<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/x/ JOINT QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the period ended April 27, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
Commission File Number 33-49544-01 Commission File Number 33-49544
Blue Bird Corporation Blue Bird Body Company
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
Delaware Georgia
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
13-3638126 58-0813156
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
3920 Arkwright Road 3920 Arkwright Road
Macon, Georgia 31210 Macon, Georgia 31210
(Address of principal executive (Address of principal executive
offices, including zip code) offices, including zip code)
(912) 757-7100 (912) 757-7100
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports),
and (2) have been subject to such filing requirements for the past 90
days. Yes /X/ No / /
As of June 1, 1996, 8,424,778 shares of Blue Bird Corporation's
common stock and 10 shares of Blue Bird Body Company's common stock
were outstanding.
BLUE BIRD BODY COMPANY ("BLUE BIRD" OR THE "COMPANY") IS A WHOLLY-
OWNED SUBSIDIARY OF BLUE BIRD CORPORATION ("BBC"). BLUE BIRD MEETS
THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1) (a) AND (b) OF
FORM 10-Q AND IS THEREFORE FILING CERTAIN PORTIONS OF THIS FORM 10-Q
APPLICABLE TO IT WITH THE REDUCED DISCLOSURE FORMAT PERMITTED BY SUCH
GENERAL INSTRUCTION.
<PAGE>
<PAGE>
BLUE BIRD CORPORATION
BLUE BIRD BODY COMPANY
Quarterly Report on Form 10-Q
For the Three-Month and Six-Month Periods
Ended April 27, 1996
Table of Contents
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
as of April 27, 1996 and
October 28, 1995 ..................................... 1
Condensed Consolidated Statements of
Income for the three-month and six-month
periods ended April 27, 1996 and
April 29, 1995 ....................................... 2
Condensed Consolidated Statements of
Cash Flows for the six-month
periods ended April 27, 1996
and April 29, 1995 ................................... 3
Notes to Condensed Consolidated
Financial Statements ................................. 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations ........................................... 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ...................................... 8
Item 6. Exhibits and Reports on Form 8-K ....................... 8
Signatures ....................................................... 9
<PAGE>
<PAGE>
BLUE BIRD CORPORATION AND SUBSIDIARIES
BLUE BIRD BODY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
APRIL 27, 1996 AND OCTOBER 28, 1995
($ IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 27, OCTOBER 28,
1996 1995
--------- ----------
( UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,049 $ 21,452
Trade receivables 15,275 18,866
Leases receivable 33,369 47,222
Inventories 126,899 83,346
Prepaid expenses 2,052 1,020
Other current assets 1,276 5,927
-------- --------
Total current assets 181,920 177,833
LEASES RECEIVABLE, NONCURRENT 38,072 15,000
PROPERTY, PLANT, AND EQUIPMENT 60,685 58,872
Less accumulated depreciation (24,694) (21,860)
-------- --------
Property, plant, and equipment, net 35,991 37,012
GOODWILL AND OTHER INTANGIBLE ASSETS 163,725 165,594
Less accumulated amortization (23,248) (21,712)
-------- --------
Goodwill and other intangible
assets, net 140,477 143,882
-------- --------
OTHER ASSETS 6,852 6,065
-------- --------
Total assets $ 403,312 $ 379,792
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facilities $ 47,236 $ 35,662
Current portions of long-term debt 12,000 12,000
Accounts payable 32,127 25,743
Income taxes payable 1,634 6,926
Deferred income taxes 8,869 9,535
Other current liabilities 26,924 26,242
-------- --------
Total current liabilities 128,790 116,108
LONG-TERM DEBT 121,822 113,750
DEFERRED INCOME TAXES 5,619 5,898
OTHER LIABILITIES 20,836 20,536
REDEEMABLE COMMON STOCK, NET 20,558 20,872
-------- --------
Total liabilities 297,625 277,164
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 25,000,000
shares authorized; 7,704,778 and
7,704,778 outstanding respectively 77 77
Additional paid-in capital 77,023 77,023
Retained earnings 30,850 27,896
Other stockholders' equity (2,263) (2,368)
-------- --------
Total stockholder's equity 105,687 102,628
-------- --------
Total liabilities and
stockholders' equity $ 403,312 $ 379,792
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated statements.
1
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<PAGE>
BLUE BIRD CORPORATION AND SUBSIDIARIES
BLUE BIRD BODY COMPANY AND SUBIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTH AND SIX MONTH PERIODS
ENDED APRIL 27, 1996 AND APRIL 29, 1995
($ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 27, APRIL 29 APRIL 27, APRIL 29,
1996 1995 1996 1995
--------- ---------- --------- ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) <S>
<C> <C> <C> <C>
Net sales $ 106,501 $ 105,384 $ 199,327 $ 182,105
Cost of goods sold 88,101 86,625 165,286 151,048
-------- -------- -------- --------
Gross profit 18,400 18,759 34,041 31,057
Selling, general and
administrative expense 10,774 10,202 20,889 19,963
Amortization of goodwill
and other intangibles 940 1,381 1,880 2,763
-------- -------- -------- --------
Operating income 6,686 7,176 11,272 8,331
Interest income 1,706 948 3,508 1,977
Interest and debt issue
expense (4,229) (4,460) (8,371) (8,673)
Other income (expense) 237 248 433 (138)
-------- -------- -------- --------
Income before income taxes 4,400 3,912 6,842 1,497
Provision for income taxes 1,811 1,599 2,786 599
-------- -------- -------- --------
Net income before
extraordinary items 2,589 2,313 4,056 898
Extraordinary item - loss on
extinguishment of debt
(net of income tax benefit
of $838) 0 0 (1,416) 0
-------- -------- -------- --------
Net income $ 2,589 $ 2,313 $ 2,640 $ 898
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
statements.
2
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<PAGE>
BLUE BIRD CORPORATION AND SUBSIDIARIES
BLUE BIRD BODY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIODS ENDED APRIL 27, 1996 AND APRIL 29, 1995
($ IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 27, APRIL 29,
1996 1995
--------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 2,640 $ 898
------- -------
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Extraordinary loss on extinguishment of debt 2,254 0
Depreciation and amortization 5,790 6,558
Increase in cash surrender value of
life insurance 52 4
Deferred income taxes (945) (1,465)
Changes in operating assets and liabilities:
(Increase) decrease in trade receivables 3,591 (6,119)
(Increase) decrease in inventories (43,553) (60,245)
(Increase) decrease in prepaid expenses (1,032) (559)
Increase (decrease) in accounts payable 6,384 9,735
Increase (decrease) in income taxes payable (5,292) (430)
Other 4,656 2,527
------- -------
Total adjustments (28,095) (49,994)
------- -------
Net cash used in operating activities (25,455) (49,096)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant, and equipment acquisitions (1,663) (2,071)
Leases receivable (9,219) 118
------- -------
Net cash used in investing activities (10,882) (1,953)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing on working capital revolvers 49,646 45,000
Repayment of long-term debt (30,000) (3,000)
Debt prepayment premium (1,625) 0
Other (192) (199)
------- -------
Net cash (used in) provided by
financing activities 17,829 41,801
------- -------
EFFECT OF EXCHANGE RATE FLUCTUATIONS 105 (243)
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (18,403) (9,491)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 21,452 10,490
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,049 $ 999
======= =======
SUPPLEMENTAL INFORMATION:
Cash interest paid $ 4,821 $ 8,096
======= =======
Cash income taxes paid $ 3,978 $ 2,511
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed
statements.
3
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<PAGE>
BLUE BIRD CORPORATION AND SUBSIDIARIES
BLUE BIRD BODY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF FINANCIAL STATEMENTS AND FORMATION AND ORGANIZATION
The accompanying unaudited condensed consolidated financial
statements of Blue Bird Corporation and subsidiaries ("BBC") have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. It is suggested that
these condensed consolidated financial statements be read in conjunction
with the financial statements and the notes thereto included in the
joint annual report of BBC and Blue Bird Body Company (the
"Predecessor") (see "Acquisition" below) on Form 10-K for the fiscal
year ended October 28, 1995.
The accompanying unaudited financial statements include, in the
opinion of management, all adjustments, which are of a normal recurring
nature, necessary for a fair presentation for the periods presented.
Results for the interim periods presented are not necessarily indicative
of results that may be expected for a full fiscal year.
FISCAL YEAR
BBC's fiscal year ends on the Saturday nearest October 31 of each
year, generally referred to as a "52-/53-week year." Fiscal year 1996
contains 53 weeks and fiscal year 1995 contains 52 weeks.
ACQUISITION
On April 15, 1992, BBC (formerly B B Holding Corp.) acquired all of
the outstanding capital stock of the Predecessor through the merger of
B B Acquisition Corp., a wholly owned subsidiary of BBC, with and into
the Predecessor (the "Acquisition"), with the Predecessor as the
surviving corporation. The Acquisition was accounted for as a purchase.
4 <PAGE>
<PAGE>
2. INVENTORIES
Inventories are valued at the lower of cost or market, cost being
determined on the last-in, first-out basis. If the first-in, first-out
method had been used, inventories would have been approximately
$3,500,000 higher at April 27, 1996 and approximately $2,600,000 higher
at October 28, 1995.
The components of inventory consist of the following at April 27,
1996 and October 28, 1995 (dollars in thousands):
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Raw materials $ 27,830 $ 32,463
Work in process 40,750 22,831
Finished goods 58,319 28,052
------- ------
$ 126,899 $ 83,346
</TABLE>
3. CONTINGENCIES
PENDING LITIGATION AND INSURANCE PROGRAM
As of April 27, 1996, a number of product liability cases were
pending against a subsidiary of BBC. Neither the outcome of certain
cases nor the amounts of any liabilities related to these certain cases
are known, however, management believes that the ultimate resolution of
these matters will not have a material adverse impact on BBC's financial
position or results of operations.
5
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED APRIL 27, 1996 COMPARED TO THREE MONTHS
ENDED APRIL 29, 1995
Net sales for the quarter ended April 27, 1996, were $106.5
million, an increase of $1.1 million or 1.0% compared to the
corresponding period in 1995. The increase was due to more deliveries
during the current reporting period as compared to the 1995 period.
Gross profit decreased to $18.4 million in the second quarter of
1996 from $18.8 million in the second quarter of 1995, a decrease of $.4
million or 2.1%, reflecting more competitive pricing on deliveries in
the second quarter of 1996.
Selling, general and administrative expenses increased to $10.8
million from $10.2 million in the 1995 period, an increase of $.6
million or 5.9%. This increase was due primarily to higher selling and
engineering costs.
Interest income increased to $1.7 million in 1996, compared to $.9
million in 1995. The increase was due mainly to a higher average dollar
amount of leases held in the lease portfolio in 1996 compared to 1995
due to the formation of Blue Bird Capital Corporation.
Interest and debt issue expense decreased to $4.2 million in the
current period from $4.5 million in the prior year's period due to lower
interest rates on bank debt as well as lower debt due to the repurchase
of $25 million of Subordinated Debt in December, 1995. The resulting
lower interest expense was partially offset by higher interest expense
on the line of credit related to leases in Blue Bird Capital
Corporation.
The provision for income taxes was $1.8 million in the current
period compared to $1.6 million in the 1995 period. The effective tax
rate for the current period was 41.2% compared to 40.9% during the prior
year period. The effective tax rate for both periods is higher than the
statutory rate primarily due to the effect of certain non-deductible
amortization charges, principally goodwill.
SIX MONTHS ENDED APRIL 27, 1996 COMPARED TO SIX MONTHS ENDED
APRIL 29, 1995
Net sales for the six months ended April 27, 1996, were $199.3
million, an increase of $17.2 million or 9.4% compared to the
corresponding period in 1995. This was due to delivering more units
during the current period as compared to the 1995 period.
Gross profit increased to $34.0 million in the current period as
compared to $31.1 million in the 1995 period. This was an increase of
$2.9 million or 9.3%. The increased gross profit was due to higher
sales volume.
6
<PAGE>
<PAGE>
Selling, general and administrative expenses increased to $20.9
million from $20.0 million in the 1995 period, an increase of $.9
million or 4.5%. This increase was due primarily to normal budgeted
increases and higher selling expenses.
Interest income increased to $3.5 million in 1996, compared to $2.0
million in 1995. The increase was due mainly to a higher average
dollar amount of leases held in the lease portfolio in 1996 compared to
1995.
Interest and debt issue expense decreased to $8.4 million in the
current period from $8.7 million in the prior year's period due to lower
interest rates on bank debt as well as lower debt due to the repurchase
of $25 million of Subordinated Debt in December, 1995. The resulting
lower interest expense was partially offset by interest expense on line
of credit related to leases in Blue Bird Capital Corporation. Other
income/(expense) was $.4 million income in the current period as
compared to $.1 million expense in the corresponding period in 1995 due
to a currency exchange loss in the 1995 period.
The provision for income taxes was $2.8 million in the current
period compared to $.6 million in the 1995 period. The effective tax
rate for the current period was 40.7% compared to 40.0% during the prior
year period. The effective tax rate for both periods is higher than the
statutory rate primarily due to the effect of certain non-deductible
amortization charges, principally goodwill.
On December 14, 1995, the Company repurchased, for cash on the open
market, $25 million in principal amount of outstanding 11 3/4% Senior
Subordinated Notes due 2002, Series B (the "Subordinated Notes") for the
purchase price (expressed as a percentage of principal amount) of
106.500% plus accrued interest to the purchase date. An extraordinary
loss of $1.4 million net of a tax benefit of $.8 million occurred during
the 1996 period due to the early extinguishment of such Subordinated
Notes.
FINANCIAL CONDITION
WORKING CAPITAL
The Company's working capital needs are seasonal. Working capital
and related bank borrowings are lowest immediately after heavy school
bus deliveries late in the fourth fiscal quarter. Beginning in December
or January, working capital and related bank borrowings typically start
to increase as parts are purchased or manufactured and distributed to
the assembly plants for assembly into buses. Management tries to build
buses as close to expected delivery time as possible. Inventory is at
its highest during May, June and July prior to heavy seasonal
deliveries.
7 <PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities during the current period was
$25.5 million. This was primarily the result of the seasonal increase
in inventory and payment of income taxes, partially offset by
depreciation, amortization and an increase in accounts payable. Net
borrowings on the working capital revolvers increased $49.6 million,
reflecting primarily the seasonal increase in inventory. The early
extinguishment of $25 million of outstanding Subordinated Notes was
funded primarily from internally generated cash and partially from an
increase in the working capital revolver. On March 29, 1996, Blue Bird
Capital Corporation entered into an Amended and Restated Loan Agreement
with LaSalle National Bank, as Agent, and other financial institutions
(the "Amended Credit Agreement"). The Amended Credit Agreement provides
Blue Bird Capital with a revolving credit facility (the "Credit Facility")
up to a maximum aggregate principal amount of $100 million, subject to
certain limitations as set forth in the Amended Credit Agreement. The
Credit Facility terminates on March 31, 1999 and may be extended for up
to two one-year periods. The Company believes that its established
financing sources are adequate for the foreseeable future.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to BBC's and the Predecessor's Joint Annual Report
on Form 10-K for the fiscal year ended October 28, 1995 for a description
of certain legal proceedings to which BBC or the Predecessor is a party.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.22 Amended and Restated Loan Agreement by and among
Blue Bird Capital Corporation and LaSalle National
Bank, as Agent, dated March 29, 1996.
27 Financial data schedule.
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Registrants
during the quarter ended April 27, 1996.
8
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, each Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
BLUE BIRD CORPORATION BLUE BIRD BODY COMPANY
By /s/ Paul E. Glaske By /s/ Paul E. Glaske
Paul E. Glaske Paul E. Glaske
Chairman of the Board and Chairman of the Board and
President and Director President and Director
(Principal Executive (Principal Executive
Officer) Officer)
Date: June 11, 1996 Date: June 11, 1996
By /s/ Bobby G. Wallace By /s/ Bobby G. Wallace
Bobby G. Wallace Bobby G. Wallace
Vice President, Treasurer and Vice President - Finance
Secretary and Director and Administration,
(Principal Financial and Treasurer and Secretary
Accounting Officer) and Director
(Principal Financial and
Accounting Officer)
Date: June 11, 1996 Date: June 11, 1996
9
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<PAGE>
Exhibit Index
-------------
Exhibit
No. Description
------- -----------
27 Financial data schedule
10.22 Amended and restated loan agreement
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000889468
<NAME> Blue Bird Body Company
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-02-1996
<PERIOD-END> APR-27-1996
<CASH> 3,049
<SECURITIES> 0
<RECEIVABLES> 48,644
<ALLOWANCES> 0
<INVENTORY> 126,899
<CURRENT-ASSETS> 181,920
<PP&E> 60,685
<DEPRECIATION> 24,694
<TOTAL-ASSETS> 403,312
<CURRENT-LIABILITIES> 128,790
<BONDS> 121,822
<COMMON> 77,100
0
0
<OTHER-SE> 49,145
<TOTAL-LIABILITY-AND-EQUITY> 403,312
<SALES> 199,327
<TOTAL-REVENUES> 199,327
<CGS> 165,286
<TOTAL-COSTS> 165,286
<OTHER-EXPENSES> 23,202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,371
<INCOME-PRETAX> 6,842
<INCOME-TAX> 2,786
<INCOME-CONTINUING> 4,056
<DISCONTINUED> 0
<EXTRAORDINARY> 1,416
<CHANGES> 0
<NET-INCOME> 2,640
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
AMENDED AND RESTATED LOAN AGREEMENT
BY AND AMONG
BLUE BIRD CAPITAL CORPORATION
and
LASALLE NATIONAL BANK, as Agent
and
THE SEVERAL FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES TO THIS AGREEMENT
March 29, 1996
<PAGE>
<PAGE>
AMENDED AND RESTATED LOAN AGREEMENT
This Amended and Restated Loan Agreement dated as of
March 29, 1996, by and among Blue Bird Capital Corporation, a
Delaware corporation (hereinafter referred to as "Borrower"),
LaSalle National Bank, a national banking association ("LaSalle")
and the several financial institutions from time to time parties
to this Agreement (individually, a "Lender" and collectively,
"Lenders") and LaSalle, as agent for Lenders (in such capacity
hereinafter referred to as "Agent").
W I T N E S S E T H:
WHEREAS, Borrower and LaSalle are parties to a Loan
Agreement dated as of October 18, 1995, as amended and
supplemented from time to time (collectively, the "Prior
Agreements"), pursuant to which LaSalle has made loans and
advances to Borrower;
WHEREAS, Borrower has requested that Lenders (i)
increase the amount available to be borrowed by Borrower under
the revolving credit facility to $100,000,000, (ii) add the
financial institutions listed on the signature pages hereto as
Lenders, and (iii) in connection with the foregoing, amend and
restate in their entirety the Prior Agreements;
WHEREAS, Lenders are willing to make the financing
accommodations requested by the Borrower and amend and restate
the Prior Agreements in their entirety, effective on the date
hereof, upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the parties' mutual
agreements contained herein, the parties hereto agree as follows:
Section 1. Definitions.
The following words and phrases, not otherwise defined
herein, when used as capitalized terms in this Agreement shall
have the following respective meanings (all words and phrases
which have been defined elsewhere herein having the meanings
there ascribed to them):
"Administrative Fee" shall have the meaning provided in Section
10.
"Affiliates" of any Person means any other Person which controls
or is controlled by, or which is under common control with, that
Person.
<PAGE>
<PAGE>
"Agreement" means this Amended and Restated Loan Agreement, any
exhibits or schedules hereto, any concurrent or subsequent rider
to this Amended and Restated Loan Agreement and any extensions,
supplements, restatements, modifications or amendments to this
Amended and Restated Loan Agreement.
"Applicable Lending Office" shall mean for Agent and each Lender
and for each Revolving Loan, the main lending office of Agent or
Lender designated on the signature pages hereof or such other
office of such Lender as such Lender may from time to time
specify to the Agent and Borrower in writing as the office by
which its Revolving Loans are to be made and maintained.
"Authorized Representative" means those officers or employees of
Borrower authorized by the Borrower to act with respect to this
Agreement, the Revolving Credit Notes, the Instruments, and for
all other necessary or appropriate purposes required to carry out
the purpose of this Agreement.
"BBBC" means Blue Bird Body Company, a Georgia corporation.
"Business Day" means (a) a day other than a Saturday, Sunday or
other day on which commercial banks are authorized or required to
close in the states in which the Applicable Lending Office of any
Lender is located, and (b) relative to the making of Eurodollar
Loans, any day on which dealings in Dollars are carried on in the
interbank eurodollar market which also satisfies the criteria set
forth in (a) above.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities
and including capitalized lease obligations but exclusive of
operating leases) by Borrower during such period that are
required by generally accepted accounting principles to be
included in or reflected by the property, plant or equipment or
similar fixed asset accounts in the balance sheet of Borrower.
"Cash Equivalent Investments" shall mean investments having a
stated maturity no greater than two years (one year in the case
of eurodollar deposits) from the date of such investment in (i)
obligations of the United States government or any agency thereof
or obligations guaranteed by the United States government, (ii)
certificates of deposit of LaSalle or such other commercial banks
having combined capital and surplus of at least $100,000,000,
(iii) commercial paper or similar short term instruments with a
rating of at least "A-1" by Standard & Poors Corporation or
"Prime-1" by Moody's Investors Service, Inc., or (iv) eurodollar
deposits.
"Change in Control" means the occurrence of any one or more of
the following: (A) the Borrower or BBBC shall consolidate with
<PAGE>
<PAGE>
or merge into any other corporation or partnership (except in a
transaction in which the Borrower or BBBC, as applicable, is the
surviving entity and is not itself the subsidiary of another
entity), or (B) any unrelated Person or group of Persons acting
in concert acquires in one or more transactions beneficial
ownership of the common stock of Borrower or BBBC representing
more than fifty percent (50%) of the voting rights with respect
to common stock of the Borrower or BBBC outstanding. For
purposes of this definition, "common stock of the Borrower or
BBBC outstanding" shall include all voting common stock of the
Borrower or BBBC issued and outstanding, and all such common
stock of the Borrower or BBBC which is issuable upon exercise of
all warrants or options.
"Commercial Contracts" means any Contract for the lease or
installment sale to a non-municipal end-user Obligor of
Equipment.
"Commitment" shall mean, as to each Lender, the amount set forth
opposite its name on the signature pages hereto under the heading
"Commitment". "Commitment Percentage" shall mean, with respect
to any Lender a fraction (expressed as a percentage), the
numerator of which shall be the aggregate amount of such Lender's
Commitment and the denominator of which shall be the aggregate
Commitments.
"Contract" means any and all lease agreements, leases, chattel
paper or other deferred payment obligations and all documents,
instruments and agreements related thereto (hereinafter referred
to as a "Contract", and in the case of any such agreement
consisting of more than one document, instrument or other
writing, every such document, instrument or other writing
comprising any such agreement shall be deemed, collectively, to
be the respective "Contract"), now existing and owned or
hereafter arising and acquired by Borrower, together with all
Related Security and all payments and other proceeds arising
therefrom.
"Credit Commitment" shall have the meaning provided in Section 2.
"Credit Termination Date" shall mean March 31, 1999.
"Default" means any Event of Default or event of a nature
described in Section 18 which, with the lapse of time (or with
notice given to Borrower by Agent, which shall be given if the
Agent is so directed by the Majority Lenders, and the lapse of
time) specified in the description of such event, would
constitute an Event of Default.
"Default Rate" shall have the meaning provided in Section 9.
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"Dollar(s)" and the sign "$" shall mean lawful money of the
United States of America.
"EBITDA" means, with respect to the Borrower for any applicable
measurement period, the sum of (a) Net Income, plus (b) income
taxes, plus (c) Interest Expense, plus (d) depreciation, plus (e)
amortization.
"Municipal Contract" means any Contract for the lease or
installment sale of Equipment to an end-user Obligor which is a
municipality or an agency of any municipal governmental unit or
unit of state or local government.
"Equipment" means any new and used school buses or other motor
vehicles which are held for sale or lease to an Obligor, and
"related Equipment" shall, when used with reference to any
Contract, mean the Equipment subject to that respective Contract.
"Eurodollar Loan" shall mean any Revolving Loan with respect to
which the Borrower shall have selected an interest rate based on
the Libor Rate in accordance with the provisions of Section 3(a)
of this Agreement; provided, however, that there shall not be in
excess of eight (8) Eurodollar Loans outstanding at any one time.
"Event of Default" shall have the meaning provided in Section 18.
"Facility Fee" shall have the meaning provided in Section 10.
"Fiscal Year" means the fiscal accounting period of Borrower each
year consisting of four (4) calendar quarter accounting periods
consisting of periods of five, four and four weeks respectively,
ending on the Saturday falling closest to October 31 of each
calendar year.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements,
and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency
exchange rates.
"Illegality" shall have the meaning set forth in Section 9.4 of
this Agreement.
"Initial Revolving Loan" shall have the meaning provided in
Section 13.1.
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"Instrument" means any document or writing under which any
obligation is evidenced, assumed or undertaken; "Instrument
executed pursuant hereto" and similar terms means all notes and
each other document or instrument executed and delivered to
Lenders by Borrower pursuant hereto.
"Intangible Assets" means, without limitation, all organization
costs, goodwill, franchises, licenses, covenants not to compete,
patents, trademarks, servicemarks, and any other assets
classified as intangibles in accordance with generally accepted
accounting principles.
"Interest Coverage Ratio" means for any applicable measurement
period the ratio of (a) EBITDA to (b) Interest Expense for such
period.
"Interest Expense" means for any applicable measurement period in
each Fiscal Year, the aggregate interest expense of the Borrower
for such period on all Liabilities (exclusive of Subordinated
Indebtedness) of the Borrower, including all capitalized
interest, net costs under Hedging Obligations, and the portion of
any interest expense payable with respect to capitalized lease
obligations, but excluding any interest in respect of debt
issuance cost (to the extent being amortized as a non-cash
charge), other than the accrued portion of the Facility Fee.
"Interest Adjustment Period" shall mean the period commencing
with the first day of any fiscal quarter of any Fiscal Year of
Borrower, commencing with the fiscal quarter ending April 27,
1996, if Agent and Lenders shall have received the financial
statements and Quarterly Compliance Certificate of Borrower
required under this Agreement on the dates required after the end
of the preceding fiscal quarter or if Agent and Lenders shall not
have received such financial statements and Quarterly Compliance
Certificate on the dates required hereunder, the day Agent and
Lenders actually receive such financial statements and Quarterly
Compliance Certificate, and expiring on the first day following
the end of such fiscal quarter.
"Interest Period" shall mean: (i) as to any Eurodollar Loan, the
period commencing on the date of such Eurodollar Loan and ending
on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3, 6 or 12 months thereafter, as the Borrower
may elect, and (ii) as to any Prime Rate Loan, the period
commencing on the date of such Prime Rate Loan and ending on the
earlier of (A) the last calendar day of each Reporting Period,
and (B) the expiration or earlier termination of this Agreement;
provided, however, that (i) if any Interest Period would end on a
day that shall not be a Business Day, such interest Period shall
be extended to the next succeeding Business Day unless, with
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respect to Eurodollar Loans only, such next succeeding Business
Day would fall in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business
Day, (ii) no Interest Period with respect to any Revolving Loan
shall end later than the expiration of the term of this
Agreement, and (iii) interest shall accrue from and including the
first day of an Interest Period to and including the last day of
such Interest Period.
"Investment" means, when used with respect to Borrower, any loan
or advance made by it to any other Person (including, without
limitation, any contingent obligation) in respect of any capital
stock, Liabilities, obligation or liability of any other Person
and any other investment made by Borrower (however acquired) in
stock or other ownership interests in any other Person,
including, without limitation, any investment made in exchange
for the issuance of shares of stock of Borrower, but excluding
Contracts entered into in the ordinary course of Borrower's
business. The outstanding amount of any Investment shall be
considered to be the original amount thereof less returns of
principal or capital thereof (and without adjustment by reason of
the financial condition of such Person), or, in the case of
Liabilities of Borrower in respect of any Liabilities, obligation
or liability of any other Person, the amount (subject to any
limitation contained in the Instrument creating such Liabilities
of Borrower) of such other Liabilities, obligation or liability.
"Lenders" shall have the meaning provided in the Preamble.
"Liabilities" of any Person means at any time all amounts which,
in accordance with generally accepted accounting principles,
would be included in determining liabilities as shown on the
liability side of a balance sheet of that Person as of the date
in question, together with indebtedness guaranteed in any manner
by such Person and any other indebtedness for which such Person
is liable, contingently or otherwise.
"Libor Rate" shall mean, with respect to any Eurodollar Loan for
any Interest Period, the interest rate per annum equal to the
quotient obtained by dividing (x) the rate of interest determined
by Agent to be the average (rounded upward to the nearest whole
multiple of one-sixteenth of one percent (1/16%) per annum, if
such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars are generally offered in the
London Interbank Market at 11:00 A.M. London time, two (2)
Business Days before the first day of such Interest Period, for a
period equal to such Interest Period and in the amount of the
applicable Eurodollar Loan, by (y) the difference between one
hundred percent (100%) and any applicable reserve requirements
(rounded upward to the nearest whole multiple of one hundredth
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(1/100) of one percent (1%) per annum), including, without
limitation, any statutory maximum requirement for Lender to hold
reserves for "Eurocurrency Liabilities" under Regulation D of the
Board of Governors of the Federal Reserve System (or any similar
reserves under any successor regulation or regulations).
"Loan Documents" shall mean, collectively, this Agreement, the
Revolving Credit Notes and all other documents, instruments and
agreements now or hereafter executed or delivered pursuant hereto
or in connection herewith, as the same may be modified, amended,
restated or supplemented from time to time (each, individually, a
"Loan Document").
"Majority Lenders" shall mean, at any time, while no Obligations
are outstanding Lenders having at least 67% of the aggregate
amount of the Commitments and, at any time while Obligations are
outstanding Lenders holding at least 67% of the outstanding
aggregate principal amount of the Obligations.
"Net Income" means, for any period, an amount equal to the net
income of the Borrower during such period, determined in
accordance with generally accepted accounting principles.
"Obligations" shall mean the Revolving Loans and all interest
payable with respect thereto, together with all other amounts
which Borrower may from time to time be obligated to pay to Agent
or any of the Lenders howsoever evidenced and however arising,
whether pursuant to any Revolving Loan, this Agreement or any
other agreement, understanding, or relationship by and between
Agent or any of the Lenders, by themselves or in connection with
any other party, with the Borrower, or arising out of any other
cause whatsoever, whether liquidated, contingent, stated,
unstated, direct or indirect, primary or secondary, voluntary or
involuntary, determinable or indeterminable, due or not due, or
otherwise whether heretofore, now, or hereafter created, owing,
incurred, made, due or payable, between the Agent or any of the
Lenders and the Borrower.
"Obligor" shall mean the Person obligated for the payment of
principal or other money under any Contract; and "Related
Obligor" shall, when used with respect to any Contract, mean the
Person so obligated thereunder.
"Organizational Documents" means, as to any Person the articles
of incorporation, or any other organizational agreement or
document which forms the basis for the legal existence of the
Person and provides for the rules or its operation and the rights
and obligations of its members, partners, shareholders, or
directors.
"Permitted Liens" shall have the meaning provided in Section
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"Person" shall mean any natural person, partnership, corporation,
firm, association, government, governmental agency or any other
entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" shall have the meaning provided in Section 15.
"Prime Rate" means the variable rate of interest, per annum, from
time to time announced by LaSalle as its prime (or equivalent)
rate and changing as and when changes therein are announced.
Such rate is one of LaSalle's index rates and merely serves as a
basis upon which effective rates of interest are calculated for
loans making reference thereto and may not be the lowest or best
rate at which LaSalle calculates interest or extends credit.
"Prime Rate Loan" shall mean any Revolving Loan with respect to
which Borrower shall have selected an interest rate based upon
the Prime Rate in accordance with the provisions of Section 3(a)
of this Agreement.
"Prior Agreements" shall have the meaning provided in the
Preamble.
"Quarterly Compliance Certificate" means a compliance certificate
duly executed by the Authorized Representative of Borrower,
substantially in the form of Exhibit B attached hereto.
"Rate" shall have the meaning set forth in Section 9.1(a) of this
Agreement.
"Regulatory Action" shall have the meaning set forth in Section
9.4 of this Agreement.
"Related Security" shall mean, with respect to a Contract: (a)
all of the Borrower's interest with respect to such Contract; (b)
all Equipment underlying such Contract; and (c) all collateral
and security agreements and property purported to be subject
thereto held as security for such Contract, including all
guaranties, indemnities, warranties, insurance proceeds and
premium refunds and underwritings and property of whatever
character at any time held as security for such Contract.
"Reporting Period" means each of Borrower's five, four and four-
week fiscal reporting periods contained in its Fiscal Year.
"Revolving Credit Notes" shall have the meaning provided in
Section 8.
"Revolving Loans" shall have the meaning provided in Section 2.
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"Security Instrument" means any security agreement, amendment or
supplement thereto, financing statement, continuation statement,
chattel mortgage, chattel mortgage note, assignment or collateral
assignment, pledge agreement or other agreement providing for,
evidencing or perfecting any Security Interest.
"Securitization Transaction" means collectively Borrower's sale,
assignment, pledge or contribution of some or all of the
Contracts and related rights to a trust or other entity as part
of a securitization transaction the terms of which has been
approved in advance by Agent and Lenders in writing.
"Security Interest" means any lien, encumbrance or security
interest of any kind whatsoever, whether arising under a Security
Instrument or as a matter of law, judicial process, or otherwise.
"Stockholders' Equity" means, without duplication, the
stockholders' equity of the Borrower, as included in and
calculated in a manner consistent with, "stockholders' equity" as
set forth in the balance sheet of Borrower dated January 27,
1996.
"Stock Pledge Agreement" shall have the meaning provided in
Section 13.1 of this Agreement.
"Subordination Agreement" shall have the meaning provided in
Section 13.1 of this Agreement.
"Subordinated Indebtedness" means any obligations of Borrower to
any Person subordinated to the repayment of the Obligations by
written agreement in form and content reasonably acceptable to
Lenders.
"Subsidiary" means any corporation of which more than fifty
percent (50%) of the outstanding common stock is owned, directly
or indirectly, by the Borrower or an Affiliate.
"Tangible Assets" means the assets of Borrower as shown on the
consolidated balance sheet of Borrower as of a given date,
exclusive of any Intangible Assets.
"Tangible Net Worth" shall mean the sum of Stockholders' Equity,
plus Subordinated Indebtedness, minus Intangible Assets and minus
(i) the aggregate amount of payments due under all Contracts
where the Obligor is delinquent in payment of any sum due
thereunder more than sixty (60) days, (ii) the amount of any
liability of Borrower for the repurchase of or losses associated
with any Contracts sold as part of any Securitization
Transaction, and (iii) the aggregate amount of payments due under
all Contracts which are not in compliance with Borrower's
Underwriting Policy.
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"Underwriting Policy" shall have the meaning provided in Section
13.1 of this Agreement.
Unless otherwise defined herein, terms or phrases
defined in the Uniform Commercial Code as in effect on the date
hereof in the State of Illinois are used herein as therein
defined.
Unless otherwise specified, all accounting terms used
herein or in any other loan document related hereto shall be
interpreted, all accounting determinations and computations
hereunder or thereunder shall be made, and all financial
statements required to be delivered hereunder or thereunder shall
be prepared in accordance with, generally accepted accounting
principles applied in preparation of the financial statements
referred to in Section 16(a). Notwithstanding the foregoing, any
calculation of the amount of Liabilities shall be based upon the
principal amount thereof outstanding, without taking into account
the value of any equity securities issued in connection
therewith.
Section 2. Revolving Credit Facility.
Subject to the terms and conditions of this Agreement,
each of the Lenders severally and not jointly agrees to make such
loans and advances (individually each a "Revolving Loan" and
collectively the "Revolving Loans") to Borrower from time to time
until, but not including, the Credit Termination Date, as the
Borrower may from time to time request, in the amount of each
Lender's Commitment Percentage of the Revolving Loans requested
by Borrower, up to, but not in excess of an aggregate sum of
$100,000,000 ("Credit Commitment") and in the case of each
Lender, up to but not exceeding each Lender's Commitment
Percentage of the Credit Commitment. The Credit Commitment will
terminate, and Lenders will be relieved from their commitment to
make Revolving Loans, on the earliest to occur of the following:
(i) the Credit Termination Date (unless extended as provided
below); or (ii) an Event of Default (except that the Credit
Commitment may be reinstated at the sole and absolute discretion
of the Lenders upon the cure of any Event of Default).
Prior to the termination of the Credit Commitment as
herein provided, Borrower may from time to time borrow, prepay
and reborrow amounts under Revolving Loans pursuant to Lenders'
Commitments and subject to and in accordance with the other
terms, provisions, and conditions of this Agreement. Provided a
Default or an Event of Default has not occurred, Borrower may
request an extension of the term of this Agreement for up to two
(2) successive periods of one (1) year each, by written notice to
Agent requesting such extension not less than sixty (60) days
prior to any anniversary date of this Agreement, and Banks shall
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respond to such request within thirty (30) days of such request;
provided, however, that the failure by Banks to respond within
such 30-day period shall be deemed to be a refusal by Banks to
extend the term of this Agreement.
Section 3. Borrowing Procedures.
(a) Agent shall have received, on or before 10:00
a.m. Chicago time, on the day a Revolving Loan is to be made, if
a Prime Rate Loan, or three (3) Business Days prior to the date a
Revolving Loan is to be made, if a Eurodollar Loan, (i) an oral
request from Borrower for a Revolving Loan in a specific amount
(and a request in writing, which shall be delivered to Agent on
the same Business Day, (ii) designation whether the Revolving
Loan is to be a Eurodollar Loan or a Prime Rate Loan, and if such
Revolving Loan is to be a Eurodollar Loan, the Interest Period or
Interest Periods with respect thereto, and (iii) copies of all
other documents which the Borrower is required to deliver to
Agent hereunder; provided, however, Borrower may not request that
a Eurodollar Loan be made if a Default shall have occurred and be
continuing. If such request for a Revolving Loan is received by
Agent orally before 10:00 a.m. Chicago time on the day a Prime
Rate Loan is to be made or orally before 10:00 a.m. Chicago time
three (3) Business Days prior to the date a Eurodollar Loan is to
be made, subject to the other terms and conditions of this
Agreement, Agent will make such Revolving Loan on the applicable
day on which such Revolving Loan is to be funded hereunder,
subject to any delays beyond Agent's reasonable control, provided
that Agent shall not be liable for any damages or liabilities for
the failure to so make any Revolving Loan on the day requested
unless such failure was due to Agent's wilful misconduct. If no
election as to the type of Revolving Loan is specified in any
such notice by Borrower, then such Revolving Loan shall be a
Prime Rate Loan. If no Interest Period is specified with respect
to a Eurodollar Loan in such notice, then Borrower shall be
deemed to have selected an Interest period of one month's
duration. Each request for a Prime Rate Loan shall be in a
minimum amount of $100,000. Notwithstanding anything contained
in this Agreement to the contrary, Borrower may not have more
than eight (8) Eurodollar Loans outstanding at any one time, each
request for a Eurodollar Loan shall be in a minimum amount of
$1,000,000 and minimum increments of $100,000, and no Eurodollar
Loan may have an Interest Period extending beyond the term of
this Agreement.
(b) Upon receipt by Agent of a timely notice from
Borrower of a request for a Prime Rate Loan or Eurodollar Loan,
Agent shall promptly, but not later than 12:00 p.m. Chicago time
on the date of receipt, notify Lenders of the amount, term and
proportionate share of such Prime Rate Loan or Eurodollar Loan to
be funded by each Lender. Two (2) Business Days prior to the
date specified for funding of such Eurodollar Loan in the notice
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from Borrower provided under (a) above, Agent shall notify
Lenders and Borrower of the Libor Rate in effect for such
Eurodollar Loan. Each Lender shall make available its
proportionate share of any Prime Rate Loan or Eurodollar Loan, by
federal funds wire transfer to Agent at Agent's Applicable
Lending Office, in immediately available funds, by not later than
2:00 p.m. Chicago time, on the date specified for a Prime Rate
Loan or Eurodollar Loan hereunder in the notice provided in (a)
above. The amount of any Revolving Loan shall, subject to the
terms of this Agreement, be made available to Borrower by
depositing same, in immediately available funds, in an account of
Borrower, as designated by Borrower, maintained at Agent's
Applicable Lending Office, or by wiring the same, in immediately
available funds, to any account specified by Borrower in its
notice of borrowing.
(c) In the event that any payment due hereunder
from a Lender is due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day.
(d) The failure of any Lender to make any Revolving
Loan to be made by it on any date specified therefor shall not
relieve any other Lender of its obligation to make its Revolving
Loan on such date, but neither the Agent nor any Lender shall be
responsible for the failure of any other Lender to make a
Revolving Loan.
Section 4. Payments and Prepayments.
(a) Borrower shall make each payment in respect of
the principal of and interest on the Revolving Loans and any
other payments due under this Agreement not later than 11:00 a.m.
Chicago time on the day when due, in Dollars, to Agent for the
account of each Lender at Agent's Applicable Lending Office in
Chicago, Illinois in immediately available funds. The
outstanding principal balance of each Eurodollar Loan shall
mature and be due and payable on the last day of the Interest
Period applicable to such Eurodollar Loan.
(b) Any Lender for whose account any payment is to
be made may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any ordinary
deposit account of Borrower with such Lender and shall give
notice thereof to Borrower, provided the failure to give such
notice shall not affect the validity of such debit.
(c) Borrower shall, at the time of making such
payment under this Agreement or any Revolving Credit Notes,
specify to Agent the Revolving Loans or other amounts payable by
Borrower hereunder to which such payment is to be applied (and in
the event that it fails to so specify, or if a Default or an
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Event of Default has occurred and is continuing, Agent may
distribute such payment to the Lenders in such manner as Agent
may determine to be appropriate subject to Section 5 hereof).
(d) Each payment in collected funds received by
Agent under this Agreement or any Revolving Credit Note for
account of a Lender shall be paid promptly to such Lender on the
same Business Day of receipt by Agent if received by 11:00 a.m.
Chicago time, or otherwise on the next successive Business Day,
in the type of funds received, for the account of such Lender at
such Lender's Applicable Lending Office for the Revolving Loan or
other obligation in respect of which such payment is made, net of
any Amounts which are due and owing to Agent by Lender at the
time of such distribution by Agent.
(e) Any prepayment of the Obligations by Borrower
shall be without premium or penalty other than the payment of
damages and fees as provided in Section 9.3 of this Agreement.
Section 5. Pro Rata Treatment.
Except to the extent otherwise provided herein: (i)
each borrowing from the Lenders shall be made from the Lenders,
and each payment of any fee under Sections 10(b) hereof shall be
made for the account of the Lenders, pro rata according to their
respective Commitment Percentage; (ii) each payment of principal
of Revolving Loans by Borrower shall be made for account of the
Lenders pro rata in accordance with the respective unpaid
principal amounts of the Revolving Loans held by the Lenders; and
(iii) each payment of interest on the Revolving Loans by Borrower
shall be made for account of the Lenders pro rata in accordance
with the amounts of interest due and payable to the respective
Lenders.
Section 6. Non-Receipt of Funds by the Agent.
Unless the Agent shall have been notified by a Lender
or Borrower (the "Payor") prior to the date on which the Payor is
scheduled to make payment to the Agent of (in the case of a
Lender) the proceeds of a Revolving Loan to be made by it
hereunder or (in the case of Borrower) a payment to the Agent for
the account of one or more of the Lenders hereunder (such payment
being herein called the "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the
Required Payment has been or will be made and may, in reliance
upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient(s) on such
date and, if the Payor does not in fact make the Required Payment
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to the Agent, the recipient(s) of such Payment shall, on demand,
repay to the Agent the amount so made available together with
interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the
Agent until the date the Agent recovers such amount at a rate per
annum equal to the Default Rate for such period in the case of
Borrower and the federal funds rate in the case of a Lender and,
if such recipient(s) shall fail promptly to make such payment,
the Agent shall be entitled to recover such amount, on demand,
from the Payor, together with interest as aforesaid.
Notwithstanding the foregoing to the contrary, the Agent shall
not charge the Lenders, and the Lenders shall not be responsible
to pay the Agent, any interest described in this Section 6 to the
extent such interest has otherwise been paid by Borrower to the
Agent.
Section 7. Sharing of Payments, Etc.
(a) Borrower agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or
counterclaim a Lender might otherwise have, each Lender shall be
entitled, at its option, to offset balances held by it for the
account of Borrower at any of its offices, against any principal
of or interest on any of such Lender's Revolving Loans or any
other amount payable to such Lender hereunder, which is not paid
when due subject to any applicable grace periods (regardless of
whether such balances are then due to Borrower), in which case it
shall promptly notify Borrower and the Agent thereof, provided
that such Lender's failure shall not affect the validity thereof.
(b) If any Lender (i) shall obtain payment of any
principal of or interest on any Revolving Loan made by it to
Borrower under this Agreement through the exercise of any right
of set-off, banker's lien or counterclaim or similar right or
otherwise, and, as a result of such payment, such Lender shall
have received a greater percentage of the Liabilities with
respect to the Revolving Loans then due hereunder by Borrower to
such Lender than the percentage of the Obligations received by
any other Lenders, or (ii) such Lender's percentage of the
outstanding Obligations relating to Revolving Loans is less than
the Lender's pro rata share of such Obligations, it shall
promptly purchase from such other Lenders participations in (or,
if and to the extent specified by such Lender, direct interests
in) the Revolving Loans made by such other Lenders (or in
interest due thereon or other Obligations with respect to the
Revolving Loans due to such Lenders, as the case may be) in such
amounts, and make such other adjustments from time to time as
shall be equitable, to the end that (x) each Lender shall have
made advances of Obligations relating to Revolving Loans
according to its pro rata share of its Commitment of such
Obligations, and (y) all the Lenders shall share the benefit of
such excess payment (net of any expenses which may be incurred by
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such Lender in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid Obligations with respect to
the Revolving Loans due to each of the Lenders. To such end all
the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(c) Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Obligations with
respect to the Revolving Loans due to other Lenders (or in
interest due thereon, as the case may be) may exercise all rights
of set-off, bankers' lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a
direct holder of Revolving Loans in the amount of such
participation.
(d) Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of
any Lender to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness or
obligation of Borrower. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured
claim in lieu of a payment or set-off to which this Section 7
applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section 7 to share in the benefits of any recovery on such
secured claim.
Section 8. Revolving Credit Note.
The Revolving Loans shall be evidenced by Revolving
Credit Notes executed by Borrower dated the date of this
Agreement and substantially in the form of Exhibit A attached
hereto and forming a part hereof ("Revolving Credit Notes").
Subject to the provisions of this Agreement, the Obligations
shall be subject to principal repayment in whole upon the Credit
Termination Date and shall be repaid in whole, upon demand of the
Majority Lenders, in accordance with Section 19 upon the
occurrence of an Event of Default.
Section 9. Interest.
9.1 Rates.
(a) Except as provided below, all Obligations owed by
Borrower to Lender (except for Eurodollar Loans and those
Obligations evidenced by a note other than a Revolving Credit
Note, or by any other agreement which specifically provides for a
rate of interest different from that provided for herein) shall
bear interest, on the unpaid principal balance thereof, at a rate
per annum (computed on the basis of the actual number of days
elapsed over a 360-day year) (the "Rate") equal to the Prime
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Rate, payable monthly in arrears on the first day of each
Reporting Period.
(b) Subject to the provisions of Sections 9.6, 9.8 and
9.9 of this Agreement, each Eurodollar Loan shall bear interest
on the unpaid principal balance thereof, at a rate per annum
(computed on the basis of the actual number of days elapsed over
a 360-day year) equal to the Libor Rate for the Interest Period
in effect for such Revolving Loan, plus 1.125%. Interest on
Eurodollar Loans for 1, 2 and 3 month Interest Periods shall be
payable in arrears on the last day of the applicable Interest
Period. Interest on Eurodollar Loans for a 6 or 12-month
Interest Period shall be payable in arrears at intervals of 90
days following funding of such Eurodollar Loan and on the last
day of such Interest Period.
(c) All Obligations owed by Borrower to Lenders shall
bear interest, from and after the occurrence of an Event of
Default by Borrower under this Agreement and for so long as an
Event of Default shall be continuing, and without constituting a
waiver of any such Event of Default, on the unpaid principal
balance thereof, at a fluctuating rate per annum equal to two (2)
percentage points above the Rate ("Default Rate"). All interest
chargeable under this Agreement shall be computed on the basis of
a 360-day year for actual days elapsed.
(d) In the event that the Prime Rate announced is, from
time to time hereafter, changed, adjustment in the Rate shall be
made on the effective date of such change in the Prime Rate. The
Rate, as adjusted, shall apply to all Obligations (except as
provided above with respect to Eurodollar Loans) owed on the date
following the date on which the adjustment is made and shall
apply to all Obligations owed during succeeding months until the
Prime Rate is adjusted again. Agent shall use reasonable efforts
to notify Borrower and each of the other Lenders of each change
in the Prime Rate as soon as practicable, but Borrower's
obligation to pay all interest at the Prime Rate and Default Rate
as provided in this Agreement shall not be affected by, nor shall
Agent have any liability for, any failure to so notify Borrower.
In no event shall the Rate, Libor Rate, or the Default Rate
exceed the highest applicable rate permitted by law ("Maximum
Rate"). If, in any month, the Rate, Libor Rate, or the Default
Rate absent such limitation, would have exceeded the Maximum
Rate, then the Rate, Libor Rate, or the Default Rate for that
month shall be the Maximum Rate, and if in future months, the
Rate, Libor Rate, or the Default Rate would otherwise be less
than the Maximum Rate, then to the extent permitted by applicable
law, the Rate, Libor Rate, or the Default Rate shall remain at
the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been
paid if the same had not been limited by the Maximum Rate.
Except as provided in (b) above, all interest payable by Borrower
<PAGE>
<PAGE>
shall be due and payable on the first Business Day of each
Reporting Period during the term of this Agreement and Agent may,
at its option, charge such interest to Borrower's account with
Agent. Any amounts which are not paid when due shall thereupon
constitute Obligations hereunder and shall thereafter accrue
interest as provided for in this Agreement.
9.2 Renewals: Conversion and Continuation of Revolving
Loans.
(a) Upon maturity of any Eurodollar Loan, the
Borrower may renew all or any part of any Eurodollar Loan to it
from Lenders with a Revolving Loan of the same or a different
type from Lenders, subject to the conditions and limitations set
forth herein and elsewhere in this Agreement. Any Eurodollar
Loan or part thereof so renewed shall be deemed to be repaid in
accordance with Section 4 with the proceeds of a new borrowing
hereunder and the proceeds of the new Revolving Loan, to the
extent such proceeds do not exceed the principal amount of the
Eurodollar Loan being renewed, shall not be paid by Lenders to
Borrower.
(b) The Borrower shall have the right at any time,
upon notice to Agent given in the manner and at the times
specified in this Agreement with respect to the Revolving Loans
into which conversion or continuation is to be made, to convert
its Eurodollar Loans into Prime Rate Loans, to convert its Prime
Rate Loans into Eurodollar Loans (specifying the Interest Period
to be applicable thereto), to convert the Interest Period
applicable to any of its Eurodollar Loans to another permissible
Interest Period, and to continue any of its Eurodollar Loans into
a subsequent Interest Period of any permissible duration, subject
to the terms and conditions of this Agreement, including, without
limitation Section 3 hereof, and to the following:
(i) each conversion shall be effected by Agent by
applying the proceeds of the new Prime Rate Loan or
Eurodollar Loan, as the case may be, to the Eurodollar Loan
or Prime Rate Loan (or portion thereof) being converted;
(ii) if any Eurodollar Loan is converted at any time
other than the end of an Interest Period applicable
thereto, the Borrower shall make such payments associated
therewith as are required pursuant to Section 9.3 at the
time such Eurodollar Loan shall be converted to a Prime Rate
Loan; and
(iii) Borrower shall not have the option to convert
to or continue any Eurodollar Loan if at the time of such
proposed continuation or conversion , a Default shall have
occurred and be continuing.
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The Interest Period applicable to any Eurodollar Loan
resulting from a conversion or continuation shall be specified by
the Borrower in the notice of conversion or continuation
delivered pursuant to this Section 9.2 provided, however, that,
if no such Interest Period shall be specified, the Borrower shall
be deemed to have selected an Interest Period of one month's
duration.
9.3 Indemnity for Funding Losses.
The Borrower shall indemnify Agent and each of the
Lenders against any loss, fee, claim, damage, liability or
expense which Agent or any of the Lenders may sustain or incur as
a consequence of (i) any failure by the Borrower to fulfill on
the date of any borrowing hereunder the applicable conditions set
forth in this Agreement, (ii) any failure by the Borrower to
borrow hereunder after notice of borrowing pursuant to this
Agreement has been given, (iii) any payment, prepayment or
conversion of a Eurodollar Loan required by any other provision
of this Agreement or otherwise made on a date other than the last
day of the applicable Interest Period, or (iv) any Regulatory
Action (as defined in Section 9.4 below), including, but not
limited to, any loss or reasonable expense sustained or incurred
or to be sustained or incurred in liquidating or employing
deposits from third parties acquired to effect or maintain such
Revolving Loan or any part thereof as a Eurodollar Loan. Such
loss or reasonable expense shall include, without limitation, an
amount equal to (1) the excess, if any, as reasonably determined
by each affected Lender of its cost of obtaining the funds for
the Eurodollar Loan being paid, prepaid or converted or not
borrowed (based on the Libor Rate applicable thereto) for the
period from the date of such payment, prepayment or conversion or
failure to borrow to the last day of the Interest Period for such
Eurodollar Loan (or, in the case of a failure to borrow, the
Interest Period for such Eurodollar Loan which would have
commenced on the date of such failure to borrow) over the amount
of interest (as reasonably determined by each affected Lender)
that could be realized by such Lender in re-employing during such
period the funds so paid, prepaid or converted or not borrowed,
or (2) any loss of yield or cost due to a Regulatory Action. A
certificate of any Lender setting forth in reasonable detail any
amount or amounts which such Lender is entitled to receive
pursuant to this Section 9.3 and reasonably detailing how such
amounts were calculated by such Lender shall be conclusive absent
manifest error. Borrower's obligations under this Section 9.3
shall survive the termination of this Agreement.
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9.4 Change in Legality.
(a) Notwithstanding anything to the contrary herein
contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority, central
bank or comparable agency charged with the administration or
interpretation thereof shall make it unlawful for any of the
Lenders to make or maintain any Eurodollar Loan or to give effect
to its obligations as contemplated hereby (an "Illegality"), or
any of the Lenders determines that maintenance of Eurodollar
Loans would cause such Lender to implement or modify any reserve,
special deposit or assessment or other requirement, or impose any
other condition on any of the Lenders affecting the Revolving
Loans (each of the foregoing circumstances called a "Regulatory
Action"), then, by written notice to the Borrower, Agent shall:
(i) declare that Eurodollar Loans will not
thereafter be made by Lenders hereunder, whereupon the
Borrower shall be prohibited from requesting Eurodollar
Loans from Lenders hereunder unless such declaration is
subsequently withdrawn; provided, however, that if after
the date of any such declaration there shall occur any
change in law or regulation or in the interpretation
thereof by any government authority charged with the
administration or interpretation thereof that shall
eliminate such Illegality, Agent shall as promptly as
reasonably practicable notify the Borrower of such
occurrence and withdraw such declaration;
(ii) require that all outstanding Eurodollar
Loans made by Lenders be converted to Prime Rate
Loans, in which event (1) all such Eurodollar Loans
shall be automatically converted to Prime Rate Loans as
of the effective date of such notice as provided in
paragraph (b) below and (2) all payments and prepayments of
principal which would otherwise have been applied to repay
the converted Eurodollar Loans shall instead be applied to
repay the Prime Rate Loans resulting from the conversion of
such Eurodollar Loans; and
(iii) require fulfillment of the indemnity
provisions of Section 9.3 hereof.
(b) For purposes of this Section 9.4, a notice to the
Borrower by Agent pursuant to paragraph (a)(ii)(1) above shall be
effective on the date of receipt by the Borrower.
9.5 Unavailability of Deposits or Inability to Ascertain,
or Inadequacy of Libor Rate.
If on or prior to the first day of any Interest Period
for any Borrowing of Eurodollar Loans:<PAGE>
<PAGE>
(a) the Agent advises the Borrower that deposits in
United States Dollars (in the applicable amounts) are not being
offered to it in the off-shore U.S. Dollar interbank market for
such Interest Period, or
(b) the Majority Lenders advise the Agent that the
Libor Rate as determined by the Agent will not adequately and
fairly reflect the cost to Lenders of funding their Eurodollar
Loans for such Interest Period, then the Agent shall give notice
thereof to Borrower and the Lenders, whereupon until the Agent
notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of Lenders to make
Eurodollar Loans shall be suspended without liability to Agent or
Lenders.
9.6 Increased Cost and Reduced Return. (a) If on or
after the date hereof, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject any Lender (or its Applicable
Lending Office) to any tax, duty or other charge with
respect to its Eurodollar Loans, its Revolving Credit
Note or its obligation to make Eurodollar Loans, or
shall change the basis of taxation of payments to any
Lender (or its Applicable Lending Office) of the
principal of or interest on its Eurodollar Loans or
any other amounts due under this Agreement in respect of
its Eurodollar Loans or its obligation to make Eurodollar
Loans (except for changes in the rate of tax on the overall
net income of such Lender or its Applicable Lending Office
imposed by the jurisdiction in which such Lender's
principal executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, against
assets of, deposits with or for the account of, or credit
extended by any Lender (or its Applicable Lending Office)
or shall impose on any Lender (or its Applicable Lending
Office) or on the interbank market any other condition
affecting its Eurodollar Loans, its Revolving Credit Note
or its obligation to make Eurodollar Loans;
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<PAGE>
and the result of any of the foregoing is to increase the cost to
such Lender (or its Applicable Lending Office) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any
sum received or receivable by such Lender (or its Applicable
Lending Office) under this Agreement or under its Revolving
Credit Note with respect thereto, by an amount deemed reasonably
and in good faith by such Lender to be material, then, in
connection with any Eurodollar Loan actually funded by such
Lender and within fifteen (15) days after demand by such Lender
(with a copy to Agent), the Borrower shall be obligated to pay
such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction (computed
commencing on the effective date of any event mentioned herein).
Each Lender agrees to use its best efforts to give the Borrower
notice of the occurrence of any event mentioned herein.
9.7 Discretion of Lender as to Manner of Funding.
Notwithstanding any other provision of this Agreement,
each Lender shall be entitled to fund and maintain its funding of
all or any part of its Revolving Loans in any manner it sees fit,
it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if each
Lender had actually funded and maintained each Eurodollar Loan
through the purchase of deposits in the interbank market having a
maturity corresponding to such Eurodollar Loan's Interest Period
and bearing an interest rate equal to the Libor Rate for such
Interest Period.
9.8 Interest Adjustment Period. During any Interest
Adjustment Period (and provided no Default or Event of Default
shall have occurred), unless modified pursuant to Sections 9.3,
9.6 or 9.9 of this Agreement, the Unused Line Fee shall be
adjusted and Eurodollar Loans shall bear interest at a rate per
annum based upon the ratio, measured on a trailing four (4)
fiscal quarter basis, of Borrower's Interest Coverage Ratio for
the preceding four (4) fiscal quarter period, computed as of the
last day of the fiscal quarter most recently ended prior to the
commencement of such Interest Adjustment Period, as calculated by
Agent based upon Borrower's financial statements delivered to
Agent pursuant to this Agreement as follows:
If Interest Coverage Is: Interest Rate Unused Line
Fee
- - ------------------------ --------------------- -----------
Less than 1.50 to 1.0 Libor Rate plus 1.25% .325%
Less than or equal to Libor Rate plus 1.125% .275%
1.61 to 1.0 but greater
than or equal to 1.50
to 1.0<PAGE>
<PAGE>
Less than or equal to Libor Rate plus 1.00% .250%
1.74 to 1.0 but greater
than or equal to 1.62
to 1.0
Greater than 1.74 to 1.0 Libor Rate plus .875% .225%
9.9 Interest Hedging. During any Interest Adjustment
Period (and provided no Default or Event of Default shall have
occurred), if Borrower shall have provided cash flow projections
to Agent and shall have reasonably demonstrated to Agent the
existence of interest rate hedging arrangements obtained through
one or more Lenders providing a hedge with respect to not less
than ninety percent (90%) of the outstanding Revolving Loans
that, assuming a maximum interest cost, allows Borrower to remain
at all times in compliance with its Interest Coverage Ratio of
not less than 1.25:1, the Unused Line Fee and the rate of
interest applicable to Eurodollar Loans shall each be reduced by
one eighth of one percent (1/8%) per annum.
Section 10. Fees, Deposit Accounts.
(a) In addition to any and all other fees and
expenses which Borrower is obligated to pay hereunder, Borrower
shall pay to Agent an annual facility fee ("Facility Fee") and an
administrative fee ("Administrative Fee") in accordance with a
letter agreement between Agent and Borrower, which fees shall be
solely for Agent's benefit as compensation for its services and
Lenders shall not share therein.
(b) Borrower shall, subject to Sections 9.8 and 9.9
of this Agreement, pay to Agent for the ratable benefit of
Lenders during the term of this Agreement, an unused line fee of
.275% per annum of the average daily unused portion of the Credit
Commitment. Such unused line fee shall be calculated quarterly
and be payable in arrears, on the first day of each fiscal
quarter of Borrower commencing with the 28th day of April, 1996
and on the expiration or earlier termination of this Agreement.
(c) Borrower shall forward all collections received
under Contracts to a depository and disbursement account
maintained at Agent and utilize such account for disbursements in
the ordinary course of business. Borrower shall pay Agent all
customary charges associated with the usage thereof which fees
shall accrue solely for Agent's benefit and Lenders shall not
share therein.
Section 11. Books and Records.
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The books and records of Agent shall be prima facie
evidence of the amount of Borrower's Obligations from time to
time outstanding and the dates and amounts of disbursements and
payments with respect to each Revolving Loan.
Section 12. Mandatory Prepayment.
If at any time, the aggregate outstanding principal
amount of all Obligations exceeds the Credit Commitment, as such
may be reduced at Borrower's request from time to time, Borrower
shall make a principal prepay-ment, in whole, or in part at least
equal to the amount of the excess of the Obligations outstanding
over the Credit Commitment.
Section 13. Conditions to Loans.
13.1 Initial Revolving Loan. The making of the first
Revolving Loan under this Agreement (the "Initial Revolving
Loan") shall be subject, in addition to all other terms and
conditions of this Agreement, to the satisfaction of the
following conditions precedent at the times specified:
(a) Consents. All consents, approvals and
authorizations required in connection with the execution,
delivery or performance of this Agreement and the Loan Documents,
shall have been obtained by the Borrower and BBBC, and neither
Borrower nor BBBC shall not have incurred or become subject to
any liability as a result thereof.
(b) Required Documents. There shall have been
delivered to Lenders the following documents in form and
substance satisfactory to Lenders, and there shall have been
consummated or satisfied all of the transactions or conditions
contemplated by each such document:
(i) Agreement; Note. Multiple copies of this
Agreement as requested by Lenders and one copy of each
Lender's Revolving Credit Note conforming to the
requirements hereof all duly executed by the Borrower.
(ii) Legal Opinion. The legal opinion of Borrower's
and BBBC's counsel in form and substance satisfactory to
Lenders and their counsel.
(iii) Officer's Certificate. A certificate executed
by the Chief Executive Officer of Borrower, stating that (A)
no Default or Event of Default has occurred and is
continuing, (B) except as disclosed by Borrower to Lenders
on Schedule A attached thereto, no litigation, investigation
or proceeding, or injunction, writ or restraining order of
the type described in Section 14(e) hereof is pending or
threatened, and (C) each of the conditions precedent to the
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<PAGE>
consummation of the Revolving Loans set forth in this
Section 13 has been met or satisfied.
(iv) Articles and Bylaws. A copy of (A) Borrower's
and BBBC's Certificates of Incorporation and any amendments
thereto, certified by the Secretary of State of Delaware as
of a date not more than 20 days prior to the date hereof,
and (B) copies of the bylaws, and any amendments thereto, of
Borrower and BBBC certified by the corporate secretary.
(v) Good Standing Certificates. Good Standing
Certificates for Borrower in Delaware and BBBC in Georgia
and in each other state in which either of them have an
office, or otherwise where the failure of Borrower or BBBC
to be qualified to transact business as a foreign
corporation would have a material adverse impact on Borrower
or BBBC.
(vi) Board Resolutions. Certified copies of
resolutions of the board of directors of Borrower and BBBC
authorizing the execution and delivery of and the
consummation of the transactions contemplated by this
Agreement, the reaffirmation Stock Pledge Agreement and
Subordination Agreement and all other Instruments.
(vii) Incumbency Certificates. Incumbency
certificates with respect to the officers of Borrower
executing this Agreement, the Instruments and the Revolving
Credit Notes and the officers of BBBC executing the
reaffirmations.
(viii) Subordination Agreements. A reaffirmation of
the Subordination Agreements dated October 18, 1995,
executed by BBBC in favor of Agent ("Subordination
Agreement"), in form and substance satisfactory to Agent.
(ix) Stock Pledge Agreement. A reaffirmation of the
Pledge Agreement dated October 18, 1995, executed by BBBC in
favor of Agent ("Stock Pledge Agreement") in form and
substance satisfactory to Agent.
(x) Accountants' Letter. A letter to Borrower's
independent certified public accountants advising them of
Lender's reliance on future financial statements in
accordance with Section 15(a) hereof.
(xi) Fees, Costs and Expenses. Agent and Lenders
shall have received all fees, costs and expenses due and
payable pursuant to Sections 10, 14 and 23 of this
Agreement.
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(xii) Tangible Net Worth. Borrower shall have
demonstrated to Lenders' satisfaction that it possesses a
Tangible Net Worth of at least $5,000,000.
(xiii) Credit Policy. A certified copy of
Borrower's underwriting policy and credit criteria for
prospective Obligors ("Underwriting Policy").
13.2 Subsequent Revolving Loans. Subject to the terms of
this Agreement, the making of each Revolving Loan after the
Initial Revolving Loan shall be subject to the satisfaction of
the following conditions precedent:
(a) No Default or Event of Default shall have occurred
and be continuing immediately before or after the making of such
Revolving Loan;
(b) All representations and warranties of Borrower
shall remain true and correct as of the date of the making of the
request for a subsequent Revolving Loan as if made on such date.
(c) No material adverse change in the financial
condition or operations of the Borrower shall have occurred prior
to each requested subsequent Revolving Loan; provided, however,
notwithstanding the occurrence of such a material adverse change,
Borrower may still convert Eurodollar Loans to Revolving Loan on
the terms and conditions set forth herein.
(d) If such Revolving Loan is being used to acquire
Contracts from BBBC, Agent shall have received a copy of an
Assignment of Contracts executed by BBBC in favor of Borrower in
form acceptable to Agent, conveying to Borrower title to the
Contracts being acquired with the proceeds of any Revolving Loan.
Section 14. Lender's Closing and Administrative Costs and
Expenses.
(a) Subject to the terms of Section 23 hereof,
Borrower shall pay Agent for all reasonable expenses and fees
paid or incurred in connection with the documentation,
negotiation, closing and administration of this Agreement and
Borrower's Obligations and shall pay Agent and each of the
Lenders for all expenses and fees paid or incurred by Agent and
each of the Lenders in connection with the enforcement of this
Agreement and Borrower's Obligations. Such fees and expenses
shall include, without limitation, search fees and expenses,
certification costs, expedited mail charges, filing and recording
fees and the reasonable fees and expenses of Agent's or any
Lender's attorneys and paralegals, whether such fees and expenses
are incurred prior to or after the date hereof; the obligations
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<PAGE>
of Borrower incurred under this Section 14(a) shall survive the
termination of this Agreement;
(b) Borrower shall further reimburse Agent and each of
the Lenders, on written demand, for all costs, fees and
expenses incurred by Agent and any of the Lenders, or their
agents or employees with respect to any procedures, examinations,
reviews of books and records or other audits performed in the
administration of this Agreement.
Section 15. Representations and Warranties.
To induce Lenders to enter into this Agreement and to
make loans and advances hereunder, Borrower represents and
warrants to Agent and Lenders as follows which representations
and warranties shall be true from the time of Borrower's
execution of this Agreement until all Obligations have been
repaid in full:
(a) Organization of Borrower. Borrower is a
corporation validly organized and existing and in good standing
under the laws of the State of Delaware and is and will be duly
qualified to do business and in good standing as a foreign
corporation in each jurisdiction where the nature of its business
or property require it to be qualified, except where the absence
of such qualification would not materially adversely affect the
financial condition, operations or business of Borrower or
materially impair the ability of Borrower to pay or perform any
of its Obligations under this Agreement or any Instrument
executed pursuant hereto. Borrower has full corporate power and
authority to own its property and conduct its business
substantially as presently conducted by it. Borrower has full
corporate power and authority to enter into and to perform its
obligations under this Agreement and each Instrument executed
pursuant hereto and to obtain loans and advances hereunder.
(b) Due Authorization. The execution and delivery
by Borrower of this Agreement and each Instrument executed
pursuant hereto and the performance by Borrower of its
obligations hereunder and thereunder have been duly authorized by
all necessary corporate action, do not require Borrower to obtain
any approval or consent of any governmental agency or authority,
do not and will not conflict with, result in any violation of, or
constitute any default under, any provision of the Organizational
Documents of Borrower or any agreement or other Instrument
binding upon or applicable to it (other than any agreement or
other Instrument with respect to which a waiver has been
obtained), or any present law or governmental regulation or court
decree or order applicable to it and will not result in or
require the creation or imposition of any Security Interest in
any of its properties pursuant to the provisions of any present
<PAGE>
<PAGE>
agreement or other Instrument binding upon or applicable to it
other than under this Agreement.
(c) Validity of This Agreement. This Agreement is,
and each Instrument executed pursuant hereto will, on the due
execution and delivery thereof, be the legal, valid and binding
obligation of Borrower enforceable in accordance with its terms,
except as may be limited by bankruptcy and moratorium laws and
all other similar laws affecting the rights of creditors
generally and the application of general principles of equity and
to the extent that specific performance and other equitable
remedies may be granted or denied in a court's discretion.
(d) Absence of Default. Borrower is not in default
in the payment of any Liabilities or under any law or
governmental regulation or court decrees or order.
(e) Litigation. No litigation, arbitration or
governmental investigation or proceeding is pending or, to the
knowledge of Borrower, threatened against Borrower.
(f) Taxes. Borrower has filed all tax returns and
reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be then owing and
payable by it. Borrower has received no notice of investigation,
audit, or any other notice or inquiry of any kind with respect to
any tax matter.
(g) Regulation U. Borrower is not engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying margin stock, and none of the assets of Borrower consist
of margin stock. Terms to which meanings are ascribed in
Regulation U of the Board of Governors of the Federal Reserve
System or any regulations substituted therefor, as from time to
time in effect, are used in this subsection with such meanings.
(h) Employee Benefit Plans. Each employee benefit
plan ("Plan") maintained by Borrower complies in all material
respects with all applicable requirements of law and regulations;
no "Reportable Event", such term being used herein with the
meaning ascribed to it in the Employee Retirement Income Security
Act of 1974, as amended (herein called "ERISA"), has occurred
with respect to any Plan; and Borrower has not withdrawn from any
Plan or initiated steps to do so, and no steps will have been
taken to terminate any Plan.
(i) Good Title and Absence of Liens. Borrower is,
and cov-enants to remain, the owner of its assets, free and clear
of all liens, encumbrances and security interests, except for
Permitted Liens.
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<PAGE>
(j) Licenses, Compliance with Laws. Borrower has
or prior to the Initial Revolving Loan will have been issued all
required material federal, state and local licenses, certificates
or permits relating to Borrower and its facilities, businesses,
assets, property, leaseholds and equipment and is in compliance
with all applicable material federal, state and local laws, rules
and regulations.
(k) Impairment of Contract. Borrower has no
knowledge of any material default as to any Contract by any
party, nor of anything which would impair the value of any
Contract.
(l) Validity of Contracts. Each Contract meets
each of the requirements of Borrower's Underwriting Policy.
(m) Accuracy of Information. All written
information heretofore or contemporaneously furnished by or on
behalf of Borrower to Agent or Lenders for purposes of or in
connection with this Agreement or the Prior Agreements and such
other such written information hereafter furnished by or on
behalf of Borrower to Agent or Lenders will be, true and accurate
in every material respect on the date as of which such
information is dated or certified and when taken in its entirety
is not incomplete by omitting to state any material fact
necessary to make such information not misleading.
(n) Chief Executive Office. The chief executive
office and principal place of business of the Borrower is located
at 3920 Arkwright Road, Macon, Georgia 31210. Except as set
forth on Exhibit C hereto, Borrower has no other places of
business. The Borrower will not change its chief executive
office and principal place of business or open any additional
places of business without fifteen (15) days prior written notice
to Agent and Lenders.
(o) Solvency. Immediately prior to the issuance of
the Revolving Credit Notes and after giving effect thereto, the
value of Borrower's assets (exclusive of goodwill) is greater
than the amount required to pay its total Liabilities, and
Borrower is able to pay its debts as they mature. Borrower will
maintain such solvent financial condition, giving effect to the
Obligations, as long as Borrower is obligated to Lenders under
this Agreement or in any other manner whatsoever. Borrower has
sufficient capital to carry on its business and transactions as
now conducted.
(p) Absence of Default. The Borrower is not in
default with respect to any Liabilities with an outstanding
principal balance of $50,000 or more individually or in the
aggregate.
Section 16. Affirmative Covenants.<PAGE>
<PAGE>
Borrower covenants and agrees with Agent and Lenders
that, until all of the Obligations shall have been paid and
performed in full and this Agreement is terminated:
(a) Financial Information. Borrower will furnish,
or will cause to be furnished, to Agent and Lenders copies of the
following financial statements, reports and information, all of
which shall be prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved and shall present fairly the financial condition of
Borrower as at the dates thereof and the results of its
operations for the periods then ended.
(i) promptly when available and in any event within
30 days after the close of each fiscal quarter of each
Fiscal Year, a Quarterly Compliance Certificate
substantially in the form of Exhibit B to this Agreement;
(ii) promptly when available and in any event within
30 days after the close of each Reporting Period, a balance
sheet as of the close of such Reporting Period, and a
statement of income and cash flow for such Reporting Period
and for the period commencing at the end of the
previous Fiscal Year and ending with the close of such
Reporting Period, and comparisons of such balance sheet and
statement of income against Borrower's projections, all in
such form as will be acceptable to Agent and Lenders,
certified by the Authorized Representative as having
been prepared as specified in (a) above, subject to the
absence of footnotes and year-end adjustments;
(iii) promptly when available and in any event within
90 days after the close of each Fiscal Year commencing with
the Fiscal Year ended November 2, 1996, audited financial
statements of Borrower consisting of at least a balance
sheet as of the close of that Fiscal Year and a statement of
income and cash flow for that Fiscal Year, together
with an unqualified opinion and report of Arthur Andersen,
L.L.P., or such other independent public accountants of
recognized standing selected by Borrower and acceptable to
Lender (which acceptance shall not be unreasonably
withheld); and a written statement of those accountants that
they have examined such provisions of this Agreement
as are appropriate to the normal scope of their audit and
have not become aware, in the normal scope of their audit,
of any default in the performance by Borrower of any
obligation to be performed by it pursuant to this Agreement
except such, if any, as may be disclosed in such statement;
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(iv) promptly upon receipt thereof, copies of all
detailed financial and management reports submitted to
Borrower by independent public accountants in connection
with any audit or review by such accountants of the books
and records of Borrower (including, without limitation, in
the normal scope of any audit or review for purposes of
certifying any annual or interim financial statements of
Borrower);
(v) a summary aging of all Contracts as of the end
of each Reporting Period, and required supporting
reconciliations and schedules (made as of the last day of
each respective Reporting Period), both of which shall be
delivered to Agent and Lenders not later than the 15th
day of the next succeeding Reporting Period;
(vi) promptly, as requested by Agent or Lenders,
annual projections, by Reporting Period, of revenue,
expenses, and income consisting of at least projections of
income statement items and balance sheet presentation
for the succeeding twelve (12) Reporting Periods
containing such information and in form reasonably
acceptable to Agent and Lenders;
(vii) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to any of its
securityholders; and
(viii) such other information with respect to the
Contracts or the financial condition and operations of
Borrower as Agent or Lenders may from time to time
reasonably request.
(b) Taxes. All assessments and taxes, whether
real, personal or otherwise, due or payable by, or imposed,
levied or assessed against, Borrower or any of its property
(exclusive of any tax or assessment against real property leased
by Borrower), have been paid, and shall hereafter be paid in
full, before delinquency, and all assessments and taxes due or
payable by, or imposed, levied or assessed against any real
property leased by Borrower have been paid, and shall hereafter
be paid in full, before delinquency. Borrower shall make due and
timely payment or deposit of all federal, state and local taxes,
assessments or contributions required of it by law. Nothing
herein contained shall preclude Borrower from contesting, in good
faith and by appropriate proceedings, the imposition of any
assessments or taxes and to withhold payment of such contested
amounts pending the resolution of such proceedings provided that
Borrower maintains adequate reserves therefore and the failure to
pay such taxes or assessments will not result in the imposition
of a lien not permitted hereunder.
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(c) Insurance. Borrower will maintain or cause to
be maintained with responsible insurance companies insurance with
respect to its properties and business, and will maintain or
cause to be maintained insurance, as set forth in its
Underwriting Policy with respect to Contracts, including personal
or real property which secures the obligations of a related
Obligor under any Contract, against such casualties and
contingencies and of such types and in such amounts as is
customary in the case of similar businesses.
(d) Notice of Default, Litigation and ERISA.
Borrower will immediately give written notice to Agent and
Lenders of:
(i) the occurrence of any Default or Event of
Default;
(ii) any litigation, arbitration or
governmental investigation or proceeding not previously
disclosed in writing by Borrower to Agent and Lenders which
has been instituted or, to the knowledge of Borrower, is
threatened against Borrower or any of its properties which,
if adversely determined, would adversely affect the financial
condition, operation or business of Borrower or impair the
ability of Borrower to perform any of its obligations under
this Agreement or any Instrument executed pursuant hereto;
and
(iii) the occurrence of any Reportable Event under,
or the institution of steps by Borrower to withdraw from, or
the institution of any steps to terminate, any Plan.
(e) Performance of Obligations. Borrower will
perform promptly and faithfully all of its obligations under the
Revolving Credit Notes and each other Instrument executed
pursuant hereto.
(f) Books and Records, Audits. Borrower will in
all material re-spects keep books and records reflecting all of
its business affairs and transactions in accordance with
generally accepted accounting principles and permit Agent (or any
of its employees or agents) at reasonable times and intervals, to
visit all of its offices, conduct examinations and audits of
Borrower's books and records, discuss Borrower's financial
matters with Borrower's officers and independent accountants (and
hereby authorizes such independent accountants to discuss
Borrower's financial matters with Lender and its representatives)
and examine any of its other corporate records; provided,
however, absent the occurrence of an Event of Default, Agent
shall conduct no more than two (2) audits in any twelve-month
period. Any Lender may accompany Agent on and participate in any
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audit conducted by Agent. Such books and records shall be
maintained at Borrower's principal place of business set forth
herein.
(g) Plans. Borrower will maintain each Plan, if
any, in compliance in all material respects with all requirements
of the Plan and any applicable laws and regulations.
(h) Performance of Contract Duties. Borrower
warrants that it has performed and covenants and agrees that it
will continue to perform its duties and obligations under each
Contract, except where the failure to do so would not have a
material adverse effect on the Contract, Borrower's rights or
Obligor's obligations thereunder, or the collectibility of the
payments thereunder.
(i) Compliance with Laws. Borrower shall comply
fully with all statutes, rules and regulations applicable to
Borrower and its business, except where any failure to comply
with any statutes, rules or regulations would not have an adverse
effect on the business of Borrower, the ability of Borrower to
pay the Obligations, Agent's and Lenders' rights hereunder, or
the enforceability of any Contract.
(j) Taxes, Fees. In the event Borrower shall now
or hereafter have an office in any other jurisdiction which
requires the payment of any tax or fee in connection with the
Obligations, Borrower shall pay all fees or taxes required
thereby.
(k) Booked Hedges. Borrower shall maintain in
existence at all times interest rate hedging arrangements
obtained through one or more Lenders providing a hedge with
respect to not less than fifty percent (50%) of the outstanding
Revolving Loans which, assuming a maximum interest cost, allows
Borrower to remain at all times in compliance with its Interest
Coverage Ratio of not less than 1.25:1.
Section 17. Negative Covenants.
Borrower covenants and agrees with Agent and Lenders
that until all of the Obligations shall have been paid and
performed in full and this Agreement is terminated:
(a) Business Activities. Borrower will not,
without Agent and Lenders' prior written consent, engage in any
business which would represent any substantial change from
Borrower's existing business.
(b) Liabilities. Borrower will not create, incur,
assume or suffer to exist or otherwise become or be liable in
respect of any Liabilities without the prior written consent of
Agent and Lenders other than:<PAGE>
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(i) Liabilities in respect of the Revolving Credit
Notes and other Obligations;
(ii) Liabilities in respect of taxes, assessments,
governmental charges or levies and claims of any kind to the
extent that payment thereof shall not at the time be required
to be made in accordance with the provisions of Section
16(b);
(iii) Subordinated Indebtedness to BBBC;
(iv) Liabilities incurred in connection with Capital
Expenditures and operating leases up to the aggregate sum of
$50,000 in any Fiscal Year;
(v) Liabilities to trade creditors, employees or
other Persons (other than for borrowed money) in the
ordinary course of Borrower's business in accordance with
historical practices; and
(vi) Liabilities in connection with any
Securitization Transaction approved by Lenders.
(c) Security Interests. Borrower will not create,
incur, assume, or suffer to exist any Security Interest upon any
of its property or assets, whether now owned or hereafter
acquired, except:
(i) inchoate liens for taxes, assessments or other
governmental charges or levies to the extent that payment
thereof shall not at the time be required to be made in
accordance with the provisions of Section 16(b);
(ii) liens resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall
not have expired, or in respect of which Borrower shall at
any time in good faith be prosecuting by appropriate
proceedings diligently pursued, an appeal or proceeding for
a review and in respect of which a stay of execution
pending such appeal or proceeding for review shall have been
secured;
(iii) carrier's, warehousemen's, mechanic's,
landlord's, materialmen's, supplier's and other like liens
and charges arising in the ordinary course of business
securing obligations that are not incurred in connection
with the obtaining of any advance or credit and which are
not yet due;
(iv) liens arising in connection with, or pledges or
deposits required by, worker's compensation, unemployment
insurance and like matters;<PAGE>
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(v) liens created in connection with a
Securitization Transaction approved by Lenders;
(vi) other liens on specific equipment in connection
with the financing of Capital Expenditures permitted
hereunder; and
(vii) rights of Obligors under Contracts in the
related Equipment.
All of the foregoing are hereinafter referred to as "Permitted
Liens".
(d) Investment. Borrower will not, without the
prior written consent of Lenders make, incur, assume or suffer to
exist any Investment except Cash Equivalent Investments.
(e) Sale, Transfer or Encumbrance of Assets.
Borrower will not without the prior written consent of Lenders,
sell, lease, pledge, encumber, grant a security interest in
(other than Permitted Liens), or otherwise dispose of, move,
relocate, or transfer, whether by sale or otherwise, any of
Borrower's assets, except for the movement of assets in the
ordinary course of business to locations disclosed in advance to
Agent and Lenders.
(f) Distributions, Issuance of Stock, Management
Fees. Borrower will not, without the prior written consent of
Lenders, purchase, redeem or retire any of its capital stock of
any class, or any options or warrants whether now or hereafter
outstanding, pay any management fees in excess of the sum of
$3,000 per month, or pay any dividends or distributions in cash,
stock or other securities.
(g) Transactions with Affiliates. Borrower shall
not enter into any transaction with, any Affiliate, except or in
the ordinary course of business and upon fair and reasonable
terms which are no less favorable to Borrower than would obtain
in a comparable arm's length transaction with a Person not an
Affiliate.
(h) Loan and Advances. Borrower will not make any
loans to any Person; guarantee any debt or other obligation of
any other Person; or advance to any employee, customer or other
Person any funds other than (i) pursuant to Contracts or (ii)
loans and advances to employees which do not exceed $25,000 in
the aggregate during the term of this Agreement.
(i) Consolidation, Merger, Sale or Pledge of
Assets. Borrower will not, without the prior written consent of
Lenders, consolidate with, combine with, acquire or merge into or
with any other Person, suffer or permit a Change in Control, or
purchase or otherwise acquire any other Person or all or
substantially all of the assets of any Person (or any division
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<PAGE>
thereof) or sell, transfer, lease, mortgage or otherwise pledge
or dispose of all or any substantial part of its assets to any
Person other than the sale or lease of Equipment in the ordinary
course of its business.
(j) Inconsistent Financing Statements. Borrower
will not file, nor allow to remain on file, and unreleased, any
financing statement or other document which perfects or purports
to perfect any Security Interest in favor of any other Person
which is inconsistent with subsection (c) of this Section.
(k) Net Income. Borrower shall not permit its
after-tax Net Income to be less than $200,000 for any Fiscal Year
commencing with the Fiscal Year ending November 2, 1996.
(l) Tangible Net Worth. Borrower shall not permit
its Tangible Net Worth at any time to be less than the sum of (i)
$5,000,000, plus (ii) Borrower's aggregate Net Income for each
Fiscal Year commencing with the Fiscal Year ending November 2,
1996, plus (iii) the amount of any additions to capital
contributed by BBBC or any other shareholder at any time, whether
or not any additional shares of Capital Stock of Borrower are
issued in connection therewith.
(m) Interest Coverage Ratio. Borrower shall not
permit its Interest Coverage Ratio, measured as of the last day
of any fiscal quarter as a cumulative year-to date average for
each fiscal quarter of Borrower's Fiscal Year ending November 2,
1996, and as a rolling four (4) fiscal quarter average measured
as of the last day of any fiscal quarter for each fiscal quarter
of each Fiscal Year thereafter, to be less than 1.25 to 1.0.
(n) Restrictions on Commercial Contracts. Borrower
shall not enter into any Commercial Contract with an Obligor
which has a credit rating of less than AA.
(o) Liabilities to Tangible Net Worth Ratio.
Borrower shall not at any time permit the ratio of its
Liabilities to its Tangible Net Worth to exceed 10.0 to 1.0.
(p) Modification of Certain Agreements. Borrower
shall not consent to or enter into any amendment, supplement or
other modification of (a) any term, provision or agreement
contained in any agreement governing or relating to any other
material Liabilities; or (b) any material term or provision (i)
contained in Borrower's Underwriting Policy from that previously
distributed to the Lenders, or (ii) of the Borrower's accounting
policies regarding its Contracts.
(q) Restrictions on Contracts. Borrower shall at
no time be a party to (i) Contracts with a single Obligor having
an aggregate outstanding balance in excess of $5,000,000; (ii)
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<PAGE>
Commercial Contracts having an aggregate outstanding balance in
excess of $5,000,000; or (iii) Municipal Contracts for Equipment
other than school buses having an aggregate outstanding balance
in excess of $5,000,000.
(r) Subordinated Indebtedness. Borrower shall not
make any payments on Subordinated Indebtedness except as
specifically permitted by the terms of any subordination
agreement executed by the holder of such Subordinated
Indebtedness in favor of Lenders.
(s) Subsidiaries. Borrower shall not create any
Subsidiaries.
(t) Tax Sharing Arrangements. Borrower shall not
amend any of its tax sharing arrangements or agreements with
BBBC.
Section 18. Events of Default.
The occurrence of any of the following shall constitute
an Event of Default hereunder:
(a) Borrower defaults in the payment or prepayment
when due of any of the Obligations, including without limitation,
any principal of the Revolving Credit Notes or any interest
thereon, or of any fee hereunder which is not cured within two
(2) Business Days of the occurrence of such default;
(b) Borrower defaults in the due performance and
observance of any warranty, representation, covenant or agreement
contained herein, or in any Instrument, document or agreement
executed pursuant hereto, and fails to cure same within 10 days
after the occurrence of such default; provided, however, that the
10-day cure period as provided by this Section 18(b) shall not
apply to any specific Events of Default set forth elsewhere in
this Section 18;
(c) any default shall occur under the terms
applicable to (i) any Liabilities of Borrower representing any
Hedging Obligations, borrowing or financing and the holder or
holders, or an agent for such holder or holders thereof, shall
then have accelerated or have the right to accelerate any payment
or the performance of any obligation due under, such Liabilities,
or (ii) any Liabilities of Borrower under any other material
agreement (which is not being contested by Borrower in good faith
by appropriate proceedings) with respect to any purchase or lease
by Borrower of goods or services, and the holder or holders, or
an agent for such holder or holders thereof, shall then have
accelerated any payment or the performance of any obligations due
under, such Liabilities;
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<PAGE>
(d) Borrower shall become insolvent or generally
fail to pay, or admit in writing its inability to pay debts as
they become due; or Borrower shall apply for, consent to, or
acquiesce in, the appointment of a trustee, receiver, or other
custodian for Borrower or any of its property, or make a general
assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or
other custodian shall be appointed for Borrower or for a
substantial part of its property and not be discharged within 30
days; or any bankruptcy, reorganization, debt arrangement, or
other case or proceeding under any bankruptcy or insolvency law,
or any dissolution or liquidation proceeding shall be commenced
against or in respect of Borrower as a debtor and, if not
commenced by Borrower, be consented to or acquiesced in by
Borrower or remain for 30 days undismissed; or Borrower shall
take any action to authorize, or in furtherance of, any of the
foregoing;
(e) Any representation or warranty made by the
Borrower herein, in any Instrument, or in any certificate or
financial or other statement heretofore, or hereafter furnished
by or on behalf of the Borrower, shall prove to be in any
material respect false or misleading when made;
(f) Borrower shall suspend the transaction of
business or is enjoined, restrained or in any way prevented by
court order from continuing to conduct all or any material part
of its business affairs; or
(g) Any Change in Control shall occur.
Section 19. Remedies.
Upon the occurrence of an Event of Default described in
Section 18(d) hereunder, the Credit Commitment shall
automatically terminate and the Obligations shall automatically
be and become immediately due and payable, without notice or
demand. Upon the occurrence of any Event of Default hereunder,
Agent may and shall, at the direction of the Majority Lenders,
exercise any or all of the following remedies, in addition to
those granted to Agent and Lenders under applicable law or any
instrument, document or agreement executed in connection
herewith, which rights and remedies will be cumulative and not
exclusive:
(a) In the case of an Event of Default other than
an Event of Default described in Section 18(d) of this Agreement,
immediately, without notice to the Borrower, declare all of the
outstanding amount of the Revolving Credit Notes and any
Obligations to be due and payable, whereupon the full unpaid
amount of the Revolving Credit Notes and any and all other
Obligations shall be and become immediately due and payable. <PAGE>
<PAGE>
(b) Cease making Revolving Loans under this
Agreement and terminate this Agreement as to any future
liabilities or obligations of Lenders except as provided by
applicable law, but without affecting Agent's or Lenders' rights
or Borrower's Obligations.
(c) Proceed to enforce payment of the Revolving
Credit Notes and the Obligations by suit in equity or by action
at law, or both.
Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization and
sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental thereto or in any way
relating to the rights of Agent hereunder, including reasonable
attorney's fees and legal expenses, to the payment in whole or in
part of the Obligations hereunder, in such order as Agent may
elect, and only after so applying such net proceeds, after
payment in full of the Obligations hereunder, shall apply the
surplus, if any, to Borrower or whomsoever may be lawfully
entitled to receive the same. Borrower hereby waives
presentment, demand, notice and protest (to the extent permitted
by applicable law) of any kind in connection with this Agreement.
Section 20. Agent.
(a) Appointment. Each Lender hereby designates and
appoints LaSalle as Agent of such Lender under this Agreement,
and each Lender hereby irrevocably authorizes Agent to take such
action on its behalf under the provisions of this Agreement and
to exercise such powers as are set forth herein, together with
such other powers as are incidental thereto. Agent agrees to act
as such on the express conditions contained in this Section 20.
The provisions of this Section 20 are solely for the
benefit of Agent and Lenders, and Borrower shall not have the
right to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, Agent
shall act solely as agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower.
(b) Nature of Duties. Agent shall not have any
duties or responsibilities except those expressly set forth in
this Agreement. The duties of Agent shall be mechanical and
administrative in nature. Agent shall not have by reason of this
Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement, expressed or implied, is intended to
or shall be construed to impose upon Agent any obligation in
respect of this Agreement except as expressly set forth herein.
Each Lender shall make its own independent investigation of the
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financial condition and affairs of Borrower in connection with
the making and the continuance of the Revolving Loans hereunder
and shall make its own appraisal of the creditworthiness of
Borrower, and Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto,
whether coming into its possession before the date of this
Agreement or at any time or times thereafter, except for
documents delivered to Agent pursuant to this Agreement by or on
behalf of the Borrower. If Agent seeks the consent or approval
of the Majority Lenders to the taking or refraining from taking
any action hereunder, Agent shall send notice thereof to each
Lender. Agent shall promptly notify each Lender at any time that
the Majority Lenders have instructed Agent to act or refrain from
acting pursuant hereto.
(c) Rights, Exculpation, etc. Neither Agent, any
Affiliate of Agent, nor any of their respective officers,
directors, employees, agents, attorneys or consultants, shall be
liable to any Lender for any action taken or omitted by them
hereunder, or in connection herewith, except that Agent shall be
obligated for its gross negligence or willful misconduct in the
performance of its express obligations hereunder. Agent shall
not be liable for any apportionment or distribution of payments
made by it in the absence of willful misconduct or gross
negligence pursuant to Section 4, and if any such apportionment
or distribution is subsequently determined to have been made in
error the sole recourse of any Person to whom payment was due,
but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are
determined to have been entitled. Agent shall not be responsible
to any Lender for any recitals, statements, representations or
warranties herein or for the enforceability, collectibility, or
sufficiency of this Agreement, or any of the transactions
contemplated hereby and thereby, or for the financial condition
of Borrower. Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or the
financial condition of Borrower, or the existence or possible
existence of any Event of Default or Default, provided, however,
that the foregoing shall not release Agent from its obligations
under this Agreement. Agent may at any time request instructions
or indemnification from Lenders with respect to any actions or
approvals which by the terms of this Agreement Agent is permitted
or required to take or to grant, and if such instructions or
indemnification are promptly requested, Agent shall be absolutely
entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any
Person for refraining from any action or withholding any approval
under this Agreement until it shall have received such
instructions or indemnification (to Agent's satisfaction) from
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the Lenders. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting under this Agreement in
accordance with the instructions of the Majority Lenders.
(d) Reliance. Agent shall be entitled to rely upon
any written notices, statements, certificates, orders or other
documents or any telephone message believed by it in good faith
to be genuine and correct and to have been signed, sent or made
by the proper Person, and with respect to all matters pertaining
to this Agreement and its duties hereunder or thereunder, upon
advice of legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by it.
(e) Indemnification. To the extent that Agent is
not reimbursed and indemnified by Borrower, Lenders will
reimburse and indemnify Agent, upon demand, for and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against it in any way relating to or arising out
of this Agreement or any action taken or omitted by Agent under
this Agreement, in proportion to each Lender's ratable shares of
the Commitments; provided that no Lender shall be liable for any
portion of such liabilities, obligations losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful
misconduct. The obligations of Lenders under this Section 20(e)
shall survive the payment in full of all Obligations and the
termination of this Agreement.
(f) The Agent Individually. With respect to its
pro rata share of the Commitments hereunder and the Revolving
Loans made by it, Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein
for any other Lender. The terms "Lender" or "Lenders" or any
similar terms shall include Agent in its individual capacity as a
Lender or one of the Lenders. Except as provided herein, Agent
in its individual capacity may accept deposits from and generally
engage in any kind of banking, trust or other business with
Borrower as if it were not acting as Agent pursuant hereto.
(g) Successor Agent; Resignation of Agent.
(1) Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to
Lenders and Borrower. Such resignation shall take effect
upon the acceptance by a successor Agent of appointment
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<PAGE>
pursuant to clauses (2) and (3) below or as otherwise
provided below.
(2) Upon any such notice of resignation by Agent,
the Majority Lenders shall appoint a successor Agent who
shall be reasonably satisfactory to Borrower.
(3) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the
retiring Agent, with the consent of Borrower (which may not
be withheld unreasonably), shall then appoint a successor
Agent who shall serve as Agent until such time, if any, as
the Majority Lenders, with the consent of Borrower,
appoint a successor Agent as provided above.
(4) Upon the appointment of a successor Agent, the
term "Agent" shall, for all purposes of this Agreement,
thereafter mean such successor.
Section 21. Relations Among Lenders.
Each Lender agrees that it will not take any action,
nor institute any actions or proceedings, against Borrower or any
other obligor hereunder, without the prior written consent of the
Majority Lenders.
Section 22. Miscellaneous.
Each Lender agrees that any action taken by Agent or
the Majority Lenders in accordance with the provisions of this
Agreement, and the exercise by Agent or the Lenders of the powers
set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders.
Section 23. Participations.
Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments and the Revolving
Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation,
its Commitment to Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii)
Borrower, Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and with
regard to any and all payments to be made under this Agreement
and (iv) the holder of any such participation shall not be
entitled to voting rights under this Agreement. No Lender may,
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<PAGE>
without the consent of Agent and, prior to any Event of Default,
the Borrower, make an assignment of its rights or obligations
under this Agreement; provided that such consent shall not be
unreasonably withheld.
Section 24. Waiver and Amendment.
(a) Agent's or Lenders' failure, at any time or
times hereafter, to require strict performance by Borrower of any
provision of this Agreement or the Revolving Credit Notes shall
not waive, affect or diminish any right of Agent or Lenders
thereafter to demand strict compliance and performance therewith.
Any suspension or waiver by Agent or Lenders of a Default or
Event of Default by Borrower under this Agreement or the
Revolving Credit Notes shall not suspend, waive or affect any
other Default or Event of Default by Borrower under this
Agreement or the Revolving Credit Notes, whether the same is
prior or subsequent thereto and whether of the same or of a
different kind or character.
(b) No amendment or modification of any provision of
this Agreement or the Revolving Credit Notes shall be effective
without the written agreement of the Majority Lenders and
Borrower, and no termination or waiver of any provision of this
Agreement, or consent to any departure by Borrower therefrom,
shall in any event be effective without the written concurrence
of the Majority Lenders, which the Majority Lenders shall have
the right to grant or withhold at their sole discretion.
(c) Notwithstanding the provisions of Section
24(b), any amendment relating (i) to any increase of the
Commitments of any Lender, of the total of the Commitments or of
the principal amount of the Revolving Loans, (ii) to any change
in the final maturity of the Revolving Loans, (iii) to the
reduction of interest rates applicable to the Revolving Loans or
fees payable under this Agreement or the timing of payment of
interest or fees, (iv) to the definition of "Majority Lenders",
(v) to the provisions contained in this Section 24(c), (vi) to
any provision contained in Sections 16 and 17 of this Agreement,
or (vii) to any Event of Default involving the payment of money
or the performance of any material obligation by Borrower under
this Agreement, shall be effective only if evidenced by a writing
signed by or on behalf of all Lenders. No amendment,
modification termination or waiver of any provision of Section 20
or any other provision referring to Agent shall be effective
without the written concurrence of Agent. Agent may, but shall
have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf
of such Lender.
<PAGE>
<PAGE>
Section 25. Accounting and Financial Determinations.
Where the character or amount of any asset or liability
or item of income or expense is required to be determined under
this Agreement, each such determination or calculation shall, to
the extent applicable and except as otherwise specified in this
Agreement, be made in accordance with generally accepted
accounting principles applied on a basis consistent with the
audited financial statements of Borrower referred to in Section
16 hereof.
Section 26. Right of Offset.
Subject to the terms of this Agreement, in addition to,
and without limitation of, any rights of Agent and Lenders under
applicable law or otherwise, Agent and Lenders may, when any
Event of Default shall have occurred and be continuing and
without notice or demand of any kind, appropriate and apply
toward payment of any Obligations (whether or not then due), any
amounts, properties, balances, credits, deposit accounts or other
monies of Borrower in the possession or control of Agent or
Lenders for any purpose.
Section 27. Computation and Payment of Liabilities.
Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, that payment shall be made
on the next succeeding Business Day, and that extension of time
shall be included in computing interest, if any, in connection
with such payment.
Section 28. Notices.
Except as otherwise expressly provided, all notices and
other communications to any party pursuant to this Agreement or
any Instrument executed pursuant hereto shall be in writing or by
telex or facsimile addressed, delivered or transmitted to it at
its address or number set forth below its signature hereto or to
such other address or number as it shall designate in a notice to
the other party. Any notice if mailed properly addressed shall
be deemed given on the third Business Day after mailing postage
prepaid or on the second Business Day when sent by overnight
deliv-ery service which provides at least upon request a receipt
for delivery; any notice to any party having a telex or facsimile
number for the receipt at its address for notice hereunder of
messages by transmission by telex or facsimile shall be deemed
given when transmitted by telex or facsimile transmitted to such
party at such telex or facsimile number.
<PAGE>
<PAGE>
Section 29. Costs and Expenses.
Borrower agrees to reimburse Agent and Lenders upon
demand for all reasonable costs, fees and expenses (including
reasonable attorneys' fees and legal expenses) incurred by Agent
or Lenders hereunder or in connection herewith in enforcing the
Obligations of Borrower hereunder or under the Revolving Credit
Notes or any other Instrument executed pursuant hereto. The
obligations of Borrower under this Section shall survive any
termination of this Agreement.
Section 30. Severability, Choice of Law.
Any provision of this Agreement or any instrument
executed pursuant hereto which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of any such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or any
such Instrument or affecting the validity or enforceability of
that provision in any other jurisdiction. This Agreement and all
terms and provisions hereof shall be construed and interpreted in
accordance with and governed by the laws of the State of Illinois
without regard to the choice of law rules thereof. Borrower, to
further induce Lenders to enter into this Agreement agrees that,
subject to Lenders' election, all actions, suits or proceedings
regarding the interpretation or enforcement of this Agreement or
any Instrument shall be litigated only in courts having situs in
Cook County, Illinois, and consents to jurisdiction of any such
court having subject matter jurisdiction over the matter of such
litigation, action, or proceeding and hereby irrevocably appoints
CT Corporation Systems, Inc., whose address is 208 South LaSalle
Street, Chicago, Illinois 60604 or such other person whom Lenders
may designate in writing to Borrower as agent for the personal
service of process. Borrower agrees that service of such process
shall constitute personal service upon Borrower, upon forwarding
of notice to Borrower of such service in accordance with the
provisions of Section 28 hereof.
Section 31. Successors and Assigns.
This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors
and assigns, except that Borrower may not assign or transfer its
rights hereunder without the prior written consent of Lenders.
Each of the Lenders reserves the right, subject to the terms of
Section 24 of this Agreement, to assign or grant participations
in all or any part of, or any interest in, its rights and
benefits hereunder and under the Revolving Credit Notes or any
other Instrument executed pursuant hereto and may, in connection
therewith, disclose all documents and information which they may
<PAGE>
<PAGE>
have relating to Borrower or its business, this Agreement, the
Revolving Credit Notes and any other such Instrument.
Section 32. Taxes and Expenses.
If Borrower fails to pay promptly when due to any other
person or entity, monies which Borrower is required to pay by
reason of any provision of this Agreement, Agent or Lenders may,
but need not, pay the same and charge Borrower's account
therefor, and Borrower shall promptly reimburse Agent and
Lenders. All such sums shall become additional Obligations owing
to Lenders and shall bear interest at the interest rate then
applicable under this Agreement. Any payments made by Agent or
Lenders shall not constitute an agreement by Agent or Lenders to
make similar payments in the future, or a waiver by Agent or
Lenders of any default under this Agreement. Agent or Lenders
need not inquire as to, or contest the validity of, any such
expense, tax, security interest, encumbrance or lien. The
receipt of the usual official governmental or court notice for
the payment of the foregoing shall be conclusive evidence that
the same was validly due and owing, and the receipt of any other
notice with respect to all other such monies due hereunder shall
be prima facie evidence that the same was validly due and owing.
Section 33. Waiver of Jury Trial.
BORROWER AND LENDERS EACH WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY TRANSACTION HEREUNDER.
Section 34. Indemnity.
Borrower shall indemnify and hold harmless Agent and
Lenders and their directors, officers, agents, counsel and
employees ("Indemnified Persons") from and against all losses,
claims, damages, costs, expenses and liabilities ("Losses")
incurred by any of them arising principally out of or relating to
this Agreement, or any other transaction contemplated hereby or
thereby other than arising out of any intercreditor relationship
between Lenders and any Participant or holder of Subordinated
Indebtedness and except for any such losses caused by the gross
negligence or willful misconduct of such Indemnified Persons, and
shall reimburse Agent and Lenders and each other Indemnified
Person for any expenses (including the fees and disbursements of
legal counsel) incurred in connection with the investigation of,
preparation for or defense of any actual or threatened claim,
action or proceeding arising therefrom (including any such costs
of responding to discovery requests or subpoenas), regardless of
whether Agent, Lenders or other Indemnified Person is a party
thereto.
Section 35. Section Headings.<PAGE>
<PAGE>
Section headings and numbers have been set forth herein
for convenience only and shall be without substantive meaning or
content of any kind whatsoever. Unless the contrary is compelled
by the context, everything contained in each section applies
equally to this entire Agreement.
Section 36. Construction.
Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against Agent, Lenders or
Borrower, whether under any rule of construction or otherwise.
On the contrary, this Agreement has been reviewed by
all parties and shall be construed and interpreted according to
the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of the parties hereto.
Section 37. Restatement of Prior Agreements.
This Agreement constitutes a renewal and extension and
an amendment and restatement of, and a replacement and substitute
for the Prior Agreements. The Obligations under the Prior
Agreements are continuing indebtedness and nothing in this
Agreement shall be deemed to constitute payment, settlement or
novation of the corresponding Obligations of Borrower under the
Prior Agreements, or to release or otherwise affect any rights of
Lenders against Borrower, or any guarantor, surety, or other
party primarily or secondarily liable for such Obligations. Upon
execution of this Agreement by the parties, this Agreement shall
amend and supersede and is substituted for the Prior Agreements
in their entirety.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
BLUE BIRD CAPITAL CORPORATION
By: /S/ Paul Glaske
------------------------------
Title: President
______________________________
ATTEST:
By: /S/ Bobby G. Wallace
_______________________________
Title: Secretary
_______________________________
Address: 3920 Arkwright Road
PO Box 7839
Macon, Georgia 31210
Fax No: 912/474-9137
Commitment: $ 40,000,000 LASALLE NATIONAL BANK
--------------
By: /S/ James M. Minich
-------------------------
Title: Assistant Vice President
---------------------------
Address: 120 South LaSalle Street
Chicago, Illinois 60603
ATTN: Michael Jamieson
Fax No. 312/606-8423
Commitment: $ 20,000,000 NATIONSBANK, N.A. (SOUTH)
--------------
By: /S/ Kathryn Robinson
----------------------------
Title: Sr. V.P.
------------------------------
Address: 600 Peachtree Street
Atlanta, Georgia 30308-2213
Attn: Derrick C. Bell
Fax No.: 404/607-6467
<PAGE>
<PAGE>
Commitment: $ 20,000,000 WACHOVIA BANK OF GEORGIA, N.A.
--------------
By: /S/ Kevin Harrison
-------------------------------
Title: Vice President
-------------------------------
Address: 191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Kevin B. Harrison
Fax No.: 404/332-6920
Commitment: $ 20,000,000 BANK OF AMERICA ILLINOIS
--------------
By: /S/ John Hesselmann
--------------------------------
Title: Senior Vice President
-------------------------------
Address: 231 South LaSalle Street
Chicago, Illinois 60697
Attn: Mark D. Cordes
Fax No.: 312/828-1974
<PAGE>
<PAGE>
EXHIBIT A
REVOLVING CREDIT NOTE
$ ___________ Chicago, Illinois
_________, 1996
FOR VALUE RECEIVED, the undersigned BLUE BIRD CAPITAL
CORPORATION ("Borrower") promises to pay to the order of ________
________ ("Lender"), at such place as Lender may
from time to time designate in writing, on _________, 1999, the
principal sum of __________________ ($_________________),
or, if less, the aggregate unpaid principal amount of all
advances made by Lender as, or relating to, the Revolving Loans
in accordance with the provisions of an Amended and Restated Loan
Agreement dated as of ________, 1996, among Borrower, Lender and
the other financial institutions from time to time parties
thereto, as amended and supplemented from time to time ("Loan
Agreement"). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Loan
Agreement.
Except as hereinafter provided, Borrower's obligations and
liabilities to Lender under this Note ("Borrower's Liabilities")
unpaid from time to time shall bear interest from the date hereof
until paid at the applicable rate provided in Section 9 of the
Loan Agreement, computed on the basis of actual days elapsed over
a 360-day year, and payable in arrears at the times provided in
the Loan Agreement.
If any of Borrower's Liabilities are not paid when due and
payable or declared due and payable, interest, in lieu of the
interest hereinabove provided, shall accrue on Borrower's
Liabilities from the due date of the same until paid, at the
Default Rate. Such amounts shall be part of Borrower's
Liabilities immediately due and payable by Borrower to Lender
without notice by Lender to or demand by Lender of Borrower.
Borrower warrants and represents to Lender that Borrower
shall use the proceeds represented by this Note solely for proper
business purposes, and consistently with all applicable laws and
statutes. Borrower further warrants and represents to Lender and
covenants with Lender that Borrower is not in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds
represented by this Note will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
<PAGE>
<PAGE>
This Note is one of the Revolving Credit Notes referred to
in the Loan Agreement to which reference is made for a statement
of the terms and conditions under which prepayments on this Note
may and shall be made, for a description of the circumstances
under which this Note may be declared due and payable, and for a
description of the rights of the holder hereof.
The occurrence of an Event of Default under the Loan
Agreement, or Borrower's failure to pay any of Borrower's
Liabilities when due and payable or declared due and payable
shall constitute a default by Borrower ("Event of Default") under
this Note.
Upon an Event of Default hereunder, without notice by Lender
to or demand by Lender of Borrower, all of Borrower's Liabilities
shall be due and payable, forthwith. The acceptance by Lender of
any partial payment made hereunder after the time when any
obligation under this Note becomes due and payable will not
establish a custom, or waive any rights of Lender to enforce
prompt payment hereof. Borrower and every endorser hereof waive
presentment, demand and protest and notice of presentment,
protest, default, non-payment, maturity, release, compromise,
settlement, extension or renewal of this Note.
Regardless of the adequacy of any collateral securing
Borrower's Liabilities hereunder, any deposits (other than
segregated deposits designated for the payment of taxes or other
designated trust funds) or other sums at any time credited by or
payable or due from Lender to Borrower, or any monies, cash, cash
equivalents, securities, instruments, documents or other assets
of Borrower in possession or control of Lender or its bailee for
any purpose may at any time be reduced to cash and applied by
Lender to or setoff by Lender against Borrower's Liabilities
hereunder.
If at any time or times after the date of this Note, Lender:
(a) employs counsel for advice or other representation (i) to
represent Lender in any litigation, contest, dispute, suit ,or
proceeding or to commence, defend or intervene or to take any
other action in or with respect to any litigation, contest,
dispute, suit or proceeding (whether instituted by Lender,
Borrower or any other person) in any way or respect relating to
this Note, or any collateral securing Borrower's Liabilities
hereunder, or (ii) to enforce any rights of Lender against
Borrower; (b) takes any action to protect, collect, sell,
liquidate or otherwise dispose of any collateral securing
Borrower's Liabilities hereunder; and/or (c) attempts to or
enforces any of Lender's rights and remedies against Borrower or
any other party primarily or otherwise liable with respect to
Borrower's Liabilities, the reasonable costs and expenses<PAGE>
<PAGE>
incurred by Lender in any manner or way with respect to the
foregoing shall be part of Borrower's Liabilities, payable by
Borrower to Lender on demand. Without limiting the generality of
the foregoing, such expenses, costs, charges and fees include (i)
reasonable attorney's fees, costs and expenses; (ii) accountants'
fees, costs and expenses; (iii) court costs and expenses; (iv)
court reporter fees, costs and expenses; (v) long distance
telephone charges; (vi) telegram charges; and (vii) expenses for
travel, lodging and food.
If any provision of this Note or the application thereof to
any party or circumstance is held invalid or unenforceable, the
remainder of this Note and the application of such provision to
other parties or circumstances will not be affected thereby and
the provisions of this Note shall be severable in any such
instance.
This Note is submitted by Borrower to Lender at Lender's
principal place of business and shall be deemed to have been made
thereat. This Note shall be governed and controlled by the laws
of the State of Illinois as to interpretation, enforcement,
validity, construction, effect, choice of law and in all other
respects.
To induce Lender to accept this Note, Borrower, irrevocably,
agrees that, subject to Lender's sole and absolute election, all
actions or proceedings in any way, manner or respect, arising out
of or from or related to this Note, shall be litigated in courts
having situs within the Court of Cook, State of Illinois.
Borrower hereby consents and submits to the jurisdiction of any
local, state or federal court located within said county and
state. Borrower hereby irrevocably appoints and designates CT
Corporation System, whose address is 208 South LaSalle Street,
Chicago, Illinois 60604, or any other party whom Borrower may
from time to time hereafter designate (after giving Lender five
(5) days written notice thereof), as Borrower's true and lawful
attorney-in-fact and duly authorized agent for service of legal
process and agrees that service of such process upon such party
shall constitute personal service of such process upon Borrower.
Such party, within five (5) days after receipt of any such
process, shall forward the same by certified or registered mail,
together with all papers affixed thereto, to Borrower at the
address designated below. Borrower hereby waives any right
Borrower may have to transfer or change the venue of any
litigation brought against Borrower by Lender in accordance with
this paragraph.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER, IN CONNECTION WITH, OR RELATING
TO THIS NOTE.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed on the _____ day of March, 1996.
BLUE BIRD CAPITAL CORPORATION
By: _________________________
Title: _________________________
3920 Arkwright Road
Macon, Georgia 31210
ATTEST:
By: _________________________
Title: _________________________
<PAGE>
<PAGE>
EXHIBIT B
QUARTERLY COMPLIANCE CERTIFICATE
LaSalle National Bank
120 South LaSalle Street
Chicago, Illinois 60603
Re: Amended and Restated Loan Agreement, dated as
of March ___, 1996 (together with all
amendments, if any, hereinafter referred to as
the "Loan Agreement") among Blue Bird Capital
Corporation ("Borrower"), LaSalle National
Bank, as Agent ("Agent"), and the financial
institutions from time to time parties thereto
("Lenders")
Gentlemen:
In accordance with Section 17(a)(i) of the Loan
Agreement the Borrower hereby certifies to the Lender and Agent
that:
A. On ________, 19___, (the "Quarterly Computation Date"),
Borrower's Interest Coverage Ratio was not less than 1.25 to 1.0
as computed on Attachment 1 hereto.
B. On the Quarterly Computation Date Borrower's Tangible Net
Worth plus aggregate Net Income was not less than
$_______________ as computed on Attachment 2 hereto.
C. Borrower's after-tax Net Income was not less than
$_________________, as computed on Attachment 3 hereto [to be
calculated solely as of the end of each Fiscal Year].
D. On the Quarterly Computation Date, the aggregate
outstanding balance of Borrower's Municipal Contracts for
equipment other than school buses was $___________________ and
the aggregate outstanding balance of Borrower's
Commercial Contracts was $_________________.
E. On the Quarterly Computation Date, the ratio of Borrower's
Liabilities to Tangible Net Worth was not more than 10.0 to 1.0
as computed on Attached 4 hereto.
F. On the Quarterly Computation Date, ___% of Borrower's
Obligations were covered by interest rate hedging
arrangements, as set forth on Attachment 5 hereto.
G. All of the information set forth in this Certificate (and
in the Attachments hereto) is true and correct; and<PAGE>
<PAGE>
H. Except as stated on Attachment 6 hereto (if applicable), no
Default or Event of Default had occurred and was continuing at
the Quarterly Computation Date or as of the date of this
certificate.
IN WITNESS WHEREOF, Borrower has caused this
Certificate to be executed and delivered by it Authorized
Representative this ______ day of ____________, 19__.
BLUE BIRD CAPITAL CORPORATION
By: ___________________________
Its: ___________________________
<PAGE>
<PAGE>
EXHIBIT C
BUSINESS LOCATIONS
3920 Arkwright Road
Macon, Georgia 31210
