----
For Value Received, the undersigned (the "Borrower") hereby promises to pay
to the order of ____________________(the "Lender") in care of Bank of America,
N.A. (the "Agent"), at the Agent's office located at 901 Main Street, 22nd
Floor, Dallas, Texas 75202, for the account of the Lender, the lesser of the
principal amount of _____________________ ($_______________) or the aggregate
amount of all outstanding Revolving Loans made to Borrower by the Lender from
time to time. The undersigned also promise to pay interest on the unpaid
principal amount of each Borrowing from the date of such Borrowing until such
principal amount is paid. This Note shall be subject to the terms of that
certain Credit Agreement described below, and all principal and interest payable
hereunder shall be due and payable in accordance with the terms of the Credit
Agreement.
This Note is one of the Notes referred to in the Credit Agreement, dated as
of January 31, 2005 (the "Credit Agreement"), among the Borrower, the Lender,
certain other Lenders party thereto, and Bank of America, N.A., as Agent for the
Lenders. Terms defined in the Credit Agreement are used herein with the same
meanings. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity of this Note upon the happening of certain stated
events and also for prepayments on account of the principal of this Note prior
to the maturity of this Note upon the terms and conditions specified in the
Credit Agreement. Without limiting the immediately preceding sentence, reference
is made to Section 2.3 of the Credit Agreement for usury savings provisions.
This Note is entitled to the benefits of the Parent Guaranty and is secured by
the Collateral.
Principal and interest payments shall be in money of the United States of
America, lawful at such times for the satisfaction of public and private debts,
and shall be in immediately available funds.
The Borrower hereby promises to pay the costs of collection, including
reasonable attorney's fees, if default is made in the payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF TEXAS.
BORROWER:
Central Freight Lines, Inc., a Texas corporation
By:
------------------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
91
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
- ------------------------------------------------------------------------------
BANK OF AMERICA
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
MONTHLY BORROWING BASE CERTIFICATE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Client: CENTRAL FREIGHT LINES, INC.
- ------------------------------------------------------------------------------
Certificate Number:
- ------------------------------------------------------------------------------
Dates Covered:
- ------------------------------------------------------------------------------
Eligible Accounts Receivable
85% Eligible
Accounts Receivable Reserve
Net Accounts Receivable Borrowing Base ------------
Eligible Unbilled Accounts Receivable
85% Eligible
Unbilled Accounts Receivable Reserve ------------
Net Unbilled Accounts Receivable Borrowing Base
Maximum Unbilled Accounts Receivable ($5,000,000)
Eligible Rolling Stock
85% Eligible ------------
Rolling Stock Reserve
Net Rolling Stock Availability
Maximum Rolling Stock ($30,000,000)
Gross Borrowing Base ------------
Outstanding Letters of Credit ------------
Net Borrowing Base ------------
The foregoing information is delivered to Bank of America, N.A. in
accordance with a Credit Agreement between Bank of America, N.A. and Central
Freight Lines, Inc., dated January 31, 2005. I hereby certify that the
information contained herein is true and correct as of the dates shown herein.
Nothing contained herein shall constitute a waiver, modification, or limitation
in any of the terms or conditions set forth in the referenced Credit Agreement.
92
- -------------------------------------------------------------------------------
BANK OF AMERICA
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
BORROWING BASE CERTIFICATE - ACCOUNTS RECEIVABLE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Client: CENTRAL FREIGHT LINES, INC.
- -------------------------------------------------------------------------------
Certificate Number:
- -------------------------------------------------------------------------------
Dates Covered:
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
BILLED (#CFL01) UNBILLED (#CFL02)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1. Beginning Billed A/R Balance 1. Beginning Unbilled A/R Balance
- --------------------------------------------------------------------------------------------------------------------------------
2. Beginning Unbilled A/R Balance (+)
- --------------------------------------------------------------------------------------------------------------------------------
3. Beginning Total A/R Balance
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4. Sales / DRJs (+)
- --------------------------------------------------------------------------------------------------------------------------------
5. Debits / FMJs, PMJs, AMJs & JEs (+)
- --------------------------------------------------------------------------------------------------------------------------------
6. Credits / FMJs, PMJs, AMJs & JEs (-)
- --------------------------------------------------------------------------------------------------------------------------------
7. Adjustments (+) 2. Adjustments (+)
- --------------------------------------------------------------------------------------------------------------------------------
8. Adjustments (-) 3. Adjustments (-)
- --------------------------------------------------------------------------------------------------------------------------------
9. Collections / CRJs & SFJs (-)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10. Current A/R Balance 4. Current Unbilled A/R Balance
- --------------------------------------------------------------------------------------------------------------------------------
11. Unbilled A/R (-)
- --------------------------------------------------------------------------------------------------------------------------------
12. Billed A/R
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
13. Ineligible 5. Ineligible
- --------------------------------------------------------------------------------------------------------------------------------
14. Eligible A/R Collateral 6. Eligible Unbilled A/R Collateral
- --------------------------------------------------------------------------------------------------------------------------------
15. 85% Eligible 7. 85% Eligible
- --------------------------------------------------------------------------------------------------------------------------------
16. Less Interline Payable Reserve 8. Less Reserve
- --------------------------------------------------------------------------------------------------------------------------------
17. Qualified Collateral 9. Qualified Collateral
- --------------------------------------------------------------------------------------------------------------------------------
18. Total Line Limit $70,000,000.00 10. Total Line Limit $5,000,000.00
- --------------------------------------------------------------------------------------------------------------------------------
The foregoing information is delivered to Bank of America, N.A. in
accordance with a Credit Agreement between Bank of America, N.A. and Central
Freight Lines, Inc., dated January 31, 2005. I hereby certify that the
information contained herein is true and correct as of the dates shown herein.
Nothing contained herein shall constitute a waiver, modification, or limitation
in any of the terms or conditions set forth in the referenced Credit Agreement.
93
- -----------------------------------------------------------------------------
BANK OF AMERICA
- ------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ACCOUNTS RECEIVABLE INELIGIBLE CALCULATION
--------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Client: CENTRAL FREIGHT LINES, INC.
- ------------------------------------------------------------------------------
Certificate Number:
- ------------------------------------------------------------------------------
Dates Covered:
- ------------------------------------------------------------------------------
BILLED (#CFL01) UNBILLED (#CFL02)
- ------------------------------------------------------------------------------------------------------------------------
Balances > 90 Days From Invoice Date Balances > 10 Days From Freight Bill Date
- ------------------------------------------------------------------------------------------------------------------------
Balances > 100 Days From Freight Bill Date Deferred Revenue
- ------------------------------------------------------------------------------------------------------------------------
Credits > 90 Days From Invoice Date
- ------------------------------------------------------------------------------------------------------------------------
50% Cross-Age
- ------------------------------------------------------------------------------------------------------------------------
Concentration Accounts > 15% (Exclud. Dell)
- ------------------------------------------------------------------------------------------------------------------------
Balance Due From Dell > 20%
- ------------------------------------------------------------------------------------------------------------------------
Contra Accounts
- ------------------------------------------------------------------------------------------------------------------------
Bankrupt Accounts
- ------------------------------------------------------------------------------------------------------------------------
COD Accounts
- ------------------------------------------------------------------------------------------------------------------------
Foreign Accounts
- ------------------------------------------------------------------------------------------------------------------------
Government Accounts
- ------------------------------------------------------------------------------------------------------------------------
Suspense Account
- ------------------------------------------------------------------------------------------------------------------------
Intercompany Accounts
- ------------------------------------------------------------------------------------------------------------------------
Invoices Without Supporting Documents
- ------------------------------------------------------------------------------------------------------------------------
Unreconciled Difference
- ------------------------------------------------------------------------------------------------------------------------
Total Ineligible A/R Total Ineligible Unbilled A/R
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
<FN>
The foregoing information is delivered to Bank of America, N.A. in accordance with a Credit Agreement between Bank of
America, N.A. and Central Freight Lines, Inc., dated January 31, 2005. I hereby certify that the information
contained herein is true and correct as of the dates shown herein. Nothing contained herein shall constitute a
waiver, modification, or limitation in any of the terms or conditions set forth in the referenced Credit Agreement.
</FN>
- -------------------------------------------------------------------------------
94
- -------------------------------------------------------------------------------
BANK OF AMERICA
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
BORROWING BASE CERTIFICATE - ROLLING STOCK (#CFL03)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Client: CENTRAL FREIGHT LINES, INC.
- -------------------------------------------------------------------------------
Certificate Number:
- -------------------------------------------------------------------------------
Dates Covered:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ROLLING STOCK (#CFL03)
- -------------------------------------------------------------------------------
1. Beginning Appraised Value
- -------------------------------------------------------------------------------
2. Acquisitions/New Titles - See Attached List (+)
- -------------------------------------------------------------------------------
3. Dispositions - See Attached List (-)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4. Current Appraised Value
- -------------------------------------------------------------------------------
5. Depreciation
- -------------------------------------------------------------------------------
6. Current Depreciated Appraised Value
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
7. 85% Eligible
- -------------------------------------------------------------------------------
8. Less Reserve
- -------------------------------------------------------------------------------
9. Qualified Collateral
- -------------------------------------------------------------------------------
10. Total Line Limit
- -------------------------------------------------------------------------------
The foregoing information is delivered to Bank of America, N.A. in accordance
with a Credit Agreement between Bank of America, N.A. and Central Freight Lines,
Inc., dated January 31, 2005. I hereby certify that the information contained
herein is true and correct as of the dates shown herein. Nothing contained
herein shall constitute a waiver, modification, or limitation in any of the
terms or conditions set forth in the referenced Credit Agreement.
95
EXHIBIT C
LEFT INTENTIONALLY BLANK
96
EXHIBIT D
NOTICE OF BORROWING
Date: ______________, 200_
To: Bank of America, N.A. as Agent for the Lenders who are parties to the
Credit Agreement dated as of January 31, 2005 (as extended, renewed,
amended or restated from time to time, the "Credit Agreement") among
Central Freight Lines, Inc., certain Lenders which are signatories thereto
and Bank of America, N.A., as Agent
Ladies and Gentlemen:
The undersigned, Central Freight Lines, Inc. (the "Borrower"), refers to
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably of the Borrowing specified
below:
1. The Business Day of the proposed Borrowing is , 200 .
----------------------- --
2. The aggregate amount of the proposed Borrowing is $ . ---------------------
3. The Borrowing is to be comprised of $ of Base Rate and $ of ------------
-------------- LIBOR Revolving Loans.
4. The duration of the Interest Period for the LIBOR Revolving Loans, if any,
included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained in the
Credit Agreement are true and correct as though made on and as of such date;
(b) No Default or Event of Default has occurred and is continuing, or would
result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal amount of
all outstanding Revolving Loans plus the maximum aggregate amount available for
drawing under all outstanding Letters of Credit, to exceed the Borrowing Base or
the combined Commitments of the Lenders.
CENTRAL FREIGHT LINES, INC.
By:-----------------------------------
Title:-----------------------------------
97
EXHIBIT E
NOTICE OF CONTINUATION/CONVERSION
Date: ___________________, 200_
To: Bank of America, N.A. as Agent for the Lenders to the Credit Agreement
dated as of January , 2005 ---- (as extended, renewed, amended or restated
from time to time, the "Credit Agreement") among Central Freight Lines,
Inc., certain Lenders which are signatories thereto and Bank of America,
N.A., as Agent
Ladies and Gentlemen:
The undersigned, Central Freight Lines, Inc. (the "Borrower"), refers to
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Continuation/Conversion Date is , 200 . ------------ -
2. The aggregate amount of the Loans to be [converted] [continued] is $ .
--------------
3. The Loans are to be [converted into] [continued as] [LIBOR Rate] [Base
Rate] Loans.
4. The duration of the Interest Period for the LIBOR Revolving Loans
included in the [conversion] [continuation] shall be months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed Continuation/Conversion Date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained in the
Credit Agreement are true and correct as though made on and as of such date;
(b) Default or Event of Default has occurred and is continuing, or would
result from such proposed [conversion] [continuation]; and
(c) The proposed conversion-continuation will not cause the aggregate
principal amount of all outstanding Revolving Loans plus the maximum aggregate
amount available for drawing under all outstanding Letters of Credit to exceed
the Borrowing Base or the combined Commitments of the Lenders.
CENTRAL FREIGHT LINES, INC., a Texas corporation
By:
-----------------------------------------
Title:
-----------------------------------------
98
EXHIBIT F
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of ____________________, 200_ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated as of
January , 2005 (as amended, amended and restated, modified, supplemented or
renewed, the "Credit Agreement") among Central Freight Lines, Inc., a Texas
corporation (the "Borrower"), the several financial institutions from time to
time party thereto (including the Assignor, the "Lenders"), and Bank of America,
N. A., as agent for the Lenders (the "Agent"). Any terms defined in the Credit
Agreement and not defined in this Assignment and Acceptance are used herein as
defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has committed
to making Loans (the "Committed Loans") to the Borrower in an aggregate amount
not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the aggregate principal
amount of $__________ to the Borrower
WHEREAS, [the Assignor has acquired a participation in its pro rata share
of the Lenders' liabilities under Letters of Credit in an aggregate principal
amount of $____________ (the "L/C Obligations")] [no Letters of Credit are
outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Commitment, together with a corresponding portion of each of its outstanding
Committed Loans and L/C Obligations, in an amount equal to $__________ (the
"Assigned Amount") on the terms and subject to the conditions set forth herein
and the Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and Acceptance,
(i) the Assignor hereby sells, transfers and assigns to the Assignee, and (ii)
the Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) __% (the "Assignee's Percentage Share") of (A) the
Commitment, the Committed Loans and the L/C Obligations of the Assignor and (B)
all related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
(b) With effect on and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
99
all of the rights and be obligated to perform all of the obligations of a Lender
under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender. It is the
intent of the parties hereto that the Commitment of the Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections __ and __ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth herein,
on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to $__________, representing the
Assignee's Pro Rata Share of the principal amount of all Committed Loans.
(b) The Assignee further agrees to pay to the Agent a processing fee in the
amount specified in Section 11.2(a) of the Credit Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment, and Committed Loans and L/C Obligations shall be for
the account of the Assignor. Any interest, fees and other payments accrued on
and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee. Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements of the Borrower, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be __________, 200_ (the "Effective Date");
100
provided that the following conditions precedent have been satisfied on or
before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered by the
Assignor and the Assignee;
[(ii) the consent of the Agent required for an effective assignment of the
Assigned Amount by the Assignor to the Assignee shall have been duly obtained
and shall be in full force and effect as of the Effective Date;]
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section 11.2 of the Credit
Agreement (if applicable);]
(v) the processing fee referred to in Section 2(b) hereof and in Section
11.2(a) of the Credit Agreement shall have been paid to the Agent; and
(b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Borrower and the Agent for acknowledgment by the
Agent, a Notice of Assignment in the form attached hereto as Schedule 1.
6. [Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the Lenders pursuant to the terms of
the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the Assignor
in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the Agent and the
Borrower that under applicable law and treaties no tax will be required to be
withheld by the Lender with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Borrower prior to the time that the Agent or Borrower is required to make
any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue Service Form W-8ECI or U.S. Internal
Revenue Service Form W-8BEN (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms W-8ECI or W-8BEN upon the expiration of any previously delivered form
or comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
101
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Borrower, or the performance or observance by the Borrower, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance; and apart from any
agreements or undertakings or filings required by the Credit Agreement, no
further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; (iii) this Assignment and
Acceptance has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignee, enforceable against the Assignee
in accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable principles;
[and (iv) it is an Eligible Assignee.]
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrower or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
102
(c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance. (d) This Assignment and
Acceptance may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. The Assignor and the Assignee
each irrevocably submits to the non-exclusive jurisdiction of any State or
Federal court sitting in Texas over any suit, action or proceeding arising out
of or relating to this Assignment and Acceptance and irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such Texas State or Federal court. Each party to this Assignment and Acceptance
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:------------------------------
Title:---------------------------
Address:-------------------------
[ASSIGNEE]
By:------------------------------
Title:---------------------------
Address:-------------------------
103
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 200_
Bank of America, N.A
901 Main Street, 22nd Floor
Dallas, Texas 75202
Attn: Joy L. Bartholomew
Re: Central Freight Lines, Inc.
5601 West Waco Drive
Waco, TX 76710
Attention: Steve Owen
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of January 31, 2005 (as amended,
amended and restated, modified, supplemented or renewed from time to time the
"Credit Agreement") among Central Freight Lines, Inc. (the "Borrower"), the
Lenders referred to therein and Bank of America, N. A., as agent for the Lenders
(the "Agent"). Terms defined in the Credit Agreement are used herein as therein
defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including the right, title and interest of the Assignor in
and to the Commitments of the Assignor, all outstanding Loans made by the
Assignor and the Assignor's participation in the Letters of Credit pursuant to
the Assignment and Acceptance Agreement attached hereto (the "Assignment and
Acceptance"). We understand and agree that the Assignor's Commitment, as of ,
200 , is $ ___________, the aggregate amount of its outstanding Loans is
$_____________, and its participation in L/C Obligations is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent and,
if applicable, the Borrower to such assignment, the Assignee will be bound by
the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Lender originally holding such interest in the Credit
104
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
Address:
----------------------------------
Attention:
----------------------------------
Telephone: (___)
Telecopier: (___)
Telex (Answerback):
(B) Payment Instructions:
Account No.:
----------------------------
At:
----------------------------
Reference:
----------------------------
Attention:
----------------------------
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America, N. A.
as Agent
By:
-----------------------------------------
Title:
-----------------------------------------
105