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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 0-11300
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BUILDERS TRANSPORT, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 58-1186216
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2029 W. DEKALB ST., 29020-7005
P.O. BOX 7005, CAMDEN SC (Zip Code)
(Address of Principal executive Offices)
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(803) 432-1400
(Registrant's Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.01 PER SHARE
8% CONVERTIBLE SUBORDINATED DEBENTURES DUE AUGUST 15, 2005
6-1/2% CONVERTIBLE SUBORDINATED DEBENTURES DUE MAY 1, 2011
(Titles of Classes)
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. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (x)
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: $44,595,360 as of March 18, 1996.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date: the number of shares
outstanding as of March 18, 1996, of the registrant's only issued and
outstanding class of stock, its $0.01 per share par value common stock, was
5,099,517.
DOCUMENTS INCORPORATED BY REFERENCE
The information set forth under Items 10,11,12 and 13 of Part III of this
Report is incorporated by reference from the registrant's definitive proxy
statement for the 1996 annual meeting of stockholders that will be filed no
later than April 29, 1996.
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PART I
ITEM 1. BUSINESS.
GENERAL
Builders is a truckload carrier that transports a wide range of commodities in
both intrastate and interstate commerce. From its origins as a Southeastern
regional, high service, flatbed carrier for a limited number of building
materials shippers, the Company has expanded and developed into a carrier that
provides dedicated contract carriage, dry van and flatbed service for shippers
of a variety of products in the medium-haul, short-haul and regional markets.
These products include, among others, textiles, tires, paper products, metal
products, chemicals, consumer goods and building materials. Throughout its
history, the Company has concentrated on tailoring its services to the specific
requirements of individual customers. As a result, the preponderance of
Builders' business involves providing high-quality, specialized services to
service-sensitive shippers.
To assure the most efficient response to the differing requirements of customers
at numerous shipping locations, Builders has a network of terminals where
over-the-road tractors are based and drivers are domiciled. This terminal
network is supplemented by miscellaneous staging lots near certain major
shipping points. The Company utilizes a computerized operations system to
control and facilitate the movement of freight. Builders' operating philosophy
is founded on maintaining the highest level of service in the most efficient
manner possible.
Builders is headquartered in Camden, South Carolina, and its total operation
encompasses thousands of plants, warehouses and shipping points of regularly
served customers in the eastern two-thirds of the United States and the
Provinces of Ontario and Quebec, Canada. The Company holds common and contract
carrier authority to transport general commodities in interstate commerce
between all points in the United States. (See "Regulation.")
No single customer (including groups of customers under common control and
affiliated customers) accounted for as much as ten percent of Builders'
consolidated revenues in 1995.
OPERATIONS
Builders believes its range of services is one of the most comprehensive offered
by any truckload carrier. The Company's services are divided into three major
categories.
Flatbed Operations. Builders' Flatbed Division provides customized
transportation to service-sensitive shippers. The Company strives to meet all
specific pickup and delivery schedules requested by both single and
multi-location shippers. This customized service is designed to accommodate the
increasing number of shippers that utilize just-in-time delivery techniques or
that seek to reduce costs by controlling their inventory levels. In recent
years, the Flatbed Division has diversified its commodity mix that now includes,
among other things, lumber, steel, aluminum, wallboard, roofing materials and
pipe. This makes the division less vulnerable to periodic downturns in any
single business segment represented in the Flatbed Division's customer base. The
Flatbed Division also now acts as a single source provider of logistics support
(that is, supervising all of a shipper's trucking needs, even though some of
those needs may be met by carriers other than Builders) for certain customers.
Dry Van Operations. The Company's Van Division services a broad array of
customers having a variety of shipping needs in the medium-haul and regional
markets. This is consistent with the Company-wide emphasis on meeting the
increasing regional carrier requirements of shippers in
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various regions including the Southeast, Midwest and Southwest. This division
also tailors its services to specialized customer requirements such as
just-in-time delivery. Further, the Van Division operates with both single
drivers and teams, depending upon what is most efficient for a particular
shipper. Capacity is committed to a customer where that is appropriate.
Dedicated Contract Carriage. Builders' Dedicated Fleet Division provides
dedicated equipment and personnel on a contractual basis to each of its
customers for that customer's exclusive use, frequently as a lower cost
alternative to private carriage. In some instances, Dedicated Fleet supplements
this dedicated service with customized linehaul service. While providing
shippers with a higher level of service, Dedicated Fleet frees for other uses
that portion of a shipper's capital that would have been invested in a private
fleet. This allows shippers to deploy resources to their primary businesses that
otherwise would be diverted to transportation. Dedicated Fleet's service also
includes the administrative staffing associated with operating a private fleet.
In addition to the three categories described above, the Company operated a tire
loading and warehousing business from January 1994 until Builders exited that
business in February 1996. The tire loading and warehousing operation accounted
for less than 2% of the Company's total revenues during 1995.
Builders currently conducts operations from 48 terminals. Each terminal is the
base for specific over-the-road tractors and is the domicile of the drivers who
operate those tractors. 35 of these terminals have facilities and staff to
provide fueling and routine and heavy maintenance. The Company also operates
miscellaneous staging lots near certain major shipping points. The Company
believes this network of facilities enhances its ability to provide highly
responsive, specialized services at its customers' major shipping locations in
an efficient manner. This extensive terminal network also should give Builders
an advantage over much of its competition in responding to the increasing
regional carrier requirements of many shippers.
Each customer's shipment is accorded exclusive use of a trailer: goods of more
than one customer are not carried on the same trailer. Builders' preferred
operating procedure is for a unit carrying a shipment to proceed directly from
origin to destination with no delay enroute occasioned by a change of drivers,
relays or circuitous routing via terminals. The Company operates computerized
Central Control Departments for van, flatbed and dedicated operations. These
departments strive to maintain fleet balance by locating and procuring freight
shipments that originate near the destination of another shipment that is
enroute or already scheduled. The Central Control Departments send this
information to the terminal, and each terminal then dispatches its domiciled
drivers accordingly.
In addition to those already noted, other specialized services that all
Builders' divisions offer to a shipper when required to meet its needs include
the following: (i) assignment of a specific number of linehaul units to the
shipper on a continuing basis; (ii) establishment of a trailer pool on the
shipper's property or on a Company lot near the shipper's property; (iii) close
coordination with the shipper to assure delivery at specified times; (iv)
establishment of individualized pricing formats and information exchange
systems, including electronic data interchange, to complement the shipper's
systems designs and information flows; and (v) utilization of two-driver teams
in those instances where a shipper's needs can be met more efficiently in that
manner.
MARKETING
The primary focus of Builders' marketing strategy is to increase freight density
within defined market areas that are consistent with the Company's growth and
profit objectives. The goal is
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to provide optimal equipment utilization and superior customer service in
furtherance of Builders' aim to be a leader in the truckload industry. The
Company vigorously markets all its services including Flatbed, Van, Dedicated
Fleet and logistics management.
The directors of sales for the Flatbed and Van Divisions supervise the
activities of regional sales managers in obtaining strategically located
business to balance traffic flows. The directors of sales report directly to
their respective division vice presidents. The Flatbed and Van Divisions have
recently added several high level sales professionals in an effort to secure new
business. The vice president of Dedicated Fleet and two sales vice presidents in
that division are responsible for developing contacts with shippers who desire
dedicated services.
Builders compiles and publishes its own pricing schedules to maintain
flexibility in responding rapidly to the varying service demands of its
customers. It does not participate in any collective rate making with other
carriers through rate bureaus or tariff publishing agents. The Company does not
compete for, or handle, any less-than-truckload business.
REVENUE EQUIPMENT
At December 31, 1995, Builders' linehaul fleet, including owner-operators'
equipment, consisted of 2,810 over-the-road tractors and 6,283 trailers. The
equipment is assigned to the three operating divisions as follows: Flatbed
Division 1,081 tractors and 1,683 trailers; Van Division 974 tractors and 2,576
trailers; and Dedicated Fleet 755 tractors and 2,024 trailers. The average age
of Builders' tractors and trailers at December 31, 1995, was 2 years and 5.5
years, respectively. (See "Developments in the Company's Business -- Acquisition
of Equipment.")
All Company-owned tractors are manufactured using consistent drive-train
specifications. This standardization enables the Company to repair and service
any unit of equipment at any of the Company's full-service terminal locations,
provide a consistent and simplified driver training program, and reduce spare
parts inventory to a minimum level. All tractors purchased after 1992 are
equipped with fully electronic engine systems.
Additionally, all tractors purchased since late 1994 have been premium tractors
that represent a significant upgrade over the Company's previously existing
tractor specifications. These new tractors include, among other things, extra
large cabins, double sleeper bunks and more powerful electronic engines. The
Company believes that this exceptional equipment will help to attract and retain
high quality, professional drivers by improving their work environment.
The Company has over 1,000 two-way mobile satellite communication systems in the
tractors that operate primarily in the Van Division. Builders believes that this
satellite communication capability has resulted in higher productivity, lower
communication and driver management costs, and improved driver retention.
COMPETITION
Competition is based largely on the price and quality of service offered.
Builders competes predominately with private carriage and other truckload
carriers. The Company competes to a lesser degree with railroads, intermodal
carriers, air freight carriers, freight forwarding companies and
less-than-truckload motor common carriers.
Builders concentrates on providing high quality, specialized transportation in
the most efficient manner possible to service-sensitive customers in various
regions from Texas through the South, Southeast and Midwest. Builders believes
its extensive terminal network gives it an advantage over much of its
competition in responding to the increasing regional carrier
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requirements of many shippers. Builders is often the primary carrier at the
shipping locations that it serves.
Effective January 1, 1995, Section 601(c) of the Federal Aviation Administration
Authorization Act prohibited states from requiring intrastate operating
authority or from regulating rates or services of motor freight carriers other
than household goods movements. The effects of intrastate deregulation will vary
from state-to-state, and the Company cannot predict what long-term impact this
deregulation will have on specific customers, lanes or regional operations.
However, Builders observed no discernible impact on its 1995 results of
operations from this particular deregulation. In this connection, Builders has
never been materially dependent on intrastate rate or pricing protection.
Effective December 31, 1995, the Interstate Commerce Commission (the "ICC") was
eliminated by the ICC Termination Act (the "Termination Act") and certain of its
authority was transferred to the United States Department of Transportation (the
"DOT"). Although it is too early to determine the potential long-term
competitive impact of the Termination Act, the Company believes the initial
impact will be minimal. (See "Regulation.")
EMPLOYEES
At December 31, 1995, Builders employed over 3,700 people of whom approximately
2,900 were drivers or mechanics. None of the Company's employees is a member of
any collective bargaining unit, and Builders' management believes employee
relations are excellent.
Drivers. Builders has established several programs to increase driver loyalty
and to give drivers a stake in the Company. Drivers are compensated on the basis
of miles driven, and base pay for miles driven increases with a driver's length
of employment with Builders. The Company maintains a KSOP benefit plan for
drivers and most other employees. Under this plan, Builders may match some
portion of the employees' contribution in the form of Builders' common stock.
(See Note 6 to Consolidated Financial Statements.)
Safety and Training. Builders conducts comprehensive training programs to
promote safety, customer relations, service standards, productivity and positive
attitudes. Driver training and safety programs are developed jointly by the
Company's Safety and Drivers' Services Departments. The Company's goal is to
earn the reputation of being the safest truckload carrier in the industry.
All drivers meet or exceed all DOT qualifications. All driver qualification
files are updated at least annually in an effort to ensure that compliance with
DOT regulations is maintained. Since 1994, Builders has operated two driver
schools to provide training for inexperienced, newly hired drivers and to help
them acquire the federally mandated Commercial Drivers License. Almost all of
the drivers hired by the Company who do not have prior over-the-road experience
are graduates of one of these two schools. The Company believes that its own
driver schools will consistently produce better trained and more safety
conscious drivers.
In addition, Builders has a comprehensive training program for all drivers newly
hired by Builders including those with previous driving experience. Each driver
applicant must pass a driving skills road test as part of the employment
application and screening process. Once accepted for employment, each driver
attends the Company's New Driver Orientation. New Driver Orientation is a
three-day training program that is conducted at one of Builders' five regional
training terminals. Among the topics included in Builders' training program,
are: defensive driving; pre-trip inspection; regulatory compliance; hazardous
materials handling; load
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fastening and protection; equipment maintenance; equipment operations; company
policies; and emergency reporting procedures. This training is conducted by
full-time training specialists. Drivers, regardless of past driving experience,
must successfully complete this training prior to being released to a Driver
Trainer. New drivers may be assigned to a qualified Driver Trainer for a period
of one to five weeks, depending on their past driving experience and their
skills mastery. The Driver Trainers complete evaluations of the new drivers,
ensuring competence in basic driving and customer service skills.
Ongoing training is conducted through drivers' safety meetings at each terminal.
The Company's Safety Department provides training topics and content. The focus
of these safety efforts is the prevention of accidents and injuries.
Additionally, Builders utilizes the services of an outside firm to conduct road
observations to identify any drivers who may need counseling or retraining. The
Company marks its trailers with a toll-free number to facilitate the motoring
public's reporting of driving behaviors. Compliments and complaints are
investigated and directed to the appropriate terminal manager for follow-up. As
part of the Company's corrective action process, remedial training is available
to all drivers upon request. Builders also requires remedial training for
drivers with excessive log errors or who are involved in preventable accidents.
OWNER-OPERATORS
During 1995, the Company continued to expand its fleet with equipment purchased
by independent contractors ("owner-operators"). This provides marketing,
operating, safety, recruiting, driver retention and financial advantages to the
Company. In addition, the Company believes that the owner-operators with whom it
contracts are generally more mature and experienced than the general driver
population and that they have a vested interest in protecting their own
equipment that impels them to operate in a cautious manner. Owner-operators are
responsible for paying all their operating expenses including fuel, maintenance,
equipment payments and all other equipment-related expenses. Owner-operators are
compensated by the Company on a rate per mile or percentage of revenue basis. At
December 31, 1995, the Company had contracts with 204 owner-operators.
REGULATION
Builders' operations in interstate commerce were regulated by the ICC through
1995. Effective December 31, 1995, the ICC was eliminated by the Termination Act
and certain of the ICC's authority was transferred to the DOT. Under the
Termination Act, the DOT will assume responsibility for motor carrier licensing,
financial reporting, motor carrier self-insurance and certain other matters
formerly under the ICC's jurisdiction. In this connection, the Termination Act
created the Surface Transportation Board, an independent body within the DOT, to
assume certain duties previously performed by the ICC. The remaining motor
carrier oversight will be conducted by other departments in the DOT. Although it
is too early to determine the potential long-term competitive impact of the
Termination Act, the Company believes the initial impact will be minimal. The
Termination Act also mandates that the DOT review certain issues over the next
several years, including driver fatigue, registration of carrier insurance and
cargo liability. The Company cannot assess at this time what effect, if any,
these reviews may have on its operations.
The federal government and state agencies continue to regulate such matters as
weight and dimensions of equipment. Safety requirements for motor carrier
operations continue to be
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prescribed by the DOT. Additionally, Builders is subject to regulation by
certain governmental agencies in Ontario and Quebec, due to the Company's
operations in those Provinces.
Builders' operations are subject to regulation by the Environmental Protection
Agency and by various state environmental regulatory agencies with respect to
matters involving water quality and effluent limitation, underground storage
tanks and the handling, storage and disposal of solid waste and hazardous
materials. (See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Environmental Matters.")
RISK MANAGEMENT AND INSURANCE
Builders' Risk Management program provides a multi-faceted approach to the
protection of the Company's assets and interests through a combination of
insurance, self-insurance, and excess and umbrella coverages. The Company
believes that the coverages described below are adequate and appropriate.
The Company self-insures its automobile liability exposure with a retention of
$1,000,000 combined single limits per occurrence. The funding obligation within
the retention is secured by a letter of credit in the amount of $1,000,000. An
umbrella liability policy increases both automobile and general liability
coverage to $35,000,000. This level of umbrella coverage represents a
$20,000,000 increase over what had been in place until mid-1995. Based on recent
experience and the increasingly litigious nature of American society in general,
Builders determined that such an increase was prudent.
Workers' compensation and employer's liability exposure is covered by a
combination of self-insurance programs, self-insured excess insurance contracts
and insurance contracts. A self-insured retention of $500,000 per claim applies
to the self-insured states of Alabama, Arkansas, Georgia, Indiana, Kansas,
Mississippi, North Carolina, Oklahoma, South Carolina and Tennessee with
underwriters assuming excess liability up to statutory limits for workers'
compensation and $1,000,000 per occurrence for employer's liability. Workers'
compensation and employer's liability exposure is covered by insurance policies
in Florida, Kentucky, Virginia, Illinois, Louisiana, Massachusetts, Michigan,
New Jersey, New York and Pennsylvania. Coverage is provided to statutory limits
with a deductible/retention of $250,000 per claim. Employer's liability coverage
is $1,000,000 per claim. The Company's funding obligation within the deductible
retention is secured by letters of credit in favor of the underwriter. The
Company participates in state funds providing workers' compensation coverage in
Ohio and West Virginia. In Texas, occupational accident full medical and
indemnity benefits are provided under a self-insured ERISA plan. The previously
noted umbrella policy provides liability coverage of $35,000,000 in excess of
the underlying coverages for workers' compensation and employer's liability.
Executive liability, fiduciary liability and commercial crime coverage is
provided by a policy with limits of $5,000,000 annual aggregate for executive
liability with a deductible of $500,000; $2,500,000 each loss and annual
aggregate for fiduciary liability with a deductible of $50,000; and $2,500,000
for designated commercial crime acts with a deductible of $25,000.
The Company has cargo insurance coverage with limits of $500,000 per loss with
deductibles of $500,000, $500,000 and $25,000 per occurrence, respectively, for
the flatbed, dedicated fleet and van divisions.
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DEVELOPMENTS IN THE COMPANY'S BUSINESS
Operations: The Company began to experience weakened freight demand during the
second quarter of 1995. The trend continued throughout the remainder of 1995 and
severely impacted the Company's revenue growth and results of operations. The
slower than expected growth in freight made it difficult for the Company to
generate the volume it required to achieve the variable cost reductions that had
been anticipated with newer equipment. Likewise, it was more difficult during
the second half of 1995 to generate the utilization levels needed to cover the
additional fixed costs incurred in acquiring the new tractors. Pricing
deteriorated in certain markets, as many marginal carriers discounted their
rates in particular areas or on certain commodities.
The excess capacity existed throughout the truckload sector during 1995. Market
forces should eventually correct the over-capacity situation. However, rather
than depending on a gradual improvement in the overall freight market, the
Company has aggressively taken actions to address the current market trend.
These actions include, among other things, a substantial upgrade of the
Company's sales force in an effort to secure new business; reduction of the
Company's non-driver work force as a result of streamlining systems and
procedures; and a very conservative capital expenditure plan for 1996. Except
for the impact of severe weather experienced early in 1996, the Company's
current volume has improved substantially as a result of a more aggressive
marketing program.
The Company has elected to exit the tire loading and warehousing business. In
February 1996 a significant part of this operation was sold. The loss on the
sale and exiting of this operation has been recorded as a special operating
charge in 1995. The tire loading and warehousing operation represented less than
2% of the total revenue of the Company. This operation was reasonably profitable
in 1994, but became unprofitable in 1995. This operation projected to be
unprofitable again in 1996 and did not fit into the long-term plans of the
Company. Therefore, the Company elected to exit and sell these operations.
Acquisition of Equipment. In 1995, Builders acquired 863 new over-the-road
tractors and 704 new 53-foot van and flatbed trailers. Capital expenditures
during 1995 aggregated approximately $76.5 million relating primarily to the
acquisition of revenue equipment. These expenditures were financed through
internally generated funds and long-term financing.
During 1995, the Company completed a sale and leaseback transaction involving
its corporate headquarters facility. This transaction generated $3.5 million and
the proceeds were used to repay existing debt.
In December 1995, the Company increased the term loan borrowings under its
credit agreement to $4 million. The term loan will be payable in quarterly
installments of $500,000. The Company and its lenders also amended other aspects
of the Company's credit agreement to reflect 1995 changes and 1996 projections.
During 1995, the Company prefunded subordinated debenture sinking fund payments
totaling $1,456,000 and repurchased common stock it viewed as undervalued
totaling $460,548.
ITEM 2. PROPERTIES.
At March 18, 1996, Builders operated 48 terminals, at the following locations:
Birmingham, Alabama -- Flatbed
Cuba, Alabama (Meridian, Mississippi area) -- Van and Flatbed
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Decatur, Alabama* -- Dedicated Fleet
Hartselle, Alabama -- Dedicated Fleet
Mobile, Alabama -- Flatbed
Vernon, Alabama* -- Van
Hamburg, Arkansas -- Van and Flatbed
West Memphis, Arkansas -- Flatbed and Dedicated Fleet
Tampa, Florida* -- Flatbed
Lakeland, Florida* -- Dedicated Fleet
Forest Park, Georgia -- Dedicated Fleet
Ft. Valley, Georgia* -- Dedicated Fleet
McDonough, Georgia (Atlanta area) -- Flatbed and Van
Newnan, Georgia -- Dedicated Fleet
Savannah, Georgia -- Flatbed
Union Point, Georgia* -- Dedicated Fleet
Akron, Indiana -- Dedicated Fleet
Portage, Indiana* -- Flatbed
Medicine Lodge, Kansas -- Flatbed
Pineville, Louisiana -- Dedicated Fleet
Nicholson, Mississippi (New Orleans, Louisiana area) -- Flatbed
Kalamazoo, Michigan* -- Dedicated Fleet
Halifax, North Carolina -- Flatbed
Lexington, North Carolina -- Van and Dedicated Fleet
Lumberton, North Carolina -- Flatbed
Monroe, North Carolina* -- Dedicated Fleet
North Wilkesboro, North Carolina -- Dedicated Fleet
Cincinnati, Ohio -- Dedicated Fleet
Munroe Falls, Ohio* -- Dedicated Fleet
Newark, Ohio -- Van
Sidney, Ohio* -- Dedicated Fleet
Youngstown, Ohio -- Flatbed
Tulsa, Oklahoma -- Flatbed and Dedicated Fleet
Carlisle, Pennsylvania -- Dedicated Fleet
Hartsville, South Carolina -- Dedicated Fleet
Laurens, South Carolina -- Van
Lugoff, South Carolina (Camden area) -- Van, Flatbed and Dedicated Fleet
North Augusta, South Carolina -- Dedicated Fleet, Flatbed and Van
Spartanburg, South Carolina -- Flatbed and Van
Alcoa, Tennessee* -- Flatbed
Carthage, Tennessee -- Dedicated Fleet
Nashville, Tennessee -- Flatbed
Newport, Tennessee* -- Dedicated Fleet
White Pine, Tennessee -- Van
Dallas, Texas -- Van and Flatbed
Rotan, Texas -- Flatbed
Kinsale, Virginia -- Flatbed
Parkersburg, West Virginia -- Dedicated Fleet
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* These 13 terminals, while being the base for over-the-road tractors and the
domicile for drivers, do not include the facilities for both routine and heavy
maintenance that is otherwise characteristic of Builders' full-service
terminal network.
Of the 48 terminals, 24 are owned outright (subject to encumbrances securing the
Company's credit facility), and 24 are operated under lease agreements.
The Company's general offices and division headquarters for Flatbed, Van and
Dedicated Fleet, comprising 32,000 square feet, are located in Camden, South
Carolina. Builders also operates a corporate maintenance support facility in a
55,000-square foot building in Lugoff, South Carolina, near the Company's
general offices. This facility includes shops where new tractors are prepared
for service, and tractor and trailer body work and painting are done. Builders'
general offices and division headquarters were sold during 1995 in a sale and
leaseback transaction. (See Note 9 to Consolidated Financial Statements.) This
lease is for a five-year term with four successive optional renewal terms of
five years each. The corporate maintenance facility is owned outright by the
Company.
Builders believes that its general offices and division headquarters, its
corporate maintenance support facility and terminal network are suitable for
their intended purposes. Each of these properties is adequate for the Company's
current needs. From time to time Builders opens new terminals and closes old
terminals depending upon its customers' requirements. Each terminal is the base
for specified over-the-road tractors and is the domicile of the drivers who
operate those tractors. The Company believes this network of facilities enhances
its ability to provide highly responsive, specialized services at its customers'
major shipping locations in an efficient manner.
In addition, Builders operates miscellaneous staging lots near major shipping
points. The Company also owns certain small real estate parcels; 55 acres of
unimproved property on Hutchinson Island and a 22-acre and a seven-acre tract of
unimproved property, all near Savannah, Georgia; and commercial property which
was formerly used for terminals in Grand Prairie, Texas, Midlothian, Texas (both
near Dallas), and Amarillo, Texas. The Amarillo and Grand Prairie properties are
under lease.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a party to routine litigation incidental to its business,
primarily involving claims for personal injury and property damage incurred in
the transportation of freight. The Company believes that adverse results in one
or more of these cases would not have a material adverse effect on its results
of operations or financial position. The Company maintains excess insurance
above its self-insured levels which covers extraordinary liabilities resulting
from such claims to a level that management considers adequate. The Company
increased its excess coverage during 1995 from $15,000,000 to $35,000,000. (See
"Business -- Risk Management and Insurance" and Note 4 to the Consolidated
Financial Statements.)
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of stockholders of the Company during
the fourth quarter of 1995.
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EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered Item in Part I of this Report in lieu of being
included in the Proxy Statement for the 1996 Annual Meeting of Stockholders.
The table set forth below includes, as of March 18, 1996, the names and ages of
all executive officers of the Company and all positions and offices with the
Company held by such persons. Each such person has been elected to serve until
the next annual meeting of the Company's Board of Directors and until his
successor is duly elected and qualified, or until his earlier death, resignation
or removal. Each of the officers listed below, except Robert Y. Fox has,
throughout the past five years, served in one or more executive capacities with
the Company and/or its affiliates. There are no family relationships among
executive officers or other significant employees.
Mr. Fox is a certified public accountant and was appointed to the additional
position of Executive Vice President, Administration in January 1996. He has
been Chief Financial Officer of the Company since February 1995 and was Vice
President, Accounting and Finance from March 1993 through January 1995. From
April 1991, until he joined the Company, he was Vice President of Finance and
Controller for Burlington Motor Carriers, Inc. From 1984 until he joined
Burlington, Mr. Fox was with Deloitte & Touche's Dallas office where he last
served as Audit Manager.
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Name Age Current Position
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David C. Walentas............................. 57 Chairman of the Board
Stanford M. Dinstein.......................... 48 Vice Chairman and Chief Executive Officer
John R. Morris................................ 52 President and Chief Operating Officer
Robert Y. Fox................................. 34 Executive Vice President, Administration
and Chief Financial Officer
T. M. Guthrie................................. 48 Vice President, Administration and
Treasurer
Philip M. Adams............................... 46 Vice President, Van Division
P. Michael Davis.............................. 55 Vice President, Dedicated Fleet Division
J. Barry Moody................................ 47 Vice President, Flatbed Division
</TABLE>
10
<PAGE> 12
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Builders Transport, Incorporated's Common Stock trades on The Nasdaq Stock
Market under the ticker symbol "TRUK". As of March 18, 1996, there were
approximately 2,000 holders of the Company's Common Stock (including individual
participants in security position listings). The following table sets forth, for
the calendar periods indicated, the range of high and low sales prices from
January 1, 1994:
<TABLE>
<CAPTION>
1994 High Low
-------------------------------------------------------------------- ------ ------
<S> <C> <C>
First Quarter....................................................... 18.75 14.375
Second Quarter...................................................... 16.00 12.50
Third Quarter....................................................... 15.25 11.625
Fourth Quarter...................................................... 12.125 10.50
</TABLE>
<TABLE>
<CAPTION>
1995 HIGH LOW
------------------------------------------------------------------ ------ ------
<S> <C> <C>
First Quarter..................................................... 12.625 10.50
Second Quarter.................................................... 12.00 10.875
Third Quarter..................................................... 13.50 11.00
Fourth Quarter.................................................... 12.25 7.375
</TABLE>
On March 18, 1996, the last sale price for the Common Stock was $10.00 per
share.
The Company has never paid a cash dividend on its Common Stock. The Company has
agreed, in some of the financing agreements to which it is a party, to certain
restrictions on the payment of dividends. (See Note 3 to Consolidated Financial
Statements.) The Company reviews its dividend policy from time to time. Future
dividends, if any, will be determined by the Company's Board of Directors in
light of circumstances existing from time to time, including the Company's
growth, profitability, financial condition, results of operations, continued
existence of the restrictions described above and other factors deemed relevant
by the Company's Board of Directors.
11
<PAGE> 13
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------
1995 1994 1993(1) 1992 1991
- --------------------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA
Operating revenues.................... $289,527 $286,243 $250,009 $221,908 $212,365
Provision for special charge(4)....... 1,420 -- -- -- --
Operating income...................... 15,149 19,710 17,131 12,206 7,694
Interest expense and other expenses... 15,145 12,593 11,499 11,183 13,000
-------- -------- -------- -------- --------
Income (loss) before income taxes,
extraordinary item and cumulative
effect of accounting changes........ 4 7,117 5,632 1,023 (5,306)
Provision (benefit) for income
taxes............................... (215) 2,602 2,590 797 (1,229)
-------- -------- -------- -------- --------
Income (loss) before extraordinary
item and cumulative effect of
accounting changes.................. 219 4,515 3,042 226 (4,077)
Extraordinary item, net of income
tax(2).............................. -- -- -- -- 538
Cumulative effect of accounting
changes, net of taxes(5)............ (7,291) -- -- -- --
-------- -------- -------- -------- --------
Net income (loss)..................... $ (7,072) $ 4,515 $ 3,042 $ 226 $ (3,539)
======== ========== ======== ======== ========
Earnings (loss) per common share:
Income (loss) before extraordinary
item & cumulative effect of
accounting change................... $ .04 $ .81 $ .57 $ .04 $ (.81)
Extraordinary item(2)................. -- -- -- -- .10
Cumulative effect of accounting
change.............................. (1.38) -- -- -- --
-------- -------- -------- -------- --------
Net income (loss)(3).................. $ (1.34) $ .81 $ .57 $ .04 $ (.71)
======== ========== ======== ======== ========
BALANCE SHEET DATA
Total assets.......................... $272,061 $244,067 $207,665 $167,874 $164,748
Long-term debt including current
maturities.......................... 201,128 163,199 130,869 106,544 106,809
Total stockholders' equity............ 38,289 45,578 43,087 36,802 35,839
</TABLE>
- ---------------
(1) Includes operations of VMC truckload division since August 27, 1993.
(2) Gain relating to early retirement of debt.
(3) The computation of fully diluted earnings (loss) per common share is
antidilutive for all periods presented.
(4) Special charge relates to the sale and exiting of the tire loading and
warehousing operations in February 1996.
(5) Cumulative effect adjustment relates to the adoption of SFAS No. 121
"Accounting for the Impairment of Long-Lived Assets and For Long-Lived
Assets To Be Disposed Of."
12
<PAGE> 14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following table sets forth the percentage relationship of revenue and
expense items to operating revenue for the periods indicated.
<TABLE>
<CAPTION>
Percentage of Operating Revenue
Year Ended December 31
1995 1994 1993
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Operating revenue........................................... 100.0% 100.0% 100.0%
------ ----- -----
Operating expenses:
Wages, salaries and employee benefits....................... 41.2 41.5 40.4
Operations and maintenance.................................. 20.5 22.4 24.6
Operating taxes and licenses................................ 9.5 9.8 9.8
Insurance and claims........................................ 6.2 4.8 5.6
Communications and utilities................................ 1.6 1.7 1.7
Depreciation and equipment rents............................ 8.5 9.2 8.9
(Gain) on disposition of carrier property and equipment..... (.2) (.2) (.1)
Rents and purchased transportation.......................... 6.6 3.6 1.8
Miscellaneous operating expenses............................ .4 .3 .4
Special charges............................................. .5
------ ----- -----
Total operating expenses.................................... 94.8 93.1 93.1
------ ----- -----
Operating income............................................ 5.2 6.9 6.9
Interest and other expenses................................. 5.2 4.4 4.6
Provision (benefit) for income taxes........................ (.1) .9 1.1
Net income before cumulative effect of accounting change.... (2.5)
------ ----- -----
Net income (loss)........................................... (2.4)% 1.6% 1.2%
====== ===== =====
</TABLE>
The following table sets forth certain industry data regarding the operations of
the Company.
<TABLE>
<CAPTION>
Year Ended December 31
1995 1994 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Truckloads per week........................................ 9,879 9,251 8,483
Average miles per trip..................................... 495 519 515
Total tractor miles (in thousands)......................... 254,000 250,000 227,000
Total tractors operated (at year end):
Company-owned.............................................. 2,606 2,474 2,605
Owner-operators............................................ 204 150 34
Total tractors............................................. 2,810 2,624 2,639
Total trailers operated (at year end)...................... 6,283 6,214 5,649
</TABLE>
RESULTS OF OPERATIONS
Year Ended December 31, 1995 Compared to Year Ended December 31, 1994
Operating revenues for the year ended December 31, 1995 were $289.5 million as
compared to $286.2 million in 1994. The Company's revenue growth was negatively
impacted by the weakened freight demand that was experienced industry-wide
during 1995. The Company's Van and Flatbed divisions were more significantly
affected by the weakened demand than was the Dedicated Fleet division. Rather
than depending on gradual improvement in the overall market,
13
<PAGE> 15
the Company more aggressively added new business during late 1995 and early
1996. Except for the impact of severe weather experienced early in 1996, the
Company's current volume has improved substantially as a result of this
marketing program. It is expected that volume should increase further during
1996 as the Company began service in March 1996 on new dedicated contracts that
have annual revenues of approximately $10 million.
During 1995, the Company recorded operating income of $15.1 million and a net
loss of $7.1 million ($1.34 loss per share). In 1994, the Company recorded
operating income of $19.7 million and net income of $4.5 million ($.81 per
share).
Results for 1995 were affected by the adoption of Statement of Financial
Accounting Standards Number 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of", which resulted in an $7.3
million after-tax charge ($1.38 per share). During 1994, the Company initiated a
plan to dispose of certain older revenue equipment and to significantly reduce
the average age of its fleet. Throughout 1995 the Company had been actively
disposing of its older equipment. The modernization plan is expected to be
completed during 1996. The adoption of SFAS No. 121 as of January 1, 1995,
requires the Company to recognize a cumulative effect adjustment to the extent
the carrying value of the affected assets exceeds the estimated fair value less
costs to sell.
Results for 1995 also include pre-tax special charges of $1.4 million ($840,000
after-tax, or $.17 per share) associated with the sale and closing of its tire
loading and warehousing operations in February 1996. These operations generated
less than 2% of the Company's 1995 total revenues. However, the operating loss
from these operations was approximately $600,000 in 1995. The withdrawal from
these unprofitable activities should have a positive impact on results of
operations in 1996. (See Note 10 to Consolidated Financial Statements.)
Excluding the cumulative effect of the accounting changes and the special
charges and operations relating to the tire loading and warehousing operation,
the net income for 1995 was $1.5 million ($.29 per share) and operating income
was $17.2 million.
The operating ratio (operating expenses as a percentage of operating revenues)
was 94.8% for 1995 as compared to 93.1% for 1994. If the special charges and
operations associated with the tire loading and warehousing business were
excluded, the operating ratio for 1995 would have been 93.9%. The increased
operating ratio resulted from unfavorable claims settlement experience and
weakened freight demand.
Wages, salaries and employee benefits as a percentage of revenues decreased
slightly, due to a reduction in non-driver employees and an increase in the use
of owner-operators that was partly offset by increased driver training-related
salary costs. The reduction in non-driver staffing occurred in mid-1995 and was
made in response to the weakened freight demand experienced industry-wide.
Operations and maintenance related expenses as a percentage of revenues
decreased 8%, primarily as a result of maintenance cost reductions attributable
to the replacement of approximately 1,000 five-to-eight-year-old tractors with
new tractors. These costs were further reduced by the increased use of
owner-operators, who pay their own fuel and maintenance expenses.
Insurance and claims expense as a percentage of revenues rose 30%, as a result
of a claim settlement at an unanticipated level that cost the Company $2.5
million and as a result of general upward revisions in other open claims. The
large claim settlement was unique in the Company's experience in terms of both
its size and its impact on results of operations. The
14
<PAGE> 16
Company has increased its liability insurance limit to $35 million primarily in
response to this loss. Management expects that insurance claim expenses will
stabilize near a more traditional level in the future, as this unprecedented
claim was fully settled during 1995.
Depreciation and equipment rents as a percentage of revenue decreased
principally as a result of increased use of owner-operators, certain groups of
assets becoming fully depreciated during the year, the disposal of
under-utilized assets and the adoption of SFAS 121.
Rents and purchased transportation increased to 6.6% of revenue from 3.6% in
1994, reflecting the continued increase in the number of owner-operators used.
The increase in owner-operators caused a redistribution of certain costs from
expense categories related to company-owned equipment (fuel, driver wages,
depreciation, etc.) to the rents and purchased transportation expense account.
Interest and other expenses rose 20% to $15.1 million, principally due to the
additional interest charges associated with the debt incurred as a result of the
Company's equipment replacement program. The Company expects that interest
expense will increase slightly during 1996 as a full year's interest charges
will be incurred on the debt added in 1995.
RESULTS OF OPERATIONS
Year ended December 31, 1994 Compared to Year ended December 31, 1993.
Net income was $4.5 million in 1994, compared to $3 million in 1993.
Operating revenues for the year ended December 31, 1994, increased 14.5% over
1993 to $286.2 million. The Company achieved this revenue growth through a
combination of higher equipment productivity, improved freight rates, increased
use of owner-operators, the effects of a full year of operations of the
truckload division of Vernon Milling Company, Inc. ("VMC") which was acquired in
August 1993, and the acquisition of Applied Logistics Systems, Inc. ("ALS") on
January 1, 1994.
Federal tax law changes effective in 1994 have made 1994's operating results,
financial statistics and earnings somewhat difficult to compare to previous
years' financial results. More specifically, the Company ceased reimbursing its
drivers for non-deductible expenses (meals and over-the-road living expenses)
and increased driver's pay by an equal amount. While the amount actually paid to
drivers remained the same, other costs such as payroll taxes and payroll-based
workers' compensation insurance costs rose dramatically due to the increase in
per driver taxable payroll amounts being allocated to drivers. The higher
operating expenses were substantially offset by a much lower effective tax rate
resulting from the tax law change. Since all driver-related compensation was
fully deductible in 1994 (due to the cessation of reimbursing non-deductible
driver expenses), the Company's effective tax rate approximated the statutory
federal income tax rate of 34% plus applicable state income taxes. Previously,
the Company's effective tax rate was 46% in 1993 and 78% in 1992 because of the
payment of non-deductible expenses to the drivers during those years.
The operating ratio (operating expenses as a percentage of operating revenues)
was 93.1% for both 1994 and 1993. Tax law changes effective in 1994 and the
inclusion of the lower margins from the ALS operations increased certain
operating costs and reduced operating margins. Overall, the Company had to
reduce other operating costs by 1% or approximately $3,000,000 to maintain a
93.1% operating ratio in 1994. Productivity gains, continued cost-cutting and
the improvements attributable to re-engineering many operational and
administrative functions combined to lower costs in most areas. Salaries, wages
and employee benefits expenses
15
<PAGE> 17
increased primarily as a result of the previously discussed 1994 tax law changes
that caused the Company's payroll taxes and other payroll-related costs to
increase significantly. Other less significant factors that caused wages and
benefits to increase, included the following: a driver productivity bonus
program initiated in June 1994, ALS wages which represent approximately 80% of
ALS's total expenses, and increased driver training-related wages.
Operations and maintenance as a percentage of revenue decreased significantly
due to lower fuel and maintenance costs. Fuel expense decreased as a result of
several factors including, among others, improved fuel efficiency as a result of
a newer and more modern tractor fleet, generally lower average fuel prices, and
improved fuel purchasing procedures and discounts as a result of reorganizing
the Company's fuel purchasing program during 1994. Maintenance costs decreased
due to a newer tractor fleet and a more cost-effective maintenance program as a
result of reorganizing the Company's maintenance department and systems.
Depreciation and equipment rents increased as a result of the Company acquiring
690 new tractors and disposing of 685 older tractors. The new tractors acquired
are premium units with depreciation rates significantly greater than the six to
eight year-old units they replaced.
Rents and purchased transportation increased significantly as compared to 1993
due to an increase in the number of owner-operators from 34 in December 1993 to
150 in December 1994. The increase in owner-operators also caused a
redistribution of certain costs from expense categories related to company-owned
equipment (fuel, driver wages, depreciation, etc.) to the rents and purchased
transportation expense account.
LIQUIDITY AND CAPITAL RESOURCES
Cash generated from operations, the Company's primary source of liquidity,
increased to $29.9 million in 1995 from $29.4 million during 1994. The Company's
cash flows and cash requirements tend to fluctuate during the year. Generally
more cash is required during the first part of the year, primarily to fund the
Company's annual prepayments of operating taxes and licenses. Cash flow from
operations generally increases consistently beginning in the second quarter
through year end. The Company uses its revolving credit facility to smooth
cyclical cash flows associated with its operations. Outstanding borrowings under
the revolver decreased to $3.5 million at December 31, 1995, as compared to $7.6
million at December 31, 1994. Borrowing availability at December 31, 1995, was
$11.5 million.
In addition to the $15 million revolving credit facility, the other items
available in the $29 million credit agreement were a $4 million term loan and an
irrevocable letter of credit facility of up to $10 million.
Borrowings under the revolving credit facility are limited to a specified
percentage of customer accounts receivable, as defined in the credit agreement,
or $15 million, whichever is less. The interest rate on borrowings under the
credit agreement is prime plus 1%. Fees on outstanding letters of credit are
2 1/4% per annum, and fees on the unused portion of the revolving credit and
letter of credit facilities are 1/2% per annum. The credit agreement
obligations are secured by substantially all the Company's assets that are not
collateralized under other financing agreements. The credit agreement includes
certain financial covenants and restrictions on payments of dividends, capital
expenditures, indebtedness and the sale of certain assets, all of which the
Company anticipates that it should be able to comply with in the foreseeable
future. The term portion of the credit agreement is payable in quarterly
installments of $500,000. The entire credit agreement is scheduled to expire at
December 31, 1997.
16
<PAGE> 18
Historically, Builders has replaced its then existing credit agreements well in
advance of their scheduled maturities in response to changing needs and credit
environments. Based on past experience, the Company's recent performance and its
relationships with its current lead lender and the lender community, in general,
Builders anticipates that it should be able to negotiate an extension to, or
replacement of, the current credit agreement well in advance of scheduled
maturities, if necessary. Management believes that cash flows generated from
operations will be adequate to meet cash requirements for 1996. On a longer term
basis, the Company believes it has commitments from various equipment financing
sources sufficient to finance its capital expenditure needs for the foreseeable
future.
In October 1995, the Company completed a sale and leaseback transaction
involving its corporate headquarters facility. The Company sold the headquarters
building for $3.5 million and agreed to lease the facility for a period of five
years at approximately $450,000 per annum, and the Company has four successive
optional lease terms of five years each. The Company has the option to purchase
the headquarters site, at fair market value at the end of each lease term.
Proceeds from the sale were used to reduce the Company's borrowings under its
revolving credit facility. The $3.5 million sale, net of closing costs, resulted
in a deferred gain of approximately $400,000 which will be recognized over the
lease term. The Company has posted a Letter of Credit of $1.6 million to secure
future lease payments.
Capital expenditures during 1995 were $76.5 million including capitalized leases
of $69.7 million. These capital expenditures and capital leases were primarily
for new, more efficient revenue equipment that replaced older equipment that was
sold. Proceeds from the sale of property and equipment amounted to $11.4
million.
The Company's capital lease obligations increased from $101 million in 1994 to
$145 million during 1995, as a result of the continued aggressive equipment
replacement initiative.
The Company has adopted a very conservative capital expenditure budget for 1996,
due to the newer fleet and the weakened freight market. While the Company has
not made any 1996 capital purchase commitments, it maintains a substantial
amount of available credit from several equipment financing sources. Should the
Company elect to acquire equipment in 1996, it has the financing availability to
complete an equipment purchase.
As a result of the reduced capital expenditure budget for 1996, the Company
currently plans to repay a significant amount of equipment debt during 1996. The
Company will remain highly leveraged for the foreseeable future, however,
without a significant equity infusion. The majority of the Company's debt
relates to equipment financing and is closely matched with the expected useful
lives of the equipment collateralizing the debt.
At December 31, 1995, the Company had available for issuance (and not otherwise
reserved) 16.9 million authorized shares of its $.01 per share per value common
stock and 1,000,000 authorized shares of its $.01 per share per value preferred
stock. This stock could be issued, at any time, in connection with an
acquisition, to increase working capital, or for any other business purpose
deemed appropriate by the Board of Directors. Currently, there are no specific
plans for the use of the available authorized stock.
SEASONALITY
In the trucking industry generally, results of operations reflect a seasonal
pattern as customers reduce shipments during and after the winter holiday season
and its attendant weather variations. Accordingly, without growth in business,
the first and fourth quarters of a year would
17
<PAGE> 19
account for less revenue and net income than the second and third quarters.
Builders' quarterly results have traditionally reflected this seasonality.
Moreover, the extent of these seasonal variations can change significantly from
one year to the next depending, particularly, on the severity of winter weather
and its impact on travel conditions and the economy.
IMPACT OF INFLATION
Inflation has in the past been, and may in the future be, a significant factor
in the economy. While the Company does not believe that inflation had a
significant impact on its results of operations in 1995, Builders continues to
monitor closely the impact of inflation, if any, and to optimize its impact on
prevailing price trends. The Company hopes to obtain additional rate increases
during 1996. The substantial downward pressure on rate structures that has
existed in the truckload segment of the industry over the past several years
continues, however, and may make it more difficult to obtain rate increases.
Equipment. The service lives of the Company's revenue equipment are relatively
short (five to ten years), and a regular cycle of equipment replacement ensures
that depreciation, as reported in the financial statements, reasonably
approximates current costs. This tends to neutralize, over time, the impact of
inflation in the cost of new equipment on results of operations.
Fuel. Over the past three years, fuel prices have been relatively stable. The
cost and availability of fuel is significant to Builders' results of operations.
Historically, the Company has never experienced a situation in which fuel
shortages were so severe that adequate supplies could not be obtained, nor is
the Company aware of this having ever been the case for other companies in the
truckload segment of the industry. Fuel shortages do impact prices, however, and
from time to time in the past, fuel costs have been volatile. It is likely that
fuel costs will be volatile again at times in the future. When fuel prices have
spiked in the past, the Company and others in the industry have been able to
ameliorate, to some extent, the negative effect on results of operations by
imposing fuel surcharges. Builders believes that it should be able to do this
again should the need arise. Shippers' acceptance of fuel surcharges typically
lags behind the increase in fuel prices. Thus, the level of such surcharges is
sometimes not sufficient to offset totally the negative impact of the increased
costs until fuel prices recede toward their historic norms.
The Company tries to minimize fuel costs by purchasing in bulk as opposed to
making spot purchases on the road. Builders' bulk-purchase program is
facilitated by its 564,000 gallon active storage capacity at 17 of its
terminals. Most spot purchases on the road are made at an average wholesale rack
price plus a small pumping fee for the vendor. The Company believes that this
pricing arrangement helps to prevent the vendor from realizing excessive retail
profit margins in certain less competitive areas. The Company has hedged its
fuel costs on a limited basis in the past, and is currently considering hedging
part of its 1996 fuel requirements.
ENVIRONMENTAL MATTERS
The Environmental Protection Agency and various state environmental regulatory
agencies regulate the Company's operations with respect to matters involving
water quality and effluent limitation, underground storage tanks and the
handling, storage and disposal of solid waste and hazardous materials.
Capital expenditures include amounts spent for various environmental matters. In
addition, the Company provides for costs related to contingencies when a loss is
probable and the amount is
18
<PAGE> 20
reasonably determinable (based on case by case consultation with environmental
specialists). Receivables relating to claims for recovery are recorded only when
realization is probable. Recorded recoveries were not material at December 31,
1995.
Capital expenditures for all environmental control efforts were not material in
1995, and they are not expected to be material in 1996.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future operating results may be affected by a number of factors
such as: uncertainties relative to economic conditions; industry factors
including, among others, competition, rate pressure, driver availability and
fuel prices; and, the Company's ability to sell its services profitably,
successfully increase market share in its core businesses and effectively manage
expense growth relative to revenue growth in anticipation of continued pressure
on gross margins. The Company's operating results could be adversely affected
should the Company be unable to anticipate customer demand accurately or to
effectively manage the impact on the Company of changes in the trucking,
transportation and logistics industries.
Because of the foregoing factors, as well as other factors affecting the
Company's operating results, past financial performances should not be
considered to be a reliable indicator of future performance, and investors
should not use historical trends to anticipate results or trends in future
periods.
Recent Developments and Trends. During the second half of 1995, the Company
experienced weakened freight demand and is uncertain as to whether this signals
the beginning of a trend that may continue through future periods. It appears
that some of the Company's competitors have over-expanded their fleets and are
discounting their rates in order to maintain the volume needed to support their
excess equipment capacity. To the extent, if any, that the weaker freight level
and equipment over-capacity situation continues, its impact on the Company's
results of operations would be negative. In response to the weakened freight
levels, the Company has reduced non-driver payroll by approximately 5%, adopted
a very conservative future capital expenditure budget, increased marketing
efforts, and is considering other actions. Except for the impact of severe
weather, the Company's volume in early 1996 has improved, primarily as a result
of this marketing program. While the Company is more optimistic about future
business levels, it cannot predict whether this positive trend will continue.
19
<PAGE> 21
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Consolidated financial statements of the Company meeting the requirements of
Regulation S-X are filed on the succeeding pages of this Item 8 of this Annual
Report on Form 10-K.
20
<PAGE> 22
Consolidated Financial Statements
BUILDERS TRANSPORT, INCORPORATED
AND SUBSIDIARIES
Three years ended December 31, 1995, with
Report of Independent Auditors
<PAGE> 23
Builders Transport, Incorporated and Subsidiaries
Consolidated Financial Statements
Three years ended December 31, 1995
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors........................................... 1
Audited Consolidated Financial Statements
Consolidated Statements of Operations ................................... 2
Consolidated Balance Sheets.............................................. 3
Consolidated Statements of Stockholders' Equity ......................... 4
Consolidated Statements of Cash Flows.................................... 5
Notes to Consolidated Financial Statements............................... 6
</TABLE>
<PAGE> 24
Report of Independent Auditors
Stockholders and Board of Directors
Builders Transport, Incorporated
We have audited the accompanying consolidated balance sheets of Builders
Transport, Incorporated and subsidiaries as of December 31, 1995 and 1994, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1995.
Our audits also included the financial statement schedules listed in the index
at item 14(a). These financial statements and the schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Builders Transport, Incorporated and subsidiaries at December 31, 1995 and
1994, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
As discussed in Notes 1 and 11 of Notes to the Consolidated Financial
Statements, the Company adopted Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" in 1995.
Winston-Salem, North Carolina
February 23, 1996
1
<PAGE> 25
Builders Transport, Incorporated and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Operating revenues $289,527 $286,243 $250,009
Operating expenses:
Wages, salaries and employee benefits 119,236 118,729 101,048
Operations and maintenance 59,370 64,247 61,486
Operating taxes and licenses 27,611 27,903 24,510
Insurance and claims 17,846 13,675 14,084
Communications and utilities 4,670 4,721 4,145
Depreciation and equipment rents 24,559 26,306 22,283
Gain on disposition of carrier
property and equipment (643) (545) (285)
Rents and purchased transportation 19,164 10,548 4,573
Miscellaneous operating expenses 1,145 949 1,034
Special charges 1,420 - -
-------- -------- --------
274,378 266,533 232,878
-------- -------- --------
Operating income 15,149 19,710 17,131
Interest and other expenses, net 15,145 12,593 11,499
-------- -------- --------
Income before income taxes and cumulative
effect of accounting change 4 7,117 5,632
Income tax benefit (provision) 215 (2,602) (2,590)
-------- -------- --------
Income before cumulative effect of
accounting change 219 4,515 3,042
Cumulative effect of accounting change, net
of income taxes of $4,096 (7,291) - -
-------- -------- --------
Net (loss) income $ (7,072) $ 4,515 $ 3,042
======== ======== ========
Earnings (loss) per common share:
Earnings per common share before
cumulative effect of accounting change $ .04 $ .81 $ .57
Cumulative effect of accounting change (1.38) - -
-------- -------- --------
Earnings (loss) per common share $ (1.34) $ .81 $ .57
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 26
Builders Transport, Incorporated and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 109 $ 9
Accounts receivable:
Customers, less allowances of
$511 in 1995 and $354 in 1994 22,147 24,831
Other 6,668 6,202
---------- ----------
28,815 31,033
Prepaid expenses:
Tires in service 13,897 12,985
Taxes, licenses and other 3,274 4,516
Repair parts and operating supplies 3,233 3,073
---------- ----------
20,404 20,574
---------- ----------
Total current assets 49,328 51,616
Property and equipment, net 199,262 168,324
Other assets:
Costs in excess of net assets of businesses acquired 19,865 20,414
Miscellaneous, less allowances of
$168 in 1995 and $258 in 1994 3,606 3,713
---------- ----------
23,471 24,127
---------- ----------
$ 272,061 $ 244,067
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable and accrued expenses $ 9,551 $ 8,892
Taxes other than income 1,866 1,943
Wages, salaries and benefits 3,043 2,924
Claims payable 5,285 4,479
Deferred income taxes 2,378 1,503
Current portion of long-term debt and capital lease obligations 36,366 27,217
---------- ----------
Total current liabilities 58,489 46,958
Long-term debt and capital lease obligations, less current portion 164,762 135,982
Deferred income taxes 2,013 6,951
Reserve for claims payable and other 8,508 8,598
Stockholders' equity:
Preferred stock, par value $.01 per share: authorized 1,000,000 shares;
none outstanding - -
Common stock, par value $.01 per share: authorized 25,000,000 shares;
issued 6,218,347 shares in 1995 and 6,206,220 shares in 1994 62 62
Capital in excess of par value 33,281 33,178
Unearned compensation related to employee stock benefit plan
(KSOP) receivable (4,477) (4,617)
Retained earnings 24,201 31,273
---------- ----------
53,067 59,896
Less treasury stock, 1,168,083 shares in 1995 and
1,117,133 shares in 1994, at cost 14,778 14,318
---------- ----------
Total stockholders' equity 38,289 45,578
---------- ----------
Commitements and contingencies $ 272,061 $ 244,067
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 27
Builders Transport, Incorporated and Subsidiaries
Consolidated Statements of Stockholders' Equity
(in thousands)
<TABLE>
<CAPTION>
UNEARNED
COMPENSATION
CAPITAL RELATED TO
COMMON IN EXCESS KSOP RETAINED TREASURY
STOCK OF PAR RECEIVABLE EARNINGS STOCK TOTAL
------------ ---------- ---------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1993 $ 59 $ 29,603 $ (5,346) $ 23,716 $ (11,230) $ 36,802
Net income 3,042 3,042
Issuance of common
stock for acquisition 1 1,483 1,484
Issuance of common
stock to 401 (k) plan 176 176
Exercise of stock options 1 999 1,000
Contribution to KSOP 583 583
----------- --------- --------- -------- --------- ---------
Balance at
December 31, 1993 61 32,261 (4,763) 26,758 (11,230) 43,087
Net income 4,515 4,515
Issuance of common
stock to 401(k) plan 248 248
Exercise of stock options 1 669 670
Purchase of treasury stock (3,088) (3,088)
Contribution to KSOP 146 146
----------- --------- --------- -------- --------- ---------
Balance at
December 31, 1994 62 33,178 (4,617) 31,273 (14,318) 45,578
Net loss (7,072) (7,072)
Issuance of common
stock to 401(k) plan 25 25
Exercise of stock options 78 78
Purchase of treasury stock (460) (460)
Contribution to KSOP 140 140
----------- --------- --------- -------- --------- ---------
Balance at
December 31, 1995 $ 62 $ 33,281 $ (4,477) $ 24,201 $ (14,778) $ 38,289
=========== ========= ========= ======== ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 28
Builders Transport, Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
---------- ---------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (7,072) $ 4,515 $ 3,042
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization, net
of (gain) loss on dispositions 24,584 26,946 23,046
Deferred income taxes 33 1,895 2,440
Cumulative effect of accounting change 7,291 - -
Special charges 1,420 - -
Changes in operating assets and liabilities:
Accounts receivable 2,218 (3,208) (3,212)
Trade accounts payable and
accrued expenses 596 (2,295) 3,130
Reserve for claims payable 1,206 131 (1,296)
Other (398) 1,374 (2,564)
---------- --------- ---------
Net cash provided by operating activities 29,878 29,358 24,586
INVESTING ACTIVITIES
Purchases of equipment (6,810) (6,407) (3,395)
Proceeds from disposal of equipment 11,421 5,997 2,944
Acquistion of business net of cash acquired - (550) -
---------- --------- ---------
Net Cash provided by (used in) investing activities 4,611 (960) (451)
FINANCING ACTIVITIES
Proceeds from lines of credit and
long-term borrowings 4,000 1,606 -
Principal payments on line of credit, long-
term debt and capital lease obligations (38,007) (27,585) (25,129)
Proceeds from issuance of common stock 78 670 1,000
Purchase of common stock for treasury
from related party - (2,400) -
Purchase of common stock for treasury (460) (688) -
---------- --------- ---------
Net cash used in financing activities (34,389) (28,397) (24,129)
---------- --------- ---------
Increase in cash and cash
equivalents 100 1 6
Cash and cash equivalents at beginning of year 9 8 2
---------- --------- ---------
Cash and cash equivalents at end of year $ 109 $ 9 $ 8
========== ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 29
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements
Three years ended December 31, 1995
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Builders Transport, Incorporated (the "Company"), through its wholly-owned
subsidiaries, operates as a truckload irregular route, common and contract
carrier transporting a wide range of commodities in both interstate and
intrastate commerce.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
Cash Equivalents
The Company considers all highly liquid investments readily convertible into
cash or having a maturity of three months or less when purchased to be cash
equivalents.
Revenue Recognition
Operating revenues and related expenses are recognized on the date the freight
is picked up for shipment. This method of revenue recognition is not
materially different from methods deemed preferable by the Financial Accounting
Standards Board Emerging Issues Task Force in their consensus opinion Issue No.
91-9.
Prepaid Tires
The cost of tires acquired with revenue equipment, together with replacement
tires, is capitalized and amortized on the straight-line method over the tires'
estimated useful life. The average amortization period for new additions to
prepaid tires is approximately three years. Recapping costs are expensed as
incurred.
Property and Equipment
Carrier property and equipment is carried at cost including expenditures for
readying the assets for use. Major additions and betterments are capitalized
while maintenance and repairs that do not improve or extend the lives of the
respective assets are charged to expense as incurred. Depreciation is computed
on the straight-line method over the estimated useful life. Leasehold
improvements are amortized over the lives of the leases. Non-carrier property
comprises terminal facilities and staging lots no longer utilized in the
Company's operations and land held for investment purposes. See note 11.
Gains and losses on property dispositions are included in operations.
6
<PAGE> 30
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible Assets
Excess cost over the fair value of net assets acquired (goodwill) generally is
amortized on a straight-line basis over forty years. The carrying value of
goodwill is reviewed if the facts and circumstances suggest that it may be
impaired. If this review indicates that goodwill will not be recoverable, as
determined based on the undiscounted cash flows of the business acquired over
the remaining amortization period, the Company's carrying value of the goodwill
will be reduced to the estimated discounted cash flows. Accumulated
amortization was $2,277,000 and $1,717,000 at December 31, 1995 and 1994,
respectively.
Earnings Per Common Share
The calculation of primary earnings per share of common stock is based on the
weighted average number of shares outstanding, during each period as adjusted
for the effect of issuance of stock options. Weighted average common and
common equivalent shares outstanding were 5,262,429 in 1995, 5,608,701 in 1994,
and 5,374,193 in 1993. The fully diluted earnings per share calculation
assumes full conversion of convertible subordinated debentures and exercise of
stock options as of the beginning of the year (or date of issue, if later), if
dilutive, and shares contingently issuable. The computation of fully diluted
earnings per common share is anti-dilutive for all periods presented.
Stock Based Compensation
The Company grants stock options for a fixed number of shares to employees with
an exercise price equal to the fair value of the shares at the date of grant.
The Company accounts for stock options grants in accordance with APB Opinion
No. 25, Accounting for Stock Issued to Employees, and, accordingly, recognizes
no compensation expense for the stock option grants.
Fair Values of Financial Instruments
At December 31, 1995 and 1994, the carrying value of financial instruments such
as cash and cash equivalents, trade accounts receivable and payable and the
long-term credit agreement approximated their fair values. The fair value of
the Company's 8% and 6 1/2% convertible subordinated debentures are estimated
using the average of the quoted market bid and ask prices. The fair value of
these debentures at December 31, 1995, was approximately $40,651,000. The
carrying value of the debentures at December 31, 1995, was $48,945,000. Fair
value is determined based on expected future cash flows, discounted at market
interest rates, and other appropriate valuation methodologies.
7
<PAGE> 31
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounting Changes
The Company implemented Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" (SFAS No. 121) as of January 1,
1995. This statement establishes accounting standards for determining
impairment of long-lived assets. The Company periodically assesses the
realizability of its long-lived assets and evaluates such assets for
impairment whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverable . For assets to be
held, impairment is determined to exist if estimated future cash flows,
undiscounted and without interest charges, are less than carrying
amount. For assets to be disposed of, impairment is determined to exist
if the estimated net realizable value is less than the carrying account.
As discussed in Note 11, the Company recognized a cumulative effect
adjustment as of January 1, 1995 for certain assets that were planned to
be disposed of related to the adoption.
Credit Risk
Financial investments that potentially subject the Company to
concentrations of credit risk consist primarily of customer receivables.
Concentrations of credit risk with respect to customer receivables are
limited due to the Company's diversified freight base with no one
customer, industry, or geographic region making up a large percentage of
the customer receivables or revenues. As of December 31, 1995, the
Company had no significant concentrations of credit risk.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amount reported in the financial statements and accompanying
notes. Estimates made by the Company relate primarily to self insurance
accruals, valuation of long-lived assets, realization of deferred tax assets
and allowances for uncollectible accounts. Actual results could differ from
these estimates.
Reclassification
Certain prior year amounts have been reclassified for comparative purposes.
8
<PAGE> 32
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 2. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
------------ -------------
<S> <C> <C>
Carrier property:
Land $ 4,941 $ 4,712
Buildings 20,583 23,788
Revenue equipment 250,906 232,622
Service equipment and other 18,973 17,128
------------ ------------
295,403 278,250
Non-carrier property 6,521 6,505
------------ ------------
301,924 284,755
Less reserves for depreciation
and amortization (102,662) (116,431)
------------ ------------
$ 199,262 $ 168,324
============ ============
</TABLE>
NOTE 3. CREDIT AGREEMENT, DEBT, AND CAPITAL LEASES
Long-term debt is summarized as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-------- --------
<S> <C> <C>
Credit agreement: (a)
Term loan $ 4,000 $ 4,000
Revolver 3,469 7,393
8% convertible subordinated
debentures (b) 26,594 26,950
61/2% convertible subordinated
debentures (c) 22,351 23,451
Capital leases (d) 144,714 101,220
Industrial revenue bonds - 185
-------- --------
201,128 163,199
Less current portion 36,366 27,217
-------- --------
Portion classified as long-term debt $164,762 $135,982
======== ========
</TABLE>
9
<PAGE> 33
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 3. CREDIT AGREEMENT, DEBT, AND CAPITAL LEASES (CONTINUED)
(a) The credit agreement, which expires December 31, 1997, provides for a
maximum availability of $29 million, comprising a $4 million term loan, a
revolving credit facility of up to $15 million, of which $3.5 million was
outstanding at December 31, 1995, and irrevocable letters of credit of up
to $10 million that may be reduced to $8.5 million at the request of the
lenders. The Company may increase the letter of credit facility by up to
an additional $2 million, however, by reducing the revolving credit
facility by a like amount. The term portion of the credit agreement is
payable in quarterly installments of $500,000. Borrowings under the
revolving credit facility are limited to a specified percentage of
customer accounts receivable, as defined in the credit agreement. The
interest rate on borrowings under the credit agreement is prime plus 1%.
Fees on outstanding letters of credit are 21/4% per annum, and fees on the
unused portion of the revolving credit and letter of credit facilities are
1/2% per annum. The credit agreement obligations are secured by
substantially all the Company's assets that are not collateralized under
other financing agreements.
(b) The 8% Convertible Subordinated Debentures issued in 1985 are convertible
(until maturity or prior redemption) into common stock at $24.40 per share
(equal to 1,089,918 shares at December 31, 1995). The debentures are
subject to certain optional redemption provisions, sinking fund
requirements from 1996 to 2004, inclusive, and optional retirement
provisions, and are subordinated to all present and future senior
indebtedness of the Company.
(c) The 61/2% Convertible Subordinated Debentures issued in 1986 are
convertible (until maturity or prior redemption) into common stock at
$37.75 per share (equal to 592,079 shares at December 31, 1995). The
debentures are subject to certain optional redemption provisions, sinking
fund requirements from 2002 to 2010, inclusive, and optional retirement
provisions, and are subordinated to all present and future senior
indebtedness of the Company.
(d) Capital leases represent primarily leased revenue equipment capitalized
for $180,312,000 and $130,027,000 with accumulated amortization of
$32,812,000 and $24,086,000 at year end 1995 and 1994, respectively. The
leases are for periods of up to seven years and provide for various
renewal options. The tractor and trailer leases also provide a purchase
option, any time after 36, 48, 60, or 84 months, at predetermined
termination values. The termination values have been included in the
capital lease obligation.
The credit agreement, and certain capital lease agreements contain financial
covenants and restrictions on payments of dividends, capital expenditures,
indebtedness and the sale of certain assets. As a result of these restrictive
covenants, there are no retained earnings available for payment of dividends at
December 31, 1995.
10
<PAGE> 34
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 3. CREDIT AGREEMENT, DEBT, AND CAPITAL LEASES (CONTINUED)
The aggregate annual maturities and sinking fund requirements of long-term
debt, capital leases, and noncancelable operating leases at December 31, 1995,
are as follows (in thousands):
<TABLE>
<CAPTION>
OPERATING LONG-TERM CAPITAL
LEASES DEBT LEASES TOTAL
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Year
1996 $ 3,022 $ 4,156 $ 41,651 $ 48,829
1997 1,646 7,625 38,171 47,442
1998 1,015 2,156 32,173 35,344
1999 691 2,156 25,284 28,131
2000 442 2,156 25,914 28,512
Thereafter 20 38,165 6,943 45,128
--------- --------- -------- --------
6,836 56,414 170,136 233,386
Less amounts representing interest - - (25,422) (25,422)
--------- --------- -------- --------
$ 6,836 $ 56,414 $144,714 $207,964
========= ========= ======== ========
</TABLE>
Interest expense on debt and capital leases amounted to $14,794,000 in 1995,
$12,427,000 in 1994, and $11,008,000 in 1993. During 1995, approximately
$600,000 of interest was capitalized.
Rental expense for revenue equipment, facilities, and office equipment amounted
to $3,846,000 in 1995, $3,189,000 in 1994, $2,066,000 and in 1993.
NOTE 4. RESERVE FOR CLAIMS PAYABLE
Under an agreement with its insurance underwriters, the Company is liable up to
$1,000,000 for any single occurrence for bodily injury and personal liability
claims. Excess liability is assumed by the underwriters up to $35,000,000.
The Company's agreement with its underwriters is secured by letters of credit
totaling $2,744,000. Additionally, $1,307,000 and letters of credit
aggregating $4,959,000 have been deposited with various regulatory agencies to
satisfy self-insurance requirements. That portion of the reserve for claims
estimated to be payable within one year is classified as a current liability.
11
<PAGE> 35
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 4. RESERVE FOR CLAIMS PAYABLE (CONTINUED)
Reserves for workers' compensation are based upon historical trends, claim
frequency, severity, the Company's experience and other factors, and are
discounted to present value. The effect of future inflation for both medical
costs and lost wages is considered in establishing reserves. Adjustments to
previously established reserves, if required, are included in operating
results. At December 31, 1995 and 1994, estimated future payments for these
claims aggregated approximately $2,494,000 and $2,611,000, respectively. The
present value of these estimated future payments was approximately $1,928,000 at
December 31, 1995, and $1,973,000 at December 31, 1994, discounted at rates of
7.4% for 1995 and 8.64% for 1994. The estimated future payments at December 31,
1995, are $517,000 in 1996, $541,000 in 1997, $370,000 in 1998, $254,000 in
1999, $164,000 in 2000 and $648,000 thereafter. The Company does not offset
claims for recovery in which the potential for realization is probable against
probable contingent liabilities, such as self-insurance reserves.
NOTE 5. INCOME TAXES
The provision (benefit) for income taxes consists of the following (in
thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ---------
<S> <C> <C> <C>
Current $ (111) $ 707 $ 150
Deferred (104) 1,895 2,440
---------- ---------- ---------
$ (215) $ 2,602 $ 2,590
========== ========== =========
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax liabilities and assets are (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-------- -------
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation $ 14,004 $ 17,711
Capital leases and other 3,538 558
-------- --------
Total deferred tax liabilities 17,542 18,269
-------- --------
</TABLE>
12
<PAGE> 36
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 5. INCOME TAXES (CONTINUED)
<TABLE>
<S> <C> <C>
Deferred tax assets:
Allowances for accounts receivable
and claims reserves (3,815) (4,498)
Net operating loss carryforwards (2,074) (157)
General business, minimum tax
and other credit carryforwards (6,048) (4,639)
Capital loss carryforward - (521)
Other deferred tax assets (1,214) -
-------- --------
Net deferred tax assets (13,151) (9,815)
-------- --------
Net deferred tax liabilities $ 4,391 $ 8,454
======== ========
</TABLE>
The reasons for the difference between total income tax expense benefit and the
amount computed by applying the statutory federal income tax rate to income
before income taxes are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Computed tax expense (benefit) using
the statutory federal income tax rate $ (1) $ 2,420 $ 1,915
Increase (decrease) in taxes arising from:
State taxes, net of federal benefit 7 72 -
Reduction of valuation allowance - (521) -
Tax rate (decreases) increases (228) 430 -
Prior year (over) under accrual (100) 64 48
Nondeductible expenses 86 121 626
Other items 21 16 1
------- -------- --------
$ (215) $ 2,602 $ 2,590
======= ======== ========
</TABLE>
At December 31, 1995, the Company had net operating loss carryforwards for
federal tax purposes of $5,319,000 expiring in the year 2010, general business
credit carryforwards of $5,404,000 expiring in years 1997 through 2004, state
net operating loss carryforwards of $13,397,000 expiring in years 1996 through
2007, and minimum tax credits of $643,000 that carry forward indefinitely.
13
<PAGE> 37
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 6. BENEFIT PLANS
The Company has a stock option plan that permits the granting of options to
purchase up to an aggregate of 1,450,000 shares of Common Stock to officers and
key employees. Under this Plan, options to purchase shares of Common Stock may
be granted at not less than 100% of the fair market value at the date of grant,
or 110% of fair market value in the case of any employee who holds more than
10% of the combined voting power of the Company's Common Stock as of the date
of grant if the option is designated as an incentive stock option.
The Company also has a Non-employee Directors' Stock Option Plan. This plan
provides for the granting of options to purchase up to an aggregate of 100,000
shares of Common Stock to members of the Board of Directors of the Company who
are not employees of the Company or any of its subsidiaries. Under the Plan,
options to purchase 10,000 shares of Common Stock were granted to each
non-employee director upon the Board's adoption of this plan, and options to
purchase 10,000 shares will be granted to any new Non-employee's Director upon
his or her election to the Board of Directors. Each Non-employee Director
shall receive additional options to purchase 2,000 shares each even numbered
year during the Plan's existence beginning March 29, 1994, at not less than
100% of the fair market value at the date of the grant.
The following table summarizes the changes in options outstanding and related
price ranges for shares of Common Stock under options:
<TABLE>
<CAPTION>
NUMBER OPTION PRICE
OF SHARES PER SHARE
--------- ----------------------
<S> <C> <C> <C>
Outstanding at January 1, 1994 1,184,562 $ 3.75 - $ 14.75
=========
Exercised (86,514) $ 4.9375 - $ 10.50
Expired or canceled (37,522) $ 6.1875 - $ 14.75
Granted 138,500 $ 11.313 - $15.375
---------
Outstanding at December 31, 1994 1,199,026 $ 3.75 - $15.375
=========
Exercised (9,699) $ 7.0625 - $ 10.50
Expired or canceled (102,181) $ 7.0625 - $ 14.75
Granted 22,500 $12.4375
---------
Outstanding at December 31, 1995 1,109,646 $ 3.75 - $15.375
=========
</TABLE>
At December 31, 1995, options to purchase 787,408 shares were exercisable, and
183,885 shares were reserved for future grants.
14
<PAGE> 38
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 6. BENEFIT PLANS (CONTINUED)
During 1993, there were two benefit plans available to substantially all
Company employees who met the eligibility requirements: a "401(k) Plan" and an
"ESOP." Under the 401(k) Plan, the Company made matching contributions in the
form of common stock at a rate equal to 25% of a participant's contributions
until the participant's contributions reached 6% of the participant's annual
salary at which point the Company's matching contribution ceased. The ESOP was
established in 1989 when 683,000 shares of Common Stock were acquired through a
loan from the Company at a cost of $7 million. The KSOP released a ratable
number of shares from encumbrance each year as payments were made to reduce the
principal amount of the loan. The released shares were allocated to the
accounts of eligible employees.
Effective January 1, 1994, the 401(k) Plan and the ESOP were merged and amended
to form the Builders Transport, Incorporated Employee's Retirement Savings &
Profit Sharing Plan (the "KSOP"). The KSOP utilizes the shares of common stock
that were acquired by the ESOP in 1989 and that remain unallocated to make the
Company's future 401(k) matching contributions under the KSOP. The amount of
the Company's 401(k) matching contribution under the KSOP is now discretionary.
However, it is anticipated that by December 31, 2011, all of the common stock
acquired by the ESOP in 1989 will have been allocated as the KSOP loan is
repaid over its remaining 17-year life.
The KSOP will obtain the funds to repay the loan through tax deductible
contributions made by the Company to the KSOP. The Company incurred interest
expense of $390,000, $398,000, and $539,000 and compensation expense of
$234,000, $244,000, and $681,000 related to the KSOP/ESOP during the years
ended December 31, 1995, 1994, and 1993, respectively. Compensation expense is
recognized under the shares allocated method.
Contributions accrued for all defined contribution plans were $1,278,000 in
1995, $856,000 in 1994, and $937,000 in 1993.
15
<PAGE> 39
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 7. SUPPLEMENTAL INFORMATION TO CONSOLIDATED STATEMENTS OF CASH FLOWS
Additional information related to the consolidated statements of cash flows
with regard to certain cash payments and noncash investing and financing
activities is as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
------- -------- --------
<S> <C> <C> <C>
Cash paid:
Interest $15,098 $11,915 $10,129
Income taxes 200 376 -
Noncash investing activity:
Equipment acquired through
capital leases 69,718 59,226 33,349
Issuance of common stock (125,000
shares) and assumption of liabilities
related to acquisition. Total assets
acquired, including goodwill, of
$24,011,000. See Note 8. - - 23,361
Noncash financing activity:
Common stock issued under employee
benefit plans 165 394 759
</TABLE>
NOTE 8. ACQUISITION
On August 27, 1993, the Company completed the acquisition of certain of the
assets of the truckload van operations of Vernon Milling Company, Inc. ("VMC"),
including among other things, 230 tractors and 701 trailers. The Company paid
for these assets through the assumption of certain equipment-related debt
consisting of $8,221,000 in notes payable, $7,884,000 in operating leases that
were refinanced, and the issuance of 125,000 shares of the Company's common
stock, valued at $1,484,000. This transaction was accounted for as a purchase.
Accordingly, the purchase price has been allocated to the assets acquired
(principally, tractors and trailers) and the liabilities assumed (the
equipment-related debt and purchase accounting accruals of $7,220,000) based on
estimated fair market values. The excess of the purchase price over the fair
market value of the net assets acquired has been recorded as goodwill.
During 1994, a purchase price contingency pertaining to the Company's
acquisition of VMC was resolved, and the total purchase price was finalized.
The resolution of the contingency increased the purchase price of VMC by
$600,000 from the year-end 1993 preliminary purchase price estimate. Goodwill
was increased to reflect the increased purchase price. Additionally,
Goodwill was increased by approximately $3.9 million to reflect the final
valuation of revenue equipment acquired. Concurrent with the final valuation,
the Company reduced the economic useful lives of the tractors acquired from 5.5
years, on average, to 4 years on average. This change in estimated useful life
was accounted for prospectively, in 1994.
16
<PAGE> 40
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 8. ACQUISITION (CONTINUED)
Effective January 1, 1994, the Company acquired the logistics management and
truckloading operations of VMC's wholly-owned subsidiary, Applied Logistic
Systems, Inc. ("ALS"). The Company paid $550,000 cash for ALS and accounted
for the transaction as a purchase in 1994.
The following unaudited pro forma consolidated operating results present the
operating results as if both of the acquisitions had occurred at the beginning
of 1993 and do not purport to be indicative of what would have occurred had the
acquisitions been made as of that dates or of results which may occur in the
future (in thousands, except per share amounts):
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1993
-----------------
(UNAUDITED)
<S> <C>
Operating revenue $ 275,122
============
Net income $ 3,730
============
Net income per share $ .68
============
</TABLE>
NOTE 9. RELATED PARTY TRANSACTIONS
During 1995, the Company entered into an agreement with Two Trees, a New York
general partnership for the sale and leaseback of the building that houses the
Company's offices and division headquarters and related land, located in
Camden, South Carolina. The Company's Chairman of the Board is a general
partner of Two Trees. The Company has purchase and lease renewal options at
projected future fair market values under the agreement. The lease is
classified as an operating lease in accordance with Statement of Financial
Accounting Standards No. 13, "Accounting for Leases."
The cost and associated accumulated depreciation of the building, approximately
$3,473,000 and $899,000, respectively, have been removed from the accounts and
the gain realized on the sale of approximately $392,000 has been deferred. The
deferred gain will be credited to income as rent expense adjustments over the
lease term of five years. Payments under the lease approximate $454,000
annually, commencing in October 1995. The Company has an outstanding letter of
credit totaling $1,600,000 to Two Trees in support of the lease payments.
In connection with the sale and leaseback, the Company paid $200,000 in
brokerage commissions to Two Trees. The fees paid are based on ordinary and
customary standards for such services and the lease payments are based on fair
market of the property.
17
<PAGE> 41
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 9. RELATED PARTY TRANSACTIONS (CONTINUED)
In connection with the purchase of VMC, discussed in Note 8, the Company paid
investment banking fees in 1994 of $650,000 to Two Trees pursuant to terms and
conditions that included, among other things, a requirement that the combined
operations, for a certain period post-closing, of the Company and VMC
demonstrate that the increased revenues anticipated from the acquisition were
in fact, achievable. The fees were based on ordinary and customary standards
for such services.
In October 1994, the Company purchased 200,000 shares of its common stock at
$12.00 per share from its Chairman of the Board, who made these shares
available for sale due to his short-term liquidity needs. The Company's Board
of Directors approved this purchase and a general common stock repurchase
program on the open market, because they viewed the market price of common
stock as undervalued in late 1994. The purchase from the Chairman was viewed
as a beneficial method to acquire the Company's stock because the repurchase
could be effected with minimal transaction costs.
NOTE 10. SPECIAL CHARGES
In the fourth quarter of 1995, the Company recorded special charges of
$1,420,000 associated with exiting the tire loading and warehousing business.
The special charges comprise principally the loss on sale of equipment
(consummated in February 1996) and write-downs of accounts receivable,
intangibles and other assets.
NOTE 11. IMPAIRMENT OF LONG-LIVED ASSETS
During 1994, the Company initiated a plan to dispose of certain older revenue
equipment and to reduce the average age of its fleet. The plan is expected to
be completed during 1996. The adoption of SFAS No. 121 "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of," as of
January 1, 1995, requires the Company to recognize a cumulative effect
adjustment to the extent the carrying value of the affected assets exceeds the
estimated net realizable value.
Prior to the cumulative effect adjustment, this revenue equipment to be
disposed of had a carrying amount of $19,408,000 as of January 1, 1995. The
Company recorded a pre-tax cumulative effect adjustment of $11,387,000 to
reduce the carrying amount to the estimated net realizable value of $8,021,000.
The after-tax cumulative effect adjustment was a charge of $7,291,000 or $1.38
per share. The carrying amount of assets remaining to be disposed of is
$6,031,000 as of December 31, 1995.
NOTE 12. CONTINGENCIES
The Company is involved in various legal proceedings and claims that have
arisen in the ordinary course of its business that have not been finally
adjudicated. Many of these proceedings are covered in whole or in part by
insurance. These actions, when finally concluded and determined will not, in
the opinion of management, have a material adverse effect upon the financial
position of the Company.
18
<PAGE> 42
Builders Transport, Incorporated and Subsidiaries
Notes to Consolidated Financial Statements (continued)
NOTE 13. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of unaudited quarterly results of operations for the
years ended December 31, 1995 and 1994. Previously published results for the
quarters ending March 31, June 30, and September 30, 1995 have been restated
for the adoption of SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." (See Notes 1 and 11).
The computation of fully diluted earnings per common share is anti-dilutive for
all periods presented (in thousands, except per share amounts).
<TABLE>
<CAPTION>
1995 QUARTER ENDED
--------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
---------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Operating revenue $ 73,114 $ 74,847 $ 73,249 $ 68,317
Operating expenses 68,357 68,742 70,991 65,288
Net income (loss) as previously reported
before effect of accounting change 785 1,582 (1,033) (1,115)
Effect of change in accounting principle on:
Operating expenses 1,055 921 515 (2,492)
Provision for income taxes (414) (358) (182) 954
Cumulative effect of accounting change (7,291) - - -
Net income (loss) as restated (5,865) 2,145 (700) (2,653)
Net income (loss) per common share as
previously reported before cumulative
effect of accounting change .15 .30 (.19) -
Cumulative effect of accounting change (1.38) - - -
Net income (loss) per common share
as restated (1) (1.11) .40 (.13) (.53)
</TABLE>
<TABLE>
<CAPTION>
1994 QUARTER ENDED
--------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
---------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Operating revenue $ 68,825 $ 71,433 $ 72,870 $ 73,115
Operating expenses 64,631 65,873 67,517 68,512
Net income 638 1,413 1,630 834
Net income per common share .11 .25 .29 .16
</TABLE>
(1) The sum of the quarter's earnings per share does not equal the
year-to-date earnings per share due to changes in average share calculations.
This is in accordance with prescribed reporting requirements.
19
<PAGE> 43
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEMS 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT; AND CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.
For information with respect to the executive officers of the Company, see
"Executive Officers of the Registrant" at the end of Part I of this Report. The
information set forth under the captions "Election of Directors", "Committees of
the Company's Board of Directors and Meeting Attendance," "Executive
Compensation and Other Information", "Security Ownership of Certain Beneficial
Owners and Management", and "Certain Relationships and Related Transactions" in
the Proxy Statement for the 1996 Annual Meeting of Stockholders is incorporated
herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) LIST OF DOCUMENTS FILED AS PART OF THIS REPORT.
(1) FINANCIAL STATEMENTS.
<TABLE>
<S> <C>
Report of Independent Auditors, Ernst & Young LLP.........................
Consolidated Statements of Operations for the years ended December 31,
1995, 1994 and 1993.....................................................
Consolidated Balance Sheets as of December 31, 1995 and 1994..............
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1995, 1994, 1993...........................................
Consolidated Statements of Cash Flows for the years ended December 31,
1995, 1994 and 1993.....................................................
Notes to Consolidated Financial Statements................................
</TABLE>
(2) FINANCIAL STATEMENT SCHEDULE.
<TABLE>
<S> <C>
Consolidated Schedule as of and for the years ended December 31, 1995,
1994 and 1993...........................................................
II -- Valuation and Qualifying Accounts...................................
</TABLE>
All other financial statements and schedules have been omitted because they are
not required or are not applicable.
21
<PAGE> 44
(3) EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-K).
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ----------------------------------------------------------------------------------
<C> <C> <S>
3.1 -- Amended and Restated Certificate of Incorporation of the Company, incorporated by
reference to Exhibit 3.1 to the Company's Quarterly Report for the quarter ended
June 30, 1992, on Form 10-Q, filed August 14, 1992
3.2 -- Amended and Restated Bylaws of the Company, as amended, incorporated by reference
to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, filed March 31, 1994
4.1 -- Indenture between the Company and The First National Bank of Maryland, dated as of
August 15, 1985, incorporated by reference to Exhibit (4)B to the Company's
Amendment No. 1 to Registration Statement on Form S-1, filed August 29, 1985 (No.
2-99727)
4.2 -- Indenture between the Company and The First National Bank of Maryland, dated as of
May 1, 1986, incorporated by reference to Exhibit (4)B to the Company's Amendment
No. 1 to Registration Statement on Form S-1, filed May 1, 1986 (No. 33-5057)
4.3 -- First Supplemental Indenture between the Company and The First National Bank of
Maryland, dated as of September 1, 1986, incorporated by reference to Exhibit 4a1
to the Company's Quarterly Report for the quarter ended September 30, 1986 on Form
10-Q, filed November 14, 1986
10.1* -- Builders Transport, Incorporated Restated 1986 Incentive Stock Option Plan,
incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30,1994, filed August 11, 1994
10.2 -- Stock Purchase Agreement dated as of December 21, 1989, by and between the Company
and AmSouth Bank, N.A., as Trustee (subsequently assigned to National Bank of
Commerce) under the stock benefit plan, incorporated by reference to Exhibit 1 to
the Company's Report on Form 8-K, filed December 29, 1989
10.3 -- Secured Loan Agreement dated as of December 21, 1989, by and among Builders
Transport, Incorporated, the Subsidiaries, and AmSouth Bank, N.A., as Trustee
(subsequently assigned to National Bank of Commerce) under the stock benefit plan,
incorporated by reference to Exhibit 4 to the Company's Report on Form 8-K, filed
December 29, 1989.
10.4 -- First Amendment dated as of January 1, 1994, to Secured Loan Agreement dated as of
December 21, 1989, (subsequently assigned to National Bank of Commerce)
incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form
10-K for the year ended December 31, 1993, filed March 31, 1994
10.5 -- Pledge Agreement dated as of December 21, 1989, by and among the Company, the
Subsidiaries, and AmSouth Bank, N.A., as Trustee (subsequently assigned to
National Bank of Commerce) under the stock benefit plan, incorporated by reference
to Exhibit 5 to the Company's Report on Form 8-K filed December 29, 1989
10.6 -- Assignment dated as of December 22, 1992, of Promissory Note, Secured Loan
Agreement, Pledge Agreement, Stock Purchase Agreement and Indemnification
Agreement to National Bank of Commerce as Successor Trustee pursuant to the
Builders Transport, Incorporated and Subsidiaries Employee Stock Benefit Trust,
incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form
10-K for the year ended December 31, 1992, filed March 22, 1993
10.7* -- Builders Transport, Incorporated Employees Retirement Savings & Profit Sharing
Plan, as amended and restated, incorporated by reference to Exhibit 10.7 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, filed
March 31, 1995
</TABLE>
22
<PAGE> 45
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ----------------------------------------------------------------------------------
<C> <C> <S>
10.8 -- Trust Agreement under the Builders Transport, Incorporated Employees Retirement
Savings & Profit Sharing Plan, incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, filed
March 31, 1995
10.9* -- Employment Agreement dated October 1, 1990, by and between the Company and Phillip
M. Adams, as amended, incorporated by reference to Exhibit 10.10 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1992, filed March 22,
1993
10.10* -- Employment Agreement dated October 1, 1990, by and between the Company and P.
Michael Davis, as amended, incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992, filed
March 22, 1993
10.11* -- Employment Agreement dated October 1, 1990, by and between the Company and J.
Barry Moody, as amended, incorporated by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992, filed
March 22, 1993
10.12* -- Employment Agreement dated March 1, 1991, between the Company and Stanford M.
Dinstein, incorporated by reference to Exhibit 10.11 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993, filed March 31, 1994
10.13* -- Employment Agreement dated December 16, 1993, between the Company and John R.
Morris, incorporated by reference to Exhibit 10.13 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993, filed March 31, 1994
10.14 -- Consulting Agreement dated April 30, 1993, between the Company and Two Trees, a
New York general partnership, incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1993, filed
March 31, 1994
10.15 -- Amended and Restated Financing Agreement among the CIT Group/Business Credit,
Inc., National Canada Finance Corp. and Builders Transport, Inc. dated as of Mary
28, 1993, incorporated by reference to Exhibit 10.1 to the Company's Quarterly
Report for the quarter ended June 30, 1993, on Form 10-Q, filed August 12, 1993
10.16 -- Amendment No. 1 dated as of November 11, 1993, to the Amended and Restated
Financing Agreement among the CIT Group/Business Credit, Inc., National Canada
Finance Corp. and Builders Transport, Inc. dated as of May 28, 1993, incorporated
by reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, filed March 31, 1995
10.17 -- Amendment No. 2 effective as of March 31, 1994, to the Amended and Restated
Financing Agreement among the CIT Group/Business Credit, Inc., National Canada
Finance Corp. and Builders Transport, Inc. dated as of May 28, 1993, incorporated
by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994, filed May 11, 1994
10.18 -- Amendment No. 3 effective as of October 1, 1994, to the Amended and Restated
Financing Agreement among the CIT Group/Business Credit, Inc., National Canada
Finance Corp. and Builders Transport, Inc. dated as of May 28, 1993, incorporated
by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, filed March 31, 1995
10.19 -- Amendment No. 4 effective as of February 28, 1995, to the Amended and Restated
Financing Agreement among the CIT Group/Business Credit, Inc., National Canada
Finance Corp. and Builders Transport, Inc. dated as of May 28, 1993, incorporated
by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994, filed March 31, 1995
</TABLE>
23
<PAGE> 46
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- ----------------------------------------------------------------------------------
<C> <C> <S>
10.20 -- Registration Rights Agreement dated August 27, 1993, by and between Vernon Milling
Company, Inc., Elmer Thomas, Builders Transport, Incorporated and Builders
Transport, Inc., incorporated by reference to Exhibit 4.1 to the Company's Report
on Form 8-K, filed September 10, 1993
10.21* -- Builders Transport, Incorporated Amended and Restated Non-Employee Directors'
Stock Option Plan, incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, filed May 11,
1994
10.22 -- Agreement of Purchase and Sale by and between Builders Transport, Incorporated and
Two Trees
10.23 -- Lease Agreement by and between Two Trees and Builders Transport, Incorporated
10.24 -- Amendment No. 5 effective as of December 29, 1995, to the Amended and Restated
Financing Agreement among the CIT Group/Business Credit, Inc.; National Bank of
Canada, as assignee of National Canada Finance Corp.; and Builders Transport, Inc.
dated as of May 28, 1993
10.25 -- Amendment No. 6 effective as of March 25, 1996, to the Amended and Restated
Financing Agreement among the CIT Group/Business Credit, Inc.; National Bank of
Canada, as assignee of National Canada Finance Corp.; and Builders Transport, Inc.
dated as of May 28, 1993
10.26* -- Amendment No. 1 to the Builders Transport, Incorporated Employees Retirement
Savings & Profit Sharing Plan
11 -- Statement re: Computation of Per Share Earnings
21 -- Subsidiaries of the Company, incorporated by reference to Exhibit 21 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, filed
March 31, 1995
23 -- Consent of Independent Auditors
24 -- Powers of Attorney
27 -- Financial Data Schedule
</TABLE>
- ---------------
* Denotes a management contract or compensatory plan or arrangement.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of 1995.
(c) EXHIBITS.
The exhibits required to be filed with this Annual Report on Form 10-K pursuant
to Item 601, of Regulation S-K are listed under "Exhibits" in Part IV, Item
14(a)(3) of this Annual Report on Form 10-K, and are incorporated herein by
reference.
(d) FINANCIAL STATEMENT SCHEDULES.
The Financial Statement Schedules required to be filed with this Annual Report
on Form 10-K are listed under "Financial Statement Schedules" in Part IV, Item
14(a)(2) of this Annual Report on Form 10-K, and are incorporated herein by
reference.
24
<PAGE> 47
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BUILDERS TRANSPORT, INCORPORATED
By: *
------------------------------------
Stanford M. Dinstein
Vice Chairman, Chief Executive
Officer and Director
March 27, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
on Form 10-K has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ----------------
<S> <C> <C>
* Chairman of the Board and March 27, 1996
- --------------------------------------------- Director
David C. Walentas
* Vice Chairman, Chief March 27, 1996
- --------------------------------------------- Executive Officer and
Stanford M. Dinstein Director
* President, Chief Operating March 27, 1996
- --------------------------------------------- Officer and Director
John R. Morris
* Executive Vice President, March 27, 1996
- --------------------------------------------- Administration and Chief
Robert Y. Fox Financial Officer
(Principal Financial
Officer)
* Vice President, March 27, 1996
- --------------------------------------------- Administration and
T. M. Guthrie Treasurer (Principal
Accounting Officer)
* Director March 27, 1996
- ---------------------------------------------
Arthur C. Baxter
</TABLE>
25
<PAGE> 48
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- ----------------
<S> <C> <C>
* Director March 27, 1996
- ---------------------------------------------
Frederick S. Morton
For the Directors and officers indicated above
/s/ T.M. GUTHRIE March 27, 1996
- ---------------------------------------------
T. M. Guthrie
Attorney-in-fact
* T. M. Guthrie, pursuant to Powers of
Attorney dated prior to the date hereof,
executed by the officers and Directors
listed above and filed with the Securities
and Exchange Commission, by signing his
name hereto does hereby sign and execute
this Report on Form 10-K of Builders
Transport, Incorporated, on behalf of the
Company and each of the Directors and
officers indicated above, in the capacities
in which such names appear above.
</TABLE>
26
<PAGE> 49
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -----------------------------------------------------------------------------------------------------------------------------
Additions
------------------------------------
Charged to
Balance at Other
Beginning of Charged to Costs and Accounts- Deductions - Balance at
Descriptions Period Expenses Describe Describe End of Period
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Reserves and allowances
deducted from asset accounts:
Allowance for uncollectible
accounts receivable
- current $ 353,779 $ 261,000 $ (1,205)(2) $ 101,890(1) $ 511,684
-noncurrent 258,210 10,119 99,999(1) 168,330
----------- ----------- --------- ----------- -----------
$ 611,989 $ 271,119 $ (1,205) $ 201,889 $ 680,014
=========== =========== ========= =========== ===========
Reserve for claims payable as
self-insurer $ 6,152,000 $(400,000)(2) $ 5,752,000
Portion of claims payable in
current liabilities 4,478,640 20,665,221 937,109(2) 20,796,066(3) 5,284,904
----------- ----------- --------- ----------- -----------
$10,630,640 $20,665,221 $ 537,109 $20,796,066 $11,036,904
=========== =========== ========= =========== ===========
</TABLE>
(1) Uncollectible accounts written off, net of recoveries.
(2) Transfers between account classifications.
(3) Payments of claims, net of recoveries.
27
<PAGE> 50
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------- ----------- ------------------------ ------------ -----------
ADDITIONS
------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER BALANCE
BEGINNING COSTS AND ACCOUNTS -- DEDUCTIONS -- AT END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
- -------------------------------- ----------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Reserves and allowances deducted
from asset accounts:
Allowance for uncollectible
accounts receivable
-- current.................. $ 200,386 $ 155,441 $ 2,048 (1) $ 353,779
-- noncurrent............... 334,706 76,496 (1) 258,210
----------- ----------- ---------- ------------ -----------
$ 535,092 $ 155,441 $ 0 $ 78,544 $ 611,989
============ ============ ============ ============== ============
Reserve for claims payable as
self-insurer.................. $ 6,156,000 $ (4,000)(2) $ 6,152,000
Portion of claims payable in
current liabilities........... 3,969,236 14,503,706 374,500(4) 14,312,498 (3) 4,478,640
(56,304)(2)
----------- ----------- ---------- ------------ -----------
$10,125,236 $14,503,706 $314,196 $14,312,498 $10,630,640
============ ============ ============ ============== ============
</TABLE>
- ---------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Transfers between account classifications.
(3) Payments of claims, net of recoveries.
(4) Reserves resulting from acquisitions.
28
<PAGE> 51
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
BUILDERS TRANSPORT, INCORPORATED AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------------------- ---------- ------------------------ ------------ -----------
ADDITIONS
------------------------
CHARGED TO
BALANCE AT CHARGED TO OTHER BALANCE
BEGINNING COSTS AND ACCOUNTS -- DEDUCTIONS -- AT END OF
DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD
- ------------------------------- ---------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Reserves and allowances
deducted from asset accounts:
Allowance for uncollectible
accounts receivable
-- current................. $ 432,722 $ 158,141 $ 5,500 (2)(4) $ 395,977 (1) $ 200,386
-- noncurrent.............. 605,131 37,000 (2)(4) 307,425 (1) 334,706
---------- ----------- ---------- ------------ -----------
$1,037,853 $ 158,141 $ 42,500 $ 703,402 $ 535,092
=========== ============ ============ ============== ============
Reserve for claims payable as
self-insurer................. $5,434,000 $ 12,000 $ 710,000 (2) $ 6,156,000
Portion of claims payable in
current liabilities.......... 3,676,556 19,685,737 1,600,700 (2)(4) 20,993,757 (3) 3,969,236
---------- ----------- ---------- ------------ -----------
$9,110,556 $19,697,737 $2,310,700 $20,993,757 $10,125,236
=========== ============ ============ ============== ============
</TABLE>
- ---------------
(1) Uncollectible accounts written off, net of recoveries.
(2) Transfers between account classifications.
(3) Payments of claims, net of recoveries.
(4) Reserves resulting from acquisitions.
29
<PAGE> 52
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. EXHIBIT PAGE NO.
- ------- ------------------------------------------------------------------------ ----------
<C> <C> <S> <C>
3.1 -- Amended and Restated Certificate of Incorporation of the Company,
incorporated by reference to Exhibit 3.1 to the Company's Quarterly
Report for the quarter ended June 30, 1992, on Form 10-Q, filed August
14, 1992................................................................
3.2 -- Amended and Restated Bylaws of the Company, as amended, incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993, filed March 31, 1994..................
4.1 -- Indenture between the Company and The First National Bank of Maryland,
dated as of August 15, 1985, incorporated by reference to Exhibit (4)B
to the Company's Amendment No. 1 to Registration Statement on Form S-1,
filed August 29, 1985 (No. 2-99727).....................................
4.2 -- Indenture between the Company and The First National Bank of Maryland,
dated as of May 1, 1986, incorporated by reference to Exhibit (4)B to
the Company's Amendment No. 1 to Registration Statement on Form S-1,
filed May 1, 1986 (No. 33-5057).........................................
4.3 -- First Supplemental Indenture between the Company and The First National
Bank of Maryland, dated as of September 1, 1986, incorporated by
reference to Exhibit 4a1 to the Company's Quarterly Report for the
quarter ended September 30, 1986 on Form 10-Q, filed November 14,
1986....................................................................
10.1* -- Builders Transport, Incorporated Restated 1986 Incentive Stock Option
Plan, incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,1994, filed
August 11, 1994.........................................................
10.2 -- Stock Purchase Agreement dated as of December 21, 1989, by and between
the Company and AmSouth Bank, N.A., as Trustee (subsequently assigned to
National Bank of Commerce) under the stock benefit plan, incorporated by
reference to Exhibit 1 to the Company's Report on Form 8-K, filed
December 29, 1989.......................................................
10.3 -- Secured Loan Agreement dated as of December 21, 1989, by and among
Builders Transport, Incorporated, the Subsidiaries, and AmSouth Bank,
N.A., as Trustee (subsequently assigned to National Bank of Commerce)
under the stock benefit plan, incorporated by reference to Exhibit 4 to
the Company's Report on Form 8-K, filed December 29, 1989...............
10.4 -- First Amendment dated as of January 1, 1994, to Secured Loan Agreement
dated as of December 21, 1989, (subsequently assigned to National Bank
of Commerce) incorporated by reference to Exhibit 10.4 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, filed
March 31, 1994..........................................................
10.5 -- Pledge Agreement dated as of December 21, 1989, by and among the
Company, the Subsidiaries, and AmSouth Bank, N.A., as Trustee
(subsequently assigned to National Bank of Commerce) under the stock
benefit plan, incorporated by reference to Exhibit 5 to the Company's
Report on Form 8-K filed December 29, 1989..............................
10.6 -- Assignment dated as of December 22, 1992, of Promissory Note, Secured
Loan Agreement, Pledge Agreement, Stock Purchase Agreement and
Indemnification Agreement to National Bank of Commerce as Successor
Trustee pursuant to the Builders Transport, Incorporated and
Subsidiaries Employee Stock Benefit Trust, incorporated by reference to
Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992, filed March 22, 1993...........................
</TABLE>
<PAGE> 53
<TABLE>
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10.7* -- Builders Transport, Incorporated Employees Retirement Savings & Profit
Sharing Plan, as amended and restated, incorporated by reference to
Exhibit 10.7 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, filed March 31, 1995...........................
10.8 -- Trust Agreement under the Builders Transport, Incorporated Employees
Retirement Savings & Profit Sharing Plan, incorporated by reference to
Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, filed March 31, 1995...........................
10.9* -- Employment Agreement dated October 1, 1990, by and between the Company
and Phillip M. Adams, as amended, incorporated by reference to Exhibit
10.10 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992, filed March 22, 1993.................................
10.10* -- Employment Agreement dated October 1, 1990, by and between the Company
and P. Michael Davis, as amended, incorporated by reference to Exhibit
10.11 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992, filed March 22, 1993.................................
10.11* -- Employment Agreement dated October 1, 1990, by and between the Company
and J. Barry Moody, as amended, incorporated by reference to Exhibit
10.12 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992, filed March 22, 1993.................................
10.12* -- Employment Agreement dated March 1, 1991, between the Company and
Stanford M. Dinstein, incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993, filed March 31, 1994..............................................
10.13* -- Employment Agreement dated December 16, 1993, between the Company and
John R. Morris, incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1993, filed March 31, 1994..............................................
10.14 -- Consulting Agreement dated April 30, 1993, between the Company and Two
Trees, a New York general partnership, incorporated by reference to
Exhibit 10.14 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, filed March 31, 1994...........................
10.15 -- Amended and Restated Financing Agreement among the CIT Group/Business
Credit, Inc., National Canada Finance Corp. and Builders Transport, Inc.
dated as of May 28, 1993, incorporated by reference to Exhibit 10.1 to
the Company's Quarterly Report for the quarter ended June 30, 1993, on
Form 10-Q, filed August 12, 1993........................................
10.16 -- Amendment No. 1 dated as of November 11, 1993, to the Amended and
Restated Financing Agreement among the CIT Group/Business Credit, Inc.,
National Canada Finance Corp. and Builders Transport, Inc. dated as of
May 28, 1993, incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..............................................
10.17 -- Amendment No. 2 effective as of March 31, 1994, to the Amended and
Restated Financing Agreement among the CIT Group/Business Credit, Inc.,
National Canada Finance Corp. and Builders Transport, Inc. dated as of
May 28, 1993, incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
filed May 11, 1994......................................................
</TABLE>
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10.18 -- Amendment No. 3 effective as of October 1, 1994, to the Amended and
Restated Financing Agreement among the CIT Group/Business Credit, Inc.,
National Canada Finance Corp. and Builders Transport, Inc. dated as of
May 28, 1993, incorporated by reference to Exhibit 10.18 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..............................................
10.19 -- Amendment No. 4 effective as of February 28, 1995, to the Amended and
Restated Financing Agreement among the CIT Group/Business Credit, Inc.,
National Canada Finance Corp. and Builders Transport, Inc. dated as of
May 28, 1993, incorporated by reference to Exhibit 10.19 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..............................................
10.20 -- Registration Rights Agreement dated August 27, 1993, by and between
Vernon Milling Company, Inc., Elmer Thomas, Builders Transport,
Incorporated and Builders Transport, Inc., incorporated by reference to
Exhibit 4.1 to the Company's Report on Form 8-K, filed September 10,
1993....................................................................
10.21* -- Builders Transport, Incorporated Amended and Restated Non-Employee
Directors' Stock Option Plan, incorporated by reference to Exhibit 10.1
to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994, filed May 11, 1994......................................
10.22 -- Agreement of Purchase and Sale by and between Builders Transport,
Incorporated and Two Trees..............................................
10.23 -- Lease Agreement by and between Two Trees and Builders Transport,
Incorporated............................................................
10.24 -- Amendment No. 5 effective as of December 29, 1995, to the Amended and
Restated Financing Agreement among the CIT Group/Business Credit, Inc.;
National Bank of Canada, as assignee of National Canada Finance Corp.;
and Builders Transport, Inc. dated as of May 28, 1993...................
10.25 -- Amendment No. 6 effective as of March 25, 1996, to the Amended and
Restated Financing Agreement among the CIT Group/Business Credit, Inc.;
National Bank of Canada, as assignee of National Canada Finance Corp.;
and Builders Transport, Inc. dated as of May 28, 1993...................
10.26* -- Amendment No. 1 to the Builders Transport, Incorporated Employees
Retirement Savings & Profit Sharing Plan................................
11 -- Statement re: Computation of Per Share Earnings.........................
21 -- Subsidiaries of the Company, incorporated by reference to Exhibit 21 to
the Company's Annual Report on Form 10-K for the year ended December 31,
1994, filed March 31, 1995..............................................
23 -- Consent of Independent Auditors.........................................
24 -- Powers of Attorney......................................................
27 -- Financial Data Schedule.................................................
</TABLE>
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* Denotes a management contract or compensatory plan or arrangement.
<PAGE> 1
EXHIBIT 10.22
STATE OF SOUTH CAROLINA )
) AGREEMENT OF PURCHASE AND SALE
COUNTY OF KERSHAW )
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement"), made and entered into
this 11th day of October, 1995, by and between BUILDERS TRANSPORT,
INCORPORATED (hereinafter "Seller") and TWO TREES, a New York General
Partnership (hereinafter "Purchaser").
W I T N E S S E T H:
WHEREAS, Seller is the lessee under that certain Lease Agreement with
Kershaw County dated April 1, 1980, and recorded in Book IN, Page 2701, as
amended, records of Kershaw Co. (hereinafter the "Lease") of that certain tract
or parcel of land containing 28.765 acres in Kershaw County, South Carolina,
more particularly shown and described on the attached Exhibit A (hereinafter
the "Property"); and
WHEREAS, pursuant to the terms of the Lease, Kershaw County shall convey
the Property to Seller upon payment of the indebtedness to Citizens and
Southern National Bank of South Carolina now NationsBank;
WHEREAS, the said indebtedness has been paid and Seller desires to convey
its right to receive the Property to Purchaser.
WHEREAS, Purchaser desires to purchase from Seller the Property and Seller
desires to sell and transfer the same to Purchaser.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
PROPERTY TO BE SOLD
1.1 Property. Seller agrees to sell and Purchaser agrees to buy the
Property pursuant to the terms and conditions set forth herein.
1.2 Description of Property. The Property shall consist of the land
shown and described on Exhibit A, together with all improvements located
thereon and all rights, privileges and easements appurtenant to the Property,
including all rights-of-way, roadways, roadbeds and reversions or other
appurtenances used in connection with the beneficial use of the Property.
<PAGE> 2
ARTICLE II
PURCHASE PRICE
2.1 Payment of Purchase Price. The purchase price for the Property shall
be Three Million Five Hundred Thousand and No/100 ($3,500,000.00) Dollars
(hereinafter the "Purchase Price") to be paid at Closing by wire transfer to
the closing attorney's trust account.
ARTICLE III
SELLER'S REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
In order to induce Purchaser to enter into this Agreement and to purchase
the Property, in addition to warranties, representations and undertakings
contained elsewhere in this Agreement, Seller hereby makes the following
representations, warranties and covenants, each of which is material and is
relied upon by Purchaser:
3.1 Title to Property. Seller has the right to receive from Kershaw
County good and marketable fee simple title to all of the Property, title
insurable free and clear of all liens, claims, options, encumbrances,
rights-of-way, easements, conditions, covenants and restrictions except for the
permitted encumbrances under Paragraph 5.2.
3.2 Authority of Seller. Seller has the right, power and authority to
enter into this Agreement and to sell the Property in accordance with the terms
and conditions hereof. This Agreement, when executed and delivered by Seller,
will be a valid and binding obligation of Seller in accordance with its terms.
3.3 Zoning. The current zoning classification for the Property permits
its use as an office building.
3.4 No Special Taxes. Seller is current with all real property taxes and
the Property is free from special taxes or assessments.
3.5 Options. No options or other contracts have been granted or entered
into which are still outstanding and which give any other party a right to
purchase the Property or any part thereof.
3.06 Insurance. Intentionally Deleted
3.07 Condemnation Proceedings: Roadways. There are no condemnation or
eminent domain proceedings pending or to the best knowledge of Seller
contemplated against the Property or any part thereof and the Seller has
received no notice, oral or written, of
2
<PAGE> 3
the desire of any public authority or other entity to take or use the
Property. The Property connects to and has access to an adjacent public road.
3.08 Mechanic's Liens. No payments for work, materials, or improvements
furnished to the Property will be due or owing at Closing and Seller shall
execute standard mechanics lien, affidavit or waiver forms as may be required
by Purchaser's title insurance company.
3.09 Pending Litigation. There is no claim, litigation, or other
proceeding, pending or threatened before any court, commission, or other body
or authority relating to the Property or its operation and further, Seller has
not received written notification of any asserted failure of Seller to comply
with applicable laws (whether statutory or not) or any rule, regulation, order,
ordinance, judgment or decree of any federal, municipal or other governmental
authority relating to the Property.
3.10 Utilities. The Property is currently served by public sanitary and
storm sewers, public water facilities, and electrical facilities (collectively
the "Utilities").
3.11 Condition of Property. The Property is in good condition and repair.
3.12 Events Prior to Closing. Seller will not cause or permit any action
to be taken which would cause any of Seller's representations or warranties to
be untrue as of the Closing. Seller agrees to notify Purchaser in writing of
any event or condition known to Seller which occurs prior to Closing hereunder,
which causes a change in the facts related to, or the truth of any of Seller's
representations.
3.13 Further Acts of Seller. On or before the closing, Seller will do,
make, execute and deliver all such additional and further acts, deeds,
instruments and documents as may be reasonable to completely vest in and assure
to Purchaser full rights in or to the Property.
3.14 Hazardous Substances. Seller represents and warrants to Purchaser
that to the best of Seller's knowledge (i) the Property has not been used as a
treatment, storage or disposal facility for hazardous wastes or hazardous
substances as those terms are defined by any federal or state statute or
regulation including, without limitation, the Resource Conservation and
Recovery Act of 1976, the Toxic Substances Control Act of 1976, the Safe
Drinking Water Act of 1977, or the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, or any other federal or state statutes,
including all amendments to and regulations under such statutes; (ii) there is
no state of facts creating potential liability for remedial action or third
party
3
<PAGE> 4
liability for property damage or personal injury from environmental
impairment under any federal, state or local statute, regulation, ordinance or
common law; (iii) the Property is free of hazardous substances or hazardous
wastes, as defined by the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 ("CERCLA") as amended, 42 U.S.C. Section 9601 et
seq., the Resource Conservation and Recovery Act of 1976 "RCRA"), 42 U.S.C.
Section 6901 et seq., or any other applicable federal or state law or
regulation; and (iv) there are no conditions on the Property which constitute a
violation of any environmental laws. Seller makes the foregoing
representations and warranties in good faith, but without having made any
investigation as to environmental matters.
ARTICLE IV
PURCHASER'S WARRANTIES AND REPRESENTATIONS
4.1 Purchaser's Authority. This Agreement, when executed and delivered
by Purchaser, will be a valid and binding obligation of Purchaser in accordance
with its terms. Purchaser has the requisite power and authority to consummate
the transaction contemplated herein.
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
The following shall be conditions precedent to the Purchaser's obligations
to purchase the Property. Unless otherwise specified in this Article V, if any
of the conditions precedent set forth below are not satisfied as of Closing,
the Earnest Money shall be returned to Purchaser, this Agreement shall be null
and void, and neither Purchaser nor Seller shall have any further obligation
hereunder.
5.1 Representations and Warranties. The representations, warranties,
covenants and agreements of Seller set forth herein shall be true and in full
force and effect as of closing.
5.2 Status of Title. Purchaser shall have thirty (30) days from the date
hereof to obtain a title search and submit to Seller notice in writing of any
objections to title which render same unmarketable. Seller shall have thirty
(30) days from the receipt of the aforesaid notice to correct at Seller's
expense the title defects indicated. If, at the end of said period Seller has
not corrected to Purchaser's reasonable satisfaction the objections to title,
Purchaser may (1) waive its objections and consummate the within transaction
without a reduction in the purchase price or (2) terminate this Agreement and
receive a refund of the Earnest Money, in which event this Agreement shall be
void.
4
<PAGE> 5
5.3 No Change in Operation of Property. Seller shall continue to
maintain and hold the Property in the same manner between the date hereof and
the Date of Closing, as it has prior to the date hereof and shall make no
changes in the condition of the Property.
5.4 Financing. Purchaser shall be able to obtain a loan to purchase the
Property for no less than Three Million Five Hundred Thousand and No/100
($3,500,000.00) Dollars payable over no less than five years (5) years at an
interest rate of no more than Ten and One-Fourth (10.25%) percent.
ARTICLE VI
CLOSING
6.1 Closing. The purchase and sale contemplated hereunder shall be
consummated at the closing (referred to herein as the "Closing") which shall
take place no later than ninety (90) days from the date hereof ("Date of
Closing"). The Closing shall take place at a mutually agreeable time, date and
location.
ARTICLE VII
PRO-RATED ITEMS AND ADJUSTMENTS
7.1 Deed Stamps and Transfer Taxes. Seller shall be responsible for the
cost of any and all deed stamps and transfer taxes or fees and Purchaser shall
pay for the recording fees of this transaction.
7.2 Legal Fees. Purchaser and Seller shall each pay their own legal fees
related to this transaction.
7.3 Taxes. Taxes for the current year shall be prorated to Date of
Closing. Purchaser acknowledges that 23.77 acres of the Property are
classified as agricultural for tax purposes and any change of use of the parcel
will result in roll-back taxes. Purchaser shall be responsible for any such
roll-back taxes.
7.4 Prorations and Adjustments. The adjustments and prorations required
under this Agreement shall be computed as of the Date of Closing and the cash
portion of the purchase price paid to Seller hereunder shall be adjusted to
reflect such prorations. In the event that accurate prorations and other
adjustments cannot be made at Closing because current bills are not obtainable,
the parties shall prorate on the best available information, subject to
adjustment upon receipt of the necessary information.
ARTICLE VIII
SELLER'S DELIVERIES AT CLOSING
In addition to other conditions precedent set forth elsewhere in this
Agreement, Seller shall deliver to Purchaser at Closing the
5
<PAGE> 6
following documents, the delivery and accuracy of which shall be further
conditions Purchaser's obligations to consummate the purchase and sale herein
contemplated.
8.1 Assignment. Assignment of Sellers right to receive the Property from
Kershaw County which assignment shall be in form and substance satisfactory to
counsel for the Purchaser.
8.2 Warranty Deed. A Special Warranty Deed from Kershaw County
satisfactory in form and substance to counsel for Purchaser, conveying good and
marketable fee simple title to the Property, free and clear of all liens,
encumbrances, easements and restrictions of every nature and description,
except as specifically approved by Purchaser.
8.3 Owner's Affidavit. An Owner's Affidavit or lien waiver satisfactory
for the purpose of removing the mechanics lien exception from Purchaser's
Owner's Title Insurance Policy.
8.4 Termite Report. Intentionally Deleted
8.5 Tax Affidavit. An Affidavit in the form required by the South
Carolina Tax Commission to meet withholding requirements. Based upon the
Affidavit the closing attorney will comply with the withholding requirements of
the state of South Carolina.
8.6 Survey. Seller shall obtain at Seller's expense and deliver at
Closing a current survey of the Property suitable for recording and use as the
legal description of the Property for the deed.
8.7 Foreign Affidavit. An affidavit of Seller pursuant to Section
1445(b)(2) of the Internal Revenue Code of 1986 to the effect that Seller is
not a "foreign person: as defined therein.
8.8 Miscellaneous Forms and Affidavits. Such other forms and affidavits
as may reasonably be requested by Purchaser's attorney and standard in a
transaction of this nature.
ARTICLE IX
PURCHASER'S DELIVERIES AT CLOSING
At Closing and after Seller has duly complied with the provisions of
Article VIII, Purchaser shall deliver the purchase price, by wire transfer or
other good funds, adjusted for the proration required in connection with the
Closing.
ARTICLE X
CONDEMNATION AND RISK OF LOSS
10.1 Condemnation. In the event of condemnation or receipt of notice of
condemnation or taking of the Property by
6
<PAGE> 7
governmental authority prior to the Closing, Purchaser, at its option, shall
have the right to terminate this Agreement.
10.2 Risk of Loss. In the event the Property is materially damaged or
destroyed by fire, flood or other casualty on or after the effective date of
this Agreement, but prior to the Closing, Purchaser shall have the option of
notifying Seller in writing within fifteen (15) days of the damage or
destruction of the Property, that this Agreement is terminated.
ARTICLE XI
REAL ESTATE COMMISSION
11.1 Real Estate Commissions. The parties acknowledge that a real estate
commission in the amount of $200,000.00 shall be due and payable to Purchaser
and Seller shall be responsible for the payment of same. Seller warrants and
represents to Purchaser that no other real estate commission shall be payable
in connection with this transaction as a result of Seller's activities. Seller
agrees to indemnify and hold Purchaser harmless from and against any claims of
any real estate broker or agent with which Seller has engaged or dealt with in
connection with this transaction.
ARTICLE XII
DEFAULT
12.1 Default. If Seller or Purchaser has performed its covenants and
agreements hereunder, but the other party has breached its covenants and
agreements hereunder and has failed, refused, or is unable to consummate the
purchase and sale contemplated herein, then the non-defaulting party shall be
entitled to any and all remedies at law or equity, including, without
limitation, specific performance. If Purchaser has performed its covenants and
agreements hereunder but Seller has breached its covenants and agreements under
this Agreement and has failed, refused or is unable to consummate the purchase
and sale contemplated herein, the Purchaser shall be entitled to an action for
specific performance of this Agreement.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Completeness and Modification. This Agreement constitutes the
entire agreement between the parties hereto with respect to the transactions
contemplated herein and it supersedes all prior discussions, undertakings or
agreements between the parties. This Agreement shall not be modified except by
a written agreement executed by both parties.
7
<PAGE> 8
13.2 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, and their respective successors and assigns.
13.3 Waiver. Failure by Purchaser or Seller to insist upon or enforce
any of its rights hereunder shall not constitute a waiver thereof.
13.4 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of South Carolina.
13.5 Article Headings. The Article Headings as herein used are for
convenience or reference only and shall not be deemed to vary the content of
this Agreement or the covenants, agreements, representations, and warranties
herein set forth or limit the provisions or scope of any Article.
13.6 Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.
13.7 Time of Essence. Both parties hereto specifically agree that time
is of the essence to this Agreement.
13.8 Counterparts. To facilities execution, this Agreement may be
executed in as many counterparts as any be required.
13.9 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be personally delivered or mailed by
First Class, Registered or Certified Mail, return receipt requested, postage
prepaid, as follows:
(a) If to Purchaser: 111 West 57th Street
Suite 1000
New York, New York 10019
(b) If to Seller: 2029 W. DeKalb Street
Camden, South Carolina 29020
Any such notice, request, consent or other communication shall be deemed
received at such time as it is personally delivered or on third business day
after it is mailed, as the case may be.
13.10 Invalid Provisions. In the event any one or more of the provisions
contained in this Agreement shall be for any reason held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement; this Agreement shall be
constructed as if such invalid, illegal or unenforceable provision had never
been contained herein or therein.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WITNESSES: SELLER:
BUILDERS TRANSPORT, INCORPORATED
/s/ John C. Stewart, Jr. By: /s/ Robert Fox
- -------------------------- -----------------------------
/s/ Jennifer M. Markle Its: V.P. & CFO
- -------------------------- -------------------------
/s/ John C. Stewart, Jr. Attest: /s/ J. Ray Hardy
- -------------------------- -------------------------
/s/ Jennifer M. Markle Its: Asst. Secretary
- -------------------------- -------------------------
[CORPORATE SEAL]
PURCHASER:
WITNESSES: TWO TREES, a New York General
Partnership
/s/ By: /s/ Stanford M. Dinstein
- -------------------------- ----------------------------
/s/ Judy Gluck Its: Attorney-in-Fact
- -------------------------- ------------------------
9
<PAGE> 10
EXHIBIT "A"
LEGAL DESCRIPTION
All that piece, parcel or tract of land, lying and
being situate near City of Camden, County of Kershaw,
State of South Carolina, containing approximately
twenty eight and 78/100ths (28.78) acres, more or
less, and being more particularly described as
follows:
Point of Beginning (iron pipe corner) located 372 feet
southeast from the centerline of Battleship Road
Extension measured along the right of way of U.S.
Highway No. 1; thence continuing in a southeasterly
direction along the right of way of U.S. No. 1 South
75 degrees -51'-47" East a distance of 450.0 feet; thence in
southeasterly direction South 24 degrees -36'-40" East a
distance of 1133.95' to right-of-way of C.S.X.
Railroad; thence in a southwesterly direction along
right-of-way of C.S.X. Railroad South 65 degrees -22'-28" West
a distance of 642.74 feet; thence South 65 degrees -15'-00"
West a distance of 550.82 feet; thence South
63 degrees -57'-44" West a distance of 300.40 feet; thence in
a northerly direction North 14 degrees -06'-52' East a
distance of 196.63 feet; thence North 14 degrees -07'-37" East
a distance of 494.59 feet; thence North 14 degrees -06'-14"
East a distance of 754.70 feet; thence North
14 degrees -11'-05" East a distance of 380.46 feet to the
Point of Beginning.
The above-described property is shown and described on
a survey prepared by Daniel D. Riddick, Professional
Surveyor No. 3322B on August 16, 1995, revised
September 27, 1995 and recorded October 2, 1995, in
Plat Book B-1 at Page 2, Records of Kershaw County,
which is incorporated herein by reference and made a
part hereof.
This being the same property conveyed to Two Trees by
deed from the County of Kershaw recorded October
_____, 1995, in the office of the Clerk of Court for
Kershaw County, in Deed Book ______at Page ______.
Tax Map Number: 284-00-00-007
10
<PAGE> 1
EXHIBIT 10.23
LEASE AGREEMENT
BETWEEN
TWO TREES, A NEW YORK GENERAL PARTNERSHIP
AS LESSOR
AND
BUILDERS TRANSPORT, INC., A GEORGIA CORPORATION,
AS LESSEE
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO CHAPTER 48 OF TITLE 15 OF
THE 1976 CODE OF LAWS OF SOUTH CAROLINA, AS AMENDED, WHICH ARBITRATION
PROVISIONS ARE SET FORTH IN ARTICLE XXXI OF THIS AGREEMENT.
i
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
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<S> <C> <C>
ARTICLE I
LEASED PROPERTY; TERM................................. 1
---------------------
ARTICLE II
RENT.................................................. 2
----
2.1 MINIMUM RENT AND ADJUSTMENTS TO MINIMUM RENT.......... 2
2.2 [INTENTIONALLY DELETED]............................... 2
2.3 ADDITIONAL CHARGES.................................... 2
2.4 NET LEASE............................................. 2
ARTICLE III
IMPOSITION............................................ 2
-----------
3.1 PAYMENT OF IMPOSITIONS................................ 3
3.2 PRORATION OF IMPOSITIONS.............................. 3
3.3 UTILITY CHARGES....................................... 3
3.4 INSURANCE PREMIUM .................................... 4
ARTICLE IV
NO TERMINATION........................................ 4
--------------
ARTICLE V
OWNERSHIP OF LEASED PROPERTY
AND LESSEE'S PERSONAL PROPERTY........................ 4
------------------------------
5.1 OWNERSHIP OF THE PROPERTY............................. 4
5.2 LESSEE'S PERSONAL PROPERTY............................ 4
ARTICLE VI
CONDITION AND USE OF LEASED PROPERTY.................. 5
------------------------------------
6.1 CONDITION OF THE LEASED PROPERTY...................... 5
6.2 USE OF THE LEASED PROPERTY............................ 5
6.3 LESSOR TO GRANT EASEMENTS ............................ 6
ARTICLE VII
LEGAL, INSURANCE AND FINANCIAL REQUIREMENTS........... 6
-------------------------------------------
7.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS...... 6
7.2 LEGAL REQUIREMENT COVENANTS........................... 6
7.3 SUPPORT FOR PAYMENT OBLIGATIONS....................... 6
ARTICLE VIII
REPAIRS, RESTRICTIONS................................. 7
---------------------
8.1 MAINTENANCE AND REPAIR................................ 7
8.2 [INTENTIONALLY DELETED]............................... 8
8.3 ENCROACHMENTS; RESTRICTIONS........................... 8
</TABLE>
ii
<PAGE> 3
ARTICLE IX
CAPITAL ADDITIONS.................................... 8
-----------------
9.1 CONSTRUCTION OF CAPITAL ADDITIONS TO THE LEASED
PROPERTY............................................. 8
9.2 [INTENTIONALLY DELETED].............................. 9
9.3 [INTENTIONALLY DELETED].............................. 9
9.4 TITLE TO CAPITAL ADDITIONS........................... 9
9.5 SALVAGE.............................................. 9
ARTICLE X
LIENS................................................ 9
-----
ARTICLE XI
PERMITTED CONTESTS................................... 9
------------------
ARTICLE XII
INSURANCE............................................ 10
---------
12.1 GENERAL INSURANCE REQUIREMENTS....................... 10
12.2 REPLACEMENT COST..................................... 11
12.3 ADDITIONAL INSURANCE................................. 12
12.4 WAIVER OF SUBROGATION................................ 12
12.5 FORM OF INSURANCE.................................... 12
12.6 CHANGE IN LIMITS..................................... 12
12.7 BLANKET POLICY....................................... 12
12.8 NO SEPARATE INSURANCE................................ 13
ARTICLE XIII
FIRE AND CASUALTY.................................... 13
-----------------
13.1 INSURANCE PROCEEDS................................... 13
13.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR
DESTRUCTION COVERED BY INSURANCE.................... 13
13.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR
DESTRUCTION NOT COVERED BY INSURANCE................ 13
13.4 LESSEE'S PROPERTY.................................... 14
13.5 RESTORATION OF CAPITAL ADDITIONS PAID FOR BY LESSEE.. 14
13.6 NO ABATEMENT OF RENT................................. 14
13.7 DAMAGE NEAR END OF TERM.............................. 14
13.8 WAIVER............................................... 14
ARTICLE XIV
CONDEMNATION......................................... 14
------------
14.1 PARTIES' RIGHTS AND OBLIGATIONS...................... 14
14.2 TOTAL TAKING......................................... 14
14.3 PARTIAL TAKING....................................... 15
14.4 RESTORATION 15
14.5 AWARD DISTRIBUTION 15
14.6 TEMPORARY TAKING 15
iii
<PAGE> 4
ARTICLE XV
DEFAULT.............................................. 15
-------
15.1 EVENTS OF DEFAULT.................................... 15
15.2 REMEDIES............................................. 16
15.3 ADDITIONAL EXPENSES.................................. 18
15.4 WAIVER .............................................. 18
15.5 APPLICATION OF FUNDS................................. 18
15.6 NOTICES BY LESSOR.................................... 18
ARTICLE XVI
LESSOR'S RIGHT TO CURE............................... 18
----------------------
ARTICLE XVII
PURCHASE OF THE LEASED PROPERTY...................... 19
-------------------------------
ARTICLE XVIII
HOLDING OVER......................................... 19
------------
ARTICLE XIX
[INTENTIONALLY DELETED].............................. 20
ARTICLE XX
[INTENTIONALLY DELETED].............................. 20
ARTICLE XXI
RISK OF LOSS......................................... 20
------------
ARTICLE XXII
INDEMNIFICATION...................................... 20
---------------
ARTICLE XXIII
SUBLETTING AND ASSIGNMENT............................ 21
--------------------------
ARTICLE XXIV
OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS...... 21
-----------------------------------------------
ARTICLE XXV
INSPECTION........................................... 21
----------
ARTICLE XXVI
QUIET ENJOYMENT...................................... 21
---------------
ARTICLE XXVII
NOTICES.............................................. 22
-------
ARTICLE XXVIII
APPRAISAL............................................ 22
---------
iv
<PAGE> 5
ARTICLE XXIX
[INTENTIONALLY DELETED].............................. 23
ARTICLE XXX
DEFAULT BY LESSOR.................................... 23
-----------------
30.1 DEFAULT BY LESSOR.................................... 23
30.2 LESSEE'S RIGHT TO CURE............................... 24
ARTICLE XXXI
ARBITRATION.......................................... 24
-----------
31.1 CONTROVERSIES........................................ 24
31.2 APPOINTMENT OF ARBITRATORS........................... 24
31.3 THIRD ARBITRATOR..................................... 24
31.4 ARBITRATION PROCEDURE................................ 25
31.5 EXPENSES............................................. 25
ARTICLE XXXII
FINANCING OF THE LEASED PROPERTY..................... 25
--------------------------------
ARTICLE XXXIII
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE........ 25
---------------------------------------------
ARTICLE XXXIV
EXTENDED TERMS....................................... 26
--------------
ARTICLE XXXV
MISCELLANEOUS ....................................... 26
-------------
35.1 NO WAIVER............................................ 26
35.2 REMEDIES CUMULATIVE.................................. 26
35.3 SURRENDER............................................ 27
35.4 [INTENTIONALLY DELETED].............................. 27
35.5 TRANSFERS BY LESSOR.................................. 27
35.6 GENERAL ............................................. 27
35.7 TRANSFER OF LICENSES................................. 27
35.8 MEMORANDUM OF LEASE ................................. 28
ARTICLE XXXVI
GLOSSARY OF TERMS.................................... 28
-----------------
v
<PAGE> 6
LEASE
THIS LEASE ("Lease") dated as of October 11, 1995, is entered into by and
between TWO TREES, a New York general partnership, having its principal office
at 111 West 57th Street, New York, New York 10019 ("Lessor") and BUILDERS
TRANSPORT, INC., A GEORGIA CORPORATION, having its principal office at 2029 W.
DeKalb Street, Camden, South Carolina 29020 ("Lessee").
ARTICLE I
LEASED PROPERTY; TERM
Upon and subject to the terms and conditions hereinafter set forth, Lessor
leases to Lessee and Lessee rents from Lessor all of Lessor's rights and
interest in and to the following property (collectively, the "Leased
Property"):
(a) the real property described on Exhibit A attached hereto (the "Land");
(b) all buildings, structures, Fixtures (as hereinafter defined) and other
improvements of every kind including all alleyways and connecting tunnels,
crosswalks, sidewalks, utility pipes, conduits and lines (on-site and
off-site), parking areas and roadways appurtenant to such buildings and
structures presently or hereafter situated upon the Land, and Capital Additions
(collectively, the "Leased Improvements");
(c) all easements, rights and appurtenances relating to the Land and the
Leased Improvements;
(d) all permanently affixed equipment, machinery, fixtures and other items
of real and/or personal property, including all components thereof, now and
hereafter located in, on or used in connection with, and permanently affixed to
or incorporated into the Leased Improvements, including all furnaces, boilers,
heaters, electrical equipment, heating, plumbing, lighting, ventilating,
refrigerating, incineration, air and water pollution control, waste disposal,
air-cooling and air conditioning systems and apparatus, sprinkler systems and
fire and theft protection equipment, carpet, and moveable or immovable walls or
partitions, all of which are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto (collectively the "Fixtures");
(e) to the extent permitted by law, all permits, approvals, and other
intangible property or any interest therein now or hereafter owned or held by
Lessor in connection with the Leased Property; and
(f) all site plans, surveys, soil and substrata studies, architectural
drawings, plans and specifications, engineering plans and studies, floor plans,
landscape plans, and other plans and studies that relate to the Land or the
Leased Improvements and are in Lessor's possession or control.
SUBJECT, HOWEVER, to the matters set forth on Exhibit B attached hereto
(the "Permitted Exceptions"), to have and to hold for a fixed term of five (5)
years (the "Fixed
<PAGE> 7
Term") commencing on October 12, 1995 (the "Commencement Date") and ending at
midnight on the last day of the sixtieth (60th) month after the Commencement
Date, with four (4) successive optional renewal periods of five (5) years each.
ARTICLE II
RENT
2.1 MINIMUM RENT AND ADJUSTMENTS TO MINIMUM RENT. Lessee shall pay to
Lessor, without notice, demand, set off or counterclaim, in advance in lawful
money of the United States of America, at Lessor's address set forth herein or
at such other place or to such other person, firms or corporations as Lessor
from time to time may designate in writing, Minimum Rent (the "Minimum Rent")
for the Leased Property, in the annual sum of $453,900.00 payable in advance in
twelve (12) equal, consecutive monthly installments of $37,825.00 each, on the
first day of each calendar month of the Fixed Term. Minimum Rent shall be
prorated as to any partial month, and is subject to adjustment for each
Extended Term as provided in Article XXXIV.
2.2 [INTENTIONALLY DELETED]
2.3 ADDITIONAL CHARGES. Lessee will also pay and discharge as and when due
(a) all other amounts, liabilities, obligations and Impositions which Lessee
assumes or agrees to pay under this Lease, and (b) in the event of any failure
on the part of Lessee to pay any of those items referred to in clause (a)
above, Lessee will also promptly pay and discharge every fine, penalty,
interest and cost which may be added for non-payment or late payment of such
items (the items referred to in clauses (a) and (b) above being referred to
herein collectively as the "Additional Charges"), and Lessor shall have all
legal, equitable and contractual rights, powers and remedies provided in this
Lease, by statute or otherwise, in the case of non-payment of the Additional
Charges, as well as the Minimum Rent. If any installment of Minimum Rent or
Additional Charges (but only as to those Additional Charges which are payable
directly to Lessor) shall not be paid within ten (10) days after the date when
due, Lessee will pay Lessor on demand, as Additional Charges, a late charge
equal to five (5%) percent of the overdue installment to cover the expenses
associated with such late payment plus interest (to the extent permitted by
law) computed at the Overdue Rate on the amount of such installment, from the
due date when due to the date of payment in fall thereof. To the extent that
Lessee pays any Additional Charges to Lessor pursuant to any requirement of
this Lease, Lessee shall be relieved of its obligation to pay such Additional
Charges to the entity to which such Additional Charges would otherwise be due.
2.4 NET LEASE. The Rent shall be paid absolutely net to Lessor, so that
this Lease shall yield to Lessor the full amount of the installments of Minimum
Rent and the payments of Additional Charges throughout the Term but subject to
any provisions of this Lease which expressly provide for payments by Lessor or
the adjustment of the Rent or other charges.
ARTICLE III
IMPOSITIONS
2
<PAGE> 8
3.1 PAYMENT OF IMPOSITIONS. Subject to Article XI relating to permitted
contests, Lessee will pay, or cause to be paid, all Impositions before any
fine, penalty, interest or cost may be added for nonpayment, such payments to
be made directly to the taxing authorities where feasible, and Lessee will
promptly, upon request, furnish to Lessor copies of official receipts or other
satisfactory proof evidencing such payments. Lessee's obligation to pay such
Impositions and the amount thereof shall be deemed absolutely fixed upon the
date such Impositions become a lien upon the Leased Property or any part
thereof. If any such Imposition may lawfully be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Imposition), Lessee
may exercise the option to pay the same (and any accrued interest on the unpaid
balance of such Imposition) in installments and, in such event, shall pay such
installments during the Term hereof as the same become due and before any fine,
penalty, premium, further interest or cost may be added thereto. Lessor, at
its expense, shall, to the extent permitted by applicable law, prepare and file
all tax returns and reports as may be required by governmental authorities in
respect of Lessor's net income, gross receipts and franchise taxes. Lessee, at
its expense, shall, to the extent permitted by applicable laws and regulations,
prepare and file all other tax returns and reports in respect of any Imposition
as may be required by governmental authorities. If any refund shall be due
from any taxing authority in respect of any Imposition paid by Lessee, the same
shall be paid over to or retained by Lessee if no Event of Default shall have
occurred hereunder and be continuing. Any such funds retained by Lessor due to
an Event of Default shall be applied as provided in Article XV. Lessor and
Lessee shall, upon request of the other, provide such data as is maintained by
the party to whom the request is made with respect to the Leased Property as
may be necessary to prepare any required returns and reports. In the event
governmental authorities classify any property covered by this Lease as
personal property, Lessee shall file all personal property tax returns in such
jurisdictions where filing is required. Lessor and Lessee will provide the
other party, upon request, with cost and depreciation records necessary for
filing returns for any property so classified as personal property. Where
Lessor is legally required to file personal property tax returns, and Lessee is
obligated for the same hereunder, Lessee will be provided with copies of
assessment notices in sufficient time for Lessee to file a protest. Lessee
may, upon giving 30 days' prior written notice to Lessor, at Lessee's option
and at Lessee's sole cost and expense, protest, appeal, or institute such other
proceedings as Lessee may deem appropriate to effect a reduction of real estate
or personal property assessments and Lessor, if requested by Lessee and at
Lessee's expense as aforesaid, shall fully cooperate with Lessee in such
protest, appeal, or other action. Lessor will cooperate with Lessee in order
that Lessee may fulfill its obligations hereunder, including the execution of
any instruments or documents reasonably requested by Lessee.
3.2 PRORATION OF IMPOSITIONS. Impositions imposed in respect of the
tax-fiscal period during which the Term terminates shall be prorated between
Lessor and Lessee, whether or not such Imposition is imposed before or after
such termination, and Lessee's and Lessor's obligation to pay their prorated
shares thereof shall survive such termination.
3.3 UTILITY CHARGES. Lessee will contract for, in its own name, and will
pay or cause to be paid all charges for, electricity, power, gas, oil, water
and other utilities used on the Leased Property during the Term.
3
<PAGE> 9
3.4 INSURANCE PREMIUM. Lessee will contract for, in its own name, and will
pay or cause to be paid all premiums for, the insurance coverage required to be
maintained by Lessee pursuant to Article XII during the Term.
ARTICLE IV
NO TERMINATION
Except as provided in this Lease, Lessee shall remain bound by this Lease
in accordance with its terms and shall neither take any action without the
consent of Lessor to modify, surrender or terminate the same, nor seek nor be
entitled to any abatement, deduction, deferment or reduction of Rent, or
set-off against the Rent, nor shall the respective obligations of Lessor and
Lessee be otherwise affected by reason of (a) any damage to, or destruction of,
the Leased Property or any portion thereof from whatever cause or any Taking of
the Leased Property or any portion thereof, (b) the lawful or unlawful
prohibition of, or restriction upon, Lessee's use of the Leased Property, or
any portion thereof, or the interference with such use by any person,
corporation, partnership or other entity, or by reason of eviction by paramount
title, (c) any claim which Lessee has or might have against Lessor or by reason
of any default or breach of any warranty by Lessor under this Lease or any
other agreement between Lessor and Lessee or to which Lessor and Lessee are
parties, (d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Lessor or any assignee or transferee of Lessor, or (e) for any other
cause whether similar or dissimilar to any of the foregoing. Lessee hereby
specifically waives all rights arising from any occurrence whatsoever which may
now or hereafter be conferred upon it by law to (i) modify, surrender or
terminate this Lease or quit or surrender the Leased Property or any portion
thereof, or (ii) entitle Lessee to any abatement, reduction, suspension or
deferment of the Rent or other sums payable by Lessee hereunder, except as
otherwise specifically provided in this Lease. The obligations of Lessor and
Lessee hereunder shall be separate and independent covenants and agreements and
the Rent and all other sums payable by Lessee hereunder shall continue to be
payable in all events unless the obligations to pay the same shall be
terminated pursuant to the express provisions of this Lease.
ARTICLE V
OWNERSHIP OF LEASED PROPERTY
AND LESSEE'S PERSONAL PROPERTY
5.1 OWNERSHIP OF THE PROPERTY. Lessee acknowledges that the Leased
Property is the property of Lessor and that Lessee has only the right to the
possession and use of the Leased Property upon the terms and conditions of this
Lease.
5.2 LESSEE'S PERSONAL PROPERTY. Lessee may (and shall as provided
hereinbelow), at its expense, install, affix or assemble or place on any
parcels of the Land or in any of the Leased Improvements any items of the
Lessee's Personal Property, and may remove, replace or substitute for the same
from time to time in the ordinary course of Lessee's business, and Lessee may,
subject to the conditions set forth below, remove the same upon the expiration
or any prior termination of this Lease. Lessee shall provide and maintain
during the entire Term all such Lessee's Personal Property as shall be
necessary in order to operate the Facility in compliance with all applicable
Legal Requirements and Insurance Requirements and otherwise
4
<PAGE> 10
in accordance with customary practice in the industry for the Primary Intended
Use. All of the Lessee's Personal Property not removed by Lessee within sixty
(60) days following the expiration or earlier termination of this Lease shall
be considered abandoned by Lessee and may be appropriated, sold, destroyed or
otherwise disposed of by Lessor without first giving notice thereof to Lessee,
without any payment to Lessee and without any obligation to account to Lessee
therefor. Lessee will, at its expense, restore the Leased Property at the
expiration or earlier termination of this Lease to the condition required by
Section 8.1 (d), including repair of all damage to the Leased Property caused
by the removal of the Lessee's Personal Property whether effected by Lessee or
Lessor, normal wear and tear excepted.
ARTICLE VI
CONDITION AND USE OF LEASED PROPERTY
6.1 CONDITION OF THE LEASED PROPERTY. Lessee acknowledges receipt and
delivery of possession of the Leased Property and that Lessee has examined and
otherwise acquired knowledge of the condition of the Leased Property prior to
the execution and delivery of this Lease and has found the same to be in good
order and repair and satisfactory for its purpose hereunder. Lessee is leasing
the Leased Property "as is" in its present condition. Lessee waives any claim
or action against Lessor in respect of the condition of the Leased Property.
Lessor makes no warranty or representation, express or implied, in respect of
the Leased Property or any part thereof, either as to its fitness for use,
suitability, design or condition for any particular use or purpose or
otherwise, as to quality of the material or workmanship therein, latent or
patent, it being agreed that all such risks are to be borne by Lessee. Lessee
acknowledges that the Leased Property has been inspected by Lessee and is
satisfactory to it.
6.2 USE OF THE LEASED PROPERTY.
(a) After the Commencement Date and during the entire Term, Lessee shall
use or cause to be used the Leased Property and the improvements thereon as an
office building and for such other uses as may be necessary in connection with
or incidental to such use (the "Primary Intended Use"). Lessee shall not use
the Leased Property or any portion thereof for any other use without the prior
written consent of Lessor, which consent shall not be unreasonably withheld or
delayed.
(b) Lessee covenants that it will obtain and maintain all licenses and
approvals needed to use and operate the Leased Property and the Facility for
the Primary Intended Use in compliance with all applicable Legal Requirements.
(c) Lessee covenants and agrees that during the Term it will use its best
efforts to operate continuously the Leased Property in accordance with its
Primary Intended Use.
(d) Lessee shall not commit or suffer to be committed any waste on the
Leased Property, or in the Facility, nor shall Lessee cause or permit any
nuisance thereon.
(e) Lessee shall neither suffer nor permit the Leased Property or any
portion thereof, including any Capital Addition, to be used in such a manner as
(i) might reasonably tend to impair Lessor's (or Lessee's, as the case may be)
title thereto or to any portion thereof, or (ii)
5
<PAGE> 11
may reasonably result in a claim or claims of adverse usage or adverse
possession by the public, as such, or of implied dedication of the Leased
Property or any portion thereof.
(f) Lessee will not allow or utilize any Hazardous Materials on the Leased
Property and will not permit any contamination which may require remediation
under any applicable Hazardous Materials Law.
6.3 LESSOR TO GRANT EASEMENTS. Lessor will, from time to time, at the
request of Lessee and at Lessee's cost and expense, but subject to the approval
of Lessor (a) grant easements and other rights in the nature of easements, (b)
release existing easements or other rights in the nature of easements which are
for the benefit of the Leased Property, (c) dedicate or transfer unimproved
portions of the Leased Property for road, highway or other public purposes, (d)
execute petitions to have the Leased Property annexed to any municipal
corporation or utility district, (e) execute amendments to any covenants and
restrictions affecting the Leased Property and (f) execute and deliver to any
person any instrument appropriate to confirm or effect such grants, releases,
dedications and transfers (to the extent of its interest in the Leased
Property), but only upon delivery to Lessor of an Officer's Certificate stating
(and such other information as Lessor may reasonably require confirming) that
such grant, release, dedication, transfer, petition or amendment is required or
beneficial for and not detrimental to the proper conduct of the business of
Lessee on the Leased Property and does not reduce its value.
ARTICLE VII
LEGAL, INSURANCE AND FINANCIAL REQUIREMENTS
7.1 COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS. Subject to Article
XI relating to permitted contests, Lessee, at its expense, will promptly (a)
comply with all Legal Requirements and Insurance Requirements in respect of the
use, operation, maintenance, repair and restoration of the Leased Property,
whether or not compliance therewith shall require structural change in any of
the Leased Improvements or interfere with the use and enjoyment of the Leased
Property, and (b) directly or indirectly with the cooperation of Lessor, but at
Lessee's sole cost and expense, procure, maintain and comply with all licenses,
permits and other authorizations required for (i) any use of the Leased
Property then being made, and for (ii) the proper erection, installation,
operation and maintenance of the Leased Improvements or any part thereof,
including any Capital Additions.
7.2 LEGAL REQUIREMENT COVENANTS. Lessee covenants and agrees that the
Leased Property shall not be used for any unlawful purpose. Lessee shall,
directly or indirectly with the cooperation of Lessor, but at Lessee's sole
cost and expense, acquire and maintain all licenses, certificates, permits and
other authorizations and approvals needed to operate the Leased Property in its
customary manner for the Primary Intended Use and any other use conducted on
the Leased Property as may be permitted from time to time hereunder. Lessee
further covenants and agrees that Lessee's use of the Leased Property and
Lessee's maintenance, alteration, and operation of the same, and all parts
thereof, shall at all times conform to all applicable Legal Requirements.
7.3 SUPPORT FOR PAYMENT OBLIGATIONS. Lessee covenants and agrees that it
shall obtain and maintain in effect at all times during the Term, as further
assurance of the payment
6
<PAGE> 12
by Lessee of all amount of Rent and other obligations payable by Lessee
hereunder, a standby letter of credit, issued for the account of Lessee or a
wholly owned subsidiary of Lessee, for the benefit of Lessor, in an amount
available to be drawn at least equal to $1,600,000 or such lesser amount as
Lessor or the Facility Mortgagee (as hereinafter defined) may specify, which
letter of credit shall, among other things, be assignable for security to the
Facility Mortgagee and otherwise be substantially in the form of the standby
letter of credit issued by Dai-Ichi Kangyo Bank, Ltd., on or about the Closing
Date, in satisfaction of Lessee's obligations pursuant to this Section 7.3.
ARTICLE VIII
REPAIRS, RESTRICTIONS
8.1 MAINTENANCE AND REPAIR.
(a) Lessee, at its expense, will keep the Leased Property and all private
roadways, sidewalks and curbs appurtenant thereto in good order and repair
(whether or not the need for such repairs occurs as a result of Lessee's use,
any prior use, the elements, the age of the Leased Property or any portion
thereof), and, except as otherwise provided in Articles XIII and XIV, with
reasonable promptness, will make all necessary and appropriate repairs thereto
of every kind and nature, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by
reason of a condition existing prior to or after the commencement of the Term
of this Lease (concealed or otherwise). All repairs shall, to the extent
reasonably achievable, be at least equivalent in quality to the original work
and shall be accomplished by Lessee or a party selected by Lessee. Lessee will
not take or omit to take any action the taking or omission of which might
materially impair the value or usefulness of the Leased Property or any part
thereof for the Primary Intended Use.
(b) Lessor shall not under any circumstances be required to build or
rebuild any improvements on the Leased Property, or to make any repairs,
replacements, alterations, restorations, or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary,
structural or nonstructural, foreseen or unforeseen, or to make any expenditure
whatsoever with respect thereto in connection with this Lease, or to maintain
the Leased Property in any way.
(c) Nothing contained in this Lease and no action or inaction by Lessor
shall be construed as (i) constituting the consent or request of Lessor,
expressed or implied, to any contractor, subcontractor, laborer, materialman or
vendor to or for the performance of any particular labor or services or the
furnishing of any particular materials or other property for the construction,
alteration, addition, repair or demolition of or to the Leased Property or any
part thereof, or (ii) giving Lessee any right, power or permission to contract
for or permit the performance of any labor or services or the finishing of any
materials or other property in such fashion as would permit the making of any
claim against Lessor in respect thereof or to make any agreement that may
create, or in any way be the basis for, any right, title, interest, lien, claim
or other encumbrance upon the estate of Lessor in the Leased Property or any
portion thereof.
7
<PAGE> 13
(d) Unless Lessor shall convey any of the Leased Property to Lessee
pursuant to the provisions of this Lease, Lessee will, upon the expiration or
prior termination of this Lease, vacate and surrender the Leased Property to
Lessor in the condition in which the Leased Property was originally received
from Lessor and except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this Lease, except for ordinary wear
and tear (subject to the obligation of Lessee to maintain the Property in good
order and repair during the entire Term), damage caused by the gross negligence
or willful acts of Lessor, and damage or destruction described in Article XIII
or resulting from a Taking described in Article XIV which Lessee is not
required by the terms of this Lease to repair or restore.
8.2 [INTENTIONALLY DELETED]
8.3 ENCROACHMENTS; RESTRICTIONS. If any of the Leased Improvements shall,
at any time, encroach upon any property, street or right-of-way adjacent to the
Leased Property, or shall violate the agreements or conditions contained in any
applicable Legal Requirement, lawful restrictive covenant or other agreement
affecting the Leased Property, or any part thereof, or shall impair the rights
of others under any easement or right-of-way to which the Leased Property is
subject, then promptly upon the request of Lessor, Lessee shall, at its
expense, subject to its right to contest the existence of any encroachment,
violation or impairment, (a) obtain valid and effective waivers or settlements
of all claims, liabilities and damages resulting from each such encroachment,
violation or impairment, whether the same shall affect Lessor or Lessee, or (b)
make such changes in the Improvements, and take such other actions, as Lessee
in the good faith exercise of its judgment deems reasonably practicable, to
remove such encroachment, or to end such violation or impairment, including, if
necessary, the alteration of any of the Leased Improvements, and in any event
take all such actions as may be necessary in order to be able to continue the
operation of the Facility for the Primary Intended Use substantially in the
manner and to the extent the Facility was operated prior to the assertion of
such violation or encroachment. Notwithstanding the foregoing, Lessee shall
not be required to remedy any condition existing as of the Commencement Date.
Any such alteration shall be made in conformity with the applicable
requirements of Article IX. Lessee's obligations under this Section 8.3 shall
be in addition to and shall in no way discharge or diminish any obligation of
any insurer under any policy of title or other insurance, and Lessee shall be
entitled to a credit for any sums recovered by Lessor under any such policy of
title or other insurance.
ARTICLE IX
CAPITAL ADDITIONS
9.1 CONSTRUCTION OF CAPITAL ADDITIONS TO THE LEASED PROPERTY.
(a) If no Event of Default shall have occurred and be continuing, Lessee
shall have the right, upon and subject to the terms and conditions set forth
below, to construct or install, at Lessee's sole cost and expense, Capital
Additions on the Leased Property with the prior written consent of Lessor;
provided that Lessee shall not be permitted to create any Encumbrance on the
Leased Property in connection with such Capital Addition. Prior to commencing
construction of any Capital Addition, Lessee shall submit to Lessor in writing
a proposal setting forth in reasonable detail any proposed Capital Addition and
shall provide to
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Lessor such plans and specifications, permits, licenses, contracts and other
information concerning the proposed Capital Addition as Lessor may reasonably
request.
(b) No Capital Addition shall be made which would tie in or connect any
Leased Improvements on the Leased Property with any other improvements on
property adjacent to the Leased Property (and not part of the Land covered by
this Lease) including tie-ins of buildings or other structures or utilities,
unless Lessee shall have obtained the prior written approval of Lessor, which
approval shall not be unreasonably withheld. All proposed Capital Additions
shall be architecturally integrated and consistent with the Leased Property.
9.2 [INTENTIONALLY DELETED]
9.3 [INTENTIONALLY DELETED]
9.4 TITLE TO CAPITAL ADDITIONS. Title to all Capital Additions,
modifications and improvements shall, without payment by Lessor, be included
under the terms of this Lease and, upon expiration or earlier termination of
this Lease, shall pass to and become the property of Lessor.
9.5 SALVAGE. All materials which are scrapped or removed in connection
with the making of either Capital Additions permitted by Section 9.1 or repairs
required by Article VIII shall be or become the property of Lessor; provided
that Lessor may require Lessee to dispose of such materials and remit the net
proceeds thereof within 15 days of such disposal.
ARTICLE X
LIENS
Subject to the provisions of Article XI relating to permitted contests,
Lessee will not directly or indirectly create or suffer to exist and will
promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon the Leased Property or any attachment, levy,
claim or encumbrance in respect of the Rent, not including, however, (a) this
Lease, (b) the matters, if any, set forth in Exhibit B attached hereto, (c)
restrictions, liens and other encumbrances which are consented to in writing by
Lessor, or any easements granted pursuant to the provisions of Section 6.3 of
this Lease, (d) liens for those taxes of Lessor which Lessee is not required
to pay hereunder, (e) subleases permitted by Article XIII, (f) liens for
Impositions or for sums resulting from noncompliance with Legal Requirements
so long as (1) the same are not yet payable or are payable without the addition
of any fine or penalty or (2) such liens are in the process of being contested
as permitted by Article XI, (g) liens of mechanics, laborers, materialmen,
suppliers or vendors for sums either disputed or not yet due, provided that (1)
any such liens are in the process of being contested as permitted by Article XI
and (2) Lessee shall have posted the necessary statutory bond to have the
Leased Property released from the proceedings, and (h) any Encumbrance placed
on the Leased Property by Lessor.
ARTICLE XI
PERMITTED CONTESTS
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Lessee, after ten days' prior written notice to Lessor, on its own or on
Lessor's behalf (or in Lessor's name), but at Lessee's expense, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount, validity or application, in whole or in part, of any Imposition,
Legal Requirement, Insurance Requirement, lien, attachment, levy, encumbrance,
charge or claim (collectively "Charge") not otherwise permitted by Article X,
which is required to be paid or discharged by Lessee; provided that (a) in the
case of an unpaid Charge, the commencement and continuation of such proceedings
shall suspend the collection thereof from Lessor and from the Leased Property;
(b) Lessee shall have filed any applicable statutory bond which can be filed to
release the Leased Property from the lien or proceed or neither the Leased
Property nor any Rent therefrom nor any part thereof or interest therein would
be in any danger of being sold, forfeited, attached or lost; (c) Lessor would
not be in any danger of civil or criminal liability for failure to comply
therewith pending the outcome of such proceedings; (d) in the event that any
such contest shall involve a sum of money or potential loss in excess of
$5,000.00, then Lessee shall deliver to Lessor and its counsel an Officer's
Certificate as to the matters set forth in clauses (a), (b) and (c); (e) in the
case of an Insurance Requirement, the coverage required by Article XII shall be
maintained, and (f) if such contest be finally resolved against Lessor or
Lessee, Lessee shall, as Additional Charges due hereunder, promptly pay the
amount required to be paid, together with all interest and penalties accrued
thereon, or otherwise comply with the applicable Charge; provided further that
nothing contained herein shall be construed to permit Lessee to contest the
payment of Rent, or any other sums payable by Lessee to Lessor hereunder.
Lessor, at Lessee's expense, shall execute and deliver to Lessee such
authorizations and other documents as may reasonably be required in any such
contest and, if reasonably requested by Lessee or if Lessor so desires and then
at its own expense, Lessor shall join as a party therein. Lessor shall do all
things reasonably requested by Lessee in connection with such action. Lessee
shall indemnify and save Lessor harmless against any liability, cost or expense
of any kind that may be imposed upon Lessor in connection with any such contest
and any loss resulting therefrom.
ARTICLE XII
INSURANCE
12.1 GENERAL INSURANCE REQUIREMENTS. During the Term of this Lease, Lessee
shall at all times keep the Leased Property, and all property located in or on
the Leased Property insured with the kinds and amounts of insurance described
below and written by companies reasonably acceptable to Lessor authorized to do
insurance business in the state in which the Leased Property is located. The
policies must name Lessor as an additional insured and losses shall be payable
to Lessor and/or Lessee as provided in Article XIII. In addition, the policies
shall name as an additional insured the holder ("Facility Mortgagee") of any
mortgage, deed of trust or other security agreement securing any Encumbrance
placed on the Leased Property in accordance with the provisions of Article
XXXII ("Facility Mortgage"), if any, by way of a standard form of mortgagee's
loss payable endorsement. Any loss adjustment in excess of $15,000.00 shall
require the written consent of Lessor and each affected Facility Mortgagee.
Evidence of insurance shall be deposited with Lessor and, if requested, with
any Facility Mortgagee(s). If any provision of any Facility Mortgage which
constitutes a first lien on the Leased Property requires deposits of insurance
to be made with such Facility Mortgagee, Lessee shall either pay to Lessor
monthly the amounts required and Lessor shall transfer such amounts to such
Facility Mortgagee or, pursuant to written direction by Lessor, Lessee shall
make such
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deposits directly with such Facility Mortgagee. The policies on the Leased
Property, including the Leased Improvements, the Fixtures and the Lessee's
Personal Property, shall insure against the following risks:
(a) Loss or damage by fire, vandalism and malicious mischief, extended
coverage perils commonly known as "All Risk" and all physical loss perils,
including sprinkler leakage, in an amount not less than 100% of the then Full
Replacement Cost thereof (as defined below in Section 12.2) with a replacement
cost endorsement sufficient to prevent Lessee from becoming a co-insurer
together with an agreed value endorsement;
(b) Loss or damage by earthquake;
(c) Claims for personal injury or property damage under a policy of
comprehensive general public liability insurance including insurance against
assumed or contractual liability including indemnities under this Lease, with
amounts not less than $1,500,000.00 per occurrence; provided that if it becomes
customary for tenants occupying similar buildings in the same City where the
Leased Property is located to be required to provide liability coverage with
higher limits than the foregoing, then Lessee shall provide Lessor with an
insurance policy with coverage limits that are not less than such customary
limits;
(d) Flood (when the Leased Property is located in whole or in part within
a designated flood plain area) and such other hazards and in such amounts as
may be customary for comparable properties in the area and if available from
insurance companies authorized to do business in the state in which the Leased
Property is located; and
(e) If Lessee shall engage or cause to be engaged any contractor to
perform work on the Leased Property, Lessee shall require such contractor to
carry and maintain insurance coverage comparable to the foregoing requirements,
at no expense to Lessor; provided that Lessee may allow any such contractor to
carry or maintain alternative coverage in reasonable amounts upon Lessor's
prior written consent, which shall not be unreasonably withheld.
12.2 REPLACEMENT COST. The term "Full Replacement Cost" as used herein
shall mean the actual replacement cost of the Facility from time to time,
including increased cost of construction endorsement, less exclusions provided
in the normal fire insurance policy. In the event Lessor or Lessee believes
that the Full Replacement Cost has increased or decreased at any time during
the Term, it shall have the right at its own expense to have such Full
Replacement Cost redetermined by the insurance company which is then providing
the largest amount of casualty insurance carried on the Leased Property,
hereinafter referred to as the "impartial appraiser". The party desiring to
have the Full Replacement Cost so redetermined shall forthwith, on receipt of
such determination by the impartial appraiser, give written notice thereof to
the other party hereto. The determination of such impartial appraiser shall be
final and binding on the parties hereto, and Lessee shall forthwith increase,
or may decrease, the amount of the insurance carried pursuant to this Article
to the amount so determined by the impartial appraiser. In the event such
redetermination discloses that the existing insurance is less than required,
Lessee shall pay the fee, if any, of the impartial appraiser.
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12.3 ADDITIONAL INSURANCE. In addition to the insurance described above,
Lessee shall maintain such additional insurance as may be reasonably required
from time to time by any Facility Mortgagee or any applicable Legal Requirement
and shall at all times maintain adequate worker's compensation insurance
coverage for all persons employed by Lessee on the Leased Property, in
accordance with all applicable Legal Requirements.
12.4 WAIVER OF SUBROGATION. All insurance policies carried by either party
covering the Leased Property, the Fixtures, the Facility and/or the Lessee's
Personal Property, including contents, fire and casualty insurance, shall
expressly waive any right of subrogation on the part of the insurer against the
other party. The parties hereto agree that their policies will include such a
waiver clause or endorsement so long as the same is obtainable without extra
cost, and in the event of such an extra charge the other party, at its
election, may request and pay the same, but shall not be obligated to do so.
12.5 FORM OF INSURANCE. All of the policies of insurance referred to in
this Section shall be written in form reasonably satisfactory to Lessor by
insurance companies reasonably satisfactory to Lessor. Lessee shall pay all
premiums therefor, and deliver such policies or certificates thereof to Lessor
prior to their effective date (and, with respect to any renewal policy, at
least 30 days prior to the expiration of the existing policy). In the event of
the failure of Lessee to effect such insurance in the names herein called for
or to pay the premiums therefor, or to deliver such policies or certificates
thereof to Lessor at the times required, Lessor shall be entitled, but shall
have no obligation, to enact such insurance and pay the premiums therefor,
which premiums shall be repayable by Lessee to Lessor upon written demand
therefor, and failure to repay the same shall constitute an Event of Default
within the meaning of Section 15.1(c). Each insurer mentioned in this Section
shall agree, by endorsement on the policy or policies issued by it, or by
independent instrument furnished to Lessor, that it will give to Lessor 30
days' written notice before the policy or policies in question shall be
altered, allowed to expire or canceled.
12.6 CHANGE IN LIMITS. In the event that Lessor shall at any time
reasonably and in good faith believe the limits of the personal injury,
property damage or general public liability insurance then carried to be
insufficient, the parties shall endeavor to agree on the proper and reasonable
limits for such insurance to be carried and such insurance shall thereafter be
carried with the limits thus agreed on until further change pursuant to the
provisions of this Section. If the parties shall be unable to agree thereon,
the proper and reasonable limits for such insurance shall be determined by an
impartial third party selected by the parties. Such redeterminations, whether
made by the parties or by arbitration, shall be made no more frequently than
every two years. Nothing herein shall permit the amount of insurance to be
reduced below the amount or amounts reasonably required by any Facility
Mortgagee.
12.7 BLANKET POLICY. Notwithstanding anything to the contrary contained in
this Section, Lessee's obligations to carry the insurance provided for herein
may be brought within the coverage of a so-called blanket policy or policies of
insurance carried and maintained by Lessee; provided that the coverage afforded
Lessor will not be reduced or diminished or otherwise be different from that
which would exist under separate policies meeting all other requirements of
this Lease; provided further that the requirements of this Article XII are
otherwise satisfied.
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12.8 NO SEPARATE INSURANCE. Lessee shall not, on Lessee's own initiative or
pursuant to the request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article XII to be furnished by, or which may reasonably be
required by a Facility Mortgagee to be furnished by, Lessee, or increase the
amounts of any then existing insurance required under this Article XII by
securing an additional policy or additional policies, unless all parties having
an insurable interest in the subject matter of the insurance, including in all
cases Lessor and all Facility Mortgagees, are included therein as additional
insureds and the loss is payable under said insurance in the same manner as
losses are required to be payable under this Lease. Lessee shall immediately
notify Lessor of the taking out of any such separate insurance or of the
increasing of any of the amounts of the then-existing insurance required under
this Article XII by securing an additional policy or additional policies.
ARTICLE XIII
FIRE AND CASUALTY
13.1 INSURANCE PROCEEDS. All proceeds payable by reason of any loss or
damage to the Leased Property (except for any business interruption insurance
or any proceeds pursuant to Section 13.4, or any portion thereof), and insured
under any policy of insurance required by Article XII of this Lease shall be
paid to Lessor and held by Lessor in trust (subject to the provisions of
Section 13.7) and shall be made available for reconstruction or repair, as the
case may be, of any damage to or destruction of the Leased Property, or any
portion thereof, and shall be paid out by Lessor from time to time for the
reasonable cost of such reconstruction or repair in accordance with this
Article XIII after Lessee has expended an amount equal to or exceeding the
deductible under any applicable insurance policy. Any excess proceeds of
insurance remaining after the completion of the restoration or reconstruction
of the Leased Property shall be retained by Lessor free and clear upon
completion of any such repair and restoration. In the event neither Lessor
nor Lessee is required or elects to repair and restore the Leased Property,
then all such insurance proceeds shall be retained by Lessor.
13.2 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION COVERED BY
INSURANCE.
(a) Except as provided in Section 13.7, if during the Term, the Facility
is totally or partially destroyed from a risk covered by the insurance
described in Article XII and the Facility thereby is rendered Unsuitable for
its Primary Intended Use, Lessor shall apply all proceeds payable with respect
thereto to restore the Facility to substantially the same condition as existed
immediately before the damage or destruction. Such damage or destruction shall
not terminate this Lease.
(b) Except as provided in Section 13.7, if during the Term, the Facility
is partially destroyed from a risk covered by the insurance described in
Article XII, but the Facility is not thereby rendered Unsuitable for its
Primary Intended Use, Lessee shall restore the Facility to substantially the
same condition as existed immediately before the damage or destruction. Such
damage or destruction shall not terminate this Lease.
13.3 RECONSTRUCTION IN THE EVENT OF DAMAGE OR DESTRUCTION NOT COVERED BY
INSURANCE. Except as provided in Section 13.7 below, if during the Term the
Facility is totally
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or materially destroyed from a risk (including earthquake) not covered by the
insurance described in Article XII, whether or not such damage or destruction
renders the Facility Unsuitable for Its Primary Intended Use, Lessor shall
restore the Facility to substantially the same condition it was in immediately
before such damage or destruction and such damage or destruction shall not
terminate this Lease.
13.4 LESSEE'S PROPERTY. Lessee shall use any insurance proceeds payable by
reason of any loss of or damage to any of the Lessee's Personal Property to
restore such personal property to the Leased Property in compliance with all
applicable Legal Requirements.
13.5 RESTORATION OF CAPITAL ADDITIONS PAID FOR BY LESSEE. If Lessor is
required to restore the Facility as provided in Sections 13.2 or 13.3, Lessor
shall also restore all Capital Additions paid for by Lessee. Insurance
proceeds payable by reason of damage to Capital Additions paid for Lessee shall
be paid to Lessor and Lessor shall hold such insurance proceeds in trust to pay
the cost of repairing or replacing such Capital Additions.
13.6 NO ABATEMENT OF RENT. This Lease shall remain in full force and effect
and Lessee's obligation to make rental payments and to pay all other charges
required by this Lease shall remain unabated during any period required for
repair and restoration.
13.7 DAMAGE NEAR END OF TERM. Notwithstanding any provisions of Sections
13.2 or 13.3 to the contrary, if damage to or destruction of the Facility
occurs during the last 12 months of the Term, and if such damage or destruction
cannot be fully repaired and restored within the lesser of (i) six months or
(ii) the period remaining in the Term immediately following the date of loss,
either party shall have the right to terminate this Lease by giving notice to
the other within 30 days after the date of damage or destruction, in which
event Lessor shall be entitled to retain the insurance proceeds and Lessee
shall pay to Lessor on demand the amount of any deductible or uninsured loss
arising in connection therewith; provided that any such notice given by Lessor
shall be void and of no force and effect if Lessee exercises an available
option to extend the Term for one Extended Term, or one additional Extended
Term, as the case may be, within 30 days following receipt of such termination
notice.
13.8 WAIVER. Lessee hereby waives any statutory or common law rights of
termination which may arise by reason of any damage or destruction of the
Facility.
ARTICLE XIV
CONDEMNATION
14.1 PARTIES' RIGHTS AND OBLIGATIONS. If during the Term there is any
Taking of all or any part of the Leased Property or any interest in this Lease
by Condemnation, the rights and obligations of the parties shall be determined
by this Article XIV.
14.2 TOTAL TAKING. If there is a Taking of all of the Leased Property by
Condemnation, this Lease shall terminate on the Date of Taking, and the Minimum
Rent and all Additional Charges paid or payable hereunder shall be apportioned
and paid to the Date of Taking.
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14.3 PARTIAL TAKING. If there is a Taking of a portion of the Leased
Property by Condemnation such that the Facility is not thereby rendered
Unsuitable for Its Primary Intended Use, this Lease shall remain in effect.
If, however, the Facility is thereby rendered Unsuitable for Its Primary
Intended Use, Lessee shall have the right (a) to take such proceeds of any
Award as shall be necessary and restore the Facility, at its own expense, to
the extent possible, to substantially the same condition as existed immediately
before the partial Taking, or (b) to offer to take the proceeds from the Award
and to acquire the Leased Property from Lessor for a purchase price equal to
the Fair Market Value of the Leased Property immediately prior to such partial
Taking, in which event this Lease shall terminate upon payment of the purchase
price, or (c) terminate this Lease. Lessee shall exercise its option by giving
Lessor notice thereof within 60 days after Lessee receives notice of the
Taking. In the event Lessor does not accept Lessee's offer to so purchase
within 30 days after receipt of the notice described in the preceding sentence,
Lessee may either (a) withdraw its offer to purchase the Leased Property and
proceed to restore the Facility, to the extent possible, to substantially the
same condition as existed immediately before the partial Taking, or (b)
terminate the offer and this Lease by written notice to Lessor.
14.4 RESTORATION. If there is a partial Taking of the Leased Property and
this Lease remains in full force and effect pursuant to Section 14.3, Lessee
shall accomplish all necessary restoration.
14.5 AWARD DISTRIBUTION. In the event Lessor accepts Lessee's offer to
purchase the Leased Property, the entire Award shall belong to Lessee and
Lessor agrees to assign to Lessee all of its rights thereto. Except as
otherwise provided in Section 14.3 above, in any other event, the entire Award
shall belong to and be paid to Lessor, subject to the rights of the Facility
Mortgagee. If Lessee is required or elects to restore the Facility, Lessor
agrees that, subject to the rights of the Facility Mortgagee, its portion of
the Award shall be used for such restoration and it shall hold such portion of
the Award in trust, for application to the cost of the restoration.
14.6 TEMPORARY TAKING. The Taking of the Leased Property, or any part
thereof, by military or other public authority shall constitute a Taking by
Condemnation only when the use and occupancy by the Taking authority has
continued for longer than six months. During any such six (6) month period all
the provisions of this Lease shall remain in full force and effect and the Rent
shall not be abated or reduced during such period of Taking.
ARTICLE XV
DEFAULT
15.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute events of default (individually, an "Event of Default"
and, collectively, "Events of Default") hereunder:
(a) [INTENTIONALLY DELETED]
(b) if Lessee shall fail to make a payment of the Rent payable by Lessee
under this Lease when the same becomes due and payable and such failure
continues for a period of ten (10) days after written notice from Lessor to
Lessee or, after Lessor has provided such ten (10)
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days' prior written notice twice in any twelve (12) month period, then if
Lessee shall fail to make a payment of the Rent payable under this Lease when
the same becomes due and payable, or
(c) if Lessee shall fail to deliver to Lessor not later than 30 days prior
to the expiration date of the standby letter of credit then in effect pursuant
to Section 7.3, an extension or renewal or replacement standby letter of
credit, conforming to the provisions of Section 7.3 and issued by a commercial
bank in the United States acceptable to the Lessor and the Facility Mortgagee,
if any, in their reasonable judgment, or otherwise shall fail to maintain in
effect for the benefit of Lessor a standby letter of credit in accordance with
the provisions of Section 7.3, or
(d) if Lessee shall:
(i) admit in writing its inability to pay its debts generally as
they become due,
(ii) file a petition in bankruptcy or a petition to take advantage
of any insolvency law,
(iii) make an assignment for the benefit of its creditors,
(iv) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property, or
(v) file a petition or answer seeking reorganization or arrangement
under the Federal bankruptcy laws or any other applicable law or statute
of the United States of America or any state thereof, or
(e) if Lessee shall fail to rebuild or purchase the Leased Property when
required to do so as a result of damage or condemnation and such failure shall
continue for a period of thirty (30) days after written notice from Lessor to
Lessee.
15.2 REMEDIES. If an Event of Default shall have occurred, Lessor shall
have the right at its election, then or at any time thereafter, to pursue any
one or more of the following remedies, in addition to any remedies which may be
permitted by law or by other provisions of this Lease, without further notice
or demand, except as hereinafter provided:
(a) Without any notice or demand whatsoever, Lessor may take any one or
more actions permissible at law to ensure performance by Lessee of Lessee's
covenants and obligations under this Lease. In this regard, it is agreed that
if Lessee abandons or vacates the Leased Property, Lessor may enter upon and
take possession of such Leased Property in order to protect it from
deterioration and continue to demand from Lessee the monthly rentals and other
charges provided in this Lease. Lessor shall use reasonable efforts to relet
but shall have no absolute obligation to relet. If Lessor does, at its sole
discretion, elect to relet the Leased Property, such action by Lessor shall not
be deemed as an acceptance of Lessee's surrender of the Leased Property unless
Lessor expressly notifies Lessee of such acceptance in writing pursuant to
Section 15.2(b), Lessee hereby acknowledging that Lessor shall otherwise be
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reletting as Lessee's agent. It is further agreed in this regard that in the
event of any Event of Default described in this Section 15.2, Lessor shall have
the right to enter upon the Leased Property and do whatever Lessee is obligated
to do under the terms of this Lease; and Lessee agrees to reimburse Lessor on
demand for any reasonable expenses which Lessor may incur in thus effecting
compliance with Lessee's obligations under this Lease, and further agrees that
Lessor shall not be liable for any damages resulting to the Lessee from such
action provided that Lessor is not negligent.
(b) Lessor may terminate this Lease by written notice to Lessee, in which
event Lessee shall immediately surrender the Leased Property to Lessor, and if
Lessee fails to do so, Lessor may, without prejudice to any other remedy which
Lessor may have for possession or arrearage in Rent (including any interest
which may have accrued pursuant to Section 2.3 of this Lease or otherwise),
enter upon and take possession of the Leased Property and expel or remove
Lessee and any other person who may be occupying said premises or any part
thereof. In addition, Lessee agrees to pay to Lessor on demand the amount of
all loss and damage which Lessor may suffer by reason of any termination
effected pursuant to this Section 15.2(b), said loss and damage to be
determined, at Lessor's option, by either of the following alternative
measures of damages:
(i) Although Lessor shall be under no absolute obligation to attempt
and shall be obligated only to use reasonable efforts, to relet the
Leased Property, until the Leased Property is relet Lessee shall pay to
Lessor on or before the first day of each calendar month the monthly
rentals and other charges provided in this Lease. After the Leased
Property has been relet by Lessor, Lessee shall pay to Lessor on the 10th
day of each calendar month the difference between the monthly rentals and
other charges provided in this Lease for the preceding calendar month and
that actually collected by Lessor for such month. If it is necessary for
Lessor to bring suit in order to collect any deficiency, Lessor shall
have a right to allow such deficiencies to accumulate and to bring an
action on several or all of the accrued deficiencies at one time. Any
such suit shall not prejudice in any way the right of Lessor to bring a
similar action for any subsequent deficiency or deficiencies. Any amount
collected by Lessor from subsequent tenants for any calendar month in
excess of the monthly rentals and other charges provided in this Lease
shall be credited to Lessee in reduction of Lessee's liability for any
calendar month for which the amount collected by Lessor will be less than
the monthly rentals and other charges provided in this Lease; but Lessee
shall have no right to such excess other than the above described credit;
or
(ii) When Lessor desires, Lessor may demand a final settlement.
Upon demand for a final settlement, Lessor shall have a right to, and
Lessee hereby agrees to pay, the difference between the total of all
monthly rentals and other charges provided in this Lease for the
remainder of the Term and the Fair Market Rental Value of the Leased
Property for such period (including a reasonable time to relet the Leased
Property), as determined pursuant to the provisions of Article XXVIII
hereof, such difference to be discounted to present value at a rate equal
to the lowest rate of capitalization (highest present worth) reasonably
consistent with industry standards at the time of such determination and
allowed by applicable law.
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(c) Lessor may make demand for payment under and apply or retain, as the
case may be, the amount then available to be drawn under the standby letter of
credit, as its remedy for any damages sustained by Lessor, arising out of
termination of the Lease.
(d) The rights and remedies of Lessor hereunder are cumulative, and
pursuit of any of the above remedies shall not preclude pursuit of any other
remedies prescribed in other sections of this Lease and any other remedies
provided by law or equity. Forbearance by Lessor to enforce one or more of the
remedies herein provided upon an Event of Default shall not be deemed or
construed to constitute a waiver of such Event of Default.
15.3 ADDITIONAL EXPENSES. In addition to payments required pursuant to
subsections (a) and (b) of Section 15.2 above, Lessee shall compensate Lessor
for all reasonable expenses incurred by Lessor in repossessing the Leased
Property (including any increase in insurance premiums caused by the vacancy of
the Leased Property), all reasonable expenses incurred by Lessor in reletting
(including repairs, remodeling, replacements, advertisements and brokerage
fees), all reasonable concessions granted to a new tenant upon reletting
(including renewal options), all losses incurred by Lessor as a direct or
indirect result of Lessee's default (including any appropriate action by a
Facility Mortgagee), and a reasonable allowance for Lessor's administrative
efforts, salaries and overhead attributable directly or indirectly to Lessee's
default and Lessor's pursuing the rights and remedies provided herein and
under applicable law.
15.4 WAIVER. If this Lease is terminated pursuant to Section 15.2, Lessee
waives, to the extent permitted by applicable law, (a) any right of redemption,
reentry or repossession and (b) the benefit of any laws now or hereafter in
force exempting property from liability for rent or for debt.
15.5 APPLICATION OF FUNDS. All payments otherwise payable to Lessee which
are received by Lessor under any of the provisions of this Lease during the
existence or continuance of any Event of Default shall be applied to Lessee's
obligations in the order which Lessor may reasonably determine or as may be
prescribed by the laws of the state in which the Facility is located.
15.6 NOTICES BY LESSOR. The provisions of this Article XV concerning
notices shall be liberally construed insofar as the contents of such notices
are concerned, and any such notice shall be sufficient if it shall generally
apprise Lessee of the nature and approximate extent of any default, it being
agreed that Lessee is in good or better position than Lessor to ascertain the
exact extent of any default by Lessee hereunder.
ARTICLE XVI
LESSOR'S RIGHT TO CURE
If Lessee shall fail to make any payment, or to perform any act required
to be made or performed under this Lease and to cure the same within the
relevant time periods provided in Section 15. 1, Lessor, without waiving or
releasing any obligation or Event of Default, may (but shall be under no
obligation to) make such payment or perform such act for the account and at the
expense of Lessee, and may, to the extent permitted by law, enter upon the
Leased Property for such purpose and take all such action thereon as, in
Lessor's opinion, may be necessary or
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appropriate therefor. No such entry shall be deemed an eviction of Lessee.
All sums so paid by Lessor, together with a late charge thereon (to the extent
permitted by law) at the Overdue Rate from the date on which such sums or
expenses are paid or incurred by Lessor, and all costs and expenses (including
reasonable attorneys' fees and expenses, in each case, to the extent permitted
by law) so incurred shall be paid by Lessee to Lessor on demand. The
obligations of Lessee and rights of Lessor contained in this Article shall
survive the expiration or earlier termination of this Lease.
ARTICLE XVII
PURCHASE OF THE LEASED PROPERTY
In the event Lessee purchases the Leased Property from Lessor pursuant to
Section 14.3 of this Lease, Lessor shall, upon receipt from Lessee of the
applicable purchase price, together with full payment of any unpaid Rent due
and payable with respect to any period ending on or before the date of the
purchase and any other amounts owing to Lessor hereunder, deliver to Lessee an
appropriate special warranty deed for the Land (in substantially the same form
used to convey the Land and Leased Improvements to Lessor) and any other
documents reasonably requested by Lessee to convey the interest of Lessor in
and to the Leased Property to Lessee, and such other standard documents usually
and customarily prepared in connection with such transfers, free and clear of
all encumbrances other than (a) those that Lessee has agreed hereunder to pay
or discharge, (b) those mortgage liens, if any, which Lessee has agreed in
writing to accept and to take title subject to, (c) any other Encumbrances
permitted to be imposed on the Leased Property under the provisions of Article
XXXII which are assumable at no cost to Lessee, and (d) any matters affecting
the Leased Property on or as of the Commencement Date. The difference between
the applicable purchase price and the total of the encumbrances assigned or
taken subject to shall be paid in cash to Lessor, or as Lessor may direct, in
federal or other immediately available funds except as otherwise mutually
agreed by Lessor and Lessee. The closing of any such sale shall be contingent
upon and subject to Lessee obtaining all required governmental consents and
approvals for such transfer. If such sale shall fail to be consummated by
reason of the inability of Lessee to obtain all such approvals and consents,
any options to extend the Term which otherwise would have expired during the
period from the date when Lessee elected or became obligated to purchase the
Leased Property until Lessee's inability to obtain the approvals and consents
is confirmed shall be deemed to remain in effect for 30 days after the end of
such period. All expenses of such conveyance, including the cost of title
examination or standard coverage title insurance, attorneys' fees incurred by
Lessor in connection with such conveyance, documentary stamps, and transfer
taxes, shall be paid by Lessor. Recording fees and similar charges shall be
paid for by Lessee.
ARTICLE XVIII
HOLDING OVER
If Lessee shall for any reason remain in possession of the Leased Property
after the expiration of the Term or any earlier termination of the Term hereof,
such possession shall be as a tenancy at will during which time Lessee shall
pay as rental each month, (a) 150% of the aggregate of 1/12 of the aggregate
Minimum Rent payable with respect to the last complete year prior to the
expiration of the Term; plus (b) all Additional Charges accruing during the
month; and plus (c) all other sums, if any, payable pursuant to the provisions
of this Lease with respect
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to the Leased Property. During such period of tenancy, Lessee and Lessor shall
be obligated to perform and observe all of the terms, covenants and conditions
of this Lease and to continue its occupancy and use of the Leased Property.
Nothing contained herein shall constitute the consent, express or implied, of
Lessor to the holding over of Lessee after the expiration or earlier
termination of this Lease.
ARTICLE XIX
[INTENTIONALLY DELETED]
ARTICLE XX
[INTENTIONALLY DELETED]
ARTICLE XXI
RISK OF LOSS
Except as otherwise provided in this Lease, during the Term of this Lease,
the risk of loss or of decrease in the enjoyment and beneficial use of the
Leased Property in consequence of the damage or destruction thereof by fire,
the elements, casualties, thefts, riots, wars or otherwise, or in consequence
of foreclosures, attachments, levies or executions (other than by Lessor and
those claiming from, through or under Lessor) is assumed by Lessee and, Lessor
shall in no event be answerable or accountable therefor nor shall any of the
events mentioned in this Section entitle Lessee to any abatement of Rent except
as specifically provided in this Lease.
ARTICLE XXII
INDEMNIFICATION
Notwithstanding the existence of any insurance or self insurance provided
for in Article XII, and without regard to the policy limits of any such
insurance or self insurance, Lessee will protect, indemnify, save harmless and
defend Lessor from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including reasonable
attorneys' fees and expenses), to the extent permitted by law, imposed upon or
incurred by or asserted against Lessor by reason of: (a) any accident, injury
to or death of persons or loss to property occurring on or about the Leased
Property, (b) any use, misuse, no use, condition, maintenance or repair by
Lessee of the Leased Property, (c) any Impositions (which are the obligations
of Lessee to pay pursuant to the applicable provisions of this Lease), (d) any
failure on the part of Lessee to perform or comply with any of the terms of
this Lease, (e) the non-performance of any of the terms and provisions of any
and all existing and future subleases of the Leased Property to be performed by
Lessee as landlord thereunder and (f) the violation of any Hazardous Materials
Law. Any amounts which become payable by Lessee under this Section shall be
paid within ten days after liability therefor on the part of Lessor is finally
determined by litigation or otherwise (including the expiration of any time for
appeals) and, if not timely paid, shall bear interest (to the extent permitted
by law) at the Overdue Rate from the date of such determination to the date of
payment. Lessee, at its expense, shall contest, resist and
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defend any such claim, action or proceeding asserted or instituted against
Lessor or may compromise or otherwise dispose of the same as Lessee sees fit.
Lessor shall cooperate with Lessee in a reasonable manner to permit Lessee to
satisfy Lessee's obligations hereunder, including the execution of any
instruments or documents reasonably requested by Lessee. Nothing herein shall
be construed as indemnifying Lessor or its agents for their own negligent acts
or omissions or willful misconduct. Lessee's liability for a breach of the
provisions of this Article shall survive any termination of this Lease.
ARTICLE XXIII
SUBLETTING AND ASSIGNMENT
Lessee may not assign or sublet all or any part of the Leased Property,
without the prior written consent of Lessor, which Lessor shall not
unreasonably withhold.
ARTICLE XXIV
OFFICER'S CERTIFICATES AND FINANCIAL STATEMENTS
(a) At any time and from time to time within 20 days following written
request by Lessor, Lessee will furnish to Lessor an Officer's Certificate
certifying that this Lease is unmodified and in full force and effect (or that
this Lease is in full force and effect as modified and setting forth the
modifications) and the dates to which the Rent has been paid. Any such
Officer's Certificate furnished pursuant to this Article may be relied upon by
Lessor and any prospective purchaser or lender of and on the Leased Property.
(b) Lessee will furnish or cause to furnish the following statements to
Lessor:
(i) within 120 days after the end of each of Lessee's fiscal years a
copy of the Consolidated Financial Statements for the preceding fiscal
year of Lessee; and
(ii) with reasonable promptness, such other information respecting
the financial condition and affairs of Lessee as Lessor may reasonably
request from time to time.
ARTICLE XXV
INSPECTION
Lessee shall permit Lessor and its authorized representatives to inspect
the Leased Property during usual business hours subject to any security,
health, safety or confidentiality requirements of Lessee, any governmental
agency, any Insurance Requirements relating to the Leased Property, or imposed
by law or applicable regulations.
ARTICLE XXVI
QUIET ENJOYMENT
So long as Lessee shall pay all Rent as the same becomes due and shall
fully comply with all of the terms of this Lease and fully perform its
obligations hereunder, Lessee shall peaceably and quietly have, hold and enjoy
the Leased Property for the Term hereof, free of any claim or other action by
Lessor or anyone claiming by, through or under Lessor, but subject to all liens
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and encumbrances of record as of the date hereof or hereafter consented to by
Lessee. No failure by Lessor to comply with the foregoing covenant shall give
Lessee any right to cancel or terminate this Lease, or to fail to pay any other
sum payable under this Lease, or to fail to perform any other obligation of
Lessee hereunder. Notwithstanding the foregoing, Lessee shall have the right
by separate and independent action to pursue any claim it may have against
Lessor as a result of a breach by Lessor of the covenant of quiet enjoyment
contained in this Article.
ARTICLE XXVII
NOTICES
All notices, demands, requests, consents, approvals and other
communications hereunder shall be in writing and delivered by hand or by
Federal Express or other reputable overnight delivery service, charges prepaid
addressed to the respective parties, as follows:
(a) if to Lessee:
Builders Transport, Inc.
2029 West Dekalb Street
Camden, SC 29020
(b) if to Lessor:
Two Trees
111 West 57th Street
Suite 1000
New York, New York 10019
or to such other address as either party may hereafter designate, and shall be
effective upon receipt.
ARTICLE XXVIII
APPRAISAL
In the event that it becomes necessary to determine the Fair Market Value,
or the Fair Market Rental Value of the Leased Property for any purpose of this
Lease, the party required or permitted to give notice of such required
determination shall include in the notice the name of a person selected to act
as an appraiser on its behalf. Within ten days after receipt of any such
notice, Lessor (or Lessee, as the case may be) shall by notice to Lessee (or
Lessor, as the case may be) appoint a second person as an appraiser on its
behalf. The appraisers thus appointed (each of whom must be a member of the
American Institute of Real Estate Appraisers or any successor organization
thereto) shall, within 45 days after the date of the notice appointing the
first appraiser, proceed to appraise the Leased Property as the case may be, to
determine any of the foregoing values as of the relevant date (giving effect to
the impact, if any, of inflation from the date of their decision to the
relevant date); provided that if only one appraiser shall have been so
appointed, or if two appraisers shall have been so appointed but
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only one such appraiser shall have made such determination within 50 days after
the making of Lessee's or Lessor's request, then the determination of such
appraiser shall be final and binding upon the parties. If two appraisers shall
have been appointed and shall have made their determinations within the
respective requisite periods set forth above and if the difference between the
amounts so determined shall not exceed ten percent of the lesser of such
amounts, then the Fair Market Value or the Fair Market Rental Value shall be
an amount equal to50% of the sum of the amounts so determined. If the
difference between the amounts so determined shall exceed 10% of the lesser of
such amounts, then such two appraisers shall have 20 days to appoint a third
appraiser, but if such appraisers fail to do so, then either party may request
the American Arbitration Association or any successor organization thereto to
appoint an appraiser within 20 days of such request, and both parties shall be
bound by any appointment so made within such 20-day period. If no such
appraiser shall have been appointed within such 20 days or within 90 days of
the original request for a determination of Fair Market Value or the Fair
Market Rental Value, whichever is earlier, either Lessor or Lessee may apply to
any court having jurisdiction to have appointment made by such court. Any
appraiser appointed, by the American Arbitration Association or by such court,
shall be instructed to determine the Fair Market Value or the Fair Market
Rental Value within 30 days after appointment of such appraiser. The
determination of the appraiser which differs most in terms of dollar amount
from the determinations of the other two appraisers shall be excluded, and 50%
of the sum of the remaining two determinations shall be final and binding upon
Lessor and Lessee as the Fair Market Value or the Fair Market Rental Value for
such interest. However, in the event that following the appraisal performed by
said third appraiser, the dollar amount of two of such appraisals are higher
and lower, respectively, than the dollar amount of the remaining appraisal in
equal degrees, the determinations of both the highest and lowest appraisal,
respectively, shall be rejected and the determination of the remaining
appraisal shall be final and binding upon Lessor and Lessee as the Fair Market
Value or the Fair Market Rental Value for such interest. This provision for
determination by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by
applicable law. Lessor and Lessee shall each pay the fees and expenses of the
appraiser appointed by it and each shall pay one-half of the fees and expenses
of the third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.
ARTICLE XXIX
[INTENTIONALLY DELETED]
ARTICLE XXX
DEFAULT BY LESSOR
30.1 DEFAULT BY LESSOR. Lessor shall be in default of its obligations under
this Lease if Lessor shall fail to observe or perform any term, covenant or
condition of this Lease on its part to be performed and such failure shall
continue for a period of 30 days after written notice thereof from Lessee,
unless such failure cannot with due diligence be cured within a period of 30
days, in which case such failure shall not be deemed to continue if Lessor,
within said 30-day period, proceeds promptly and with due diligence to cure the
failure and diligently completes the curing thereof. The time within which
Lessor shall be obligated to cure any such failure
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shall also be subject to extension of time due to the occurrence of any
Unavoidable Delay. In the event Lessor fails to cure any such default, Lessee,
without waiving or releasing any obligations hereunder, and in addition to all
other remedies available to Lessee hereunder or at law or in equity, may
purchase the Leased Property from Lessor for a purchase price equal to the
greater of the Fair Market Value of the Leased Property minus an amount equal
to any damage suffered by Lessee by reason of such default. In the event
Lessee elects to purchase the Leased Property, it shall deliver a notice
thereof to Lessor specifying a Payment Date occurring no less than 90 days
subsequent to the date of such notice on which it shall purchase the Leased
Property, and the same shall be thereupon conveyed in accordance with the
provisions of Article XVII. Any sums owed Lessee by Lessor hereunder shall
bear interest at the Overdue Rate from the date due and payable until the date
paid.
30.2 LESSEE'S RIGHT TO CURE. Subject to the provisions of Section 30. 1, if
Lessor shall breach any covenant to be performed by it under this Lease,
Lessee, after notice to and demand upon Lessor in accordance with Section 30.
1, without waiving or releasing any obligation of Lessor hereunder, and in
addition to all other remedies available hereunder and at law or in equity to
Lessee, may (but shall be under no obligation at any time thereafter to) make
such payment or perform such act for the account and at the expense of Lessor.
All sums so paid by Lessee and all costs and expenses (including reasonable
attorneys' fees) so incurred, together with interest thereon at the Overdue
Rate from the date on which such sums or expenses are paid or incurred by
Lessee, shall be paid by Lessor to Lessee on demand. The rights of Lessee
hereunder to cure and to secure payment from Lessor in accordance with this
Section 30.2 shall survive the termination of this Lease.
ARTICLE XXXI
ARBITRATION
31.1 CONTROVERSIES. Except with respect to the payment of Minimum Rent
hereunder, in case any controversy shall arise between the parties hereto as to
any of the requirements of this Lease or the performance thereof which
controversy the parties shall be unable to settle by agreement or as otherwise
provided herein, such controversy shall be determined by arbitration to be
initiated and conducted as provided in this Article XXXI.
31.2 APPOINTMENT OF ARBITRATORS. The party or parties requesting
arbitration shall serve upon the other a written demand therefor specifying the
matter to be submitted to arbitration, and nominating an arbitrator. Within 20
days after receipt of such written demand and notification, the other party
shall, in writing, nominate a competent disinterested person and the two
arbitrators so designated shall, within ten days thereafter, select a third
arbitrator and give immediate written notice of such selection to the parties
and shall fix in said notice a time and place for the first meeting of the
arbitrators, which meeting shall be held as soon as conveniently possible after
the selection of all arbitrators, at which time and place the parties to the
controversy may appear and be heard.
31.3 THIRD ARBITRATOR. In case the notified party or parties shall fail to
make a selection upon notice, as aforesaid, or in case the first two
arbitrators selected shall fail to agree upon a third arbitrator within ten
days after their selection, then such arbitrator or arbitrators may, upon
application made by either of the parties to the controversy, after 20 days'
written
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notice thereof to the other party or parties, have a third arbitrator
appointed by any judge of any United States court of record having jurisdiction
in the state in which the Leased Property is located or, if such office shall
not then exist, by a judge holding an office most nearly corresponding thereto.
31.4 ARBITRATION PROCEDURE. Said arbitrators shall give each of the parties
not less than ten days' written notice of the time and place of each meeting at
which the parties or any of them may appear and be heard and after hearing the
parties in regard to the matter in dispute and taking such other testimony and
making such other examinations and investigations as justice shall require and
as the arbitrators may deem necessary, they shall decide the questions
submitted to them. The decision of said arbitrators in writing signed by a
majority of them shall be final and binding upon the parties to such
controversy. In rendering such decisions and award, the arbitrators shall not
add to, subtract from or otherwise modify the provisions of this Lease.
31.5 EXPENSES. The expenses of such arbitration shall be divided between
Lessor and Lessee unless otherwise specified in the decision of the
arbitrators. Each party in interest shall pay the fees and expenses of its own
counsel.
ARTICLE XXXII
FINANCING OF THE LEASED PROPERTY
Lessor agrees that, if it grants or creates any mortgage, deed of trust,
lien, encumbrance or other title retention agreement ("Encumbrance") upon the
Leased Property, the holder of each such Encumbrance shall simultaneously with
or prior to recording the Encumbrance agree (a) to give Lessee the same notice,
if any, given to Lessor of any default or acceleration of any obligation
underlying any such Encumbrance or any sale in foreclosure of such Encumbrance,
(b) to permit Lessee to cure any such default on Lessor's behalf within any
applicable cure period, in which event Lessor agrees to reimburse Lessee for
any and all out-of-pocket costs and expenses incurred to effect any such cure
(including reasonable attorneys' fees), (c) to permit Lessee to appear with its
representatives and to bid at any public foreclosure sale with respect to any
such Encumbrance and (d) to enter into an agreement with Lessee containing the
provisions described in Article XXXIII of this Lease. Lessee agrees to execute
and deliver to Lessor or the holder of an Encumbrance any written agreement
required by this Article within ten days of written request thereof by Lessor
or the holder of an Encumbrance.
ARTICLE XXXIII
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
At the request from time to time by one or more holders of an Encumbrance
that may hereafter be placed upon the Leased Property or any part thereof, and
any and all renewals, replacements, modifications, consolidations, spreaders
and extensions thereof, Lessee will subordinate this Lease and all of Lessee's
rights and estate hereunder to each such Encumbrance and agree with each such
holder; provided that Lessee will attorn to and recognize such holder (or the
purchaser at any foreclosure sale or any sale under a power of sale contained
in any such Encumbrance or a holder by a deed in lieu of foreclosure, as the
case may be) as Lessor under this Lease for the balance of the Term then
remaining, subject to all of the terms and provisions
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of this Lease; provided further that each such institutional holder
simultaneously with or prior to recording any such Encumbrance executes and
delivers a written agreement in recordable form (a) consenting to this Lease
and agreeing that, notwithstanding any such other lease, mortgage, deed of
trust, right, title or interest, or any default, expiration, termination,
foreclosure, sale, entry or other act or omission under, pursuant to or
affecting any of the foregoing, Lessee shall not be disturbed in peaceful
enjoyment of the Leased Property nor shall this Lease be terminated or canceled
at any time, except in the event Lessor shall have the right to terminate this
Lease under the terms and provisions expressly set forth herein; (b) agreeing
that it will be bound by all the terms of this Lease, perform and observe all
of Lessor's obligations set forth herein; and (c) agreeing that all proceeds of
the casualty insurance described in Article XIII of this Lease and all Awards
described in Article XIV will be made available to Lessor for restoration of
the Leased Property as and to the extent required by this Lease, subject only
to reasonable regulation regarding the manner of disbursement and application
thereof. Lessee agrees to execute and deliver to Lessor or the holder of an
Encumbrance any written agreement required by this Article within ten days of
written request thereof by Lessor or the holder of an Encumbrance. Lessee
agrees to execute at the request from time to time of Lessor or an
institutional investor a certificate setting forth any defaults of Lessor
hereunder and the dates through which Rent has been paid and such other matters
as may be reasonably requested.
ARTICLE XXXIV
EXTENDED TERMS
If no Event of Default shall have occurred and be continuing, Lessee is
hereby granted the right to extend the Term of this Lease for four (4)
consecutive five (5) year periods ("Extended Term") for a maximum possible Term
of 25 years, by giving written notice to Lessor of each such extension at least
180 days, but not more than 270 days, prior to the expiration of the
then-current Term; subject, however, to the provisions of Section 13.7 hereof.
Lessor agrees to use its best efforts to provide Lessee with prior written
notice at least 210 days prior to the expiration of the then-current Term.
Lessee may not exercise its option for more than one Extended Term at a time.
During each Extended Term, all of the terms and conditions of this Lease shall
continue in full force and effect, except that the Minimum Rent for and during
each of the Extended Terms shall be the Fair Market Rental Value on the first
day of such Extended Term.
ARTICLE XXXV
MISCELLANEOUS
35.1 NO WAIVER. No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment
of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or any such term. To the extent permitted by law, no waiver of
any breach shall affect or alter this Lease, which shall continue in full force
and effect with respect to any other then existing or subsequent breach.
35.2 REMEDIES CUMULATIVE. To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Lessor or Lessee now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to
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every other right, power and remedy and the exercise or beginning of the
exercise by Lessor or Lessee of any one or more of such rights, powers and
remedies shall not preclude the simultaneous or subsequent exercise by Lessor
or Lessee of any or all of such other rights, powers and remedies.
35.3 SURRENDER. No surrender to Lessor of this Lease or of the Leased
Property or any part thereof, or of any interest therein, shall be valid or
effective unless agreed to and accepted in writing by Lessor and no act by
Lessor or any representative or agent of Lessor, other than such a written
acceptance by Lessor, shall constitute an acceptance of any such surrender.
35.4 [INTENTIONALLY DELETED]
35.5 TRANSFERS BY LESSOR. If Lessor or any successor owner of the Leased
Property shall convey the Leased Property in accordance with the terms hereof,
other than as security for a debt, the grantee or transferee of the Leased
Property shall expressly assume all obligations of Lessor hereunder arising or
accruing from and after the date of such conveyance or transfer, and shall be
reasonably capable of performing the obligations of Lessor hereunder and Lessor
or such successor owner, as the case may be, shall thereupon be released from
all future liabilities and obligations of Lessor under this Lease arising or
accruing from and after the date of such conveyance or other transfer and all
such future liabilities and obligations shall thereupon be binding upon the new
owner.
35.6 GENERAL. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Lessee and Lessor
against the other arising out of or relating to this Lease and arising prior to
any date of termination of this Lease shall survive such termination. If any
term or provision of this Lease or any application thereof shall be invalid or
unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby. If any late charges provided
for in any provision of this Lease are based upon a rate in excess of the
maximum rate permitted by applicable law, the parties agree that such charges
shall be fixed at the maximum permissible rate. Neither this Lease nor any
provision hereof may be changed, waived, discharged or terminated except by an
instrument in writing and in recordable form signed by Lessor and Lessee. All
the terms and provisions of this Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. The
headings in this Lease are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. This Lease shall be governed by
and construed in accordance with the laws of South Carolina, but not including
its conflict of laws rules. This Lease may be executed in one or more
counterparts, each of which shall be an original but, when taken together,
shall constitute but one document.
35.7 TRANSFER OF LICENSES. Upon the expiration or earlier termination of
the Term, Lessee shall take all action necessary to effect or useful in
effecting the transfer to Lessor or Lessor's nominee of all licenses, operating
permits and other governmental authorizations and all service contracts which
may be necessary or useful in the operation of the Facility and which relate
exclusively to the Facility.
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35.8 MEMORANDUM OF LEASE. Lessor and Lessee shall, promptly upon the
request of either, enter into a short form memorandum of this Lease in form
suitable for recording under the laws of the state in which the Leased Property
is located in which reference to this Lease, and all options contained herein,
shall be made.
ARTICLE XXXVI
GLOSSARY OF TERMS
36.1 For purposes of this Lease, except as otherwise expressly provided or
unless the context otherwise requires, (a) the terms defined in this Article
XXXVI have the meanings assigned to them in this Article XXXVI and include the
plural as well as the singular, (b) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted
accounting principles as at the time applicable, (c) all references in this
Lease to designated "Articles", "Sections" and other subdivisions are to the
designated Articles, Sections and other subdivisions of this Lease, and (d) the
words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Lease as a whole and not to any particular Article, Section or
other subdivision and (e) the word "including" shall mean "including without
limitation". For purposes of this Lease, the following terms shall have the
meanings indicated:
"Additional Charges" has the meaning set forth in Section 2.3.
"Affiliate", when used with respect to any corporation, shall mean any
person which, directly or indirectly, controls such corporation and has entered
into a lease agreement, similar to this Lease, with Lessor or has guaranteed
the lessee's performance of such a lease. For the purposes of this definition,
"control", as used with respect to any person, shall mean the possession,
directly and indirectly, of the power to direct or cause the direction of the
management and policies of such entity, through the ownership of no less than
twenty (20%) percent of the voting securities, partnership interests or other
equity interests of such entity.
"Award" means all compensation, sums or anything of value awarded, paid or
received on a total or partial Condemnation.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which national banks are closed.
"Capital Additions" means one or more new buildings or one or more
additional structures annexed to any portion of any of the Leased Improvements,
which are constructed on any parcel or portion of the Land during the Term,
including the construction of a new wing or new story, or the rebuilding of the
existing Leased Improvements or any portion thereof not normal, ordinary or
recurring to maintain the Leased Property.
"Charge" has the meaning set forth in Article XI hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commencement Date" has the meaning set forth in Article 1.
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"Condemnation" means the transfer of all or any part of the Leased
Property as a result of (i) the exercise of any governmental power, whether by
legal proceedings or otherwise, by a Condemnor or (ii) a voluntary sale or
transfer by Lessor to any Condemnor, either under threat of Condemnation or
while legal proceedings for Condemnation are pending.
"Condemnor" means any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.
"Consolidated Financial Statements" means for any fiscal year or other
accounting period for Lessee and its respective consolidated subsidiaries,
including Lessee, audited statements of earnings and retained earnings and of
changes in financial position for such period and for the period from the
beginning of the respective fiscal year of Lessee to the end of such period and
the related balance sheet as at the end of such period, together with the notes
thereto, all in reasonable detail and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding fiscal year
of Lessee, and prepared in accordance with generally accepted accounting
principles consistently applied, except as noted.
"Current Yield" means as of any date the annual Minimum Rent, as adjusted
from time-to-time pursuant to the terms of this Lease, divided by the sum of
(i) the Purchase Price as set forth in the Purchase and Sale Agreement plus
(ii) all Capital Additions Costs paid for or financed by Lessor which have not
been repaid by Lessee.
"Date of Taking" means the date the Condemnor has the right to possession
of the property being condemned.
"Encumbrance" has the meaning set forth in Article XXXII.
"Event of Default" has the meaning set forth in Section 15.1.
"Extended Term" has the meaning set forth in Section XXXIV.
"Facility" means the three office buildings operated on the Leased
Property containing a total of 35,109.05 gross square feet.
"Facility Mortgage" has the meaning set forth in Section 12.1.
"Facility Mortgagee" has the meaning set forth in Section 12.1.
"Fair Market Rental Value" means the fair market rental value of the
Leased Property (a) assuming the same is unencumbered by this Lease, and (b)
determined in accordance with the appraisal procedures set forth in Article
XXVIII or in such other manner as shall be mutually acceptable to Lessor and
Lessee and (c) not taking into account any reduction in value resulting from an
indebtedness to which the Leased Property may be subject, and (d) be the rental
that would be obtained in an arms-length transaction between an informed and
willing lessee under no compulsion to lease, and an informed and willing lessor
under no compulsion to lease.
29
<PAGE> 35
"Fair Market Value" means the fair market value of the Leased Property
including all Capital Additions, determined in accordance with the appraisal
procedures set forth in Article XXVIII or in such other manner as shall be
mutually acceptable to Lessor and Lessee, and not taking into account any
reduction in value resulting from any indebtedness to which the Leased Property
is subject or which encumbrance Lessee or Lessor is otherwise required to
remove pursuant to any provision of this Lease or agrees to remove at or prior
to the closing of the transaction as to which such Fair Market Value
determination is being made. The positive or negative effect on the value of
the Leased Property attributable to the interest rate, amortization schedule,
maturity date, prepayment penalty and other terms and conditions of any
Encumbrance on the Leased Property, as the case may be, which is not so
required or agreed to be removed shall be taken into account in determining
such Fair Market Value. The Fair Market Value would be the purchase price that
would be obtained in an arms-length transaction between an informed and willing
buyer under no compulsion to buy, and an informed and willing seller under no
compulsion to sell.
"Fiscal Year" means the 12-month period from January I to December 31.
"Fixed Term" has the meaning set forth in Article 1.
"Fixtures" has the meaning set forth in Article 1.
"Full Replacement Cost" has the meaning set forth in Section 12.2.
"Hazardous Materials" means any substance, including asbestos or any
substance containing asbestos, the group of organic compounds known as
polychlorinated biphenyls, flammable explosives, radioactive materials, medical
waste, chemicals known to cause cancer or reproductive toxicity, pollutants,
effluents, contaminants, emissions or related materials and items included in
the definition of hazardous or toxic wastes, materials or substances under any
Hazardous Materials Law.
"Hazardous Materials Law" means any law, regulation or ordinance relating
to environmental conditions, medical waste and industrial hygiene, including
the Resource Conservation and Recovery Act of 1976 ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"),
the Hazardous Materials Transportation Act, the Federal Water Pollution Control
Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act,
the Safe Drinking Water Act, and all similar federal, state and local
environmental statutes and ordinances, whether heretofore or hereafter enacted
or effective and all regulations, orders, or decrees heretofore or hereafter
promulgated thereunder.
"Impositions" means, collectively, all taxes relating to the Leased
Property, including all ad valorem, sales and use, gross receipts, action,
privilege, rent or similar taxes, assessments (including all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof and whether or not to be completed within the Term), water,
sewer or other rents and charges, excises, tax levies, fees (including license,
permit, inspection, authorization and similar fees), and all other governmental
charges, in each case whether general
30
<PAGE> 36
or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Leased Property and/or the Rent (including all
interest and penalties thereon due to any failure in payment by Lessee), which
at any time prior to, during or in respect of the Term hereof may be assessed
or imposed on or in respect of or be a lien upon (a) Lessor or Lessor's
interest in the Leased Property, (b) the Rent, the Leased Property or any part
thereof or any rent therefrom or any estate, right, title or interest therein,
or (c) any occupancy, operation, use or possession of, sales from, or activity
conducted on, or in connection with, the Leased Property or use of the Leased
Property or any part thereof, provided that nothing contained in this Lease
shall be construed to require Lessee to pay (1) any tax based on net income
(whether denominated as a franchise or capital stock or other tax) imposed on
Lessor, (2) any transfer or net revenue tax of Lessor, (3) any tax imposed
with respect to the sale, exchange or other disposition by Lessor of any
portion of the Leased Property or the proceeds thereof, or (4) except as
expressly provided elsewhere in this Lease, any principal or interest on any
Encumbrance on the Leased Property, except to the extent that any tax,
assessment, tax levy or charge which Lessee is obligated to pay pursuant to
this definition and which is in effect at any time during the Term hereof is
totally or partially repealed, and a tax, assessment, tax levy or charge set
forth in clause (1), (2) or (3) is levied, assessed or imposed expressly in
lieu thereof.
"Insurance Requirements" means all terms of any insurance policy required
by this Lease and all requirements of the issuer of any such policy.
"Land" has the meaning set forth in Article 1.
"Lease" means this Lease.
"Leased Improvements" and "Leased Property" have the meanings set forth in
Article 1.
"Legal Requirements" means all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting the Leased Property or the construction, use
or alteration thereof, whether now or hereafter enacted and in force, including
any which may (a) require repairs, modifications or alterations of or to the
Leased Property, or (b) in any way adversely affect the use and enjoyment
thereof, and all permits, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, actions and encumbrances contained in
any instruments, either of record or known to Lessee (other than encumbrances
created by Lessor without the consent of Lessee), at any time in force
affecting the Leased Property.
"Lending Institution" means any insurance company, federally insured
commercial or savings bank, national banking association, savings and loan
association, employees' welfare, pension or retirement fund or system,
corporate profit-sharing or pension plan, college or university, or real estate
investment including any corporation qualified to be treated for federal tax
purposes as a real estate investment trust having a net worth of at least
$50,000,000.
"Lessee" means Builders Transport, Inc., a Georgia Corporation, its
successors and assigns.
31
<PAGE> 37
"Lessor" means TWO TREES, a New York general partnership, and its
successors and assigns.
"Minimum Rent" has the meaning set forth in Section 2.1(a).
"Officer's Certificate" means a certificate of Lessee signed by the
Chairman of the Board, The Vice Chairman and Chief Executive Officer, the
President, the Chief Financial Officer, or another officer authorized to so
sign by the Board of Directors or By-Laws of Lessee, or any other person whose
power and authority to act has been authorized by delegation in writing by any
of the persons holding the foregoing offices.
"Overdue Rate" means as of any date, a rate per annum equal to the Prime
Rate as of such date, plus two percent, but in no event greater than the
maximum rate then permitted under applicable law.
"Payment Date" means any due date for the payment of the installments of
Minimum Rent under this Lease.
"Permitted Liens" means (i) pledges or deposits made to secure payments of
worker's compensation insurance (or to participate in any fund in connection
with worker's compensation insurance), unemployment insurance, pensions or
social security programs, (ii) liens imposed by mandatory provisions of law
such as for materialmen, mechanics, warehousemen and other like liens arising
in the Ordinary Course of Business, securing indebtedness whose payment is not
yet due and payable, (iii) liens for taxes, assessments and governmental
charges or levies if the same are not yet due and payable or if the same are
being contested in good faith and as to which adequate cash reserves have been
provided, (iv) liens arising from good faith deposits in connection with
tenders, leases, real estate bids or contracts (other than contracts involving
the borrowing of money), pledges or deposits to secure public or statutory
obligations and deposits to secure (or in lieu of) surety, stay, appeal or
customs bonds and deposits to secure the payment of taxes, assessments, duties
or other similar charges, (v) liens to secure purchase money indebtedness, so
long as the indebtedness incurred to purchase the new asset is secured only by
such asset, or (vi) encumbrances consisting of zoning restrictions, easements
or other restrictions on the use of real property; provided that such items do
not impair the use of such property for the purposes intended, none of which
is violated by existing or proposed structures or land use.
"Person" means a natural person, corporation, partnership, trust,
association, limited liability company or other entity.
"Personal Property" means all machinery, equipment, furniture,
furnishings, computers, signage, trade fixtures or other personal property and
inventory and supplies, together with all additions, substitutions and
replacements thereof, necessary or appropriate for the use and operation of the
Leased Property for its Primary Intended Use in compliance with applicable
Legal Requirements, except for any portion of the Leased Property.
"Primary Intended Use" has the meaning set forth in Section 6.2(a).
32
<PAGE> 38
"Prime Rate" means the annual rate announced by the Wall Street Journal or
its successors from time to time as being its prime rate. The prime rate is an
index rate used by the Wall Street Journal to establish lending rates and may
not necessarily be its most favorable lending rate. Any change in the Prime
Rate hereunder shall take effect on the effective date of such change in the
prime rate as established by the Wall Street Journal, without notice to Lessee
or any other action by Lessor. Interest shall be computed on the basis that
each year contains 360 days, by multiplying the principal amount by the per
annum rate set forth above, dividing the product so obtained by 360, and
multiplying the quotient thereof by the actual number of days elapsed.
"Rent" means, collectively, the Minimum Rent and the Additional Charges.
"Taking" means a taking or voluntary conveyance during the Term hereof of
all or part of the Leased Property, or any interest therein or right accruing
thereto or use thereof, as the result of, or in settlement of any Condemnation
or other eminent domain proceeding affecting the Leased Property whether or not
the same shall have actually been commenced.
"Term" means the Fixed Term and any Extended Term as to which Lessee has
exercised its options to extend contained in Article XXXIV hereof unless
earlier terminated pursuant to the provisions hereof.
"Unavoidable Delays" means delays due to strikes, lockouts, inability to
procure materials, power failure, acts of God, government restrictions, enemy
action, civil commotion, fire, unavoidable casualty or other causes beyond the
control of the party responsible for performing an obligation hereunder,
provided that lack of funds shall not be deemed a cause beyond the control of
either party hereto unless such lack of funds is caused by the failure of the
other party hereto to perform any obligations of such other party under this
Lease.
"Unsuitable for Its Primary Intended Use" as used anywhere in this Lease,
shall mean that, by reason of damage or destruction, or a partial Taking, in
the good faith judgment of Lessee, reasonably exercised, the Facility cannot
be profitably operated for its Primary Intended Use.
IN WITNESS WHEREOF, the parties have caused this Lease to be executed and
their respective corporate seals to be hereunto affixed and attested by their
respective officers thereunto duly authorized as of the date first written
above.
Witnesses: LESSOR
/s/ TWO TREES, a New York general partnership
- ----------------------
/s/ Judy Gluck By: /s/ Stanford M. Dinstein
- ---------------------- --------------------------------------
Stanford M. Dinstein
Its: Attorney-In-Fact
33
<PAGE> 39
/s/ John C. Stewart, Jr.
- ------------------------ LESSEE
BUILDERS TRANSPORT, INC., a Georgia
/s/ Jennifer M. Markle Corporation
- ----------------------
By: /s/ Robert Fox
-------------------------------------------
Its: V.P. & CFO
--------------------------------
Attest: /s/ J. Ray Hardy
---------------------------------------
Its: Asst. Secretary
---------------------------------
34
<PAGE> 40
STATE OF NEW YORK )
) PROBATE
COUNTY OF NEW YORK )
PERSONALLY appeared before me the undersigned witness who made oath that
s/he saw the within named Lessor, Two Trees, a New York general partnership, by
Stanford M. Dinstein, its Attorney-In-Fact, sign, seal and as its act and deed
deliver the within written instrument and that s/he with Judy Gluck witnessed
the execution thereof.
SWORN to and subscribed before me
this 11th day of October, 1995. /s/
------------------------
Judy Gluck (L.S.)
Notary Public for State of N.Y.
My Commission Expires: 6/30/97
STATE OF SOUTH CAROLINA )
) PROBATE
COUNTY OF KERSHAW )
PERSONALLY appeared before me the undersigned witness who made oath that
s/he saw the within named Lessee, Builders Transport, Inc., a Georgia
Corporation, by Robert Fox its Vice-President & CFO, sign, seal and as its act
and deed deliver the within written instrument and that s/he with the above
subscribed witness witnessed the execution thereof.
/s/ John C. Stewart, Jr.
----------------------------
SWORN to and subscribed before me
this 12th day of October, 1995.
Jennifer M. Markle (L.S.)
Notary Public for South Carolina
My Commission Expires: 10/12/2002
35
<PAGE> 41
EXHIBIT A
PROPERTY DESCRIPTION
All that piece, parcel or tract of land, lying and being
situate near City of Camden, County of Kershaw, State of
South Carolina, containing approximately twenty eight
and 78/100ths (28.78) acres, more or less, and being
more particularly described as follows:
Point of Beginning (iron pipe corner) located 372 feet
southeast from the centerline of Battleship Road
Extension measured along the right of way of U.S.
Highway No. 1; thence continuing in a southeasterly
direction along the right of way of U.S. No. 1 South
75(degrees)-51'-47" East a distance of 450.0 feet; thence in
southeasterly direction South 24(degrees)-36'-40" East a
distance of 1133.95' to right-of-way of C.S.X. Railroad;
thence in a southwesterly direction along right-of-way
of C.S.X. Railroad South 65(degrees)-22'-28" West a distance
of 642.74 feet; thence South 65(degrees)-15'-00" West a distance
of 550.82 feet; thence South 63(degrees)-57'-44" West a distance
of 300.40 feet; thence in a northerly direction North
14(degrees)-06'-52' East a distance of 196.63 feet; thence North
14(degrees)-07'-37" East a distance of 494.59 feet; thence North
14(degrees)-06'-14" East a distance of 754.70 feet; thence North
14(degrees)-11'-05" East a distance of 380.46 feet to the Point
of Beginning.
The above-described property is shown and described on a
survey prepared by Daniel D. Riddick, Professional
Surveyor No. 3322B on August 16, 1995, revised September
27, 1995 and recorded October 2, 1995, in Plat Book B-1
at Page 2, Records of Kershaw County, which is
incorporated herein by reference and made a part hereof.
This being the same property conveyed to Two Trees by
deed from the County of Kershaw recorded October _____,
1995, in the office of the Clerk of Court for Kershaw
County, in Deed Book ______at Page ______.
Tax Map Number: 284-00-00-007 Kershaw County
<PAGE> 42
EXHIBIT B
PERMITTED EXCEPTIONS
1. Taxes for the year 1995 and subsequent years, a lien not yet due
and payable.
2. Water and Sewerline easement from Town & Country, Inc., CCG Corp. and
County of Kershaw to the City of Camden recorded July 27, 1981 in Book
I10, Page 2588 and also on a Plat prepared by Daniel Riddick & Associates,
Inc. dated August 16, 1995 and recorded August 30, 1995 in Plat Book A-7,
Page 8, Kershaw County, South Carolina, as amended by that certain Amended
Easement from Town & Country, Inc., CCG Corp. and County of Kershaw to the
City of Camden recorded May 24, 1993 in Book 174, Page 9, Kershaw County,
South Carolina.
3. Reservation of a fifty (50) foot Right-of-Way for Railroad Spur Easement
as set forth in Deed Book IN, Page 2714 and also on a Plat prepared by
Daniel Riddick & Associates, Inc. dated August 16, 1995 and recorded
August 30, 1995 in Plat Book A-7, Page 8, Kershaw County, South Carolina.
4. Declaration of Restrictive Covenants dated April 21, 1980 and recorded in
Deed Book IN, Page 2556 also referred to on that certain Plat prepared by
Daniel Riddick & Associates, Inc. dated August 16, 1995 and recorded
August 30, 1995 in Plat Book A-7, Page 8, Kershaw County, South Carolina.
5. Easement for Drainage and a Retention Pond between Builders Transport,
Inc. and the County of Kershaw recorded January 14, 1992 in Book 64, Page
226 and referred to on that certain Plat prepared by Daniel Riddick &
Associates, Inc. dated August 16, 1995 and recorded August 30, 1995 in
Plat Book A-7, Page 8, Kershaw County, South Carolina.
<PAGE> 1
EXHIBIT 10.24
AMENDMENT
TO
AMENDED AND RESTATED
FINANCING AGREEMENT
dated as of May 28, 1993
THIS AMENDMENT dated as of December 29, 1995 is made by and among THE
CIT GROUP/BUSINESS CREDIT, INC., a New York corporation ("CITBC"), NATIONAL
CANADA FINANCE CORP., a subsidiary of National Bank of Canada ("NCFC"),
NATIONAL BANK OF CANADA, a Canadian chartered bank ("NBC", and together with
CITBC, the "Lenders"), CITBC, in its capacity as the agent for the Lenders
("Agent"), and BUILDERS TRANSPORT, INC., a Georgia corporation ("Company").
Preliminary Statement
The Company, the Agent, NBC, as assignee of NCFC, and CITBC are parties
to that certain Amended and Restated Financing Agreement, dated as of May 28,
1993, as amended to date (the "Financing Agreement"). Terms defined in the
Financing Agreement and not otherwise defined herein are used herein as therein
defined.
The Company, the Agent and the Lenders have agreed to amend certain
provisions of the financing agreement to reflect the assignment by CITBC to
NCFC, pursuant to an Assignment and Acceptance dated October 12, 1995, of a
portion of CITBC's right, title and interest as a Lender under the Financing
Agreement, to reflect the assignment by NCFC to NBC pursuant to Assignment and
Acceptance dated December 29, 1995, of all of NCFC's right, title and interest
as a "Lender" under the Financing Agreement, to provide for an additional term
loan advance to be made by the Lenders to the Company and to make certain other
changes to the Financing Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the Financing Agreement, the
advances and other financial accommodations made thereunder, the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Amendments to Financing Agreement. The Financing Agreement
is hereby amended, subject to the provisions of Section 2 hereof, effective as
of the date hereof, by
<PAGE> 2
(a) amending Section 1 Definitions by amending clause (h) of the
definition "Permitted Encumbrances" in its entirety to read as follows:
(h) capital lease obligations for motor vehicles not to exceed
$155,000,000 in the aggregate at any time outstanding.
(b) amending Section 1 Definitions by amending the definition
"Promissory Notes" in its entirety to read as follows:
Promissory Notes shall mean the notes and all replacements,
substitutions, consolidations and restatements thereof, in substantially
the forms of Exhibit A, Exhibit B, and Exhibit C attached hereto, delivered
by the Company to the Agent, on behalf of the Lenders, to evidence Term
Loan I, Term Loan II and the Revolving Loans, respectively, as amended
hereby, pursuant to, and repayable in accordance with, the provisions of
Section 4 of this Amended and Restated Financing Agreement as to the Term
Loans and Section 3 of this Amended and Restated Financing Agreement as to
the Revolving Loans.
(c) amending Section 1 Definitions by amending the definition
"Revolving Credit Commitment" in its entirety to read as follows:
Revolving Credit Commitment shall mean, as to any Lender, the
obligation of such Lender, in accordance with the provisions hereof, to (a)
make Revolving Loans, and (b) participate in any draws under the Letter of
Credit Guaranty issued on behalf of the Company hereunder or conversion of
any such draws into Term Loan II hereunder, in an aggregate principal
and/or face amount at any one time outstanding not to exceed such Lender's
pro rata share thereof, based from and after October 12, 1995 on the
percentage set forth below of the aggregate amount of such loan and
advances, as follows:
a) CITBC 55%
b) NBC 45%
as such percentages may be modified by subsequent assignments made in
accordance with the provisions of this Amended and Restated Financing
Agreement.
(d) amending Section 1 Definitions by amending the definition "Term
Loan I" in its entirety to read as follows:
2
<PAGE> 3
Term Loan I shall mean the term loan in the original aggregate
principal amount of $16,000,000.00 made by the Original Lenders
pursuant to, and repayable in accordance with, the Original Financing
Agreement and, subsequent to the Effective Date, repayable pursuant to
the provisions of Section 4 of this Amended and Restated Financing
Agreement, the outstanding balance of which is $5,000,000 as of the
1995 Amendment Effective Date after giving effect to the 1995 Term
Loan to be made on the 1995 Amendment Effective Date in the original
principal amount of $4,000,000, such Term Loan I principal amount
being evidenced by Amended, Restated and Consolidated Term Loan Notes
substantially in the form of Exhibit A to this Amended and Restated
Financing Agreement, payable to each Lender.
(e) amending Section 1 Definitions by amending the definition "Term
Loan Commitment" in its entirety to read as follows:
Term Loan Commitment shall mean as to:
a) CITBC - 55% of the aggregate outstanding amount of all Term Loans;
and
b) NBC - 45% of the aggregate outstanding amount of all Term Loans;
as such percentages may be modified by subsequent assignments made in
accordance with the provisions of this Amended and Restated Financing
Agreement.
(f) amending Section 1 Definitions by adding the following new
definitions thereto in appropriate alphabetical order:
NBC shall mean National Bank of Canada, a Canadian chartered bank,
successor-by-assignment to National Canada Finance Corp.'s interest
hereunder, acting through its New York Branch at 125 West 55th Street,
New York, New York 10019.
1995 Amendment Effective Date shall mean the date on which the
Amendment dated as of December 29, 1995 to this Amended and Restated
Financing Agreement becomes effective in accordance with the applicable
provisions of Section 2 of such Amendment.
1995 Term Loan shall mean the term loan advance in an aggregate
principal amount not to exceed $4,000,000, to the extent made in
accordance with the provisions of
3
<PAGE> 4
Section 4 of this Amended and Restated Financing Agreement.
(g) amending Section 4 Term Loans by amending paragraphs 1, 2 and 3
thereof in their entirety to read as follows:
TERM LOAN I
1. On the 1995 Amendment Effective Date, the Lenders will advance
their ratable shares of the 1995 Term Loan, as part of Term Loan I, in
exchange for Promissory Notes of the Company dated the 1995 Amendment
Effective Date in the aggregate original principal amount of
$5,000,000.00.
2. The Company hereby agrees to execute and deliver to the Agent
said Promissory Notes in the form of Exhibit A attached hereto, one
each of said Promissory Notes payable to each Lender, to evidence
Term Loan I in the aggregate principal amount thereof.
3. The principal amount of Term Loan I shall be repaid to the
Agent, for the benefit of the Lenders, by the Company in installments
of (a) $1,000,000 on December 31, 1995 and (b) $500,000 on the last day
of each March, June, September and December beginning March 31, 1996,
provided that the entire remaining principal balance thereof shall be
due and payable in full on December 31, 1997. No repayment of Term Loan
I may be reborrowed. The proceeds of the 1995 Term Loan shall be used
solely to repay principal of and accrued and unpaid interest on
outstanding Revolving Loans.
(h) amending Section 7 Representations. Warranties and Covenants by
amending paragraph 9 thereof in its entirety to read as follows:
9. The Company shall maintain at the end of each fiscal quarter,
a Net Worth of not less than:
<TABLE>
<CAPTION>
FISCAL PERIOD AMOUNT
------------- ------
<S> <C>
For the fiscal quarter $45,250,000
ending December 31, 1995
For the fiscal quarter $44,750,000
ending March 31, 1996
For the fiscal quarters $45,000,000
ending June 30, 1996 and
September 30, 1996
</TABLE>
4
<PAGE> 5
For each fiscal quarter $45,250,000
ending on or after
December 31, 1996
(i) amending Section 7 Representations, Warranties and Covenants by
amending paragraph 11(b) thereof in its entirety to read as follows:
(b) Contract for, purchase, make expenditures for, lease
pursuant to a Capital Lease or otherwise incur obligations with respect
to Capital Expenditures (whether subject to a security interest or
otherwise) during any fiscal year in an aggregate amount in excess of:
(i) $85,000,000 for the fiscal year ending December 31,
1995;
(ii) $30,000,000 for the fiscal year ending December 31,
1996 and each fiscal year thereafter;
provided that the amounts set forth above may increase from any
one fiscal year to the next succeeding fiscal year by an amount equal
to the difference, if any, between (x) the applicable cap for the
Capital Expenditures for the preceding fiscal year minus (y) the
Company's actual Capital Expenditures for such preceding fiscal year
(as shown on the Company's audited financial statements for such year).
(j) amending Section 7 Representations, Warranties and Covenants, by
amending paragraph 13 thereof in its entirety to read as follows:
13. The Company shall maintain at the end of each fiscal quarter, an
Interest Coverage Ratio of at least:
<TABLE>
<CAPTION>
FISCAL PERIOD RATIO
------------- -----
<S> <C>
For the fiscal quarter 1.00 to 1
ending December 31, 1995
For the fiscal quarter 0.90 to 1
ending March 31, 1996
For the fiscal quarter 0.75 to 1
ending June 30, 1996
For the fiscal quarter 0.85 to 1
ending September 30,
1996
</TABLE>
5
<PAGE> 6
For each fiscal quarter 1.00 to 1
ending on or after December
31, 1996
(k) amending Section 7 Representations. Warranties and Covenants, by
amending paragraph 14 thereof in its entirety to read as follows:
14. The Company shall maintain at the end of each fiscal quarter, a
Leverage Ratio of not more than:
<TABLE>
<CAPTION>
FISCAL PERIOD RATIO
------------- -----
<S> <C>
For the fiscal quarters 5.45 to 1
ending December 31, 1995
and March 31, 1956
For the fiscal quarter 5.50 to 1
ending June 30, 1996
For the fiscal quarter 5.35 to 1
ending September 30,
1996
For each fiscal quarter 5.15 to 1
ending on or after
December 31, 1996
</TABLE>
(1) amending Section 7 Representations. Warranties and Covenants, by
adding the following immediately after paragraph 22:
23. The Company shall deliver to the Agent, on or before
December 30, 1995, (i) copies of duly executed mortgage or deed of
trust modifications with respect to the Real Estate (other than parcels
located in White Pine, Tennessee and Medicine Lodge, Kansas) reflecting
the advance to the Company of the 1995 Term Loan, in form for recording
and otherwise in form and substance satisfactory to the Agent and (ii)
fully paid endorsements to the existing mortgagee title insurance
policies reflecting the modifications, or binding commitments to issue
the same, issued by a title insurance company satisfactory to the Agent
and in form and substance satisfactory to the Agent, as to the Real
Estate identified by the Agent to the Company. The Company shall pay
all transfer, recording and other fees and taxes relating to the
preparation and recordation of the modifications.
6
<PAGE> 7
(m) amending the Financing Agreement by adding thereto a new Section 15
Cross-Border Provisions to read in its entirety as follows:
SECTION 15. CROSS-BORDER PROVISIONS:
1. Prior to the date hereof, each Lender which is not incorporated
under the laws of the United States of America or a state thereof agrees that
it will deliver to the Agent (i) a letter in duplicate and two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each case that such Lender
is entitled to receive payments under this Amended and Restated Financing
Agreement without deduction or withholding of any United States Federal income
taxes, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from United
States backup withholding tax. Each such Lender which delivers a copy of a Form
1001 or 4224 and Form W-8 or W-9 pursuant to the next preceding sentence
further undertakes to deliver to the Agent two further copies of the said
letter and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable
forms, or other manner of certification, as the case may be, on or before the
date that any such letter or form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent letter and form
previously delivered by it to the Agent, and such extensions or renewals
thereof as may reasonably be requested by the Agent, certifying in the case of
a Form 1001 or 4224 that such Lender is entitled to receive payments under this
Amended and Restated Financing Agreement without deduction or withholding of
any United States Federal income taxes, unless in any such case an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such letter or form with respect
to it and such Lender advises the Agent that it is not capable of receiving
payments without any deduction or withholding of United States Federal income
tax, and in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax, in which case, all payments by Borrower
hereunder and under any Note shall be increased by the amount necessary to pay
to the Lender, net of any such withholding tax(es) the amount of each payment
provided for hereunder.
(n) further amending the Financing Agreement by substituting for
Exhibits A.1.1 and A.1.2 thereto, Exhibit A in the form attached hereto as
Annex 1.
7
<PAGE> 8
Section 2. Effectiveness of Amendment. This Amendment shall become
effective as of the date hereof upon receipt by the Agent of the following,
each in form and substance satisfactory to the Agent and the Lenders:
(a) at least five copies of this Amendment, each duly executed and
delivered by the Company and each Lender;
(b) an Officer's Certificate executed by an authorized officer of
the Company to the effect that after giving effect to this Amendment (i) all
representations and warranties of the Company set forth in the Financing
Agreement and in any other document, instrument or agreement entered into in
connection with the Financing Agreement (together with the Financing Agreement,
the "Loan Documents") are true and correct in all material respects on and as
of the 1995 Amendment Effective Date, after giving effect to the 1995 Term Loan
and application of the proceeds thereof, and (ii) the Company is in compliance
with all of the terms and provisions set forth in the Financing Agreement and
the other Loan Documents;
(c) a legal opinion of Nelson, Mullins, Riley & Scarborough,
counsel for the Company, as to such matters in connection with the transactions
contemplated by this Amendment as may reasonably be requested by the Agent or
any Lender;
(d) confirmations duly executed and delivered by the Guarantors of
their Guaranties and the Pledge Agreements in the form attached to this
Amendment;
(e) the amendment fee in an amount equal to $15,000, which fee is
fully-earned by the Agent and the Lenders when paid and shall not be subject to
refund or rebate;
(f) notes duly executed by the Company, payable to the order of
each Lender, in the form of Annex 1 hereto, properly completed (the "1995
Notes"); and
(g) such other documents, instruments and certificates as the
Agent or any Lender may reasonably request in connection with the transactions
contemplated by this Amendment.
Section 3. Representations and Warranties. The Company hereby
represents and warrants to each Lender and the Agent as follows:
(a) Organization: Power; Qualification. The Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted and is duly qualified and authorized to do business in each
jurisdiction in
8
<PAGE> 9
which the failure to be so qualified would have a materially adverse effect on
the business, assets or financial condition of the Company.
(b) Authorization of Amendment. The Company has the right and
power, and has taken all necessary action to authorize, execute and deliver this
Amendment and the 1995 Notes and to perform the Financing Agreement, as amended
by this Amendment, and the 1995 Notes in accordance with their respective
terms. This Amendment and the 1995 Notes have been duly executed and delivered
by duly authorized officers of the Company and constitute legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms.
(c) Compliance of Financing Agreement and Amendment with Laws,
etc. The execution, delivery and performance of the Financing Agreement as
amended by this Amendment and the 1995 Notes, each in accordance with its
terms, does not and will not, by the passage of time, the giving of notice or
otherwise:
(i) require any government approval, consent, license or
registration or violate any law, rule, regulation or order applicable to
the Company or the Company's properties or assets;
(ii) conflict with, result in a breach of or constitute a
default under the certificate of incorporation or by-laws of the Company,
the Indentures, the Subordination Agreement, any indenture, agreement or
other instrument to which the Company or any subsidiary of the Company is
a party or by which the Company or any subsidiary of the Company or any
property or assets of the Company or any subsidiary of the Company may be
bound or any governmental approval, consent, license or registration
applicable to the Company or any subsidiary of the Company; or
(iii) result in or require the creation or imposition of any
lien, security interest, charge or encumbrance upon or with respect to any
property or assets now owned or hereafter acquired by the Company or any
subsidiary of the Company, other than the security interest granted to the
Agent, for its benefit and the benefit of the Lenders.
(d) Adverse Change. Since September 30, 1995,
(i) no material adverse change in the business, assets,
liabilities, financial condition, results of operations or business
prospects of the Company and its subsidiaries taken as a whole has
occurred, and
9
<PAGE> 10
(ii) no event has occurred or failed to occur which has had,
or may have, a materially adverse effect on the Company and its
subsidiaries taken as a whole.
Section 4. Confirmation by Lenders. The Lenders confirm their consent
to the Company entering into that certain Lease Agreement dated as of October
11, 1995 between Two Trees, a New York general partnership affiliated with the
Company, as lessor, and the Company, as lessee, in respect of the Company's
headquarters facility in Camden, South Carolina.
Section 5. Assignment by NCFC. The Agent, CITBC and the Company hereby
acknowledge notice of, and consent to, the assignment by NCFC of all of its
right, title and interest in and to the Financing Agreement, any Notes held by
it, and any and all rights and obligations as "Lender" under the Financing
Agreement, to its affiliate, NBC. In accordance with the terms of Section 14
paragraph (5) of the Financing Agreement, NBC hereby agrees to be bound by the
terms of the Financing Agreement as if it were an original signer thereof as a
"Lender."
Section 6. Effect of Amendment. From and after the effectiveness of
this Amendment, all references in the Financing Agreement and in the Loan
Documents to "the Amended and Restated Financing Agreement," "the Financing
Agreement," "hereunder," "hereof" and words of like import referring to the
Financing Agreement, shall mean and be references to the Financing Agreement as
amended by this Amendment. Except as expressly amended hereby, the Financing
Agreement and all terms, conditions and provisions thereof remain in full force
and effect and are hereby ratified and confirmed. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender or the Agent
under any of the Loan Documents, nor constitute a waiver of any provision of
any of the Loan Documents.
Section 7. Counterpart Execution: Governinq Law.
(a) Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same agreement.
(b) Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws of the State of Georgia,
without giving effect to principles of conflicts of laws.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
[CORPORATE SEAL] BUILDERS TRANSPORT, INC.,
a Georgia corporation, as the
ATTEST: Company
J. Ray Hardy
- ---------------------------
[Assistant] Secretary By: /s/ T. Michael Guthrie
------------------------------
Title: Treasurer
---------------------------
THE CIT GROUP/BUSINESS
CREDIT, INC., a New York
corporation, as Agent and as
a Lender
By: /s/ Neil Mulford
------------------------------
Title: Assistant Vice President
---------------------------
NATIONAL BANK OF CANADA,
a Canadian chartered bank,
successor in interest to
National Canada Finance
Corp.
By: /s/ Alex M. Council IV
------------------------------
Title: Vice President
---------------------------
NATIONAL CANADA FINANCE CORP.,
a subsidiary of National
Bank of Canada, for purposes
of Section 5
By: /s/ Dan Shaw
------------------------------
Title: Assistant Vice President
---------------------------
11
<PAGE> 1
EXHIBIT 10.25
AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED
FINANCING AGREEMENT
dated as of May 28, 1993
THIS AMENDMENT dated as of March 25, 1996 is made by and among THE CIT
GROUP/BUSINESS CREDIT, INC., a New York corporation ("CITBC"), NATIONAL BANK OF
CANADA, a Canadian chartered bank ("NBC", and together with CITBC, the
"Lenders"), CITBC, in its capacity as the agent for the Lenders ("Agent"), and
BUILDERS TRANSPORT, INC., a Georgia corporation ("Company").
Preliminary Statement
The Company, the Agent, NBC, and CITBC are parties to that certain
Amended and Restated Financing Agreement, dated as of May 28, 1993, as amended
to date (the "Financing Agreement"). Terms defined in the Financing Agreement
and not otherwise defined herein are used herein as therein defined.
The Company, the Agent and the Lenders have agreed to amend certain
financial covenants of the Financing Agreement and to waive instances of
noncompliance by the Company with such financial covenants upon and subject to
the terms of this Amendment.
NOW, THEREFORE, in consideration of the Financing Agreement, the
advances and other financial accommodations made thereunder, the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
Section 1. Amendments to Financing Agreement. The Financing Agreement
is hereby amended, subject to the provisions of Section 2 hereof, effective as
of the date hereof, by amending Section 7 Representations, Warranties and
Covenants by amending paragraphs 9, 13 and 14 thereof in their entireties to
read, respectively, as follows:
9. The Company shall maintain at the end of each fiscal
quarter, a Net Worth of not less than:
<TABLE>
<CAPTION>
FISCAL PERIOD AMOUNT
------------- ------
<S> <C>
For the fiscal quarter $37,000,000
ending March 31,
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION> <S> <C>
For the fiscal quarter $37,250,000
ending June 30, 1996
For the fiscal quarter $37,500,000
ending September 30,
1996 and each fiscal
quarter thereafter
</TABLE>
13. The Company shall maintain at the end of each fiscal
quarter, an Interest Coverage Ratio of at least:
<TABLE>
<CAPTION>
FISCAL PERIOD RATIO
------------- -----
<S> <C>
For the fiscal quarter 0.75 to 1
ending March 31, 1996
For the fiscal quarter 0.60 to 1
ending June 30, 1996
For the fiscal quarter 0.70 to 1
ending September 30,
1996
For each fiscal quarter 1.00 to 1
ending on or after
December 31, 1996
</TABLE>
14. The Company shall maintain at the end of each fiscal
quarter, a Leverage Ratio of not more than:
<TABLE>
<CAPTION>
FISCAL PERIOD RATIO
------------- -----
<S> <C>
For the fiscal quarters 6.25 to 1
ending March 31 1996
and June 30, 1996
For the fiscal quarter 6.15 to 1
ending September 30,
1996
For each fiscal quarter 6.00 to 1
ending on or after
December 31, 1996
</TABLE>
Section 2. Waiver. Subject to the provisions of Section 3, the
Lenders hereby waive compliance and the effects of noncompliance by the Company
with the provisions of Section 7, paragraph 9 to the extent that the Company's
Net Worth as of December 31, 1995 was not less than $38,289,000 and Section 7,
paragraph 14 to the extent that the Leverage Ratio as of December 31, 1995 was
not greater than 6.11 to 1.
2
<PAGE> 3
Section 3. Effectiveness of Amendment. Sections 1 and 2 of this
Amendment shall become effective as of the date hereof upon receipt by the
Agent of the following, each in form and substance satisfactory to the Agent
and the Lenders:
(a) at least five copies of this Amendment, each duly
executed and delivered by the Company and each Lender;
(b) an Officer's Certificate executed by an authorized
officer of the Company to the effect that after giving effect to this Amendment
(i) all representations and warranties of the Company set forth in the
Financing Agreement and in any other document, instrument or agreement entered
into in connection with the Financing Agreement (together with the Financing
Agreement, the "Loan Documents") are true and correct in all material respects
on and as of the date thereof and (ii) the Company is in compliance with all of
the terms and provisions set forth in the Financing Agreement and the other
Loan Documents;
(c) confirmations duly executed and delivered by the
Guarantors of their Guaranties and the Pledge Agreements in the form attached
to this Amendment; and
(d) such other documents, instruments and certificates as
the Agent or any Lender may reasonably request in connection with the
transactions contemplated by this Amendment.
Section 4. Effect of Amendment. From and after the
effectiveness of this Amendment, all references in the Financing Agreement and
in the Loan Documents to "the Amended and Restated Financing Agreement," "the
Financing Agreement," "hereunder," "hereof" and words of like import referring
to the Financing Agreement, shall mean and be references to the Financing
Agreement as amended by this Amendment. Except as expressly amended hereby,
the Financing Agreement and all terms, conditions and provisions thereof remain
in full force and effect and are hereby ratified and confirmed. The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any
Lender or the Agent under any of the Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.
Section 5. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
3
<PAGE> 4
(b) Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws of the State of Georgia, without
giving effect to principles of conflicts of laws.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[CORPORATE SEAL] BUILDERS TRANSPORT, INC.,
a Georgia corporation, as the
ATTEST: Company
T.M. Guthrie
- ------------------------
[Assistant] Secretary By: Robert Fox
--------------------------------------
Title: Executive Vice President &
Chief Financial Officer
----------------------------------
THE CIT GROUP/BUSINESS
CREDIT, INC., a New York
corporation, as Agent and as
a Lender
By: Robert Bernier
--------------------------------------
Title:Vice President
-----------------------------------
NATIONAL BANK OF CANADA,
a Canadian chartered bank
By: Charles Collie
--------------------------------------
Title: Vice President & Manager
-----------------------------------
By: Dan Shaw
--------------------------------------
Title: Assistant Vice President
-----------------------------------
5
<PAGE> 6
CONSENT, RELEASE AND CONFIRMATION OF GUARANTORS
Each of the undersigned, each a "Guarantor" as defined in the Amended
and Restated Financing Agreement dated May 28, 1993 among Builders Transport,
Inc., as borrower, The CIT Group/Business Credit, Inc., as Agent for the
Lenders (as such term is defined therein) and as a Lender and National Bank of
Canada, as a Lender, hereby acknowledges receipt of the foregoing Amendment and
Waiver to Amended and Restated Financing Agreement and confirms for the benefit
of the Agent and the Lenders, that each of the Guaranty or Non-Recourse
Guaranty, as the case may be, dated January 3, 1992, as amended, executed and
delivered by the undersigned continues in full force and effect as a guaranty
in accordance with its terms and continues to be secured by any collateral
therefor and that each of the undersigned hereby waives and releases any and
all claims it may have against the Agent or any Lender or any of their
respective shareholders, directors, employees or agents arising out of any
event or circumstance existing on or prior to the date hereof and arising under
the Original Financing Agreement (as defined in the aforesaid Amended and
Restated Financing Agreement), the aforesaid Amended and Restated Financing
Agreement, the Guaranty, the Non-Recourse Guaranty or any related document or
in connection with the transactions contemplated thereby.
BUILDERS TRANSPORT OF TEXAS, INC.
By Robert Fox
------------------------------
Name: Robert Fox
Title: Chief Financial Officer
CCG, INC.
By Robert Fox
------------------------------
Name: Robert Fox
Title: Chief Financial Officer
BUILDERS TRANSPORT, INCORPORATED
By Robert Fox
------------------------------
Name: Robert Fox
Title: Chief Financial Officer
<PAGE> 1
EXHIBIT 10.26
RESOLVED, that the Company does hereby amend the KSOP, effective as of the
Effective Date (as defined under the Plan), as follows:
Notwithstanding anything in the Plan to the contrary, if no more than
one-third ( 1/3) of the Employer Regular ESOP Contributions and Employer
Matching ESOP Contributions to the Plan for a given Plan Year, which are
deductible under Code section 404(a)(9), are allocated to Highly
Compensated Employees, the limitations imposed by Code section 415 shall
not apply to:
(A) Forfeitures of Employer Securities under the Plan, if such
securities were acquired with the proceeds of a loan (as described in
Code section 404(a)(9)(A)), or
(B) Employer Regular ESOP Contributions or Employer Matching ESOP
Contributions to the Plan which are deductible under Code section
404(a)(9)(B) and charged against the applicable Participant's
Account(s).
<PAGE> 1
EXHIBIT 11
Statement Re: Computation of Per Share Earnings
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
PRIMARY:
Average shares outstanding 6,212,517 6,187,196 5,936,770
Net effect of dilutive stock options -
based on the treasury method 178,177 326,719 292,923
Weighted average number of shares
held in treasury (1,128,265) (905,214) (855,500)
------------ ----------- -----------
Shares used to compute primary
per share income (loss) 5,262,429 5,608,701 5,374,193
============ =========== ===========
Income before cumulative effect
of accounting change $ 218,890 $ 4,515,088 $ 3,041,745
Cumulative effect of accounting change (7,290,621) - -
------------ ----------- -----------
Net income (loss) $ (7,071,731) $ 4,515,088 $ 3,041,745
============ =========== ===========
Net Income (loss) per Common Share:
Net income before cumulative effect
of accounting change $ .04 .81 .57
Cumulative effect of accounting change (1.38) - -
------------ ----------- -----------
Net income (loss) per common share $ (1.34) .81 .57
============ =========== ===========
FULLY DILUTED:
Average shares outstanding 6,212,517 6,187,196 5,936,770
Net effect of dilutive stock options -
based on the treasury stock method
using the year-end market price, if
higher than average market price 250,432 326,719 484,579
Assumed conversion of 8%
subordinated convertible debentures 1,089,918 1,155,260 1,178,279
Assumed conversion of 6-1/2%
subordinated convertible debentures 599,344 651,665 663,444
Weighted average number of shares
held in treasury (1,128,265) (905,214) (855,500)
------------ ----------- -----------
Shares used to compute fully diluted
per share income 7,023,946 7,415,626 7,407,572
============ =========== ===========
Net income before cumulative effect
of accounting change and adjustments $ 218,890 $ 4,515,088 $ 3,041,745
Add 8% subordinated convertible
debenture interest, net of income tax effect 1,297,787 1,491,385 1,518,000
Add 6-1/2% subordinated convertible
debenture interest, net of income tax effect 889,687 1,060,504 1,074,431
Cumulative effect of accounting change (7,290,621) - -
------------ ----------- -----------
Adjusted net income (loss) $ (4,884,257) $ 7,066,977 $ 5,634,176
============ =========== ===========
Net Income (loss) per Common Share:
Net income before cumulative effect
of accounting change $ .34 .95 .76
Cumulative effect of accounting change (1.04) - -
------------ ----------- -----------
Net income (loss) per common share $ (.70) .95 .76
============ =========== ===========
</TABLE>
<PAGE> 1
Ernst & Young LLP [Logo]
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-14988, 33-59948 and 33-86626) pertaining to the Incentive
Stock Option Plan, Non-employee Directors' Stock Option Plan and the Employee
Retirement Plan of Builders Transport, Incorporated and subsidiaries and in the
related Prospectuses of our report dated February 23, 1996, with respect to the
consolidated financial statements and schedule of Builders Transport,
Incorporated and subsidiaries included in the Annual Report (Form 10-K) for the
year ended December 31, 1995.
ERNST & YOUNG LLP
Winston-Salem, North Carolina
March 25, 1996
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints Stanford M. Dinstein, John R. Morris, Robert Y. Fox, T.
Michael Guthrie or Robert E. Lee Garner the true and lawful agents and
attorneys-in-fact of the undersigned with full power and authority in each of
said agents and attorneys-in-fact, acting singly, to sign for the undersigned,
as Director or an officer of the Company, or as both, the Company's 1995 Annual
Report on Form 10-K to be filed with the Securities and Exchange Commission,
Washington, D.C. under the Securities Exchange Act of 1934, and to sign any
amendment or amendments to such Annual Report, including an Annual Report
pursuant to Form 11-K to be filed as an amendment to the Form 10-K; hereby
ratifying and confirming all acts taken by such agents and attorneys-in-fact as
herein authorized.
DATED: March 15, 1996.
/s/ DAVID C. WALENTAS
--------------------------------------
David C. Walentas
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints David C. Walentas, John R. Morris, Robert Y. Fox, T.
Michael Guthrie or Robert E. Lee Garner the true and lawful agents and
attorneys-in-fact of the undersigned with full power and authority in each of
said agents and attorneys-in-fact, acting singly, to sign for the undersigned,
as Director or an officer of the Company, or as both, the Company's 1995 Annual
Report on Form 10-K to be filed with the Securities and Exchange Commission,
Washington, D.C. under the Securities Exchange Act of 1934, and to sign any
amendment or amendments to such Annual Report, including an Annual Report
pursuant to Form 11-K to be filed as an amendment to the Form 10-K; hereby
ratifying and confirming all acts taken by such agents and attorneys-in-fact as
herein authorized.
DATED: March 15, 1996.
/s/ STANFORD M. DINSTEIN
--------------------------------------
Stanford M. Dinstein
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints David C. Walentas, Stanford M. Dinstein, Robert Y. Fox,
T. Michael Guthrie or Robert E. Lee Garner the true and lawful agents and
attorneys-in-fact of the undersigned with full power and authority in each of
said agents and attorneys-in-fact, acting singly, to sign for the undersigned,
as Director or an officer of the Company, or as both, the Company's 1995 Annual
Report on Form 10-K to be filed with the Securities and Exchange Commission,
Washington, D.C. under the Securities Exchange Act of 1934, and to sign any
amendment or amendments to such Annual Report, including an Annual Report
pursuant to Form 11-K to be filed as an amendment to the Form 10-K; hereby
ratifying and confirming all acts taken by such agents and attorneys-in-fact as
herein authorized.
DATED: March 15, 1996.
/s/ JOHN R. MORRIS
--------------------------------------
John R. Morris
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints David C. Walentas, Stanford M. Dinstein, John R.
Morris, Robert Y. Fox, T. Michael Guthrie or Robert E. Lee Garner the true and
lawful agents and attorneys-in-fact of the undersigned with full power and
authority in each of said agents and attorneys-in-fact, acting singly, to sign
for the undersigned, as Director or an officer of the Company, or as both, the
Company's 1995 Annual Report on Form 10-K to be filed with the Securities and
Exchange Commission, Washington, D.C. under the Securities Exchange Act of 1934,
and to sign any amendment or amendments to such Annual Report, including an
Annual Report pursuant to Form 11-K to be filed as an amendment to the Form
10-K; hereby ratifying and confirming all acts taken by such agents and
attorneys-in-fact as herein authorized.
DATED: March 15, 1996.
/s/ ARTHUR C. BAXTER
--------------------------------------
Arthur C. Baxter
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints David C. Walentas, Stanford M. Dinstein, John R.
Morris, Robert Y. Fox, T. Michael Guthrie or Robert E. Lee Garner the true and
lawful agents and attorneys-in-fact of the undersigned with full power and
authority in each of said agents and attorneys-in-fact, acting singly, to sign
for the undersigned, as Director or an officer of the Company, or as both, the
Company's 1995 Annual Report on Form 10-K to be filed with the Securities and
Exchange Commission, Washington, D.C. under the Securities Exchange Act of 1934,
and to sign any amendment or amendments to such Annual Report, including an
Annual Report pursuant to Form 11-K to be filed as an amendment to the Form
10-K; hereby ratifying and confirming all acts taken by such agents and
attorneys-in-fact as herein authorized.
DATED: March 15, 1996.
/s/ FREDERICK S. MORTON
--------------------------------------
Frederick S. Morton
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints David C. Walentas, Stanford M. Dinstein, John R.
Morris, Robert Y. Fox, T. Michael Guthrie or Robert E. Lee Garner the true and
lawful agents and attorneys-in-fact of the undersigned with full power and
authority in each of said agents and attorneys-in-fact, acting singly, to sign
for the undersigned, as Director or an officer of the Company, or as both, the
Company's 1995 Annual Report on Form 10-K to be filed with the Securities and
Exchange Commission, Washington, D.C. under the Securities Exchange Act of 1934,
and to sign any amendment or amendments to such Annual Report, including an
Annual Report pursuant to Form 11-K to be filed as an amendment to the Form
10-K; hereby ratifying and confirming all acts taken by such agents and
attorneys-in-fact as herein authorized.
DATED: March 15, 1996.
/s/ T. MICHAEL GUTHRIE
--------------------------------------
T. Michael Guthrie
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director or officer of
Builders Transport, Incorporated, a Delaware corporation (the "Company") hereby
constitutes and appoints David C. Walentas, Stanford M. Dinstein, John R.
Morris, Robert Y. Fox, T. Michael Guthrie or Robert E. Lee Garner the true and
lawful agents and attorneys-in-fact of the undersigned with full power and
authority in each of said agents and attorneys-in-fact, acting singly, to sign
for the undersigned, as Director or an officer of the Company, or as both, the
Company's 1995 Annual Report on Form 10-K to be filed with the Securities and
Exchange Commission, Washington, D.C. under the Securities Exchange Act of 1934,
and to sign any amendment or amendments to such Annual Report, including an
Annual Report pursuant to Form 11-K to be filed as an amendment to the Form
10-K; hereby ratifying and confirming all acts taken by such agents and
attorneys-in-fact as herein authorized.
DATED: March 15, 1996.
/s/ ROBERT Y. FOX
--------------------------------------
Robert Y. Fox
<PAGE> 8
BUILDERS TRANSPORT, INCORPORATED
SECRETARY'S CERTIFICATE
I, Robert E. Lee Garner, hereby certify as follows:
1. I am the Secretary of Builders Transport, Incorporated, a
corporation duly organized and existing in good standing under the laws of
the State of Delaware (the "Company"), and as such I am authorized to
execute and deliver this certificate.
2. Attached hereto as Annex I is a true, complete and correct copy of
a resolution duly adopted on November 10, 1995, by the Company's Board of
Directors; said resolution has not been altered, amended or repealed; said
resolution has been in full force and effect at all times since the date of
its adoption; and said resolution is in full force and effect as of the
date of this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand as of this 27th day of March,
1996.
/s/ ROBERT E. LEE GARNER
--------------------------------------
Robert E. Lee Garner
Secretary
Builders Transport, Incorporated
<PAGE> 9
ANNEX I
RESOLVED, that in connection with the preparation and filing of the Company's
Annual Report on Form 10-K with the Securities and Exchange Commission, each of
the Company's officers and Directors who may be required to execute said Form
10-K or any amendment thereto (whether on behalf of the Company or as an officer
or Director thereof or by attesting the seal of the Company or otherwise) be,
and he hereby is, authorized to execute a power of attorney appointing the
Company's Chairman of the Board of Directors, the Vice Chairman of the Board of
Directors and Chief Executive Officer, President, Treasurer or Secretary his
true and lawful agent and attorney-in-fact to execute in his name, place and
stead (in any such capacity) and as attorney and agent for the Company said Form
10-K and any and all amendments thereto, and all instruments necessary in
connection therewith, to attest the seal of the Company thereon, and to file the
same with the Securities and Exchange Commission, said attorney-in-fact and
agent to have full power and authority to do and perform every act whatsoever
necessary, appropriate or desirable to be done in the premises as fully and to
all intents and purposes as any such officer or Director might or could do in
person.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BUILDERS TRANSPORT, INC. FOR THE YEAR ENDED DECEMBER 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 109
<SECURITIES> 0
<RECEIVABLES> 28,815
<ALLOWANCES> 511
<INVENTORY> 3,233
<CURRENT-ASSETS> 49,328
<PP&E> 301,924
<DEPRECIATION> 102,662
<TOTAL-ASSETS> 272,061
<CURRENT-LIABILITIES> 58,489
<BONDS> 164,762
0
0
<COMMON> 62
<OTHER-SE> 38,227
<TOTAL-LIABILITY-AND-EQUITY> 272,061
<SALES> 289,527
<TOTAL-REVENUES> 289,527
<CGS> 0
<TOTAL-COSTS> 272,958
<OTHER-EXPENSES> 1,420<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,145
<INCOME-PRETAX> 4
<INCOME-TAX> (215)
<INCOME-CONTINUING> 219
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (7,291)<F2>
<NET-INCOME> (7,072)
<EPS-PRIMARY> (1.34)
<EPS-DILUTED> 0
<FN>
<F1>OTHER EXPENSES OF $1,420,000 RELATES TO SPECIAL CHARGES ASSOCIATED WITH THE
SALE AND EXITING OF THE TIRE LOADING AND WAREHOUSING OPERATIONS IN FEBRUARY
1996.
<F2>CUMULATIVE EFFECT ADJUSTMENT RELATES TO THE ADOPTION OF SFAS NO. 121
"ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR ASSETS TO BE
DISPOSED OF"
</FN>
</TABLE>
