- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 Or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 000-23095
JEVIC TRANSPORTATION, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2373402
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Creek Road, Delanco, NJ 08075
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
609-461-7111
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
-- --
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Equity, no par value, 10,667,909 shares outstanding as of July 20, 1998,
consisting of two series:
Class A Common Stock, no par value, 5,739,544 shares outstanding as of July
20, 1998
Common Stock, no par value, 4,938,365 shares outstanding as of July 20, 1998
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<PAGE>
JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets--June 30, 1998
and December 31, 1997 1
Consolidated Statements of Income--Three
and six months ended June 30, 1998 and 1997 2
Consolidated Statements of Cash Flows--
Six months ended June 30, 1998 and 1997 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
<PAGE>
Item 1. Consolidated Financial Statements
JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
---- ----
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .......................................................... $ 4,354 $ 7,185
Accounts receivable, less allowance for doubtful accounts of
$1,426 and $1,527 ................................................................ 22,331 21,792
Prepaid expenses and other ......................................................... 3,733 3,172
Deferred income taxes .............................................................. 2,201 1,862
--------- ---------
Total current assets ...................................................... 32,619 34,011
PROPERTY AND EQUIPMENT, net ............................................................ 86,754 77,894
OTHER ASSETS ........................................................................... 1,261 1,463
--------- ---------
$ 120,634 $ 113,368
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt and capital lease
obligations ...................................................................... $ 1,883 $ 1,976
Accounts payable and accrued expenses .............................................. 13,823 12,514
Claims and insurance reserves ...................................................... 4,432 3,917
Deferred freight revenues .......................................................... 1,992 1,752
--------- ---------
Total current liabilities ................................................ 22,130 20,159
--------- ---------
LONG-TERM DEBT ......................................................................... 14,744 15,679
--------- ---------
DEFERRED INCOME TAXES .................................................................. 12,877 11,782
--------- ---------
OTHER LIABILITIES ...................................................................... 37 211
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, no par value, 10,000,000 shares authorized;
none issued and outstanding ...................................................... -- --
Common stock, no par value, 40,000,000 shares authorized;
4,938,365 and 4,918,656 issued and outstanding,
respectively ..................................................................... -- --
Class A common stock, no par value, 10,000,000 shares
authorized; 5,739,544 shares issued and outstanding .............................. -- --
Additional paid-in capital ......................................................... 72,031 71,816
Accumulated deficit ................................................................ (1,185) (6,279)
--------- ---------
Total shareholders' equity ............................................... 70,846 65,537
--------- ---------
$ 120,634 $ 113,368
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE>
JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share information)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING REVENUES ......................................................... $ 54,580 $ 46,137 $ 109,480 $ 90,417
--------- --------- --------- ---------
OPERATING EXPENSES:
Salaries, wages and benefits ........................................... 27,637 23,845 55,366 46,583
Supplies and other expenses ............................................ 9,140 8,633 18,691 17,371
Purchased transportation ............................................... 6,475 3,953 12,835 8,595
Depreciation and amortization .......................................... 3,635 2,760 7,180 5,382
Operating taxes and licenses ........................................... 2,474 2,137 5,024 4,302
Insurance and claims ................................................... 671 1,005 2,021 1,975
(Gain) loss on sale of equipment ....................................... (422) 72 (418) 100
--------- --------- --------- ---------
49,610 42,405 100,699 84,308
--------- --------- --------- ---------
Operating income .................................................. 4,970 3,732 8,781 6,109
INTEREST EXPENSE, net ...................................................... 286 870 541 1,629
OTHER INCOME, net .......................................................... (63) (24) (92) (55)
--------- --------- --------- ---------
Income before income taxes ........................................ 4,747 2,886 8,332 4,535
INCOME TAXES ............................................................... 1,875 98 3,237 180
--------- --------- --------- ---------
NET INCOME ................................................................. $ 2,872 $ 2,788 $ 5,095 $ 4,355
========= ========= ========= =========
Basic net income per share ............................................. $ 0.27 $ 0.41 $ 0.48 $ 0.64
========= ========= ========= =========
Diluted net income per share ........................................... $ 0.27 $ 0.40 $ 0.47 $ 0.62
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1998 1997
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income ......................................................................................... $ 5,095 $ 4,355
Adjustments to reconcile net income to net cash provided by
operating activities --
Depreciation and amortization ................................................................ 7,180 5,382
(Gain) loss on sale of equipment ............................................................. (418) 100
Provision for bad debts ...................................................................... (2) 483
Deferred income tax provision ................................................................ 756 75
Changes in assets and liabilities--
Increase in accounts receivable .......................................................... (537) (2,053)
Increase in prepaid expenses and other ................................................... (561) (1,086)
(Increase) decrease in other assets ..................................................... 202 (103)
Increase (decrease) in accounts payable and accrued
expenses .............................................................................. 1,113 (711)
Increase in claims and insurance reserves ................................................ 514 46
Increase in accrued income taxes ......................................................... 22 60
Increase in deferred freight revenues .................................................... 240 163
-------- --------
Net cash provided by operating activities .......................................... 13,604 6,711
-------- --------
INVESTING ACTIVITIES:
Proceeds from sale of equipment .................................................................... 1,548 241
Capital expenditures ............................................................................... (17,171) (14,180)
-------- --------
Net cash used in investing activities .............................................. (15,623) (13,939)
-------- --------
FINANCING ACTIVITIES:
Payments of long-term debt ......................................................................... (1,027) (4,294)
Proceeds from issuance of long-term debt ........................................................... -- 15,539
Payments of capital lease obligations .............................................................. -- (380)
Distributions to shareholder ....................................................................... -- (1,198)
Proceeds from Employee Stock Purchase Plan ......................................................... 215 --
-------- --------
Net cash provided by (used in) financing
activities.......................................................................... (812) 9,667
-------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ............................................................................... (2,831) 2,439
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD ................................................................................ 7,185 2,403
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD ............................................................... $ 4,354 $ 4,842
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of Jevic
Transportation, Inc. and subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for fair presentation have been included.
Operating results for the three and six month periods ended June 30, 1998, are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1998. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997.
2. Earnings Per Share
Basic and diluted net income per share have been computed under the guidelines
of Statement of Financial Accounting Standards No. 128, "Earnings per Share."
Basic net income per share is computed by dividing net income by the weighted
average number of shares of common stock outstanding for the period. Diluted net
income per share is computed by dividing net income by the weighted average
number of shares of common stock outstanding for the period, adjusted for the
dilutive effect of common stock equivalents, consisting of dilutive common stock
options using the treasury stock method. The table below sets forth the
reconciliation of basic to diluted net income per share (in thousands, except
per share amounts):
<TABLE>
<CAPTION>
Three Months Ended June 30,
-------------------------------------------------------------
1998 1997
--------------------------- -------------------------
Per Per
Net Share Net Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic net income
per share .......................... $2,872 10,672 $0.27 $2,788 6,858 $0.41
Effect of dilutive
securities .......................... -- 162 0.00 -- 175 (0.01)
------ ------ ----- ------ ----- -----
Diluted net income
per share ........................... $2,872 10,834 $0.27 $2,788 7,033 $0.40
====== ====== ===== ====== ===== =====
</TABLE>
4
<PAGE>
JEVIC TRANSPORTATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------------------------------
1998 1997
--------------------------- -------------------------
Per Per
Net Share Net Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic net income per
share .............................. $5,095 10,667 $0.48 $4,355 6,858 $0.64
Effect of dilutive
securities .......................... -- 178 (0.01) -- 166 (0.02)
------ ------ ----- ------ ----- -----
Diluted net income
per share ........................... $5,095 10,845 $0.47 $4,355 7,024 $0.62
====== ====== ===== ====== ===== =====
</TABLE>
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Jevic was founded in 1981 after the deregulation of the trucking industry, and
has developed an operating system which combines the high revenue yield
characteristics of a typical LTL carrier with the operating flexibility and low
fixed costs of a truckload carrier. Most other motor carriers have continued to
specialize as either truckload, moving one shipment at a time, or
less-than-truckload, moving multiple small shipments through networks of up to
500 terminals.
The Company's system uses a small number of regional facilities which serve as
origination points for consolidation of both small and large shipments. The
shipments are then loaded onto line-haul trailers in a sequence which permits
direct unloading at each shipment's destination, eliminating the need to
rehandle individual shipments at one or more breakbulk terminals. Management
focuses on adjusting freight mix to maximize asset utilization. The Company
maintains a high percentage of variable costs in order to minimize the impact of
short-term swings in demand.
Because of the distinct nature of Jevic's operating system, the Company believes
that profitability measures and expense ratios traditionally used to evaluate
truckload or less-than-truckload carriers are generally not meaningful. Jevic's
results of operations have been impacted by two key trends. First, Jevic has
been increasing the percentage of its shipments transported by owner-operators,
who supply their own tractor and bear all associated expenses in return for a
contracted rate. As a result, purchased transportation has increased as a
percentage of operating revenues, offset by a reduction, as a percentage of
operating revenues, of drivers' salaries, wages and benefits, depreciation,
fuel, operating taxes and licenses and other supplies and operating expenses.
Additionally, Jevic has shifted from a policy of leasing revenue equipment to
purchasing revenue equipment. As a result, depreciation and interest expense has
increased as a percentage of operating revenues while lease expense, which is
included in supplies and other expenses, has decreased.
6
<PAGE>
Results of Operations
The following table sets forth for the periods indicated the percentage of
operating revenues represented by certain items in the Company's statements of
income:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues .............................................................. 100.0% 100.0% 100.0% 100.0%
----- ----- ----- -----
Operating expenses:
Salaries, wages and benefits ................................................ 50.6 51.7 50.6 51.5
Supplies and other expenses ................................................. 16.7 18.7 17.1 19.2
Purchased transportation .................................................... 11.9 8.6 11.7 9.5
Depreciation and amortization ............................................... 6.7 6.0 6.6 6.0
Operating taxes and licenses ................................................ 4.5 4.6 4.6 4.8
Insurance and claims ........................................................ 1.2 2.2 1.8 2.2
(Gain) loss on sale of equipment ............................................ (0.7) 0.1 (0.4) 0.1
----- ----- ----- -----
90.9 91.9 92.0 93.3
----- ----- ----- -----
Operating income ................................................................ 9.1 8.1 8.0 6.7
Interest expense, net ........................................................... 0.5 1.9 0.5 1.8
Other income, net ............................................................... (0.1) (0.1) (0.1) (0.1)
----- ----- ----- -----
Income before income taxes ...................................................... 8.7% 6.3% 7.6% 5.0%
===== ===== ===== =====
</TABLE>
Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997
Operating Revenues
Operating revenues increased 18.4% for the three months ended June 30,
1998 to $54.6 million from $46.1 million for the comparable period of 1997. The
increase resulted primarily from a 14.6% increase in total shipments. In
addition, revenue per shipment increased 3.2% to $288 for the three months ended
June 30, 1998 from $279 during the three months ended June 30, 1997.
Operating Expenses
Operating expenses increased 17.0% to $49.6 million for the three
months ended June 30, 1998 from $42.4 million for the comparable period of 1997.
As a percentage of operating revenues, operating expenses decreased to 90.9% for
the three months ended June 30, 1998 from 91.9% for the comparable period of
1997. This increase in operating expenses is primarily due to increased
revenues, as the majority of the Company's operating expenses are variable in
nature. The percentage decrease was the result of the Company's increased use of
owner-operators, a reduction in fuel prices and a reduction in insurance and
claims expense.
Salaries, wages and benefits increased 16.0% to $27.6 million for the
three months ended June 30, 1998 from $23.8 million for the comparable period of
1997. As a percentage of operating revenues, salaries, wages and benefits
decreased to 50.6% for the three months ended June 30, 1998 from 51.7% for the
comparable period of 1997. This percentage decrease was primarily due to the
Company's increased use of owner-operators and outside line-haul transportation
in 1998.
7
<PAGE>
Supplies and other expenses, which primarily consist of operating
leases, fuel, tolls, tires, parts and bad debt expense, increased 5.8% to $9.1
million for the three months ended June 30, 1998 from $8.6 million for the
comparable period of 1997. As a percentage of operating revenues, supplies and
other expenses decreased to 16.7% for the three months ended June 30, 1998 from
18.7% for the comparable period of 1997. This percentage decrease was due to the
Company's continuing shift toward the purchase of revenue equipment rather than
leasing such equipment under operating leases, lower fuel prices, the Company's
increased use of owner-operators in 1998 and a reduction in bad debt expense in
1998 as a result of improved collection procedures.
Purchased transportation increased 62.5% to $6.5 million for the three
months ended June 30, 1998 from $4.0 million for the comparable period of 1997.
As a percentage of operating revenues, purchased transportation increased to
11.9% for the three months ended June 30, 1998 from 8.6% for the comparable
period of 1997. The increase was primarily due to the increased use of
owner-operators to supplement the Company's fleet and the increased use of
outside line-haul transportation.
Depreciation and amortization expense increased 28.6% to $3.6 million
for the three months ended June 30, 1998 from $2.8 million for the comparable
period of 1997. As a percentage of operating revenues, depreciation and
amortization increased to 6.7% for the three months ended June 30, 1998 from
6.0% for the comparable period of 1997. The increase was primarily attributable
to the Company's continuing shift toward the purchase of additional and
replacement revenue equipment rather than leasing such equipment under operating
leases and the Company's purchase of computer hardware.
Operating taxes and licenses increased 19.0% to $2.5 million for the
three months ended June 30, 1998 from $2.1 million for the comparable period of
1997. As a percentage of operating revenues, operating taxes and licenses
decreased to 4.5% for the three months ended June 30, 1998 from 4.6% for the
comparable period of 1997. This percentage decrease was primarily attributable
to a decrease in fuel taxes due to the Company's increased use of outside
line-haul transportation and owner-operators, who pay for their own taxes and
licenses.
Insurance and claims decreased 30.0% to $700,000 for the three months
ended June 30, 1998 from $1.0 million for the comparable period of 1997. As a
percentage of operating revenues, insurance and claims decreased to 1.2% for the
three months ended June 30, 1998 from 2.2% for the comparable period of 1997.
The percentage decrease was attributable to favorable development of claims and
reduced premiums on renegotiated insurance coverages that were effective April
1, 1998.
Interest Expense
Interest expense decreased 66.7% to $300,000 for the three months ended
June 30, 1998 from $900,000 for the comparable period of 1997. As a percentage
of operating revenues, interest expense decreased to 0.5% for the three months
ended June 30, 1998 from 1.9% for the comparable period of 1997. Interest
expense decreased due to the Company having paid off debt with part of the
proceeds of the initial public offering in October 1997.
Income Taxes
Income taxes increased to $1.9 million for the three months ended June
30, 1998 from $98,000 for the comparable period of 1997. In the second quarter
of 1998 the Company was subject to corporate federal and state income taxes.
Prior to the Company's initial public offering in October 1997 the Company was
an S corporation, and, accordingly, was not subject to corporate income taxes,
except for certain states for certain periods.
8
<PAGE>
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997
Operating Revenues
Operating revenues increased 21.1% for the three months ended June 30,
1998 to $109.5 million from $90.4 million for the comparable period of 1997. The
increase resulted primarily from a 15.2% increase in total shipments. In
addition, revenue per shipment increased 5.1% to $289 for the six months ended
June 30, 1998 from $275 during the six months ended June 30, 1997.
Operating Expenses
Operating expenses increased 19.5% to $100.7 million for the six months
ended June 30, 1998 from $84.3 million for the comparable period of 1997. As a
percentage of operating revenues, operating expenses decreased to 92.0% for the
six months ended June 30, 1998 from 93.3% for the comparable period of 1997.
This increase in operating expenses is primarily due to increased revenues, as
the majority of the Company's operating expenses are variable in nature. The
percentage decrease was the result of the Company's increased use of
owner-operators, a reduction in fuel prices and a reduction in insurance and
claims expense.
Salaries, wages and benefits increased 18.9% to $55.4 million for the
six months ended June 30, 1998 from $46.6 million for the comparable period of
1997. As a percentage of operating revenues, salaries, wages and benefits
decreased to 50.6% for the six months ended June 30, 1998 from 51.5% for the
comparable period of 1997. This percentage decrease was primarily due to the
Company's increased use of owner-operators and outside line-haul transportation
in 1998.
Supplies and other expenses, which primarily consist of operating
leases, fuel, tolls, tires, parts and bad debt expense, increased 7.5% to $18.7
million for the six months ended June 30, 1998 from $17.4 million for the
comparable period of 1997. As a percentage of operating revenues, supplies and
other expenses decreased to 17.1% for the six months ended June 30, 1998 from
19.2% for the comparable period of 1997. This percentage decrease was due to the
Company's continuing shift toward the purchase of revenue equipment rather than
leasing such equipment under operating leases, lower fuel prices, the Company's
increased use of owner-operators in 1998 and a reduction in bad debt expense in
1998 as a result of improved collection procedures.
Purchased transportation increased 48.8% to $12.8 million for the six
months ended June 30, 1998 from $8.6 million for the comparable period of 1997.
As a percentage of operating revenues, purchased transportation increased to
11.7% for the six months ended June 30, 1998 from 9.5% for the comparable period
of 1997. The increase was primarily due to the increased use of owner-operators
to supplement the Company's fleet and the increased use of outside line-haul
transportation.
Depreciation and amortization expense increased 33.3% to $7.2 million
for the six months ended June 30, 1998 from $5.4 million for the comparable
period of 1997. As a percentage of operating revenues, depreciation and
amortization increased to 6.6% for the six months ended June 30, 1998 from 6.0%
for the comparable period of 1997. The increase was primarily attributable to
the Company's continuing shift toward the purchase of additional and replacement
revenue equipment rather than leasing such equipment under operating leases and
the Company's purchase of computer hardware.
Operating taxes and licenses increased 16.3% to $5.0 million for the
six months ended June 30, 1998 from $4.3 million for the comparable period of
1997. As a percentage of operating revenues, operating taxes and licenses
decreased to 4.6% for the six months ended June 30, 1998 from 4.8% for the
comparable period of 1997. This percentage decrease was primarily attributable
to a decrease in
9
<PAGE>
fuel taxes due to the Company's increased use of outside line-haul
transportation and owner-operators, who pay for their own taxes and licenses.
Insurance and claims remained flat at $2.0 million for the six months
ended June 30, 1998 and the comparable period of 1997. As a percentage of
operating revenues, insurance and claims decreased to 1.8% for the six months
ended June 30, 1998 from 2.2% for the comparable period of 1997. The percentage
decrease was attributable to favorable development of claims and reduced
premiums on renegotiated insurance coverages that were effective April 1, 1998.
Interest Expense
Interest expense decreased 68.8% to $500,000 for the six months ended
June 30, 1998 from $1.6 million for the comparable period of 1997. As a
percentage of operating revenues, interest expense decreased to 0.5% for the six
months ended June 30, 1998 from 1.8% for the comparable period of 1997. Interest
expense decreased due to the Company having paid off debt with part of the
proceeds of the initial public offering in October 1997.
Income Taxes
Income taxes increased to $3.2 million for the six months ended June
30, 1998 from $180,000 for the comparable period of 1997. In the first six
months of 1998 the Company was subject to corporate federal and state income
taxes. Prior to the Company's initial public offering in October 1997 the
Company was an S corporation, and, accordingly, was not subject to corporate
income taxes, except for certain states for certain periods.
Liquidity and Capital Resources
The Company's primary sources of liquidity have been funds provided by
operations, equipment leases and bank borrowings. Net cash provided by operating
activities was approximately $13.6 million for the first six months of 1998
compared to $6.7 million for the corresponding period in 1997. The increase in
cash provided by operations is primarily attributable to the Company's increased
income before depreciation and amortization expense in 1998, a smaller increase
in accounts receivable in 1998 compared to 1997, and the timing of certain
payments, resulting in increased accounts payable in 1998.
Capital expenditures, net of trade-in allowances, totaled approximately
$17.2 million during the first six months of 1998 compared to $14.2 million in
the comparable period of 1997. For the six months ended June 30, 1998, the $17.2
million of capital expenditures were comprised of $10.1 million of revenue
equipment, $6.5 million for facilities and $600,000 of other equipment.
The Company generally purchases new line-haul tractors and replaces
them after three years. Regional and local tractors are replaced after five
years, depending on levels of use. The Company generated cash proceeds from
sales of used tractors of $1.5 million in the six months ended June 30, 1998
versus $241,000 in the comparable period of the prior year.
Net cash used in financing activities was approximately $812,000 for
the six months ended June 30, 1998 compared to net cash provided of $9.7 million
for the comparable period of 1997. At June 30, 1998, total borrowings under
long-term debt totaled $16.6 million, maturing through 2007, and obligations
relating to operating leases totaled $8.6 million through 2013, of which $1.8
million related to a facility lease with the Company's founders.
10
<PAGE>
On June 22, 1998, Jevic signed an agreement with First Union National
Bank for a $35 million credit facility. The new credit facility replaces the $25
million facility that Jevic had previously with CoreStates Bank, N.A., which was
acquired by First Union. The credit facility includes a $10 million working
capital revolving line of credit, with borrowings limited to 80% of the
Company's eligible accounts receivable, as defined, and a $25 million equipment
revolving line of credit used to purchase or refinance revenue equipment. At
June 30, 1998, there was $4.6 million outstanding under the equipment revolver
and $525,000 of outstanding standby letters of credit under the working capital
revolver. The equipment revolving line of credit is secured by a first priority,
perfected security interest in the revenue equipment purchased or refinanced.
The rate of interest on both lines of credit is, at the Company's election,
either the Bank's base rate (higher of the Federal Funds Rate plus 1/2 of 1% or
the prime commercial lending rate of First Union) or a rate based on the London
Interbank Offered Rate (LIBOR). The working capital line of credit expires in
June 2003; the equipment line of credit expires in June 2000. The agreement
allows the Company to convert outstanding amounts under the equipment revolver
to term loans if the line of credit is not renewed. The credit facility contains
covenants made by the Company which limit its ability to make business
acquisitions and pay dividends on its capital stock, including the Common Stock,
among other things.
The Company believes that its cash and cash equivalents, funds
generated from operations and available borrowings under its current or future
credit facilities will be sufficient to fund the Company's activities at least
through 1999.
While the Company intends to selectively pursue acquisitions of
companies that are complementary with its operations, the Company currently does
not have any commitments or agreements for any business acquisitions.
Inflation
The Company does not believe that inflation has had a material impact
on its results of operations for the past three years.
Seasonality
In the trucking industry, revenues generally follow a seasonal pattern
as customers reduce shipments during and after the winter holiday season. In
addition, highway transportation can be adversely affected depending upon the
severity of the weather in various sections of the country during the winter
months. The Company's operating expenses have historically been higher in winter
months, due primarily to decreased fuel efficiency and increased maintenance
costs for revenue equipment in colder weather. Accordingly, the Company's
results of operations may fluctuate to reflect such seasonality.
Year 2000 Costs
Many computer systems were not designed to handle dates beyond the year
1999, and, therefore, computer hardware and software will need to be modified
prior to the year 2000 in order to remain functional. The company is in the
process of upgrading its primary computer platform in order to provide increased
enterprise computing and additional disaster recovery capabilities. This new
system was designed to be Year 2000 compliant. Management is in the process of
determining whether all of the Company's other computer systems are Year 2000
compliant. Management does not expect the costs associated with any required
conversions of such other systems to ensure Year 2000 compliance to be
significant. In the event that any of the Company's significant vendors or
customers do not successfully achieve Year 2000 compliance on a timely basis,
the Company's
11
<PAGE>
business or operations could be adversely affected. To minimize this risk, the
Company has begun to contact all mission critical vendors to determine their
Year 2000 compliance status.
Cautionary Statement for Forward Looking Information
Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Operations may contain forward-looking
statements. There are a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated by the statements
made above. These include, but are not limited to, general economic factors,
availability of employee drivers and owner-operators, capital requirements,
competition, acquisition of revenue equipment, unionization, fuel, seasonality,
claims exposure and insurance costs, difficulty in managing growth, regulation,
environmental hazards and dependence on key personnel. Further information on
these and other factors which could affect the Company's financial results can
be found in the Company's periodic reports on forms 10-K and 10-Q.
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
On May 15, 1998, the Annual Meeting of Shareholders of Jevic Transportation,
Inc. was held. The shareholders re-elected two nominees from the existing Board
of Directors to three year terms expiring in 2001. The shareholders also
approved the designation of Arthur Andersen LLP as independent auditors.
The number of votes cast for and withheld from the election of each director is
set forth below.
Election of Directors:
For Withheld
--- --------
Gordon R. Bowker 14,606,290 500
Samuel H. Jones, Jr. 14,606,190 600
The number of votes cast for, against and abstentions relating to the
designation of Arthur Andersen LLP as independent auditors is set forth below.
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
Approval of designation
of Arthur Andersen LLP as
independent auditors 14,606,240 550 0
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
* Exhibit 10.21 - Amended and Restated Credit
Agreement between Jevic Transportation, Inc. and
First Union National Bank, Dated June 22, 1998
* Exhibit 27.1 - Financial Data Schedule
b. Reports on Form 8-K - None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on behalf by the undersigned, thereunto duly authorized, on the 14th day of
August, 1998.
JEVIC TRANSPORTATION, INC.
By:
---------------------------
Harry J. Muhlschlegel
Chief Executive Officer
By:
---------------------------
Brian J. Fitzpatrick
Senior Vice President and
Chief Financial Officer
Exhibit 10.21
================================================================================
Amended and Restated
CREDIT AGREEMENT
$35,000,000
between
JEVIC TRANSPORTATION, INC.
and
FIRST UNION NATIONAL BANK
Dated
June 22, 1998
================================================================================
<PAGE>
Table of Contents
<TABLE>
<S> <C>
1. Certain Definitions...........................................................................................1
1.1 Definitions.....................................................................................1
1.2 Accounting Terms...............................................................................10
2. The Credit...................................................................................................10
2.1 The Loans......................................................................................10
(a) Equipment Revolving Credit Loans. ....................................................10
(b) Working Capital Revolving Credit Loans. ..............................................11
(c) Standby Letters of Credit. ...........................................................12
2.2 The Notes......................................................................................13
(a) Equipment Revolving Credit Note.......................................................13
(b) Working Capital Revolving Credit Note.................................................13
2.3 Funding Procedures.............................................................................13
(a) Request for Advance...................................................................13
(b) Irrevocability........................................................................14
(c) Availability of Funds.................................................................14
(d) Funding of Net Amount.................................................................14
2.4 Interest.......................................................................................14
(a) Base Rate.............................................................................14
(b) LIBO Rate.............................................................................15
(c) Renewals and Conversions of Loans.....................................................15
(d) Automatic Reinstatement...............................................................16
2.5 Fees...........................................................................................16
(a) Structuring and Arranging Fee.........................................................16
(b) Equipment Revolving Loan Commitment Fee...............................................16
(c) Working Capital Revolving Loan Commitment Fee.........................................16
(d) Payment of Commitment Fees............................................................16
2.6 Reduction or Termination of Commitments........................................................16
(a) Voluntary Reductions or Terminations..................................................16
(b) Equipment Revolving Loan Commitment Termination.......................................17
(c) Working Capital Revolving Loan Commitment Termination.................................17
2.7 Voluntary Prepayments..........................................................................17
(a) Base Rate Loans.......................................................................17
(b) LIBO Rate Loans.......................................................................17
2.8 Payments.......................................................................................17
(a) Base Rate Loans.......................................................................17
(b) LIBO Rate Loans.......................................................................17
(c) Form of Payments, Application of Payments,
Payment Administration, Etc...........................................................17
(d) Net Payments..........................................................................18
(e) Prepayment of LIBO Rate Loans.........................................................18
2.9 Changes in Circumstances; Yield Protection.....................................................19
2.10 Illegality.....................................................................................20
</TABLE>
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<TABLE>
<S> <C>
3. Representations and Warranties...............................................................................21
3.1 Organization, Standing.........................................................................21
3.2 Corporate Authority, Validity, Etc.............................................................21
3.3 Litigation.....................................................................................21
3.4 ERISA..........................................................................................21
3.5 Financial Statements...........................................................................22
3.6 Not in Default, Judgments, Etc.................................................................22
3.7 Taxes..........................................................................................22
3.8 Permits, Licenses, Etc.........................................................................22
3.9 Compliance with Laws, Etc......................................................................22
3.10 Solvency.......................................................................................23
3.11 Subsidiaries, Etc..............................................................................23
3.12 Title to Properties, Leases....................................................................23
3.13 Public Utility Holding Company; Investment Company.............................................23
3.14 Margin Stock...................................................................................23
4. Conditions Precedent.........................................................................................24
4.1 All Loans......................................................................................24
(a) Documents.............................................................................24
(b) Covenants; Representations............................................................24
(c) Defaults..............................................................................24
(d) Material Adverse Change...............................................................24
(e) Borrowing Base Certificate............................................................24
4.2 Conditions to First Loan.......................................................................24
(a) Articles, Bylaws......................................................................24
(b) Evidence of Authorization.............................................................24
(c) Legal Opinions........................................................................24
(d) Incumbency............................................................................25
(e) Notes.................................................................................25
(f) Documents.............................................................................25
(g) Consents..............................................................................25
(h) Change................................................................................25
(i) Other Agreements......................................................................25
(j) Fees..................................................................................25
5. Affirmative Covenants........................................................................................25
5.1 Financial Statements and Reports...............................................................25
(a) Annual Statements.....................................................................25
(b) Quarterly Statements..................................................................26
(c) No Default............................................................................26
(d) ERISA.................................................................................26
(e) Material Changes......................................................................27
(f) Other Information.....................................................................27
(g) Borrowing Base Certificates...........................................................27
(h) Monthly Receivables Report............................................................27
5.2 Corporate Existence............................................................................27
5.3 ERISA..........................................................................................27
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
5.4 Compliance with Regulations....................................................................27
5.5 Conduct of Business; Permits and Approvals, Compliance with Laws...............................27
5.6 Maintenance of Insurance.......................................................................28
5.7 Payment of Debt; Payment of Taxes, Etc.........................................................28
5.8 Notice of Events...............................................................................28
5.9 Inspection Rights..............................................................................29
5.10 Generally Accepted Accounting Principles.......................................................29
5.11 Use of Proceeds................................................................................29
5.12 Further Assurances.............................................................................29
5.13 Compliance with Material Contracts.............................................................29
5.14 Restrictive Covenants in Other Agreements......................................................29
6. Negative Covenants...........................................................................................30
6.1 Consolidation and Merger.......................................................................30
6.2 Debt...........................................................................................30
6.3 Liens..........................................................................................30
6.4 Guarantees.....................................................................................30
6.5 Margin Stock...................................................................................30
6.6 Acquisitions and Investments...................................................................30
6.7 Transfer of Assets; Nature of Business.........................................................31
6.8 Restricted Payments............................................................................31
6.9 Accounting Change..............................................................................31
6.10 Transactions with Affiliates...................................................................31
6.11 Gross Operating Leases and TRAC Leases.........................................................31
6.12 Restriction on Amendment of This Agreement.....................................................31
7. Financial Covenants..........................................................................................31
7.1 Borrowing Base.................................................................................31
7.2 Senior Debt:Cash Flow Ratio....................................................................32
7.3 Senior Debt:Capital Ratio......................................................................32
8. Default......................................................................................................32
8.1 Events of Default..............................................................................32
(a) Payments..............................................................................32
(b) Covenants.............................................................................32
(c) Representations, Warranties...........................................................32
(d) Bankruptcy............................................................................32
(e) Certain Other Defaults................................................................32
(f) Judgments.............................................................................33
(g) Attachments...........................................................................33
(h) Change in Control.....................................................................33
(i) Security Interests....................................................................33
(j) Material Adverse Change...............................................................33
9. Collateral...................................................................................................34
9.1 Collateral.....................................................................................34
9.2 Security Agreement.............................................................................34
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
10. Miscellaneous...............................................................................................34
10.1 Waiver.........................................................................................34
10.2 Amendments.....................................................................................34
10.3 Governing Law..................................................................................34
10.4 Participations and Assignments.................................................................34
(a) Captions..............................................................................35
10.5 Notices........................................................................................35
10.6 Expenses; Indemnification......................................................................35
10.7 Survival of Warranties and Certain Agreements..................................................36
10.8 Severability...................................................................................36
10.9 No Fiduciary Relationship......................................................................36
10.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.................................................36
10.11 WAIVER OF JURY TRIAL...........................................................................36
10.12 Counterparts; Effectiveness....................................................................37
10.13 Use of Defined Terms...........................................................................37
10.14 Offsets........................................................................................37
10.15 Entire Agreement...............................................................................37
10.16 Inconsistency with Existing First Union Loans..................................................38
- -----------------------------------------------------------------------
EXHIBIT A EQUIPMENT REVOLVING CREDIT NOTE
EXHIBIT B WORKING CAPITAL REVOLVING CREDIT NOTE
EXHIBIT C BORROWING BASE CERTIFICATE
EXHIBIT D SECURITY AGREEMENT
EXHIBIT E LETTER OF CREDIT APPLICATION
SCHEDULE 1 DEPRECIATION
SCHEDULE 2 MISCELLANEOUS INFORMATION
</TABLE>
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<PAGE>
Amended and Restated
Credit Agreement
This Credit Agreement, dated June 22, 1998 (this "Agreement"), is
entered into by and between JEVIC TRANSPORTATION, INC., a New Jersey corporation
("Jevic") and FIRST UNION NATIONAL BANK ("First Union" or the "Bank").
Preliminary Statement
WHEREAS, Jevic and First Union are parties to a Credit Agreement, dated
as of June 28, 1996 (the "1996 Credit Agreement"), providing for revolving
credit loans in an aggregate amount not to exceed $25,000,000 the proceeds of
which may be used for the purchase or refinancing of over the road chassis and
trailers, Qualcomm satellites, trailer dollys, trailer heaters, fork trucks,
automobiles and miscellaneous equipment used in connection with Jevic's
business.
WHEREAS, Jevic and First Union have agreed to amend and restate the
1996 Credit Agreement as provided herein which, among other things, adds a
credit facility for revolving credit loans in an aggregate amount not to exceed
an additional $10,000,000 the proceeds of which may be used for general or
working capital purposes.
NOW, THEREFORE, in consideration of the premises and promises
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Certain Definitions
1.1 Definitions.
"Accounts Receivable Aging Report" shall mean a report in summary form
of the status of accounts receivable in form and substance reasonably
satisfactory to the Bank.
"Additional Amount" shall have the meaning set forth in ss.2.8(e).
"Affiliate" shall mean any Person: (1) which directly or indirectly
controls, or is controlled by, or is under common control with Jevic;
(2) which directly or indirectly beneficially owns or holds ten percent
(10%) or more of any class of voting stock of Jevic; or (3) ten percent
(10%) or more of whose voting stock of which is directly or indirectly
beneficially owned or held by Jevic. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract, or otherwise.
"Agreement" shall mean this Credit Agreement, as amended, supplemented,
modified, replaced, substituted for or restated from time to time and
all exhibits and schedules attached hereto.
"Agreement Year" shall have the meaning set forth in ss.2.1(a).
- 1 -
<PAGE>
"Applicable Margin" shall have the margin applicable to Base Rate and
to LIBO Rate as set forth in ss.2.4.
"Base Rate" shall mean, for any day, the higher of the Federal Funds
Rate plus 1/2 of 1% or the prime commercial lending rate of First
Union, as announced from time to time at its head office, calculated on
the basis of the actual number of days elapsed in a year of 360 days.
"Base Rate Loans" shall mean Equipment Revolving Credit Loans and
Working Capital Revolving Credit Loans accruing interest based on the
Base Rate.
"Borrowing Base" shall mean for the Equipment Revolving Credit Loans an
amount which is equal to 100% of the net book value of the Eligible
Equipment, and for the Working Capital Revolving Credit Loans an amount
which is equal to 80% of the Eligible Receivables.
"Borrowing Base Certificate" shall mean a certificate in substantially
the form attached hereto as Exhibit C hereto which shall be signed by
the chief financial officer, treasurer or controller of Jevic.
"Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Philadelphia are authorized or
required to close under the laws of the Commonwealth of Pennsylvania
and, if the applicable day relates to a LIBO Rate Loan, or notice with
respect to a LIBO Rate Loan, a day on which dealings in Dollar deposits
are also carried on in the London interbank market and banks are open
for business in London ("London Business Day").
"Capitalized Lease" shall mean all lease obligations of any Person for
any property (whether real, personal or mixed) which have been or
should be capitalized on the books of the lessee in accordance with
General Accepted Accounting Principles.
"Capitalized Lease Obligations" with respect to any Person, shall mean
the aggregate amount which, in accordance with GAAP, is required to be
reported as a liability on the balance sheet of such Person at such
time in respect of such Person's interest as lessee under a Capital
Lease.
"Cash Flow" shall mean, for any period, without duplication, the
amounts for such period, taken as a single accounting period, of (i)
net income, (ii) non-cash charges (iii) interest expense, and (iv) to
the extent reducing net income, income tax expenses of Jevic.
"Closing Date" shall mean the date closing shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and all rules and regulations with respect thereto in
effect from time to time.
"Commitment" shall mean the Equipment Revolving Loan Commitment and the
Working Capital Revolving Loan Commitment.
"Commitment Fees" shall have the meaning set forth in ss.2.5(c).
- 2 -
<PAGE>
"Debt" shall mean, as of any date of determination with respect to
Jevic, without duplication, (i) all items which in accordance with
Generally Accepted Accounting Principles would be included in
determining total liabilities as shown on the liability side of a
consolidated balance sheet of Jevic as of the date on which Debt is to
be determined, (ii) all indebtedness of others with respect to which
Jevic has become liable by way of a guarantee or endorsement (other
than for collection or deposit in the ordinary course of business),
(iii) all contingent liabilities of Jevic, and (iv) Capitalized Lease
Obligations.
"Default Rate" on any Loan shall mean 2% per annum above the Base Rate.
"Dollars" shall mean the lawful currency of the United States of
America.
"EBITDA" shall mean the sum of (i) operating income, plus (ii)
depreciation and amortization, plus (iii) the net proceeds from the
sale or other disposal of Revenue Equipment as stated in the notes to
the financial statements, but not including any gain of such sale(s)
included in net income before income taxes.
"Eligible Equipment" shall mean all Revenue Equipment pledged to the
Bank as Collateral (as defined in the Security Agreement) and in which
the Bank has a first priority, perfected security interest. Eligible
Equipment shall be depreciated as set forth on Schedule 1 hereto. The
net book value of Eligible Equipment shall be the purchase price of
said Equipment to Jevic after deduction of depreciation in accordance
with the depreciation policies described on Schedule 1 hereto. On
December 31 of the year immediately following the year in which an item
of Revenue Equipment has been depreciated to its salvage value, said
item of Revenue Equipment shall cease to be included in Eligible
Equipment at its salvage value.
"Eligible Receivables" shall mean accounts receivable by Jevic which
(1) arose in the ordinary course of business of Jevic, (2) have been
fully earned by completed performance on the part of Jevic, (3) are not
subject to any prior assignment, claim, lien, security interest or
other limitation on the absolute title of Jevic thereto, (4) with
respect a specific invoice, has not been paid in whole or in part, (5)
are not more than 90 days from the invoice date, (6) are not more than
90 days past due, (7) are freely assignable, (8) are not questionable
as to collectibility, and (9) the account debtor is not located outside
of the United States of America or Canada.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as Jevic within the meaning of
ss.414(b) of the Code, or any trade or business which is under common
control with Jevic within the meaning of ss.414(c) of the Code.
"Event of Default" shall have the meaning set forth in ss.8.1.
"Environmental Control Statutes" shall mean each and every applicable
federal, state, county or municipal environmental statute, ordinance,
rule, regulation, order, directive or requirement, together with all
successor statutes, ordinances, rules, regulations, orders, directives
or requirements, of any
- 3 -
<PAGE>
Governmental Authority, including without limitation laws in any way
related to Hazardous Substances.
"Equipment Revolver Termination Date" shall have the meaning set forth
in ss.2.1.
"Equipment Revolving Credit Loans" shall have the meaning set forth in
ss.2.1.
"Equipment Revolving Credit Note" shall have the meaning set forth in
ss.2.2.
"Equipment Revolving Loan Commitment" shall have the meaning set forth
in ss.2.1.
"Equipment Revolving Loan Commitment Fee" shall have the meaning set
forth in ss.2.5(a), 2.5(b).
"Federal Funds Rate" shall mean, 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 if the day for which such rate is to be determined 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.
"Fiscal Quarter" shall mean a fiscal quarter of Jevic, which shall be
any quarterly period ending on March 31, June 30, September 30 or
December 31 of any year.
"Fiscal Year" shall mean a fiscal year of Jevic, which shall end on
December 31.
"Generally Accepted Accounting Principles" or "GAAP" shall mean
generally accepted accounting principles as in effect from time to time
in the United States, consistently applied.
"Governmental Authority" shall mean the federal, state, county or
municipal government, or any department, agency, bureau or other
similar type body obtaining authority therefrom or created pursuant to
any laws, including without limitation Environmental Control Statutes.
"Hazardous Substances" shall mean without limitation, any regulated
substance, toxic substance, hazardous substance, hazardous waste,
pollution, pollutant or contaminant, as defined or referred to in the
New Jersey Environmental Rights Act, N.J.S.A. 2A: 35A-1 et seg.; the
New Jersey Spill Compensation and Control Act, N.J.S.A.26:2C-1 et seg.;
the Resource Conservation and Recovery Act, as amended, 15 U.S.C.,
ss.2601 et seg.; the Comprehensive Environmental Response, Compensation
and Liability Act, 33 U.S.C. ss.1251 et seg.; the Hazardous Substances
Discharge: Reports and Notices Act, N.J.S.A. 13: 1K-15 et seg.; the
Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seg.; the New Jersey
Underground storage of Hazardous Substances Act, N.J.S.A. 58:L10A-21 et
seg.; (P.L. 1986 Ch. 102), and the federal underground storage tank
law, Subtitle I of the Resource Conservation and Recovery Act, as
amended, P.L. 98-616, 42 U.S.C. ss.6901 et seg.; together with any
amendments thereto, regulations promulgated thereunder and all
substitutions thereof, as well as words of similar purport or meaning
referred to in any other federal, state, county or municipal
environmental statute, ordinance, rule or regulation.
- 4 -
<PAGE>
"Indebtedness for Borrowed Money" shall mean (i) all indebtedness,
liabilities, and obligations, now existing or hereafter arising, for
money borrowed by Jevic, whether or not evidenced by any note,
indenture, or agreement (including, without limitation, the Notes and
any indebtedness for money borrowed from an Affiliate) and (ii) all
indebtedness of others for money borrowed (including indebtedness of an
Affiliate) with respect to which Jevic has become liable by way of a
guarantee or indemnity. For purposes of this definition, Jevic's
borrowings from its Subsidiaries are excluded.
"Intangible Assets" shall mean all assets which would be classed as
intangible assets under GAAP consistently applied, including, without
limitation, goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises, and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs,
and research and development costs). For purposes of this definition,
prepayments of taxes, license fees and other expenses shall not be
deemed Intangible Assets.
"Interest Period" shall mean with respect to any LIBO Rate Loan, each
period commencing on the date any such Loan is made, or, with respect
to a Loan being renewed, the last day of the next preceding Interest
Period with respect to a Loan, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on
the last day of the calendar month) in the first, second or third
calendar month thereafter in the case of Equipment Revolving Credit
Loans or in the first, second, third or fourth week or first, second or
third calendar month thereafter in the case of Working Capital
Revolving Credit Loans, as selected under the procedures specified in
ss.2.3, if the Bank is then offering LIBO Rate Loans for such period;
provided that each LIBO Rate Loan Interest Period which would otherwise
end on a day which is not a Business Day (or, for purposes of Loans to
be repaid on a London Business Day, such day is not a London Business
Day) shall end on the next succeeding Business Day (or London Business
Day, as appropriate) unless such next succeeding Business Day (or
London Business Day, as appropriate) falls in the next succeeding
calendar month, in which case the Interest Period shall end on the next
preceding Business Day (or London Business Day, as appropriate).
"Investment" in any Person shall mean (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or
other securities of such Person; (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than any such
deposit, advance, loan or extension of credit having a term not
exceeding 90 days in the case of unaffiliated Persons and 120 days in
the case of Affiliates representing the purchase price of inventory or
supplies purchased in the ordinary course of business) or guarantee or
assumption of, or other contingent obligation with respect to,
Indebtedness for Borrowed Money or other liability of such Person; and
(c) (without duplication of the amounts included in (a) and (b)) any
amount that may, pursuant to the terms of such investment, be required
to be paid, deposited, advanced, lent or extended to or guaranteed or
assumed on behalf of such Person.
"LIBO Rate" shall mean, for the applicable Interest Period, (i) the
rate, rounded upwards to the next one-sixteenth of one percent,
determined by the Bank two London Business Days prior to the date of
the corresponding LIBO Rate Loan, at which the Bank is offered deposits
in dollars at approximately 11:00 A.M., London time by leading banks in
the interbank eurodollar or eurocurrency market for delivery on the
date of such Loan in an amount and for a period comparable
- 5 -
<PAGE>
to the amount and Interest Period of such Loan and in like funds,
divided by (ii) a number equal to one (1.0) minus the LIBO Rate Reserve
Percentage. The LIBO Rate shall be adjusted automatically with respect
to any LIBO Rate Loan outstanding on the effective date of any change
in the LIBO Rate Reserve Percentage, as of such effective date. LIBO
Rate shall be calculated on the basis of the number of days elapsed in
a year of 360 days.
"LIBO Rate Reserve Percentage" shall mean, for any LIBO Rate Loan for
any Interest Period therefor, the daily average of the stated maximum
rate (expressed as a decimal) at which reserves (including any
marginal, supplemental, or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by the Bank
against "Eurocurrency liabilities" (as such terms is used in Regulation
D) but without benefit of credit proration, exemptions, or offsets that
might otherwise be available to the Bank from time to time under
Regulation D. Without limiting the effect of the foregoing, the LIBO
Rate Reserve Percentage shall reflect any other reserves required to be
maintained by the Bank against (1) any category of liabilities which
includes deposits by reference to which the rate for LIBO Rate Loans is
to be determined; or (2) any category of extension of credit or other
assets which include LIBO Rate Loans.
"LIBO Rate Loans" shall mean Equipment Revolving Credit Loans and
Working Capital Revolving Credit Loans accruing interest based on the
LIBO Rate.
"Lien" shall mean any lien, mortgage, security interest, chattel
mortgage, pledge or other encumbrance (statutory or otherwise) of any
kind securing satisfaction of an Obligation, including any agreement to
give any of the foregoing, any conditional sales or other title
retention agreement, any lease in the nature thereof, and the filing of
or the agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction or similar evidence of any
encumbrance, whether within or outside the United States.
"Loan" or "Loans" shall mean an Equipment Revolving Credit Loan or a
Working Capital Revolving Credit Loan taken individually, and Equipment
Revolving Credit Loans or Working Capital Revolving Credit Loans taken
together.
"Loan Documents" shall mean this Agreement, the Equipment Revolving
Credit Note, the Working Capital Revolving Credit, the Security
Agreement, and all other documents directly related or incidental to
said documents, the Loans or the Collateral.
"Material Adverse Change" shall mean any event or condition which, in
the reasonable determination of the Bank, could result in a material
adverse change in the financial condition, business, properties,
profits or prospects of Jevic or which gives reasonable grounds to
conclude that Jevic may not or will not be able to perform or observe
(in the normal course) its obligations under the Loan Documents to
which it is a party, including but not limited to the Notes.
"Material Adverse Effect" shall mean a material adverse effect (i) on
the financial condition, business, properties, or profits of Jevic,
(ii) the ability of Jevic to perform its obligations under this
Agreement, the Equipment Revolving Credit Note, the Working Capital
Revolving Credit Note, and the other Loan Documents, or (iii) the
legality, validity or enforceability of this Agreement, the Equipment
Revolving Credit Note, the Working Capital Revolving Credit Note or the
rights and remedies of the holders of the Loans.
- 6 -
<PAGE>
"Multiemployer Plan" shall mean a multiemployer plan as defined in
ERISA ss.4001(a)(3), which covers employees of Jevic or any ERISA
Affiliate.
"Net Worth" shall mean the sum of capital stock, plus paid-in capital,
plus retained earnings, minus treasury stock.
"Notes" shall mean the Equipment Revolving Credit Note and the Working
Capital Revolving Credit Note.
"Obligations" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every
kind, matured or unmatured, direct or contingent, owing, arising, due,
or payable to the Bank by or from Jevic arising out of this Agreement
or any other Loan Document, including, without limitation, all
obligations to repay principal of and interest on the Equipment
Revolving Credit Loan and the Working Capital Revolving Credit Loans,
and to pay interest, fees, costs, charges, expenses, professional fees,
and all sums chargeable to Jevic or for which Jevic is liable as
indemnitor under the Loan Documents, whether or not evidenced by any
note or other instrument.
"Operating Lease" shall mean an operating lease as defined by Generally
Accepted Accounting Principles, excluding all leases the expenses of
which may be charged to a customer of Jevic pursuant to the written
terms of the contract with such customer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" shall mean, at any time, any Plan (including a
Multiemployer Plan), the funding requirements of which (under ERISA
ss.302 or Code ss.412) are, or at any time within the six years
immediately preceding the time in question, were in whole or in part,
the responsibility of Jevic or any ERISA Affiliate.
"Permitted Liens" shall mean (a) any Liens for current taxes,
assessments and other governmental charges not yet due and payable or
being contested in good faith by Jevic by appropriate proceedings and
for which adequate reserves have been established by Jevic as reflected
in Jevic's consolidated financial statements; (b) any mechanic's,
materialman's, carrier's, warehousemen's or similar Liens for sums not
yet due or being contested in good faith by Jevic by appropriate
proceedings and for which adequate reserves have been established by
Jevic as reflected in Jevic's financial statements; (c) easements,
rights-of-way, restrictions and other similar encumbrances on the real
property or fixtures of Jevic incurred in the ordinary course of
business which individually or in the aggregate are not substantial in
amount and which do not in any case materially detract from the value
or marketability of the property subject thereto or interfere with the
ordinary conduct of the business of Jevic; (d) Liens (other than Liens
imposed on any property of Jevic pursuant to ERISA or ss.412 of the
Code) incurred or deposits made in the ordinary course of business,
including Liens in connection with workers' compensation, unemployment
insurance and other types of social security and Liens to secure
performance of tenders, statutory obligations, surety and appeal bonds
(in the case of appeal bonds such Lien shall not secure any
reimbursement or indemnity obligation in an amount greater than
$500,000), bids, leases that are not Capitalized Leases, performance
bonds, sales contracts and other similar obligations, in each case, not
incurred in connection with the obtaining of credit or the payment of a
deferred purchase price, and which do not, in the aggregate, result in
- 7 -
<PAGE>
a Material Adverse Effect; (e) Liens existing on the date hereof as set
forth in Schedule 2 hereto other than Liens of the character referred
to in clause (f); and (f) Liens on specific assets purchased whether
before or after the date hereof and any revenue stream directly
attributable thereto provided that such liens are limited to the
specific assets so purchased and the revenue stream generated
therefrom.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, company, business trust or entity, or other
entity of whatever nature.
"Plan" shall mean an employee benefit plan as defined in ss.3(3) of
ERISA, other than a Multiemployer Plan, whether formal or informal and
whether legally binding or not.
"Potential Default" shall mean an event, condition or circumstance that
with the giving of notice or lapse of time or both would become an
Event of Default.
"Prohibited Transaction" shall mean a transaction that is prohibited
under Code ss.4975 or ERISA ss.406 and not exempt under Code ss.4975 or
ERISA ss.408.
"Regulation" shall mean any statute, law, ordinance, regulation, order
or rule of any United States or foreign, federal, state, local or other
government or governmental body, including, without limitation, those
covering or related to banking, financial transactions, securities,
public utilities, environmental control, energy, safety, health,
transportation, bribery, record keeping, zoning, antidiscrimination,
antitrust, wages and hours, employee benefits, and price and wage
control matters.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.
"Regulatory Change" shall mean any change after the date of this
Agreement in any Regulation (including Regulation D) or the adoption or
making after such date of any interpretations, directives or requests
of or under any Regulation (whether or not having the force of law) by
any court or governmental or monetary authority charged with the
interpretation or administration thereof applying to a class of banks
but excluding any foreign office of the Bank.
"Release" shall mean without limitation, the presence, leaking,
leaching, pouring, emptying, discharging, spilling, using, generating,
manufacturing, refining, transporting, treating, or storing of
Hazardous Substances at, into, onto, from or about the property or the
threat thereof, regardless of whether the result of an intentional or
unintentional action or omission, and which is in violation of
applicable law.
"Reportable Event" shall mean, with respect to a Pension Plan: (a) Any
of the events set forth in ERISA Sections 4043(b) (other than a
reportable event as to which the provision of 30 days' notice to the
PBGC is waived under applicable regulations) or 4063(a) or the
regulations thereunder, (b) an event requiring any Jevic or any ERISA
Affiliate to provide security to a Pension Plan under Code
ss.401(a)(29) and (c) any failure by any Jevic or any ERISA Affiliate
to make payments required by Code ss.412(m).
- 8 -
<PAGE>
"Revenue Equipment" shall mean over the road chassis and trailers,
Qualcomm satellites, trailer dollys, trailer heaters, fork trucks,
automobiles and miscellaneous equipment used by Jevic in connection
with its business.
"Senior Debt:Cash Flow Ratio" shall mean the ratio which Indebtedness
for Money Borrowed which is not subordinated to any other Debt
represents to EBITDA.
"Senior Debt:Capital Ratio" shall mean the ratio which Indebtedness for
Money Borrowed which is not subordinated to any other Debt represents
to the sum of all Indebtedness for Money Borrowed (whether subordinated
or not) and Tangible Net Worth at the time of the calculation. This
ratio shall be determined as of the end of each calendar quarter.
"Solvent" shall mean, with respect to any Person, that the aggregate
present fair saleable value of such Person's assets is in excess of the
total amount of its probable liabilities on its existing debts as they
become absolute and matured, such Person has not incurred debts beyond
its foreseeable ability to pay such debts as they mature, and such
Person has capital adequate to conduct the business it is presently
engaged in or is about to engage in.
"Standby Letter of Credit" shall mean only those standby letters of
credit issued pursuant to a completed application on the form of letter
of credit application required by the Bank at the time of the request
for each Standby Letter of Credit.
"Subsidiary" shall mean a corporation or other entity the shares of
stock or other equity interests of which having ordinary voting power
(other than stock or other equity interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries or both, by
Jevic.
"Tangible Net Worth" shall mean Net Worth, minus Intangible Assets.
"Taxes" shall have the meaning set forth in ss.2.8(d).
"Termination Event" shall mean, with respect to a Pension Plan: (a) a
Reportable Event, (b) the termination of a Pension Plan, or the filing
of a notice of intent to terminate a Pension Plan, or the treatment of
a Pension Plan amendment as a termination under ERISA ss.4041(c), (c)
the institution of proceedings to terminate a Pension Plan under ERISA
ss.4042 or (d) the appointment of a trustee to administer any Pension
Plan under ERISA ss.4042.
"Unfunded Pension Liabilities" shall mean, with respect to any Pension
Plan at any time, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of
Accounting Standards No. 87, over the fair market value of Pension Plan
assets.
"Unrecognized Retiree Welfare Liability" shall mean, with respect to
any Plan that provides post-retirement benefits other than pension
benefits, the amount of the accumulated post-retirement benefit
obligation, as determined in accordance with Statement of Financial
Accounting Standards No. 106, as of the most recent valuation date.
Prior to the date such statement is applicable to any Jevic, such
amount of the obligation shall be based on an estimate made in good
faith.
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<PAGE>
"Working Capital Revolver Termination Date" shall have the meaning set
forth in ss.2.1.
"Working Capital Revolving Credit Loans" shall have the meaning set
forth in ss.2.1.
"Working Capital Revolving Credit Note" shall have the meaning set
forth in ss.2.2.
"Working Capital Revolving Loan Commitment" shall have the meaning set
forth in ss.2.1.
"Working Capital Revolving Loan Commitment Fee" shall have the meaning
set forth in ss.2.5(c).
1.2 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with Generally Accepted Accounting
Principles consistent with those applied in the preparation of the financial
statements referred to in ss.3.5, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
2. The Credit
2.1 The Loans. Subject to the terms and conditions herein set forth,
First Union agrees to make Loans to Jevic as set forth below. All Loans shall be
made to Jevic at the main office of the Bank, Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19101. Loans made hereunder may either be Equipment
Revolving Credit Loans ("Equipment Revolving Credit Loans") or Working Capital
Revolving Credit Loans ("Working Capital Revolving Credit Loans"). As provided
below, Equipment Revolving Credit Loans may be requested by Jevic, and made from
time to time prior to the Equipment Revolver Termination Date. Working Capital
Revolving Credit Loans may be requested by Jevic, and made from to time prior to
the Working Capital Revolver Termination Date.
(a) Equipment Revolving Credit Loans. Equipment Revolving
Credit Loans may be made from time to time during the period beginning on the
date hereof and ending on June 22, 2000 or on the earlier date of termination in
full, pursuant to ss.2.6 or ss.8.1 hereof, of the obligations of the Bank under
this ss.2.1 (June 22, 2000 or such earlier date of termination being herein
called the "Equipment Revolver Termination Date") in amounts not to exceed at
any time outstanding, in the aggregate, $25,000,000 (such amount, as the same
may be reduced pursuant to ss.2.6 hereof being hereinafter called the "Equipment
Revolving Loan Commitment"). Equipment Revolving Credit Loans at the occasion of
each borrowing shall be in aggregate principal amounts at least equal to
$250,000 in the case of Base Rate Loans, or, if less, the remaining unused
amount of the Equipment Revolving Loan Commitment, and $1,000,000 in the case of
LIBO Rate Loans. Jevic shall not be entitled to any Equipment Revolving Credit
Loan if, after giving effect to such Loan, the unpaid amount of the then
outstanding Equipment Revolving Credit Loans would exceed the then current
Borrowing Base for Equipment Revolving Credit Loans. Prior to the Equipment
Revolver Termination Date and within the limits of the Equipment Revolving Loan
Commitment and the Borrowing Base for Equipment Revolving Credit Loans, Jevic
may borrow, prepay and reborrow Equipment Revolving Credit Loans. No Equipment
Revolving Credit Loans shall mature and be due and payable on the Equipment
Revolver Termination Date.
Annually, not more than one hundred twenty (120) days nor less than
sixty (60) days prior to the end of the existing Agreement Year, Jevic may
request in writing to First Union that the Equipment Revolver
- 10 -
<PAGE>
Termination Date be extended for one full year. The term "Agreement Year" shall
mean a one year period ending on the same month and day as the Equipment
Revolver Termination Date. If First Union is willing to establish a new
Equipment Revolver Termination Date, it will advise Jevic, in writing, not more
than thirty (30) days after receipt by First Union of a request from Jevic for a
new Equipment Revolver Termination Date, that the Equipment Revolver Termination
Date has been extended for one full year (stating the date of the new Equipment
Revolver Termination Date) and this Agreement shall be deemed amended to such
extent. If written notice is not so given by First Union, the Equipment Revolver
Termination Date shall not be deemed extended.
If the Equipment Revolver Termination Date is not extended, then Jevic
may, at its option, convert the existing Equipment Revolving Credit Loans to a
term payment schedule, and the total principal and interest due under such Loans
then shall be payable monthly, with interest, over a period of time not to
exceed six (6) years from the Equipment Revolver Termination Date, in accordance
with the corresponding monthly reduction in the Borrowing Base for Equipment
Revolving Credit Loans; provided, however, that upon choosing to convert the
existing Equipment Revolving Credit Loans, Jevic shall deliver to First Union a
payment schedule setting forth the reduction, on a month-to-month basis, of the
Borrowing Base over a period of time not to exceed six (6) years from the date
on which such conversion is selected by Jevic. During any said deferred payment
period, the Equipment Revolving Credit Loans shall bear interest at the rates
set forth in ss.2.4 as elected by Jevic from time to time.
(b) Working Capital Revolving Credit Loans. Working Capital
Revolving Credit Loans may be made from time to time during the period beginning
on the date hereof and ending on June 22, 2003 or on the earlier date of
termination in full, pursuant to ss.2.6 or ss.8.1 hereof, of the obligations of
the Bank under this ss.2.1 (June 22, 2003 or such earlier date of termination
being herein called the "Working Capital Revolver Termination Date") in amounts
not to exceed at any time outstanding, in the aggregate, $10,000,000 (such
amount, as the same may be reduced pursuant to ss.2.6 hereof being hereinafter
called the "Working Capital Revolving Loan Commitment"). Working Capital
Revolving Credit Loans at the occasion of each borrowing shall be in aggregate
principal amounts at least equal to $250,000 in the case of Base Rate Loans and
$1,000,000 in the case of LIBO Rate Loans. Jevic shall not be entitled to any
Working Capital Revolving Credit Loan if, after giving effect to such Loan, the
unpaid amount of the then outstanding Working Capital Revolving Credit Loans
would exceed the then current Borrowing Base for Working Capital Revolving
Credit Loans. Prior to the Working Capital Revolver Termination Date and within
the limits of the Revolving Loan Commitment and the Borrowing Base, Jevic may
borrow, prepay and reborrow Working Capital Revolving Credit Loans. All Working
Capital Revolving Credit Loans shall mature and be due and payable on the
Working Capital Revolver Termination Date.
(c) Standby Letters of Credit. The Bank, under the terms and
subject to the conditions of this Agreement, agrees to provide standby letters
of credit to Jevic, from time to time prior to the Working Capital Revolver
Termination Date, as requested by Jevic, provided that (A) the aggregate amount
of Standby Letters of Credit outstanding at any one time shall not exceed
$3,000,000 or such lesser amount, if any, as will, when added to the amount of
the Working Capital Revolving Credit Loans then outstanding, aggregate
$10,000,000 (or such lesser amount as Jevic is entitled to borrow hereunder at
such time by reason of the limitation of the Borrowing Base or otherwise), (B)
no Standby Letter of Credit shall be issued after the Working Capital Revolver
Termination Date and no Standby Letter of Credit shall be for a term longer than
one year; and (C) no Standby Letter of Credit shall be issued for other than
regulatory bonding, construction bonding or insurance purposes.
- 11 -
<PAGE>
Jevic shall request a Standby Letter of Credit by delivering a
completed letter of credit application to the Bank not less than three Business
Days prior to the date specified by Jevic as the date the Standby Letter of
Credit is to be issued. The form of First Union's letter of credit application
as currently in effect is set forth as Exhibit E hereto.
Standby Letters of Credit shall not bear interest until drawn upon but
shall each be subject to an annual charge, payable in advance, equal to the
percentage of the amount of the Standby Letter of Credit as set forth in the
table below:
Senior Debt:Capital Ratio Annual Percentage
------------------------- -----------------
35% or less 1.00%
More than 35% 1.25%
The Senior Debt:Capital Ratio shall be measured as of the most recently ended
fiscal quarter of Jevic. Annual charges for Standby Letters of Credit will not
be adjusted during interim periods between renewals.
Within the foregoing limit, Jevic may request issuance of Standby
Letters of Credit, pay them upon a drawing thereunder and request new issuances.
In the event Jevic shall terminate the Commitment as provided in ss.2.6 and
shall pay the outstanding principal amount of the Working Capital Revolving
Credit Loans in full and with interest or the Working Capital Revolver
Termination Date shall occur at a time when one or more Standby Letters of
Credit remain outstanding, then Jevic shall furnish to the Bank within two
Business Days such amount of cash, to be held as cash collateral and invested in
certificates of deposit of the Bank, as will pay the maximum amount which may be
drawn by beneficiaries of Standby Letters of Credit outstanding at the date of
such termination or the Working Capital Revolver Termination Date, as
applicable.
Standby Letters of Credit requested by Jevic and issued by the Bank
pursuant to the terms of the 1996 Credit Agreement, and outstanding as of the
date hereof, shall be deemed to have been requested by Jevic and issued by the
Bank hereunder. There will be no additional annual charges on such Standby
Letters of Credit until their renewal.
2.2 The Notes.
(a) Equipment Revolving Credit Note. The Equipment Revolving
Credit Loans made by the Bank shall be evidenced by a single promissory note of
Jevic (such promissory note as it may be amended, extended, modified, restated,
replaced, substituted for or renewed, the "Equipment Revolving Credit Note") in
principal face amount equal to the Bank's Equipment Revolving Loan Commitment,
payable to the order of the Bank and otherwise in the form attached hereto as
Exhibit A. The Equipment Revolving Credit Note shall be dated the Closing Date,
shall bear interest at the rate per annum and be payable as to principal and
interest in accordance with the terms hereof. The Equipment Revolving Credit
Note shall mature upon the Equipment Revolver Termination Date and, upon
maturity, each outstanding Equipment Revolving Credit Loan evidenced thereby
shall be due and payable unless Jevic shall have elected a deferred pay off of
the principal thereof as permitted in ss.2.1(a), in which the Equipment
Revolving Credit Loan shall be due and payable monthly as contemplated thereby.
The Bank shall maintain records of all Loans evidenced by the Equipment
Revolving Credit Note and of all payments thereon, which records shall
- 12 -
<PAGE>
be conclusive absent manifest error. The Equipment Revolving Credit Note shall
be deemed to be an amendment and restatement of the Revolving Credit Note dated
June 28, 1996 executed and delivered in accordance with the 1996 Credit
Agreement and shall be substituted for and replace said Revolving Credit Note in
its entirety.
(b) Working Capital Revolving Credit Note. The Working
Capital Revolving Credit Loans made by the Bank shall be evidenced by a single
promissory note of Jevic (such promissory note as it may be amended, extended,
modified, restated, replaced, substituted for or renewed, the "Working Capital
Revolving Credit Note") in principal face amount equal to the Bank's Working
Capital Revolving Loan Commitment, payable to the order of the Bank and
otherwise in the form attached hereto as Exhibit B. The Working Capital
Revolving Credit Note shall be dated the Closing Date, shall bear interest at
the rate per annum and be payable as to principal and interest in accordance
with the terms hereof. The Working Capital Revolving Credit Note shall mature
upon the Working Capital Revolver Termination Date and, upon maturity, each
outstanding Working Capital Revolving Credit Loan evidenced thereby shall be due
and payable. The Bank shall maintain records of all Loans evidenced by the
Working Capital Revolving Credit Notes and of all payments thereon, which
records shall be conclusive absent manifest error.
2.3 Funding Procedures.
(a) Request for Advance. Each request for a Loan, or the
conversion or renewal of an interest rate with respect to a Loan, shall be made
not later than 2:00 p.m. on a Business Day by delivery to the Bank of a written
request signed by Jevic or, in the alternative, a telephone request followed
promptly by written confirmation of the request, specifying the date, amount and
type of the Loan to be made, converted or renewed, selecting the interest rate
option applicable thereto, and in the case of LIBO Rate Loans, specifying the
Interest Period applicable to such Loans. Each request shall be received not
less than one Business Day prior to the date of the proposed borrowing,
conversion or renewal in the case of Base Rate Loans, and two London Business
Days prior to the date of the proposed borrowing, conversion or renewal in the
case of LIBO Rate Loans. No request shall be effective until actually received
in writing by the Bank.
(b) Irrevocability. Upon receipt of a request for a Loan and
if the conditions precedent provided herein shall be satisfied at the time of
such request, the request for a Loan shall not be revocable by Jevic.
(c) Availability of Funds. Unless the Bank knows that any
applicable condition specified herein has not been satisfied, it will make funds
immediately available to Jevic on the date of each Loan by a credit to the
account of Jevic at the Bank's address set forth opposite its name on the
signature page hereof or to such other destination and in such other form as
Jevic may request, in writing.
(d) Funding of Net Amount. If the Bank makes a Loan on a day
on which all or any part of an outstanding Loan from the Bank is to be repaid,
the Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by the Bank to
Jevic as provided in clause (c).
- 13 -
<PAGE>
2.4 Interest. The following interest rates may be applicable to any
Loan or Loans, as requested by Jevic from time to time.
(a) Base Rate. Each Base Rate Loan shall bear interest on
the principal amount thereof from the date made until such Loan is paid in full
or converted, at a rate per annum equal to the Base Rate plus the Applicable
Margin. The Applicable Margin for Base Rate Loans outstanding through October
22, 1998 shall be zero. Thereafter, the Applicable Margin for Base Rate Loans
shall be as follows:
<TABLE>
<CAPTION>
Equipment Revolving Working Capital Revolving
Senior Debt:Capital Ratio Credit Loans Credit Loans
- ---------------------- ------------------- ------------------------
<S> <C> <C>
25% or less (0.50)% (0.50)%
More than 25% but
not more than 35% (0.25)% (0.25)%
More than 35% -0- -0-
</TABLE>
The Senior Debt: Capital Ratio shall be measured as of the most recently ended
fiscal quarter of Jevic. Each change in the Applicable Margin for Base Rate
Loans shall take effect on the first day of the month following receipt by the
Bank of the certificate required to be provided periodically by Jevic pursuant
to Section 5.1(c) hereof.
(b) LIBO Rate. Each LIBO Rate Loan shall bear interest on
the principal amount thereof from the date made until such Loan is paid in full,
renewed, or converted, at a rate per annum equal to the LIBO Rate plus the
Applicable Margin for LIBO Rate Loans. After receipt of a request for a LIBO
Rate Loan, the Bank shall proceed to determine the LIBO Rate to be applicable
thereto. The Bank shall give prompt notice by telephone or facsimile to Jevic of
the LIBO Rate thus determined in respect of each LIBO Rate Loan or any change
therein. Not more than twelve LIBO Rate Loans shall be in existence at any one
time in any combination of LIBO Rates applicable to the Equipment Revolving
Credit Loan or LIBO Rates applicable to Working Capital Revolving Credit Loan.
The Applicable Margin for LIBO Rate Loans shall be as follows:
- 14 -
<PAGE>
<TABLE>
<CAPTION>
Equipment Revolving Working Capital Revolving
Senior Debt:Capital Ratio Credit Loans Credit Loans
- ---------------------- ------------------- ------------------------
<S> <C> <C>
25% or less 0.60% 0.55%
More than 25% but
not more than 35% 0.70% 0.60%
More than 35% but
not more than 45% 0.85% 0.75%
More than 45% but
not more than 55% 1.00% 0.90%
More than 55% 1.25% 1.15%
</TABLE>
The Senior Debt:Capital Ratio shall be measured as of the most recently ended
fiscal quarter of Jevic. Each change in the Applicable Margin for LIBO Rate
Loans shall take effect on the first day of the month following receipt by the
Bank of the certificate required to be provided periodically by Jevic pursuant
to Section 5.1(c) hereof.
(c) Renewals and Conversions of Loans. On the last day of
each Interest Period, the LIBO Rate Loan then maturing shall automatically be
renewed for a new Interest Period of like duration, unless Jevic shall have
given the Bank notice of a permitted conversion or renewal at for an Interest
Period of different duration as provided in ss.2.3 hereof, or an Event of
Default, or Potential Default exists or would thereby occur. If no Event of
Default or Potential Default exists or would thereby occur, Jevic shall have the
right to convert Base Rate Loans into LIBO Rate Loans, to convert LIBO Rate
Loans into Base Rate Loans, and to renew LIBO Rate Loans for Interest Periods of
different duration, from time to time, provided that it shall give the Bank
notice of each permitted conversion or renewal as provided in ss.2.3 hereof, and
LIBO Rate Loans may be converted or renewed for different Interest Periods only
as of the last day of the applicable Interest Period for such Loans. The Bank
shall use its best efforts to notify Jevic of the effectiveness of such
conversion or renewal (automatic or not automatic), and the new interest rate to
which the converted or renewed Loan is subject, as soon as practicable after the
conversion or renewal; provided, however, that any failure to give such notice
shall not affect Jevic's obligations or the Bank's rights and remedies hereunder
in any way whatsoever. In the event a LIBO Rate Loan is not automatically
renewed as provided herein and Jevic shall not have selected an alternative
Interest Period for any LIBO Rate Loan maturing as provided herein, such Loan
shall be automatically converted into a Base Rate Loan on the last day of the
Interest Period for such Loan.
(d) Automatic Reinstatement. The liability of Jevic under
this ss.2.4 shall continue to be effective or be automatically reinstated, as
the case may be, if at any time payment, in whole or in part, of any of the
payments to the Bank is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of Jevic
or any other Person, or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with
-15-
<PAGE>
respect to Jevic or any other Person or any substantial part of its property, or
otherwise, all as though such payment had not been made.
2.5 Fees.
(a) Structuring and Arranging Fee. Jevic agrees to pay to
the Bank on the Closing Date a structuring and arranging fee (the "Closing Fee")
in the amount of 1/8 of 1% of the sum of the Equipment Revolving Loan Commitment
and the Working Capital Revolving Loan Commitment at the time this Agreement is
executed and delivered by both parties.
(b) Equipment Revolving Loan Commitment Fee. Jevic agrees to
pay to the Bank as compensation for the Equipment Revolving Loan Commitment a
fee (the "Equipment Revolving Loan Commitment Fee") computed at the rate per
annum equal to 1/5th of 1% of the average daily amount of the unused portion of
the Equipment Revolving Loan Commitment accrued from and after the date hereof.
(c) Working Capital Revolving Loan Commitment Fee. Jevic
agrees to pay to the Bank as compensation for the Working Capital Revolving Loan
Commitment a fee (the "Working Capital Revolving Loan Commitment Fee" and
together with the Equipment Revolving Loan Commitment Fee, the "Commitment
Fees") computed at the rate per annum equal to 1/4th of 1% of the average daily
amount of the unused portion of the Working Capital Revolving Loan Commitment
accrued from and after the date hereof. For purposes of calculating the Working
Capital Revolving Loan Commitment Fee, the unused portion of the Working Capital
Revolving Loan Commitment shall be reduced by the aggregate undrawn face amount
of all Standby Letters of Credit.
(d) Payment of Commitment Fees. Commitment Fees shall be
payable in arrears on the first day of each January, April, July and October,
commencing July 1, 1998 (for the three month period or portion thereof ended on
the preceding day), on the Equipment Revolver Termination Date, and on the
Working Capital Revolver Termination Date. Commitment Fees shall be calculated
on the basis of a 360 day year.
2.6 Reduction or Termination of Commitments.
(a) Voluntary Reductions or Terminations. Jevic may at any
time, on not less than two Business Days' written notice, terminate or
permanently reduce the Equipment Revolving Loan Commitment or the Working
Capital Revolving Loan Commitment, provided that any reduction shall be in the
amount of $250,000 or a multiple thereof and that no such reduction shall cause
the principal amount of Loans outstanding to exceed the Equipment Revolving Loan
Commitment or Working Capital Revolving Loan Commitment each as reduced.
(b) Equipment Revolving Loan Commitment Termination. In the
event the Equipment Revolving Loan Commitment is terminated in full or Jevic
does not amortize the Equipment Revolving Credit Loans over the applicable
amortization period, the Equipment Revolver Termination Date shall accelerate
and Jevic shall, simultaneously with such termination, repay the Base Rate
Equipment Revolving Credit Loans and LIBO Rate Equipment Revolving Credit Loans
in accordance with Section 2.8, without any prepayment penalty, other than, if
applicable, as set forth in Section 2.8(e).
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(c) Working Capital Revolving Loan Commitment Termination.
In the event the Working Capital Revolving Loan Commitment is terminated, the
Working Capital Revolver Termination Date shall accelerate and Jevic shall,
simultaneously with such termination, repay the Base Rate Working Capital
Revolving Credit Loans and LIBO Rate Working Capital Revolving Credit Loans in
accordance with Section 2.8.
2.7 Voluntary Prepayments.
(a) Base Rate Loans. On one Business Day's notice to the
Bank, Jevic may, at its option, prepay any Base Rate Loan in whole at any time
or in part from time to time, provided that each partial prepayment shall be in
the principal amount of $250,000 or, if greater, then in multiples thereof and,
if less than $250,000 shall be outstanding, in principal amount equal to amount
remaining outstanding.
(b) LIBO Rate Loans. Jevic may, at its option prepay any
LIBO Rate Loan provided that any such prepayment shall be the minimum principal
amount of $1,000,000 and if it shall pay a LIBO Rate Loan prior to the last day
of the applicable Interest Period, or shall fail to borrow any LIBO Rate Loan on
the date such Loan is to be made, it shall pay to the Bank, in addition to the
principal and interest then to be paid in the case of a prepayment, on such date
of prepayment, the Additional Amount incurred or sustained by the Bank as a
result of such prepayment or failure to borrow as provided in ss.2.3(a).
2.8 Payments.
(a) Base Rate Loans. Accrued interest on all Base Rate Loans
shall be due and payable on the first Business Day of each calendar month, upon
the Equipment Revolver Termination Date, and upon the Working Capital Revolver
Termination Date.
(b) LIBO Rate Loans. Accrued interest on LIBO Rate Loans
shall be due and payable on the last day of the applicable Interest Period.
(c) Form of Payments, Application of Payments, Payment
Administration, Etc. Provided that no Event of Default or Potential Default then
exists, all payments and prepayments shall be applied to the Loans in such order
and to such extent as shall be specified by Jevic, by written notice to the Bank
at the time of such payment or prepayment. Except as otherwise provided herein,
all payments of principal, interest, fees, or other amounts payable by Jevic
hereunder shall be remitted to the Bank at the address set forth opposite its
name on the signature page hereof or at such office or account as the Bank shall
specify to Jevic, in immediately available funds not later than 2:00 p.m. on the
day when due. Whenever any payment is stated as due on a day which is not a
Business Day, the maturity of such payment shall, except as otherwise provided
in the definition of "Interest Period", be extended to the next succeeding
Business Day and interest and commitment fees shall continue to accrue during
such extension. Jevic authorizes the Bank to deduct from any account of Jevic
maintained at the Bank or over which the Bank has control any amount payable
under this Agreement, the Notes or any other Loan Document which is not paid in
a timely manner. The Bank's failure to deliver any bill, statement or invoice
with respect to amounts due under this Section or under any Loan Document shall
not affect Jevic's obligation to pay any installment of principal, interest or
any other amount under this Agreement when due and payable.
(d) Net Payments. (i) All payments made to the Bank by Jevic
hereunder, under any Note or under any other Loan Document will be made without
set off, counterclaim or other defense. All
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such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or any political subdivision or taxing authority thereof or therein
(but excluding, except as provided below, any tax imposed on or measured by the
gross or net income of the Bank (including all interest, penalties or similar
liabilities related thereto) pursuant to the laws of the United States of
America or any political subdivision thereof, or taxing authority of the United
States of America or any political subdivision thereof, in which the principal
office or applicable lending office of the Bank is located), and all interest,
penalties or similar liabilities with respect thereto (collectively, together
with any amounts payable pursuant to the next sentence, "Taxes"). Jevic shall
also reimburse the Bank, upon the written request of the Bank, for Taxes imposed
on or measured by the gross or net income of the Bank pursuant to the laws of
the United States of America (or any State or political subdivision thereof), or
the jurisdiction (or any political subdivision or taxing authority thereof) in
which the principal office or applicable lending office of the Bank is located
as the Bank shall determine are payable by the Bank due to the amount of Taxes
paid to or on behalf of the Bank pursuant to this or the preceding sentence. If
any Taxes are so levied or imposed, Jevic agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due hereunder, under any Note or under any other Loan Document,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. Jevic will furnish to the
Bank upon request certified copies of tax receipts evidencing such payment by
Jevic. Jevic will indemnify and hold harmless the Bank, and reimburse the Bank
upon its written request, for the amount of any Taxes so levied or imposed and
paid or withheld by the Bank.
(e) Prepayment of LIBO Rate Loans. If any principal of a
LIBO Rate Loan shall be repaid (whether upon prepayment, reduction of the
Equipment Revolving Loan Commitment, reduction of the Working Capital Revolving
Loan Commitment, or for any other reason) or converted to a Base Rate Loan
pursuant to ss.2.4(c) prior to the last day of the Interest Period applicable to
such LIBO Rate Loan or if Jevic fails for any reason to borrow a LIBO Rate Loan
after giving irrevocable notice pursuant to ss.2.3, Jevic shall pay to the Bank,
in addition to the principal and interest then to be paid, such additional
amounts as may be necessary to compensate the Bank for all direct and indirect
costs and losses (including losses resulting from redeployment of prepaid or
unborrowed funds at rates lower than the cost of such funds to the Bank, and
including lost profits incurred or sustained by the Bank) as a result of such
repayment or failure to borrow (the "Additional Amount"). The Additional Amount
(which the Bank shall take reasonable measures to minimize) shall be specified
in a written notice or certificate delivered to Jevic by the Bank sustaining
such costs or losses. Such notice or certificate shall contain a calculation in
reasonable detail of the Additional Amount to be compensated and shall be
conclusive as to the facts and the amounts stated therein, absent manifest
error.
2.9 Changes in Circumstances; Yield Protection.
(a) If any Regulatory Change or compliance by the Bank with
any request made after the date of this Agreement by the Board of Governors of
the Federal Reserve System or by any Federal Reserve Bank or other central bank
or fiscal, monetary or similar authority (in each case whether or not having the
force of law) shall:
(1) impose, modify or make applicable any reserve,
special deposit, Federal Deposit Insurance Corporation premium or
similar requirement or imposition against assets held by, or deposits
in or for the account of, or loans made by, or any other acquisition of
funds for loans or advances by, the Bank;
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(2) impose on the Bank any other condition regarding
the Notes;
(3) subject the Bank to, or cause the withdrawal or
termination of any previously granted exemption with respect to, any
tax (including any withholding tax but not including any income tax not
currently causing the Bank to be subject to withholding) or any other
levy, impost, duty, charge, fee or deduction on or from any payments
due from Jevic; or
(4) change the basis of taxation of payments from
Jevic to the Bank (other than by reason of a change in the method of
taxation of a Bank's net income);
and the result of any of the foregoing events is to increase the cost to the
Bank of making or maintaining any Loan or to reduce the amount of principal,
interest or fees to be received by the Bank hereunder in respect of any Loan,
the Bank will immediately so notify Jevic. If the Bank determines in good faith
that the effects of the change resulting in such increased cost or reduced
amount cannot reasonably be avoided or the cost thereof mitigated, then upon
notice by the Bank to Jevic, Jevic shall pay to the Bank on each interest
payment date of the Loan, such additional amount as shall be necessary to
compensate the Bank for such increased cost or reduced amount.
(b) If the Bank shall determine that any Regulation
regarding capital adequacy or the adoption of any Regulation regarding capital
adequacy, which Regulation is applicable to banks (or their holding companies)
generally and not First Union (or its holding company) specifically, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank (or its
holding company) with any such request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has the effect of reducing the rate of return on the Bank's
capital as a consequence of its obligations hereunder to a level below that
which the Bank could have achieved but for such adoption, change or compliance
(taking into consideration the Bank's policies with respect to capital adequacy)
by an amount deemed by the Bank to be material, Jevic shall promptly pay to the
Bank, upon the demand of the Bank, such additional amount or amounts as will
compensate the Bank for such reduction.
(c) If the Bank shall determine (which determination shall
be, in the absence of fraud or manifest error, conclusive and binding upon all
parties hereto) that by reason of abnormal circumstances affecting the interbank
eurodollar or applicable eurocurrency market adequate and reasonable means do
not exist for ascertaining the LIBO Rate to be applicable to the requested LIBO
Rate Loan or that eurodollar or eurocurrency funds in amounts sufficient to fund
all the LIBO Rate Loans are not obtainable on reasonable terms, the Bank shall
give notice of such inability or determination by telephone to Jevic at least
two Business Days prior to the date of the proposed Loan and thereupon the
obligations of the Bank to make, convert other Loans to, or renew such LIBO Rate
Loan shall be excused, subject, however, to the right of Jevic at any time
thereafter to submit another request.
(d) Determination by the Bank for purposes of this Section
2.9 of the effect of any Regulatory Change or other change or circumstance
referred to above on its costs of making or maintaining Loans or on amounts
receivable by it in respect of the Loans and of the additional amounts required
to compensate the Bank in respect of any additional costs, shall be made in good
faith and shall be evidenced by a certificate, signed by an officer of the Bank
and delivered to Jevic, as to the fact and amount of the
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increased cost incurred by or the reduced amount accruing to the Bank owing to
such event or events. Such certificate shall be prepared in reasonable detail
and shall be conclusive as to the facts and amounts stated therein, absent
manifest error.
(e) The Bank will notify Jevic of any event occurring after
the date of this Agreement that will entitle the Bank to compensation pursuant
to this Section as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. Said notice shall be in writing,
shall specify the applicable Section or Sections of this Agreement to which it
relates and shall set forth the amount of amounts then payable pursuant to this
Section. Jevic shall pay the Bank the amount shown as due on such notice within
30 days after its receipt of the same.
2.10 Illegality. Notwithstanding any other provision in this Agreement,
if the adoption of any applicable Regulation, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank, or
comparable agency shall make it unlawful or impossible for the Bank to (1)
maintain its Equipment Revolving Loan Commitment or Working Capital Revolving
Loan Commitment, then upon notice to Jevic by the Bank, the Equipment Revolving
Loan Commitment and Working Capital Revolving Loan Commitment shall terminate;
or (2) maintain or fund its LIBO Rate Loans, then upon notice to Jevic of such
event, Jevic's outstanding LIBO Rate Loans shall be converted into Base Rate
Loans.
3. Representations and Warranties
Jevic represents and warrants to the Bank that:
3.1 Organization, Standing. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and authority necessary to own its
assets, carry on its business and enter into and perform its obligations
hereunder, under each Loan Document to which it is a party, and (iii) is
qualified to do business and is in good standing in each jurisdiction where the
nature of its business or the ownership of its properties requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.
3.2 Corporate Authority, Validity, Etc. The making and performance of
the Loan Documents to which it is a party are within the power and authority of
Jevic and have been duly authorized by all necessary corporate action. The
making and performance of the Loan Documents do not and under present law will
not require any consent or approval of any of Jevic's shareholders or any other
Person, do not and under present law will not violate any law, rule, regulation
order, writ, judgment, injunction, decree, determination or award, do not
violate any provision of its charter or by-laws, do not and will not result in
any breach of any material agreement, lease or instrument to which it is a
party, by which it is bound or to which any of its assets are or may be subject,
and do not and will not give rise to any Lien upon any of its assets. Further,
Jevic is not in default under any such agreement, lease or instrument except to
the extent such default reasonably could not have a Material Adverse Effect. No
authorizations, approvals or consents of, and no filings or registrations with,
any governmental or regulatory authority or agency are necessary for the
execution, delivery or performance by Jevic of any Loan Document to which Jevic
is a party or for the
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validity or enforceability thereof. Each Loan Document, when executed and
delivered, will be the legal, valid and binding obligation of Jevic, enforceable
against it in accordance with its terms.
3.3 Litigation. Except as disclosed on Schedule 2, there are no
actions, suits or proceedings pending or, to Jevic's knowledge, threatened
against or affecting Jevic or any assets of Jevic before any court, government
agency, or other tribunal which if adversely determined reasonably could have a
Material Adverse Effect or upon the ability of Jevic to perform under the Loan
Documents. The status (including the tribunal, the nature of the claim and the
amount in controversy) of each such litigation matter as of the date of this
Agreement is set forth in Schedule 2.
3.4 ERISA. (a) Jevic and ERISA Affiliate are in compliance in all
material respects with all applicable provisions of ERISA and the regulations
promulgated thereunder; and, neither Jevic, nor any ERISA Affiliate maintains or
contributes to or has maintained or contributed to any multiemployer plan (as
defined in ss.4001 of ERISA) under which Jevic or any ERISA Affiliate could have
any withdrawal liability; (b) neither Jevic nor any ERISA Affiliate, sponsors or
maintains any Plan under which there is an accumulated funding deficiency within
the meaning of ss.412 of the Code, whether or not waived; (c) the aggregate
liability for accrued benefits and other ancillary benefits under each Plan that
is or will be sponsored or maintained by Jevic or any ERISA Affiliate
(determined on the basis of the actuarial assumptions prescribed for valuing
benefits under terminating single-employer defined benefit plans under Title IV
of ERISA) does not exceed the aggregate fair market value of the assets under
each such defined benefit pension Plan; (d) the aggregate liability of Jevic and
each ERISA Affiliate arising out of or relating to a failure of any Plan to
comply with the provisions of ERISA or the Code, will not have a Material
Adverse Effect; and (e) there does not exist any unfunded liability (determined
on the basis of actuarial assumptions utilized by the actuary for the plan in
preparing the most recent Annual Report) of Jevic or any ERISA Affiliate under
any plan, program or arrangement providing post-retirement life or health
benefits.
3.5 Financial Statements. The financial statements of Jevic as of and
for the Fiscal Years ending December 31, 1996 and December 31, 1997, consisting
in each case of a balance sheet, a statement of operations, a statement of
shareholders' equity, a statement of cash flows and accompanying footnotes, and
the interim financial statements of Jevic as of March 31, 1998 furnished to the
Bank in connection herewith, present fairly, in all material respects, the
financial position, results of operations and operating statistics of Jevic as
of the dates and for the periods referred to, in conformity with Generally
Accepted Accounting Principles. Except as set forth on Schedule 2 hereto, there
are no liabilities, fixed or contingent, which are not reflected in such
financial statements, other than liabilities which are not required to be
reflected in such balance sheets. There has been no Material Adverse Change
since March 31, 1998.
3.6 Not in Default, Judgments, Etc.. No Event of Default or Potential
Default under any Loan Document has occurred and is continuing. Jevic has
satisfied all judgments and is not in default with respect to any judgment,
writ, injunction, decree, rule, or regulation of any court, arbitrator, or
federal, state, municipal, or other governmental authority, commission, board
bureau, agency, or instrumentality, domestic or foreign.
3.7 Taxes. Jevic has filed all federal, state, local and foreign tax
returns and reports which it is required by law to file and as to which its
failure to file would have a Material Adverse Effect, and has paid all taxes,
including wage taxes, assessments, withholdings and other governmental charges
which are presently due and payable, other than those being contested in good
faith by appropriate proceedings and
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disclosed on Schedule 2. The tax charges, accruals and reserves on the books of
Jevic are adequate to pay all such taxes that have accrued but are not presently
due and payable.
3.8 Permits, Licenses, Etc. Jevic possesses all permits, licenses,
franchises, trademarks, trade names, copyrights and patents necessary to the
conduct of its business as presently conducted or as presently proposed to be
conducted, except where the failure to possess the same would not have a
Material Adverse Effect.
3.9 Compliance with Laws, Etc.
(a) Jevic is in compliance in all material respects with all
Regulations applicable to its business (including obtaining all authorizations,
consents, approvals, orders, licenses, exemptions from, and making all filings
or registrations or qualifications with, any court or governmental department,
public body or authority, commission, board, bureau, agency, or
instrumentality), the noncompliance with which reasonably could have a Material
Adverse Effect.
(b) Hazardous Wastes, Substances and Petroleum Products.
Jevic has received all permits and filed all notifications necessary to carry on
its business; and is in compliance in all respects with all Environmental
Control Statutes. Jevic has not given any written or oral notice, nor has it
failed to give required notice, to the Environmental Protection Agency ("EPA")
or any state or local agency with regard to any actual or imminently threatened
Release of Hazardous Substances on properties owned, leased or operated by Jevic
or used in connection with the conduct of its business and operations. Jevic has
not received notice that it is potentially responsible for costs of clean-up or
remediation of any actual or imminently threatened Release of Hazardous
Substances pursuant to any Environmental Control Statute. To the best of Jevic's
knowledge and belief, no real property owned or leased by it is in violation of
any Environmental Laws and no Hazardous Substances are present on said real
property in violation of applicable law. Jevic has not been identified in any
litigation, administrative proceedings or investigation as a potentially
responsible party for any liability under any Environmental Laws.
3.10 Solvency. Jevic is, and after giving effect to the transactions
contemplated hereby, will be, Solvent.
3.11 Subsidiaries, Etc. Jevic does not have any Subsidiaries except as
set forth in Schedule 2 hereto. Set forth in Schedule 2 hereto is a complete and
correct list, as of the date of this Agreement, of all Investments held by Jevic
in any joint venture or other Person.
3.12 Title to Properties, Leases. Jevic has good and marketable title
to all assets and properties reflected as being owned by it in its financial
statements as well as to all assets and properties acquired since said date
(except property disposed of since said date in the ordinary course of
business). Except for the Liens set forth in Schedule 2 hereto and any other
Permitted Liens, there are no Liens on any of such assets or properties. It has
the right to, and does, enjoy peaceful and undisturbed possession under all
material leases under which it is leasing property as a lessee. All such leases
are valid, subsisting and in full force and effect, and none of such leases is
in default, except where such default, either individually or in the aggregate,
could not have a Material Adverse Effect.
3.13 Public Utility Holding Company; Investment Company. Jevic is not a
"public utility company" or a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of
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a "holding company" or of a "subsidiary company" of a "holding company", as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended;
or a "public utility" within the meaning of the Federal Power Act, as amended.
Further, it is not an "investment company" or an "affiliated person" of an
"investment company" or a company "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
3.14 Margin Stock. Jevic is not or will not be engaged principally or
as one of its important activities in the business of extending credit for the
purpose of purchasing or carrying or trading in any margin stocks or margin
securities (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System as amended from time to time). It will not use or permit
any proceeds of the Loans to be used, either directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying margin
stocks or margin securities.
4. Conditions Precedent
4.1 All Loans. After this Agreement has become effective, the
obligation of the Bank to make any Loan (including but not limited to the first
Loan hereunder) is conditioned upon the following:
(a) Documents. Jevic shall have delivered and the Bank shall
have received a request for a Loan in such form as the Bank may request from
time to time.
(b) Covenants; Representations. Jevic shall be in compliance
with all covenants, agreements and conditions in each Loan Document and each
representation and warranty contained in each Loan Document shall be true with
the same effect as if such representation or warranty had been made on the date
such Loan is made or issued.
(c) Defaults. Immediately prior to and after giving effect
to such transaction, no Event of Default or Potential Default shall exist.
(d) Material Adverse Change. Since March 31, 1998, there
shall not have been any Material Adverse Change with respect to Jevic, and there
shall not be any other event or circumstance which gives the Bank reasonable
grounds to conclude that Jevic may not or will not be able to perform or observe
(in the normal course) its obligations hereunder and under the Revolving Credit
Note, the Term Notes or the other Loan Documents.
(e) Borrowing Base Certificate. Jevic shall have delivered
and the Bank shall have received a Borrowing Base Certificate dated the date of
each Loan under this Agreement.
4.2 Conditions to First Loan. The obligation of the Bank to make the
first Loan hereunder is conditioned upon the following: satisfactory to each
Bank:
(a) Articles, Bylaws. The Bank shall have received copies of
the Articles or Certificates of Incorporation and Bylaws of Jevic, certified by
its Secretary or Assistant Secretary; together with Certificate of Good Standing
from any jurisdiction where the nature of its business or the ownership
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of its properties requires such qualification except where the failure to be so
qualified would not have a Material Adverse Effect.
(b) Evidence of Authorization. The Bank shall have received
copies certified by the Secretary or Assistant Secretary of Jevic or other
appropriate official (in the case of a Person other than Jevic) of all corporate
or other action taken by each Person other than the Bank who is a party to any
Loan Document to authorize its execution and delivery and performance of the
Loan Documents and to authorize the Equipment Revolving Credit Loan and the
Working Capital Revolving Credit Loan, together with such other related papers
as the Bank shall reasonably require.
(c) Legal Opinions. The Bank shall have received a favorable
written opinion in form and substance satisfactory to the Bank from Archer &
Greiner, P.C., counsel for Jevic, which shall be addressed to the Bank and be
dated the date of the first Loan.
(d) Incumbency. The Bank shall have received a certificate
signed by the secretary or assistant secretary of Jevic, together with the true
signature of the officer or officers authorized to execute and deliver the Loan
Documents and certificates thereunder, upon which the Bank shall be entitled to
rely conclusively until it shall have received a further certificate of the
secretary or assistant secretary of Jevic amending the prior certificate and
submitting the signature of the officer or officers named in the new certificate
as being authorized to execute and deliver Loan Documents and certificates
thereunder.
(e) Notes. The Bank shall have received the Equipment
Revolving Credit Note and the Working Capital Revolving Credit Note duly
executed, completed and issued in accordance herewith.
(f) Documents. The Bank shall have received all
certificates, instruments and other documents then required to be delivered
pursuant to any Loan Documents, in each instance in form and substance
reasonably satisfactory to it.
(g) Consents. Jevic shall have provided to the Bank evidence
satisfactory to it that all governmental, shareholder and third party consents
and approvals necessary in connection with the transactions contemplated hereby
have been obtained and remain in effect.
(h) Change. No Material Adverse Change shall have occurred
since March 31, 1998 and there shall not be any other event or circumstance
which gives the Bank reasonable grounds to conclude that Jevic may not or will
not be able to perform or observe (in the normal course) its obligations
hereunder and under the Revolving Credit Note, the Term Notes and the other Loan
Documents.
(i) Other Agreements. Jevic shall have executed and
delivered each other Loan Document required hereunder.
(j) Fees. Jevic shall simultaneously pay or shall have paid
all fees due hereunder or any other Loan Document.
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5. Affirmative Covenants
Jevic covenants and agrees that, without the prior written consent of
the Bank, from and after the date hereof and so long as any Commitment is in
effect or any Obligation remains unpaid or outstanding, it will:
5.1 Financial Statements and Reports. Furnish to the Bank the following
financial information:
(a) Annual Statements. No later than one hundred and twenty
(120) days after the end of each Fiscal Year, its balance sheet as of the end of
such year and the prior year in comparative form, and related statements of
operations, shareholders' equity, and cash flows for the Fiscal Year and the
prior Fiscal Year in comparative form. The financial statements shall be in
reasonable detail with appropriate notes and be prepared in accordance with
Generally Accepted Accounting Principles. The annual financial statements shall
be certified (without any qualification or exception) by independent public
accountants of nationally recognized standing reasonably acceptable to the Bank.
Such financial statements shall be accompanied by a report of such independent
certified public accountants stating that, in the opinion of such accountants,
such financial statements present fairly, in all material respects, the
financial position, and the results of operations and the cash flows of Jevic
for the period then ended in conformity with Generally Accepted Accounting
Principles, except for inconsistencies resulting from changes in accounting
principles and methods agreed to by such accountants and specified in such
report, and that, in the case of such financial statements, the examination by
such accountants of such financial statements has been made in accordance with
generally accepted auditing standards and accordingly included examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and assessing the accounting principles used and significant
estimates made, as well as evaluating the overall financial statement
presentation. Each financial statement provided under this subsection (a) shall
be accompanied by a certificate signed by such accountants either stating that
during the course of their examination nothing came to their attention which
would cause them to believe that any event has occurred and is continuing which
constitutes an Event of Default or Potential Default, or describing each such
event. In addition to the annual financial statements, Jevic shall, promptly
upon receipt thereof, furnish to the Bank a copy of each other report submitted
to its board of directors by its independent accountants in connection with any
annual, interim or special audit made by them of the financial records of Jevic.
(b) Quarterly Statements. No later than sixty (60) calendar
days after the end of each Fiscal Quarter of each Fiscal Year, its balance sheet
and related statements of operations, shareholders' equity and cash flows for
such quarterly period and for the period from the beginning of such fiscal year
to the end of such Fiscal Quarter and the corresponding financial statements
(other than the balance sheet) for the same periods in the preceding Fiscal Year
certified by the chief financial officer of Jevic as having been prepared in
accordance with Generally Accepted Accounting Principles (subject to changes
resulting from audits and year-end adjustments); provided, however, that if the
independent certified public accountants issue a review report on the quarterly
financial statements of Jevic, the financial statements required by this
subsection (b) shall be accompanied by a certificate signed by such accountants
either stating that during the course of their examination nothing came to their
attention which would cause them to believe that any event has occurred and is
continuing which constitutes an Event of Default or Potential Default, or
describing each such event and the remedial steps being taken by Jevic.
(c) No Default. Within sixty (60) calendar days after the
end of each of the first three Fiscal Quarters of each Fiscal Year and within
one hundred and twenty (120) calendar days after the end of each Fiscal Year, a
certificate signed by the chief financial officer of Jevic certifying that, to
the best of such officer's knowledge, after due inquiry, (i) Jevic has complied
with all covenants, agreements and conditions
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in each Loan Document and that each representation and warranty contained in
each Loan Document is true and correct with the same effect as though each such
representation and warranty had been made on the date of such certificate
(except to the extent such representation or warranty related to a specific
prior date), and (ii) no event has occurred and is continuing which constitutes
an Event of Default or Potential Default, or describing each such event and the
remedial steps being taken by Jevic.
(d) ERISA. All reports and forms filed with respect to all
Plans, except as filed in the normal course of business and that would not
result in an adverse action to be taken under ERISA, and details of related
information of a Reportable Event.
(e) Material Changes. Notification to the Bank of any
litigation, administrative proceeding, investigation, business development, or
change in financial condition which could reasonably have a Material Adverse
Effect.
(f) Other Information. Promptly upon request by the Bank
from time to time (which may be on a monthly or other basis), Jevic shall
provide such other information and reports regarding its operations, business
affairs, prospects and financial condition as the Bank may reasonably request.
(g) Borrowing Base Certificates. If there are Loans
outstanding and Jevic shall not have delivered a Borrowing Base Certificate to
the Bank during any calendar month, it will deliver to the Bank, no later than
30 days after the end of such calendar month as of the last day of the preceding
calendar month, a Borrowing Base Certificate signed by the chief financial
officer, treasurer or controller of Jevic.
(h) Monthly Receivables Report. If there are Loans
outstanding, Jevic will deliver to the Bank, no later than 30 days after the end
of such calendar month, an Accounts Receivable Aging Report.
5.2 Corporate Existence. Preserve its corporate existence and material
franchises, licenses, patents, copyrights, trademarks and trade names consistent
with good business practice. Maintain, keep, and preserve all of its properties
(tangible and intangible) necessary or useful in the conduct of its business in
good working order and condition, ordinary wear and tear expected.
5.3 ERISA. Comply in all material respects with the provisions of ERISA
to the extent applicable to any Plan maintained for the employees of Jevic or
any ERISA Affiliate; do or cause to be done all such acts and things that are
required to maintain the qualified status of each Plan and tax exempt status of
each trust forming part of such Plan; not incur any material accumulated funding
deficiency (within the meaning of ERISA and the regulations promulgated
thereunder), or any material liability to the PBGC (as established by ERISA);
not permit any event to occur as described in ss.4042 of ERISA or which may
result in the imposition of a lien on its properties or assets; notify the Bank
in writing promptly after it has come to the attention of senior management of
Jevic of the assertion or threat of any "reportable event" or other event
described in ss.4042 of ERISA (relating to the soundness of a Plan) or the
PBGC's ability to assert a material liability against it or impose a lien on
its, or any ERISA Affiliates', properties or assets; and refrain from engaging
in any Prohibited Transactions or actions causing possible liability under
ss.5.02 of ERISA.
5.4 Compliance with Regulations. Comply in all material respects with
all Regulations applicable to its business, the noncompliance with which
reasonably could have a Material Adverse Effect.
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5.5 Conduct of Business; Permits and Approvals, Compliance with Laws.
Continue to engage in an efficient and economical manner in a business of the
same general type as conducted by it on the date of this Agreement; maintain in
full force and effect, its franchises, and all licenses, patents, trademarks,
trade names, contracts, permits, approvals and other rights necessary to the
profitable conduct of its business.
5.6 Maintenance of Insurance. Maintain insurance with financially sound
and reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
5.7 Payment of Debt; Payment of Taxes, Etc. Where the amount involved
exceeds $500,000 or where the non-payment or non-discharge would otherwise have
a Material Adverse Effect on Jevic or any of its assets: promptly pay and
discharge (a) all of its Debt in accordance with the terms thereof; (b) all
taxes, assessments, and governmental charges or levies imposed upon it or upon
its income and profits, upon any of its property, real, personal or mixed, or
upon any part thereof, before the same shall become in default; (c) all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
become a lien or charge upon such property or any part thereof; provided,
however, that so long as Jevic first notifies the Bank of its intention to do
so, Jevic shall not be required to pay and discharge any such Debt, tax,
assessment, charge, levy or claim so long as the failure to so pay or discharge
does not constitute or result in an Event of Default or a Potential Default
hereunder and so long as no foreclosure or other similar proceedings shall have
been commenced against such property or any part thereof and so long as the
validity thereof shall be contested in good faith by appropriate proceedings
diligently pursued and it shall have set aside on its books adequate reserves
with respect thereto.
5.8 Notice of Events. Promptly upon discovery of any of the following
events, Jevic shall provide telephone notice to the Bank (confirmed within three
(3) calendar days by written notice), describing the event and all action Jevic
proposes to take with respect thereto:
(a) an Event of Default or Potential Default under this
Agreement;
(b) any default or event of default under a contract or
contracts and the default or event of default involves payments by the
Jevic in an aggregate amount equal to or in excess of $500,000;
(c) a default or event of default under or as defined in any
evidence of or agreements for Indebtedness for Borrowed Money under
which the Jevic's liability is equal to or in excess of $500,000,
singularly or in the aggregate, whether or not an event of default
thereunder has been declared by any party to such agreement or any
event which, upon the lapse of time or the giving of notice or both,
would become an event of default under any such agreement or instrument
or would permit any party to any such instrument agreement to terminate
or suspend any commitment to lend to Jevic or to declare or to cause
any such indebtedness to be accelerated or payable before it would
otherwise be due;
(d) the institution of, any material adverse determination
in, or the entry of any default judgment or order or stipulated
judgment or order in, any suit, action, arbitration, administrative
proceeding, criminal prosecution or governmental investigation against
Jevic
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in which the amount in controversy is in excess of $500,000,
singularly or in the aggregate; or
(e) any change in any Regulation, including, without
limitation, changes in tax laws and regulations, which would have a
Material Adverse Effect.
5.9 Inspection Rights. At any time during regular business hours and as
often as reasonably requested of Jevic by the Bank, permit the Bank, or any
authorized officer, employee, agent, or representative of the Bank to examine
and make abstracts from the records and books of account of Jevic, wherever
located, and to visit the properties of Jevic; and to discuss the affairs,
finances, and accounts of Jevic with its Chairman, President, any executive vice
president, it chief financial officer, treasurer, controller or independent
accountants. Each inspection shall be at the expense of the Bank, unless such
inspection shall be made during the continuance of a Potential Default or an
Event of Default (in which event, the expense of such inspection shall be borne
by Jevic). Notwithstanding the foregoing sentence, it is understood and agreed
by Jevic that all expenses in connection with any such inspection which may be
incurred by Jevic, any officers and employees thereof and the attorneys and
independent certified public accountants therefor shall be expenses payable by
Jevic and shall not be expenses of the Bank. Further, it is understood and
agreed by First Union that the number of inspection visits shall be limited to
two per year and reasonable prior notice shall be given to Jevic unless an Event
of Default or a Potential Default shall exist.
5.10 Generally Accepted Accounting Principles. Maintain books and
records at all times in accordance with Generally Accepted Accounting
Principles.
5.11 Use of Proceeds. Jevic will use the proceeds of the Loans for the
purchase or refinancing of over the road chassis and trailers, Qualcomm
satellites, trailer dollys, trailer heaters, fork trucks, automobiles and
miscellaneous equipment used in connection with its business and for working
capital purposes.
5.12 Further Assurances. Do such further acts and things and execute
and deliver to the Bank such additional assignments, agreements, powers and
instruments, as the Bank may reasonably require or reasonably deem advisable to
carry into affect the purposes of this Agreement or to better assure and confirm
unto the Bank its rights, powers and remedies hereunder.
5.13 Compliance with Material Contracts. Jevic will comply in all
material respects with all obligations, terms, conditions and covenants, as
applicable, in all Debt of Jevic and all instruments and agreements related
thereto, and all other instruments and agreements to which it is a party or by
which it is bound or any of its properties is affected and in respect of which
the failure to comply reasonably could have a Material Adverse Effect.
5.14 Restrictive Covenants in Other Agreements. In the event that Jevic
shall enter into or otherwise become subject to or suffer to exist any agreement
pertaining to Debt which contains covenants or restrictions that are more
restrictive on it than the covenants and restrictions contained in this
Agreement, each and every such covenant and restriction as in effect from time
to time shall be deemed incorporated herein by reference as fully as if set
forth herein. If and to the extent that any such covenant or restriction shall
be inconsistent with or otherwise be in conflict with any covenant or
restriction set forth herein (other than by reason of its being more
restrictive), this Agreement shall govern.
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6. Negative Covenants
Jevic covenants and agrees that, without the prior written consent of
the Bank, from and after the date hereof and so long as any Commitment is in
effect or any Obligation remains unpaid or outstanding, it will not:
6.1 Consolidation and Merger. Merge or consolidate with or into any
corporation except, if no Potential Default or Event of Default shall have
occurred and be continuing either immediately prior to or upon the consummation
of such transaction, any Person may be merged into Jevic as long as (a) Jevic is
the surviving entity, (b) the event is not deemed to be a "change in control"
for purposes of Item 1 in Jevic's filing of the Securities and Exchange
Commission's current report on Form 8K, (c) the board members of Jevic at the
time of the merger hold a majority of seats on the board of the surviving
entity, and (d) the Person had been, prior to the merger, in a business similar
to that of Jevic.
6.2 Debt. Advance, borrow, or assume any Debt or other obligations for
working capital purposes (including, but not limited to, Working Capital
Revolving Credit Loans hereunder) which, in the aggregate at any time, exceed
eighty percent (80%) of the Eligible Accounts Receivable.
6.3 Liens. Create, assume or permit to exist any Lien on any of its
property or assets, whether now owned or hereafter acquired, or upon any income
or profits therefrom, except Permitted Liens.
6.4 Guarantees. Guarantee or otherwise in any way become or be
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts) of any other Person, contingently or
otherwise, in an aggregate amount equal to or exceeding ten percent (10%) of the
Tangible Net Worth of Jevic.
6.5 Margin Stock. Use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock within the meaning of Regulation U
of The Board of Governors of the Federal Reserve System, as amended from time to
time.
6.6 Acquisitions and Investments. If an Event of Default or a Potential
Default exists or would exist immediately thereafter: purchase or otherwise
acquire (including without limitation by way of share exchange) any part or
amount of the capital stock or assets of, or make any Investments in any other
Person; or enter into any new business activities or ventures not directly
related to its present business; or create any Subsidiary, except (a) it may
acquire and hold stock, obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to it, and (b) it may
make and own (i) Investments in certificates of deposit or time deposits having
maturities in each case not exceeding one year from the date of issuance thereof
and issued by a Bank, or any FDIC-insured commercial bank incorporated in the
United States or any state thereof having a combined capital and surplus of not
less than $150,000,000, (ii) Investments in marketable direct obligations issued
or unconditionally guaranteed by the United States of America, any agency
thereof, or backed by the full faith and credit of the United States of America,
in each case maturing within one year from the date of issuance or acquisition
thereof, (iii) Investments in
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commercial paper issued by a corporation incorporated in the United States or
any State thereof maturing no more than one year from the date of issuance
thereof and, at the time of acquisition, having a rating of A-1 (or better) by
Standard & Poor's Corporation or P-1 (or better) by Moody's Investors Service,
Inc., (iv) Investments in money market mutual funds all of the assets of which
are invested in cash or investments described in the immediately preceding
clauses (i), (ii) and (iii), and (v) strategic business investments, in an
amount not to exceed $3,000,000, in business enterprises similar to Jevic or
complementary to Jevic.
6.7 Transfer of Assets; Nature of Business. Sell, transfer, pledge,
assign or otherwise dispose of any of its assets unless such sale or disposition
shall be in the ordinary course of its business for value received; or
discontinue, liquidate or change in any material respect any substantial part of
its operations or business.
6.8 Restricted Payments. Make or pay any redemptions, repurchases,
dividends or distributions of any kind with respect to its capital stock except
that dividends may be made and paid as long as the aggregate thereof does not
exceed 50% of its net income (net of any net losses) accumulated after December
31, 1997.
6.9 Accounting Change. Make or permit any change in financial
accounting policies or financial reporting practices, except as required by
Generally Accepted Accounting Principles or regulations of the Securities and
Exchange Commission.
6.10 Transactions with Affiliates. Enter into any transaction
(including, without limitation, the purchase, sale or exchange of property, the
rendering of any services or the payment of management fees) with any Affiliate,
except transactions in the ordinary course of, and pursuant to the reasonable
requirements of, its business, and in good faith and upon commercially
reasonable terms.
6.11 Gross Operating Leases and TRAC Leases. Enter into gross operating
leases or leases involving terminal rental adjustment clauses ("TRAC Leases")
which, in the aggregate, involve annual lease payments in excess of $4,000,000.
6.12 Restriction on Amendment of This Agreement. Enter into or
otherwise become subject to or suffer to exist any agreement which would require
it to obtain the consent of any other Person as a condition to the ability of
First Union and Jevic to amend or otherwise modify this Agreement.
7. Financial Covenants
Jevic covenants and agrees that, without the prior written consent of
the Bank, from and after the date hereof and so long as any Commitment is in
effect or any Obligation remains unpaid or outstanding:
7.1 Borrowing Base. The aggregate principal amount of the Loans
outstanding shall not at any time exceed the Borrowing Base; provided, however,
that this covenant shall not be deemed breached if, with respect to any time
such aggregate amount exceeds said level, within five Business Days after the
earlier of the date Jevic first has knowledge of such breach or the date of the
next Borrowing Base Certificate disclosing the existence of such breach a
prepayment of the Loans shall be made in an amount sufficient to assure
continued compliance with this covenant in the future.
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7.2 Senior Debt:Cash Flow Ratio. The Senior Debt:Cash Flow Ratio for
the four (4) most recently ended consecutive Fiscal Quarters will not exceed
4:1.
7.3 Senior Debt:Capital Ratio. The Senior Debt:Capital Ratio will not
exceed 0.6:1.
8. Default
8.1 Events of Default. Jevic shall be in default if any one or more of
the following events (each an "Event of Default") occurs:
(a) Payments. Jevic fails to pay any principal of or
interest on any Note when due and payable (whether at maturity, by notice of
intention to prepay, or otherwise) or fails to pay when it is due and payable
any other amount payable under any Loan Document and such failure shall continue
for three Business Days.
(b) Covenants. Jevic fails to observe or perform (1) any
term, condition or covenant set forth in ss.5.2 (first sentence only), ss.ss.6.1
through 6.11 or ss.8.1(a) of this Agreement, as and when required, (2) any term,
condition or covenant set forth in ss.ss.5.1(a), 5.1(b), 5.1(c), 5.1(g) or
5.1(h) of this Agreement, as and when required and such failure shall continue
for a period of 3 days or more, or (3) any term, condition or covenant contained
in this Agreement or any other Loan Document other than as set forth in (1) and
(2) above, as and when required and such failure shall continue for a period of
15 days or more.
(c) Representations, Warranties. Any representation or
warranty made or deemed to be made by Jevic herein or in any Loan Document or in
any exhibit, schedule, report or certificate delivered pursuant hereto or
thereto shall prove to have been false, misleading or incorrect in any material
respect when made or deemed to have been made.
(d) Bankruptcy. Jevic is dissolved or liquidated, makes an
assignment for the benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any
receiver or trustee, commences any proceeding relating to itself under any
bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, has commenced against it any such proceeding
which remains undismissed for a period of thirty (30) days, or indicates its
consent to, approval of or acquiescence in any such proceeding, or any receiver
of or trustee for Jevic or any substantial part of the property of Jevic is
appointed, or if any such receivership or trusteeship to continues undischarged
for a period of thirty (30) days.
(e) Certain Other Defaults. Jevic shall fail to pay when due
any Indebtedness for Borrowed Money which singularly or in the aggregate exceeds
$500,000, and such failure shall continue beyond any applicable cure period, or
Jevic shall suffer to exist any default or event of default in the performance
or observance, subject to any applicable grace period, of any agreement, term,
condition or covenant with respect to any agreement or document relating to
Indebtedness for Borrowed Money if the effect of such default is to permit, with
the giving of notice or passage of time or both, the holders thereof, or any
trustee or agent for said holders, to terminate or suspend any commitment (which
is equal to or in excess of $500,000) to lend money or to cause or declare any
portion of any borrowings thereunder to
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become due and payable prior to the date on which it would otherwise be due and
payable, provided that during any applicable cure period the Bank's obligations
hereunder to make further Loans shall be suspended.
(f) Judgments. Any judgments against Jevic or against its
assets or property for amounts in excess of $500,000 in the aggregate remain
unpaid, unstayed on appeal, undischarged, unbonded and undismissed for a period
of thirty (30) days.
(g) Attachments. Any assets of Jevic shall be subject to
attachments, levies, or garnishments for amounts in excess of $500,000 in the
aggregate which have not been dissolved or satisfied within twenty (20) days
after service of notice thereof to Jevic.
(h) Change in Control. Any event that would be deemed to be
a "change in control" for purposes of Item 1 in the Securities and Exchange
Commission's current report on Form 8K
(i) Security Interests. Any security interest created
pursuant to any Loan Document (i) shall cease to be in full force and effect, or
(ii) shall cease in any material respect to give the Bank, the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a per fected security interest in, and Lien on, all of the
Collateral), superior to and prior to the rights of all third Persons, and
subject to no other Liens (except as permitted by ss.6.3).
(j) Material Adverse Change. In the determination of the
Bank, in its discretion reasonably exercised, (1) a Material Adverse Change
shall have occurred or any event or circumstance shall have occurred which gives
reasonable grounds to conclude that Jevic may not or will not be able to perform
or observe in the normal course its obligations under this Agreement, the
Revolving Credit Notes, the Term Notes, the Security Agreement or the other Loan
Documents, (2) the Bank shall have given Jevic written notice thereof and (3) at
least 15 Business Days shall have elapsed from the giving of notice as provided
in ss.10.5 hereof.
THEN and in every such event other than that specified in ss.8.1(d), the Bank
may immediately terminate the Commitments by notice in writing to Jevic and
immediately declare the Revolving Credit Notes, the Term Notes and all other
Obligations, including without limitation accrued interest, to be, and they
shall thereupon forthwith become due and payable without presentment, demand, or
notice of any kind, all of which are hereby expressly waived by Jevic. Upon the
occurrence of any event specified in ss.8.1(d), the Commitments shall
automatically terminate and the Revolving Credit Notes, the Term Notes and all
other Obligations, including without limitation accrued interest, shall
immediately be due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by Jevic. Any date
on which the Loans and such other Obligations are declared due and payable
pursuant to this ss.8.1, shall be the Equipment Revolver Termination Date and
the Working Capital Revolver Termination Date for purposes of this Agreement.
From and after the date an Event of Default shall have occurred and for so long
as an Event of Default shall be continuing, the Loans shall bear interest at the
Default Rate.
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9. Collateral
9.1 Collateral. Except as otherwise specifically set forth herein or in
any other Loan Document, the Equipment Revolving Credit Loans and their
repayment at all times shall be secured by a first priority, perfected, security
interest in the Collateral (as defined in the Security Agreement, hereinafter
referred to as the "Collateral").
9.2 Security Agreement. As security for the punctual payment in full of
all Equipment Revolving Credit Loans (including all payments of principal, and
interest and other costs contemplated hereby), Jevic at or prior to the funding
of the first Equipment Revolving Credit Loan hereunder shall execute and deliver
to First Union a security agreement in the form and substance attached as
Exhibit D hereto (herein referred to as the "Security Agreement").
10. Miscellaneous
10.1 Waiver. No failure or delay on the part of the Bank or any holder
of any Note in exercising any right, power or remedy under any Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy under any Loan Document. The
remedies provided under the Loan Documents are cumulative and not exclusive of
any remedies provided by law.
10.2 Amendments. No amendment, modification, termination or waiver of
any Loan Document or any provision thereof nor any consent to any departure by
Jevic therefrom shall be effective unless the same shall have been approved in
writing by the Bank, be in writing and be signed by the Bank and the Jevic and
then any such waiver or consent shall be effective only in the instance and for
the specific purpose for which given. No notice to or demand on the Jevic shall
entitle the Jevic to any other or further notice or demand in similar or other
circumstances.
10.3 Governing Law. The Loan Documents and all rights and obligations
of the parties thereunder shall be governed by and be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
Pennsylvania or federal principles of conflict of laws.
10.4 Participations and Assignments. Jevic hereby acknowledges and
agrees that First Union may at any time: (a) grant participations in all or any
portion of its Equipment Revolving Loan Commitment, Working Capital Revolving
Loan Commitment, any Note or of its right, title and interest therein or in or
to this Agreement (collectively, "Participations") to any other lending office
of the First Union or to any other bank, lending institution or other entity
which has the requisite sophistication to evaluate the merits and risks of
investments in Participations ("Participants"); provided, however, that: (i) all
amounts payable by the Jevic hereunder shall be determined as if First Union had
not granted such Participation; and (ii) any agreement pursuant to which First
Union may grant a Participation: (x) shall provide that First Union shall retain
the sole right and responsibility to enforce the obligations of Jevic hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provisions of this Agreement; (y) such participation agreement
may provide that First Union will not agree to any modification, amendment or
waiver of this Agreement without the consent of the Participant if such
modification, amendment or waiver would reduce the principal of or rate of
interest on any Loan or postpone the date fixed for any payment of principal of
or interest on any Loan; and (z) shall not relieve First Union from its
obligations, which shall remain absolute, to make Loans hereunder; and (b) First
Union may assign any of its Loans and
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its Revolving Loan Commitment (but only with the consent of the Jevic, which
consent shall not be unreasonably withheld), provided that, each such assignment
shall be in an amount of at least $10,000,000 (unless, after giving effect to
such assignment and all other such assignments by First Union occurring
simultaneously or substantially simultaneously therewith, First Union shall hold
no Equipment Revolving Loan Commitment, Working Capital Revolving Loan
Commitment or Loan hereunder); and (ii) each such assignment by First Union of
its Loans, or Equipment Revolving Loan Commitment or Working Capital Revolving
Loan Commitment shall be made in such manner so that the same portion of its
Loans, Notes, Equipment Revolving Loan Commitment, and Working Capital Loan
Commitment is assigned to the respective assignee. Upon execution and delivery
by the assignee to the Jevic of an instrument in writing pursuant to which such
assignee agrees to become a "Bank" hereunder having the Commitment(s) and Loans
specified in such instrument, and upon consent thereto by the Jevic, to the
extent required above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of the Jevic),
the obligations, rights and benefits of a bank hereunder holding the Equipment
Revolving Loan Commitment(s), Working Capital Loan Commitment(s) and Loans (or
portions thereof) assigned to it, and First Union shall, to the extent of such
assignment, be released from the Commitment(s) (or portion(s) thereof) so
assigned. Jevic shall not be obligated to consent to any participation or
assignment which would result in First Union retaining less than 51% of the
Commitment(s), Loans and Notes.
(a) Captions. Captions in the Loan Documents are included
for convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
10.5 Notices. All notices, requests, demands, directions, declarations
and other communications between the Bank and the Jevic provided for in any Loan
Document shall, except as otherwise expressly provided, be mailed by registered
or certified mail, return receipt requested, or telegraphed, or telefaxed, or
delivered in hand to the applicable party at its address indicated opposite its
name on the signature pages hereto. The foregoing shall be effective and deemed
received three days after being deposited in the mails, postage prepaid,
addressed as aforesaid and shall whenever sent by telegram, telegraph or telefax
or delivered in hand be effective when received. Any party may change its
address by a communication in accordance herewith.
10.6 Expenses; Indemnification. Jevic will from time to time reimburse
the Bank promptly following demand for all out-of-pocket expenses (including the
reasonable fees and expenses of legal counsel) in connection with (i) the
preparation of the Loan Documents, (ii) the making of any Loans, (iii) the
administration of the Loan Documents, and (iv) the enforcement of the Loan
Documents; and reimburse the Bank for all out-of-pocket expenses (including
reasonable fees and expenses of legal counsel) in connection with the
enforcement of the Loan Documents. In addition to the payment of the foregoing
expenses, Jevic hereby agrees to indemnify, protect and hold the Bank and any
holder of the Notes and the officers, directors, employees, agents, affiliates
and attorneys of the Bank and such holder (collectively, the "Indemnitees")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature, including reasonable fees and expenses of legal counsel, which
may be imposed on, incurred by, or asserted against such Indemnitee by Jevic or
other third parties and arise out of or relate to this Agreement or the other
Loan Documents or any other matter whatsoever related to the transactions
contemplated by or referred to in this Agreement or the other Loan Documents;
provided, however, that Jevic shall have no obligation to an Indemnitee
hereunder to the extent that the liability incurred by such Indemnitee has been
determined by a court of competent jurisdiction to be the result of gross
negligence or willful misconduct of such Indemnitee.
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10.7 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made or deemed made herein shall survive the
execution and delivery of this Agreement, the making of the Loans hereunder and
the execution and delivery of the Notes. Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of Jevic set forth
in ss.ss.2.8(e), 2.9, 2.10, and 10.6 shall survive the payment of the Loans and
the termination of this Agreement. This Agreement shall remain in full force and
effect until the latest to occur of the termination of the Equipment Revolving
Loan Commitment, the Working Capital Revolving Loan Commitment or the repayment
in full of all amounts owed by Jevic under any Loan Document.
10.8 Severability. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement, the
Notes or other Loan Documents shall not affect or impair the validity, legality
or enforceability of the remaining provisions or obligations under this
Agreement, the Notes or other Loan Documents or of such provision or obligation
in any other jurisdiction.
10.9 No Fiduciary Relationship. No provision in this Agreement or in
any of the other Loan Documents and no course of dealing between the parties
shall be deemed to create any fiduciary duty by the Bank to Jevic.
10.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. JEVIC AND FIRST
UNION EACH HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE EASTERN DISTRICT OF PENNSYLVANIA AND IRREVOCABLY AGREES THAT,
ANY ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THE NOTES, THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS MAYBE LITIGATED IN SUCH COURTS. EACH PARTY
TO THIS AGREEMENT ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENT, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, ANY
NOTE, OR SUCH OTHER LOAN DOCUMENT.
10.11 WAIVER OF JURY TRIAL. JEVIC AND First Union EACH HEREBY WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE
LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. JEVIC AND FIRST UNION EACH ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE TRANSACTION, THAT EACH HAS
ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. JEVIC AND First
Union EACH FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS, MODIFICATIONS, REPLACEMENTS OR RESTATEMENTS TO THIS AGREEMENT, THE
LOAN
-35-
<PAGE>
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.
10.12 Counterparts; Effectiveness. This Agreement and any amendment
hereto or waiver hereof may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement and any amendments
hereto or waivers hereof shall become effective when the Bank shall have
received signed counterparts or notice by telecopy of the signature page that
the counterpart has been signed and is being delivered to it or facsimile that
such counterparts have been signed by all the parties hereto or thereto.
10.13 Use of Defined Terms. All words used herein in the singular or
plural shall be deemed to have been used in the plural or singular where the
context or construction so requires. Any defined term used in the singular
preceded by "any" shall be taken to indicate any number of the members of the
relevant class.
10.14 Offsets. Nothing in this Agreement shall be deemed a waiver or
prohibition of the Bank's right of banker's lien or offset.
10.15 Entire Agreement. This Agreement, the Notes issued hereunder and
the other Loan Documents constitute the entire understanding of the parties
hereto as of the date hereof with respect to the subject matter hereof and
thereof and supersede any prior agreements, written or oral, with respect hereto
or thereto.
10.16 Inconsistency with Existing First Union Loans. In the event any
representation or covenant contained in the documentation pertaining to any
Existing First Union Loan shall be inconsistent with any representation or
covenant contained herein (excluding any payment dates, maturity dates, interest
rates or comparable types of provisions), the representation or covenant
contained in this Agreement shall govern.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed by their duly authorized representatives as of the date
first above written.
JEVIC TRANSPORTATION, INC.
By: /s/ Brian J. Fitzpatrick
------------------------
Name: Brian J. Fitzpatrick
Title: Senior Vice President and
Chief Financial Officer
Notices To:
Mr. Brian J. Fitzpatrick
Senior Vice President and Chief Financial Officer
Jevic Transportation, Inc.
600 Creek Road
Delanco, NJ 08075
FAX No. (609) 764-7237
-36-
<PAGE>
FIRST UNION NATIONAL BANK
By: /s/ Roy O. Young
-----------------
Roy O. Young
Vice President
Notices To:
Mr. Roy O. Young
Vice President
First Union National Bank
Transportation, Leasing, and Equipment Finance Department
FC 1-8-11-24
1339 Chestnut Street
Philadelphia, PA 19107
FAX No. (215) 786-7704
- 37 -
<PAGE>
Reference Table of Definitions
Definition Page Defined
1996 Credit Agreement........................................................1
Accounts Receivable Aging Report.............................................1
Additional Amount ...........................................................1
Affiliate ...................................................................1
Agreement ...................................................................1
Agreement Year .............................................................12
Applicable Margin ...........................................................2
Bank ........................................................................1
Base Rate ...................................................................2
Base Rate Loans .............................................................2
Borrowing Base ..............................................................2
Borrowing Base Certificate...................................................2
Business Day ................................................................2
Capitalized Lease ...........................................................2
Capitalized Lease Obligations................................................2
Closing Date ................................................................2
Closing Fee ................................................................16
Code ........................................................................2
Collateral .................................................................34
Commitment Fees ............................................................16
Debt ........................................................................3
Default Rate ................................................................3
Dollars .....................................................................3
EBITDA ......................................................................3
Eligible Equipment .........................................................3
Eligible Receivables.........................................................3
Environmental Control Statutes...............................................4
Equipment Revolver Termination Date..........................................4
Equipment Revolving Credit Loans.............................................4
Equipment Revolving Credit Note..............................................4
Equipment Revolving Loan Commitment..........................................4
Equipment Revolving Loan Commitment Fee......................................4
ERISA .......................................................................3
ERISA Affiliate .............................................................3
Event of Default ............................................................3
Existing First Union Loans..................................................12
Federal Funds Rate .........................................................4
First Union .................................................................1
Fiscal Quarter ..............................................................4
Fiscal Year .................................................................4
GAAP ........................................................................4
Generally Accepted Accounting Principles.....................................4
- 39 -
<PAGE>
Governmental Authority.......................................................4
Hazardous Substances.........................................................4
Indebtedness for Borrowed Money..............................................5
Indemnitees ................................................................35
Intangible Assets ...........................................................5
Interest Period .............................................................5
Investment ..................................................................5
Jevic .......................................................................1
Letter of Credit ............................................................9
LIBO Rate ...................................................................6
LIBO Rate Loans .............................................................6
LIBO Rate Reserve Percentage.................................................6
Lien ........................................................................6
Loan ........................................................................6
Loan Documents ..............................................................6
Loans .......................................................................6
London Business Day .........................................................2
Material Adverse Change......................................................6
Material Adverse Effect......................................................7
Multiemployer Plan .........................................................7
Net Worth ...................................................................7
Notes .......................................................................7
Obligations .................................................................7
Operating Lease .............................................................7
Participants ...............................................................34
Participations .............................................................34
PBGC ........................................................................7
Pension Plan ................................................................7
Permitted Liens .............................................................7
Person ......................................................................8
Plan ........................................................................8
Potential Default ...........................................................8
Prohibited Transaction.......................................................8
Regulation ..................................................................8
Regulation D ................................................................8
Regulatory Change ...........................................................8
Release .....................................................................9
Reportable Event ............................................................9
Revenue Equipment ...........................................................9
Revolving Credit Note.......................................................13
Revolving Loan Commitment Fee...............................................16
Security Agreement ........................................................34
Solvent .....................................................................9
Standby Letter of Credit.....................................................9
Subsidiary ..................................................................9
Tangible Net Worth .........................................................9
Taxes ......................................................................18
- 40 -
<PAGE>
Term Loan Commitment........................................................12
Term Loan Commitment Termination Date.......................................12
Term Loans .................................................................10
Term Note ..................................................................13
Termination Event ..........................................................10
Unfunded Pension Liabilities................................................10
Unrecognized Retiree Welfare Liability......................................10
Working Capital Revolver Termination Date...................................10
Working Capital Revolving Credit Loans......................................10
Working Capital Revolving Credit Note.......................................10
Working Capital Revolving Loan Commitment...................................10
Working Capital Revolving Loan Commitment Fee...............................10
- 41 -
<PAGE>
EXHIBIT A
Equipment Revolving Credit Note
$25,000,000 Philadelphia, PA
June 22, 1998
For Value Received, JEVIC TRANSPORTATION, INC., a New Jersey corporation
("Jevic"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK (the
"Bank"), in lawful currency of the United States of America in immediately
available funds at the Bank's offices located at Broad and Chestnut Streets,
Philadelphia, Pennsylvania, on the Equipment Revolver Termination Date, or on
such earlier date or dates as provided in the Credit Agreement described below,
the principal sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000) or, if less, the
then unpaid principal amount of all Equipment Revolving Credit Loans made by the
Bank pursuant to the Credit Agreement.
Jevic promises also to pay interest on the unpaid principal amount hereof in
like money at such office from the date hereof until paid at the rates and at
the times provided in the Credit Agreement.
This Note is the Equipment Revolving Credit Note referred to in, is entitled to
the benefits of and is secured by security interests referred to in the Credit
Agreement, dated as of June 22, 1998 by and between Jevic and the Bank (as such
may be amended, modified, supplemented, restated or replaced from time to time,
the "Credit Agreement"). This Note is subject to voluntary prepayment and
mandatory repayment prior to the Equipment Revolver Termination Date, in whole
or in part, as provided in the Credit Agreement.
In case an Event of Default shall occur and be continuing, the principal of and
the accrued interest on this Note may be declared to be due and payable in the
manner and with the effect provided in the Credit Agreement.
Jevic hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.
Notwithstanding the face amount of this Note, the undersigned's liability
hereunder shall be limited at all times to the actual aggregate outstanding
indebtedness to the Bank relating to such Bank's Equipment Revolving Credit
Loans, including all principal and interest, together with all fees and expenses
as provided in the Credit Agreement, as established by the Bank's books and
records which shall be conclusive absent manifest error.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PENNSYLVANIA OR FEDERAL
PRINCIPLES OF CONFLICT OF LAWS.
JEVIC TRANSPORTATION INC.
By ______________________________
Name:
Title:
<PAGE>
EXHIBIT B
Working Capital Revolving Credit Note
$10,000,000 Philadelphia, PA
June 22, 1998
For Value Received, JEVIC TRANSPORTATION, INC., a New Jersey corporation
("Jevic"), hereby promises to pay to the order of FIRST UNION NATIONAL BANK (the
"Bank"), in lawful currency of the United States of America in immediately
available funds at the Bank's offices located at Broad and Chestnut Streets,
Philadelphia, Pennsylvania, on the Working Capital Revolver Termination Date, or
on such earlier date or dates as provided in the Credit Agreement described
below, the principal sum of TEN MILLION DOLLARS ($10,000,000) or, if less, the
then unpaid principal amount of all Working Capital Revolving Credit Loans made
by the Bank pursuant to the Credit Agreement.
Jevic promises also to pay interest on the unpaid principal amount hereof in
like money at such office from the date hereof until paid at the rates and at
the times provided in the Credit Agreement.
This Note is the Working Capital Revolving Credit Note referred to in, is
entitled to the benefits of and is secured by security interests referred to in
the Credit Agreement, dated as of June 22, 1998 by and between Jevic and the
Bank (as such may be amended, modified, supplemented, restated or replaced from
time to time, the "Credit Agreement"). This Note is subject to voluntary
prepayment and mandatory repayment prior to the Working Capital Revolver
Termination Date, in whole or in part, as provided in the Credit Agreement.
In case an Event of Default shall occur and be continuing, the principal of and
the accrued interest on this Note may be declared to be due and payable in the
manner and with the effect provided in the Credit Agreement.
Jevic hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.
Notwithstanding the face amount of this Note, the undersigned's liability
hereunder shall be limited at all times to the actual aggregate outstanding
indebtedness to the Bank relating to such Bank's Working Capital Revolving
Credit Loans, including all principal and interest, together with all fees and
expenses as provided in the Credit Agreement, as established by the Bank's books
and records which shall be conclusive absent manifest error.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PENNSYLVANIA OR FEDERAL
PRINCIPLES OF CONFLICT OF LAWS.
JEVIC TRANSPORTATION INC.
By ______________________________
Name:
Title:
<PAGE>
EXHIBIT C
Borrowing Base Certificate
[insert date of certificate]
To: First Union National Bank
Gentlemen:
This Borrowing Base Certificate is delivered to you pursuant to the terms of
ss.5.1(g) of the Credit Agreement, dated as of June 22, 1998, as currently in
effect. Capitalized terms used without definition below have the same meanings
as they have in the Credit Agreement.
We hereby certify that:
1. No Potential Default or Event of Default has occurred and is continuing
as of the date of this Borrowing Base Certificate.
2. There has been no Material Adverse Change since March 31, 1998 or, if
applicable, since the date of the most recent Borrowing Base
Certificate, except as disclosed on the attached schedules.
3. The information set forth on the attached schedules is true, current
and complete as of the date of this Borrowing Base Certificate.
JEVIC TRANSPORTATION INC.
By ______________________________
Name:
Title:
<PAGE>
Jevic Transportation, Inc.
Monthly Computation of Borrowing Base Availability
for Working Capital Revolver
for the Month of ____________ , ______
Collateral Value
<TABLE>
<CAPTION>
<S> <C>
1. Total Accounts Receivable $____________________
2. less: Total Accounts Receivable Which Are Ineligible $(___________________)
3. Total Eligible Accounts Receivable $____________________
4. Line 3 multiplied by 80% x .80
5. Borrowing Base for Working Capital Revolving Loans $____________________
Maximum Working Capital Revolving Credit Loans
6. Working Capital Revolving Credit Loans Maximum $ 10,000,000.00
7. less: Letters of Credit Outstanding (Face Amount) $____________________
8. Adjusted Working Capital Revolving Credit Loans Maximum $____________________
Working Capital Revolving Credit Loan Usage
9. Working Capital Revolving Loan Balances (principal)1/ $____________________
10. Availability Under Borrowing Base for Working $____________________
Capital Revolving Loans (line 5 minus line 9)
11. Availability As Working Capital Revolving Credit Loans $____________________
(line 8 minus line 9)
12. Lesser of Line 10 or Line 11 $____________________
13. Amount of Working Capital Revolving
Loan Requested This Date (if any) $____________________
(Not to exceed line 12)
</TABLE>
Certification: Jevic Transportation, Inc.
Date: ____________________________ By: _______________________________
- --------
1/ Including any other working capital lines of credit with other institutions.
<PAGE>
Jevic Transportation, Inc.
Monthly Computation of Borrowing Base Availability
for Equipment Revolver
for the Month of ____________ , ______
Collateral Value
<TABLE>
<S> <C>
1. Total Eligible Equipment $____________________
2. less: Depreciation $(___________________)
3. Total Net Book Value of Eligible Equipment $____________________
Maximum Equipment Revolving Credit Loans
4. Equipment Revolving Credit Loans Maximum $ 25,000,000.00
Equipment Revolving Credit Loan Usage
5. Equipment Revolving Loan Balance (principal) $____________________
6. Availability Under Borrowing Base for Equipment $____________________
Revolving Loans (line 3 minus line 5)
7. Lesser of Line 4 or Line 6 $____________________
8. Amount of Equipment Revolving
Loan Requested This Date (if any) $____________________
(Not to exceed line 7)
</TABLE>
Certification: Jevic Transportation, Inc.
Date: ____________________________ By: _______________________________
<PAGE>
EXHIBIT D
Amended and Restated Security Agreement
This Security Agreement, dated June 22, 1998, by and between JEVIC
TRANSPORTATION INC., a New Jersey corporation, with its main business office
located at 600 Creek Road, Delanco, New Jersey 08075 (the "Debtor") and First
Union, a national banking association (the "Secured Party"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned in
the Credit Agreement. This Security Agreement amends and restates in its
entirety and replaces and substitutes for that certain Security Agreement dated
as of June 28, 1996 by and between the Debtor and the Secured Party (the "1996
Security Agreement").
Preliminary Statement
This Security Agreement is entered into in accordance with and is a
condition precedent to any Loan under the Credit Agreement.
Agreement
The Debtor and the Secured Party, intending to be legally bound, agree
as follows:
1. Definitions.
As used herein the following terms shall have the meanings indicated:
(a) "Collateral" means the Revenue Equipment and other assets set forth
in Schedule A1 hereto, and all supplemental Schedules A1 delivered by the Debtor
to the Secured Party from time to time after the date hereof, Schedule A1 to the
1996 Security Agreement and all supplemental Schedules A1 delivered by the
Debtor to the Secured Party from time to time after the date thereof, together
with products and Proceeds (including insurance Proceeds) of any of the
foregoing, less the Revenue Equipment and other assets set forth in Schedule A2
hereto, and all supplemental Schedules A2 delivered by the Debtor to the Secured
Party from time to time after the date hereof.
(b) "Credit Agreement" means that certain Credit Agreement, dated as of
the date hereof (as such agreement may be amended, restated, modified, replaced
or substituted hereafter) between the Debtor and First Union National Bank.
(c) "Accounts", "Chattel Paper", "Documents of Title", "Equipment",
"General Intangibles", "Instruments", and "Proceeds" shall have the meanings
assigned to them under the Uniform Commercial Code as in effect in the
Commonwealth of Pennsylvania and shall be applicable solely for purposes of the
Collateral.
(d) "Liabilities" means all existing and future indebtedness and other
liabilities, absolute or contingent, direct or indirect, primary or secondary,
of the Debtor to the Bank arising hereunder or in respect of the Equipment
Revolving Credit Note or otherwise in connection with the Credit Agreement or
any Loan Document, except for the Working Capital Revolving Credit Note.
Security Agreement Dated
Jevic Transportation, Inc. - 1 - June 22, 1998
<PAGE>
(e) "Prevailing Interest Rate" as of any date means the highest rate of
interest then payable by the Debtor under any Loan (as defined in the Credit
Agreement).
2. Grant of Security. To secure the payment, promptly when due, and the
punctual performance of all of the Liabilities, the Debtor hereby pledges and
assigns to the Secured Party, and grants to the Secured Party and agrees that
the Secured Party shall have, a general continuing lien upon and security
interest in all the Collateral, which lien and security interest shall be a
general continuing first priority lien upon and security interest in all the
Collateral.
3. Substitution or Release of Collateral. The Debtor may, from time to
time provided there shall not be any Event of Default or Potential Default (as
defined in the Credit Agreement) in existence and no Event of Default or
Potential Default would exist as a result thereof, withdraw assets from the
Collateral, provided that the net book value of the remaining Collateral is
greater than or equal to the Equipment Revolving Credit Loans outstanding and
that the Debtor has submitted a Borrowing Base Certificate with Schedules A1 and
A2 attached.
4. Books and Records. The Debtor shall faithfully keep complete and
accurate books and records and make all necessary entries therein to reflect the
quantities, costs, current values and locations of all Collateral, the events
and transactions giving rise thereto and all payments, credits and adjustments
applicable thereto, shall keep the Secured Party fully and accurately informed
as to the locations of all such books and records and shall permit the Secured
Party's agents to have such access to them and to any other records pertaining
to the Debtor's business as the Secured Party may request from time to time.
5. Control of and Access to Collateral.
(a) Upon the occurrence of an Event of Default, the Secured Party shall
have the right at any time to take possession of the Collateral or any part
thereof. Notwithstanding any such taking of possession, the Collateral shall
remain at all times at the Debtor's sole risk, and to the full extent permitted
by law the Secured Party shall not be responsible for any loss, damage or
diminution in the value thereof. All costs of transportation, packaging,
custody, processing, storage, and insurance of any unit or item of Collateral
which may be incurred by the Secured Party shall be promptly repaid to the
Secured Party by the Debtor together with interest thereon at the Prevailing
Interest Rate, and the Debtor's liability to the Secured Party for such
repayment with interest shall be included in the Liabilities.
(b) If any item or unit of Collateral is now or hereafter the subject
of a certificate of title or is required by law so to be, the Debtor will
promptly procure the necessary certificate of title and take all steps necessary
to cause the Secured Party's lien or security interest therein to be noted on
the face of such certificate and undertake such other steps as may be necessary
to assure that the Secured Party has a first priority, perfected security
interest in each such item or unit of Collateral, and shall thereafter deposit
the original of such certificate of title with the Secured Party.
(c) The Debtor shall immediately notify the Secured Party of any event
causing any deterioration, loss or depreciation in value of any substantial
portion of the Collateral and the Debtor's best estimate of the amount of such
deterioration, loss or depreciation.
(d) The Debtor shall afford the Secured Party's agents access to the
Collateral from time to time upon request for purposes of examination,
inspection and appraisal thereof and to verify the Debtor's books
Security Agreement Dated
Jevic Transportation, Inc. - 2 - June 22, 1998
<PAGE>
and records pertaining thereto. After an Event of Default and upon the Secured
Party's demand therefor, the Debtor shall assemble the Collateral and make it
available to the Secured Party at such place reasonably convenient to both
parties as the Secured Party may designate, and the Secured Party's rights to
such assemblage shall be enforceable by injunction. If an Event of Default shall
not exist, the Secured Party shall furnish written prior notice to the Debtor
reasonably in advance of any intended examination, inspection, appraisal and
verification and such activity shall commence during the Debtor's normal
business hours.
(e) From and after the occurrence of an Event of Default hereunder, the
Debtor shall pay to the Secured Party on demand any and all expenses of
conducting any and all periodic examinations or reviews or causing any periodic
examinations or reviews of Collateral determined to be appropriate by the
Secured Party (including but not limited to reasonable attorneys' fees and legal
expenses) which may be incurred by the Secured Party, with interest at the
Prevailing Interest Rate.
(f) Upon an Event of Default, the Secured Party is hereby granted a
license or other right to use, without charge, Debtor's labels, intellectual
property, or use of any name, trade secrets, tradenames, trademarks and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in advertising for sale, and selling any Collateral and Debtor's
rights under all licenses and all franchise agreements shall inure to the
Secured Party's benefit.
6. Maintenance of Collateral. Subject to the Debtor's business judgment
and reasonable commercial practice, the Debtor shall take good care of the
Collateral and shall afford it suitable preventative maintenance. The Debtor
shall pay the cost of all repairs to or maintenance of the Collateral and shall
not permit anything to be done that might in any way impair the value of any of
the Collateral or any of the security intended to be afforded by this Agreement.
The Debtor shall conscientiously adhere to a well designed internal control
system with respect to the Collateral, and such system shall be capable of
permitting the Debtor and the Secured Party to identify readily at any time the
location and condition of each and every item of Collateral. The Debtor will not
permit any of the Collateral to become or be a fixture.
7. Title to Collateral.
(a) The Debtor has acquired or shall acquire absolute and exclusive
title to each and every item or unit of the Collateral free and clear of all
liens, claims, security interests and other encumbrances, except as permitted
under the Credit Agreement, and the Debtor shall warrant and defend its title to
the Collateral, subject to the rights of the Secured Party, against the claims
and demands of all persons whomsoever. Without limiting the generality of the
foregoing, the Debtor shall not pledge, assign or otherwise encumber, or permit
any liens or security interests (other than those in favor of the Secured Party)
to attach to, any of the Collateral, nor permit any of the Collateral to be
levied upon under any legal process. Notwithstanding the foregoing, mechanics
liens may be created or exist from time to time and such mechanics liens shall
not be deemed to constitute a breach of this agreement provided the aggregate
amount of such liens at any time does not exceed $50,000.
(b) The Secured Party may, at its sole election but without obligation
to do so, discharge any unpermitted encumbrance pertaining to the Collateral and
all expenses incurred by the Secured Party in so doing, together with interest
thereon at the Prevailing Interest Rate, shall be added to the Liabilities and
shall be payable by the Debtor on demand.
Security Agreement Dated
Jevic Transportation, Inc. - 3 - June 22, 1998
<PAGE>
8. Taxes and Liens. The Debtor shall promptly notify the Secured Party
in the event there ever arises against any of the Collateral any lien,
assessment or tax or other liability, whether or not entitled to priority over
the Secured Party's security interest hereunder. In any such event, whether or
not such notice is given, the Secured Party shall have the right (but shall be
under no obligation) to pay any tax or other liability of the Debtor deemed by
the Secured Party in good faith to affect the Secured Party's interests
hereunder. The Debtor shall repay to the Secured Party on demand all sums which
the Secured Party shall have paid under this section in respect of taxes or
other liabilities of the Debtor, with interest thereon at the Prevailing
Interest Rate, and the Debtor's liability to the Secured Party for such
repayment with interest shall be included in the Liabilities. The Secured Party
shall be subrogated to the extent of any such payment by it to all the rights
and liens of the payee against the Debtor's assets.
9. Locations of the Collateral; Name.
(a) If any of the Collateral or any of the Debtor's records concerning
any of the Collateral are at any time to be located on premises leased by the
Debtor, or any premises owned by the Debtor subject to a mortgage or other lien,
the Debtor shall obtain and deliver to the Secured Party, prior to the delivery
of any such Collateral or books or records to such premises, an agreement in
form satisfactory to the Secured Party waiving the landlord's, mortgagee's or
other lienholder's right to enforce against the Collateral or the Debtor's
records concerning the same and assuring the Secured Party's access to such
Collateral and books and records to facilitate the Secured Party's exercise of
its rights to take possession thereof. The location of Debtor's chief executive
office and all locations at which the Debtor maintains a place of business are
set forth in Schedule B, and the Debtor agrees to provide the Secured Party
annually with a list of each location of any such place of business or the
establishment of any additional place of business of the Debtor.
(b) The Debtor represents and warrants that at no time during the past
five (5) years has it been known by or used any other name, including any trade
or fictitious name, except as disclosed in Schedule B.
10. Further Assurances. The Debtor shall continue to conduct its
business in substantially the manner heretofore conducted and will make no
material changes therein which might impair the security of the Secured Party.
The Debtor shall execute and deliver to the Secured Party from time to time all
such other agreements, instruments and other documents (including without
limitation all requested financing and continuation statements) and do all such
other and further acts and things as the Secured Party may reasonably request in
order further to evidence or carry out the intent of this Agreement or to
perfect the liens and security interests created hereby or intended so to be.
11. Default and Remedies.
(a) The Debtor shall be in default hereunder upon the occurrence of any
one of the following events (each an "Event of Default"):
(i) the Debtor shall fail to pay any amount payable in
respect of any Liability when due (including the
expiration of any applicable grace periods).
(ii) any representation, warranty or information herein,
heretofore or hereafter furnished to the Secured
Party by the Debtor in connection with any of the
Liabilities, including any warranty made by the
Debtor through the submission of any schedule,
statement,
Security Agreement Dated
Jevic Transportation, Inc. - 4 - June 22, 1998
<PAGE>
certificate or other document pursuant to or in
connection with this Agreement, shall be false in any
material respect.
(iii) there shall exist any Potential Default or Event of
Default as defined under the Credit Agreement.
(b) Upon the occurrence of any Event of Default which shall be
continuing, (i) unless the Secured Party elects otherwise, the entire unpaid
amount of such of the Liabilities as are not then otherwise due and payable
shall become immediately due and payable without notice to or demand on the
Debtor, (ii) the Secured Party or its agents may enter the Debtor's premises to
exercise the Secured Party's right to take possession of any Collateral, and
(iii) the Secured Party may at its option exercise from time to time any and all
rights and remedies available to it under the Uniform Commercial Code or
otherwise, including the right to assemble, receipt for, adjust, modify, repair,
refurnish or refurbish (but without any obligation to do so) or foreclose or
otherwise realize upon any of the Collateral and to dispose of any of the
Collateral at one or more public or private sales or other proceedings. The
Debtor agrees that the Secured Party or its nominee may become the purchaser at
any such sale or sales. The Debtor further agrees that ten (10) days shall be
reasonable prior notice of the date of any public sale or other disposition of
all or any part of the Collateral, or of the date on or after which any private
sale or other disposition of the same may be made.
(c) The exercise by the Secured Party of any one right or remedy shall
not be deemed a waiver or release of or any election against any other right or
remedy, and the Secured Party may proceed against the Debtor and the Collateral
and any other collateral granted by the Debtor to the Secured Party under any
other agreement, all in any order and through any available remedies. A waiver
on any one occasion shall not be construed as a waiver or bar on any future
occasion. All property of any kind held at any time by the Secured Party as
Collateral shall stand as one general continuing collateral security for all the
Liabilities and may be retained by the Secured Party as security until all the
Liabilities are fully satisfied. The Debtor shall pay to the Secured Party on
demand any and all expenses (including reasonably attorneys' fees and legal
expenses) which may have been incurred by the Secured Party with interest at the
Prevailing Interest Rate (i) in the prosecution or defense of any action growing
out of or connected with the subject matter of this Agreement, the Liabilities,
the Collateral or any of the Secured Party's rights therein or thereto; or (ii)
in connection with the custody, preservation, use, operation, preparation for
sale or sale of any of the Collateral, the incurring of all of which are hereby
authorized to the extent the Secured Party deems the same advisable. The
Debtor's liability to the Secured Party for any such payment with interest shall
be included in the Liabilities. The Proceeds of any Collateral received by the
Secured Party at any time before or after default, whether from a sale or other
disposition of Collateral or otherwise, or the Collateral itself, may be applied
to the payment in full or in part of such of the Liabilities and in such order
and manner as the Secured Party may elect. The Debtor to the extent of its
rights in the Collateral waives and releases any right to require the Secured
Party to collect any of the Liabilities from any other of the Collateral or any
other collateral then held by the Secured Party under any theory of marshalling
of assets or otherwise.
12. Power of Attorney. The Debtor hereby irrevocably appoints any
officer, employee or agent of the Secured Party as the Debtor's true and lawful
attorney-in-fact with power to (i) endorse the Debtor's name upon any notes,
checks, drafts, money orders, or other instruments or payments or other
Collateral that may come into the Secured Party's possession; (ii) sign and
endorse the Debtor's name upon any Documents of Title, invoices, freight or
express bills, assignments, verifications and notices in connection with any of
the Collateral, and any instruments or documents relating thereto or to the
Debtor's rights therein; and (iii) execute in the Debtor's name and file one or
more financing, amendment and continuation statements
Security Agreement Dated
Jevic Transportation, Inc. - 5 - June 22, 1998
<PAGE>
covering the Collateral. Any such attorney of the Debtor shall have full power
to do any and all things necessary to be done with respect to the above
transactions as fully and effectually as the Debtor might do, and the Debtor
hereby ratifies all that said attorney shall lawfully do or cause to be done by
virtue hereof.
13. Financing Statements. The Debtor shall execute all financing
statements and amendments thereto as the Secured Party may request from time to
time to evidence the security interest granted to the Secured Party hereunder
and will pay all filing fees and taxes, if any, necessary to effect the filing
thereof. Wherever permitted by law, the Debtor authorizes the Secured Party to
file financing statements with respect to the Collateral without the signature
of the Debtor. A copy of this Agreement or a copy of any financing statement
prepared in connection with this Agreement may itself be filed as a financing
statement.
14. Miscellaneous.
(a) This Agreement shall commence on the date hereof and shall continue
in full force and effect so long as any of the Liabilities shall exist from time
to time.
(b) No modification or waiver of any provision hereof shall be
effective unless the same is in writing and signed by the party against whom its
enforcement is sought. This Agreement and any amendment hereto or waiver of any
provision hereof may be signed in any number of counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(c) The representations, warranties, covenants and agreements contained
herein are all material and continuing, and any breach of them shall constitute
a material breach of this Agreement.
(d) All the rights and remedies of the Secured Party hereunder shall be
concurrent and cumulative with and not alternative to or in lieu of the Secured
Party's rights and remedies under any other agreement or agreements.
(e) This Agreement shall bind and inure to the benefit of the parties
and their respective successors and assigns, except that the Debtor shall not
assign any of the its rights hereunder without the Secured Party's prior written
consent.
(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
(g) No persons other than the Debtor and the Secured Party, and the
assignees of the Secured Party, are intended to be benefitted hereby or shall
have any rights hereunder, as third-party beneficiaries or otherwise.
(h) The Debtor acknowledges that this Agreement and the obligations of
the Debtor hereunder and the security created or intended to be created hereby
have constituted, and were intended by the Debtor to constitute, a material
inducement to the Secured Party to enter into the Credit Agreement and other
agreements referred to therein, knowing that the Secured Party will rely upon
this Agreement. The Debtor intends to be legally bound hereby.
Security Agreement Dated
Jevic Transportation, Inc. - 6 - June 22, 1998
<PAGE>
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Security Agreement Dated
Jevic Transportation, Inc. - 7 - June 22, 1998
<PAGE>
(i) This Agreement shall be deemed to be a contract made under and
shall be construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to Pennsylvania or federal principles of the
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed by their duly authorized representatives as of the date
first above written.
Debtor
JEVIC TRANSPORTATION, INC.
By ______________________________
Name
Title
Notices To:
Mr. Brian J. Fitzpatrick
Senior Vice President and Chief Financial Officer
Jevic Transportation, Inc.
600 Creek Road
Delanco, NJ 08075
FAX No. (609) 764-7237
Secured Party
FIRST UNION NATIONAL BANK
By ______________________________
Roy O. Young
Vice President
Notices To:
Mr. Roy O. Young
Vice President
First Union National Bank
Transportation, Leasing, and Equipment Finance Department
FC 1-8-11-24, 1339 Chestnut Street
Philadelphia, PA 19107
FAX No. (215) 786-7704
Security Agreement Dated
Jevic Transportation, Inc. - 8 - June 22, 1998
<PAGE>
SCHEDULE A1 TO SECURITY AGREEMENT
[insert date]
This Schedule "A1" is an integral part of the Security Agreement dated as of
June 22, 1998 between Jevic Transportation, Inc. (the "Debtor") and First Union
National Bank, Philadelphia, Pennsylvania 19101.
The Debtor hereby grants to First Union a security interest in all property
described below, subject to the terms and conditions of the Security Agreement
referred to above, which property shall be included in the Collateral.
<TABLE>
<CAPTION>
Acquisition Acquisition Accumulated
Unit # Make Serial # Date Price Depreciation Net Book Value
- ------ ---- -------- ------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
-------------
Total Net Book Value of Collateral:
(Amount should equal line 1 of
Equipment Borrowing Base
Computation)
</TABLE>
JEVIC TRANSPORTATION, INC.
By ______________________________
Name:
Title:
<PAGE>
SCHEDULE A2 TO SECURITY AGREEMENT
[insert date]
This Schedule "A2" is an integral part of the Security Agreement dated as of
June 22, 1998 between Jevic Transportation, Inc. (the "Debtor") and First Union
National Bank, Philadelphia, Pennsylvania 19101.
The Debtor hereby requests that First Union release its security interest in all
property described below, subject to the terms and conditions of the Security
Agreement referred to above, which property shall be removed from the
Collateral.
<TABLE>
<CAPTION>
Acquisition Acquisition Accumulated
Unit # Make Serial # Date Price Depreciation Net Book Value
- ------ ---- -------- ------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
-------------
Total Net Book Value of Collateral
Requested to be Released:
</TABLE>
The Debtor hereby certifies that the aggregate amount of Loans outstanding under
the Equipment Revolving Credit Note does not exceed the Borrowing Base (as
defined in the Credit Agreement) after giving effect to this release. The Debtor
also hereby certifies that:
1. No Potential Default or Event of Default has occurred and is continuing as
of the date of this Schedule A2.
2. There has been no Material Adverse Change since March 31, 1998, or, if
applicable, since the date of the most recent Schedule A2, except as
disclosed on the attached schedules.
3. The information set forth herein is true, current, and complete as of the
date hereof.
JEVIC TRANSPORTATION, INC.
By ______________________________
Name:
Title:
<PAGE>
SCHEDULE B TO SECURITY AGREEMENT
1. The location of the Debtor's chief executive office and all locations
at which the Debtor maintains a place of business are as follows:
Chief executive office: 600 Creek Road, Delanco, New Jersey 08075
Other locations: 4200 West 35th Place, Chicago, IL 65032
655 Goodman Road, Concord, NC 28025
476 Hartford Turnpike, Shrewsbury, MA 01545
48 Ironside Court, Willingboro, NJ 08046
3934 Thurmond Road, Conley, GA 39026
2. During the past five years the Debtor has not used or been known by any
other name, including any trade or fictitious name.
<PAGE>
EXHIBIT E
Letter of Credit Application
<PAGE>
SCHEDULE 1
Equipment Depreciable Lives and Salvage Values
<TABLE>
<CAPTION>
Type of Equipment Straight Line GAAP Depreciation Salvage Value
- --------------------------- ------------------------------- -------------
<S> <C> <C>
Revenue Equipment:
Tractors 5 Years 20%
Trucks 5 Years 20%
Trailers 10 Years 10%
Commercial Equipment 5 Years None
Automobiles 5 Years None
Services Equipment:
Trucks 5 Years None
</TABLE>
<PAGE>
SCHEDULE 2
Disclosure Schedule
Section 3.3 Litigation
Section 3.5 Additional Indebtedness Not Shown In Financial Statements.
Section 3.7 Taxes
Section 3.11 Subsidiaries
Section 3.12 Liens
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001044066
<NAME> Jevic Transportation, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1.000
<CASH> 4,354
<SECURITIES> 0
<RECEIVABLES> 23,757
<ALLOWANCES> 1,426
<INVENTORY> 0
<CURRENT-ASSETS> 32,619
<PP&E> 121,612
<DEPRECIATION> 34,858
<TOTAL-ASSETS> 120,634
<CURRENT-LIABILITIES> 22,130
<BONDS> 0
0
0
<COMMON> 72,031
<OTHER-SE> (1,185)
<TOTAL-LIABILITY-AND-EQUITY> 120,634
<SALES> 109,480
<TOTAL-REVENUES> 109,480
<CGS> 0
<TOTAL-COSTS> 100,699
<OTHER-EXPENSES> (92)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 541
<INCOME-PRETAX> 8,332
<INCOME-TAX> 3,237
<INCOME-CONTINUING> 5,095
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,095
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.47
</TABLE>
