NINTH AMENDED AND RESTATED
LOAN AGREEMENT
This Ninth Amended and Restated Loan Agreement ("Agreement") entered into
the 24 day of October, 2000, by and between M.S. CARRIERS, INC. a Tennessee
corporation ("Borrower"), and BANK OF AMERICA, N.A., Agent, a national banking
association ("Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and Lender have previously entered into a series of
loans pursuant to the Eighth Amended and Restated Loan Agreement dated June
25, 1993, as amended; and
WHEREAS, the Borrower has requested that the Lender provide a Eighty-Five
Million and No/100 Dollars ($85,000,000.00) credit facility to the Borrower;
and
WHEREAS, Borrower and Lender have agreed to enter into this Ninth Amended
and Restated Loan Agreement to set forth the terms and conditions of such
credit facility; and
NOW, THEREFORE, as an inducement to cause Lender to extend credit to
Borrower, and for other valuable consideration, the receipt and sufficiency of
which are acknowledged, it is agreed as follows:
1. Definitions.
(a) "Adjusted Funded Debt" means, without duplication, the sum of (a)
all indebtedness of the Borrower for borrowed money, (b) all purchase money
indebtedness of the Borrower, (c) the principal portion of all obligations of
the Borrower under Capital Leases, and (d) the Present Value of all Operating
Leases.
(b) "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation
if such Person possesses, directly or indirectly, the power (i) to vote 10% or
more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
(c) "Agent" means Bank of America, N.A. which is initially serving as
Agent for itself only. Borrower and Bank of America, N.A. contemplate that
this Agreement may be amended in the future to provide for additional parties
making loans to Borrower pursuant to the provisions of this Agreement, as
amended. At such time, Bank of America, N.A. will serve as Agent for itself
as a Lender and one or more other parties who will become Lenders.
(d) "Applicable Margin" means for any Fiscal Quarter the applicable
rate per annum in excess of the LIBOR Rate set forth in the table below:
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Applicable Margin
Level Pricing Leverage Ratio Over LIBOR Rate
I Less than 1.75 .50%
II Less than 2.50,
but greater than or equal to 1.75 .60%
III Greater than or equal to 2.50 .80%
(e) "Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
(f) "Base Rate" means the Lender's LIBOR Rate for a LIBOR Period plus
the Applicable Margin. For purposes hereof, the Applicable Margin will be
that shown as Level II in the table contained in the definition of Applicable
Margin for the period from the Effective Date until September 30, 2000 and
thereafter as Level III in the table contained in the definition of Applicable
Margin, provided, however, that if the Borrower delivers to the Lender the
quarterly financial statements of the Borrower within the time limits
contained in Section 19, which financial statements indicate that the
applicable ratio set forth in the table in the definition of Applicable Margin
justifies resetting the Applicable Margin to another Level, then the
Applicable Margin shall be retroactively adjusted as of the first day of the
then Fiscal Quarter to Level I, II, or III as applicable and shall continue to
the last day of such Fiscal Quarter. The Applicable Margin will then be reset
to Level III on the first day of the next Fiscal Quarter, subject to being
again retroactively reset as set forth above. This will continue each Fiscal
Quarter thereafter.
(g) "Business Day" means any day other than a Saturday, a Sunday, or
legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Memphis, Tennessee;
provided that such day is also a day on which dealings between banks are
carried on in U.S. dollar deposits in the London interbank market. Should any
payment of principal or interest be due on a day that is not a Business Day,
then the payment shall be due on the first Business Day thereafter.
(h) "Capital Expenditures" means all expenditures of the Borrower
which, in accordance with GAAP, would be classified as capital expenditures,
including, without limitation, Capital Leases.
(i) "Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
(j) "Change of Control" means the change of 1/3 or more of the
Continuing Directors of the Company within any twelve-month period; the change
of 1/2 or more of the Continuing Directors of the Company within any twenty-
four month-period; or the acquisition by any person or "group" (as such term
is used in Section 13 (b) (3) of the Securities Exchange Act of 1934, as
amended) of a direct or indirect majority (more than 50%) interest in the
voting power of the voting stock of the Company by way of merger,
consolidation or otherwise. A "Continuing Director" shall mean any member of
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the board of directors of the Company who (i) was a member of such board of
directors on the date of this Loan Agreement or (ii) was nominated for
election or elected to such board of directors with the affirmative vote of a
majority of the Continuing Directors who are members of such board at that
time of such nomination or election whether as a result of the addition of new
members to replace Continuing Directors who die, resign or retire, an increase
in the number of directors or otherwise.
(k) "Closing Date" means the date hereof.
(l) "Code" means the Internal Revenue Code of 1986, as amended,
modified, succeeded or replaced from time to time.
(m) "Collateral" means all collateral referred to in and covered by
the Collateral Documents.
(n) "Collateral Documents" means the Security Agreement, the EASO
Guaranty, the Warehousing Guaranty, the Warehousing Security Agreement, and
such other documents executed and delivered in connection with the attachment
and perfection of the Lender's security interests in the assets of the
Borrower, including, without limitation, vehicle titles.
(o) "Commitment Fees" means the fees payable to the Lender pursuant
to Section 7.
(p) "Commitment Letter" means the letter from Lender to Borrower
dated as of August 25, 2000.
(q) "Commitments" means the Revolving Committed Amount and Reducing
Revolving Loan Committed Amount.
(r) "Current Assets" will have the meaning given in accordance with
Generally Accepted Accounting Principles.
(s) "Current Liabilities" will have the meaning given in accordance
with Generally Accepted Accounting Principles.
(t) "Default" has the meaning specified in Section 37.
(u) "Dollars" and "$" means dollars in lawful currency of the United
States of America.
(v) "EASO Guaranty" means that Continuing and Unconditional Guaranty
Agreement executed by Borrower in favor of Lender with respect to the
obligations of Transportes EASO.
(w) "EBITDA" means, for any period, with respect to the Borrower, the
sum of (a) Net Income for such period (excluding the effect of any
extraordinary or non-recurring gains or losses outside of the ordinary course
of business) plus (b) an amount which, in the determination of Net Income for
such period has been deducted for (i) Interest Expense for such period; (ii)
total federal, state, foreign or other income taxes for such period: and (iii)
all depreciation and amortization for such period, all as determined in
accordance with GAAP.
(x) "Effective Date" means the date on which the conditions set forth
in Section 7 shall have been fulfilled (or waived in the sole discretion of
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the Lender) and on which the initial Loans shall have been made and/or the
initial Letters of Credit shall have been issued.
(y) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by the
rules and regulations thereunder, all as the same may be in effect from time
to time. References to sections of ERISA shall be construed also to refer to
any successor sections.
(z) "ERISA Affiliates" means an entity, whether or not incorporated,
which is under common control with Borrower within the meaning of Section
4001(a)(14) or ERISA, or is a member of a group which includes Borrower and
which is treated as a single employer under Sections 414(b), (c), (m), or (o)
of the Code.
(aa) "ERISA Plan" means any employee benefit plan (as defined in
Section 3(3) of ERISA) which is covered by ERISA and with respect to which
Borrower or any ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" within
the meaning of Section 3(5) of ERISA.
(bb) "Environmental Laws" means the Environmental Protection Act, the
Resource Conservation and Recovery Act of 1976, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Hazardous
Materials Transportation Act and any other federal, state or municipal law,
rule or regulation relating to air emissions, water discharge, noise
emissions, solid or liquid waste disposal, hazardous or toxic waste or
materials, or other environmental or health matters.
(cc) "Eurodollar Daily Floating Rate" shall mean the fluctuating rate
of interest equal to the fluctuating rate of interest (rounded upwards, if
necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the one month London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) on the second preceding
Business Day, as adjusted from time to time in Bank's sole discretion for then
applicable reserve requirements, deposit insurance assessment rates and other
regulatory costs. If for any reason such rate is not available, the term
"Eurodollar Daily Floating Rate" shall mean the fluctuating rate of interest
equal to the month rate of interest (rounded upwards, if necessary to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one month
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) on the second preceding Business Day, as adjusted from time
to time in Bank's sole discretion for then applicable reserve requirements,
deposit insurance assessment rates and other regulatory costs; provided,
however, if more then one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
(dd) "Eurodollar Daily Floating Rate Interest Period" means the period
of time during which the Eurodollar Daily Floating Rate shall be applicable.
(ee) "Fiscal Quarter" means the three-month period ending on the last
day of March, June, September and December.
(ff) "Funded Debt" means, without duplication, the sum of (a) all
indebtedness of the Borrower for borrowed money, (b) all purchase money
indebtedness of the Borrower, (c) the principal portion of all obligations of
the Borrower under Capital Leases, (d) commercial letters of credit and the
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maximum amount of all performance and standby letters of credit issued for the
account of the Borrower, (e) all guaranty obligations of the Borrower with
respect to Funded Debt of another person, (f) all Funded Debt of any
partnership or unincorporated joint venture to the extent the Borrower is
legally obligated or has a reasonable expectation of being liable with respect
thereto, net of any assets of such partnership or joint venture, (g) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product pursuant to which Borrower is the obligor where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as
an operating lease in accordance with GAAP, and (h) the Present Value of all
Operating Leases.
(gg) "Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board, consistently applied and maintained
throughout the period indicated and consistent with the prior financial
practice of Borrower and any predecessors.
(hh) "Governmental Authority" means any federal, state, local,
provincial or foreign court or governmental agency, authority, instrumentality
or regulatory body.
(ii) "Hazardous Materials" means those substances included from time
to time within the definition of hazardous substances, hazardous materials,
toxic substances, or solid waste under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended, 42 U.S.C. Sec.
9601 et seq.; the Resource Conversation and Recovery Act of 1976, 42 U.S.C.
Sec. 1801 et seq., and in the regulations promulgated pursuant to such acts
and laws; and such other substances that are or become regulated under any
applicable local, state or federal law or regulation addressing environmental
hazards.
(jj) "Interest Expense" means, for any period, with respect to the
Borrower, all interest expense, including the interest component under Capital
Leases, as determined in accordance with GAAP.
(kk) "Interest Income" means, for any period, with respect to the
Borrower, all interest income as determined in accordance with GAAP.
(ll) "Issuing Lender" means Bank of America, N.A.
(mm) "Joint Venture" means a proposed Joint Venture to be created to
provide financing through leases or other means to owner operators.
(nn) "Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.
(oo) "Letter of Credit" means a Letter of Credit issued for the
account of Borrower by the Issuing Lender, as such Letter of Credit may be
amended, modified, extended, renewed or replaced.
(pp) "Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge or any kind (including, without
limitation, any agreement to give any of the foregoing, any conditional sale
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or other title retention agreement, any financing or similar statement or
notice filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and any
lease in the nature thereof).
(qq) "Loan" or "Loans" means the Revolving Loans and/or the Reducing
Revolving Loans (or a portion of any Revolving Loan or the Reducing Revolving
Loans), individually or collectively, as appropriate.
(rr) "Loan Documents" means this Agreement, the Notes, the Collateral
Documents, the LOC Documents, and all other related agreements and/or
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
(ss) "LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk or (b) any
collateral security for such obligations.
(tt) "LOC Obligations" means, at any time, the sum of (a) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (b) the
aggregate amount of all drawings under Letters of Credit honored by an Issuing
Lender but not theretofore reimbursed.
(uu) "Material Adverse Effect" means a material adverse effect, after
taking in account applicable insurance, if any (to the extent the provider
thereof has the financial ability to support its obligation with respect
thereto and is not disputing same), on (a) the operations, financial
condition, business or prospects of the Borrower taken as a whole, (b) the
ability of Borrower to perform its obligations under this Agreement or any of
the other Loan Documents, or (c) the validity or enforceability of this
Agreement, any of the other Loan Documents, or the rights or remedies of the
Lender hereunder or thereunder taken as a whole.
(vv) "Net Income" means, for any period, the net income after taxes
for such period of the Borrower, as determined in accordance with GAAP.
(ww) "Note" or "Notes" means the Revolving Loan Notes and/or the
Reducing Revolving Loan Notes, individually or collectively, as appropriate.
(xx) "Notice of Borrowing" means a request by the Borrower for a
Revolving Loan or a Reducing Revolving Loan.
(yy) "Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee
at any time) of any property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which that Person is the lessor.
(zz) "Person" means any individual partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated), or any Governmental Authority.
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(aaa) "Present Value of all Operating Leases" means as of a particular
date the remaining payments due under all Operating Leases discounted to
present value with an 8% discount rate.
(bbb) "Pricing Leverage Ratio" means the ratio of (Borrower's Adjusted
Funded Debt) divided by (Borrower's EBITDA plus the payments made by Borrower
on Operating Leases during the applicable twelve month period), all computed
on a rolling four quarter basis as of the end of a Fiscal Quarter.
(ccc) "Revolving Committed Amount" means $30,000,000.00 or such lesser
amount as the Revolving Committed Amount may be reduced.
(ddd) "Revolving Loan Maturity Date" means June 1, 2002.
(eee) "Revolving Loans" means the Revolving Loans made to the Borrower
pursuant to Section 2.
(fff) "Revolving Note" or "Revolving Notes" means the promissory note
of the Borrower in favor of the Lender evidencing the Revolving Loans provided
pursuant to Section 2, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented, extended, renewed or
replaced from time to time.
(ggg) "Security Agreement" means the Security Agreement between
Borrower and Lender pursuant to which Borrower has granted to Lender a
security interest in all trailers now owned or hereafter acquired by Borrower.
(hhh) "Tangible Net Worth" will mean the excess of total assets
(excluding intangible assets) over total liabilities (exclusive of capital
stock and surplus), all determined in accordance with Generally Accepted
Accounting Principles consistently applied.
(iii) "Reducing Revolving Loan Committed Amount" means $55,000,000.00
from the date of this Agreement through December 30, 2000; $50,000,000.00 from
December 31, 2000 through March 30, 2001, with such amount to be reduced an
additional $5,000,000.00 as of the last day of each Fiscal Quarter thereafter
through the Reducing Revolving Maturity Date.
(jjj) "Reducing Revolving Loan Maturity Date" means October 15, 2003.
(kkk) "Reducing Revolving Loan Note" or "Reducing Revolving Loan
Notes" means the promissory notes of the Borrower in favor of the Lender
evidencing the Reducing Revolving Loans provided pursuant to Section 4,
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced from time to
time.
(lll) "Reducing Revolving Loans" means the Reducing Revolving Loans
made to the Borrower pursuant to Section 4.
(mmm) "Total Funded Debt" means Borrower's Funded Debt plus debt of
Transportes EASO guaranteed by Borrower (to the extent not included in
Borrower's Funded Debt) plus Funded Debt of the Joint Venture.
(nnn) "Transportes EASO" means, Transportes EASO, a Mexican
Corporation, 50% of which is owned by Borrower.
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(ooo) "Unused Commitment" means, for any period, the amount by which
(a) the then applicable aggregate Revolving Committed Amount exceeds (b) the
daily average sum for such period of the outstanding aggregate principal
amount of all Revolving Loans plus the aggregate amount of LOC Obligations
outstanding.
(ppp) "Unused Fee Rate" means .15% if the then Applicable Margin is at
Level I, .175% if the then Applicable Margin is at Level II and .225% if the
then Applicable Margin is at Level III (computed on a 360 day basis).
(qqq) "Unused Reducing Revolving Commitment" means for any period, the
amount by with (a) the then applicable aggregate Reducing Revolving Committed
Amount (determined before the $5,000,000 step down on the last day of the
Fiscal Quarter) exceeds (b) the daily average sum for such period of the
outstanding aggregate principal amount of all Reducing Revolving Loans.
(rrr) "Warehousing" means M.S. Warehousing & Distribution, Inc.
(sss) "Warehousing Guaranty" means the Continuing and Unconditional
Guaranty Agreement signed by Warehousing in favor of Lender.
(ttt) "Warehousing Security Agreement" means the security agreement
between Warehousing and Lender pursuant to which Warehousing has granted to
Lender a security interest in all trailers now owned or hereafter acquired by
Warehousing.
2. Revolving Loan Commitment. Concurrently with the execution of this
Agreement and subject to the terms and conditions set forth herein, Lender
agrees to make a Revolving Loan (each a "Revolving Loan" and collectively the
"Revolving Loans") to the Borrower at any time and from time to time during
the period from and including the date hereof to but not including the
Revolving Loan Maturity Date (or such earlier date if the Revolving Committed
Amount has been terminated as provided herein); provided however that the
aggregate amount of Revolving Loans outstanding and Letters of Credit issued
shall not exceed Thirty Million and No/100 Dollars ($30,000,000.00). Subject
to the terms of this Agreement, the Borrower may borrow, repay and reborrow
Revolving Loans.
(a) Interest Rate. Prior to maturity, the principal amount
outstanding under the Revolving Loans shall bear interest at the Base Rate.
(b) Method of Borrowing for Revolving Loans. Unless Borrower is using
Lender's AutoBorrow service, then by no later than 11:00 a.m. Eastern Standard
or Daylight Time, as the case may be, on the same Business Day of the
requested borrowing of Revolving Loans, the Borrower shall submit a Notice of
Borrowing to the Lender setting forth the amount requested.
(c) Funding of Revolving Loans. The amount of the requested Revolving
Loans will then be made available to the Borrower by the Lender by crediting
the account of the Borrower on the books of such office of the Lender, to the
extent the amount of such Revolving Loans are made available to the Lender.
(d) Payments. Payment of all obligations arising under the Revolving
Loan shall be made as follows:
(i) Interest and Fees. Interest on the outstanding principal
balance under the Revolving Loans shall be paid in arrears on the 1st day of
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each month beginning on November 1, 2000. All interest and principal shall be
due and payable on the Revolving Loan Maturity Date. Also, on the 1st day of
each month, an Unused Fee equal to the Unused Fee Rate times the Unused
Commitment for the prior month shall be determined and paid to Lender.
(ii) Voluntary Prepayment. Voluntary prepayments of principal or
accrued interest may be made, in whole or in part, at any time without
penalty, except, in the case of a LIBOR Rate borrowing, a payment prior to the
end of the LIBOR Period will require Borrower to pay Lender any breakage costs
associated with such prepayment.
(iii) Mandatory Prepayment. Borrower must immediately prepay any
amount by which the principal balance of the Revolving Loans plus all
outstanding Letters of Credit exceeds the Revolving Committed Amount.
3. Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, the Issuing Lender shall from time to time upon
request issue, in Dollars, letters of credit (the "Letters of Credit") for the
account of the Borrower, from the Effective Date until the Revolving Loan
Maturity Date, in a form reasonably acceptable to the Issuing Lender;
provided, however, that (i) the aggregate amount of LOC Obligations shall not
at any time exceed Fifteen Million and 00/100 ($15,000,000.00), (ii) and the
sum of the aggregate amount of LOC Obligations outstanding plus Revolving
Loans outstanding shall not exceed the Revolving Committed Amount. The
issuance and expiration date of each Letter of Credit shall be a Business Day.
The quarterly fee for each Letter of Credit shall be the face amount of the
Letter of Credit times the applicable percentage in the table set forth in the
following sentence, payable in advance. If the Applicable Margin is at Level
I, the fee shall be .50%; if the Applicable Margin is at Level II the fee
shall be .60%, and if the Applicable Margin is a Level III the fee shall be
.80%. The fee shall be fully earned upon issuance and shall not be refunded
or pro rated in the event the Letter of Credit is released, expires or is
drawn prior to the quarter-annual anniversary of the Letter of Credit. No
Letter of Credit shall have an original expiry date more than one year from
the date of issuance, or, as extended, shall have an expiry date extending
beyond the Revolving Loan Maturity Date. Each Letter of Credit shall be
either (x) a standby letter of credit issued to support the obligations of the
Borrower which finance the working capital and business of the Borrower in the
ordinary course of business or (y) a commercial letter of credit in respect to
the purchase of goods or services by the Borrower in the ordinary course of
business. Each Letter of Credit shall comply with the related LOC Documents.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five Business Days
prior to the requested date of issuance.
(c) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Revolving Loan for a 30 day LIBOR Period in the amount of the
drawing, the proceeds of which will be used to satisfy the reimbursement
obligations. The Borrower shall reimburse the Issuing Lender on the day of
drawing under any Letter of Credit either with the proceeds of Revolving Loan
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obtained hereunder or otherwise in the same day funds as provided herein or in
the LOC Documents. If the Borrower shall fail to reimburse the Issuing Lender
as provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at the Default Rate. The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment the
applicable account party or the Borrower may claim or have against the Issuing
Lender, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation, any defense based on any failure of the
applicable account party, the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit.
(d) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practices for
Documentary Credits, as published as of the date of issue by the International
Chamber of Commerce (Publication No. 500 or the most recent publication, the
"UCP"), in which case the UCP may be incorporated therein and deemed in all
respects to be a part thereof.
(e) Conflict with LOC Documents. In the event of any conflict between
this Agreement and any LOC Document, this Agreement shall govern.
(f) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Agreement, the
Borrower hereby agrees to protect, indemnify, pay and hold the Issuing Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees)
that the Issuing Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the failure of
the Issuing Lender to honor a drawing under a Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omission, herein called "Government Acts").
(ii) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. Except in the case of gross negligence or
willful misconduct on the part of Issuing Lender, the Issuing Lender shall not
be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for an issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon a Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit or of the proceeds thereof; and (G)
any consequences arising from causes beyond the control of the Issuing Lender,
including, without limitation, any government acts. None of the above shall
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affect, impair, or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put the
Issuing Lender under any resulting liability to the Borrower. It is the
intention of the parties that this Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby assumed
by the Borrower including, without limitation, any and all risks of the
present or future Government Acts. The Issuing Lender shall not, in any way,
be liable for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any government acts or any
other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (f) is intended to limit the
reimbursement obligation of the Borrower contained in this Section 3. The
obligations of the Borrower under this subsection (f) shall survive the
termination of this Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit under this
Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection i, the Borrower shall have no obligation to indemnify the Issuing
Lender in respect of any liability incurred by the Issuing Lender arising
solely out of the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction.
4. Reducing Revolving Loan Commitment. Concurrent with the execution of
this Agreement and subject to the terms and conditions set forth herein,
Lender agrees to make a reducing revolving loan ("Reducing Revolving Loan" and
collectively the "Reducing Revolving Loans") to the Borrower at any time and
from time to time during the period from and including the date hereof to, but
not including, the Reducing Revolving Loan Maturity Date (or such earlier date
if the Reducing Revolving Committed Amount has been terminated as provided
herein; provided however that the aggregate amount of Reducing Revolving Loans
outstanding shall not exceed the Reducing Revolving Committed Amount. Subject
to the terms of this Agreement, the Borrower may borrow, repay and reborrow
Reducing Revolving Loans.
(a) Interest. The principal amount outstanding under the Reducing
Revolving Loan shall bear interest at the Base Rate.
(b) Method of Borrowing for Reducing Revolving Loans. Unless Borrower
is using Lender's AutoBorrow service, then by no later than 11:00 a.m. Eastern
Standard or Daylight Time, as the case may be, on the same Business Day of the
requested borrowing of Reducing Revolving Loans, the Borrower shall submit a
Notice of Borrowing to the Lender setting forth the amount requested.
(c) Funding of Reducing Revolving Loans. The amount of the requested
Reducing Revolving Loans will then be made available to the Borrower by the
Lender by crediting the account of the Borrower on the books of such office of
the Lender, to the extent the amount of such Reducing Revolving Loans are made
available to the Lender.
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(d) Payments. Payment of all obligations arising under the Revolving
Loan shall be made as follows:
(i) Interest and Fees. Interest on the outstanding principal
balance under the Revolving Loans shall be paid in arrears on the 1st day of
each month beginning on November 1, 2000. All interest and principal shall be
due and payable on the Reducing Revolving Loan Maturity Date. Also, on the
1st day of each month, an Unused Fee equal to the Unused Fee Rate times the
Unused Reducing Revolving Commitment for the prior month shall be determined
and paid to Lender.
(ii) Voluntary Prepayment. Voluntary prepayments of principal or
accrued interest may be made, in whole or in part, at any time without
penalty, except, in the case of a LIBOR Rate borrowing, a payment prior to the
end of the LIBOR Period will require Borrower to pay Lender any breakage costs
associated with such prepayment.
(iii) Mandatory Prepayment. Borrower must immediately prepay any
amount by which the principal balance of the Reducing Revolving Loans exceeds
the Reducing Revolving Committed Amount.
5. Notes.
(a) Revolving Loan Note. The Revolving Loans made by Lender shall be
evidenced by a duly executed promissory note of the Borrower to Lender in the
face amount of the Revolving Committed Amount.
(b) Reducing Revolving Loan Note. The Reducing Revolving Loan made by
Lender shall be evidenced by a duly executed promissory note of the Borrower
to Lender in the face amount of the Reducing Revolving Loan Committed Amount.
6. Interest. For purposes hereof, the "LIBOR Rate" shall mean, for the
LIBOR Period applicable thereto, the Eurodollar Daily Floating Rate. For
purposes hereof, a "LIBOR Period" shall mean a Eurodollar Daily Floating Rate
Interest Period. Interest shall be calculated based upon a 360-day year in
the case of LIBOR Rate loans. If the adoption of or change in any applicable
legal requirement or any change in the interpretation or administration
thereof by any governmental authority or compliance by the Lender with any
request or directive (whether or not having the force of law) from any central
bank or other governmental authority, shall at any time as a result of any
portion of the principal balance of the Revolving Loans being maintained on
the LIBOR Rate:
(a) Subject the Lender to any tax (including without limitation any
United States Interest Equalization Tax), levy, impost, duty, charge, fee
(collectively "Taxes"), other than income and franchise taxes of the United
States and its political subdivisions; or
(b) Change the basis of taxation on payments due from the Borrower to
the Lender under any LIBOR Rate borrowing (otherwise than by a change in the
rate of taxation of the overall net income of the Lender); or
(c) Impose, modify, increase or make applicable any reserve
requirement, special deposit requirement or similar requirement (including,
but not limited to, state law requirements and Regulation D) against assets
held by the Lender, or against deposits or accounts in or for the account of
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the Lender, or against any loans made by the Lender, or against any other
funds, obligations or other property owned or held by Lender; or
(d) Impose on the Lender any other condition regarding any LIBOR Rate
borrowing;
and the result of any of the foregoing (a) through (d) is to increase the cost
to the Lender of agreeing to make or of making, renewing or maintaining such
borrowing on the basis of the LIBOR Rate, or reduce the amount of principal or
interest received by the Lender, then, upon demand by the Lender, the Borrower
shall pay to the Lender, from time to time as specified by the Lender,
additional amounts which shall reasonably compensate the Lender for such
increased cost or reduced amount relating to LIBOR Rate borrowings outstanding
after Lender's demand. Lender will promptly notify Borrower of any proposed
increase hereunder. The Lender's reasonable determination of the amount of
any such increased cost, increased reserve requirement or reduced amount shall
be conclusive and binding, absent manifest error.
In no event shall the interest rate charged on the Loans exceed the
maximum rate allowed under applicable law. Any amounts paid in excess of the
maximum lawful rate shall be applied to reduce the principal amount of
Borrower's obligations to Lender or shall be refunded to Borrower, at Lender's
election. After maturity or upon a Default (by acceleration or otherwise),
the principal amount under the Loans shall bear interest at the rate of
interest in effect immediately before maturity or Default plus three percent
(3%) ("Default Rate").
7. Closing Conditions. The obligation of the Lender to enter into this
Agreement and make the Loans is subject to satisfaction of the following
conditions (in form and substance acceptable to the Lender in its sole
discretion):
(a) Executed Credit Documents. Receipt by the Lender of duly executed
copies of: (i) this Agreement; (ii) the Notes; (iii) the Collateral
Documents; and (iv) all other Loan Documents.
(b) Corporate Documents. Receipt by the Lender of the following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of Borrower certified to be true and
complete as of a recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified by secretary or
assistant secretary of Borrower to be true and correct as of the Effective
Date.
(ii) Bylaws. A copy of the bylaws of Borrower certified by a
secretary or assistant secretary of Borrower to be true and correct as of the
Effective Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of Borrower approving and adopting the Loan Documents to which it is
a party, the transactions contemplated therein and authorizing execution and
delivery thereof, and an incumbency certificate, certified by a secretary or
assistant secretary of Borrower to be true and correct and in force and effect
as of the Effective Date.
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(iv) Good Standing. Copies of (A) certificates of good standing,
existence or its equivalent with respect to Borrower certified as of a recent
date by the appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing would have a Material Adverse Effect on
the business or operations of Borrower in such jurisdiction and (B) to the
extent available, a certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate governmental taxing
authorities.
(c) Personal Property Collateral. The Lender shall have received, in
form and substance satisfactory to the Lender.
(i) searches of Uniform Commercial Code ("UCC") filings in the
jurisdiction of the chief executive office of Borrower and each jurisdiction
where any Collateral is located or where a filing would need to be made in
order to perfect the Lender's security interest in the Collateral, copies of
the financing statements on file in such jurisdictions and evidence that no
liens exist; and
(ii) duly executed applications necessary to note the lien in
favor of Lender on the certificates of title pledging the collateral described
in the Security Agreement.
(d) Evidence of Insurance. Receipt by the Lender of copies of
insurance policies or certificates of insurance of the Borrower evidencing
liability and casualty insurance meeting the requirements set forth in the
Loan Documents, including, but not limited to, naming the Lender as sole loss
payee on behalf of the Lender.
(e) Corporate Structure. The corporate capital and ownership
structure of the Borrower shall be satisfactory in form and substance to the
Lender.
(f) Certain Consents. Receipt by the Lender of evidence that all
governmental, shareholder and material third party consents including, without
limitation, written consent, if necessary in the sole discretion of the
Lender, of any existing Lenders or bondholders and expiration of all
applicable waiting periods without any action being taken by any authority
that could reasonably be likely to restrain, prevent or impose any material
adverse conditions on the transactions contemplated by this Agreement or that
could reasonably be likely to seek or threaten any of the foregoing, and no
law or regulation shall be applicable which in the judgment of the Lender
could reasonably be likely to have such effect.
(g) Material Adverse Effect. There shall not have occurred a change
since March 31, 2000 that has had or could reasonably be expected to have a
Material Adverse Effect (including matters related to litigation, tax,
accounting, labor, insurance and pension liabilities).
(h) Litigation. There shall not exist any (i) order, decree,
judgment, ruling or injunction which restrains the consummation of the
transactions contemplated by this Agreement or (ii) any pending or threatened
action, suit, investigation or proceeding which if adversely determined
against the Borrower would have or would reasonably be expected to have a
Material Adverse Effect.
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(i) Officer's Certificates. The Lender shall have received a
certificate or certificates executed by the president or chief financial
officer of the Borrower as of the Effective Date stating that (A) the Borrower
is in compliance with all existing financial obligations, (B) all
governmental, shareholder and third party consents and approvals, if any, with
respect to the Loan Documents and the transactions contemplated thereby have
been obtained, (C) no action, suit, investigation and proceeding is pending or
to his knowledge threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect the Borrower or any
transaction contemplated by the Loan Documents, or could have or might be
reasonably expected to have a Material Adverse Effect, (D) immediately after
giving effect to this Agreement, the other Loan Documents and all the
transactions contemplated therein to occur on such date, (1) the Borrower is
solvent, (2) no Default or Event of Default exists, (3) all representations
and warranties contained herein and in the other Loan Documents are true and
correct in all material respects, and (4) the Borrower is in compliance with
each of the financial covenants set forth in Section 35.
(j) Fees and Expenses. Payment by the Borrower of all fees and
expenses owed by them to the Lender, including, without limitation, payment to
the Lender of the fees set forth in the Commitment Letter.
(k) Opinion of Borrower's Counsel. Delivery of an opinion of
Borrower's counsel to Lender in the form attached as Exhibit A.
(l) Other. Receipts by the Lender of such other documents,
instruments, agreements or information as reasonably requested by Lender,
including, but not limited to, information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property ownership and
contingent liabilities of the Borrower.
8. Conditions to All Extension of Credit. In addition to the conditions
precedent stated elsewhere herein, the Lender shall not be obligated to make,
continue or convert Loans nor shall an Issuing Lender be required to issue or
extend a Letter of Credit unless:
(a) Notice. The Borrower shall have delivered (i) in the case of any
new Revolving Loan, a Notice of Borrowing, duly executed and completed, by the
time specified in Section 2 or 4, as the case may be, (unless Borrower is
using Lender's AutoBorrow service) and (ii) in the case of any Letter of
Credit, the Issuing Lender shall have received an appropriate request for
issuance in accordance with the provisions of Section 3.
(b) Representations and Warranties. The representations and
warranties made by the Borrower in any Loan Document are true and correct in
all material respects at and as if made as of such date.
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto.
(d) No Material Adverse Effect. There shall not have occurred any
Material Adverse Effect.
(e) Availability. Immediately after giving effect to the making of
such Loan (and the application of the proceeds thereof) or to the issuance of
a Letter of Credit, as the case may be, the sum of the Revolving Loans
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<PAGE>
outstanding plus LOC Obligations outstanding shall not exceed the Revolving
Commitment Amount and the sum of the Reducing Revolving Loans Outstanding
shall not exceed the Reducing Revolving Commitment Amount.
9. Capacity. Borrower warrants that it is and shall remain a duly
organized corporation in good standing under the laws of Tennessee, and that
Borrower is and shall remain duly qualified to do business in each state other
than Tennessee in which the failure to qualify would result in a Material
Adverse Effect on Borrower or its business. Borrower warrants that its
execution of and performance under this Agreement and all related documents
are permitted under and will not violate any provision of Borrower's Charter
or By-Laws or any agreement to which Borrower is a party or any law, rule,
ordinance, regulation or Court Order to which Borrower is subject. Borrower
further warrants that the execution of all necessary resolutions and other
prerequisites of corporate action, as applicable, have been duly performed so
that the individual executing this Agreement and related documents on behalf
of Borrower is duly authorized to bind Borrower by his signature.
10. No Subsidiaries. Except as set forth on Schedule 10, Borrower
warrants that it presently has no subsidiaries or interests in any partnership
or other business entity.
11. Corporate Records. Borrower covenants to maintain or cause to be
maintained current corporate minute books and stock ledgers and agrees to
allow Lender to inspect the same at any time during normal business hours upon
reasonable notice.
12. Accounting. Borrower warrants that Borrower's accounting complies
with applicable "GAAP" and covenants that it will continue to apply GAAP
throughout the life of the Reducing Revolving Loans and Revolving Loans.
Borrower agrees to allow Lender to inspect Borrower's books and records and
real and personal property throughout the life of the Reducing Revolving Loans
and Revolving Loans.
13. ERISA. Borrower has not incurred and shall not incur a material
accumulated funding deficiency within the meaning of ERISA and has not
incurred any material liability to the Pension Benefit Guaranty Corporation
established under ERISA (or any successor thereto under ERISA) in connection
with any retirement plan, and no reportable event has occurred and is
continuing or shall occur with respect to any welfare or benefit plan
maintained by Borrower.
14. Books, Records and Property. Borrower covenants to maintain
financial books and records in a manner that will allow financial statements
to be prepared in accordance with GAAP, consistently applied, and shall allow
Lender to inspect such records during normal business hours upon reasonable
notice. Lender has full authority to inspect all property of Borrower during
normal business hours upon reasonable notice.
15. Insurance. In addition to any specific insurance requirements
contained herein or in any other document pertaining to the Loans, Borrower
agrees to generally maintain adequate insurance against casualty and liability
losses in accordance with customary practices in Borrower's field of
enterprise (being of similar coverage as exists at the time of Closing).
Borrower agrees to provide Lender with proof of the existence of such
insurance upon demand.
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16. Chief Executive Office. Borrower warrants that the address
designated herein to which notices are to be sent to Borrower is Borrowers
chief executive office. Borrower agrees to notify Lender in writing of any
change thereof and agree that the same shall not in any event be moved outside
Shelby County, Tennessee, without Lender's prior written consent.
17. No Defaults Under Other Agreements. Borrower warrants that neither
Borrower, nor to the best of Borrower's knowledge, information, and belief,
any other party thereto is presently in default beyond any applicable notice
and/or cure periods in any material respect under any material contract or
agreement to which Borrower is a party, and no condition presently exists
which, with the giving of notice, the passing of time, or both, would cause
such a default.
18. Disclosure of Litigation. Except as disclosed on Schedule 18, there
are no actions, suits or proceedings pending (including, but not limited to,
matters relating to any Environmental Laws), or, to the best of knowledge of
Borrower, threatened, against or affecting Borrower or involving the validity
or enforceability of any of the Loan Documents, at law or in equity, or before
any governmental or administrative agency, except actions, suits and
proceedings that are covered by insurance in all material respects or that, if
adversely determined, would not impair the ability of Borrower to perform each
and every one of its obligations under this Agreement; or materially and
adversely affect Borrower's business or Borrower's ability to carry on its
business substantially in the manners now conducted (individually or in the
aggregate).
19. Financial Statements.
(a) Warranties. Borrower warrants that Borrower's quarterly and
annual financial statements delivered to Lender in connection with the Loans
have been prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, and present fairly the financial condition
of Borrower as of the date or dates thereof and are true and correct in all
material respect. Without limiting the foregoing, Borrower warrants that such
financial statements disclose all known material contingent liabilities as
well as material direct liabilities. Borrower acknowledges that Lender has
advanced (or shall advance) the Loans in reliance upon such financial
statements, and Borrower warrants that no Material Adverse Effect has occurred
to the financial condition of Borrower as set forth in the most recent
financial statements.
(b) Reporting Requirements. Borrower covenants to furnish Lender
Borrower's annual audited financial statements within one hundred (100) days
of the close of the preceding fiscal year. Each audit must be performed by a
certified public accountant reasonably acceptable to Lender, at Borrower's
expense. In addition, Borrower covenants to furnish to Lender, on or before
the forty-fifth (45th) day following the end of each Fiscal Quarter, income
statements, balance sheets, covenant calculation report and report showing the
value of the trailers in which Lender has a first perfected security interest
pursuant to the Security Agreement together with an officer's certificate
executed by the chief financial officer of Borrower certifying compliance with
the financial covenants set forth herein and further stating that, to the best
of his knowledge, information and belief, no Default exists hereunder as of
the date of the certification. Borrower also covenants to furnish to Lender,
upon demand, copies of Borrower's tax returns and additional financial
information in form and substance acceptable to Lender.
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20. Notice of Changes in Financial Condition and Defaults. Borrower
covenants to give Lender prompt written notice of (i) the creation or
discovery of any material additional contingent liability or the occurrence of
any other material adverse change in the financial condition of Borrower, and
(ii) the occurrence of any event, or presence of any condition, which
constitutes a Default hereunder or which with the giving of notice, the
passing of time, or both, would constitute a Default or which would have a
Material Adverse Effect. Borrower covenants that it will not change it fiscal
year without obtaining the prior written consent of Lender.
21. No Unpaid Taxes. Borrower has filed or properly extended all tax
returns and reports required to be filed and has paid all taxes, assessments,
fees and other governmental charges levied upon it or upon any of its
properties or income, which are due and payable, including interest and
penalties, or have provided adequate reserves for the payment thereof, other
than any taxes or assessments that could not impair the ability of Borrower to
perform each and every one of its obligations hereunder; or materially and
adversely affect the ability of Borrower to carry on its business in the
manner as now conducted. To the best knowledge of Borrower, no tax liens have
been filed against Borrower or any of its properties, that could impair the
ability of Borrower to perform each and every one of its obligations
hereunder; or materially and adversely affect the business of Borrower.
22. No Untrue or Misleading Representations. Borrower warrants that no
information, exhibit or report furnished in writing by Borrower to Lender in
connection with the Loans contains any untrue statement of material fact or
omits to state a material fact necessary to make the statements contained
therein not misleading in any material respect.
23. Compliance with Law. Borrower warrants that the business activities
of Borrower are conducted in material compliance with all applicable laws and
regulations. Borrower covenants that such activities shall continue to be so
conducted.
24. Assistance in Litigation. Borrower covenants to, upon request,
cooperatively participate in any proceeding in which Borrower is not an
adverse party to Lender and which concerns Lender's rights regarding the
Loans.
25. Name. Except as set forth in Schedule 25, Borrower warrants that
during the past five (5) years, Borrower has not been known under or done
business under any name other than the name used by Borrower in executing this
Agreement. Borrower agrees to give Lender written notice no later than 15
days before Borrower begins using any name other than that used in executing
this Agreement.
26. Fees and Expenses. Upon demand, Borrower will advance to Lender or,
at Lender's option, reimburse Lender for, the following expenses:
(a) Taxes. All taxes (other than income taxes) that Lender may be
required to pay because of the Loans.
(b) Administration. All expenses that Lender may incur in connection
with the preparation, execution, or enforcement of this Agreement or of any
other document pertaining to the Loans;
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<PAGE>
(c) Costs of Collection. All court costs and other costs of
collecting any debt, overdraft or other obligation included in the Loans;
(d) Litigation. All costs arising from any litigation, investigation,
or administrative proceeding (whether or not Lender is a party thereto) that
Lender may incur as a result of the Loans or as a result of Lender's
association with Borrower, including, but not limited to, expenses incurred by
Lender in connection with a case or proceeding involving Borrower under any
chapter of the Bankruptcy Code or any successor statute thereto;
(e) Attorneys Fees. Reasonable attorneys' fees incurred in connection
with any of the foregoing.
If Lender pays any of the foregoing expenses, they shall become a part of
the Revolving Loans and shall bear interest at the rate of interest then in
effect. This paragraph shall remain in full effect regardless of the full
payment of the Loans, the purported termination of this Agreement, the
delivery of the executed original of this Agreement to Borrower, or the
content or accuracy of any representation made by Borrower to Lender;
provided, however, Lender may terminate this paragraph by executing and
delivering to Borrower a written instrument of termination specifically
referring to this Paragraph.
27. Further Assurances. Borrower covenants to execute such other
documents that Lender may reasonably deem necessary to further evidence the
obligations provided for herein.
28. Default Certificates. Borrower covenants to deliver to Lender,
within five (5) business days after request, the certificate of Borrower, or
of Borrower's appropriate representative (as specified by Lender) stating
whether, to the best of the person's knowledge, information, and belief and
after due investigation, a Default then exists under this Agreement. The
certificate shall describe with particularity any Default and shall address
with particularity any circumstances or subjects described by Lender in its
request. Borrower covenants that it will promptly forward to Lender a copy of
any notice of default Borrower receives from any party with which any Borrower
has a contract, where the amount of such contract exceeds $500,000.00.
Borrower covenants that it will promptly forward to Lender copies of any
litigation involving Borrower or any of its property where the amount of such
litigation exceeds $500,000.00; except for litigation involving motor vehicles
unless the claim against Borrower exceeds Borrower's $500,000.00 self insured
amount and Borrower's $1,000,000.00 corridor retainage risk.
29. Recitals. Borrower warrants and agrees that the recitals set forth
at the beginning of this Agreement relating to it are true.
30. No Burdensome Agreements. Borrower warrants that Borrower is not a
party to any material contract or agreement and is not subject to any material
contingent liability that does or may impair the ability of Borrower to
perform under the terms of this Agreement. Borrower further warrants that the
execution and performance of this Agreement will not cause a default,
acceleration or other event under any other contract or agreement to which
Borrower or any property of Borrower is subject, and will not result in the
imposition of any charge, penalty, lien or other encumbrance against any
property of Borrower except in favor of Lender.
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31. Legal and Binding Agreement. Borrower warrants that the execution
and performance of this Agreement will not violate any judicial or
administrative order or governmental law or regulation, and that this
Agreement is valid, binding and enforceable according to its terms, subject to
bankruptcy and other laws affecting the rights of creditors generally.
32. No Consent Required. Borrower warrants that Borrower's execution,
delivery and performance of this Agreement does not require the consent of or
the giving of notice to any third party including, but not limited to, any
other Lender, governmental body or regulatory authority, which has not been
obtained.
33. No Default. Borrower warrants that, as of the execution of this
Agreement, no Default exits hereunder and no condition exists which, with the
giving of notice, the passing of time, or both, would constitute such a
Default.
34. Negative Covenants. Without Lender's prior written consent, Borrower
shall not do any of the following:
(a) Stock Transactions. Redeem any stock, subordinated debt,
warrants, or debt securities convertible into stock; provided, however, that
Borrower may do any of the foregoing so long as that at such time the ratio of
(Total Funded Debt) divided by (the Tangible Net Worth of Borrower) is less
than 2.0 to 1.0, and after giving effect to the proposed transaction such
ratio would be less than 2.0 to 1.0.
(b) Reorganization. Enter into any agreement to merge, consolidate,
or otherwise reorganize or recapitalize.
(c) Disposition of Assets. Sell, lease, or otherwise transfer its
assets in any transaction which is not in the ordinary course of business;
provided, that should Borrower transfer or dispose of assets in the ordinary
course of business and acquire replacement property, Lender, shall execute UCC
Termination Statements and Borrower shall execute, as needed, new UCC
Financing Statements relating to such replacement property.
(d) Guaranties. Guarantee any obligations of any other business other
than Transportes EASO or individual, except through the endorsement of items
tendered to Borrower as payment in the ordinary course of business.
(e) Change of Control. Suffer or permit a Change of Control to occur.
(f) ERISA Matters. Suffer or permit any of the following events or
conditions to exist or occur: (A) any "accumulated funding deficiency," as
such term is defined in section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any ERISA Plan, or any lien
shall arise on the assets of the Borrower or any ERISA Affiliate in favor of
the PBGC of an ERISA Plan; (B) a Termination Event shall occur with respect to
a Single Employer Plan, which is, in the reasonable opinion of the Lender,
likely to result in the termination of such Plan for the purposes of Title IV
or ERISA; (C) a Termination Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of the
Lender, likely to result in (i) the termination of such Plan for purposes of
Title IV of ERISA, or (ii) the Borrower or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency of (within the meaning of
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Section 4245 of ERISA) such Plan; or (D) any prohibited transaction (within
the meaning of Section 406 of ERISA of Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject the Borrower or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) or
ERISA or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which the Borrower or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability.
(g) Fiscal Year; Organizational Documents. Change its fiscal year or
materially change its articles or certificate of incorporation or its by-laws.
(h) Management Change. Change both its chief executive officer and
chief financial prior to the Revolving Loan Maturity Date.
(i) Change of Business. Make any material change to the business of
Borrower as conducted on the Effective Date.
(j) Continuation of Business. Liquidate, dissolve or voluntarily
suspend business for more than five days in any calendar year.
(k) Collateral Coverage. Permit the fair market value of the trailers
owned by Borrower in which Lender has a perfected first security interest to
be less than one hundred twenty five percent (125%) of the aggregate amount of
Revolving Loans outstanding, the aggregate amount of Reducing Revolving Loans
outstanding and Letters of Credit issued.
35. Financial Covenants. Borrower shall maintain the following financial
covenants computed on a rolling four quarter basis as determined by GAAP on a
consolidated basis (unless otherwise noted):
(a) Total Leverage Ratio. Maintain a ratio of Total Funded Debt
divided by (Borrower's EBITDA plus the payments made by Borrower on Operating
Leases during the applicable twelve month period plus the income or loss of
Transportes EASO reported on Borrower's income statement plus the rental
income (or loss) of the Joint Venture), of not more than 2.85 to 1.0 through
March 30, 2001 and not more than 2.75 to 1.0 at the end of each Fiscal Quarter
thereafter.
(b) Fixed Charge Coverage Ratio. Maintain a ratio of (Borrower's
EBITDA plus Operating Lease expense less taxes paid in cash less dividends
paid) divided by (Borrower's Interest Expense plus principal payments made by
Borrower plus Operating Lease Expense plus 20 percent of the Revolving Loan
outstanding as of the last day of the rolling four quarter period), of at
least 1.25 to 1.0 as of the end of each Fiscal Quarter.
36. Environmental Matters
(a) Environmental Law Compliance. Borrower warrants and covenants
that the conduct of Borrower's business operations do not and will not
violate, in any material respect, any federal laws, rules, or ordinance for
environmental protection, regulations of the Environmental Protection Agency
and any applicable local or state law, rule, regulation, or rule of common law
and any judicial interpretation thereof relating primarily to the
environmental or Hazardous Materials and Borrower will not use or permit any
other party to use any Hazardous Materials at any of Borrower's places of
business or at any other property owned by Borrower except such materials as
are incidental to Borrower's normal course of business, maintenance and
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repairs and which are handled in material compliance with all applicable
environmental laws. Upon the occurrence of a Default or if necessary to meet
any regulatory requirement imposed on any Lender, Borrower agrees to permit
Lender, its agents, contractors, and employees to enter and inspect any of
Borrower's places of business or any other property of Borrower at any
reasonable times upon five (5) days prior notice for the purpose of conducting
an environmental investigation and audit (including taking physical samples)
to insure that Borrower is complying with this covenant and Borrower shall
reimburse Lender on demand for the costs of any such environmental
investigation and audit. Borrower shall provide Lender, its agents,
contractors, employees, and representatives with access to and copies of any
and all data and documents relating to or dealing with any Hazardous Materials
used, generated, manufactured, stored or disposed of by Borrower's business
operations within five (5) days of the request thereof.
(b) Notification of Environmental Claims. Borrower shall immediately
advise Lender in writing of (i) any and all material enforcement, cleanup,
remedial, removal, or other governmental or regulatory actions instituted,
completed, or threatened pursuant to any applicable federal, state, or local
laws, ordinances or regulations relating to any Hazardous Materials affecting
Borrower's business operations; and (ii) all material claims made or
threatened by any third party against Borrower relating to damages,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials. Borrower shall immediately notify Lender of any material
remedial action taken by Borrower with respect to Borrower's business
operations.
(c) Indemnification. Borrower shall indemnify, defend, and hold
Lender and its successors and assigns harmless from and against any and all
claims, demands, suits, losses, damages, assessments, fines, penalties, costs,
or other expenses (including reasonable attorneys' fees and court costs)
arising from or in any way related to actual or threatened damage to the
environment, agency costs of investigation, personal injury or death, or
property damage, due to a release or alleged release of Hazardous Materials,
arising from Borrower's business operations, any other property owned by
Borrower or in the surface or ground water arising from Borrower's business
operations, or gaseous emissions arising from Borrower's business operations
or any other condition existing from Borrower's business operations resulting
from the use or existence of Hazardous Materials, whether such claim proves to
be true or false. Borrower further agrees that its indemnity obligations
shall include, but are not limited to, liability for damages resulting from
the personal injury or death of an employee of the Borrower, regardless of
whether the Borrower has paid the employee under the worker's compensation
laws of any state or other similar federal or state legislation for the
protection of employees. The term "property damage" as used in this paragraph
includes, but is not limited to, damage to any real or personal property of
the Borrower, the Lender, and of any third parties. The Borrower's
obligations under this paragraph shall survive the repayment of the Loans.
37. Default Defined. The occurrence of any one or more of the following
events shall constitute a Default under this Agreement:
(a) Monetary Default. The failure of Borrower to timely pay any
amount due Lender under the Loans within 5 days of the due date.
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(b) Breach of Covenant. The failure of Borrower to comply with any of
the terms and obligations of this Agreement (other than those addressed in a,
c, d, e, f or g hereof) for a period of 30 days.
(c) Breach of Warranty. Lender's discovery that any representation or
warranty in connection with this Agreement or the Loans or any other Loan
Document was materially false when made.
(d) Default Under Other Document. Subject to applicable cure periods,
the occurrence of a default under the terms of any document evidencing or
otherwise pertaining to the Loans, including, without limitation, the Loan
Documents or the occurrence of a default under the terms of any document
evidencing or otherwise pertaining to any other extension of credit by Lender
or any affiliate of Lender to Borrower.
(e) Voluntary Bankruptcy. The Borrower shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property or shall consent to any such relief or to
the appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize any
of the foregoing.
(f) Involuntary Bankruptcy. An involuntary case or other proceeding
shall be commenced against Borrower seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency
or similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety (90)
days; or an order for relief shall be entered against the Borrower under the
bankruptcy laws as now or hereafter in effect.
(g) Default Under Other Loans. Subject to any grace or cure periods,
the occurrence of a default under the terms of any document or agreement
evidencing, securing or otherwise pertaining to the extension of credit in
excess of $500,000.00 by any other party to Borrower, the default, which if
not cured, would permit the acceleration of the debt.
(h) Judgment. The entry of a judgment against Borrower or any of its
property in an amount is excess of $1,000,000.00 which is not either satisfied
or bonded off prior to the time execution could issue under such judgment.
(i) Collateral. Should any Lien in favor of Lender on any Collateral
prove to be unperfected, unenforceable or void or should Borrower assert that
with respect to any such Lien.
(j) Death of Individual. If Borrower is an individual or if any
guarantor is an individual, the death of such individual.
38. Remedies Upon Default. Upon a Default, Lender may exercise any or
all of the following remedies:
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(a) Remedies. Lender, may exercise any right that it may have at law
or equity, including those under the Loan Documents and including an action to
collect the Loans and foreclosure on some or all of the Collateral. All
obligations of Lender to advance or readvance under the Revolving Loans will
terminate. Lender, at its option, may increase the rate of interest on the
Loans to the Default Rate.
(b) Application of Proceeds. All amounts received by Lender for
Borrower's account by exercise of its remedies hereunder shall be applied as
follows: First, to the payment of all reasonable expenses incurred by Lender
in exercising their rights hereunder, including reasonable attorney's fees,
and any other expenses due Lender from Borrower; Second, to the payment of all
interest included in the Loans, in such order as Lender may elect; Third, to
the payment of all principal included in the Loans, in such order as Lender
may elect; and Fourth, surplus to Borrower or other party entitled thereto.
39. Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to the preceding paragraph, require the Borrower at
such time to deposit in a cash collateral account opened by the Issuing Lender
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Issuing Lender to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied
to repay the other Loans. After all such Letters of Credit shall have expired
or been fully drawn upon and all other Loans shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower.
40. Reversal of Payments. To the extent Borrower makes a payment or
payments to the Lender or the Lender receives any payment or proceeds of the
collateral, if applicable, which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or proceeds repaid, the Loans or part thereof
intended to be satisfied shall be revived and continued in full force and
effect as if such payment or proceeds had not been received by the Lender.
41. Set-Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon and after
the occurrence of any Default and during the continuance thereof, the Lender,
and any assignee or participant of a Lender, is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or
to any other person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special, time
or demand, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Lender, or any such assignee or
participant to or for the credit or the account of Borrower against and on
account of the Loans irrespective of whether or not (a) the Lender shall have
made any demand under this Agreement or any of the other Loan Documents or (b)
the Lender shall have declared any or all of the Loans to be due and payable
and although such Loans shall be contingent or unmatured.
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42. Arbitration and Waiver of Jury Trial.
(a) This paragraph concerns the resolution of any controversies or
claims between the Borrower and the Lender, whether arising in contract, tort
or by statute, including but not limited to controversies or claims that arise
out of or relate to: (i) this Agreement (including any renewals, extensions or
modifications); or (ii) any document related to this Agreement; (collectively
a "Claim").
(b) At the request of the Borrower or the Lender, any Claim shall be
resolved by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U. S. Code) (the "Act"). The Act will apply even though this
Agreement provides that it is governed by the law of a specified state.
(c) Arbitration proceedings will be determined in accordance with the
Act, the rules and procedures for the arbitration of financial services
disputes of J.A.M.S./Endispute or any successor thereof ("J.A.M.S."), and the
terms of this paragraph. In the event of any inconsistency, the terms of this
paragraph shall control.
(d) The arbitration shall be administered by J.A.M.S. and conducted in
Memphis, Tennessee. All Claims shall be determined by one arbitrator;
however, if Claims exceed $5,000,000, upon the request of any party, the
Claims shall be decided by three arbitrators. All arbitration hearings shall
commence within 90 days of the demand for arbitration and close within 90 days
of commencement and the award of the arbitrator(s) shall be issued within 30
days of the close of the hearing. However, the arbitrator(s), upon a showing
of good cause, may extend the commencement of the hearing for up to an
additional 60 days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be submitted to
any court having jurisdiction to be confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any
Claim is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. For purposes of the application of the statute of
limitations, the service on J.A.M.S. under applicable J.A.M.S. rules of a
notice of Claim is the equivalent of the filing of a lawsuit. Any dispute
concerning this arbitration provision or whether a Claim is arbitrable shall
be determined by the arbitrator(s). The arbitrator(s) shall have the power to
award legal fees pursuant to the terms of this Agreement.
(f) This paragraph does not limit the right of the Borrower or the
Lender to: (i) exercise self-help remedies, such as but not limited to,
setoff; (ii) initiate judicial or nonjudicial foreclosure against any real or
personal property collateral; (iii) exercise any judicial or power of sale
rights, or (iv) act in a court of law to obtain an interim remedy, such as but
not limited to, injunctive relief, writ of possession or appointment of a
receiver, or additional or supplementary remedies.
(g) By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any
Claim. Furthermore, without intending in any way to limit this Agreement to
arbitrate, to the extent any Claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim. This provision is a material inducement for the parties entering
into this Agreement.
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43. Not Partners; No Third Party Beneficiaries. Nothing contained herein
or in any related document shall be deemed to render Lender a partner of
Borrower for any purpose. This Agreement has been executed for the sole
benefit of Lender, Borrower and no third party is authorized to rely upon
Lender's rights hereunder or to rely upon an assumption that Lender has or
will exercise its rights under this Agreement or under any document referred
to herein.
44. Regulation U. Borrower warrants that none of the proceeds of the
loan evidenced by the Note will be used to purchase or carry "margin stock,"
as defined in Regulation U issued by the Federal Reserve Board.
45. Business Days. If any payment date under the Revolving Loans falls
on a day that is not a Business Day of Lender, or if the last day of any
notice period falls on such a day, the payment shall be due and the notice
period shall end on the next succeeding Business Day of Lender.
46. Notices. Any communications concerning this Agreement or the credit
described herein shall be addressed as follows:
As to Borrower:
M.S. Carriers, Inc.
Attention: M.J. Barrow
3170 Director's Row
Memphis, TN 38116
With a Copy to:
Martin, Tate, Morrow & Marston, P.C.
Attention: Robert Orians
Suite 1100, 22 North Front Street
Memphis, TN 38103
As to Lender:
Bank of America, N.A.
Attention: Mike Frick
6060 Poplar Avenue, Suite 400
Memphis, Tennessee 38119
With a copy to:
Neal & Harwell, PLC
Attention: James R. Kelley
2000 First Union Tower
150 Fourth Avenue North
Nashville, Tennessee 37219-2498
Communications to be given to a party shall be effective when actually
or constructively received by such party or three (3) days after when set
forth in writing and mailed or delivered to such party's address stated above.
Any party may change its address for receipt of notices by submitting the
change in writing to the other party.
47. Participations. Lender may, from time to time, in its sole
discretion, and without notice to Borrower, sell participations in any credit
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subject hereto to such other investors or financial institutions as it may
elect. Such participants will have no direct relationship with Borrower and
will have no right with respect to waivers or amendments or default
declarations. Lender may from time to time disclose to any participant or
prospective participant such information as the Lender may have regarding the
financial condition, operations, and prospects of Borrower, but the Lender
shall take reasonable precautions to require such participant or prospective
participant to keep such information confidential.
48. Incorporation of Exhibits and Schedules. All Exhibits and Schedules
referred to in this Agreement are incorporated herein by this reference.
49. Indulgence Not Waiver. Lender's indulgence in the existence of a
default hereunder or any other departure from the terms of this Agreement
shall not prejudice Lender's rights to declare a default or otherwise demand
strict compliance with this Agreement.
50. Cumulative Remedies. The remedies provided Lender in this Agreement
are not exclusive of any other remedies that may be available to Lender under
any other document or at law or equity.
51. Amendments, Waiver and Consents. Neither this Agreement nor any
other Loan Documents nor any of the terms hereof or thereof may be amended,
changed, waived, discharged or terminated unless such amendment, change,
waiver, discharge or termination is in writing and signed by the Lender and
the Borrower.
52. Assignment. This Agreement shall be binding upon and inure to the
benefit of the respective heirs, successors and assigns of Borrower and
Lender, except that Borrower shall not assign any rights or delegate any
obligations arising hereunder without the prior written consent of Lender. Any
attempted assignment or delegation by Borrower without the required prior
consent shall be void.
53. Entire Agreement. This Agreement and the other written agreements
between Borrower and Lender represent the entire agreement between the parties
concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein.
54. Severability. Should any provision of this Agreement be invalid or
unenforceable for any reason, the remaining provisions hereof shall remain in
full effect.
55. Time of Essence. Time is of the essence of this Agreement, and all
dates and time periods specified herein shall be strictly observed, except
that Lender may permit specific deviations therefrom by its written consent.
56. Applicable Law. The validity, construction and enforcement of this
Agreement and all other documents executed with respect to the Loans shall be
determined according to the laws of Tennessee applicable to contracts executed
and performed entirely within that state, in which state this Agreement has
been executed and delivered.
57. Gender and Number. Words used herein indicating gender or number
shall be read as context may require.
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58. Captions Not Controlling. Captions and headings have been included
in this Agreement for the convenience of the parties, and shall not be
construed as affecting the content of the respective paragraphs.
Executed the date first written above.
THE UNDERSIGNED ACKNOWLEDGE A THOROUGH
UNDERSTANDING OF THE TERMS OF THIS AGREEMENT
AND AGREE TO BE BOUND THEREBY:
BANK OF AMERICA, N.A., as Agent for itself
and as Lender
By:
Title:
M.S. CARRIERS, INC.
By:
Title:
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