UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
-----------
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to__________
Commission file number 0-23210
TRISM, INC.
(DEBTOR-IN-POSSESSION)
(Exact name of registrant as specified in its charter)
DELAWARE 13-3491658
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
4174 Jiles Road, Kennesaw, Georgia 30144
(Address of principal executive offices) (Zip Code)
(770) 795-4600
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[ X ] Yes [ ] No
As of September 30, 1999, 5,702,137 shares of TRISM, Inc.'s
common stock, par value $.01 per share, were outstanding.
<PAGE>
TRISM, INC.
(DEBTOR-IN-POSSESSION)
TABLE OF CONTENTS
ITEM PAGE
Part I FINANCIAL INFORMATION
3
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of 10
Financial Condition and Results of Operations
Part II OTHER INFORMATION
Item 1. Legal Proceedings 6
Item 3. Defaults Upon Senior Securities 16
Item 6. Exhibits and Reports on Form 8-K 16
<PAGE>
<TABLE>
ITEM 1. Financial Statements
TRISM, Inc.
(DEBTOR-IN-POSSESSION)
Consolidated Balance Sheets
As of September 30, 1999 and December 31, 1998
(In thousands, unaudited)
September 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,078 $ 2,029
Restricted cash and insurance deposits 845 847
Accounts receivable, net of allowance for doubtful accounts
of $1,094 and $1,063 for 1999 and 1998, respectively 38,905 37,388
Materials and supplies 1,179 1,389
Prepaid expenses 16,567 18,795
Deferred income taxes 3,089 3,901
-------- ---------
Total current assets 61,663 64,349
Property and equipment, at cost 190,339 193,953
Less: accumulated depreciation and amortization (70,840) (64,775)
-------- ---------
Net property and equipment 119,499 129,178
Intangibles and other, net 18,114 19,624
Other 625 801
-------- ---------
Total assets $ 199,901 $ 213,952
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES NOT SUBJECT TO COMPROMISE:
Current liabilities:
Accounts payable $ 8,798 $ 7,206
Bank overdraft 1,312 5,642
Accrued expenses and insurance reserves 12,182 12,412
Current maturities of long-term debt:
Principal payments 14,818 13,857
Residual obligations on equipment debt 3,999 4,014
Long-Term debt classified as current 49,928 -
-------- --------
Total current liabilities 91,037 43,131
Long-term debt, less current maturities - 144,419
Insurance reserves 7,431 6,702
Deferred income taxes 3,089 3,901
-------- ---------
Total liabilities not subject to compromise 101,557 198,153
LIABILITIES SUBJECT TO COMPROMISE (All Current):
Long term debt - senior subordinated notes, 10.75% 86,230 -
Accrued interest expense on senior subordinated notes 7,757 -
-------- ---------
Total liabilities subject to compromise 93,987 -
Stockholders' equity:
Common stock; $.01 par; 10,000 shares authorized;
issued 5,903 shares 59 59
Additional paid-in capital 37,243 37,229
Loans to stockholders - (83)
Accumulated deficit (31,308) (19,769)
Treasury stock, at cost, 201 shares (1,637) (1,637)
--------- ---------
Total stockholders' equity 4,357 15,799
========= =========
Total liabilities and stockholders' equity $ 199,901 $ 213,952
=========== ============
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ITEM 1. Financial Statements, Continued
TRISM, Inc.
(DEBTOR-IN-POSSESSION)
Consolidated Statements of Operations
For the three and nine months ended September 30, 1999 and 1998
(In thousands, except per share amounts, unaudited)
Three Months Ended Nine Months Ended
1999 1998 1999 1998
----- ---- ---- ------
<S> <C> <C> <C> <C>
Revenues $ 69,606 75,170 210,406 224,492
Operating expenses:
Salaries, wages and fringe benefits 24,175 28,506 75,271 85,423
Operating supplies and expenses 9,939 10,172 29,495 31,580
Contractor equipment 7,041 6,134 20,944 17,312
Brokerage carrier expense 7,695 5,243 19,498 14,379
Operating taxes and licenses 5,568 6,959 17,482 20,501
Depreciation and amortization 4,655 4,871 14,761 14,926
General supplies and expenses 3,984 3,672 11,381 11,025
Revenue equipment rents 2,502 3,590 8,656 10,255
Claims and insurance 2,348 2,497 7,523 7,182
Communications and utilities 1,086 1,178 3,327 3,819
(Gain) loss on disposition of assets (136) 379 (3) 917
Non-recurring expenses - 350 99 752
------ ------ -------- --------
Total operating expenses 68,857 73,551 208,434 218,071
Operating income 749 1,619 1,972 6,421
Interest expense, net 3,230 3,550 10,500 11,147
Other expense, net 68 114 509 -
Reorganization items:
Loss on write-off of deferred
debt issuance costs 750 - 750 -
Financial restructuring costs 1,748 - 1,748 -
----- -------- ------ --------
Loss before income tax benefit
and extraordinary item (5,047) (2,045) (11,535) (4,726)
Income tax benefit - (715) - (1,654)
----- -------- ------ --------
Loss before extraordinary item (5,047) (1,330) (11,535) (3,072)
----- -------- ------ --------
Extraordinary item, gain on extinguishment
of debt, net of income taxes of $841 1,563 - 1,563
----- -------- ------ --------
Net earnings (loss) $ (5,047) 233 (11,535) (1,509)
====== ==== ======== ========
Basic earnings (loss) per share
Loss before extraordinary item $ (0.89) (0.23) (2.02) (0.53)
Extraordinary item - 0.27 - 0.27
----- ---- -------- -------
Net earnings (loss) $ (0.89) 0.04 (2.02) (0.26)
====== ==== ======== ========
Diluted earnings (loss) per share
Loss before extraordinary item $ (0.89) (0.23) (2.02) (0.53)
Extraordinary item - 0.27 - 0.27
-------- ----- -------- ---------
Net earnings (loss) $ (0.89) 0.04 (2.02) (0.26)
====== ==== ======= ========
Weighted average number of shares used in
computation of basic and diluted
earnings (loss) per share 5,702 5,719 5,702 5,719
========== ======= ======= ========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ITEM 1. Financial Statements, Continued
TRISM, Inc.
(DEBTOR-IN-POSSESSION)
Consolidated Statements of Cash Flows
For the nine months ended September 30, 1999 and 1998
(In thousands, unaudited)
1999 1998
<S>
Cash flows from operating activities: <C> <C>
Net loss (11,535) $ (1,509)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 15,494 15,553
Loss on disposition of assets (3) 917
Provision for losses on accounts receivable 180 488
Deferred gain on sale-leaseback (151) (194)
Deferred income taxes - (813)
Extraordinary gain, net - (1,563)
Changes in assets and liabilities:
Accounts receivable (1,733) 1,662
Prepaid expenses 2,405 (669)
Accrued expenses and insurance reserves 1,853 3,599
Accrued interest expense, net 6,566 10
Accounts payable 1,761 (2,076)
Other (582) 642
Net cash provided by operating activities before
------ ------
reorganization items 14,255 16,047
------ ------
Cash flows from operating activities relating to reorganization items:
Write-off of deferred debt issuance costs 750 -
------ -------
Net cash provided by operating activities 15,005 16,047
------ -------
Cash flows from investing activities:
Proceeds from sale of assets 4,905 10,098
Purchases of property and equipment (2,839) (3,296)
Other, net (71) 317
------ -------
Net cash (used in) provided by investing activities 1,995 7,119
------ -------
Cash flows from financing activities:
Net proceeds (repayment) under revolving credit agreement (1,514) 194
Repayment of long-term debt and capital lease obligations (13,949) (27,039)
Issuance of long-term debt 1,830 -
Decrease in bank overdrafts (4,330) (1,583)
Payment deferred loan costs (83) -
Other, net 95 (88)
------- --------
Net cash used in financing activities (17,951) (28,516)
-------- --------
Decrease in cash and cash equivalents (951) (5,350)
Cash and cash equivalents, beginning of period 2,029 6,271
====== ======
Cash and cash equivalents, end of period $ 1,078 $ 921
========== =========
Supplemental cash flow information:
Cash paid during the period for interest $ 4,397 $ 8,772
========= =========
Equipment purchases and borrowings $ 8,196 $ 15,781
========= ========
Conversion of capital lease to an operating lease $ 1,880 $ -
========= =========
See accompanying notes to the consolidated financial statements.
</TABLE>
<PAGE>
TRISM, Inc.
(DEBTOR-IN-POSSESSION)
Notes to Consolidated Financial Statements
Accounting Policies
The 1998 Annual Report on Form 10-K for Trism, Inc. includes a
summary of significant accounting policies and should be read in
conjunction with this Form 10-Q. The statements for the periods
presented are condensed and do not contain all information
required by generally accepted accounting principles to be
included in a full set of financial statements. In the opinion
of management, all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial
position as of September 30, 1999 and December 31, 1998 and the
results of operations and cash flows for the periods ended
September 30, 1999 and 1998, respectively, have been included.
The Company's operations are subject to seasonal trends common to
the trucking industry. Results of operations for the quarters
ending in December and March are materially lower than the
quarters ending in June and September due to reduced shipments
and higher operating costs in the winter months. The results of
operations for any interim period are not necessarily indicative
of the results of operations to be expected for the entire year.
Certain reclassifications were made to the 1998 accounts to
reflect classifications adopted in 1999.
Recent Developments
The Company has approximately $86.2 million of Senior
Subordinated Notes (the "Notes") outstanding as of September
30, 1999, which mature December 15, 2000. The Company failed to
make a scheduled interest payment due on June 15, 1999. The
grace period for the payment expired on July 15, 1999. This
payment default constitutes an Event of Default under the terms
of the indenture pursuant to which the Notes were issued. This
Event of Default caused other technical defaults under other
secured borrowing arrangements, including the Company's revolving
credit facility.
On July 15, 1999, the Company reached an agreement in principle
with the steering committee representing major holders of the
Notes. On September 10, 1999, the Company executed a
restructuring agreement with the steering committee. The Company
expects the agreement will significantly reduce its existing
long-term debt, pay all of its other debt in full, and fully
satisfy its trade and leasing obligations in accordance with
their terms.
The agreement provides for the Notes to be converted into (i) new
notes in the aggregate principal amount of $30 million, due 2004,
with interest at the rate of 12% per annum (the first semi-annual
interest payment on which will be due in March 2000), and (ii)
95% of the new common equity of TRISM to be issued post-
recapitalization, prior to dilution respecting a contemplated
management stock incentive program. TRISM's existing common
stock will be converted into 5% of the new common equity to be
issued post-recapitalization, prior to dilution.
On September 16, 1999, the Company filed (the"Filing") for
protection under Chapter 11 of the United States Bankruptcy Code
(the "Code") in the State of Delaware. The Company is
operating as Debtor-in-Possession ("DIP") under the Code.
Subsequent to the Filing, the Company obtained a $42.4 million
senior secured super priority DIP credit facility to meet its
ongoing working capital needs and replace its pre-petition
revolving credit facility. The DIP facility provides for
borrowings up to $35 million on a revolving credit facility, with
availability depending upon a borrowing base formula based on
accounts receivable. Additionally, the DIP facility provides
additional borrowings capacity of $2.4 million to refinance an
existing term loan secured by five hundred and forty-one trailers
and an incremental $5 million of borrowings, if drawn, to be
secured by identified real property and other unencumbered
trailers. The borrowings bear interest rates ranging from prime
rate plus .25% to .50% or from LIBOR rates plus 2.25% to 2.50%.
The DIP facility matures at the earliest of: (a) the six-month
anniversary of the effective date of the credit agreement; (b)
the date the lender has terminated the right of the Company to
receive advances or accommodations for letters of credit based
upon certain conditions of Default; (c) the date of prepayment in
full by the Company; (d) the date a plan of reorganization in the
Chapter 11 case becomes effective; and (e) the date on which a
disclosure statement attendant to a plan of reorganization filed
by anyone except the Company is approved by the U.S. Bankruptcy
Court. The DIP facility was approved by the Court on October 11,
1999. The Company intends to seek financing for a revolving
credit facility upon post-reorganization.
On October 25, 1999, the Court signed an order approving the
second amended disclosure statement for a joint plan of
reorganization. As noted earlier, the plan of reorganization
contemplates the exchange of $86.2 million of senior subordinated
notes for $30.0 million of new notes and 95% of the new common
equity of the Company to be issued post-recapitalization. All of
the Company's other obligations are expected to be fully
satisfied in accordance with their terms. The Company
distributed proxy materials to all holders of record as of
October 21, 1999, for outstanding
<PAGE>
Notes to Consolidated Financial Statements, Continued
Recent Developments, Continued
Notes and equity security holders. The deadline to vote on the
plan of reorganization, and file and serve objections to the
confirmation of the plan reorganization is December 1, 1999.
As a result of the Events of Default under the Notes and the
other secured borrowing arrangements, and pending the completion
of the debt restructuring, the Company has recorded all
liabilities in default as current liabilities in the September
30, 1999 consolidated balance sheet.
Accounting and Reporting Requirements During Bankruptcy
Under Chapter 11 of the Bankruptcy Code, certain claims against
the Debtor in existence prior to the filing of the petitions for
relief under the U.S. bankruptcy laws are stayed while the Debtor
continues business operations as Debtor-in-possession. Under
AICPA Statement of Position 90-7 "Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code ("SOP 90-7"), the
Company is required to report liabilities subject to compromise.
In the case of Trism, Inc., the Notes and the related accrued
interest are reflected as liabilities subject to compromise. The
Company's plan of reorganization contemplates full satisfaction
of all other secured, trade and leasing obligations.
Furthermore, the Bankruptcy Court granted the Company approval to
pay pre-petition secured and leasing obligations and certain
essential pre-petition trade creditors during the proceeding.
In addition, SOP 90-7 requires the Company to report interest
expense during the bankruptcy proceeding only to the extent that
it will be paid during the proceeding or that it is probable to
be an allowed priority, secured or unsecured claim. Accordingly,
the Company recorded interest expense for its DIP credit facility
and secured debt obligations subsequent to the bankruptcy filing.
The difference between the reported interest expense and the
contractual interest expense was $0.4 million for the three and
nine months ended September 30, 1999, and relates to the Notes.
The Company recorded interest expense for all long-term debt
obligations prior to the Filing.
Reorganization Items
In accordance with SOP 90-7, the Consolidated Statements of
Operations should portray the results of operations of the
Company while it is in Chapter 11. Expenses resulting from the
restructuring are reported separately as reorganization items.
In the accompanying Consolidated Statements of Operations for the
three and nine months ending September 30, 1999, the Company
wrote-off $0.75 million of deferred debt issuance costs related
to the pre-petition revolving credit facility and the outstanding
Notes. Furthermore, the Company incurred financial restructuring
costs of $1.7 million for the three and nine months ended
September 30, 1999.
Long-Term Indebtedness and DIP Credit Facility
The Company had approximately $86.2 million of Notes outstanding
as of September 30, 1999, which mature December 15, 2000. The
Company failed to make a scheduled interest payment due on June
15, 1999. The grace period for the payment expired on July 15,
1999. This payment default constitutes an Event of Default under
the terms of the indenture pursuant to which the Notes were
issued. The accrued interest due as of September 30, 1999 under
the Notes was $7.8 million.
On September 16, 1999, the Company filed a Plan of Reorganization
with the United States Bankruptcy Court in Delaware under Chapter
11 of the Bankruptcy Code. The Company secured a $42.4 million
DIP facility which was approved by the Court on October 11, 1999.
Cash and availability under the DIP facility was approximately
$8.2 million at September 30, 1999, net of a reduction for
outstanding letters of credit of approximately $12.1 million.
Additional borrowings of $5 million secured by identified real
property and unencumbered trailers are also available.
The Company has classified certain long-term debt as current due
to the existence of technical defaults caused by the defaults
under the Notes. Furthermore, the Company has classified the
Notes and related accrued interest as subject to compromise due
to the contemplated plan of reorganization outlined above.
<PAGE>
Notes to Consolidated Financial Statements, Continued
Contingencies
Under the Comprehensive Environmental Responses, Compensation and
Liability Act ("CERCLA") and similar state laws, a transporter
of hazardous substances may be liable for the costs of responding
to the release or threatened release of hazardous substances from
disposal sites if such transporter selected the site for
disposal. Because it is the Company's practice not to select the
sites where hazardous substances and wastes will be disposed, the
Company does not believe it will be subject to material liability
under CERCLA and similar laws. Although the Company has been
identified as a "potentially responsible party" at two sites,
solely because of its activities as a transporter of hazardous
substances, the Company does not believe it will be subject to
material liabilities at such sites.
The Company is a party to certain legal proceedings incidental to
its business, primarily involving claims for personal injury or
property damage arising from the transportation of freight. The
Company does not believe that these legal proceedings, or any
other claims or threatened claims of which it is aware, are
likely to materially and adversely affect the Company's financial
condition. With regard to personal injury, property damage,
workers' compensation claims, and cargo claims, the Company is
and has been covered by insurance. Such matters may include
claims for punitive damages. It is an open question in some
jurisdictions in which the Company does business as to whether or
not punitive damages awards are covered by insurance.
Segment and Related Information
The Company identifies operating segments based on management
responsibility and marketing strategies. The Company has three
reportable segments: Heavy Haul, Secured Materials and
Logistics.
Heavy Haul
This segment consists of Trism Specialized Carriers, Inc.
("TSC"), the Company's largest operating segment, specializing
in the transportation of over-sized and over-dimensional loads
throughout the United States, Canada, and Mexico. The largest
markets for Heavy Haul are manufacturers of large machinery and
equipment, suppliers and contractors to industrial and public
construction, importers of industrial durable goods and the U.S.
Government. Also, the Company entered the Super Heavy Haul market
in 1997 through its strategic alliance with Econofreight Group
Limited, a U.K. subsidiary of Brambles Corporation. The Super
Heavy Haul market allows for the transportation of freight in
excess of 80 tons up to 10,000 tons.
Secured Materials
The Secured Materials segment consists of the following: Tri-
State Motor Transit Co. ("TSMT"), Diablo Systems, Inc.
("Diablo") and C.I. Whitten Transfer ("CIW"), and is
characterized by the toxic or explosive nature and special
handling requirements of the cargo. The cargo typically consists
of military munitions, commercial explosives, hazardous waste,
and radioactive materials. The largest markets for Secured
Materials are the United States government and various
governmental agencies, waste generators, and environmental clean-
up firms.
TSMT, Diablo and CIW service customers in the munitions and
explosives market and are collectively the largest transporters
of Department of Defense munitions in the continental United
States. TSMT and CIW operate throughout the continental United
States with Diablo's market focus primarily in the western
regions of the United States.
Trism Environmental Services ("TES"), a division of TSMT,
provides service to customers in the hazardous waste and
radioactive materials market and operates throughout the United
States, but its primary market focus is east of the Mississippi.
The operating companies within the Secured Materials group have
operating authority in the continental United States and certain
provinces of Canada. In addition, the group maintains trailer
interchange agreements with certain Mexican carriers.
<PAGE>
Notes to Consolidated Financial Statements, Continued
Segment and Related Information, Continued
Logistics
The Trism Logistics, Inc. ("TLI") segment specializes in the
management of freight by truck (particularly in the hazardous
waste market). TLI's client base includes engineering and
construction companies, suppliers to the European Community,
Fortune 500 companies and major utility companies. In September
of 1998, TLI began operations to provide logistics services to
the rail industry through its intermodal division.
<TABLE>
A summary of segment information is presented below (in thousands):
Operating Revenue
Three Months Ended Nine Months Ended
Segment 1999 1998 1999 1998
- ------------------------------------ ---- ----- ------ ------
<S> <C> <C> <C> <C>
Heavy Haul $ 47,010 $ 52,730 $ 146,330 $ 155,375
Secured Materials 21,799 23,208 64,395 72,413
Trism Logistics 3,982 1,237 9,226 5,366
Eliminations and other (3,185) (2,005) (9,545) (8,662)
------- -------- -------- --------
Consolidated $ 69,606 $ 75,170 $ 210,406 $ 224,492
========= ========= ========= ==========
Operating Income
Three Months Ended Nine Months Ended
Segment 1999 1998 1999 1998
- ------------------------------------ ---- ---- ---- ----
Heavy Haul $ (67) $ 2,471 $ 1,129 $ 6,453
Secured Materials 684 (135) 652 1,402
Logistics (4) 12 287 235
Gain (loss) on sale of assets 136 (379) 3 (917)
Non-recurring charge - (350) (99) (752)
----- ------- ------- -------
Consolidated $ 749 $ 1,619 $ 1,972 $ 6,421
========== ========= =========== ============
Interest expense, net 3,230 3,550 10,500 11,147
Other expense, net 68 114 509 -
Reorganization items 2,498 - 2,498 -
-------- --------- ---------- ----------
Loss before income taxes $ (5,047) $ (2,045) $ (11,535) $ (4,726)
========== ========= ========== ============
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements. Certain
statements in this Form 10-Q include information that is forward-
looking, such as the Company's anticipated liquidity and capital
requirements, the results of legal proceedings, and the
restructuring of the Company as contemplated by the restructuring
agreement executed with representatives of certain Note holders.
The matters referred to in forward-looking statements could be
affected by the risks and uncertainties involved in the Company's
business. In addition, there can be no assurance that the plan
of reorganization will occur as described or at all. Subsequent
written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified
in their entirety by the cautionary statements in this paragraph.
The following discussion and analysis should be read in
conjunction with the Company's Consolidated Financial Statements
and notes for the year ended December 31, 1998 and quarter ended
September 30, 1999.
The following table summarizes certain financial information on a
percentage of revenue basis for the three and nine Months ended
September 30, 1999 and 1998.
<TABLE>
Three Months Ended Nine Months Ended
1999 1998 1999 1998
---- ---- ---- ----
Percentage of Revenue Basis:
<S> <C> <C> <C> <C>
Operating Revenue: 100.0 100.0 100.0 100.0
------ -------- ------ ------
Operating Expenses:
Salaries, wages and fringe benefits 34.7 37.9 35.8 38.1
Operating supplies and expenses 14.3 13.5 14.0 14.1
Contractor equipment 10.1 8.1 10.0 7.7
Brokerage carrier expense 11.1 7.0 9.3 6.4
Operating taxes and licenses 8.0 9.2 8.3 9.1
Depreciation and amortization 6.7 6.5 7.0 6.6
General supplies and expenses 5.7 4.9 5.4 4.9
Revenue equipment rents 3.6 4.8 4.1 4.6
Claims and insurance 3.4 3.3 3.6 3.2
Communications and utilities 1.6 1.6 1.6 1.7
Loss on disposition of assets (0.2) 0.5 - 0.4
Non-recurring expenses - 0.5 - 0.3
------ ----- ----- -----
Total operating expenses 99.0 97.8 99.1 97.1
Income from operations 1.0 2.2 0.9 2.9
Interest expense, net 4.6 4.8 5.0 5.0
Other expense, net 0.1 0.2 0.2 -
Reorganization items:
Loss on write-off of deferred debt issuance costs 1.1 - 0.4 -
Financial restructuring costs 2.5 - 0.8 -
----- --- ---- ---
Loss before income tax benefit
and extraordinary item (7.3) (2.8) (5.5) (2.1)
Income tax benefit - 1.1 - 0.7
---- ---- ----- ------
Loss before extraordinary item (7.3) (1.7) (5.5) (1.4)
------ ------ ------ ------
Extraordinary item, gain on extinguishment
of debt, net of income taxes - 2.1 - 0.7
--- ----- ---- -----
Net earnings (loss) (7.3) 0.4 (5.5) (0.7)
===== ==== ===== =====
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations, Continued
Summary of Third Quarter 1999 Results
Net loss for the quarter ended September 30, 1999, amounted to
$3.1 million or $0.54 per basic share compared to a net earnings
of $0.2 million or $0.04 per basic share in the third quarter of
1998. The results for the quarter were negatively impacted by a
decline in revenues at Heavy Haul, lower asset utilization caused
by competition for available drivers and increased fuel costs.
These factors were partially offset by improved operating
performance at Secured, a reduction of fixed freight operating
costs and net gain on the disposal of real property and revenue
equipment. The results for the third quarter of 1999 include the
full reserve for additional tax benefits associated with the net
operating loss carry-forwards in the amount of $1.8 million, or
$.31 per share.
Operating Revenue
Third Quarter 1999 as compared to the Third Quarter of 1998
Operating revenue decreased $5.6 million, or 7.4% from the third
quarter of 1998 to the third quarter 1999. Revenue per loaded
mile was $1.77 for the quarter ended September 30, 1999 as
compared to $1.73 for the quarter ended September 30, 1998.
However, operating revenues were impacted by a decline in total
miles driven of approximately 6.7 million from the third quarter
of 1998 to the third quarter of 1999.
Operating revenues were primarily affected by a decline in
revenues at Heavy Haul as a result of a decline in demand in the
agricultural and aerospace industries. While the Secured segment
miles driven were lower in the third quarter of 1999 from 1998,
there was a positive increase in revenue quality. Both of these
segments were negatively impacted by lower asset utilization
caused by competition for available drivers. The Logistics
segment revenues increased by $2.8 million, primarily as a result
of new contracts in the third party logistics market and the
intermodal division which began operations in September of 1998.
Nine Months Ended September 30, 1999 as compared to Nine Months
Ended September 30, 1998
Operating revenue decreased $14.1 million, or 6.3% for the nine
months ended September 30, 1999 as compared to 1998. Revenue per
loaded mile was $1.75 for the nine months ended September 30,
1999 as compared to $1.74 for the nine months ended September 30,
1998. However, the Company's total miles driven also declined by
15.5 million miles from the nine months ended September 30, 1998
to the same period in 1999.
For the nine months ended September 30, 1999 and 1998, the Heavy
Haul segment was impacted from fewer miles driven and lower
demand. The Secured segment was impacted by competitiveness in
the military munitions market and a decline in freight volume of
approximately $11.2 million. Both segments were negatively
impacted by lower asset utilization caused by competition for
available drivers. The Logistics segment positively impacted
revenue with an increase of $3.9 million primarily as a result of
new contracts in the third party logistics market and the
intermodal division which began operations in September of 1998.
Operating Income
Third Quarter 1999 as compared to the Third Quarter of 1998
Operating income for the three months ended September 30, 1999,
was $0.7 million compared to $1.6 million in 1998. The decline
in operating revenue of $5.6 million negatively impacted
operating income by $0.8 million primarily as a result of fewer
miles driven.
In addition, certain variable costs on a per mile basis
negatively impacted operating income as follows: (a) higher fuel
costs of $1.1 million caused by an increase in cost per gallon of
$0.16 cents; (b) higher contractor equipment costs of $0.6
million as a result of increased miles driven by contractor
equipment; (c) higher maintenance charges of $0.4 million
resulting from an increase in the overall age of the
tractor and trailer fleets; and (d) higher driver recruiting
costs of $0.4 million caused by increased expense to attract and
retain qualified drivers.
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations, Continued
Operating Income, Continued
The decline in revenues and increase in certain variable costs in
the third quarter of 1999 were partially offset by lower fixed
freight operating costs of $2.3 million. The reductions resulted
from a reduced tractor and trailer fleet size and lower general
and administrative costs. Additionally, the Company recorded a
gain on the disposal of real property of $1.0 million offset by
losses on revenue equipment disposals of $0.9 million.
Nine Months Ended September 30, 1999 as compared to Nine Months
Ended September 30, 1998
Operating income for the nine months ended September 30, 1999 was
$2.0 million as compared to $6.4 million in 1998. The decline in
operating revenue of $14.1 million negatively impacted operating
income by $3.5 million primarily as a result of fewer miles
driven.
In addition, certain variable costs on a per mile basis
negatively impacted operating income as follows: (a) higher fuel
costs of $1.3 million; (c) higher driver pay costs of $0.8
million as a result of driver incentive programs; (c) higher
contractor equipment costs of $1.5 million as a result of
increased miles driven by contractor equipment; (d) higher
maintenance charges of $1.1 million resulting from an
increase in the overall age of the tractor and trailer
fleets; and (e) higher claims and insurance costs of $0.8 million
as result of higher frequency of accidents relating to cargo
claims.
Furthermore, certain positive cost variances increased operating
income for the nine months ended September 30, 1999 as compared
to the same period in 1998 as follows: (a) lower fixed freight
operating costs of $3.5 resulting from a reduced tractor and
trailer fleet size and lower general and administrative costs;
(b) lower loss on disposition of assets of $0.9 million; and (c)
higher Logistics segment operating income of $0.2 million.
Operating and Other Expenses
Total operating expenses were approximately $68.9 million for the
three months ended September 30, 1999 and $208.4 million for the
nine months ended September 30, 1999 as compared to $73.5 million
for the three months ended September 30, 1998 and $218.1 million
for the nine months ended September 30, 1998. The following
expense categories increased or decreased significantly as a
percentage of revenue between the periods:
Salaries, wages and fringe benefits decreased 3.2% of revenue
during the quarter and 2.3% for nine months ended September 30,
1999 as compared to the corresponding periods in 1998. The
decrease is primarily due to lower driver wages due to an overall
increase in the use of independent contractors.
Operating supplies increased by 0.8% for the three months ended
September 30, 1999 as compared to the same period in 1998, due to
an increase in fuel price per gallon of $0.16 cents and lower
tractor fuel economy resulting from an increase in the age of the
tractor fleet. For the nine months ended September 30, 1999,
operating supplies decreased by 0.1% due to lower fuel prices
during the first three months of 1999 as compared to the same
period in 1998.
Brokerage carrier expenses increased by 4.1% and 2.9 % of revenue
from the quarter and nine months ended September 30, 1999 as
compared to the corresponding periods in 1998. Brokerage carrier
revenue as a percentage of overall revenues increased 4.6% and
3.3% of revenue for the quarter and nine months ended September
30, 1999.
General supplies increased by 0.6% for the three months ended
September 30, 1999 as compared to the same period in 1998,
primarily due to an increase in driver recruiting expenses to
attract and retain qualified drivers. For the nine months ended
September 30, 1999, general supplies expenses increased by 0.5%
primarily due to additional driver recruiting expenses.
Revenue equipment rent expenses decreased by 1.2% and 0.5% of
revenue for the quarter and nine months ended September 30, 1999
as compared to the corresponding periods in 1998 consistent with
the decrease in the average number of tractors under operating
leases for the quarter ended 1999.
The Company established a valuation allowance of $1.8 and $4.0
million relating to tax benefits associated with net operating
loss carryforwards for the quarter and nine months ended
September 30, 1999. In 1998, the Company recorded an income tax
expense of $0.1 million and an income tax benefit of $0.8 million
for the quarter and nine months ended September 30, 1998.
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations, Continued
Liquidity and Capital Resources
Net cash provided by operating activities was $15.0 million in
1999 compared to $16.0 million in 1998. The decrease is
primarily due to the payment of financial restructuring costs of $1.7
million relating to the Notes.
Net cash provided by investing activities was $2.0 million in
1999 compared to cash provided of $7.1 million in 1998. The
decrease in investing activities is primarily attributed to a
decrease in proceeds from sale of assets due to the expiration
and replacement of operating lease tractors.
Net cash used in financing activities was $19.5 million in 1999
compared to $28.5 million in 1998. The decrease in cash used in
financing activities is primarily related to the repurchase of
senior subordinated notes of $9.5 million in 1999.
Prior to the Chapter 11 filing, the Company experienced
difficulty servicing its long-term debt caused by continued
declining revenues and a highly leveraged balance sheet. Upon
consummation of the financial restructuring plan, the Company's
debt service problems will be improved by eliminating a
significant portion of the payment obligations under the Notes.
While the Restructuring will significantly reduce the Company's
debt obligations, the Company will remain highly leveraged upon
exiting Bankruptcy. The Company's management believes that,
following the confirmation of the plan of reorganization; the
Company will have sufficient cash flow from operations to pay
interest on all of its outstanding debt as those payments become
due. However, the Company's ability to meet its debt service
obligations will depend on a number of factors, including its
ability to achieve future financial results by stabilizing
revenues and reducing costs.
See "Recent Developments" and "Long-Term Indebtedness and DIP
Credit Facility" below for an additional discussion of the
Company's liquidity and capital resources.
Capital Requirements
The Company does not anticipate material additional capital
expenditures during the remainder of 1999. The Company intends to
extend the maturities of approximately $5.4 million in tractor
equipment under certain operating and capital lease obligations.
Recent Developments
The Company has approximately $86.2 million of Senior
Subordinated Notes (the "Notes") outstanding as of September
30, 1999, which mature December 15, 2000. The Company failed to
make a scheduled interest payment due on June 15, 1999. The
grace period for the payment expired on July 15, 1999. This
payment default constitutes an Event of Default under the terms
of the indenture pursuant to which the Notes were issued. This
Event of Default caused other technical defaults under other
secured borrowing arrangements, including the Company's revolving
credit facility.
On July 15, 1999, the Company reached an agreement in principle
with the steering committee representing major holders of the
Notes. On September 10, 1999, the Company executed a
restructuring agreement with the steering committee. The Company
expects the agreement will significantly reduce its existing
long-term debt, pay all of its other debt in full, and fully
satisfy its trade and leasing obligations in accordance with
their terms.
The agreement provides for the Notes to be converted into (i) new
notes in the aggregate principal amount of $30 million, due 2004,
with interest at the rate of 12% per annum (the first semi-annual
interest payment on which will be due in March 2000), and (ii)
95% of the new common equity of TRISM to be issued post-
recapitalization, prior to dilution respecting a contemplated
management stock incentive program. TRISM's existing common
stock will be converted into 5% of the new common equity to be
issued post-recapitalization, prior to dilution.
On September 16, 1999, the Company filed (the"Filing") for
protection under Chapter 11 of the United States Bankruptcy Code
(the "Code") in the State of Delaware. The Company is
operating as Debtor-in-Possession ("DIP") under the Code.
Subsequent to the Filing, the Company obtained a $42.4 million
senior secured super priority DIP credit facility to meet its
ongoing working capital needs and replace its pre-petition
revolving credit facility. The DIP facility provides for
borrowings up to $35 million on a revolving credit facility, with
availability depending upon a borrowing base formula based on
accounts receivable. Additionally, the DIP facility provides
additional borrowings capacity of $2.4 million to
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations, Continued
Recent Developments, Continued
refinance an existing term loan secured by five hundred and
forty-one trailers and an incremental $5 million of borrowings,
if drawn, to be secured by identified real property and other
unencumbered trailers. The borrowings bear interest rates
ranging from prime rate plus .25% to .50% or from LIBOR rates
plus 2.25% to 2.50%. The DIP facility matures at the earliest
of: (a) the six-month anniversary of the effective date of the
credit agreement; (b) the date the lender has terminated the
right of the Company to receive advances or accommodations for
letters of credit based upon certain conditions of Default; (c)
the date of prepayment in full by the Company; (d) the date a
plan of reorganization in the Chapter 11 case becomes effective;
and (e) the date on which a disclosure statement attendant to a
plan of reorganization filed by anyone except the Company is
approved by the U.S. Bankruptcy Court. The DIP facility was
approved by the Court on October 11, 1999. The Company intends
to seek financing for a revolving credit facility upon post-
reorganization.
On October 25, 1999, the Court signed an order approving the
second amended disclosure statement for a joint plan of
reorganization. As noted earlier, the plan of reorganization
contemplates the exchange of $86.2 million of senior subordinated
notes for $30.0 million of new notes and 95% of the new common
equity of the Company to be issued post-recapitalization. All of
the Company's other obligations are expected to be fully
satisfied in accordance with their terms. The Company
distributed proxy materials to all holders of record as of
October 21, 1999, for outstanding Notes and equity security
holders. The deadline to vote on the plan of reorganization, and
file and serve objections to the confirmation of the plan
reorganization is December 1, 1999.
As a result of the Events of Default under the Notes and the
other secured borrowing arrangements, and pending the completion
of the debt restructuring, the Company has recorded all
liabilities in default as current liabilities in the September
30, 1999 consolidated balance sheet.
Accounting and Reporting Requirements During Bankruptcy
Under Chapter 11 of the Bankruptcy Code, certain claims against
the Debtor in existence prior to the filing of the petitions for
relief under the U.S. bankruptcy laws are stayed while the Debtor
continues business operations as Debtor-in-possession. Under
AICPA Statement of Position 90-7 "Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code ("SOP 90-7"), the
Company is required to report liabilities subject to compromise.
In the case of Trism, Inc., the Notes and the related accrued
interest are reflected as liabilities subject to compromise. The
Company's plan of reorganization contemplates full satisfaction
of all other secured, trade and leasing obligations.
Furthermore, the Bankruptcy Court granted the Company approval to
pay pre-petition secured and leasing obligations and certain
essential pre-petition trade creditors during the proceeding.
In addition, SOP 90-7 requires the Company to report interest
expense during the bankruptcy proceeding only to the extent that
it will be paid during the proceeding or that it is probable to
be an allowed priority, secured or unsecured claim. Accordingly,
the Company recorded interest expense for its DIP credit facility
and secured debt obligations subsequent to the bankruptcy filing.
The difference between the reported interest expense and the
contractual interest expense was $0.4 million for the three and
nine months ended September 30, 1999, and relates to the Notes.
The Company recorded interest expense for all long-term debt
obligations prior to the Filing.
Reorganization Items
In accordance with SOP 90-7, the Consolidated Statements of
Operations should portray the results of operations of the
Company while it is in Chapter 11. Expenses resulting from the
restructuring are reported separately as reorganization items.
In the accompanying Consolidated Statements of Operations for the
three and nine months ending September 30, 1999, the Company
wrote-off $0.75 million of deferred debt issuance costs related
to the pre-petition revolving credit facility and the outstanding
Notes. Furthermore, the Company incurred financial restructuring
costs of $1.7 million for the three and nine months ended
September 30, 1999.
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations, Continued
Long-Term Indebtedness and DIP Credit Facility
The Company had approximately $86.2 million of Notes outstanding
as of September 30, 1999, which mature December 15, 2000. The
Company failed to make a scheduled interest payment due on June
15, 1999. The grace period for the payment expired on July 15,
1999. This payment default constitutes an Event of Default under
the terms of the indenture pursuant to which the Notes were
issued. The accrued interest due as of September 30, 1999 under
the Notes was $7.8 million.
On September 16, 1999, the Company filed a Plan of Reorganization
with the United States Bankruptcy Court in Delaware under Chapter
11 of the Bankruptcy Code. The Company secured a $42.4 million
DIP facility which was approved by the Court on October 11, 1999.
Cash and availability under the DIP facility was approximately
$8.2 million at September 30, 1999, net of a reduction for
outstanding letters of credit of approximately $12.1 million.
Additional borrowings of $5 million secured by identified real
property and unencumbered trailers are also available.
The Company has classified certain long-term debt as current due
to the existence of technical defaults caused by the defaults
under the Notes. Furthermore, the Company has classified the
Notes and related accrued interest as subject to compromise due
to the contemplated plan of reorganization outlined above.
Year 2000 Position Statement
The Company has evaluated its internal date-sensitive systems and
equipment for Year 2000 compliance. The assessment and testing
phase of the Year 2000 project is complete and included both
information technology equipment and non-information technology
equipment. Based on its assessment and testing, the Company
determined that its critical software, hardware and information
technology equipment was in compliance with Year 2000
requirements. However, at September 30, 1999, the Company was
approximately 98% complete in the modification or replacement of
the non-information technology equipment requiring remediation.
The Company expects such remediation to be completed by the end
of November 1999. The Company does not believe the effect of the
Year 2000 on its systems is likely to have a material adverse
impact. The total estimated cost of the Year 2000 project was not
material and is being funded by operating cash flows.
The Company has also communicated with key suppliers and
customers to determine their Year 2000 compliance and the extent
to which the Company is vulnerable to any third-party Year 2000
issues. This program will be ongoing, and the Company's efforts
with respect to specific problems identified will depend on its
assessment of the risk. Most key suppliers and customers who
have replied to the Company's inquiries indicated they expect to
be Year 2000 compliant on a timely basis. There can be no
assurance that there will not be an adverse effect on the Company
if third parties do not make the necessary modifications to their
systems in a timely manner. However, management believes that
ongoing communication with and assessment of these third parties
will minimize these risks.
The Company has established contingency plans based on actual
test results and assessment of outside risks to supplement any
unknown risks. These contingency plans are currently being
evaluated and tested.
The costs of the Year 2000 issue and completion dates are based
on management's best estimates which are derived utilizing
numerous assumptions of future events, including the continued
availability of certain resources, third-party modification plans
and other factors. However, there can be no guarantee that these
estimates will be achieved, and actual results could differ
materially from those plans.
The above statement in its entirety is designated a Year 2000
readiness disclosure under the Year 2000 Information and
Readiness Disclosure Act.
Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS 133
establishes accounting and reporting standards for derivatives
and hedging. It requires that all derivatives are recognized as
either assets or liabilities at fair value and establishes
specific criteria for the use of hedge accounting. The Company's
required adoption date is January 1, 2001. SFAS 133 is not to be
applied retroactively to financial statements of prior periods.
The Company expects no material adverse effect on consolidated
results of operations, financial position, cash flows or
stockholders' equity upon adoption of SFAS 133.
<PAGE>
Item 3. Defaults Upon Senior Securities
On July 15, 1999, the Company defaulted on the payment of its 10-3/4%
Senior Subordinated Notes. See "Recent Developments" above
for an additional discussion and information.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
The following exhibit is filed as part of this report.
Designation Nature of Exhibit
10 Debtor in Possession Credit Facility
11 Computation of basic and diluted earnings
(loss) per common share
27 Financial Data Schedule
B. Reports on Form 8-K
During the quarter covered by this report there were
four reports on Form 8-K filed.
I. Other Events - Filed on July 26, 1999
Agreement in Principle to Restructure Debt
On July 15, 1999, the Registrant issued a press
release, included as an exhibit to the Form 8-K,
announcing that it had reached an agreement in
principle with the steering committee representing
major holders of the Registrant's approximately
$86.2 million of 10 3/4% Senior Subordinated Notes
due 2000.
II. Other Events - Filed on July 26, 1999
Trism, Inc. to be traded on the OTC Bulletin Board
On July 21, 1999, the Registrant issued a press
release, included as an exhibit to the Form 8-K,
announcing that the Company's Common Stock will no
longer be listed on the NASDAQ Stock Market.
III. Other Events - Filed on September 24, 1999
TRISM, Inc. Announces Agreement to Restructure Debt
On September 10, 1999, the Registrant announced that
it finalized an agreement with the steering committee
representing major holders of the company's
approximately $86.2 million of 10-3/4% Senior
Subordinated Notes due 2000.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K, Continued
B. Reports on Form 8-K, Continued
IV. Other Events - Filed on September 24, 1999
Trism, Inc. Petitions for Reorganization
On September 16, 1999, the Registrant filed petitions for
its previously announced financial reorganization under
Chapter 11 of the United States Bankruptcy Code 11 U.S.C.
Sections 101 et seq. The petitions were filed in the
United States Bankruptcy Court for the District of Delaware.
Simultaneously, the Registrant filed a Plan of Reorganization
which embodies the ``pre- arranged'' restructuring agreement
and a proposed disclosure statement
Items 2 and 5 of Part II were not applicable and have been omitted.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
TRISM, INC.
By:/s/Edward L. McCormick
Edward L. McCormick
Director, President and
Chief Executive Officer
By:/s/James G. Overley
James G. Overley
Senior Vice President of Finance,
Chief Financial Officer and Treasurer
Date: November 15, 1999
<PAGE>
TRISM, INC.
(DEBTOR-IN-POSSESSION)
Exhibit Index
Exhibit Number Description Page Number
10 Debtor in Possession Credit Facility 22
11 Computation of basic and diluted
earnings (loss) 20
per common share
27 Financial Data Schedule 21
EXHIBIT 11
<TABLE>
TRISM, INC.
(DEBTOR-IN-POSSESSION)
Computation of Basic and Diluted Earnings Per Common Share
For the three months and nine months ended September 30, 1999 and 1998
(In thousands, except per share amounts, unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Income (loss) before extraordinary item $ (5,047) (1,330) (11,535) (3,072)
Extraordinary item, gain on extinguishment
of debt, net of income taxes of $841 - 1,563 - 1,563
Net earnings (loss) $ (5,047) 233 (11,535) (1,509)
Weighted average number of shares
Basic:
Average common shares outstanding 5,702 5,719 5,702 5,719
Diluted:
Average common shares outstanding 5,702 5,719 5,702 5,719
Common share equivalents resulting from
assumed exercise of stock options - - - -
5,702 5,719 5,702 5,719
Basic earnings (loss) per common share:
Loss before extraordinary item $ (0.89) (0.23) (2.02) (0.53)
Extraordinary item - 0.27 - 0.27
Net earnings (loss) $ (0.89) 0.04 (2.02) (0.26)
Diluted earnings (loss) per share:
Loss before extraordinary item $ (0.89) (0.23) (2.02) (0.53)
Extraordinary item - 0.27 - 0.27
Net earnings (loss) $ (0.89) 0.04 (2.02) (0.26)
</TABLE>
Earnings (Loss) Per Share
Basic earnings (loss) per share excludes dilution and is computed
by dividing net earnings (loss) by the weighted average number of
common shares outstanding. Common shares outstanding include
issued shares less shares held in treasury. Diluted earnings per
share reflect the potential dilution that could occur if
securities or other contracts to issue common stock were
exercised or converted into common stock (common stock
equivalents). Diluted earnings per share is calculated by
dividing net income by the sum of the weighted average number of
common shares outstanding and dilutive common stock equivalents
at the end of each reporting period. Common stock equivalents
are excluded from the diluted calculation if a net loss was
incurred for the period as these transactions are anti-dilutive.
Under the contemplated plan of reorganization, current
shareholders ownership interests will be significantly diluted as
more fully discussed in the accompanying footnotes.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,078
<SECURITIES> 0
<RECEIVABLES> 38,905
<ALLOWANCES> 1,094
<INVENTORY> 1,179
<CURRENT-ASSETS> 61,663
<PP&E> 190,339
<DEPRECIATION> 70,840
<TOTAL-ASSETS> 199,901
<CURRENT-LIABILITIES> 91,037
<BONDS> 86,230
0
0
<COMMON> 59
<OTHER-SE> 4,298
<TOTAL-LIABILITY-AND-EQUITY> 199,901
<SALES> 0
<TOTAL-REVENUES> 69,606
<CGS> 0
<TOTAL-COSTS> 68,857
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,230
<INCOME-PRETAX> (5,047)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,047)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,047)
<EPS-BASIC> (0.89)
<EPS-DILUTED> (0.89)
</TABLE>
$42,429,167
SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION
LOAN AND SECURITY AGREEMENT
Dated as of September __, 1999
Among
TRISM, INC.
TRISM SECURED TRANSPORTATION, INC.
TRI-STATE MOTOR TRANSIT CO.
DIABLO SYSTEMS INCORPORATED, d/b/a DIABLO TRANSPORTATION, INC.
TRISM EASTERN, INC., d/b/a C. I. WHITTEN TRANSFER
TRISM HEAVY HAUL, INC.
TRISM SPECIALIZED CARRIERS, INC.
TRISM SPECIAL SERVICES, INC.
TRISM LOGISTICS, INC.
AND
TRISM EQUIPMENT, INC.
(collectively, the Borrowers)
and
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME AS LENDERS
(collectively, the Lenders)
and
THE CIT GROUP/BUSINESS CREDIT, INC.
(the Agent)
SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION
LOAN AND SECURITY AGREEMENT
Dated as of September __, 1999
TRISM, INC., a Delaware corporation ("Trism"), TRISM SECURED
TRANSPORTATION, INC., a Delaware corporation ("Trism Secured") TRI-
STATE MOTOR TRANSIT CO., a Delaware corporation ("TSMT"), DIABLO
SYSTEMS INCORPORATED D/B/A/ DIABLO TRANSPORTATION, INC., a California
corporation ("Diablo"), TRISM EASTERN, INC. D/B/A C.I. WHITTEN
TRANSFER, a Delaware corporation ("CI Whitten"), TRISM HEAVY HAUL,
INC., a Delaware corporation ("Heavy Haul"), TRISM SPECIALIZED
CARRIERS, INC., a Georgia corporation ("Specialized"), TRISM SPECIAL
SERVICES, INC., a Georgia corporation ("Special Services"), TRISM
LOGISTICS, INC., a New Jersey corporation ("Logistics"), TRISM
EQUIPMENT, INC., a Delaware corporation ("TEI") (each of Trism, Trism
Secured, TSMT, Diablo, CI Whitten, Heavy Haul, Specialized, Special
Services, Logistics and TEI, in their capacities as debtors and
debtors-in-possession, is herein referred to individually as a
"Borrower" and are collectively referred to herein as the
"Borrowers"), all with a principal place of business at 4174 Jiles
Road, Kennesaw, Georgia 30144, the Lenders (as hereinafter defined)
and THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation (the
"Agent") agree as follows:
RECITALS:
A. On September 16, 1999 (the "Petition Date"), each of the Borrowers
filed petitions in the United States Bankruptcy Court for the District
of Delaware (the "Court") for relief under Chapter 11 of the
Bankruptcy Code, thereby initiating Chapter 11 Case Nos. 99-3364
through 99-3373, which are being jointly administered (collectively
the "Chapter 11 Cases" and individually a "Chapter 11 Case").
Borrowers continue to operate their respective businesses, and manage
their respective properties, as debtors-in-possession pursuant to
1107 and 1108 of the Bankruptcy Code.
B. The Borrowers have requested that Lenders provide a senior secured
superpriority credit facility, consisting of revolving and term loans,
and Letters of Credit, to the Borrowers in an aggregate amount up to
$42,429,167. The Borrowers' business is a mutual and collective
enterprise, and the consolidation of all loans and other
accommodations under this Agreement will enhance the Borrowers'
aggregate borrowing powers and facilitate the administration of their
respective Chapter 11 Cases, all to the Borrowers' respective
individual mutual advantage and that of their respective creditors.
ARTICLE
DEFINITIONS
SECTION Definitions. For the purposes of this
Agreement:
1.
"Account Debtor" means a Person who is obligated on a Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquiring or acquisition of such Business Unit
or Investment by purchase, exchange, issuance of stock or other
securities, or by merger, reorganization or any other method.
"Adjusted Net Worth" means on any relevant date an amount equal
to the Net Worth plus the principal amount of the Subordinated
Indebtedness then outstanding.
"Administration Fee" shall have the meaning assigned to such term
in Section 4.2(c).
"Advance" means amounts advanced by the Lenders to a Borrower
pursuant to Section 2.1 hereof.
"Affiliate" means, with respect to a Person, (a) any partner,
officer, shareholder (if holding more than ten percent (10%) of the
outstanding shares of capital stock of such Person), director,
employee or managing agent of such Person or such Person's Affiliates,
(b) any other Person (other than a Subsidiary) that, (i) directly or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person,
(ii) directly or indirectly beneficially owns or holds ten percent
(10%) or more of any class of voting stock or partnership or other
voting interest of such Person or any Subsidiary of such Person, or
(iii) ten percent (10%) or more of the voting stock or partnership or
other voting interest of which is directly or indirectly beneficially
owned or held by such Person or a Subsidiary of such Person. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities or partnership
or other voting interest, by contract or otherwise.
"Agency Account" means an account of a Borrower maintained by it
with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among a Borrower,
the Agent and a Clearing Bank, in form and substance satisfactory to
the Agent, concerning the collection, treatment and remission of
payments or other deposits which represent the proceeds of Receivables
or of any other Collateral.
"Agent" means The CIT Group/Business Credit, Inc., a New York
corporation, and any successor agent appointed pursuant to Section
14.9 hereof.
"Agent's Office" means the office of the Agent specified in or
determined in accordance with the provisions of Section 15.1(c)
hereof.
"Agreement" means and includes this Post-Petition Loan and
Security Agreement, including all Schedules, Exhibits and other
attachments hereto, and all amendments, modifications and supplements
hereto and thereto, and shall mean and refer to this Agreement as the
same may be in effect at the time such reference becomes operative.
"Agreement Date" means the date as of which this Agreement is
dated.
"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all
governmental bodies and of all orders and decrees of all courts and
arbitrators, including, without limitation, Environmental Laws.
"Asset Disposition" means the disposition of any asset of any
Borrower or any of its Subsidiaries.
"Assignment and Transfer" means an assignment and transfer
in a form acceptable to the Agent and Lenders assigning all or a
portion of a Lender's interests, rights and obligations under this
Agreement pursuant to Section 13.1.
"Audited Financial Statements" shall have the meaning assigned to
such term in Section 10.1(a) hereof.
"Availability Shortfall" shall mean a condition which occurs, at
any time and from time to time, when the Borrowers' Borrowing Base
Availability has remained below $5,000,000 for a period of ten (10)
consecutive Business Days during the term hereof.
"Bankruptcy Code" means the provisions of Title 11, United States
Code, as amended from time to time, or any successor statute.
"Benefit Plan" means an "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) in
respect of which the Borrower or any Related Company is, or with
respect to defined benefit plans (as defined under ERISA) within the
immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA, including such plans as may be established
after the Agreement Date.
"Billed Eligible Receivables" shall mean the aggregate amount of
Eligible Receivables for which the services related thereto have been
performed by an Operating Company and an invoice has been rendered to
the customer.
"Borrower" and/or "Borrowers" shall have the meanings ascribed to
such terms in the preamble of this Agreement.
"Borrowers' Motion Regarding Banks" means that certain
"Application for an order (1) authorizing debtors to (a) continue and
maintain their consolidated cash management system, (b) continue and
maintain their existing bank accounts and (c) continue to use existing
business forms and (2) granting related relief" filed in the Chapter
11 Cases by Debtors.
"Borrowing Base" means at any time an amount equal to the lesser
of:
(a) the Revolving Credit Facility Amount minus the sum of
(i) the Letter of Credit Reserve, plus
(ii) the Carve-Out Amount, plus
(iii) such other reserves as the Agent may establish
from time to time in the exercise of its reasonable credit
judgment, or
(b) an amount equal to
(i) the sum of (A) eighty-five percent (85%) of the face
value of Billed Eligible Receivables due and owing at such
time, plus (B) eighty percent (80%) of the face value of
Unbilled Eligible Receivables due and owing at such time up
to the lesser of (1) $5,000,000 or (2) twenty-five percent
(25%) of the amount calculated in clause (b)(i)(A) hereof,
minus
(ii) the sum of
(A) the Letter of Credit Reserve, plus
(B) the Carve-Out Amount, plus
(C) such other reserves as the Agent may establish
from time to time in the exercise of its reasonable credit judgment.
"Borrowing Base Availability" means at any time (a) the Borrowing
Base at such time minus (b) the aggregate principal amount of
Revolving Credit Loans outstanding at such time.
"Borrowing Base Certificate" means a certificate in the form
attached hereto as Exhibit C.
"Business Day" means any day other than a Saturday, Sunday or
other day on which either the office of Chase Manhattan Bank, N.A., in
New York, New York or the Agent's office in Atlanta, Georgia is
authorized to close.
"Business Unit" means the assets constituting the business or a
division or operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of
assets (other than assets which constitute a Business Unit) which are
not, in accordance with GAAP, treated as expense items for such Person
in the year made or incurred or as a prepaid expense applicable to a
future year or years.
"Capitalized Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such
Indebtedness shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"Carve-Out Amount" shall have the meaning assigned in Section
4.9.
"Carve-Out Expenses" means the aggregate amount of expenses
entitled to the benefits of the Carve-Out Amount, but not greater than
the Carve-Out Amount.
"Cash Collateral" means collateral consisting of cash or Cash
Equivalents on which the Agent, for the benefit of itself as Agent and
the Lenders, has a first priority Lien.
"Cash Equivalents" means
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the
date of acquisition thereof;
(b) commercial paper maturing no more than one (1) year from the
date issued and, at the time of acquisition thereof, having a
rating of at least A-1 from Standard & Poor's Corporation or at
least P-1 from Moody's Investors Service, Inc.;
(c) certificates of deposit or bankers' acceptances issued in
Dollar denominations and maturing within one (1) year from the
date of issuance thereof issued by any commercial bank organized
under the laws of the United States of America or any state
thereof or the District of Columbia having combined capital and
surplus of not less than $100,000,000.00 and, unless issued by
the Agent or a Lender, not subject to set-off or offset rights in
favor of such bank arising from any banking relationship with
such bank; and
(d) repurchase agreements in form and substance and for amounts
satisfactory to the Agent.
"Change of Control" means (a) any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange
Act of 1934, as amended) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of twenty percent (20%) or more
of the voting power of the then outstanding common stock of Trism;
or (b) during any period of twelve (12) consecutive calendar months,
individuals who were directors of Trism on the first (1st) day of such
period shall cease to constitute a majority of the board of directors
of Trism; provided that a director who has resigned or is replaced
during such time shall not be included in any determination of whether
a change of control default has occurred pursuant to this clause (b)
to the extent such director is replaced by a successor director
elected by a majority of those directors who were directors at the
commencement of such period.
"Chapter 11 Cases" shall have the meaning assigned in the
Recitals hereof, and "Chapter 11 Case" means the respective bankruptcy
case for any Borrower under Chapter 11 of the Bankruptcy Code.
"Charges" means all Federal, state, county, city, municipal,
local, foreign or other governmental taxes (including, without
limitation, taxes owed to PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating
to (i) the Collateral, (ii) the Secured Obligations, (iii) the
employees, payroll, income or gross receipts of Borrowers, (iv) the
ownership or use of any assets by any Borrower, or (v) any other
aspect of Borrowers' business.
"Chase Manhattan Bank Rate" shall mean the rate of interest per
annum announced by Chase Manhattan Bank, N.A. from time to time as its
prime rate in effect at its principal office in the City of New York.
Such rate is not intended to be the lowest rate of interest charged by
Chase Manhattan Bank, N.A. to its borrowers.
"Clearing Bank" means any banking institution including, without
limitation, Mercantile Bank, with which an Agency Account has been
established pursuant to an Agency Account Agreement.
"Closing Fees" shall have the meaning assigned to such term in
Section 4.2(a).
"Collateral" means and includes all of each and every Borrower's
and each and every Guarantor's right, title and interest in and to
each of the following, wherever located and whether now or hereafter
existing or now owned or hereafter acquired or arising:
(a) all Receivables,
(b) all Contract Rights,
(c) all General Intangibles,
(d) the Stock,
(e) the Vehicles,
(f) the Mortgaged Real Estate and the Term Loan B
Trailers, when and if pledged to Lenders in accordance
with Article 2B hereof,
(g) all goods and other property (other than truck
tractors, trailers (excluding Vehicles or Term Loan B
Trailers) computer and communications equipment
including satellite tracking equipment), whether or not
delivered,
(i) the sale or lease of which gives or purports to give
rise to any Receivable, including, but not limited to, all
merchandise returned or rejected by or repossessed from
customers, or
(ii) securing any Receivable,
including, without limitation, all rights as an unpaid vendor or
lienor (including, without limitation, stoppage in transit,
replevin and reclamation) with respect to such goods and other
property,
(h) all mortgages, deeds to secure debt and deeds of trust on
real or personal property, guaranties, leases, security
agreements, and other agreements and property which secure or
relate to any Receivable or other Collateral, or are acquired for
the purpose of securing and enforcing any item thereof,
(i) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents and
instruments evidencing or pertaining to any and all items of
Collateral,
(j) all files, correspondence, computer programs, tapes, discs
and related data processing software which contain information
identifying or pertaining to any of the Receivables or any
Account Debtor, or showing the amounts thereof or payments
thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(k) all cash deposited with the Agent or any Lender or any
Affiliate of the Agent or any Lender or which the Agent, for the
benefit of the Lenders, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to
the provisions of this Agreement or any of the Security Documents
or any agreement relating to any Letters of Credit, and
(l) any and all products and proceeds of the foregoing
(including, but not limited to, any claim to any item referred to
in this definition, and any claim against any third party for
loss of, damage to or destruction of any or all of, the
Collateral or for proceeds payable under, or unearned premiums
with respect to, policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and
other instruments for the payment of money, chattel paper,
security agreements and other documents.
"Collection Account" means the Agent's account at The Chase
Manhattan Bank, N.A., New York, New York; ABA No. 021000021; For the
Account of The CIT Group/Business Credit Account No.144026613;
Reference: Trism Inc. (DIP).
"Commitment" means, as to each Lender, an amount equal to the
Total Commitment multiplied by the percentage set forth opposite such
Lender's name on the signature pages hereof, representing such
Lender's obligation, upon and subject to the terms and conditions of
this Agreement (including the applicable provisions of Section 13.1),
to make Revolving Credit Loans and Term Loans and to purchase
participations in Letters of Credit or, from and after the date
hereof, in the Register (as defined in Section 13.1(d)) representing
such Lender's obligation to make Revolving Credit Loans and Term Loans
and to purchase participations in Letters of Credit.
"Commitment Fee" means the fee paid by the Borrowers to the Agent
pursuant to and in connection with the execution by the Borrowers of
the Commitment Letter.
"Commitment Letter" shall mean the commitment letter dated
September 15, 1999 issued by the Agent and Lenders to, and accepted
by, the Borrowers as the same may be amended prior to the Effective
Date.
"Commitment Percentage" means, as to any Lender, the percentage
of the Total Commitment obtained by dividing such Lender's Commitment
by the Total Commitment.
"Consolidated Balance Sheet" shall mean a consolidated balance
sheet for the Borrowers and the consolidated Subsidiaries of each of
the Borrowers, eliminating all inter-Borrower transactions and
prepared in accordance with GAAP.
"Consolidating Balance Sheet" shall mean a Consolidated Balance
Sheet plus individual balance sheets for each Borrower listed on
Schedule 1.1 and the consolidated subsidiaries of each such Borrower,
showing all eliminations of inter-Borrower transactions and prepared
in accordance with GAAP and including a balance sheet for each such
Borrower exclusively.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or
petroleum-derived substance or waste, or any constituent of any such
substance or waste.
"Contracts" shall mean all "contracts," as such term is defined
in the Uniform Commercial Code, now owned or hereafter acquired by any
Borrower, in any event, including all contracts, undertakings, or
agreements (other than rights evidenced by chattel paper, documents or
instruments as such terms are defined in the Uniform Commercial Code)
in or under which any Borrower may now or hereafter have any right,
title or interest, including any agreement relating to the terms of
payment or the terms of performance of any Receivable.
"Contract Rights" means and includes, as to any Person, all of
such Person's then owned or existing and future acquired or arising
rights under Contracts not yet earned by performance and not evidenced
by an instrument or chattel paper, to the extent that the same may
lawfully be assigned.
"Controlled Disbursement Account" means one or more accounts
maintained by and in the name of the Borrowers with a Disbursing Bank
for the purposes of disbursing Loan proceeds and amounts deposited
thereto.
"Court" shall have the meaning assigned in the Recitals hereto.
"Default" means any of the events specified in Section 12.1 which
with the passage of time or giving of notice or both would constitute
an Event of Default.
"Default Margin" means two percent (2.0%) per annum.
"Disbursing Bank" means any commercial bank with which a
Controlled Disbursement Account is maintained after the Effective
Date.
"Dollar" and "$" means freely transferable United States
dollars.
"EBITDA" means, for any period, an amount equal to the Borrowers'
aggregate consolidated Net Income from recurring operations, excluding
extraordinary items, plus Interest Expense, depreciation and
amortization expense, and taxes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time, and any successor statute.
"Early Termination Date" shall mean the date on which the DIP
Facility is voluntarily terminated or any of the loans thereunder are
fully repaid by Borrowers (but excluding payments in the ordinary
course of business of amounts drawn under the Revolving Facility and
further excluding a termination of the DIP Facility upon the
consummation of a plan of reorganization proposed by Borrowers
accompanied by the simultaneous satisfaction of all obligations of the
Borrowers thereunder with proceeds of a new post-confirmation
financing facility provided by the Agent); provided, however, that
such term shall also exclude the date, if any, on which the Borrowers
voluntarily terminate this Agreement because of confirmation of a plan
of reorganization by the Court in the Chapter 11 Cases, which plan
contemplates post-confirmation refinancing to the Borrowers by the
Agent and with respect to which the Agent have provided a written
commitment containing provisions not materially inconsistent with such
plan.
"Early Termination Fee" shall mean the fee that the Agent, for
the ratable benefit of the Lenders, is entitled to charge the
Borrowers, in the event an Early Termination Date occurs, and shall be
an amount equal to (a) the Total Commitment multiplied by (b) one-half
percent (.50%).
"Effective Date" means the later of (a) the Agreement Date or (b)
the first date on which all of the conditions set forth in Sections
5.1 and 5.3 shall have been fulfilled.
"Effective Interest Rate" means each rate of interest per annum
on the Revolving Credit Loans and the Term Loans in effect from time
to time pursuant to the provisions of Section 4.1.
"Eligible Assignee" means (i) a commercial bank organized under
the laws of the United States, or any State thereof, having total
assets in excess of $1,000,000,000.00 or any commercial finance or
asset based lending affiliate of any such commercial bank; (ii) a
savings and loan association or savings bank organized under the laws
of the United States, or any State thereof, having a net worth of at
least $250,000,000.00 calculated in accordance with GAAP; and (iii)
any Lender listed on the signature page of this Agreement; provided in
each case that the representation contained in Sections 13.1(c)(i) and
13.2 hereof shall be applicable with respect to such institution or
Lender.
"Eligible Receivable" means the unpaid portion of a Receivable
payable in Dollars to an Operating Company net of any returns,
discounts, claims, credits, charges or other allowances, offsets,
deductions, counterclaims, disputes or other defenses and reduced by
the aggregate amount of all reserves, limits and deductions provided
for in this definition which is deemed by the Agent in its reasonable
credit judgment to be eligible for inclusion in the calculation of the
Borrowing Base. Unless otherwise approved in writing by the Agent, no
Receivable shall be deemed an Eligible Receivable unless it meets all
of the following requirements: (a) such Receivable is owned by an
Operating Company and represents a complete bona fide transaction
which requires no further act under any circumstances on the part of
such Operating Company to make such Receivable payable by the Account
Debtor; (b) such Receivable is not unpaid more than ninety (90) days
after the date of the original invoice or past due more than seventy-
five (75) days after its due date; (c) such Receivable does not arise
out of any transaction with any Subsidiary or Affiliate of an
Operating Company; (d) such Receivable is not owing by an Account
Debtor more than fifty percent (50%) of whose then-existing accounts
owing to an Operating Company do not meet the requirements set forth
in clause (b) above; (e) if the Account Debtor with respect thereto is
located outside of the United States of America, Canada or the United
Kingdom (a "Foreign Receivable"), the transportation services which
gave rise to such Receivable were rendered after receipt by an
Operating Company from the Account Debtor of an irrevocable letter of
credit that has been confirmed by a financial institution acceptable
to the Agent and is in form and substance acceptable to the Agent,
payable in the full face amount of the face value of the Receivable in
Dollars at a place of payment located within the United States and has
been duly delivered to the Agent (an "L/C Backed Foreign Receivable");
provided that the Operating Companies may include in Eligible
Receivables, in the aggregate, an amount of up to $500,000 of Foreign
Receivables which are not L/C Backed Foreign Receivables; (f) if such
Receivable is subject to the Assignment of Claims Act of 1940, as
amended from time to time, or any applicable law now or hereafter
existing similar in effect thereto, as determined in the sole
discretion of the Agent, or to any provision prohibiting its
assignment or requiring notice of or consent to such assignment that,
upon the request of the Agent pursuant to Section 8.12 or otherwise,
an Operating Company promptly complies with the requirements of
Section 8.12; (g) the Account Debtor with respect to such Receivable
is not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind or of any other proceeding or action,
threatened or pending, which might, in the Agent's reasonable credit
judgment, have a Materially Adverse Effect on such Account Debtor; (h)
excluding any Receivable owing by any agency or department of the
federal government, such Receivable is not owing by an Account Debtor,
who or along with a group of affiliated Account Debtors has then-
existing accounts owing to an Operating Company which exceed in face
amount fifteen percent (15%) of such Operating Company's total
Eligible Receivables; (i) if such Receivable is a Billed Receivable,
it is evidenced by an invoice or other documentation in a form
acceptable to the Agent containing only terms normally offered by an
Operating Company, (j) if such Receivable is an Unbilled Receivable,
then no more than fifteen (15) days have elapsed from the earliest of
the date on which (i) such Receivable was created or arose, (ii) such
sale was made or service performed, or (iii) such Receivable could
have been invoiced by the Operating Company; (k) such Receivable is a
valid, legally enforceable obligation of the Account Debtor with
respect thereto and is not subject to any present, or contingent (and
no facts (i) exist to the knowledge of an Operating Company, or (ii)
have been disclosed in the course of any audit, which are the basis
for any future), offset, deduction or counterclaim, dispute or other
defense on the part of such Account Debtor, including, without
limitation, those arising as a result of the filing of the Chapter 11
Cases or any action or inaction by the Borrowers in such Chapter 11
Cases; (l) such Receivable is not evidenced by chattel paper or an
instrument of any kind; (m) such Receivable does not arise out of a
rebill or advertising bill; (n) such Receivable is subject to the
Security Interest, which is perfected as to such Receivable, and is
subject to no other Lien whatsoever other than a Permitted Lien; and
(o) any other requirements deemed necessary by the Agent in its
reasonable business judgment and which are customary either in the
commercial finance industry or in the lending practices of the Agent
or the Lenders.
"Environmental Laws" means all federal, state, local and foreign
laws now or hereafter in effect relating to pollution or protection of
the environment, including laws relating to emissions, discharges,
Releases or threatened Releases of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into
the environment (including, without limitation, ambient air, surface
water, ground water, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and
any and all regulations, notices or demand letters issued, entered,
promulgated or approved thereunder; such laws and regulations include
but are not limited to the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et seq., as amended; the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 6901 et seq., as
amended; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.,
as amended; the Clean Air Act, 46 U.S.C. 7401 et seq., as amended;
and state and federal lien and environmental cleanup programs.
"Environmental Lien" means a Lien in favor of any governmental
entity for (a) any liability under Environmental Laws or (b) damages
arising from, or costs incurred by such governmental entity in
response to, a Release or threatened Release of Contaminant into the
environment.
"Environmental Liabilities" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response,
remedial and removal costs, investigation and feasibility study costs,
capital costs, operation and maintenance costs, losses, damages,
punitive damages, property damages, natural resource damages,
consequential damages, treble damages, costs and expenses (including
all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a
result of or related to any claim, suit, action, investigation,
proceeding or demand by any Person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil
statute or common law, including any arising under or related to any
Environmental Laws, Environmental Permits, or in connection with any
Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any
real or personal property.
"Environmental Permits" shall mean all permits, licenses,
authorizations, certificates, approvals, registrations or other
written documents required by any Governmental Authority under any
Environmental Laws.
"Event of Default" means any of the events specified in Section
12.1, provided that any requirement for notice or lapse of time or any
other express condition has occurred or been satisfied.
"Expense Deposit" means the expense deposit under and pursuant to
the Commitment Letter.
"Final Order" means an order of the Court which meets all of the
requirements of an Interim Order but which (a) fully and finally
approves all of the Loan Documents, (b) removes any interim or
temporary limitations contained in the Interim Order, including,
without limitation, any interim limitation on the maximum amount of
Secured Obligations permitted to be incurred thereunder, and (c) is in
form and substance satisfactory to the Agent and the Required Lenders
in their sole discretion, and (d) reflects the consent of counsel to
the Agent to the entry thereof.
"Financial Officer" means the chief financial officer, Treasurer
or Controller of a Borrower.
"Financing Statements" means all Uniform Commercial Code
financing statements required by Agent and executed by a Borrower, in
form and substance satisfactory to the Agent.
"Fiscal Month" shall mean each calendar month during the Fiscal
Year.
"Fiscal Quarter" shall mean each three (3) month period ended
March 31, June 30, September 30 and December 31 of each year.
"Fiscal Year" shall mean each twelve (12) month period commencing
on January 1 of each year and ending on the following December 31.
"GAAP" means generally accepted accounting principles
consistently applied and maintained throughout the period indicated
and consistent with the prior financial practice of the Person
referred to.
"General Intangibles" means, as to any Person, all of such
Person's then owned or existing and future acquired or arising general
intangibles, choses in action and causes of action and all other
intangible personal property of such Person of every kind and nature
(other than Receivables), including, without limitation, Intellectual
Property, corporate or other business records, inventions, designs,
blueprints, plans, specifications, trade secrets, goodwill, computer
software, customer lists, licenses, franchises, tax refund claims,
reversions or any rights thereto and any other amounts payable to such
Person from any Benefit Plan, Multiemployer Plan or other employee
benefit plan, rights and claims against carriers and shippers, rights
to indemnification, business interruption insurance proceeds thereof,
property, casualty or any similar type of insurance and any proceeds
thereof, any letter of credit, guarantee, claims, security interest or
other security held by or granted to such Person to secure payment by
an Account Debtor of any of the Receivables.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with,
and reports to, all governmental bodies, whether federal, state, local
or foreign national or provincial and all agencies thereof.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any agency,
department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"Guarantor" shall mean each of TRISM Maintenance Services, Inc.,
EFB, Inc., Transportation Recovery Systems, Inc., TRISM Benefits,
Inc., Aero Body and Truck Equipment, Inc., Tri-state Transportation
Services, Inc., Emerald Leasing, Inc., McGil Special Services, Inc.,
E.L. Powell & Sons Trucking Co., Inc., Trism Transport, Inc., and
Trism Transport Services, Inc., and any other Subsidiary of Trism
which is not a debtor in a Chapter 11 Case, and "Guarantors" shall
collectively refer to all of the above-listed entities.
"Guaranty Agreement" means the Guaranty dated as of the Effective
Date, executed by the Guarantors in favor of the Agent, for the
benefit of the Lenders, as amended, modified or supplemented from time
to time.
"Guaranty," "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person shall mean and include
(a) a guaranty (other than by endorsement of negotiable instruments
for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation of
such other Person, and
(b) an agreement direct or indirect, contingent or otherwise, and
whether or not constituting a guaranty, the practical effect of which
is to assure the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of such obligation of such
other Person whether by (i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or lessor) of property or
the purchase or sale of services primarily for the purpose of enabling
the obligor with respect to such obligation to make any payment or
performance (or payment of damages in the event of nonperformance) of
or on account of any part or all of such obligation or to assure the
owner of such obligation against loss, (iii) the supplying of funds
to, or in any other manner investing in, the obligor with respect to
such obligation, (iv) repayment of amounts drawn down by beneficiaries
of letters of credit, or (v) the supplying of funds to or investing in
a Person on account of all or any part of such Person's obligation
under a guaranty of any obligation or indemnifying or holding
harmless, in any way, such Person against any part or all of such
obligations.
"Indebtedness" of any Person means, without duplication, (a)
Liabilities, (b) all obligations for money borrowed or for the
deferred purchase price of property or services or in respect of
Reimbursement Obligations under letters of credit, (c) all obligations
represented by bonds, debentures, notes and accepted drafts that
represent extensions of credit, (d) Capitalized Lease Obligations, (e)
all obligations (including, during the noncancelable term of any lease
in the nature of a title retention agreement, all future payment
obligations under such lease discounted to their present value in
accordance with GAAP) secured by any Lien to which any property or
asset owned or held by such Person is subject, whether or not the
obligation secured thereby shall have been assumed by such Person, (f)
all obligations of other Persons which such Person has Guaranteed,
including, but not limited to, all obligations of such Person
consisting of recourse liability with respect to accounts receivable
sold or otherwise disposed of by such Person, and (g) in the case of
the Borrower (without duplication) the Loans.
"Initial Anniversary Date" shall mean the six-month anniversary
of the Effective Date.
"Intellectual Property" means, as to any Person, all of such
Person's then owned existing and future acquired or arising patents,
patent rights, copyrights, works which are the subject of copyrights,
trademarks, service marks, trade names, trade styles, patent,
trademark and service mark applications, and all licenses and rights
related to any of the foregoing and all other rights under any of the
foregoing, all extensions, renewals reissues, divisions, continuations
and continuations-in-part of any of the foregoing and all rights to
sue for past, present and future infringements of any of the
foregoing.
"Interest Expense" means the interest on Indebtedness during the
period for which computation is being made, excluding (a) the
amortization of fees and costs incurred with respect to the closing of
loans which have been capitalized as transaction costs, and (b)
interest paid in kind.
"Interest Payment Date" means the first (1st) day of each
calendar month commencing on October 1, 1999 and continuing thereafter
until the Secured Obligations have been irrevocably paid in full.
"Interim Order" means the order of the Court entered in the
Chapter 11 Cases, after a hearing, satisfactory in form and substance
to the Agent and the Required Lenders in their sole discretion and
which reflects the consent thereto of counsel to the Agent, which,
among other matters, but not by way of limitation, authorizes the
Borrower to obtain credit, incur indebtedness, grant Liens under this
Agreement and under the Loan Documents, as the case may be, and
provide for the superpriority claim status of the Secured Obligations,
all as set forth in such order.
"Investment" means, with respect to any Person: (a) the direct
or indirect purchase or acquisition of any beneficial interest in, any
share of capital stock of, evidence of Indebtedness of or other
security issued by any other Person; (b) any loan, advance or
extension of credit to, or contribution to the capital of, any other
Person, excluding advances to employees in the ordinary course of
business for business expenses; (c) any Guaranty of the obligations of
any other Person; or (d) any commitment or option to take any of the
actions described in clauses (a), (b) or (c) above.
"IRC" means the Internal Revenue Code of 1986, as amended from
time to time.
"IRS" means the Internal Revenue Service.
"Issuing Bank" shall have the meaning ascribed thereto in Section
3.1.
"Lender" means at any time any financial institution party to
this Agreement as a lender at such time, including any such Person
becoming a party hereto pursuant to the provisions of Article 13, and
its successors and assigns, and "Lenders" means at any time all of the
financial institutions party to this Agreement as lenders at such
time, including any such Persons becoming parties hereto pursuant to
the provisions of Article 13, and their successors and assigns,
including, without limitation, the financial institutions whose
signatures are affixed hereto as of the Agreement Date.
"Letter of Credit" means any Letter of Credit issued by an
Issuing Bank for the account of a Borrower pursuant to Article 3.
"Letter of Credit Accommodations" shall have the meaning assigned
in Section 4.2(d).
"Letter of Credit Amount" means, with respect to any Letter of
Credit, the aggregate maximum amount at any time available for drawing
under such Letter of Credit.
"Letter of Credit Facility" means that portion of this Agreement
pursuant to which Letters of Credit are provided.
"Letter of Credit Facility Amount" means the amount of
$17,000,000.
"Letter of Credit Obligations" means, at any time, the sum of (a)
the aggregate Reimbursement Obligations of the Borrowers at such time,
plus (b) the aggregate Letter of Credit Amount of Letters of Credit
outstanding at such time, plus (c) the aggregate Letter of Credit
Amount of Letters of Credit the issuance of which has been authorized
by the Agent and the Issuing Lender pursuant to Section 3.1 but that
have not yet been issued, in each case (i) as determined by the Agent,
and (ii) expressly including all such amounts outstanding under the
Pre-Petition Loan Agreement as of the Effective Date, which shall
automatically, and without any further action by any Person, be deemed
assumed by Borrowers and constitute Secured Obligations hereunder
(without duplication) upon the occurrence of the Effective Date.
"Letter of Credit Reserve" means, at any time, the aggregate
Letter of Credit Obligations at such time, excluding Letter of Credit
Obligations, if any, that are fully secured by Cash Collateral.
"Liabilities" means, as at the end of any fiscal period, all
liabilities determined in accordance with GAAP and included on a
balance sheet.
"LIBOR" shall mean at any time of determination, and subject to
availability, for each interest period the higher of the applicable
London Interbank Offered rate paid in London on dollar deposits from
other banks as (x) quoted by Chase Manhattan Bank, N.A., (y) published
under "Money Rates" in the New York City edition of the Wall Street
Journal or, if there is no such publication or statement therein as to
LIBOR, then in any publication used in the New York City financial
community or (z) determined by the Agent based upon information
presented on Telerate Systems at Page 3750 as of 11:00 a.m. (London
Time).
"LIBOR Loan(s)" shall mean those Revolving Credit Loans and Term
Loans for which the Borrowers have elected to use LIBOR for interest
rate computations.
"LIBOR Period" shall have the meaning assigned to such term in
Section 4.1(a)(i) hereof.
"Lien" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge,
lease constituting a Capitalized Lease Obligation, conditional sale or
other title retention agreement, or other security interest, security
title or encumbrance of any kind in respect of any property of such
Person or upon the income and profits therefrom, (b) any arrangement,
express or implied, under which any property of such Person is
transferred, sequestered or otherwise identified for the purpose of
subjecting the same to the payment of Indebtedness or performance of
any other obligation in priority to the payment of the general,
unsecured creditors of such Person, and (c) the filing of, or any
agreement to give, any financing statement under the UCC or its
equivalent in any jurisdiction.
"Loan(s)" means any Revolving Credit Loan or Term Loan, as well
as such loans collectively, as the context requires.
"Loan Account" and "Loan Accounts" shall have the meanings
ascribed thereto in Section 4.4.
"Loan Documents" means collectively this Agreement, the Notes,
the Security Documents, the Guaranty Agreement, the Pledge Agreement,
the Trademark Security Agreement, the Interim Order, the Final Order
and each other instrument, agreement or document executed by the
Borrowers, the Guarantors or any Affiliate or Subsidiary of the
Borrowers or the Guarantors in connection with this Agreement whether
prior to, on or after the Effective Date and each other instrument,
agreement or document referred to herein or contemplated hereby, all
in form and substance acceptable to the Agent.
"Lockbox" means each U. S. Post Office Box specified in a Lockbox
Agreement.
"Lockbox Agreement" means each agreement between a Borrower and a
Clearing Bank concerning the establishment of a Lockbox for the
collection of Receivables.
"Margin Stock" means margin stock as defined in Section 221.1(h)
of Regulation U, as the same may be amended or supplemented from time
to time.
"Material Intellectual Property" shall mean any Intellectual
Property which is in any manner related to a product or service (or a
related group of products or services) of a Borrower which generates
gross revenue to such Borrower at an annual rate of at least
$1,000,000.
"Materially Adverse Effect" means, with respect to any Person, a
materially adverse effect upon such Person's business, assets,
liabilities, condition (financial or otherwise), results of operations
or business prospects, and in addition (i) with respect to a Borrower,
includes a materially adverse effect upon such Borrower's ability to
perform its obligations hereunder or under any other Loan Document to
which it is a party or upon the enforceability of such obligations
against such Borrower and (ii) with respect to a Guarantor, includes a
materially adverse effect upon such Guarantor's ability to perform its
obligations under the Guaranty Agreement, or under any other Loan
Document to which it is a party or upon the enforceability of such
obligations against such Guarantor; provided, however, that the filing
of the Chapter 11 Cases does not constitute a Materially Adverse
Effect.
"Measurement Period" means, upon and after an Availability
Shortfall during the term hereof the month which immediately precedes
the month in which the Availability Shortfall occurs and each
determination period thereafter.
"Minimum Commitment" shall have the meaning ascribed to such term
in Section 13.1(b) hereof.
"Money Borrowed" means, as applied to Indebtedness, (a)
Indebtedness for money borrowed, (b) Indebtedness, whether or not in
any such case the same was for money borrowed, (i) represented by
notes payable and drafts accepted, that represent extensions of
credit, (ii) constituting obligations evidenced by bonds, debentures,
notes or similar instruments, or (iii) upon which interest charges are
customarily paid (other than trade Indebtedness) or that was issued or
assumed as full or partial payment for property, (c) Indebtedness that
constitutes a Capitalized Lease Obligation, and (d) Indebtedness that
is such by virtue of clause (f) of the definition thereof, but only to
the extent that the obligations Guaranteed are obligations that would
constitute Indebtedness for Money Borrowed.
"Mortgaged Real Estate" means all real property and improvements
owned by Trism and located at 4174 Jiles Road in Kennesaw, Georgia
comprising the Borrowers' executive offices and principal place of
business.
"Mortgages" means and includes any mortgages, deeds of trust,
deeds to secure debt, assignments and other instruments executed and
delivered or that may be executed and delivered by any Borrower to the
Agent, for the benefit of itself and the Lenders, in connection with
the Mortgaged Real Estate or otherwise.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which a Borrower or a Related Company
is required to contribute or has contributed within the immediately
preceding six (6) years.
"Net Income" or "Net Loss" means, as applied to any Person, the
net income (or net loss) of such Person for the period in question
after giving effect to deduction of or provision for all operating
expenses, all taxes and reserves (including reserves for deferred
taxes and all other proper deductions), all determined in accordance
with GAAP, provided that there shall be excluded: (a) the net income
(or net loss) of any Person accrued prior to the date it becomes a
Subsidiary of, or is merged into or consolidated with, the Person
whose Net Income is being determined or a Subsidiary of such Person,
(b) the net income (or net loss) of any Person in which the Person
whose Net Income is being determined or any Subsidiary of such Person
has an ownership interest, except, in the case of net income, to the
extent that any such income has actually been received by such Person
or such Subsidiary in the form of cash dividends or similar
distributions, (c) any restoration of any contingency reserve, except
to the extent that provision for such reserve was made out of income
during such period, (d) any net gains or losses on the sale or other
disposition, not in the ordinary course of business, of Investments,
Business Units and other capital assets, provided that there shall
also be excluded any related charges for taxes thereon, (e) any net
gain arising from the collection of the proceeds of any insurance
policy, (f) any write-up of any asset, and (g) any other extraordinary
item.
"Net Outstandings" of any Lender means, at any time, the sum of
(a) all amounts paid by such Lender to the Agent in respect of
Revolving Credit Loans, Term Loans or otherwise under this Agreement,
minus (b) all amounts paid by the Agent to such Lender which are
received by the Agent and which, pursuant to this Agreement, are paid
over to such Lender for application in reduction of the outstanding
principal balance of the Revolving Credit Loans, Term Loans or Letter
of Credit Obligations.
"Net Proceeds" means proceeds received by a Borrower or any of
its Subsidiaries in cash from any Asset Disposition (including,
without limitation, payments under notes or other debt securities
received in connection with any Asset Disposition), net of: (a) the
reasonable transaction costs of such sale, lease, transfer or other
disposition; (b) any tax liability arising solely from such
transaction; and (c) amounts applied to repayment of Indebtedness
(other than the Secured Obligations) secured by a Permitted Lien on
the asset or property disposed.
"Net Worth" means, as at the end of any fiscal period, the total
shareholders' equity determined in accordance with GAAP (including
capital stock, additional paid-in capital and retained earnings, after
deducting treasury stock) included on a Consolidated Balance Sheet.
"Non-Ratable Loan" means a Revolving Credit Loan made by the
Settlement Lender in accordance with the provisions of Section
4.7(b)(ii).
"Note" means either of a Revolving Credit Note or a Term Note,
individually, and "Notes" mean all such Notes, collectively.
"Operating Companies" shall mean Tri-State Motor Transit Co., Tri-
State Transportation Services, Inc., Diablo Systems Incorporated d/b/a
Diablo Transportation, Inc., Trism Eastern, Inc., d/b/a C. I. Whitten
Transfer, Trism Specialized Carriers, Inc., Trism Special Services,
Inc.,Trism Logistics, Inc. and Trism Equipment, Inc.
"Operating Lease" shall have the meaning assigned to such term in
Section 11.10 hereof.
"Operating Lease Obligations" means the aggregate amount of all
obligations under all Operating Leases of any Borrower and any of its
Subsidiaries as of the end of any relevant fiscal period, where the
amount of each such obligation, with respect to any such Operating
Lease, is equal to the sum of the following, in each case discounted
to present value using the implicit interest rate embedded in such
Operating Lease: (a) the monthly lease payment under such Operating
Lease multiplied by the number of months then remaining in the term
of such Operating Lease plus (b) the amount of any optional or
mandatory residual payment due at the end of the term of such
Operating Lease upon payment of which such Borrower will acquire the
asset(s) subject to such Operating Lease.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
"Permitted Existing Indebtedness" means the Indebtedness set
forth on Schedule 6.1(i) hereof.
"Permitted Guaranties" means (a) the Guaranty in favor of Agent,
(b) those guarantees described on Schedule 6.1(i), and (c) guarantees
of Permitted Obligations.
"Permitted Incremental Obligations" means, for the six (6) month
period commencing after the Petition Date, an amount equal to
$8,000,000 (plus the Term Loan B, if any).
"Permitted Investments" means (a) direct obligations of the
United States of America, or any agency, thereof, or obligations
guaranteed as to principal and interest by the United States of
America, or any agency thereof; (b) certificates of deposit issued by
any bank or trust company organized under the laws of the United
States of America or any state thereof and having capital, surplus and
undivided profits of at least Five Hundred Million Dollars
($500,000,000); and (c) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Corporation or Moody's Investors Services, Inc.
respectively.
"Permitted Liens" means: (a) Liens securing taxes, assessments
and other govern mental charges or levies (excluding any Lien imposed
pursuant to any of the provisions of ERISA) or the claims of
materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of
business, but in all cases, only if payment shall not at the time be
required to be made in accordance with Section 9.6, and (b) Liens
consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar
legislation or under surety or performance bonds, in each case arising
in the ordinary course of business; (c) Liens constituting
encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of the real estate of a
Borrower, which in the reasonable credit judgment of the Agent do not
materially detract from the value of such real estate or impair the
use thereof in such business of such Borrower; (d) Liens securing
Permitted Obligations; (e) Liens of the Agent, for the benefit of the
Lenders, arising under this Agreement and the other Loan Documents;
(f) Liens, if any, which, by virtue of the entry of, and pursuant to
the express terms of, the Interim Order or the Final Order, as the
case may be, are subordinate and inferior to the Liens of Lenders; and
(g) Liens arising out of or 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 a Borrower is fully protected by
insurance or in respect of which such Borrower shall at any time in
good faith be prosecuting 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, and as to which appropriate
reserves have been established on the books of such Borrower.
"Permitted Obligations" means the aggregate amount of outstanding
Purchase Money Indebtedness, Operating Lease Obligations and
Indebtedness for Money Borrowed which, and only to the extent, is
incurred in accordance with the provisions of this Agreement,
including without limitation, Section 11.2.
"Person" means an individual, corporation, partnership,
association, trust or unincorporated organization, or a Governmental
Authority.
"Petition Date" shall have the meaning assigned in the Recitals
hereto.
"Plan" means any employee benefit plan as defined in Section 3(3)
of ERISA in respect of which the Borrower or any Related Company is,
or with respect to defined benefit plans (as defined under ERISA)
within the immediately preceding six years was, an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Stock Pledge Agreement dated as of
the Effective Date, among Trism, Trism Secured, Heavy Haul, Transport
Services, TSMT and Specialized and the Agent, for the ratable benefit
of the Lenders, as amended, modified or supplemented from time to
time.
"Pre-Petition Loan Agreement" means that certain Loan and
Security Agreement dated as of July 14, 1997 by and among the
Borrowers and certain affiliates thereof, the Agent and the Lenders
identified therein, as amended.
"Prime Option" shall mean either a Revolver Prime Option or a
Term Loan Prime Option, as such terms are defined in Section
4.1(a)(i).
"Projections" shall have the meaning assigned to such term in
Section 6.1(m).
"Proposal Letter" shall mean that certain Proposal Letter from
Agent to Trism, Inc., dated as of August 30, 1999, with respect to a
Debtor in Possession Credit Facility.
"Purchase Money Indebtedness" means (a) Indebtedness created to
finance or refinance the payment of all or any part of the lesser of
(i) the purchase price or (ii) the fair market value, of any tangible
asset (other than inventory), and secured only by Purchase Money Liens
and (b) Capitalized Lease Obligations.
"Purchase Money Lien" means any Lien securing Purchase Money
Indebtedness, but only if such Lien shall at all times be confined
solely to the tangible asset (other than inventory) which was financed
or refinanced through the incurrence of the Purchase Money
Indebtedness secured by such Lien.
"Real Estate" means all of each and every Borrower's now or
hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds and future interests, together with
all of each and every Borrower's now or hereafter owned or leased
interests in the improvements and emblements thereon, the fixtures
attached thereto and the easements appurtenant thereto, including,
without limitation the real property described on Schedule 6.1(t).
"Receivables" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising (a)
rights to the payment of money or other forms of consideration of any
kind (whether classified under the Uniform Commercial Code as
accounts, contract rights, chattel paper, General Intangibles or
otherwise) including, but not limited to, accounts receivable, letters
of credit and the right to receive payment thereunder, chattel paper,
tax refunds, insurance proceeds, Contracts and Contract Rights, notes,
drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any Person (other
than any of the foregoing relating to the sale of equipment unless
such equipment relates to or was obtained by the Borrowers in
connection with the settlement of a customer Receivable) and
guaranties, security and Liens securing payment thereof and (b) cash
and non-cash proceeds of any of the foregoing.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System (or any successor), as the same may be
amended or supplemented from time to time.
"Reimbursement Agreement" means, with respect to a Letter of
Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single document or several documents)
as the Issuing Bank may employ in the ordinary course of business for
its own account, with such modifications thereto as may be agreed upon
by an Issuing Bank and a Borrower, provided that such application and
agreement and any modifications thereto are not inconsistent with the
terms of this Agreement.
"Reimbursement Obligations" means the reimbursement or repayment
obligations of a Borrower to an Issuing Bank pursuant to Article 3 or
pursuant to a Reimbursement Agreement with respect to amounts that
have been drawn under Letters of Credit.
"Related Company" means, as to any Person, any (a) corporation
which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the IRC) as such Person, (b)
partnership or other trade or business (whether or not incorporated)
under common control (within the meaning of Section 414(c) of the IRC)
with such Person, or (c) member of the same affiliated service group
(within the meaning of Section 414(m) of the IRC) as such Person or
any corporation described in clause (a) above or any partnership,
trade or business described in clause (b) above.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any
property, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"Remedial Action" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or
outdoor environment; (ii) prevent the Release or threat of Release or
minimize the further Release of Contaminants so they do not migrate or
endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (iii) perform pre-remedial studies
and investigations and post-remedial monitoring and care.
"Replacement Letters of Credit" shall have the meaning assigned
to such term in Section 3.3(b) hereof.
"Required Lenders" means, at any time, any combination of Lenders
whose Commitment Percentages at such time aggregate at least sixty-six
and two-thirds percent (66_%).
"Restricted Distribution" by any Person means (a) its retirement,
redemption, pur chase, or other acquisition for value of any capital
stock or other equity securities or partnership interests issued by
such Person, (b) the declaration or payment of any dividend or
distribution on or with respect to any such securities or partnership
interests, (c) any loan or advance by such Person to, or other
investment by such Person in, the holder of any of such securities or
partnership interests, and (d) any other payment by such Person in
respect of such securities or partnership interests.
"Restricted Payment" means (a) any redemption, repurchase or
prepayment or other retirement, prior to the stated maturity thereof
or prior to the due date of any regularly scheduled installment or
amortization payment with respect thereto, of any Indebtedness of a
Person (other than the Secured Obligations and trade debt), and (b)
the payment by any Person of the principal amount of or interest on
any Indebtedness (other than trade debt) owing to an Affiliate of such
Person.
"Revolver LIBOR Option" shall have the meaning assigned to such
term in Section 4.1(a)(i).
"Revolving Credit Facility" means that portion of this Agreement
pursuant to which Revolving Credit Loans are made.
"Revolving Credit Facility Amount" means $35,000,000.
"Revolving Credit Loans" means the Loans made to the Borrowers,
from time to time, pursuant to Section 2.1 or, as the context
requires, the aggregate outstanding amount thereof.
"Revolving Credit Note" means each Revolving Credit Note made by
the Borrowers payable to the order of a Lender evidencing the
obligation of the Borrowers to pay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by such Lender (and
any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor
whether payable to such Lender or to a different Lender in connection
with a Person becoming a Lender after the Effective Date or otherwise)
substantially in the form of Exhibit A hereto, with all blanks
properly completed, either as originally executed or as the same may
from time to time be supplemented, modified, amended, renewed,
extended or refinanced.
"Rolling Stock" means tractors and trailers used by Borrowers in
the operation of their respective businesses.
"Schedule of Receivables" means a schedule delivered by the
Borrowers to the Agent, from time to time, pursuant to the provisions
of Section 8.11, setting forth a detailed aged trial balance of all
the then existing Receivables, specifying the name of each Account
Debtor and balance due from (and any rebate due to) each Account
Debtor obligated on a Receivable so listed.
"Secured Obligations" means, in each case whether now in
existence or hereafter arising, (a) the principal of, and interest and
premium, if any, on, the Loans, (b) the Letter of Credit Obligations,
and (c) all indebtedness, liabilities, obligations, covenants and
duties of any Borrower to the Agent or to the Lenders of every kind,
nature and description arising under or in respect of this Agreement,
the Notes or any of the other Loan Documents, whether direct or
indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by
any note, and whether or not for the payment of money, including
without limitation, fees required to be paid pursuant to Article 4 and
expenses required to be paid or reimbursed pursuant to Section 15.2.
"Security Documents" means each of the following:
(a) the Mortgage, relating to the Mortgaged Real Estate,
(b) the Financing Statements,
(c) the Guaranty Agreement,
(d) the Pledge Agreement,
(e) the Trademark Security Agreement,
(f) each other writing executed and delivered by a Borrower or
any other Person securing the Secured Obligations, and
(g) the certificates of titles for the Vehicles and the Term
Loan B Trailers, with the first-priority lien of Agent properly
noted thereon.
"Security Interest" means the valid and perfected first priority
Liens of the Agent, for the benefit of the Lenders, on and in the
Collateral effected hereby or by any of the Security Documents or
pursuant to the terms hereof or thereof.
"Settlement Date" means each Business Day after the Effective
Date selected by the Agent in its sole discretion subject to and in
accordance with the provisions of Section 4.7(b)(i) as of which a
Settlement Report is delivered by the Agent and on which settlement is
to be made among the Lenders in accordance with the provisions of
Section 4.7.
"Settlement Lender" means, for the purposes of Section 4.7, the
Agent in its capacity as a Lender.
"Settlement Report" means each report, substantially in the form
attached hereto as Exhibit E, prepared by the Agent and delivered to
each Lender and setting forth, among other things, as of the
Settlement Date indicated thereon and as of the next preceding
Settlement Date, the aggregate principal balance of all Revolving
Credit Loans outstanding, each Lender's Commitment Percentage thereof,
each Lender's Net Outstandings and all Non-Ratable Loans made, and all
payments of principal, interest and fees received by the Agent from
the Borrower during the period beginning on such next preceding
Settlement Date and ending on such Settlement Date.
"Stock" shall mean all of the issued and outstanding stock of all
of the direct and indirect Subsidiaries of Trism, which Stock will be
pledged as Collateral for the Loans.
"Subordinated Indebtedness" means the Indebtedness evidenced by
the Subordinated Indenture.
"Subordinated Indenture" shall mean that certain Indenture, dated
as of December 15, 1993, among Trism, as Issuer, First Trust National
Association, as Trustee, and certain of the Borrowers, as Guarantors,
relating to the sale of $100,000,000 of Trism's 10 3/4% Senior
Subordinated Notes due 2000, as supplemented or amended from time to
time.
"Subsidiary"
(a) when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of fifty
percent (50%) or more of the stock of any class or classes or
fifty percent (50%) or more of other ownership interests is owned
of record or beneficially by such other Person, or by one or more
Subsidiaries of such other Person, or by such other Person and
one or more Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a
majority of the directors (or other individuals performing
similar functions) of such Person, even though the right so
to vote has been suspended by the happening of such a
contingency, or (B) are entitled, as such holders, to vote
for the election of a majority of the directors (or
individuals performing similar functions) of such Person,
whether or not the right so to vote exists by reason of the
happening of a contingency, or
(ii) in the case of such other ownership interests, if such
ownership interests constitute a majority voting interest,
and
(b) when used with respect to a Plan, ERISA or a provision of
the IRC pertaining to employee benefit plans, also means any
corporation, trade or business (whether or not incorporated)
which is under common control with a Borrower and is treated as a
single employer with such Borrower under Section 414(b) or (c) of
the IRC and the regulations thereunder.
"Term Loan LIBOR Option" shall have the meaning assigned to such
term in Section 4.1(a)(i).
"Term Loan A" means the aggregate term loan to be made to
Borrowers by Lenders pursuant to Article 2A hereof in an amount not to
exceed the Term Loan A Facility Amount.
"Term Loan A Facility Amount" means an amount equal to
$2,429,167.
"Term Loan B" means the aggregate term loan made to Borrowers by
Lenders pursuant to Article 2B hereof in an amount not to exceed the
Term Loan B Facility Amount.
"Term Loan B Collateral Value" means as of any date an amount
equal to (i) sixty- four percent (64%) of the aggregate orderly
liquidation value of the Term Loan B Trailers (as determined by the
most recently completed appraisal of such trailers pursuant to the
terms of this Agreement) plus (ii) sixty percent (60%) of the
appraised fair market value of the Mortgaged Real Estate (as
determined by the most recently completed appraisal of such property
pursuant to the terms of this Agreement).
"Term Loan B Facility Amount" means an amount equal to the lesser
of (i) $5,000,000 or (ii) the Term Loan B Collateral Value.
"Term Loan B Funding Conditions" shall have the meaning assigned
in Section 2B.2.
"Term Loan B Funding Date" means the date on which all of the
Term Loan B Funding Conditions (hereinafter defined) have been
satisfied or waived in writing by the Agent with the consent of the
Required Lenders and Term Loan B is funded by the Lenders.
"Term Loan B Trailers" means those certain trailers listed on
Schedule 5.2 hereto.
"Term Loan(s)" means either or both Term Loan A and Term Loan B
or, as applicable, the amount of a Lender's commitment with respect
thereto.
"Term Loan Credit Facility" means that portion of this Agreement
pursuant to which Term Loans are made.
"Term Note(s)" means any or all of the Term Loan A Notes and the
Term Loan B Notes made by Borrowers to the order of each Lender
evidencing the Borrowers' joint and several obligation to pay the
aggregate unpaid principal amount, together with any accrued but
unpaid interest and charges thereon, of the Term Loans made to them by
Lenders.
"Termination Date" shall mean the earliest of: (i) the Initial
Anniversary Date; (ii) the date that Agent has, pursuant to Section
12.2 hereof, terminated Borrowers' right to receive Loans or
accommodations for Letters of Credit; (iii) the date of prepayment in
full by Borrowers of any of the Loans; (iv) October 17, 1999, if the
Interim Order has been entered but the Final Order has not been
entered by the Court by such date; (v) the date a plan of
reorganization in the Chapter 11 Case of any Borrower becomes
effective; and (vi) the date on which a disclosure statement attendant
to a plan of reorganization filed in any of the Chapter 11 Cases by
any Person except a Borrower is approved by the Court.
"Termination Event" means (a) a "Reportable Event" as defined in
Section 4043(b) of ERISA, but excluding any such event as to which the
provision for thirty (30) days' notice to the PBGC is waived under
applicable regulations, (b) the filing of a notice of intent to
terminate a Benefit Plan or the treatment of a Benefit Plan amendment
as a termination under Section 4041 of ERISA, or (c) the institution
of proceedings to terminate a Benefit Plan by the PBGC under Section
4042 of ERISA or the appointment of a trustee to administer any
Benefit Plan.
"Total Commitment" means $42,429,167.
"Total Liabilities" means, as at the end of any relevant fiscal
period, the sum of (a) the Liabilities reflected on the Consolidated
Balance Sheet as of such date and (b) the aggregate amount of all
Operating Lease Obligations of Borrower and all of its Subsidiaries as
of such date.
"Trademark Security Agreement" means the Assignment of Security
Interest in Trademarks, dated on or about the Effective Date, by a
Borrower to the Agent, for the ratable benefit of the Lenders, as the
same may be amended, modified or supplemented from time to time.
"Trism" shall have the meaning ascribed to such term in the
preamble hereof.
"Unbilled Eligible Receivables" shall mean the aggregate amount
of Eligible Receivables representing amounts for which the services
related thereto have been performed by an Operating Company but for
which no invoice has been rendered to the customers.
"Unfunded Capital Expenditures" means Capital Expenditures which
are paid for by a Person other than with the proceeds of Indebtedness
for Money Borrowed (other than the Loans) incurred to finance such
Capital Expenditures and other than those represented by Capitalized
Lease Obligations.
"Unfunded Vested Accrued Benefits" means with respect to any Plan
at any time, the amount (if any) by which
(a) the present value of all vested nonforfeitable benefits
under such Plan exceeds
(b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation
date for such Plan.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of Georgia.
"Unused Line Fee" shall have the meaning assigned to such term in
Section 4.2(d).
"Vehicles" mean the trailers and other vehicles listed on a
written schedule provided to Agent.
SECTION Other Referential Provisions.
1.
1) All defined terms in this Agreement, the Exhibits and Schedules
hereto shall have the same meanings when used in any other Loan
Document, unless the context shall require otherwise.
1) Except as otherwise expressly provided herein, all accounting
terms not specifically defined or specified herein shall have the
meanings generally attributed to such terms under GAAP including,
without limitation, applicable statements and interpretations issued
by the Financial Accounting Standards Board and bulletins, opinions,
interpretations and statements issued by the American Institute of
Certified Public Accountants or its committees.
1) All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural, and the plural shall include
the singular. In any circumstance where use of the term "Borrower" as
opposed to the term "Borrowers," or vice versa, would limit, diminish
or otherwise impair or negatively affect any of Lenders' rights
hereunder, the plural shall be substituted for the singular, or vice
versa, in such manner as will result in the maintenance or enlargement
of Lenders' rights hereunder or pursuant hereto. By way of example,
but not in limitation, if a reference to "Borrowers' property" would
otherwise be construed as referring only to property which is jointly
owned by all Borrowers, such reference shall instead be construed as
referring to the aggregate total of all of each Borrower's property.
1) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provisions of this Agreement.
1) Titles of Articles and Sections in this Agreement are for
convenience only, do not constitute part of this Agreement and neither
limit nor amplify the provisions of this Agreement, and all references
in this Agreement to Articles, Sections, Subsections, paragraphs,
clauses, subclauses, Schedules or Exhibits shall refer to the
corresponding Article, Section, Subsection, paragraph, clause or
subclause of, or Schedule or Exhibit attached to, this Agreement,
unless specific reference is made to the articles, sections or other
subdivisions or divisions of , or to schedules or exhibits to, another
document or instrument.
1) Each definition of a document in this Agreement shall include
such document as amended, modified, supplemented or restated from time
to time in accordance with the terms of this Agreement.
1) Except where specifically restricted, reference to a party to a
Loan Document includes that party and its permitted successors and
assigns permitted hereunder or under such Loan Document.
1) Unless otherwise specifically stated, whenever a time is referred
to in this Agreement or in any other Loan Document, such time shall be
the local time in the city in which the principal office of Agent is
located.
1) Whenever the phrase "to the knowledge of a Borrower" or words of
similar import relating to the knowledge of a Borrower are used
herein, such phrase shall mean and refer to (i) the actual knowledge
of the President or chief financial officer or (ii) the knowledge that
such officers would have obtained if they had engaged in good faith in
the diligent performance of their duties, including the making of such
reasonable specific inquiries as may be necessary of the appropriate
persons in a reasonable credit judgment attempt to ascertain the
accuracy of the matter to which such phrase relates.
1) The terms accounts, chattel paper, documents, equipment,
instruments, general intangibles and inventory, as and when used
(without being capitalized) in this Agreement or the Security
Documents, shall have the meanings given those terms in the Uniform
Commercial Code.
SECTION Exhibits and Schedules. All Exhibits and
Schedules attached hereto are by reference made a part hereof.
1.
ARTICLE
REVOLVING CREDIT LOANS
SECTION Revolving Credit Loans. Upon the terms and
subject to the conditions of, and in reliance upon the representations
and warranties made under, this Agreement and subject to the Interim
Order and the Final Order, as the case may be, each Lender agrees,
severally, but not jointly, to make Revolving Credit Loans to the
Borrowers from time to time from the Effective Date to but not
including the Termination Date, as requested or deemed requested by a
Borrower in accordance with the terms of Section 2.2, in amounts equal
to such Lender's Commitment Percentage of each such Loan requested or
deemed requested hereunder up to an aggregate amount at any one time
outstanding equal to such Lender's Commitment Percentage of the
Borrowing Base; provided, however, that the aggregate principal amount
of all outstanding Revolving Credit Loans (after giving effect to the
Loans requested) shall not exceed the Borrowing Base; and provided,
further that no Loan shall be made which as a result of the making
thereof or the use of proceeds of such Loan would result in a
violation of any applicable provision of the Interim Order or the
Final Order, as the case may be. It is expressly understood and
agreed that the Lenders may and at present intend to use the Borrowing
Base as a maximum ceiling on Revolving Credit Loans to the Borrowers;
provided, however, that it is agreed that should the Revolving Credit
Loans exceed the ceiling so determined or any other limitation set
forth in this Agreement, such Revolving Credit Loans shall
nevertheless constitute Secured Obligations and, as such, shall be
entitled to all benefits thereof and security therefor. The principal
amount of any Revolving Credit Loan which is repaid pursuant to
Section 2.3(c) may be reborrowed by the Borrowers, subject to the
terms and conditions of this Agreement, in accordance with the terms
of this Section 2.1. The Agent's and each Lender's books and records
reflecting the date and the amount of each Revolving Credit Loan and
each repayment of principal thereof shall constitute prima facie
evidence of the accuracy of the information contained therein, subject
to the provisions of Section 4.7.
1.
SECTION Manner of Borrowing Revolving Credit Loans.
Borrowings under the Revolving Credit Facility shall be made as
follows:
1.
1) Requests for Borrowing. A request for a borrowing shall be made,
or shall be deemed to be made, in the following manner:
1) with respect to Revolving Credit Loans, a Financial
Officer of Trism (or another authorized officer designated by a
Financial Officer and listed on Schedule 2.2 hereto) shall give the
Agent notice, in the form of Exhibit B hereto, for and on behalf of
the Borrowers not later than 1:00 p.m. (New York time) on the Business
Day of the proposed Advance, of its intention to borrow, specifying
the amount of the proposed borrowing, the proposed borrowing date and
which notice shall be given in accordance with the provisions of
Section 4.1 hereof; provided, however, that upon written notice from
Agent, Borrowers shall thereafter include in each such notice of a
proposed Advance the amount of Borrowing Base Availability after
giving effect to such requested Advance,
1) unless payment is otherwise made by the Borrowers, the
becoming due of any amount required to be paid under this Agreement or
any of the Notes as interest shall be deemed to be a request for an
Advance on the due date in the amount required to pay such interest,
1) unless payment is otherwise made by the Borrowers, the
becoming due of any other Secured Obligation shall be deemed to be a
request for an Advance on the due date in the amount then so due, and
such request shall be irrevocable,
1) the receipt by the Agent of notification from the
Issuing Bank to the effect that a drawing has been made under a Letter
of Credit and that a Borrower has failed to reimburse the Issuing Bank
therefor in accordance with the terms of the Letter of Credit, the
Reimbursement Agreement and Article 3, shall be deemed to be a request
for an Advance on the date such notification is received in the amount
of such drawing which is so unreimbursed; and
1) unless payment is otherwise made by a Borrower, the
receipt by Agent of a demand for reimbursement by a Clearing Bank
pursuant to the provisions of any Agency Account Agreement, shall be
deemed to be a request for an Advance on the date any such demand is
received by Agent in the amount set forth therein;
Unless the Agent has elected periodic settlements pursuant to
Section 4.7, the Agent shall promptly notify the Lenders of any
notice of borrowing given or deemed given pursuant to this
Section 2.2(a) by 2:00 p.m. (New York time) on the proposed
borrowing date with respect to any Advance. The notice from the
Agent to the Lenders shall set forth the information contained in
the Borrowers' notice of borrowing. Not later than 3:30 p.m.
(New York time) on the proposed borrowing date, each Lender will
make available to the Agent, for the account of the Borrowers, at
the Agent's Office in funds immediately available to the Agent,
an amount equal to such Lender's Commitment Percentage of the
Revolving Credit Loans to be made on such borrowing date.
1) Disbursement of Loans. The Borrowers, jointly and severally,
hereby irrevocably authorize the Agent to disburse the proceeds of
each borrowing requested, or deemed to be requested, pursuant to this
Section 2.2 as follows:
1) the proceeds of each borrowing requested under Sections
2.2(a)(i) or (ii) shall be disbursed by the Agent in Dollars in
immediately available funds, (A) in the case of the initial borrowing,
in accordance with notice from the Borrowers to the Agent referred to
in Section 5.1(c)(xi), and (B) in the case of each subsequent
borrowing, by wire transfer to a Controlled Disbursement Account or,
in the absence of a Controlled Disbursement Account, by wire transfer
to such other account as may be agreed upon by the Borrowers and the
Agent from time to time,
1) the proceeds of each borrowing deemed requested under
Section 2.2 (a)(iii) or (iv) shall be disbursed by the Agent by way of
direct payment of the relevant Secured Obligation, and
1) the proceeds of each borrowing deemed requested under
Section 2.2(a)(iv) shall be disbursed by the Agent directly to the
Issuing Bank on behalf of the Borrowers.
SECTION Repayment of Revolving Credit Loans.
The Revolving Credit Loans will be repaid as follows:
1.
1) Whether or not any Default or Event of Default has occurred, the
outstanding principal amount of all the Revolving Credit Loans is due
and payable, and shall be repaid by the Borrowers in full, not later
than the Termination Date;
1) If at any time the aggregate outstanding unpaid principal amount
of the Revolving Credit Loans exceeds the Borrowing Base in effect at
such time, the Borrowers shall repay the Revolving Credit Loans in an
amount sufficient to reduce the aggregate unpaid principal amount of
such Revolving Credit Loans by an amount equal to such excess,
together with accrued and unpaid interest on the amount so repaid to
the date of repayment; and
1) The Borrowers hereby instruct the Agent to repay the Revolving
Credit Loans outstanding on any day in an amount equal to the amount
received by the Agent on such day pursuant to Section 8.1(b).
SECTION Revolving Credit Note. Each Lender's
Revolving Credit Loans and the obligation of the Borrowers to
repay such Revolving Credit Loans shall also be evidenced by a
Revolving Credit Note payable to the order of such Lender. Each
Revolving Credit Note shall be dated the Effective Date and be
duly and validly executed and delivered by the Borrowers.
1.
ARTICLE 2A
TERM LOAN A FACILITY
SECTION 2A.1 Term Loan A. Upon the terms and subject to
the conditions of, and in reliance upon the representations and
warranties made under, this Agreement and subject to the Interim
Order and the Final Order, as the case may be, each Lender
agrees, severally, but not jointly, to make a Term Loan to the
Borrowers, in an amount equal to such Lender's Commitment
Percentage of the Term Loan A Facility Amount.
SECTION 2A.2 Manner of Borrower and Disbursing Term Loan
A. Upon satisfaction of the applicable conditions set forth in
Sections 5.1 and 5.3 hereof, each Lender shall make an amount
equal to such Lender's Commitment Percentage multiplied by Term
Loan A Facility Amount available to the Borrowers (either
directly or through the Agent) on the Effective Date in same day
funds. Borrowers shall use the proceeds of Term Loan A to
satisfy in full and retire the outstanding and unpaid balance of
the "Term Loan" under, and as defined in, the Pre-Petition Loan
Agreement.
SECTION 2A.3 Repayment of Term Loan A. The outstanding
principal balance of Term Loan A shall be due and payable in (a)
five (5) consecutive monthly installments, each in an amount
equal to $45,833.33, commencing on the fifteenth (15th) day of
the first (1st) month following the month in which the Petition
Date occurs and continuing on the fifteenth (15th) day of each
and every Fiscal Month thereafter, and (b) one (1) final
installment in an amount equal to the total remaining outstanding
principal balance of Term Loan A, together with all accrued but
unpaid interest and charges thereon, which final installment
shall be due and payable on the Termination Date. Any portion of
the Term Loan A that is repaid may not be reborrowed.
SECTION 2A.4 Term Loan A Notes. Term Loan A and the joint
and several obligation of the Borrowers to repay such Loan shall
be evidenced by Term Loan A Notes payable to the order of each
Lender. Such Notes shall be dated the Effective Date and shall
be duly and validly executed and delivered by the Borrowers.
SECTION 2A.5 Prepayment. In the event this Agreement is
terminated by Agent or any Borrower either (a) pursuant to the
terms hereof or (b) upon the occurrence of an Event of Default
hereunder, Term Loan A shall become due and payable in full on
the effective date of such termination, notwithstanding any
provision to the contrary in the Term Loan A Notes or elsewhere
in this Agreement.
SECTION 2A.6 Mandatory Prepayment. In the event (a) the
amount of the aggregate orderly liquidation value of the Vehicles
(as determined by an appraisal received by Agent pursuant to the
terms of Section 8.15 hereof) is at any time less than fifty-five
percent (55%) of the outstanding principal balance of Term Loan A
and (b) Agent makes demand therefor, Borrowers hereby agree to
make a mandatory prepayment to Lenders in an amount equal to the
difference between fifty-five percent (55%) of the outstanding
principal balance of Term Loan A and such aggregate orderly
liquidation value of the Vehicles, which prepayment shall not
reduce the amount or defer the time of payment of any required
monthly payments on such Term Loan.
ARTICLE 2B
TERM LOAN B FACILITY
SECTION 2B.1 Term Loan B. Upon the terms and subject to
the conditions of, and in reliance upon the representations and
warranties made under, this Agreement and subject to the Interim
Order and the Final Order, as the case may be, each Lender
agrees, severally, but not jointly, upon the written request of
Borrowers (which once made shall be irrevocable) and shall be
limited to one (1) request only during the term hereof in an
amount not to exceed the Term Loan B Facility Amount) to make an
additional Term Loan to the Borrowers, in an amount equal to such
Lender's Commitment Percentage of the Borrower's requested Term
Loan B Facility Amount.
SECTION 2B.2 Manner of Borrower and Disbursing Term Loan
B. Upon satisfaction of the applicable conditions set forth
below and in Article 5 hereunder (collectively, the "Term Loan B
Funding Conditions"), each Lender shall make an amount equal to
such Lender's Commitment Percentage multiplied by the Term Loan B
Facility Amount available to the Borrowers on the Business Day
immediately following the date on which each of the Term Loan B
Funding Conditions is satisfied (or waived in writing by Agent
with the consent of the Required Lenders) in same day funds.
Upon satisfaction of the Term Loan B Funding Conditions, the
Borrowers may only make one (1) request, in an amount up to the
Term Loan B Facility Amount, for the Term Loan B Loan to repay
any Secured Obligations or to be made to the Borrowers.
Borrowers shall use the proceeds of the Term Loan B Loan as
working capital in the ordinary course of their businesses.
SECTION 2B.3 Repayment of Term Loan B. The outstanding
principal balance of the Term Loan B Loan shall be due and
payable in (a) consecutive monthly installments (each in an
amount equal to the monthly payment required to amortize and pay
in full of the principal amount of Term Loan B plus interest
thereon over an eighty-four (84) month period), commencing on the
fifteenth (15th) day of the first (1st) month following the Term
Loan B Funding Date and continuing on the fifteenth (15th) day of
each and every Fiscal Month thereafter until the Termination
Date, and (b) one (1) final installment in an amount equal to the
total remaining outstanding principal balance of Term Loan B
together with all accrued but unpaid interest and charges
thereon, which final installment shall be due and payable on the
Termination Date. Any portion of Term Loan B that is repaid may
not be reborrowed.
SECTION 2B.4 Term Loan B Note. Term Loan B and the joint
and several obligations of the Borrowers to repay such Loan shall
be evidenced by Term Loan B Notes payable to the order of each
Lender. Such Notes shall be dated as of the Term Loan B Funding
Date and shall be duly and validly executed and delivered by the
Borrowers.
SECTION 2B.5 Prepayment. In the event this Agreement is
terminated by Agent or any Borrower either (a) pursuant to the
terms hereof, or (b) upon the occurrence of an Event of Default
hereunder, Term Loan B shall become due and payable in full on
the effective date of such termination, notwithstanding any
provision to the contrary in the Term Loan B Notes or this
Agreement.
SECTION 2B.6. Mandatory Prepayment. In the event (a) the
Term Loan B Collateral Value is at any time less than the
outstanding principal balance of the Term Loan B Loan, and (b)
Agent makes demand therefor, Borrowers hereby agree to make a
mandatory prepayment to Lenders in an amount equal to the
difference between the Term Loan B Collateral Value and the
outstanding principal balance of such Term Loan, which prepayment
shall not reduce the amount or defer the time of payment of any
required monthly payments on such Term Loan.
ARTICLE
LETTER OF CREDIT FACILITY
SECTION Issuance. Subject to the terms and
conditions of the Agreement, Agent and the Lenders agree to
incur, from time to time prior to the Termination Date, upon the
request of Borrowers and for Borrowers' account, Letter of Credit
Obligations by causing Letters of Credit to be issued (by a bank
or other legally authorized Person selected by or acceptable to
Agent in its sole discretion (each, an "Issuing Bank")) for
Borrowers' account and guaranteed by Agent; provided, however,
that if the Issuing Bank is a Lender, then such Letters of Credit
shall not be guaranteed by Agent but rather each Lender shall,
subject to the terms and conditions hereinafter set forth,
purchase (or be deemed to have purchased) risk participations in
all such Letters of Credit issued with the written consent of
Agent, as more fully described in Section 3.2(b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall
not at any time exceed the lesser of (a) the Letter of Credit
Facility Amount, or (b) the Borrowing Base less the aggregate
then outstanding principal balance of the Revolving Credit Loans.
No such Letter of Credit shall have an expiry date which is more
than one year following the date of issuance thereof, and neither
Agent nor the Lenders shall be under any obligation to incur
Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date
which is later than the Termination Date.
1.
SECTION Advances Automatic; Participations. (a)
In the event that Agent or any Lender shall make any payment on
or pursuant to any Letter of Credit Obligation (an "LC Payment"),
such payment shall then be deemed automatically to constitute a
Revolving Credit Loan under Section 2.1 of the Agreement
regardless of whether a Default or Event of Default shall have
occurred and be continuing and notwithstanding Borrowers' failure
to satisfy the conditions precedent set forth in Article 5, and
each Lender (other than a Lender that made the instant LC
Payment) shall be obligated to pay to the Agent or to another
Lender, as the case may be, an amount calculated by applying such
Lender's Commitment Percentage to the aggregate amount of such
payment. The failure of any Lender to make available to Agent
for Agent's own account or to another Lender, as the case may be,
an amount equivalent to a Lender's Commitment Percentage as to
any such Revolving Credit Loan or payment by Agent or another
Lender, as the case may be, under or in respect of a Letter of
Credit shall not relieve any other Lender of its obligation
hereunder to make available to Agent or another Lender, as the
case may be, an amount equivalent to such Lender's Commitment
Percentage with respect thereto, but no breach by a Lender shall
cause an increase in any other Lender's Commitment Percentage.
1.
(b) If it shall be illegal or unlawful for Borrowers to
incur Revolving Credit Loans in the circumstances contemplated by
paragraph (a) above because of an Event of Default described in
Section 12.1(g) or (h) or otherwise or if it shall be illegal or
unlawful for any Lender to be deemed to have assumed a ratable
share of the Reimbursement Obligations owed to an Issuing Bank,
or if the Issuing Bank is a Lender, then (i) immediately and
without further action whatsoever, each Lender shall be deemed to
have irrevocably and unconditionally purchased from Agent (or
such Issuing Bank, as the case may be) an undivided interest and
participation in an amount equivalent to such Lender's Commitment
Percentage (based on the Commitments) of the Letter of Credit
Obligations in respect of all Letters of Credit then outstanding
and (ii) thereafter, immediately upon issuance of any Letter of
Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such Issuing Bank, as
the case may be) an undivided interest and participation in an
amount equivalent to such Lender's Commitment Percentage (based
on the Commitments) of the Letter of Credit Obligations with
respect to such Letter of Credit on the date of such issuance.
Each Lender shall fund its participation in all payments or
disbursements made under the Letters of Credit in the same manner
as provided in the Agreement with respect to Revolving Credit
Loans.
SECTION Cash Collateral. (a) If Borrowers are
required to provide cash collateral for any Letter of Credit
Obligations pursuant to this Agreement prior to the Termination
Date, Borrowers will, jointly and severally, pay to Agent for the
benefit of the Lenders cash or Cash Equivalents in an amount
equal to one hundred five percent (105%) of the maximum amount
then available to be drawn under each applicable Letter of Credit
outstanding. Such funds or Cash Equivalents shall be held by
Agent in a cash collateral account (the "Cash Collateral
Account") maintained at a bank or financial institution
acceptable to Agent. The Cash Collateral Account shall be in the
name of Borrowers and shall be pledged to, and subject to the
control of, Agent, for the benefit of Agent and Lenders, in a
manner satisfactory to Agent. Borrowers hereby, jointly and
severally, pledge and grant to Agent, on behalf of Lenders, a
security interest in all such funds and Cash Equivalents held in
the Cash Collateral Account from time to time and all proceeds
thereof, as security for the payment of all amounts due in
respect of the Letter of Credit Obligations and other Secured
Obligations, whether or not then due. This Agreement shall
constitute a security agreement under applicable law.
1.
(b) If any Letter of Credit Obligations, whether or not
then due and payable, shall for any reason be outstanding on the
Termination Date, Borrowers shall (i) provide Cash Collateral
therefor in the manner described above, or (ii) cause all such
Letters of Credit and guaranties thereof to be canceled and
returned, or (iii) deliver a stand-by letter (or letters) of
credit in guarantee of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and
duration as, and be in an amount equal to one hundred three
percent (103%) of the aggregate then available to be drawn under,
the Letters of Credit to which such outstanding Letter of Credit
Obligations relate and shall be issued by a Person, and shall be
subject to such terms and conditions, as are be satisfactory to
Agent in its sole discretion (the "Replacement Letters of
Credit").
(c) From time to time after funds are deposited in the Cash
Collateral Account by Borrowers, whether before or after the
Termination Date, Agent may apply such funds or Cash Equivalents
then held in the Cash Collateral Account to the payment of any
amounts, in such order as Agent may elect, as shall be or shall
become due and payable by Borrowers to Lenders with respect to
such Letter of Credit Obligations of Borrowers and, upon the
satisfaction in full of all Letter of Credit Obligations of
Borrowers, to any other Secured Obligations then due and payable.
(d) No Borrower nor any Person claiming on behalf of or
through a Borrower shall have any right to withdraw any of the
Cash Collateral held in the Cash Collateral Account, except that
upon the termination or satisfaction in full of all Letter of
Credit Obligations and the payment of all amounts payable by
Borrowers to Lenders in respect thereof, any funds remaining in
the Cash Collateral Account shall be held and applied to other
Secured Obligations when due and owing and upon payment in full
of all Secured Obligations, any remaining amount shall be paid to
Borrowers or as otherwise required by law.
SECTION Fees and Expenses. Borrowers, jointly
and severally, agree to pay to Agent for the benefit of the
Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (a) all costs and expenses
incurred by Agent or any Lender on account of such Letter of
Credit Obligations, and (b) for each month during which any
Letter of Credit Obligation shall remain outstanding, an amount
equal to the fee set forth in Section 4.2(e) hereof. Such fee
shall be paid to Agent for the ratable benefit of the Lenders in
arrears, on the first day of each month. In addition, Borrowers
shall pay to any Issuing Bank, on demand, such fees (including
all per annum fees), charges and expenses of such Issuing Bank in
respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or as are otherwise
payable pursuant to the application and related documentation
under which such Letter of Credit is issued.
1.
SECTION Request for Incurrence of Letter of
Credit Obligations. Borrowers shall give Agent at least three
(3) Business Days prior written notice requesting a guarantee of
any Letter of Credit, specifying the date such Letter of Credit
Obligation is to be incurred, identifying the beneficiary to
which such Letter of Credit Obligation relates and describing the
nature of the transactions proposed to be supported thereby. The
notice shall be accompanied by the form of the Letter of Credit
(which shall be acceptable to the Issuing Bank) to be guaranteed.
Notwithstanding anything contained herein to the contrary, Letter
of Credit applications by a Borrower and approvals by Agent may
be made and transmitted pursuant to electronic codes and security
measures mutually agreed upon and established by and among a
Borrower, Agent and the Issuing Bank.
1.
SECTION Obligation Absolute. (a) The obligation
of Borrowers to reimburse Agent and the Lenders for payments made
with respect to any Letter of Credit Obligation shall be
absolute, unconditional and irrevocable, without necessity of
presentment, demand, protest or other formalities, and the
obligations of each Lender to make payments to Agent with respect
to Letters of Credit shall be unconditional and irrevocable.
Such obligations of Borrowers and the Lenders shall be paid
strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
1.
1) any lack of validity or enforceability of any Letter of
Credit or this Agreement or the other Loan Documents or any other
agreement;
1) the existence of any claim, set-off, defense or other
right which a Borrower or any of its Affiliates or any Lender may at
any time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection
with the Agreement, the Letter of Credit, the transactions
contemplated herein or therein or any unrelated transaction (including
any underlying transaction between a Borrower or any of its Affiliates
and the beneficiary for which the Letter of Credit was procured);
1) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
1) payment by Agent or any Issuing Bank under any Letter
of Credit or guaranty thereof against presentation of a demand, draft
or certificate or other document which does not comply with the terms
of such Letter of Credit or such guaranty;
1) any other circumstance or happening whatsoever, which
is similar to any of the foregoing; or
1) the fact that a Default or an Event of Default shall
have occurred and be continuing.
SECTION Indemnification; Nature of Lenders'
Duties. (a) In addition to amounts payable by Borrowers to Agent
and Lenders as elsewhere provided in this Agreement, Borrowers,
jointly and severally, hereby agree to pay and to protect,
indemnify, and save harmless Agent and each Lender from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including attorneys' fees
and, after and during the continuance of an Event of Default,
allocated costs of internal counsel) which Agent or any Lender
may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit or guaranty thereof,
or (ii) the failure of Agent or any Lender seeking
indemnification or of any Issuing Bank to honor a demand for
payment under any Letter of Credit or guaranty thereof as a
result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent
solely as a result of the gross negligence or willful misconduct
of Agent or such Lender (as finally determined by a court of
competent jurisdiction).
1.
(b) As between Agent and any Lender and Borrowers,
Borrowers hereby, jointly and severally, assume all risks of the
acts and omissions of, or misuse of any Letter of Credit by
beneficiaries of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by
law neither Agent nor any Lender shall be responsible: (i) for
the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document issued by any party in connection with the
application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in
order to demand payment under such Letter of Credit; provided
that, in the case of any payment by Agent under any Letter of
Credit or guaranty thereof, Agent shall be liable to the extent
such payment was made solely as a result of its gross negligence
or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for
payment under such Letter of Credit or guaranty thereof complies
on its face with any applicable requirements for a demand for
payment under such Letter of Credit or guaranty thereof; (iv) for
errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or delay in
the transmission or otherwise of any document required in order
to make a payment under any Letter of Credit or guaranty thereof
or of the proceeds thereof; (vii) for the application of the
proceeds of any drawing under any Letter of Credit or guaranty
thereof; and (viii) for any consequences arising from causes
beyond the control of Agent or any Lender. None of the above
shall affect, impair, or prevent the vesting of any of Agent's or
any Lender's rights or powers hereunder or under the other Loan
Documents.
(c) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by a Borrower
in favor of any Issuing Bank in any letter of credit application,
reimbursement agreement or similar document, instrument or
agreement between any Borrower and such Issuing Bank.
ARTICLE
GENERAL LOAN PROVISIONS
SECTION Interest, Etc.
1.
1) General Interest Provisions.
(i) Borrowers shall pay interest to Agent on the aggregate
outstanding Revolving Credit Loans in each case from time to time
outstanding, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on
each applicable Interest Payment Date, at the following rate: (A)
with respect to the Revolving Credit Loans either (i) a floating
rate equal to the Chase Manhattan Bank Rate plus one quarter of
one percent (0.25%) (the "Revolver Prime Option") or (b) a fixed
rate for interest periods of one, two, or three whole calender
months (each, a "LIBOR Period", provided, however, that Borrowers
may not elect a LIBOR Period if the last day of such period is
later than the Initial Anniversary Date) equal to the reserve
adjusted LIBOR for the specified period plus two and one quarter
percent (2.25%) ("Revolver LIBOR Option"); or (B) with respect to
Term Loan A or Term Loan B (i) a floating rate equal to the Chase
Manhattan Bank Rate plus one-half of one percent (0.50%) (the
"Term Loan Prime Option") or (b) a fixed rate for a LIBOR Period
equal to the reserve adjusted LIBOR for the specified period plus
two and one-half percent (2.50%) (a "Term Loan LIBOR Option" and
together with a Revolver LIBOR Option, sometimes referred to
herein as a "LIBOR Option"). A LIBOR Option may be exercised by
the Borrowers for all, or any portion, of the outstanding amounts
of Revolving Credit Loans, Term Loan A or Term Loan B, as the
case may be, at any time upon three (3) Business Day's prior
written notice pursuant to Section 2.2 hereof. Upon such
exercise, a LIBOR Option shall remain in effect until the
expiration of the LIBOR Option Period selected, at which time,
unless an additional LIBOR Option shall have been timely
exercised, the rate hereunder upon expiration shall be the
applicable Prime Option. The Borrowers shall not be entitled to
select a LIBOR Option if a Default or Event of Default exists
hereunder. In the event of any change in the Chase Manhattan
Bank Rate, the rate of the applicable Prime Option shall change
as of the first day of the first month following such change.
(ii) LIBOR Option elections must be for $500,000 or whole
multiples thereof and in no event may the Borrowers have in the
aggregate more than three (3) LIBOR Loans outstanding at one
time. If a LIBOR election is not timely made or cannot be made,
or if LIBOR cannot be determined, then the Agent shall use the
Prime Option to compute interest. In the event that the
Borrowers request a LIBOR Loan, the Borrower shall pay to the
Agent a $500 LIBOR processing fee, due and payable upon the
effective date of each such LIBOR Loan. In addition, the
Borrowers shall pay to the Agent for the benefit of the Lenders,
upon the request of the Agent such amount or amounts as shall
compensate the Agent and/or the Lenders for any loss, costs or
expenses incurred by the Agent and/or the Lenders (as reasonably
determined by the Agent and the Lenders) as a result of: (A) any
payment or prepayment on a date other than the last day of a
LIBOR Period for such LIBOR Loan, or (B) any failure of the
Borrowers to borrow a LIBOR Loan on the date for such borrowing
specified in the relevant notice; such compensation to include,
without limitation, an amount equal to any loss or expense
suffered by the Agent and/or the Lenders during the period from
the date of receipt of such payment or prepayment or the date of
such failure to borrow to the last day of such LIBOR Period if
the rate of interest obtained by the Agent and/or the Lenders
upon the reemployment of an amount of funds equal to the amount
of such payment, prepayment or failure to borrow is less than the
rate of interest applicable to such LIBOR Loan for such LIBOR
Period. The determination by the Agent and/or the Lenders of the
amount of any such loss or expense, when set forth in a written
notice to the Borrowers, containing the Agent's and/or the
Lenders' calculations thereof in reasonable detail, shall be
conclusive on the Borrowers, in the absence of manifest error.
Calculation of all amounts payable to the Agent and/or the
Lenders under this paragraph with regard to LIBOR Loans shall be
made as though the Agent and/or the Lenders had actually funded
the LIBOR Loans through the purchase of deposits in the relevant
market and currency, as the case may be, bearing interest at the
rate applicable to such LIBOR Loans in an amount equal to the
amount of the LIBOR Loans and having a maturity comparable to the
relevant interest period; provided, however, that the Agent and
the Lenders may fund each of the LIBOR Loans in any manner the
Agent and the Lenders see fit and the foregoing assumption shall
be used only for calculation of amounts payable under this
paragraph. In addition, notwithstanding anything to the contrary
contained herein, the Agent and the Lenders shall apply all
proceeds of Collateral, including the Receivables, and all other
amounts received by it from or on behalf of the Borrowers (1)
initially to the Prime Option Loans and (2) subsequently to LIBOR
Loans; provided, however, (x) upon the occurrence of an Event of
Default or (y) in the event the aggregate amount of outstanding
LIBOR Loans exceeds Borrowing Base Availability or the applicable
maximum levels set forth therefor, the Agent and the Lenders may
apply all such amounts received by them to the payment of Secured
Obligations in such manner and in such order as the Agent may
elect in its reasonable credit judgment. In the event that any
such amounts are applied to Revolving Loans which are LIBOR
Loans, such application shall be treated as a prepayment of such
Loans and the Agent and the Lenders shall be entitled to
indemnification hereunder.
1) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during
any such extension.
1) From and after the occurrence of an Event of Default, the unpaid
principal amount of each Secured Obligation shall bear interest while
such Event of Default is continuing at a rate per annum equal to the
Default Margin plus the applicable Prime Option, payable on demand.
The interest rate provided for in this Section 4.1(c) shall to the
extent permitted by applicable law also apply to and accrue on the
amount of any judgment entered with respect to any Secured Obligation
and shall continue to accrue at such rate during any proceeding
described in Section 12.1(g) or (h).
1) The interest rates provided for in this Section 4.1 shall be
computed on the basis of a year of three hundred sixty (360) days and
the actual number of days elapsed.
1) It is not intended by the Lenders, and nothing contained in this
Agreement or any Note shall be deemed, to establish or require the
payment of a rate of interest in excess of the maximum rate permitted
by applicable law (the "Maximum Rate"). If, in any month, any
Effective Interest Rate, absent such limitation, would have exceeded
the Maximum Rate, then such Effective Interest Rate for that month
shall be the Maximum Rate, and if, in future months, any Effective
Interest Rate would otherwise be less than the Maximum Rate, then such
Effective Interest Rate shall remain at the Maximum Rate until such
time as the amount of interest paid hereunder equals the amount of
interest which would have been paid if the same had not been limited
by the Maximum Rate. In this connection, in the event that, upon
payment in full of the Secured Obligations, the total amount of
interest paid or accrued under the terms of this Agreement is less
than the total amount of interest which would have been paid or
accrued if the Effective Interest Rate had at all times been in
effect, then the Borrowers shall, to the extent permitted by
applicable law, pay to the Lenders an amount equal to the difference
between (i) the lesser of (A) the amount of interest which would have
been charged if the Maximum Rate had, at all times, been in effect and
(B) the amount of interest which would have accrued had the Effective
Interest Rate, at all times, been in effect, and (ii) the amount of
interest actually paid or accrued under this Agreement. In the event
the Lenders receive, collect or apply as interest any sum in excess of
the Maximum Rate, such excess amount shall be applied to the reduction
of the principal balance of the applicable Secured Obligation, and, if
no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrowers.
SECTION Fees.
1.
1) Closing Fees. The Borrowers shall pay to the Agent for the
ratable benefit of the Lenders, non-refundable when paid, closing fees
equal to (i) sixty-five one hundredths percent (0.65%) of the
Revolving Credit Facility Amount, plus (ii) sixty-five one hundredths
percent (0.65%) of the Term Loan A Facility Amount, plus (iii) sixty-
five one hundredths percent (0.65%) of the Term Loan B Facility
Amount, on (A) the Effective Date in the case of the Revolving Credit
Facility Amount and the Term Loan A Facility Amount, and (B) the Term
Loan B Funding Date in the case of the Term Loan B Facility Amount.
On the Effective Date, an amount equal to the Commitment Fee and any
then unused portion of the Expense Deposit shall be credited against
the Closing Fees due and payable on the Effective Date, which Fees
shall be fully earned and non-refundable as of the Effective Date or
the Term Loan B Funding Date as the case may be (collectively, the
"Closing Fees"). Borrowers and Lenders agree that the Closing Fees,
payable to Lenders, shall be reported for all tax purposes in
accordance with Treasury Regulation Section 1.1273-2(j)(2) as a
reduction in the issue price of the debt issued to Lenders. Such
reduction in issue price will be treated by the parties as original
issue discount and reported as interest income and interest expense in
accordance with the applicable provisions of the IRC and the
regulations promulgated thereunder.
1) Contingent Credit for Part of Closing Fees. Should Borrowers
seek post- confirmation financing with Agent and such financing is
approved by Agent (and all relevant Lenders) and consummated, at the
closing of such financing a credit in an amount equal to not less than
one-third (_) of all Closing Fees paid pursuant to Section 4.2(a)
above shall be applied to any closing fees related to such post-
confirmation financing. The foregoing shall in no manner affect the
payment of the Closing Fees payable pursuant to Section 4.2(a) above,
which shall be fully earned when paid. In addition, and
notwithstanding anything to the contrary contained in or implied by
the provisions of this Agreement, or by any action(s) of Agent or any
Lender, neither Agent nor any of the Lenders shall have any obligation
to provide or to consider the provision of post-confirmation financing
to Borrowers. A commitment with respect to any post-confirmation
financing for Borrowers, if any, shall be contained in a separate
subsequent written agreement executed by Agent or one or more of the
Lenders, as the case may be.
1) Administration Fee. As additional consideration for the Agent's
ongoing costs and expenses of administration of this Agreement, the
Borrowers agree, jointly and severally, to pay to the Agent in advance
on the Effective Date, non-refundable when paid, an administration fee
in the amount of $25,000 (the "Administration Fee") for the account
only of Agent.
1) Unused Line Fee. As additional compensation for the costs and
risks in making the Loans available to the Borrowers, the Borrowers
agree, jointly and severally, to pay to the Agent, for the ratable
benefit of the Lenders, in arrears, on the first (1st) Business Day of
each month with respect to the immediately prior month, prior to the
Termination Date and on the Termination Date, a fee for Borrower's non-
use of Borrowing Base Availability or available accommodations under
the Letter of Credit Facility ("Letter of Credit Accommodations") in
an amount equal to one-quarter of one percent (0.25%) per annum of the
difference between (i) $35,000,000 and (ii) the sum of the average
daily outstanding balances of the Revolving Credit Loans and the
Letter of Credit Obligations during the period for which the Unused
Line Fee is due (the "Unused Line Fee"), calculated on the basis of a
three hundred sixty (360) day year and actual days elapsed.
1) Letter of Credit Obligations Fee. The Borrowers agree, jointly
and severally, to pay to Agent for the ratable benefit of the Lenders
as compensation to the Lenders for issuing guaranties in support of or
purchasing risk participations in, Letters of Credit, in arrears, on
the first Business Day of each month with respect to the immediately
preceding month through and including the first day of the month
following the month in which all Letter of Credit Obligations have
been paid or otherwise satisfied, a fee in an amount equal to (i) the
average daily aggregate Letter of Credit Amount of all Letters of
Credit outstanding on each day during the previous month, multiplied
by (ii) either (1) monthly interest rate equivalent to one and one-
half percent (1.5%) per annum, or (2) upon the occurrence and during
the continuation of an Event of Default, three and one-half percent
(3.5%) per annum.
1) Early Termination Fee. If for any reason an Early Termination
Date occurs, in view of the impracticality and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as
to a reasonable calculation of Lenders' lost profits as a result
thereof, the Borrowers agree, jointly and severally, to pay to Agent
for the ratable benefit of the Lenders, on such Early Termination
Date, the Early Termination Fee.
SECTION Manner of Payment.
1.
1) Except as otherwise expressly provided in Section 8.1(b), each
payment (including prepayments) by the Borrowers on account of the
principal of or interest on the Loans or of any other amounts payable
to the Lenders under this Agreement or any Note shall be made not
later than 1:00 p.m. (New York time) on the date specified for payment
under this Agreement to the Agent, for the account of the Lenders, at
the Agent's Office, in Dollars, in immediately available funds and
shall be made without any setoff, counterclaim or deduction
whatsoever. Any payment received after 1:00 p.m. (New York time) on
such day shall be deemed to have been made on the next succeeding
Business Day.
1) The Borrowers hereby, jointly and severally, irrevocably
authorize each Lender and each Affiliate of such Lender and each
participant herein to charge any account of the Borrowers maintained
with such Lender or with such Affiliate or participant with such
amounts as may be necessary from time to time to pay any Secured
Obligations (whether or not owed to such Lender, Affiliate or
participant) which are not paid when due, and the proceeds thereof
shall be applied as set forth in Section 12.3.
SECTION Loan Accounts: Statements of Account.
1.
1) Each Lender shall open and maintain on its books a loan account
in the Borrowers' names (each, a "Loan Account" and collectively, the
"Loan Accounts"). Each such Loan Account shall show as debits thereto
each Loan made under this Agreement by such Lender to the Borrowers
and as credits thereto all payments received by such Lender and
applied to principal of such Loan, so that the balance of the loan
account at all times reflects the aggregate principal amount of Loans
due such Lender from the Borrowers.
1) The Agent shall maintain on its books a control account for the
Borrowers in which shall be recorded (i) the amount of each
disbursement made hereunder, (ii) the amount of any principal or
interest due or to become due from the Borrowers hereunder, and (iii)
the amount of any sum received by the Agent hereunder from the
Borrowers and each Lender's ratable share therein.
1) The entries made in the accounts pursuant to subsections (a) and
(b) shall be prima facie evidence, in the absence of manifest error,
of the existence and amounts of the obligations of the Borrowers
therein recorded and in case of discrepancy between such accounts, in
the absence of manifest error, the accounts maintained pursuant to
subsection (b) shall be controlling.
1) The Agent will account to the Borrowers monthly with a statement
of Loans, charges and payments made to and by the Borrowers pursuant
to this Agreement, and such accounts rendered by the Agent shall be
deemed final, binding and conclusive, save for manifest error, unless
the Agent is notified by the Borrowers in writing to the contrary
within sixty (60) days of the date the account to the Borrowers was so
rendered. Such notice by the Borrowers shall be deemed an objection
to only those items specifically objected to therein. Failure of the
Agent to render such account shall in no way affect the rights of the
Agent or of the Lenders hereunder.
SECTION Termination of Agreement.
1.
1) On the Termination Date, the Borrowers shall pay to the Agent,
for the account of the Lenders, in same day funds, an amount equal to
all Secured Obligations then outstanding, including, without
limitation, all (i) accrued interest thereon, (ii) all accrued fees
provided for hereunder, and (iii) any amounts payable to the Lenders
pursuant to Sections 4.1, 4.8, 15.2, 15.3 and 15.12, and, in addition
thereto, shall deliver to the Agent, in respect of each outstanding
Letter of Credit, either the Replacement Letter of Credit or the Cash
Collateral as provided in Section 3.3. Upon ninety (90) days' prior
written notice to the Agent, the Borrowers may terminate this
Agreement on an Early Termination Date, upon payment in full of all
amounts specified in this Section 4.5 and the Early Termination Fee as
specified in Section 4.2 hereof. Following a notice of termination as
provided for in this Section 4.5 and upon payment in full of the
amounts specified in this Section 4.5, this Agreement shall be
terminated and the Agent, the Lenders and the Borrowers shall have no
further obligations to any other party hereto except for the
obligations to the Agent and the Lenders pursuant to Section 15.12
hereof.
SECTION Making of Loans.
1.
1) Nature of Obligations of Lenders to Make Loans. The obligations
of the Lenders under this Agreement to make the Loans are several and
are not joint or joint and several.
1) Assumption by Agent. Subject to the provisions of Section 4.7
and notwithstanding the occurrence or continuance of a Default or
Event of Default or other failure of any condition to the making of
Loans hereunder subsequent to the Loans to be made on the Effective
Date, unless the Agent shall have received notice from a Lender in
accordance with the provisions of Section 4.6(c) prior to a proposed
borrowing date that such Lender will not make available to the Agent
such Lender's ratable portion of the amount to be borrowed on such
date, the Agent may assume that such Lender will make such portion
available to the Agent in accordance with Section 2.2(a), and the
Agent may, in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount. If and to the extent
such Lender shall not make such ratable portion available to the
Agent, such Lender and the Borrowers severally agree to repay to the
Agent forthwith on demand (provided the Borrowers shall be entitled to
a five-day grace period) such corresponding amount (the "Make-Whole
Amount"), together with interest thereon for each day from the date
such amount is made available to the Borrowers until the date such
amount is repaid to the Agent at the Effective Interest Rate or, if
lower, subject to Section 4.1(c), the Maximum Rate; provided, however,
if on the Interest Payment Date next following the date on which any
Lender pays interest to the Agent at the Effective Rate or the Maximum
Rate on a Make-Whole Amount as aforesaid, the Borrowers default in
making the interest payment due on such Interest Payment Date, then
the Agent shall reimburse such Lender for the excess, if any, of the
amount of interest so paid by such Lender on the Make-Whole Amount
over the amount of interest that such Lender would have paid had the
Lender been required to pay interest on the Make-Whole Amount at the
Prime Option. If such Lender shall repay to the Agent such
corresponding amount, the amount so repaid shall constitute such
Lender's Commitment Percentage of the Loan made on such borrowing date
for purposes of this Agreement. The failure of any Lender to make its
Commitment Percentage of any Loan available shall not (without regard
to whether the Borrowers shall have returned the amount thereof to the
Agent in accordance with this Section 4.6) relieve it or any other
Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Loan available on such borrowing date, but no
Lender shall be responsible for the failure of any other Lender to
make its Commitment Percentage of such Loan available on the borrowing
date.
1) Delegation of Authority to Agent.
1) Without limiting the generality of Section 14.1, each
Lender expressly authorizes the Agent to determine on behalf of such
Lender (A) any reduction or increase of advance rates applicable to
the Borrowing Base, so long as such advance rates do not at any time
exceed the rates set forth in the Borrowing Base definition, (B) the
creation or elimination of any reserves (other than the Letter of
Credit Reserve) against the Borrowing Base, and (C) whether or not
Receivables shall be deemed to constitute or Eligible Receivables.
Such authorization may be withdrawn by the Required Lenders by giving
the Agent written notice of such withdrawal signed by the Required
Lenders; provided, however, that unless otherwise agreed by the Agent
such withdrawal of authorization shall not become effective until the
thirtieth (30th) Business Day after receipt of such notice by the
Agent. Thereafter, the Required Lenders shall jointly instruct the
Agent in writing regarding such matters with such frequency as the
Required Lenders shall jointly determine. Notwithstanding anything to
the contrary set forth in this Section, from and during the
continuation of any Default or Event of Default, the Agent shall not
make any Loan(s) which the Agent knows to be in an amount in excess of
Borrowing Base Availability without the consent of all Lenders on
behalf of whom such Loans are being made.
1) Unless and until the Agent shall have received written
notice from the Required Lenders that because of a Default or Event of
Default the Required Lenders do not intend to make available to the
Agent such Lenders' ratable share of Loans made after the effective
date of such notice, the Agent shall be entitled to continue to make
the assumptions described in Section 4.6(b). After receipt of the
notice described in the preceding sentence, which shall become
effective on the third (3rd) Business Day after receipt of such notice
by the Agent unless otherwise agreed by the Agent, the Agent shall be
entitled to make the assumptions described in Section 4.6(b) as to any
Loans as to which it has not received a written notice to the contrary
prior to 11:00 a.m. (New York time) on the Business Day next preceding
the day on which the Loan is to be made. The Agent shall not be
required to make any Loan as to which it shall have received notice by
a Lender of such Lender's intention not to make its ratable portion of
such Loan available to the Agent. Any withdrawal of authorization
under this Section 4.6(c) shall not affect the validity of any Loans
made prior to the effectiveness thereof.
SECTION Settlement Among Lenders.
1.
1) Revolving Credit Loans. It is agreed that each Lender's Net
Outstandings are intended by the Lenders to be equal at all times to
such Lender's Commitment Percentage of the aggregate principal amount
of all Loans outstanding, including without limitation, Revolving
Credit Loans. Notwithstanding such agreement, the several and not
joint obligation of each Lender to fund Revolving Credit Loans made in
accordance with the terms of this Agreement ratably in accordance with
such Lender's Commitment Percentage and each Lender's right to receive
its ratable share of principal payments on Revolving Credit Loans in
accordance with its Commitment Percentage, the Lenders agree that in
order to facilitate the administration of this Agreement and the Loan
Documents that settlement among them as to Revolving Credit Loans may
take place on a periodic basis in accordance with the provisions of
this Section 4.7.
1) Settlement Procedures as to Revolving Credit Loans. To the
extent and in the manner hereinafter provided in this Section 4.7,
settlement among the Lenders as to Revolving Credit Loans may occur
periodically on Settlement Dates determined from time to time by the
Agent, which may occur before or after the occurrence or during the
continuance of a Default or Event of Default and whether or not all of
the conditions set forth in Section 5.2 have been met. On each
Settlement Date payments shall be made by or to the Settlement Lender
and the other Lenders in the manner provided in this Section 4.7 in
accordance with the Settlement Report delivered by the Agent pursuant
to the provisions of this Section 4.7 in respect of such Settlement
Date so that as of each Settlement Date, and after giving effect to
the transactions to take place on such Settlement Date, each Lender's
Net Outstandings shall equal such Lender's Commitment Percentage of
the Revolving Credit Loans outstanding.
1) Selection of Settlement Dates. If the Agent elects, in its
discretion, but subject to the consent of the Settlement Lender, to
settle accounts among the Lenders with respect to principal amounts of
Revolving Credit Loans less frequently than each Business Day, then
the Agent shall designate periodic Settlement Dates which may occur on
any Business Day after the Effective Date; provided, however, that the
Agent shall designate as a Settlement Date any Business Day which is
an Interest Payment Date; and provided further, that a Settlement
Date shall occur at least once during each seven-day period. The
Agent shall designate a Settlement Date by delivering to each Lender a
Settlement Report not later than 12:00 noon (New York time) on the
proposed Settlement Date, which Settlement Report will be in the form
of Exhibit D hereto and shall be with respect to the period beginning
on the next preceding Settlement Date and ending on such designated
Settlement Date.
1) Non-Ratable Loans and Payments. Between Settlement Dates,
the Agent shall request and the Settlement Lender may (but shall not
be obligated to) advance to the Borrowers out of the Settlement
Lender's own funds, the entire principal amount of any Revolving
Credit Loan requested or deemed requested pursuant to Section 2.2(a)
(any such Revolving Credit Loan being referred to as a "Non-Ratable
Loan"). The making of each Non-Ratable Loan by the Settlement Lender
shall be deemed to be a purchase by the Settlement Lender of a one
hundred percent (100%) participation in each other Lender's Commitment
Percentage of the amount of such Non-Ratable Loan. All payments of
principal, interest and any other amount with respect to such Non-
Ratable Loan shall be payable to and received by the Agent for the
account of the Settlement Lender. Upon demand by the Settlement
Lender, with notice thereof to the Agent, each other Lender shall pay
to the Settlement Lender, as the repurchase of such participation, an
amount equal to one hundred percent (100%) of such Lender's Commitment
Percentage of the principal amount of such Non-Ratable Loan. Any
payments received by the Agent between Settlement Dates which in
accordance with the terms of this Agreement are to be applied to the
reduction of the outstanding principal balance of Revolving Credit
Loans, shall be paid over to and retained by the Settlement Lender for
such application, and such payment to and retention by the Settlement
Lender shall be deemed, to the extent of each other Lender's
Commitment Percentage of such payment, to be a purchase by each such
other Lender of a participation in the Revolving Credit Loans
(including the repurchase of participations in Non-Ratable Loans) held
by the Settlement Lender. Upon demand by another Lender, with notice
thereof to the Agent, the Settlement Lender shall pay to the Agent,
for the account of such other Lender, as a repurchase of such
participation, an amount equal to such other Lender's Commitment
Percentage of any such amounts (after application thereof to the
repurchase of any participations of the Settlement Lender in such
other Lender's Commitment Percentage of any Non-Ratable Loans) paid
only to the Settlement Lender by the Agent.
1) Net Decrease in Outstandings. If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's Net
Outstandings which is required to comply with the first sentence of
Section 4.7(b) is less than such Lender's Commitment Percentage of
amounts received by the Agent but paid only to the Settlement Lender
since the next preceding Settlement Date, such Lender and the Agent,
in their respective records, shall apply such Lender's Commitment
Percentage of such amounts to the increase in such Lender's Net
Outstandings, and the Settlement Lender shall pay to the Agent, for
the account of such Lender, the excess allocable to such Lender.
1) Net Increase in Outstandings. If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's Net
Outstandings which is required to comply with the first sentence of
Section 4.7(b) exceeds such Lender's Commitment Percentage of amounts
received by the Agent but paid only to the Settlement Lender since the
next preceding Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Commitment Percentage of
such amounts to the increase in such Lender's Net Outstandings, and
such Lender shall pay to the Agent, for the account of the Settlement
Lender, any excess.
1) No Change in Outstandings. If a Settlement Report indicates
that no Revolving Credit Loans have been made during the period since
the next preceding Settlement Date, then such Lender's Commitment
Percentage of any amounts received by the Agent in respect of
Revolving Credit Loans but paid only to the Settlement Lender shall be
paid by the Settlement Lender to the Agent, for the account of such
Lender. If a Settlement Report indicates that the increase in the
dollar amount of a Lender's Net Outstandings which is required to
comply with the first sentence of Section 4.7(b) is exactly equal to
such Lender's Commitment Percentage of amounts received by the Agent
in respect of Revolving Credit Loans but paid only to the Settlement
Lender since the next preceding Settlement Date, such Lender and the
Agent, in their respective records, shall apply such Lender's
Commitment Percentage of such amounts to the increase in such Lender's
Net Outstandings.
1) Return of Payments. If any amounts received by the
Settlement Lender in respect of the Secured Obligations are later
required to be returned or repaid by the Settlement Lender to the
Borrowers or any other obligor or their respective representatives or
successors in interest, whether by court order, settlement or
otherwise, in excess of the Settlement Lender's Commitment Percentage
of all such amounts required to be returned by all Lenders, each other
Lender shall, upon demand by the Settlement Lender with notice to the
Agent, pay to the Agent for the account of the Settlement Lender, an
amount equal to the excess of such Lender's Commitment Percentage of
all such amounts required to be returned by all Lenders over the
amount, if any, returned directly by such Lender.
1) Payments to Agent, Lenders. (A) Payment by any Lender to the
Agent shall be made not later than 1:00 p.m. (New York time) on the
Business Day such payment is due, provided that if such payment is due
on demand by another Lender, such demand is made on the paying Lender
not later than 11:00 a.m. (New York time) on such Business Day.
Payment by the Agent to any Lender shall be made by wire transfer,
promptly following the Agent's receipt of funds for the account of
such Lender and in the type of funds received by the Agent, provided
that if the Agent receives such funds at or prior to 1:00 p.m. (New
York time), the Agent shall pay such funds to such Lender by 2:00 p.m.
(New York time) on such Business Day. If a demand for payment is made
after the applicable time set forth above, the payment due shall be
made by 2:00 p.m. (New York time) on the first Business Day following
the date of such demand.
(B) If a Lender shall, at any time, fail to make any payment to
the Agent required hereunder, the Agent may, but shall not be
required to, retain payments that would otherwise be made to such
Lender hereunder and apply such payments to such Lender's
defaulted obligations hereunder, at such time, and in such order,
as the Agent may elect in its sole discretion.
(C) With respect to the payment of any funds under this Section
4.7(c), whether from the Agent to a Lender or from a Lender to
the Agent, the party failing to make full payment when due
pursuant to the terms hereof shall, upon demand by the other
party, pay such amount together with interest on such amount at
the Prime Option.
1) Settlement of Other Obligations. All other amounts received by
the Agent on account of, or applied by the Agent to the payment of,
any Secured Obligation owed to the Lenders (including, without
limitation, fees payable to the Lenders pursuant to Sections 4.2(d)
and (e) and proceeds from the sale of, or other realization upon, all
or any part of the Collateral following an Event of Default) that are
received by the Agent on or prior to 1:00 p.m. (New York time) on a
Business Day will be paid by the Agent to each Lender on the same
Business Day, and any such amounts that are received by the Agent
after 1:00 p.m. (New York time) will be paid by the Agent to each
Lender on the following Business Day. Unless otherwise stated herein,
the Agent shall distribute fees payable to the Lenders pursuant to
Section 4.2(d) and (e) ratably to the Lenders based on each Lender's
Commitment Percentage and shall distribute proceeds from the sale of,
or other realization upon, all or any part of the Collateral following
an Event of Default ratably to the Lenders based on the amount of the
Secured Obligations then owing to each Lender.
SECTION Increased Costs and Reduced Returns.
Borrowers agree that if (a) any law hereafter in effect or (b)
any request, guideline or directive of any Governmental Authority
(whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) not in effect as
of the Effective Date with respect to any law now or hereafter in
effect (and whether or not any such law is presently applicable
to any Lender) or the interpretation or administration thereof by
any Governmental Authority, shall either (i)(A) impose, affect,
modify or deem applicable any reserve, special deposit, capital
maintenance or similar requirement against any Loan, (B) impose
on such Lender any other condition regarding any Loan, this
Agreement, any Note or the facilities provided hereunder, or (C)
result in any requirement regarding capital adequacy (including
any risk-based capital guidelines) affecting such Lender being
imposed or modified or deemed applicable to such Lender or (ii)
subject such Lender to any taxes on the recording, registration,
notarization or other formalization of the Loans or any Note, and
the result of any event referred to in clause (a) or (b) above
shall be to increase the cost to such Lender of making, funding
or maintaining any Loan or to reduce the amount of any sum
receivable by such Lender or such Lender's rate of return on
capital with respect to any Loan to a level below that which such
Lender could have achieved but for such imposition, modification
or deemed applicability (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by
such Lender (in the exercise of its reasonable discretion) to be
material, then, upon demand by such Lender, Borrowers shall
immediately pay to such Lender additional amounts which shall be
sufficient to compensate such Lender for such increased cost, tax
or reduced rate of return. A certificate of such Lender to the
Borrowers claiming compensation under this Section 4.8 shall be
final, conclusive and binding on all parties for all purposes in
the absence of manifest error. Such certificate shall set forth
the nature of the occurrence giving rise to such compensation,
the additional amount or amounts to be paid to it hereunder and
the method by which such amounts were determined. In determining
such amount, such Lender may use any reasonable averaging and
attribution methods. Notwithstanding anything to the contrary in
this Section 4.8, (x) the Borrower shall not be liable to any
such Lender(s) for any costs, taxes or reduced rates of return
which were incurred or paid by such Lender(s) more than ninety
(90) days prior to the date of the certificate of Lender to be
delivered to the Borrower pursuant to this Section 4.8 and (y) if
the costs, taxes or reduced rates of return incurred or paid by
the Lender(s) at any time during the term hereof exceed in the
aggregate $250,000 and, in the future any additional costs, taxes
or reduced rates of return may be mitigated by changing the
location of such Lender(s) office for administration of the Loans
to another existing loan office of such Lender(s) within the
United States of America then such Lender(s) shall use
commercially reasonable efforts to move the administration of the
Loans and this Agreement to such other existing loan office.
1.
SECTION Superpriority Nature of Secured
Obligations. All Secured Obligations under any of the Loan
Documents shall constitute administrative expenses of Borrowers
in the Chapter 11 Cases with priority under Section 364(c)(1) of
the Bankruptcy Code over any and all other administrative
expenses of the kind specified in, among others, Sections 105,
326, 330,331, 503 and 507 of the Bankruptcy Code, and shall also
have priority over any claims arising under Section 506(c) of the
Bankruptcy Code, subject and subordinate only to the following:
fees and disbursements incurred by professionals retained
pursuant to court order in the Chapter 11 Cases pursuant to
Section 327 or 1103 of the Bankruptcy Code by any Borrower or any
statutory committee appointed in any of the Chapter 11 Cases or
as identified on Schedule 4.9 hereto, or an examiner appointed
pursuant to Section 1104 of the Bankruptcy Code, and any
statutorily mandated costs and fees of the United States Trustee
with respect to the Chapter 11 Cases, up to a maximum aggregate
amount not to exceed Five Hundred Thousand Dollars ($500,000);
such dollar amount being referred to herein as the "Carve-Out
Amount") (determined without regard to fees and expenses awarded
and paid on an interim basis) provided, that the Carve-Out
Expenses shall not include any other claims that are or may be
senior to or pari passu with any of the Carve-Out Expenses or any
professional fees and expenses of a Chapter 7 trustee; and
provided further that the Carve-Out Amount shall not include,
apply to or be available for any fees or expenses incurred by any
party, including any official committee of unsecured creditors
that may be appointed in these cases, in objecting to or
contesting in any manner, or in raising any defenses to, the
validity, extent, perfection, priority or enforceability of the
Prepetition Indebtedness or the Postpetition Obligations or any
mortgages, liens or security interests with respect thereto or
any other rights or interest of the Agent and the Lenders, or in
asserting any claims or causes of action, including, without
limitation, any actions under chapter 5 of the Bankruptcy Code,
against the Agent or the Lender, provided nothing herein bars the
use of the funds in the Carve-Out Amount to investigate such
matters. The foregoing shall not be construed as consent to the
allowance of any fees and expenses referred to above and shall
not affect the right of the Debtors, the Agent or the Lender to
object to the allowance and payment of such amounts.
1.
ARTICLE
CONDITIONS PRECEDENT
SECTION Conditions Precedent to Revolving Credit
Loans, Letter of Credit Accommodations and Term Loans.
Notwithstanding any other provision of this Agreement, the
initial Revolving Credit Loan will not be made, nor will any Term
Loan be made, nor will any Letter of Credit be issued or Letter
of Credit Obligation incurred hereunder, until the fulfillment of
each of the following conditions prior to or contemporaneously
with the making of the first to be made of such Secured
Obligations (unless waived in writing by the Agent, or in the
case of subsections (a), (c), (d), (g), (i), (k), (m) and (n) of
this Section 5.1, with the consent of the Required Lenders):
1.
1) Fees. Borrowers shall have paid all of the fees payable on the
Effective Date referred to herein.
1) Court Order. The Borrowers' Motion Regarding Banks shall have
been granted by the Court (on terms reasonably satisfactory to the
Agent).
1) Termination Date. The Termination Date has not occurred.
1) Security Interests. The Agent shall have received satisfactory
evidence that the Agent (for the benefit of itself and the Lenders)
has a valid and perfected first priority security interest as of the
Effective Date in all of the Collateral, subject only to Permitted
Liens.
1) Closing Documents. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and
substance to the Borrowers, the Agent and its counsel and the Lenders
and, as to Loans or Letter of Credit Obligations requested by any
Borrower more than thirty (30) days after the Effective Date, the
Agent shall have received all of the documents set forth in Section
5.4 hereof:
1) a certificate of the Secretary or Assistant Secretary
of each of the Borrowers with the required attachments thereto;
1) a certificate of the President or a Financial Officer
of each Borrower;
1) a Borrowing Base Certificate and a Schedule of
Receivables, prepared as of the Effective Date;
1) an original Power of Attorney, as executed by the
Borrowers in favor of Agent;
1) an initial Notice of Proposed Advance, from the
Borrowers to the Agent requesting the initial Revolving Credit Loan
and specifying the method of disbursement;
1) copies of each of the other Loan Documents, the
Revolving Credit and the Term Loan A Notes, Guaranty Agreements and
Security Documents duly executed by the parties thereto, together with
evidence satisfactory to the Agent of the due authorization and
binding effect of each such Loan Document on such party; and
1) such other documents and instruments as the Agent or
any Lender may reasonably request.
1) Guarantor Documents. The Agent shall have received each of the
following documents, all of which shall be satisfactory in form and
substance to the Borrowers, the Agent and its counsel and the Lenders:
1) a certificate of the Secretary or Assistant Secretary
of each of the Guarantors;
1) a certificate of the President or Financial Officer of
each Guarantor;
1) the Guaranty Agreement, duly executed and delivered by
each Guarantor; and
1) such other documents and instruments as the Agent or
any Lender may reasonably request.
1) Notes. Each Lender shall have received a Revolving Credit Note
and the Term Loan A Note duly executed and delivered by the Borrowers,
complying with the terms of Sections 2.4.
1) Security Documents. The Agent shall have received each Security
Document, duly executed and delivered by the Borrowers.
1) Availability. The Agent shall be provided with evidence
satisfactory to it, confirmed by a certificate of a Financial Officer
of Trism, that as of the Effective Date, after giving effect to the
initial Advances and the issuance of any Letters of Credit on the
Effective Date, Borrowing Base Availability is not less than
$5,000,000.
1) [Intentionally Omitted]
1) Material Adverse Change. As of the Effective Date, and except as
disclosed in the unaudited financial statements described in Section
6.1(m), there shall not have occurred any change which is materially
adverse, in the Lenders' sole discretion, to the assets, liabilities,
businesses, operations, condition (financial or otherwise) or
prospects of the Borrowers from those presented by the unaudited
financial statements described in Section 6.1(m).
1) Release of Security Interests. The Agent shall have received
evidence satisfactory to it of the release and termination of all
Liens other than Permitted Liens.
1) Commitment Letter. Agent shall have received evidence
satisfactory to it that the Borrowers have complied fully with the
terms of the Commitment Letter.
1) Due Diligence. The Agent shall have completed, with results
satisfactory to it in its sole discretion, its legal credit and
business due diligence in respect of the Borrower and the Guarantors
and their respective subsidiaries and affiliates.
SECTION Additional Conditions Precedent to
Funding of Term Loan B. Notwithstanding any other provision of
this Agreement, Term Loan B will not be made unless and until
each and all of the following additional conditions have been
satisfied (unless waived in writing by Agent with the consent of
the Required Lenders):
1.
1) If required by the Interim Order or the Final Order, the Court
shall have separately approved the borrowing by Borrowers of the
proceeds of Term Loan B; and
1) Agent and Lenders shall have received appraisals in form and
substance acceptable to Agent and Lenders in their sole discretion,
confirming asset values of the Term Loan B Trailers and Mortgaged Real
Estate, such appraisals having been performed by appraisers retained
by Borrowers and acceptable to Agent and Lenders; and
1) Agent shall have received an environmental audit and risk
assessment of the Mortgaged Real Estate satisfactory to Agent and
Lenders, in their sole discretion, such assessments having been
performed by environmental engineering company retained by Borrowers
and acceptable to Agent and Lenders;
1) The execution and delivery of legal documentation granting to
Agent for the benefit of the Lenders validly perfected first liens or
mortgages upon the Mortgaged Real Estate and the Term Loan B Trailers,
in form and substance acceptable to Agent and its counsel;
1) Each Lender shall have received executed originals of the Term
Loan B Notes, substantially in the form attached hereto as part of
Exhibit A1;
1) Agent shall have received a mortgagee title insurance policy in
an amount not less than the appraised value of the Mortgaged Real
Estate in favor of the Agent and the Lenders insuring that the
mortgage on the Mortgaged Real Estate contemplated by clause (d) above
creates and conveys to Agent a first priority Lien for the benefit of
the Lenders, subject only to such exceptions as may be consented to by
the Agent in its sole discretion;
SECTION All Loans; Letters of Credit. At the
time of making of each Loan, including the initial Revolving
Credit Loan, the Term Loans and all subsequent Loans, and the
issuance of each Letter of Credit and incurrence of each Letter
of Credit Obligation:
1.
1) all of the representations and warranties made or deemed to be
made under this Agreement shall be true and correct at such time both
with and without giving effect to the Loan to be made at such time and
the application of the proceeds thereof,
1) the corporate actions of each of the Borrowers, including
shareholder approval if necessary, to authorize the execution,
delivery and performance of this Agreement, the other Loan Documents
and the borrowings hereunder shall remain in full force and effect and
the incumbency of officers shall be as stated in the certificates of
incumbency delivered pursuant to Section 5.1(c)(i) or as subsequently
modified and reflected in a certificate of incumbency delivered to the
Agent, and
) each request and deemed request for any Advance hereunder shall
be deemed to be a certification by the Borrowers to the Agent and the
Lenders as to the matters set forth in Section 5.2(a) and (b) and the
Agent may, without waiving either condition, consider the conditions
specified in Sections 5.2(a) and (b) fulfilled and a representation by
the Borrowers to such effect made, if no written notice to the
contrary is received by the Agent prior to the making of the Loan then
to be made.
1) (i) Borrowers' reaffirmation of all representations and
warranties contained in Article 6 hereof, (ii) the nonexistence,
before and after giving effect to making of the Loan of any Default or
Event of Default, and (iii) since the Effective Date there shall not
have occurred any change which is materially adverse, in the Agent's
sole discretion, to the assets, liabilities, businesses, operations,
condition (financial or otherwise) or prospects of Borrowers;
1) The Interim Order or, if the funding date of such Loan occurs
after entry of the Final Order, the Final Order, as the case may be,
shall be in full force and effect and (i) such Order shall not have
been appealed, stayed, reversed, vacated, rescinded, modified or
amended in any respect (other than modifications acceptable to Agent
which in the opinion of the Agent, could not materially adversely
affect the Lenders); and
1) No Injunctions, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative body to
enjoin, restrain, or prohibit, or to obtain damages in respect of, or
which is related to or arises out of this Agreement or the
consummation of the transactions contemplated hereby or which, in the
Lenders' reasonable discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement, and the
automatic stay shall have been modified to permit the creation and
perfection of the Lenders' Liens and security interests and shall have
been automatically vacated to permit enforcement of the Lenders'
rights and remedies under the Loan Documents.
1) The absence of any adverse developments or events in any of the
Chapter 11 Cases, which have had or could reasonably be expected to
have a Materially Adverse Effect.
SECTION Other Post-Petition Lending Documents.
Within thirty (30) calendar days following the Effective Date,
the Agent shall have received each of the following documents,
all of which shall be satisfactory in form and substance to the
Agent and its counsel and to the Lenders:
1.
1) a certificate evidencing the good standing of each Borrower and
each Guarantor in the jurisdiction of its incorporation;
1) copies of all financial statements referred to in Section 6.1(m)
and meeting the requirements thereof;
1) such lien searches and title reports as the Agent or its counsel
may request;
1) the Financing Statements duly executed and delivered by the
Borrowers and acknowledgment copies evidencing the filing of such
Financing Statements in each jurisdiction where such filing may be
necessary or appropriate to perfect the Security Interest;
1) certificates or binders of insurance relating to each of the
policies of insurance covering any of the Collateral together with
loss payable clauses which comply with the terms of Section 8.7
hereof;
1) supplements or amendments to existing Agency Account Agreements,
each duly executed by a Borrower and the Clearing Bank party thereto,
which provide for the same to be applicable to the respective debtors
in possession, and such other agreements with the Agent regarding each
of the Borrowers' Lockboxes, Lockbox Accounts and other cash and
deposit accounts, as requested by the Agent; and
1) copies of all of the most recent existing reports from a
qualified environmental engineering firm or other qualified consultant
acceptable to the Agent and Lenders with respect to investigations and
audits of all Real Estate, as Agent may reasonably request.
ARTICLE
REPRESENTATIONS AND WARRANTIES OF BORROWERS
SECTION Representations and Warranties. The
Borrowers, jointly and severally, represent and warrant to the
Agent and to the Lenders that, except to the extent that a breach
of, default under or misrepresentation with respect to any of the
following results solely from the filing of the Chapter 11 Cases:
1.
1) Organization; Power; Qualification; FEIN. Each of the Borrowers
and each of the Guarantors is a corporation, duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
properties and to carry on its business as now being and hereafter
proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which failure to be so qualified and
authorized would have a Materially Adverse Effect. The jurisdictions
in which each Borrower is qualified to do business as a foreign
corporation are listed on Schedule 6.1(a). Schedule 6.1(a) lists the
federal employer identification number of each Borrower and each
Guarantor.
1) Subsidiaries; Ownership of the Borrowers; Operating Status.
Except for as disclosed on Schedule 6.1(b), the Borrowers have no
Subsidiaries. The outstanding stock of each Borrower has been duly
and validly issued and is fully paid and nonassessable by such
Borrower and the number and owners of such shares of capital stock of
such Borrower are set forth on Schedule 6.1(b). Except as set forth
on Schedule 6.1(b), there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which
any Borrower may be required to issue, sell, repurchase or redeem any
of its stock or other equity securities or any stock or other equity
securities of its Subsidiaries. Except for Subsidiaries which are
Borrowers, no Subsidiary of any Borrower, including, without
limitation, any Guarantor (i) owns any assets or property (x) having a
value in excess of $10,000 or (y) otherwise material to the operation
of the business of any Borrower, or (ii) engages in any operations
which are material to the business of any Borrower, or (iii) would, by
the nature of its assets, properties or operations, be required to be
a debtor in any Chapter 11 Case in order to insure the reorganization
of the Borrowers contemplated by the Plan and Disclosure Statement.
1) Authorization of Agreement, Notes, Loan Documents and Borrowing.
Each of the Borrowers and each of the Guarantors has the right and
power and has taken all necessary action to authorize it to execute,
deliver and perform each of the Loan Documents to which it is a party
in accordance with their respective terms. Each of the Loan Documents
to which it is a party have been duly executed and delivered by the
duly authorized officers of each Borrower or each Guarantor, as the
case may be, and each is, or when executed and delivered in accordance
with this Agreement will be, a legal, valid and binding obligation of
each Borrower or each Guarantor, as the case may be, enforceable in
accordance with its terms.
1) Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, Etc. Other than the entry of the Interim Order and the Final
Order, the execution, delivery and performance of each of the Loan
Documents to which each Borrower or each Guarantor, as the case may
be, is a party in accordance with their respective terms and the
borrowings hereunder do not and will not, by the passage of time, the
giving of notice or otherwise,
1) require any Governmental Approval or violate any
Applicable Law relating to any Borrower, any Guarantor or any of their
Affiliates,
1) conflict with, result in a breach of or constitute a
default under (A) the articles or certificate of incorporation or by-
laws of any Borrower or any Guarantor, (B) any indenture, agreement or
other instrument to which any Borrower or any Guarantor is a party or
by which any of their property may be bound or (C) any Governmental
Approval relating to any Borrower or any Guarantor, or,
1) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter
acquired by any Borrower or any Guarantor other than the Security
Interest.
1) Business. Each Borrower is engaged principally in the business
described on Schedule 6.1(e).
1) Compliance with Law, Governmental Approvals.
1) Except as set forth in Schedule 6.1(f), each Borrower
(A) has all material Governmental Approvals, including
permits relating to federal, state and local Environmental
Laws, ordinances and regulations, required by any Applicable
Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on
appeal and is not the subject of any pending or, to the
knowledge of such Borrower, threatened attack by direct or
collateral proceeding, and
(B) is in compliance with each material Governmental
Approval applicable to it and in compliance with all other
material Applicable Law relating to it, including, without
being limited to, all material Environmental Laws and all
material occupational health and safety laws applicable to
such Borrower, any of its Subsidiaries or their respective
properties,
except for instances of noncompliance which would not, singly or
in the aggregate, cause a Default or Event of Default or have a
Materially Adverse Effect on such Borrower and its Subsidiaries
as a whole and in respect of which reserves in respect of such
Borrower's or such Subsidiary's reasonably anticipated liability
therefor have been established on the books of such Borrower or
such Subsidiary, as applicable.
1) Without limiting the generality of the above, except as
disclosed on a report delivered pursuant to Section 5.1(c)(xii) or
(xiii) or with respect to matters which could not reasonably be
expected to have, singly or in the aggregate, a Materially Adverse
Effect on any Borrower and its Subsidiaries as a whole:
(A) the operations of such Borrower and each of its
Subsidiaries comply in all material respects with all
applicable environmental, health and safety requirements of
Applicable Law;
(B) such Borrower and each of its Subsidiaries has obtained
all environmental, health and safety permits necessary for
its operation, and all such permits are in good standing and
such Borrower and each of its Subsidiaries is in compliance
in all material respects with all terms and conditions of
such permits;
(C) neither such Borrower nor any of its Subsidiaries nor
any of their respective present or past property or
operations are subject to any order from or agreement with
any public authority or private party respecting (x) any
environmental, health or safety requirements of Applicable
Law, (y) any Remedial Action, or (z) any liabilities and
costs arising from the Release or threatened Release of a
Contaminant into the environment, except for past properties
and operations covered in full by the Seller Indemnity;
(D) none of the operations of such Borrower or of any of
its Subsidiaries is subject to any judicial or
administrative proceeding alleging a violation of any
environmental, health or safety requirement of Applicable
Law;
(E) to the knowledge of such Borrower, none of the present
nor past operations of such Borrower or any of its
Subsidiaries is the subject of any investigation by any
public authority evaluating whether any Remedial Action is
needed to respond to a Release or threatened Release of a
Contaminant into the environment, except for past operations
covered in full by the Seller Indemnity;
(F) neither such Borrower nor any of its Subsidiaries has
filed any notice under any requirement of Applicable Law
indicating past or present treatment, storage or disposal of
a hazardous waste, as that term is defined under 40 CFR Part
261 or any state equivalent;
(G) neither such Borrower nor any of its Subsidiaries has
filed any notice under any requirement of Applicable Law
reporting a Release of a Contaminant into the environment,
except for instances in which the Release has been remedied
in strict compliance with all Environmental Laws;
(H) except in compliance in all material respects with
applicable Environmental Laws, during the course of such
Borrower's or any of its Subsidiaries' ownership of or
operations on the Real Estate, to the best of such
Borrower's knowledge, there have been no generation,
treatment, recycling, storage or disposal of hazardous
waste, as that term is defined under 40 CFR Part 261 or any
state equivalent, use of underground storage tanks or
surface impoundments, use of asbestos-containing materials,
or use of polychlorinated biphenyls (PCB) used in hydraulic
oils, electrical transformers or other equipment;
(I) neither such Borrower nor any of its Subsidiaries has
entered into any negotiations or agreements with any Person
(including, without limitation, any prior owner of any of
the Real Estate or other property of such Borrower or any of
its Subsidiaries) relating to any Remedial Action or
environmental related claim;
(J) neither such Borrower nor any of its Subsidiaries has
received any notice or claim to the effect that it is or may
be liable to any Person as a result of the Release or
threatened Release of a Contaminant into the environment,
except for Releases covered in full by the Seller Indemnity;
(K) neither such Borrower nor any of its Subsidiaries has
any material contingent liability in connection with any
Release or threatened Release of any Contaminant into the
environment, except for Releases covered in full by the
Seller Indemnity;
(L) no Environmental Lien has attached to any of the Real
Estate or other property of such Borrower or of any of its
Subsidiaries;
(M) the presence and condition of all asbestos-containing
material which is on or part of the Real Estate (excluding
any raw materials used in the manufacture of products or
products themselves) do not violate in any material respect
any currently applicable requirement of Applicable Law; and
(N) neither such Borrower nor any of its Subsidiaries
manufactures, distributes or sells, and has not, in the past
twenty (20) years, manufactured, distributed or sold,
products which contain asbestos-containing material.
(O) Such Borrower hereby acknowledges and agrees that Agent
(1) is not now, and has not ever been, in control of any of
the Real Estate or any of such Borrower's affairs, and (2)
does not have the capacity through the provisions of the
Loan Documents or otherwise to influence such Borrower's
conduct with respect to the ownership, operation or
management of any of its Real Estate or compliance with
Environmental Laws or Environmental Permits.
1) Schedule 6.1(f) sets forth each notice of a material
violation of any Environmental Laws and occupational health and safety
laws applicable to any Borrower, any of their respective Subsidiaries
or any of their respective properties.
1) Titles to Properties. Except as set forth in Schedule 6.1(g),
each Borrower and each of its Subsidiaries is the sole owner of and
has good and marketable title to or a valid leasehold interest in all
its owned Real Estate, is the sole owner of and has valid and legal
title to or a valid leasehold interest in all personal property and
assets used in or necessary to the conduct of its business. Each
Borrower has received all deeds, assignments, waivers, consents, non-
disturbance and recognition or similar agreements, bills of sale and
other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such
Borrower's right, title and interest in and to all such Real Estate
and other properties and assets. Schedule 6.1(g) also describes any
purchase options, rights of first refusal or other similar contractual
rights pertaining to any Real Estate. As of the Effective Date, no
portion of any Borrower's Real Estate has suffered any material damage
by fire or other casualty loss which has not heretofore been repaired
and restored in all material respects to its original condition or
otherwise remedied. As of the Effective Date, all material permits
required to have been issued or appropriate to enable the Real Estate
to be lawfully occupied and used for all of the purposes for which
they are currently occupied and used have been lawfully issued and are
in full force and effect.
1) Liens. Except as set forth in Schedule 6.1(h), none of the
properties and assets of any Borrower or any Subsidiary, including,
without limitation, the Collateral, is subject to any Lien, except
Permitted Liens. Other than the Financing Statements, no financing
statement under the Uniform Commercial Code of any state which names
any Borrower or any Subsidiary as debtor and which has not been
terminated has been filed in any state or other jurisdiction, and no
Borrower nor any Subsidiary has signed any such financing statement or
any security agreement authorizing any secured party thereunder to
file any such financing statement, except to perfect those Liens
listed in Schedule 6.1(h) and Permitted Liens.
1) Indebtedness and Guaranties. Set forth on Schedule 6.1(i) is a
complete and correct listing of all of each and every Borrower's and
its Subsidiaries' (i) Indebtedness for Money Borrowed and (ii)
Guaranties of obligations of Persons and entities other than the
obligations of other Borrowers or the Guarantors. There is no
Indebtedness owing by any Borrower or any Guarantor to any Affiliate
of any Borrower or any Guarantor. Other than as previously disclosed
to Agent, no Borrower nor any Subsidiary is in default of any material
provision of any agreement evidencing or relating to any such
Indebtedness or Guaranty.
1) Litigation. Except as set forth on Schedule 6.1(j), there are no
actions, suits or proceedings pending (nor, to the knowledge of any of
the Borrowers, are there any actions, suits or proceedings threatened,
nor is there any basis therefor) against or in any other way relating
adversely to or affecting any Borrower or any Subsidiary or any of
their property, or which challenge any Borrower's right or power to
enter into or perform any of its obligations under the Loan Documents
to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, in any court or before any
arbitrator of any kind or before or by any governmental body, which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect on any Borrower and its Subsidiaries, as a
whole.
1) Tax Returns and Payments. Except as set forth on Schedule
6.1(k), all United States federal, state and local as well as foreign
national, provincial and local and other tax returns of each Borrower
and each of its Subsidiaries required by Applicable Law to be filed
have been duly filed, and all United States federal, state and local
and foreign national, provincial and local and other taxes,
assessments and other governmental charges or levies upon such
Borrower and each of its Subsidiaries and such Borrower's and any of
its Subsidiaries' property, income, profits and assets which are due
and payable have been paid, except any such nonpayment which is at the
time permitted under Section 9.6. The charges, accruals and reserves
on the books of each Borrower and each of its Subsidiaries in respect
of United States federal, state and local and foreign national,
provincial and local taxes for all fiscal years and portions thereof
since the organization of such Borrower are in the judgment of such
Borrower adequate, and such Borrower knows of no reason to anticipate
any additional assessments for any of such years which, singly or in
the aggregate, could reasonably be expected to have a Materially
Adverse Effect on such Borrower. Proper and accurate amounts have
been withheld by each Borrower from its respective employees for all
periods in full and complete compliance with all applicable federal,
state, local and foreign law and such withholdings have been timely
paid to the respective Governmental Authorities. Schedule 6.1(k) sets
forth as of the Effective Date those taxable years for which any
Borrower's tax returns are currently being audited by the IRS or any
other applicable Governmental Authority and any assessments or
threatened assessments in connection with such audit, or otherwise
currently outstanding. Except as described on Schedule 6.1(k) as of
the Effective Date, no Borrower has executed or filed with the IRS or
any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for
assessment or collection of any Charges. No Borrower and none of its
respective predecessors are liable for any Charges: (a) under any
agreement (including any tax sharing agreements) or (b) to such
Borrower's knowledge, as a transferee. As of the Effective Date, no
Borrower has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or
otherwise, which would have a Materially Adverse Effect.
1) Burdensome Provisions. No Borrower or any of its Subsidiaries is
a party to any indenture, agreement, lease or other instrument, or
subject to any charter or corporate restriction, Governmental Approval
or Applicable Law compliance with the terms of which could reasonably
be expected to have a Materially Adverse Effect on such Borrower and
its Subsidiaries, taken as a whole.
1) Financial Statements; Projections. The Borrowers have furnished
to the Agent and the Lenders a copy of (i) the Consolidated Balance
Sheet as at December 31, 1998 and the Consolidating Balance Sheet as
at December 31, 1998, and the related statements of income, cash flow
and retained earnings for the twelve-month period then ended and (ii)
their unaudited balance sheet as at July 31, 1999, and the related
statement of income for the seven (7) month period then ended. Such
financial statements are complete and correct and present fairly and
in all material respects in accordance with GAAP, the financial
position of the Borrowers as at the dates thereof and the results of
operations of the Borrowers for the periods then ended. Except as
disclosed or reflected in such financial statements, the Borrowers
have no material liabilities, contingent or otherwise, and there were
no material unrealized or anticipated losses of the Borrowers. In
addition, attached hereto as Schedule 6.1(m) are projections of the
monthly financial performance for each Borrower for the period
commencing September 1, 1999 through and including December 31, 2000
(the "Projections"). The Projections have been prepared by the senior
management of Borrowers and were at the time furnished (i) believed to
be reasonable, (ii) prepared on a reasonable basis and in good
faith based on assumptions believed to be reasonable and (ii) made and
based upon the best information then available.
1) Adverse Change. Since the date of the financial statements
described in clause (i) of Section 6.1(m) and other than as disclosed
in the unaudited financial statements described in clause (ii) of
Section 6.1(m), (i) no change in the business, assets, liabilities,
condition (financial or otherwise), results of operations or business
prospects of the Borrowers has occurred that has had, or may have, a
Materially Adverse Effect, and (ii) no event has occurred or failed to
occur which has had, or may have, a Materially Adverse Effect.
1) ERISA. No Borrower or any Related Company maintains or
contributes to (x) any Benefit Plan other than those listed on
Schedule 6.1(o) as of the Effective Date or (y) thereafter, any Title
IV Plan other than those listed in Schedule 6.1(o). Each Benefit Plan
is in substantial compliance with ERISA to the extent that ERISA is
applicable, and no Borrower or any Related Company has received any
notice asserting that a Benefit Plan is not in compliance with ERISA.
No material liability to the PBGC or to a Multiemployer Plan has been,
or is expected by any Borrower to be, incurred by such Borrower or any
Related Company. Copies of all such listed Plans, together with a
copy of the latest form 5500 for each such Plan, have been delivered
to Agent. No Borrower or any ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section 412
of the IRC or Section 302 of ERISA or the terms of any such Plan. No
Borrower or any ERISA Affiliate has engaged in a prohibited
transaction, as defined in Section 4975 of the IRC, in connection with
any Plan, which would subject such Borrower to a material tax on
prohibited transactions imposed by Section 4975 of the IRC. Except
as set forth in Schedule 6.1(o): (i) no Title IV Plan has any Unfunded
Vested Accrued Benefits in excess of $0.00; (ii) no ERISA Event or
event described in Section 4062(e) of ERISA with respect to any Title
IV Plan has occurred or is reasonably expected to occur; (iii) there
are no pending, or to the knowledge of any Borrower, threatened claims
(other than claims for benefits in the normal course), sanctions,
actions or lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan; (iv) no Borrower or any
ERISA Affiliate has incurred or reasonably expects to incur any
liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan
with Unfunded Pension Liabilities has been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of
ERISA) of any Borrower or any ERISA Affiliate; and (vi) no liability
under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the
Standard & Poor's Corporation or the equivalent by another nationally
recognized rating agency.
1) Absence of Defaults. No Borrower or any of its Subsidiaries is
in default under its articles or certificate of incorporation or by-
laws and no event has occurred, which has not been remedied, cured or
waived, which constitutes a Default or an Event of Default, or which
constitutes, or which with the passage of time or giving of notice or
both would constitute, a default or event of default by such Borrower
or any of its Subsidiaries under any material agreement (other than
this Agreement) or judgment, decree or order to which such Borrower or
any of its Subsidiaries is a party or by which such Borrower, any of
its Subsidiaries or any of such Borrower's or any of its Subsidiaries'
properties may be bound or which would require such Borrower or any of
its Subsidiaries to make any payment under any thereof prior to the
scheduled maturity date therefor.
1) Accuracy and Completeness of Information. All Schedules hereto
and all material written information, reports and other papers and
data produced by or on behalf of the Borrowers and furnished to the
Agent or any Lender were, at the time the same were so furnished,
complete and correct in all material respects, to the extent necessary
to give the recipient a true and accurate knowledge of the subject
matter. No fact is known to any Borrower which has had, or may in the
future have (so far as such Borrower can foresee), a Materially
Adverse Effect upon any Borrower or any of its Subsidiaries which has
not been set forth in the financial statements or disclosure delivered
prior to the Effective Date, in each case referred to in Section
6.1(m), or in such written information, reports or other papers or
data or otherwise disclosed in writing to the Agent and the Lenders
prior to the Agreement Date. No document furnished or written
statement made to the Agent or any Lender by any Borrower in
connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contains or will contain any
untrue statement of a fact material to the creditworthiness of any
Borrower or omits or will omit to state a material fact necessary in
order to make the statements contained therein not misleading.
1) [Intentionally Omitted]
1) Receivables.
1) Status. Each Receivable reflected in the computations
included in any Borrowing Base Certificate meets the criteria
enumerated in clauses (a) through (o) of the definition of Eligible
Receivables, except as disclosed in such Borrowing Base Certificate or
as disclosed in a timely manner in a subsequent Borrowing Base
Certificate or otherwise in writing to the Agent.
1) Chief Executive Office. The chief executive office and
principal place of business of each Borrower and the books and records
relating to the Receivables and other Collateral is located at the
address or addresses set forth (i) on Schedule 6.1(s) or (ii) in a
written notice which complies with the applicable provisions of
Section 8.8 hereunder; no Borrower has maintained its chief executive
office or books and records relating to the Collateral at any other
address at any time during the five years immediately preceding the
Agreement Date.
1) Real Property. No Borrower owns Real Estate or leases Real
Estate other than that Real Estate described on Schedule 6.1(t).
1) Corporate and Fictitious Names. Except as otherwise disclosed on
Schedule 6.1(u), during the five-year period preceding the Agreement
Date, no Borrower or any predecessor thereof has been known as or used
any corporate or fictitious name other than the corporate names of the
Borrowers on the Effective Date.
1) Federal Reserve Regulations. No Borrower or any of its
Subsidiaries is engaged and none will engage, principally or as one of
its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" (as each of
the quoted terms is defined or used in Regulations G and U of the
Board of Governors of the Federal Reserve System). No Borrower owns
any Margin Stock and no part of the proceeds of any of the Loans will
be used for so purchasing or carrying margin stock or, in any event,
for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation G, T, U or X of such Board of Governors.
If requested by the Agent or any Lender, the Borrowers will furnish to
the Agent and the Lenders a statement or statements in conformity with
the requirements of said Regulation G, T, U or X to the foregoing
effect.
1) Government Regulation. No Borrower is an "investment company" or
a company "controlled" by an "investment company" (as each of the
quoted terms is defined or used in the Investment Company Act of 1940,
as amended). No Borrower is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any
other federal or state statute that restricts or limits its ability to
incur Indebtedness or to perform its obligations hereunder. Assuming
the accuracy of the representations set forth in Section 13.2
hereunder, the making of the Loans by Lenders to Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers,
the application of the proceeds thereof and repayment thereof and the
consummation of the related transactions will not violate any
provision of any such statute or any rule, regulation or order issued
by the Securities and Exchange Commission.
1) Employee Relations. Each Borrower and each of its Subsidiaries
has a stable work force in place and is not, except as set forth on
Schedule 6.1(x), party to any collective bargaining agreement nor has
any labor union been recognized as the representative of any
Borrower's or any of its Subsidiaries' employees, and no Borrower
knows of pending, threatened or contemplated strikes, work stoppage or
other labor disputes involving any Borrower's or any of its
Subsidiaries' employees.
1) Intellectual Property. Each Borrower owns or possesses all
Intellectual Property required to conduct its business as now and
presently planned to be conducted without, to its knowledge, conflict
with the rights of others except as otherwise disclosed on Schedule
6.1(y), and Schedule 6.1(y) lists all Material Intellectual Property
owned by any Borrower or which any Borrower has the right to use.
1) Trade Names. All trade names or styles under which any Borrower
creates Receivables, or to which instruments in payment of Receivables
are made payable, are listed on Schedule 6.1(z).
1) Brokers. No broker or finder acting on behalf of any Borrower
brought about the obtaining, making or closing of the Loans or the
related transactions, and no Borrower has obligation to any Person in
respect of any finder's or brokerage fees in connection therewith.
1) Insurance. Schedule 6.1(bb) lists all insurance policies of any
nature maintained, as of the Effective Date, for current occurrences
by any Borrower, as well as a summary of the terms of each such
policy.
1) Deposit and Controlled Disbursement Accounts. Schedule 6.1(cc)
lists all banks and other financial institutions at which any Borrower
maintains deposits and/or other accounts as of the Effective Date,
including any Controlled Disbursement Accounts, and such Schedule
correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of
the purpose of the account, and the complete account number.
1) Government Contracts. Except as set forth in Schedule 6.1(dd),
as of the Effective Date, no Borrower is a party to any contract or
agreement with the federal government or any state or municipal
government and the Receivables are not subject to the Federal
Assignment of Claims Act, as amended (31 U.S.C. Section 3727) or any
similar state or local law.
1) Customer and Trade Relations. As of the Effective Date, there
exists no actual or, to the knowledge of any Borrower, threatened
termination or cancellation of, or any material adverse modification
or change in: the business relationship of any Borrower with any
customer or group of customers whose purchases during the preceding
twelve (12) months caused them to be ranked among the ten largest
customers of any Borrower; or the business relationship of any
Borrower with any supplier material to its operations.
1) Agreements and Other Documents.
1) As of the Effective Date, Borrowers have made available
to Agent or its counsel, on behalf of Lenders, for their review,
accurate and complete copies (or summaries) of all of the following
agreements or documents to which any it is subject and each of which
are listed on Schedule 6.1(ff): supply agreements and purchase
agreements not terminable by a Borrower within sixty (60) days
following written notice issued by such Borrower and involving
transactions in excess of $1,000,000 per annum; and any lease of
equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $500,000 per annum;
and
1) as of the Effective Date, Borrowers have provided to
Agent or its counsel, on behalf of Lenders, accurate and complete
copies of (A) licenses and permits (other than state, municipal and
other local licenses and permits in which case summaries thereof are
acceptable to the Agent) held by a Borrower, the absence of which
could be reasonably likely to have a Materially Adverse Effect; (B)
instruments or documents evidencing Indebtedness of a Borrower and any
security interest granted by such Borrower with respect thereto; and
(C) instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities
of a Borrower.
1) Appointment of Trustee or Examiner; Liquidation. No order has
been entered (i) for the appointment of a chapter 11 trustee or
examiner with enlarged powers with respect to the operation of the
business of any Borrower beyond those set forth in Sections 1106(a)
and 1106(a)(4) of the Bankruptcy Code, or (ii) to convert any of the
Chapter 11 Cases to a Chapter 7 case or to dismiss any Chapter 11
Case.
ARTICLE
SECURITY INTEREST
SECTION Security Interest.
1.
1) To secure the payment, observance and performance of the Secured
Obligations, the Borrowers hereby, jointly and severally, mortgage,
pledge and assign all of the Collateral to the Agent, for the benefit
of itself as Agent and the Lenders, and grants to the Agent, for the
benefit of itself as Agent and the Lenders, a continuing security
interest in, and a continuing Lien upon, all of the Collateral.
1) As additional security for all of the Secured Obligations, the
Borrowers, jointly and severally, grant to the Agent, for the benefit
of itself as Agent and the Lenders, a security interest in, and
assigns to the Agent, for the benefit of itself as Agent and the
Lenders, all of each and every Borrower's right, title and interest in
and to, any deposits or other sums at any time credited by or due from
each Lender and each Affiliate of a Lender to a Borrower, or credited
by or due from any participant of any Lender to a Borrower, with the
same rights therein as if the deposits or other sums were credited by
or due from such Lender. Each Borrower hereby authorizes each Lender
and each Affiliate of such Lender and each participant to pay or
deliver to the Agent, for the account of the Lenders, without any
necessity on the Agent's or any Lender's part to resort to other
security or sources of reimbursement for the Secured Obligations, at
any time during the continuation of any Event of Default or in the
event that the Agent, on behalf of the Lenders, should make demand for
payment hereunder and without further notice to the Borrowers (such
notice being expressly waived), any of the aforesaid deposits (general
or special, time or demand, provisional or final) or other sums for
application to any Secured Obligation, irrespective of whether any
demand has been made or whether such Secured Obligation is mature, and
the rights given the Agent, the Lenders, their Affiliates and
participants hereunder are cumulative with such Person's other rights
and remedies, including other rights of set-off. The Agent will
promptly notify the Borrowers of its receipt of any such funds for
application to the Secured Obligations, but failure to do so will not
affect the validity or enforceability thereof. The Agent may give
notice of the above grant of a security interest in and assignment of
the aforesaid deposits and other sums, and authorization, to, and make
any suitable arrangements with, any Lender, any such Affiliate of any
Lender or participant for effectuation thereof, and Borrowers hereby
irrevocably appoint Agent as its attorney to collect any and all such
deposits or other sums to the extent any such payment is not made to
the Agent or any Lender by such Lender, Affiliate or participant.
1) Notwithstanding anything to the contrary provided in this
Agreement, if at any time prior to the Term Loan B Funding Date, the
Borrowing Base Availability is less than $2,500,000, the Borrowers
hereby irrevocably authorize the Agent, on behalf of the Lenders, to
file or cause to be filed the Mortgages with respect to the Mortgaged
Real Estate. Except as set forth above or in connection with the
funding of Term Loan B, the Agent and the Lenders agree not to file or
cause to be filed the Mortgages with respect to the Mortgaged Real
Estate.
SECTION Continued Priority of Security Interest.
1.
1) The Security Interest granted by the Borrowers shall at all times
be valid, perfected and enforceable against each and every Borrower
and all third parties in accordance with the terms of this Agreement,
as security for the Secured Obligations, and the Collateral shall not
at any time be subject to any Liens that are prior to, on a parity
with or junior to the Security Interest, other than Permitted Liens.
1) No Borrower shall be required to file a collateral assignment in
the Patent and Trademark Office for any Intellectual Property other
than Material Intellectual Property.
1) The Borrowers shall, at their cost and expense, take all action
that may be necessary or desirable, or that the Agent may reasonably
request, so as at all times to maintain the validity, perfection,
enforceability and rank of the Security Interest in the Collateral in
conformity with the requirements of Section 7.2(a), or to enable the
Agent and the Lenders to exercise or enforce their rights hereunder,
including, but not limited to:
1) paying all taxes, assessments and other claims lawfully
levied or assessed on any of the Collateral, except to the extent that
such taxes, assessments and other claims constitute Permitted Liens,
1) obtaining, after the Effective Date, any additional or
new landlords' and mortgagees' releases, subordinations or waivers,
and using all reasonable efforts to obtain mechanics' releases,
subordinations or waivers,
1) delivering to the Agent, for the benefit of the
Lenders, endorsed or accompanied by such instruments of assignment as
the Agent may specify, and stamping or marking, in such manner as the
Agent may specify, any and all chattel paper, instruments, letters and
advices of guaranty and documents evidencing or forming a part of the
Collateral, and
1) executing and delivering financing statements, pledges,
designations, hypothecations, notices and assignments in each case in
form and substance satisfactory to the Agent relating to the creation,
validity, perfection, maintenance or continuation of the Security
Interest under the Uniform Commercial Code or other Applicable Law.
1) The Agent is hereby authorized to file one or more financing or
continuation statements or amendments thereto without the signature of
or in the name of any Borrower for any purpose described in Section
7.2(c). The Agent will give the Borrowers notice of the filing of any
such statements or amendments, which notice shall specify the
locations where such statements or amendments were filed. A carbon,
photographic, xerographic or other reproduction of this Agreement or
of any of the Security Documents or of any financing statement filed
in connection with this Agreement is sufficient as a financing
statement.
1) Each Borrower shall mark its books and records as directed by the
Agent and as may be necessary or appropriate to evidence, protect and
perfect the Security Interest and shall cause its financial statements
to reflect the Security Interest.
ARTICLE
COLLATERAL COVENANTS
Until the Revolving Credit Facility and Term Loan Facility
have been terminated and all the Secured Obligations have been
paid in full, unless the Required Lenders shall otherwise consent
in the manner provided in Section 15.9:
SECTION Collection of Receivables.
1.
1) At the request of the Agent, each Borrower will cause all monies,
checks, notes, drafts and other payments relating to or constituting
proceeds of trade accounts receivable to be forwarded to a Lockbox for
deposit in an Agency Account in accordance with the procedures set out
in the corresponding Agency Account Agreement. Each Borrower will
promptly cause all monies, checks, notes, drafts and other payments
relating to or constituting proceeds of other Receivables, of any
other Collateral and of any trade accounts receivable that are not
forwarded to a Lockbox, to be transferred to or deposited in an Agency
Account. In particular, each Borrower will:
1) advise each Account Debtor on trade accounts receivable
to address all remittances with respect to amounts payable on account
thereof to a specified Lockbox,
1) advise each other Account Debtor that makes payment to
such Borrower by wire transfer, automated clearinghouse transfer or
similar means to make payment directly to an Agency Account, and
1) stamp all invoices relating to trade accounts
receivable with a legend satisfactory to the Agent indicating that
payment is to be made to such Borrower via a specified Lockbox.
1) The Borrowers and the Agent shall cause all collected balances in
each Agency Account to be transmitted daily by wire transfer,
depository transfer check or other means in accordance with the
procedures set forth in the corresponding Agency Account Agreement, to
the Collection Account:
1) for application, on account of the Secured Obligations,
as provided in Sections 2.3(c), 12.2, and 12.3, such credits to be
entered as of the Business Day following receipt and to be conditioned
upon final payment in cash or solvent credits of the items giving rise
to them, and
1) with respect to the balance, so long as no Default or
Event of Default has occurred and is continuing, for transfer by wire
transfer or depository transfer check to a Controlled Disbursement
Account.
1) Any monies, checks, notes, drafts or other payments referred to
in subsection (a) of this Section 8.1 which, notwithstanding the terms
of such subsection, are received by or on behalf of the Borrowers will
be held in trust for the Agent and will be delivered to the Agent or a
Clearing Bank, as promptly as possible, in the exact form received,
together with any necessary endorsements for application by the Agent
directly to the Secured Obligations or, if applicable, for deposit in
the Agency Account maintained with a Clearing Bank and processing in
accordance with the terms of the corresponding Agency Account
Agreement.
1) It is expressly agreed by the Borrowers that, anything herein to
the contrary notwithstanding, each Borrower shall remain liable under
each of its Contracts, licenses and other agreements, documents and
instruments evidencing Receivables to observe and perform all the
conditions and obligations to be observed and performed by it
thereunder. Neither Agent nor any Lender shall have any obligation or
liability under any such Contract, license or agreement by reason of
or arising out of this Agreement or the granting herein of a security
interest therein or the receipt by Agent or any Lender of any payment
relating to any such Contract, license or agreement pursuant hereto.
Neither Agent nor any Lender shall be required or obligated in any
manner to perform or fulfill any of the obligations of any Borrower
under or pursuant to any such Contract, license or agreement, or to
make any payment, or to make any inquiry as to the nature or the
sufficiency of any payment received by it or the sufficiency of any
performance by any party under any such Contract, license or
agreement, or to present or file any claims, or to take any action to
collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any
time or times.
1) All chattel paper shall be marked with the following legend:
"This writing and the obligations evidenced or secured hereby are
subject to the security interest of The CIT Group/Business Credit,
Inc., as Agent, for the benefit of itself as a Lender and certain
other Lenders." For Agent's further security, Borrowers agree that
Agent shall have a special property right and security interest in all
of each Borrower's books and records pertaining to the Collateral and,
upon the occurrence and during the continuance of any Event of
Default, each Borrower shall deliver and turn over any such books and
records to Agent or to its representatives at any time on demand of
Agent. Prior to the occurrence of a Default or Event of Default and
upon notice from Agent, each Borrower shall permit any representative
of Agent to inspect such books and records and shall provide
photocopies thereof to Agent, for the benefit of Agent and Lenders, as
more specifically set forth in this Agreement.
SECTION Verification and Notification. The
Agent shall have the right (a) at any time and from time to time,
in the name of the Agent, the Lenders or in the name of any
Borrower, to verify the validity, amount or any other matter
relating to any Receivables or other Collateral by mail,
telephone, telegraph or otherwise, and to review, audit and make
extracts from all records and files related to any such
Collateral, and (b) after an Event of Default, to (i) notify the
Account Debtors or obligors under any Receivables, of the
assignment of such Collateral to the Agent, for the benefit of
the Lenders, and to direct such Account Debtor or obligors to
make payment of all amounts due or to become due thereunder
directly to the Agent, for the account of the Lenders, and, upon
such notification and at the expense of the Borrowers, to enforce
collection of any such Collateral and to adjust, settle or
compromise the amount or payment thereof, in the same manner and
to the same extent as a Borrower might have done and (ii) cause
the certified independent public accountants then engaged by any
Borrower to prepare and deliver to Agent and each Lender at the
Borrowers' expense at any time and from time to time promptly
upon Agent's request the following reports with respect to
Borrowers: (a) a reconciliation of all Receivables; (b) an aging
of all Receivables; (c) trial balances; and (d) a test
verification of such Receivables as Agent may request.
1.
SECTION Disputes, Returns and Adjustments.
1.
1) In the event any amounts due and owing under any Receivable for
an amount in excess of $100,000 are in dispute between the Account
Debtor and a Borrower, such Borrower shall provide the Agent with
prompt written notice thereof.
1) Each Borrower shall notify the Agent promptly of all returns and
credits in excess of $100,000 in respect of any Receivable, which
notice shall specify the Receivable affected.
1) Each Borrower may, in the ordinary course of business unless a
Default or an Event of Default has occurred and is continuing, grant
any extension of time for payment of any Receivable or compromise,
compound or settle the same for less than the full amount thereof, or
release wholly or partly any Person liable for the payment thereof, or
allow any credit or discount whatsoever therein; provided that (i) no
such action results in the reduction of more than $100,000 in the
amount payable with respect to any one Receivable or of more than
$500,000 per Fiscal Quarter, not to exceed $1,000,000 in any Fiscal
Year, with respect to all Receivables of the Borrowers (in each case,
excluding the allowance of credits or discounts generally available to
Account Debtors in the ordinary course of the Borrowers' businesses
and appropriate adjustments to the accounts of Account Debtors in the
ordinary course of business), and (ii) the Agent is promptly notified
of the amount of such adjustments and the Receivable(s) affected
thereby.
SECTION Invoices.
1.
1) No Borrower will use any invoices other than invoices in the form
delivered to the Agent prior to the Agreement Date and shall not make
any change in the names, addresses, or substantive terms, conditions
or provisions of the invoice without giving the Agent forty-five (45)
days prior notice of the intended use of a different form of invoice
together with a copy of such different form.
1) Upon the reasonable request of the Agent, each Borrower shall
deliver to the Agent, at such Borrower's expense, copies of customers'
invoices or the equivalent, original shipping and delivery receipts or
other proof of delivery, customers' statements, customer address
lists, the original copy of all documents, including, without
limitation, repayment histories and present status reports, relating
to Receivables and such other documents and information relating to
the Receivables as the Agent shall specify.
SECTION Delivery of Instruments. In the event
any Receivable in an amount in excess of $100,000 is, or
Receivables in excess of $500,000 in the aggregate are at any
time evidenced by a promissory note, trade acceptance or any
other instrument for the payment of money, each Borrower will
immediately thereafter deliver such instrument to the Agent,
appropriately endorsed to the Agent, for the benefit of the
Lenders.
1.
SECTION Ownership and Defense of Title.
1.
1) Except for Permitted Liens, the Borrowers shall at all times be
the sole owner or lessee of each and every item of Collateral and
shall not create any lien on, or sell, lease, exchange, assign,
transfer, pledge, hypothecate, grant a security interest or security
title in or otherwise dispose of, any of the Collateral or any
interest therein, except for cash or on open account or on terms of
payment ordinarily extended to its customers, and except for
dispositions that are otherwise expressly permitted under this
Agreement. The inclusion of "proceeds" of the Collateral under the
Security Interest shall not be deemed a consent by the Agent or the
Lenders to any other sale or other disposition of any part or all of
the Collateral.
1) Each and every Borrower shall defend its title or leasehold
interest in and to, and the Security Interest in, the Collateral
against the claims and demands of all Persons.
SECTION Insurance.
1.
1) Each Borrower shall at all times maintain insurance on the
Collateral and its equipment customary and appropriate to the nature
of such Collateral and equipment including, without limitation,
coverage against loss or damage by fire, theft (excluding theft by
employees), burglary, pilferage, loss in transit and such other
hazards as the Agent shall reasonably specify, in amounts not to
exceed those obtainable at commercially reasonable rates and under
policies issued by insurers acceptable to the Agent in the exercise of
its reasonable judgment. All premiums on such insurance shall be paid
by such Borrower and copies of the policies delivered to the Agent.
1) All insurance policies required under Section 8.7(a) shall name
the Agent, for the benefit of the Lenders, as an additional insured
and shall contain loss payable clauses in the form submitted to the
Borrowers by the Agent, or otherwise in form and substance
satisfactory to the Required Lenders, naming the Agent, for the
benefit of the Lenders, as loss payee, as its interests may appear,
and providing that
1) all proceeds thereunder shall be payable to the Agent,
for the benefit of the Lenders (provided, however, if no Default or
Event of Default exists, proceeds from any loss not exceeding $250,000
may be paid to the Borrowers for replacement of the damaged or
destroyed property),
1) no such insurance shall be affected by any act or
neglect of the insured or owner of the property described in such
policy, and
1) such policy and loss payable clauses may be canceled,
amended or terminated only upon at least ten (10) days prior written
notice given to the Agent.
1) Any proceeds of insurance referred to in this Section 8.7 which
are paid to the Agent, for the account of the Lenders, shall be, at
the option of the Required Lenders in their sole discretion, either
(i) applied to replace the damaged or destroyed property, or (ii)
applied to the payment or prepayment of the Secured Obligations.
1) Each Borrower irrevocably makes, constitutes and appoints Agent
(and all officers, employees or agents designated by Agent), so long
as any Event of Default shall have occurred and be continuing as such
Borrower's true and lawful agent and attorney-in-fact for the purpose
of making, settling and adjusting claims under such "All Risk"
policies of insurance, endorsing the name of such Borrower on any
check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions
with respect to such "All Risk" policies of insurance; provided,
however, that in the event that any claim which is or could be made
under any of such insurance policies exceeds $1,000,000 no such claim
shall be settled, compromised or finally determined, except with the
prior written consent of Agent. Agent shall have no duty to exercise
any rights or powers granted to it pursuant to the foregoing power-of-
attorney. Each Borrower shall promptly notify Agent of any loss,
damage, or destruction to the Collateral in the amount of $200,000 or
more, whether or not covered by insurance. After deducting from such
proceeds the expenses, if any, incurred by Agent in the collection or
handling thereof, Agent may, at its option, apply such proceeds to the
reduction of the Secured Obligations, or permit or require such
Borrower to use such money, or any part thereof, to replace, repair,
restore or rebuild the Collateral in a diligent and expeditious manner
with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction. Notwithstanding the
foregoing, if the casualty giving rise to such insurance proceeds
would not reasonably be expected to have a Materially Adverse Effect
and such insurance proceeds do not exceed $2,500,000 in the aggregate,
and no default or Event of Default exists, Agent shall permit such
Borrower to replace, restore, repair or rebuild the property; provided
that if such Borrower has not completed or entered into binding
agreements to complete such replacement, restoration, repair or
rebuilding within one hundred eighty (180) days of such casualty,
Agent may apply such insurance proceeds to the reduction of the
Secured Obligations. All insurance proceeds which are to be made
available to a Borrower to replace, repair, restore or rebuild the
Collateral shall be applied by Agent to reduce the outstanding
principal balance of the Revolving Loan (which application shall not
result in a permanent reduction of the Revolving Loan Commitment) and
upon such application, Agent shall establish a reserve against the
Borrowing Base in an amount equal to the amount of such proceeds so
applied. Thereafter, such funds shall be made available to the
Borrowers to provide funds to replace, repair, restore or rebuild the
Collateral as follows: (i) Borrowers shall request an Advance in the
amount requested to be released; (ii) so long as the conditions set
forth in Article 2 have been met, the Lenders shall make such Advance;
and (iii) the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of such Advance. To the
extent not used to replace, repair, restore or rebuild the Collateral,
such insurance proceeds shall be applied to the reduction of the
Secured Obligations.
SECTION Location of Offices and Collateral.
1.
1) No Borrower will change the location of its chief executive
office or the place where it keeps its books and records relating to
the Collateral or change its name, its identity or corporate structure
in any manner which might make any Financing Statement or other
Uniform Commercial Code amendment, assignment or continuation
statement filed in connection herewith seriously misleading within the
meaning of Section 9-402(7) of the Uniform Commercial Code or any
other then applicable provision of the Uniform Commercial Code without
giving the Agent thirty (30) days prior written notice thereof and
complying with the requirements and conditions of Section 8.8(b).
1) After Agent's written acknowledgment that any reasonable action
requested by Agent in connection with any changes covered by Section
8.8(a), including continuation of the perfection of any Liens in favor
of Agent, on behalf of Lenders, in any Collateral, has been completed
or taken, a Borrower may change the location of its Collateral or the
location where it keeps its books and records relating to the
Collateral, provided that any such new location shall be in the
continental United States, or change its name, its identity or its
corporate structure. No Borrower shall change its fiscal year to a
year ending in any day other than December 31.
SECTION Records Relating to Collateral. Each
Borrower will at all times keep complete and accurate records of
all Collateral on a basis consistent with past practices of such
Borrower.
1.
SECTION Inspection. The Agent and each Lender
(by any of their officers, employees or agents) shall have the
right, to the extent that the exercise of such right shall be
within the control of a Borrower, at any time or times to (a)
visit the properties of any Borrower and its Subsidiaries,
inspect the Collateral and the other assets of such Borrower and
its Subsidiaries and inspect and make extracts from the books and
records of such Borrower and its Subsidiaries, including but not
limited to management letters prepared by independent
accountants, all during customary business hours at such
premises; (b) discuss such Borrower's and its Subsidiaries'
business, assets, liabilities, financial condition, results of
operations and business prospects, insofar as the same are
reasonably related to the rights of the Agent or the Lenders
hereunder or under any of the Loan Documents, with such
Borrower's and its Subsidiaries' (i) principal officers, (ii)
independent accountants, and (iii) any other Person (except that
any such discussion with any third parties shall be conducted
only in accordance with the Agent's or such Lender's standard
operating procedures relating to the maintenance of the
confidentiality of confidential information of borrowers); and
(c) verify the amount, quantity, value and condition of, or any
other matter relating to, any of the Collateral and in this
connection to review, audit and make extracts from all records
and files related to any of the Collateral.
1.
The Borrowers will deliver to the Agent, for the benefit of the
Lenders, any instrument necessary for it to obtain records from
any service bureau maintaining records on behalf of the
Borrowers.
SECTION Information and Reports.
1.
1) Schedule of Receivables. The Borrowers shall deliver to the
Agent (i) on or before the Effective Date, a Schedule of Receivables
as of a date not more than three (3) Business Days prior to the
Effective Date which schedule shall be reconciled to the balance of
the accounts receivable as set forth in a Consolidated Balance Sheet
as of such date, and (ii) no later than ten (10) days after the end of
each Fiscal Month of the Borrowers, a Schedule of Receivables as of
the last Business Day of the Borrowers' immediately preceding Fiscal
Month which schedule shall be reconciled to (A) the balance of the
accounts receivable as set forth in the Consolidated Balance Sheet as
of the end of such Fiscal Month and (B) the Schedule of Receivables
delivered in respect of the next preceding Fiscal Month.
1) Borrowing Base Certificate. Borrowers shall deliver to the Agent
not later than three (3) Business Days after the last day of each
accounting week of the Borrowers a Borrowing Base Certificate prepared
as of the close of business on the last Business Day of such
accounting week, and upon the Agent's request on each Business Day a
Borrowing Base Certificate as of the third (3rd) preceding Business
Day.
1) Notice of Diminution of Value. Each Borrower shall give prompt
notice to the Agent of any matter or event which has resulted in, or
may result in, the diminution in excess of $100,000 in the value of
any of its Collateral, except for any such diminution (i) in the value
of any Receivables in the ordinary course of business or (ii) which
has been appropriately reserved against, as reflected in financial
statements previously delivered to the Agent and the Lenders pursuant
to Article 10.
1) Additional Information. The Agent may in its discretion from time
to time request that the Borrowers deliver the schedules, certificates
described in Sections 8.11(a), (b) and (c) more or less often and on
different schedules than specified in such Sections and the Borrowers
will comply with such requests. The Borrowers will also furnish to
the Agent and each Lender such other information with respect to the
Collateral as the Agent or such Lender may from time to time
reasonably request.
1) Vehicles and Term B Trailers. Borrowers shall deliver to Agent
not later than five (5) Business Days after the last Business Day of
each Fiscal Month, a report indicating the exact location of each and
every Vehicle, and, after the Term Loan B Funding Date, the Term Loan
B Trailers, located outside of the continental United States as of the
last day of such Fiscal Month. Such reports shall be provided more
frequently by Borrowers to Agent upon the request of Agent.
SECTION Assignment of Claims Act. Upon the
request of the Agent, the Borrowers shall execute any documents
or instruments and shall take such steps or actions reasonably
required by the Agent so that all monies due or to become due
under any contract with the United States of America, the
District of Columbia or any state, county, municipality or other
domestic or foreign governmental entity, or any department,
agency or instrumentality thereof, will be assigned to the Agent,
for the benefit of itself and the Lenders, and notice given
thereof in accordance with the requirements of the Assignment of
Claims Act of 1940, as amended, or any other laws, rules or
regulations relating to the assignment of any such contract and
monies due or to become due.
1.
SECTION Covenants Regarding Material
Intellectual Property Collateral.
1.
1) Each Borrower shall notify Agent immediately if it knows that any
application or registration relating to any Material Intellectual
Property (now or hereafter existing) may become abandoned or
dedicated, or of any adverse determination or development (including
the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the
United States Copyright Office or any court) regarding such Borrower's
ownership of any Material Intellectual Property, its right to register
the same, or to keep, use and maintain the same.
1) Promptly after the date on which (i) a Borrower acquires any
Material Intellectual Property or (ii) any Intellectual Property
becomes Material Intellectual Property, such Borrower shall execute
and deliver any and all Material Intellectual Property security
agreements as Agent may request to evidence Agent's security interest
in such Material Intellectual Property, and the General Intangibles of
such Borrower relating thereto or represented thereby.
1) Each Borrower shall take all actions necessary or requested by
Agent to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration with respect to all of
its Material Intellectual Property (now or hereafter existing),
including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and
cancellation proceedings.
1) In the event that any of the Material Intellectual Property
Collateral is infringed upon, or misappropriated or diluted by a third
party, Borrowers shall notify Agent promptly after a Borrower learns
thereof. Each Borrower shall, unless it shall reasonably determine
that such Material Intellectual Property is no longer material to the
conduct of its business or operations in accordance with the
definition of "Material Intellectual Property," promptly sue for
infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution, and shall
take such other actions as Agent shall deem appropriate under the
circumstances to protect such Material Intellectual Property
Collateral.
SECTION Covenants Regarding Vehicles and Term
Loan B Trailers. Borrowers shall maintain the Vehicles and Term
Loan B Trailers in good order and repair, except for ordinary
wear and tear in the ordinary course of business. In addition,
Borrowers shall maintain insurance on the Vehicles and Term Loan
B Trailers, in such amounts and with such companies as may be
acceptable to Agent, and shall maintain Agent, on behalf of the
Lenders, as loss-payee on all such insurance. In the event a
loss related to a Vehicle or a Term Loan B Trailer occurs, all
proceeds of insurance shall promptly be paid to Agent, for the
ratable benefit of Lenders and such sums shall be applied to
reduce the principal balance of Term Loans. Borrowers agree not
to sell, lease or otherwise dispose of any Vehicle or Term Loan B
Trailer without the prior written consent of Agent. The
provisions hereof with respect to Term Loan B Trailers shall not
be applicable until the Term Loan B Funding Date.
1.
SECTION 8.15 Appraisals of Vehicles and Term Loan B
Trailers. Borrowers hereby agree that Agent may, at Borrowers'
cost and expense, undertake or have undertaken (whether in-house
or through an appraiser satisfactory to Agent in its sole
discretion) an appraisal of the Vehicles and Term Loan B
Trailers, which appraisal shall be in form and substance
satisfactory to Agent in its sole discretion. Such appraisals
may be conducted at any time, but not more than twice prior to
the Initial Anniversary Date. The provisions hereof with respect
to Term Loan B Trailers shall not be applicable until the Term
Loan B Funding Date.
ARTICLE
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility and Term Loan Facility
have been terminated and all the Secured Obligations have been
paid in full, unless the Required Lenders shall otherwise consent
in the manner provided for in Section 15.9, each Borrower will,
and will cause each of its Subsidiaries to (except where, and
only to the extent that, but only for so long as, any such
performance is rendered impossible because of the filing of the
Chapter 11 Cases):
SECTION Preservation of Corporate Existence and
Similar Matters.
1.
1) Preserve and maintain its corporate existence, rights,
franchises, licenses and privileges in the jurisdiction of its
incorporation and qualify and remain qualified as a foreign
corporation and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business
requires such qualification or authorization, except where the failure
to obtain or maintain such qualification or authorization would not
have a Material Adverse Effect on such Borrower and its Subsidiaries
as a whole, provided that, within ninety (90) calendar days after the
Effective Date, the Borrowers shall deliver to the Agent a proposed
plan with respect to the dissolution or merger of the Guarantors with
and into the respective owners of each such Guarantor, which plan
shall not be implemented without the prior written consent of the
Agent.
1) Deliver to the Agent within thirty (30) days after the Effective
Date, certificates evidencing the good standing of each Borrower in
each jurisdiction in which it is required to be qualified as a foreign
corporation to transact business as presently conducted including,
without limitation, those jurisdictions in which intrastate authority
is held (as listed in Schedule 6.1(f) hereto) and required to be held.
SECTION Compliance with Applicable Law. Comply
with all material Applicable Law relating to such Borrower or
such Subsidiary.
1.
SECTION Interim Order; Final Order;
Administrative Expense Claim Priority; Lien Priority; Payments.
1.
1) The Borrowers shall not at any time seek, consent to or suffer to
exist any modification, stay, vacation or amendment of the Interim
Order or the Final Order, as the case may be, except for modifications
and amendments mutually agreed to by the Required Lenders, the
Borrowers and the Agent or, if Section 5.3(e) is applicable, by Agent.
1) Prior to the date on which the Secured Obligations have been paid
in full in cash or otherwise satisfied on terms acceptable to Agent
and the Required Lenders and the Commitments have been terminated,
Borrowers shall not pay any administrative expense claims except (i)
the Carve-Out Expenses, (ii) administrative expense claims incurred in
the ordinary course of the business of the Borrowers, and (iii) the
fees and expenses of attorneys, accountants, financial advisors and
consultants retained by the Agent.
1) Notwithstanding subparagraph (b), above, the Borrowers shall be
permitted, except after the occurrence and during the continuance of
an Event of Default, to pay as the same may become due and payable (i)
administrative expenses of the kind specified in Section 503(b) of the
Bankruptcy Code incurred in the ordinary course of their business, and
(ii) compensation and reimbursement of expenses to professionals
allowed and payable under section 330 and 331 of the Bankruptcy Code.
1) Other than payments pursuant to Borrowers' "Application For An
Order Authorizing the Debtors to Pay in the Ordinary Course of Their
Businesses Pre-Petition Claims of Essential Trade Creditors and
Related Pre-Petition Obligations" filed upon the commencement of the
Chapter 11 Case, except with the written consent of Agent and upon an
Order of the Court, prior to the date on which the Secured Obligations
have been paid in full in cash or otherwise satisfied on terms
acceptable to Agent and the Required Lenders and the Commitments have
been terminated, the Borrowers shall not pay any Indebtedness which
existed prior to the Petition Date.
SECTION Maintenance of Property. In addition
to, and not in derogation of, the requirements of the Security
Documents,
1.
1) protect and preserve all properties material to its business,
including copyrights, patents, trade names and trademarks, and
maintain in good repair, working order and condition in all material
respects, with reasonable allowance for wear and tear, all tangible
properties, and
1) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such
properties necessary for the conduct of its business, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION Conduct of Business. At all times carry
on its business in an efficient manner and engage only in the
business described in Section 6.1(e).
1.
SECTION Insurance. Maintain, in addition to the
coverage required by Section 8.7 and the Security Documents,
insurance with responsible insurance companies against such risks
and in such amounts as is customarily maintained by similar
businesses or as may be required by Applicable Law, and from time
to time deliver to the Agent or any Lender upon its request a
detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties
and risks covered thereby.
1.
SECTION Payment of Taxes and Claims. Pay or
discharge when due (a) all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits
or upon any properties belonging to it, except that real property
ad valorem taxes shall be deemed to have been so paid or
discharged if the same are paid before they become delinquent,
and (b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and
rentals which, if unpaid, might become a Lien on any properties
of such Borrower; except that this Section 9.6 shall not require
the payment or discharge of any such tax, assessment, charge,
levy or claim which is being contested in good faith by
appropriate proceedings and for which reserves in respect of the
reasonably anticipated liability therefor have been appropriately
established.
1.
SECTION Accounting Methods and Financial
Records. Maintain a system of accounting, and keep such books,
records and accounts (which shall be true and complete), as may
be required or as may be necessary to permit the preparation of
financial statements in accordance with GAAP consistently
applied.
1.
SECTION Use of Proceeds.
1.
1) Use the proceeds of the initial Revolving Credit Loan (i) first,
to satisfy in full all of the outstanding (pre-petition) Secured
Obligations under the Pre-Petition Loan Agreement as of the Effective
Date after taking into account (A) satisfaction of certain of such
(pre-petition) Secured Obligations with the proceeds of Term Loan A
(as provided hereinabove in Article 2A) and (B) for the assumption by
Borrowers, as Letter of Credit Obligations hereunder, of all (pre-
petition) Letter of Credit Obligations under the Pre-Petition Loan
Agreement (as provided hereinabove in the definition of Letter of
Credit Obligations), (ii) to fund certain of the fees and expenses
associated with the extension of the Loans, and (iii) to use all
subsequent Loans only for working capital purposes or as is otherwise
expressly authorized herein or in the Interim Order or Final Order,
and
1) not use any part of such proceeds to purchase or, to carry or
reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulation G or U of
the Board of Governors of the Federal Reserve System) or, in any
event, for any purpose which would involve a violation of such
Regulation G or U or of Regulation T or X of such Board of Governors,
or for any purpose prohibited by law or by the terms and conditions of
this Agreement.
SECTION Hazardous Waste and Substances:
Environmental Requirements.
1.
1) In addition to, and not in derogation of, the requirements of
Section 9.2 and of the Security Documents, substantially comply with
all Environmental Laws and all Applicable Law relating to occupational
health and safety (except for instances of noncompliance that are
being contested in good faith by appropriate proceedings if reserves
in respect of such Borrower's or such Subsidiary's reasonably
anticipated liability therefor have been appropriately established),
promptly notify the Agent of its receipt of any notice of a violation
of any such Environmental Laws or other such Applicable Law and
indemnify and hold the Agent and the Lenders harmless from all
Environmental Liabilities incurred by or imposed upon the Agent or any
Lender on account of such Borrower's failure to perform its
obligations under this Section 9.9.
1) Such Borrower shall not cause or permit a Release of any
Contaminant on, at, in, under, above, to, from or about any of the
Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely
impact the value or marketability of any of the Real Estate or any of
the Collateral, other than such violations or impacts which could not
reasonably be expected to have a Materially Adverse Effect on such
Borrower and its Subsidiaries as a whole.
1) Whenever such Borrower gives notice to the Agent pursuant to this
Section 9.9 with respect to a matter that reasonably could be expected
to result in an Environmental Liability to such Borrower in excess of
$500,000 in the aggregate, such Borrower shall, at the Agent's request
and such Borrower's expense (i) cause an independent environmental
engineer acceptable to the Agent to conduct an assessment, including
tests where necessary, of the site where the noncompliance or alleged
noncompliance with Environmental Laws has occurred and prepare and
deliver to the Agent a report setting forth the results of such
assessment, a proposed plan to bring such Borrower into compliance
with such Environmental Laws (if such assessment indicates
noncompliance) and an estimate of the costs thereof, and (ii) provide
to the Agent a supplemental report of such engineer whenever the scope
of the noncompliance, or the response thereto or the estimated costs
thereof, shall materially adversely change.
SECTION Landlords' Agreements, Mortgagee
Agreements and Bailee Letters. Such Borrower shall use its
reasonable best efforts to obtain a landlord's agreement,
mortgagee agreement or bailee letter, as applicable, from the
lessor of each leased property or mortgagee of owned property or
with respect to any warehouse, processor or converter facility or
other location where Collateral is located, which agreement or
letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be
satisfactory in form and substance to Agent. After the Effective
Date, no real property or warehouse space where Collateral may be
stored or located shall be leased or acquired by such Borrower,
unless and until a satisfactory landlord or mortgagee agreement,
as the case may be, shall first have been obtained with respect
to such location. Such Borrower shall timely and fully pay and
perform its obligations under all leases and other agreements
with respect to each leased location or public warehouse where
any Collateral is or may be located. Nothing contained in this
Section 9.11 shall impair or otherwise modify any of Agent's or
any Lender's rights under this Agreement.
1.
SECTION Further Assurances. Each Borrower
agrees that it shall, at its expense and upon request of Agent,
duly execute and deliver, or cause to be duly executed and
delivered, to Agent such further instruments and do and cause to
be done such further acts as may be necessary in the reasonable
opinion of Agent to carry out the express provisions of this
Agreement or any other Loan Document.
1.
ARTICLE
INFORMATION
Until the Revolving Credit Loan Facility and Term Loan
Facility have been terminated and all the Secured Obligations
have been paid in full, unless the Required Lenders shall
otherwise consent in the manner set forth in Section 15.9, each
Borrower will furnish to the Agent and to each Lender at the
offices then designated for such notices pursuant to Section
15.1:
SECTION Financial Statements.
1.
1) Audited Year-End-Statements. As soon as available, but in any
event within ninety (90) days after the end of each Fiscal Year of the
Borrowers, copies of the Consolidated Balance Sheet and the
Consolidating Balance Sheets as at the end of such Fiscal Year and the
related statements of income, shareholders' equity and cash flow for
such Fiscal Year, together with consolidating statements for the
Borrowers and the Guarantors, in each case setting forth in
comparative form the figures for the previous Fiscal Year of the
Borrowers and the Guarantors and reported on, without qualification,
by independent certified public accountants selected by Borrowers and
acceptable to the Agent (the "Audited Financial Statements").
1) Quarterly Financial Statements. As soon as available, but in any
event within forty-five (45) days after the end of each Fiscal Quarter
of the Borrowers, copies of the Consolidated Balance Sheet and the
Consolidating Balance Sheets, as of the end of such Fiscal Quarter,
and the related statements of income, shareholders, equity, and cash
flow for such Fiscal Quarter, together with consolidating statements
for the Borrowers and the Guarantors, in each case setting forth in
comparative form the figures for the previous Fiscal Year of the
Borrowers and Guarantors (including, without limitation, a comparison
to the projected budgeted figures), certified by the Financial Officer
of the Borrowers and the Guarantors, to the best of his knowledge, as
presenting fairly the financial condition and results of operations of
the Borrower and the Guarantors as of the date thereof and for the
periods ended on such date, subject to normal year-end adjustments.
1) Monthly Financial Statements. As soon as available, but in any
event within thirty (30) days after the end of each Fiscal Month of
the Borrowers, copies of the Consolidated Balance Sheet and
Consolidating Balance Sheets of the Borrowers and the Guarantors as at
the end of such Fiscal Month and the related unaudited income
statement for the Borrowers and the Guarantors for such Fiscal Month
and for the portion of the Fiscal Year through such Fiscal Month,
together with consolidating statements for the Borrowers and the
Guarantors, in each case setting forth in comparative form the figures
for the previous Fiscal Year (including, without limitation, a
comparison to the projected budget figures for the previous Fiscal
Year), certified by the Financial Officer of the Borrowers and the
Guarantors to the best of his knowledge as presenting fairly the
financial condition and results of operations of the Borrowers and the
Guarantors as at the date thereof and for the periods ended on such
date, subject to normal year end adjustments, and promptly when filed
with the Court or delivered to the United States Trustee, all monthly
reports, projections or other information respecting the Borrowers'
businesses or financial condition, or prospects filed with the Court
or delivered to the United States Trustee.
1) Projected Financial Statements. As soon as available, but in any
event prior to the last Business Day of each Fiscal Year during the
term hereof, forecasted financial statements prepared by the Operating
Companies on a consolidated basis and approved by Trism's Board of
Directors, consisting of monthly consolidated balance sheets, cash
flow statements and income statements of the Operating Companies,
reflecting projected borrowings hereunder and setting forth the
assumptions on which such forecasted financial statements were
prepared, covering the one-year period commencing on the first day of
the next succeeding fiscal year.
All such financial statements referred to in clauses (a) and (b)
shall be complete and correct in all material respects and
prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of footnotes and normal
year-end adjustments) applied consistently throughout the periods
reflected therein.
SECTION Accountants' Certificate. Together with
the Audited Financial Statements referred to in Section 10.1(a),
each Borrower shall use its reasonable best efforts to cause its
independent certified public accountants to deliver a certificate
of such accountants addressed to the Agent
1.
1) stating that in making the examination necessary for the
certification of such financial statements, nothing has come to their
attention to lead them to believe that any Default or Event of Default
exists and, in particular, they have no knowledge of any Default or
Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature, and
1) having attached the calculations, prepared by each Borrower and
reviewed by such accountants, required to establish whether or not
each Borrower is in compliance with the covenants contained in
Sections 11.1, 11.2, 11.5, 11.6, 11.10 and 11.12, as at the date of
such financial statements.
SECTION Officer's Certificate. Together with
each delivery of financial statements required by Section 10.1
(a), (b) and (c), a certificate of each Borrower's President or
Financial Officer (a) stating that, based on an examination
sufficient to enable him to make an informed statement, no
Default or Event of Default exists or, if such is not the case,
specifying such Default or Event of Default and its nature, when
it occurred, whether it is continuing and the steps being taken
by each Borrower with respect to such Default or Event of
Default, and (b) setting forth the calculations necessary to
establish whether or not each Borrower was in compliance with the
covenants contained in Sections 11.1, 11.2, 11.5, 11.6, 11.10 and
11.12 as of the date of such statements.
1.
SECTION Additional Reports.
1.
1) Financial Performance Projections. As soon as available, but in
any event within thirty (30) days prior to the last Business Day of
each Fiscal Month during the term hereof, the Borrowers shall deliver
to the Agent updated information regarding the Projections.
1) Variance Reports. As soon as possible, but in any event within
fifteen (15) days after the end of each Fiscal Month, deliver to the
Agent a report prepared in a manner consistent with the Projections
and otherwise in form and substance acceptable to the Agent, that
compares the financial performance of the Borrowers set forth in the
Projections against the actual financial performance for such
corresponding periods, with such performance figures compared on both
a monthly and year-to-date basis.
1) Revenues and Disbursements Report. Not later than the close of
business on each Tuesday, a report summarizing the revenues and
disbursements for each Borrower for the preceding week, in a form and
otherwise containing a level of detail acceptable to the Agent in its
sole discretion.
1) Operations Report. Not later than the close of business on each
Tuesday, a report that sets forth (i) the aggregate number of drivers
who performed services, either as employees or independent contractor
owner/operators, on behalf of the Borrowers during the preceding week
and (ii) all increases or decreases in the number, if any, and dollar
value of any Rolling Stock of Borrowers during the preceding week and
since the Petition Date.
SECTION Copies of Other Reports.
1.
romptly upon receipt thereof, copies of all reports, if any,
submitted to each Borrower or its Board of Directors by its
independent public accountants.
1) As soon as practicable, copies of all financial statements and
reports that each Borrower shall send to its shareholders generally
and of all registration statements and all regular or periodic reports
which each Borrower shall file with the Securities and Exchange
Commission or any successor commission.
1) From time to time and as soon as reasonably practicable following
each request, such forecasts, data, certificates, reports, statements,
opinions of counsel, documents or further information regarding the
business, assets, liabilities, financial condition, results of
operations or business prospects of each Borrower or any of its
Subsidiaries as the Agent or any Lender may reasonably request and
that each Borrower has or (except in the case of legal opinions
relating to the perfection or priority of the Security Interest)
without unreasonable expense can obtain; provided, however, that the
Lenders shall, to the extent reasonably practicable, coordinate
examinations of each Borrower's records by their respective internal
auditors. The rights of the Agent and the Lenders under this Section
10.5 are in addition to and not in derogation of their rights under
any other provision of this Agreement or of any other Loan Document.
1) If requested by the Agent or any Lender, each Borrower will
furnish to the Agent and the Lenders statements in conformity with the
requirements of Federal Reserve Form G-3 or U-1 referred to in
Regulation G and U, respectively, of the Board of Governors of the
Federal Reserve System.
SECTION Notice of Litigation and Other Matters.
Prompt notice of:
1.
1) the commencement, to the extent each Borrower is aware of the
same, of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings
in any court or before any arbitrator against or in any other way
relating to or affecting any Borrower, any of its Subsidiaries or any
of any Borrower's or any of its Subsidiaries' properties, assets or
businesses, which might, singly or in the aggregate, result in the
occurrence of a Default or an Event of Default, or have a Materially
Adverse Effect on any Borrower and its Subsidiaries, taken as a whole,
1) any amendment of the articles of incorporation or by-laws of any
Borrower or any of its Subsidiaries,
1) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of any Borrower
or any of its Subsidiaries which has had or may have, singly or in the
aggregate, a Materially Adverse Effect on any Borrower or its
Subsidiaries, taken as a whole, and any change in the Chief Executive
Officer, President or Chief Financial Officer of such Borrower, and
1) any Default or Event of Default or any event which constitutes or
which with the passage of time or giving of notice or both would
constitute a default or event of default by any Borrower or any of its
Subsidiaries under any material agreement (other than this Agreement)
to which any Borrower or any of its Subsidiaries is a party or by
which any Borrower, any of its Subsidiaries or any of any Borrower's
or any of its Subsidiaries' properties may be bound.
SECTION ERISA. As soon as possible and in any
event within thirty (30) days after any Borrower knows, or has
reason to know, that:
1.
1) any Termination Event with respect to a Plan has occurred or will
occur, or
1) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of $0.00, or
1) any Borrower or any of its Subsidiaries is in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan required by reason of such Borrower's or such
Subsidiary's complete or partial withdrawal (as described in Section
4203 or 4205 of ERISA) from such Multiemployer Plan,
a certificate of the President or a Financial Officer of such
Borrower setting forth the details of such event and the action
which is proposed to be taken with respect thereto, together with
any notice or filing which may be required by the PBGC or other
agency of the United States government with respect to such
event.
SECTION Accuracy of Information. All written
information, reports, statements and other papers and data
furnished to the Agent or any Lender, whether pursuant to this
Article 10 or any other provision of this Agreement or of any
other Loan Document, shall be, at the time the same is so
furnished, complete and correct in all material respects to the
extent necessary to give the Agent and the Lenders true and
accurate knowledge of the subject matter.
1.
SECTION Revisions or Updates to Schedules.
Should any of the information or disclosures provided on any of
the Schedules originally attached hereto become outdated or
incorrect in any material respect, the Borrowers shall deliver to
the Agent and the Lenders as part of the officer's certificate
required pursuant to Section 10.3 such revisions or updates to
such Schedule(s) as may be necessary or appropriate to update or
correct such Schedule(s), provided that no such revisions or
updates to any Schedule(s) shall be deemed to have amended,
modified or superseded such Schedule(s) as originally attached
hereto, or to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such
Schedule(s), unless and until the Required Lenders in the
exercise of their reasonable credit judgment, shall have accepted
in writing such revisions or updates to such Schedule(s).
1.
SECTION Compliance with Laws. Comply with the
requirements of all Applicable Law, rules, regulations, and
orders of any governmental authority, including the Bankruptcy
Code, the Fair Labor Standards Act and the Americans with
Disabilities Act, other than laws, rules, regulations, and orders
(a) compliance with which is prevented solely by the import of
Section 362 of the Bankruptcy Code, or (b) the non-compliance
with which individually or in the aggregate would not have and
could not reasonably be expected to have a Materially Adverse
Effect.
1.
ARTICLE
NEGATIVE COVENANTS
Until the Revolving Credit Facility and Term Loan Facility
have been terminated and all the Secured Obligations have been
paid in full, unless the Required Lenders shall otherwise consent
in the manner set forth in Section 15.9, no Borrower will
directly or indirectly and will not permit its Affiliates to:
SECTION Financial Ratios. Upon and after the
date on which an event of an Availability Shortfall shall first
occur, breach any of the financial covenants set forth in this
Section 11.1:
1.
1) Minimum Availability. The Borrowers shall not permit the
Borrowing Base Availability at any time to be less than One Million
Dollars ($1,000,000) or, if Term Loan B has been funded, $2,500,000.
1) Minimum EBITDA. The Borrowers' cumulative consolidated EBITDA
for any period beginning on September 1, 1999 and ending on any of the
dates set forth below shall not be less than the corresponding amounts
set forth below:
Period Ending: Minimum EBITDA
September 30, 1999 $1,500,000
October 30, 1999 3,000,000
November 30, 1999 4,300,000
December 31, 1999 5,100,000
January 31, 2000 5,900,000
February 29, 2000 7,200,000
SECTION Indebtedness for Money Borrowed.
Create, assume, or otherwise become or remain obligated in
respect of, or permit or suffer to exist or to be created,
assumed or incurred or to be outstanding any Indebtedness for
Money Borrowed.
1.
SECTION Guaranties. Become or remain liable
with respect to any Guaranty of any obligation of any other
Person.
1.
SECTION Investments. Acquire, after the
Agreement Date, any Business Unit or Investment or, after such
date, maintain any Investment.
1.
SECTION Unfunded Capital Expenditures. Make any
Unfunded Capital Expenditures, other than expenses, not to exceed
$250,000 per Fiscal Month, relating to the maintenance of
tractors or trailers which are capitalized by Borrowers.
1.
SECTION Restricted Dividend Payments and
Purchases, Etc. Declare or make any Restricted Distribution or
Restricted Payment.
1.
SECTION Merger, Consolidation and Sale of
Assets. Merge or consolidate with any other Person or sell,
lease or transfer or otherwise dispose of all or a substantial
portion of its assets to any Person, including its stock or the
capital stock of any of its Subsidiaries, other than sales of
Inventory in the ordinary course of business, except as may be
permitted under Section 9.1 hereof.
1.
SECTION Transactions with Affiliates. Effect any
transaction with any Affiliate without the express prior written
consent of the Agent, except (a) in the ordinary course of the
Borrower's business and otherwise in compliance with all orders
of the Court, and (b) loans to Affiliates of any of the Borrowers
in the aggregate during the term hereof not to exceed $250,000
(excluding the existing loans to Affiliates set forth in Schedule
11.8 hereto as of the Effective Date); and in each case only to
the extent such Affiliates is a Borrower.
1.
SECTION Liens. Create, assume or permit or
suffer to exist or to be created or assumed any Lien on any of
the Collateral or its other assets, other than Permitted Liens,
specifically including, without limitation, any effort by the
Borrowers, any committee formed in the Chapter 11 Cases or any
other party-in-interest in the Chapter 11 Cases to create any
Lien which is superior to or pari passu with any claims or
interest of the Lenders, irrespective of whether such claims or
interest may be "adequately protected" within the meaning of the
Bankruptcy Code.
1.
SECTION Operating Leases. Enter into any lease
other than a Capitalized Lease (an "Operating Lease") that would
cause the Borrowers to exceed the Permitted Incremental
Obligations.
1.
SECTION Plans. Permit any condition to exist in
connection with any Plan which might constitute grounds for the
PBGC to institute proceedings to have such Plan terminated or a
trustee appointed to administer such Plan, and any other
condition, event or transaction with respect to any Plan which
could result in the incurrence by such Borrower of any material
liability, fine or penalty.
1.
SECTION Sales and Leasebacks. Enter into any
synthetic lease or any arrangement with any Person providing for
such Borrower's leasing from such Person any real or personal
property which has been or is to be sold or transferred, directly
or indirectly, by such Borrower to such Person.
1.
SECTION Capital Structure and Business. (a) Make
any material changes in any of its business objectives, purposes
or operations which could reasonably be expected to materially
and adversely affect the repayment of the Loans or any of the
other Secured Obligations or could reasonably be expected to
result in a Materially Adverse Effect on such Borrower and its
Subsidiaries as a whole, (b) make any change in its capital
structure as described on Schedule 11.13, including the issuance
of any shares of stock, warrants or other securities convertible
into Stock or any revision of the terms of its outstanding stock,
except for options issued pursuant to the terms of the employee
and/or management stock option plan in effect as of the Effective
Date and the shares of stock issued in connection therewith, or
(c) amend its charter or bylaws in a manner which would adversely
affect Agent or Lenders or such Borrower's duty or ability to
repay the Secured Obligations.
1.
SECTION No Impairment of Intercompany Transfers.
Directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than
this Agreement and the other Loan Documents) which could directly
or indirectly restrict, prohibit or require the consent of any
Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary
of such Borrower to such Borrower.
1.
SECTION No Speculative Transactions. Engage in any
transaction involving commodity options, futures contracts or
similar transactions, except solely to hedge against fluctuations
in the prices of commodities owned or purchased by it and the
values of foreign currencies receivable or payable by it and
interest swaps, caps or collars.
1.
SECTION New Indebtedness. Incur any post-Petition
Date Indebtedness, other than the Secured Obligations, except:
1.
1) unsecured trade debt incurred in the ordinary course of
Borrowers' businesses, and on terms not inconsistent with the
superpriority administrative expense status of the Secured Obligations
pursuant to the Interim Order and the Final Order;
1) obligations of the Borrowers and their Subsidiaries for the
payment of rent for any property (real, personal or mixed, tangible or
intangible) under leases, subleases or similar arrangements (other
than Capital Leases) incurred in the ordinary course of Borrowers'
businesses;
1) obligations of the Borrowers for the payment of fees for services
rendered by, and of expenses incurred by, (i) professionals retained
pursuant to court order in the Chapter 11 Cases pursuant to Section
327 or 1103 of the Bankruptcy Code by any Borrower or any statutory
committee appointed in any of the Chapter 11 Cases and identified on
Schedule 4.9 hereto, or (ii) the United States Trustee; and
1) obligations of the Borrowers and their Subsidiaries (other than
any such obligations that would cause the Borrowers to exceed the
Permitted Incremental Obligations) incurred in connection with any
refinancing of purchase options under any Capital Leases entered into
prior to the Petition Date.
SECTION Cancellation of Indebtedness. Cancel any
claim or debt owing to any Borrower except for reasonable
consideration and in the ordinary course of business and
otherwise in compliance with all orders of the Court.
1.
SECTION Pre-Petition Obligations; Adequate
Protection. Except with respect to the orders of the Court, if
any, referenced in Schedule 11.18, without the express prior
written consent of Agent, make any payment or transfer with
respect to any pre-Petition Date Lien or Indebtedness, whether by
way of "adequate protection" under the Bankruptcy Code or
otherwise, provided, however, that the Borrowers may continue to
make regular monthly payments (but not any "balloon" payments)
with respect to any pre-Petition Date Capital Leases or
promissory notes related to the financing of any trucks,
trailers, computer equipment, or satellite communications or
telephone equipment and otherwise in compliance with all orders
of the Court.
1.
SECTION Maintenance of Certain Operations. Cause,
permit or otherwise allow (i) the number of drivers (whether
employees or independent contractor owner/operators) employed by
the Borrowers (at driver-to-tractor ratios consistent with the
historic pre-Petition Date practices of the Borrowers) to at any
time be less than 1840, or (ii) the availability of Borrowers'
Rolling Stock (whether owned or leased) to decrease to levels
which may, in the judgment of the Agent and the Required Lenders,
materially affect the ability of Borrowers' to maintain business
operations at levels consistent with the levels operated by
Borrowers prior to the Petition Date.
1.
ARTICLE
DEFAULT
SECTION Events of Default. Each of the following
shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order
of any court or any order, rule or regulation of any governmental
or nongovernmental body:
1.
1) Any Borrower shall default in any payment of principal of or
interest on any Loan or any Note when and as due (whether at maturity,
by reason of acceleration or otherwise);
1) Any Borrower shall default in the payment, as and when due, of
principal of or interest on, any other Secured Obligation, and such
default shall continue for a period of five (5) calendar days after
written notice thereof has been given to such Borrower by the Agent;
1) Any representation or warranty made or deemed to be made by any
Borrower under this Agreement or any Loan Document, or any amendment
hereto or thereto, shall at any time prove to have been incorrect or
misleading in any material respect when made;
1) Any Borrower shall default in the performance or observance of
any term, covenant, condition or agreement to be performed by such
Borrower, contained in
1) Articles 7, 8, 10 or 11, or Sections 9.1 (insofar as it
requires the preservation of the corporate existence of such
Borrower), or 9.8 and the Agent shall have delivered to such Borrower
written notice of such default; or
1) any other provision of this Agreement (other than as
specifically provided for otherwise in this Section 12.1) and such
default shall continue for a period of thirty (30) calendar days after
written notice thereof has been given to such Borrower by the Agent;
1) the bringing of a motion, or the filing of any plan of
reorganization or disclosure statement attendant thereto by Borrower
in the Chapter 11 Case: (i) except as otherwise provided under Section
11.16(d), to obtain additional financing under Section 364(c) or (d)
of the Bankruptcy Code; (ii) to grant any Lien upon or affecting any
Collateral; (iii) to use cash collateral of Lenders under Section
363(c) of the Bankruptcy Code without Lenders' consent; or (iv) any
other action or actions adverse to Lenders or their rights and
remedies hereunder or their interest in the Collateral that would,
individually or in the aggregate, have a Materially Adverse Effect;
1) the allowance of any claim or claims under Section 506(c) of the
Bankruptcy Code against or with respect to any of the Collateral in
excess of $50,000 in the aggregate;
1) the occurrence of: (i) a post-petition judgment, liability or
event in excess of $500,000; (ii) general liability and workers
compensation costs (inclusive of insurance premiums with respect
thereto) during the period from the Effective Date through and
including the Initial Anniversary Date, which in the aggregate exceed
such costs for the preceding six (6) month period by more than
$500,000; or (iii) any post-petition judgments, liabilities or events,
including but not limited to any occurrences specified in subparts (i)
and (ii) of this subsection, that would individually or in the
aggregate have a Materially Adverse Effect;
1) the appointment of an interim or permanent trustee in any of the
Chapter 11 Cases or the appointment of an examiner in any of the
Chapter 11 Cases with expanded powers to operate or manage the
financial affairs, the business, or reorganization of any Borrower;
1) the dismissal of any of the Chapter 11 Cases, or the conversion
of any of the Chapter 11 Cases from one under Chapter 11 to one under
Chapter 7 of the Bankruptcy Code;
1) the entry of an order by the Court granting relief from or
modifying the automatic stay of Section 362 of the Bankruptcy Code (i)
to allow any creditor (other than a Lender) to execute upon or enforce
a Lien on any Collateral, or (ii) with respect to any Lien of or the
granting of any Lien on any Collateral to any State or local
environmental or regulatory agency or authority, which in either case
would have a Materially Adverse Effect;
1) the material and adverse modification (other than any
modification expressly consented to by Agent and Required Lenders) of
the Interim Order or the Final Order, in the sole judgment of Agent
and Required Lenders;
1) the commencement of a suit or action against Agent or any Lender
and, as to any suit or action brought by any person other than a
Borrower or an officer or employee of Borrower, the continuation
thereof without dismissal for thirty (30) days after service thereof
on Lender, that asserts, by or on behalf of any Borrower, the
Environmental Protection Agency, any State environmental protection or
health and safety agency or any creditor(s) or official committee in
any of the Chapter 11 Cases, any claim or legal or equitable remedy
for the avoidance or recovery of any pre-Petition Date transfer to
Agent or any Lender by any Borrower (including without limitation the
transfer of any Lien) or which seeks the equitable subordination or
avoidance of any pre-Petition Date Indebtedness of any Borrower to, or
any Lien of, any Lender or Agent;
1) the occurrence of any default or Event of Default under any other
Loan Document, or the default by any Borrower or any Guarantor in the
performance or observance of any material term, covenant, condition or
agreement contained in, or the payment of any other sum covenanted to
be paid by such Borrower or any Guarantor under any such Loan
Document, or if any provision of this Agreement or of any other Loan
Document after delivery thereof hereunder shall for any reason cease
to be valid and binding, other than a nonmaterial provision rendered
unenforceable by operation of law, or if such Borrower or other party
thereto (other than the Agent or a Lender) shall so state in writing,
or this Agreement or any other Loan Document, after delivery thereof
hereunder, shall for any reason (other than any action taken
independently by the Agent or a Lender and except to the extent
permitted by the terms thereof) cease to create a valid, perfected
and, except as otherwise expressly permitted herein, first priority
Lien on, or security interest in, any of the Collateral purported to
be covered thereby;
1) (i) any Termination Event with respect to a Plan shall occur
that, after taking into account the excess, if any, of (A) the fair
market value of the assets of any other Plan with respect to which a
Termination Event occurs on the same day (but only to the extent that
such excess is the property of any Borrower) over (B) the present
value on such day of all vested nonforfeitable benefits under such
other Plan, results in an Unfunded Vested Accrued Benefit in excess of
$100,000, or (ii) any Plan shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the IRC or Section 302 of
ERISA) for which a waiver has not been obtained in accordance with the
applicable provisions of the IRC and ERISA, or (iii) any Borrower is
in "default" (as defined in Section 4219(c)(5) of ERISA) with respect
to payments to a Multiemployer Plan resulting from the Borrower's
complete or partial withdrawal (as described in Section 4203 or 4205
of ERISA) from such Multiemployer Plan;
1) the filing or any plan of reorganization or disclosure statement
attendant thereto by any Person that does not require repayment in
full of all of the Borrowers' Secured Obligations under this Agreement
and the Borrowers' remaining obligations, if any, to the Lenders under
the Pre-Petition Loan Agreement;
1) the entry of an order amending, supplementing, staying, vacating,
or otherwise modifying the Loan Documents, the Interim Order or the
Final Order without the prior written consent of the Agent;
1) the payment of, or application for authority to pay, any pre-
Petition Date claim, other than those of trade creditors and those
required to be paid with the initial Advance pursuant to the terms of
the Agreement, unless done (i) with the Agent's prior written consent,
and (ii) pursuant to an order of the Court after notice and a hearing;
or
1) there occurs any act, omission, event, undertaking or
circumstance or series of acts, omissions, events, undertakings or
circumstances which have, or would have, either individually or in the
aggregate, a Materially Adverse Effect.
SECTION Remedies.
1.
1) Automatic Acceleration and Termination of Commitments. Upon the
occurrence of an Event of Default specified in Section 12.1(h), (i) or
(l), (i) the principal of and the interest on the Loans and any Note
at the time outstanding, and all other amounts owed to the Agent or
the Lenders under this Agreement or any of the Loan Documents and all
other Secured Obligations, shall thereupon become due and payable
without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived, anything in this Agreement or any of
the Loan Documents to the contrary notwithstanding, and (ii) any
obligation of any Lender or the Agent to make Loans or incur Letter of
Credit Obligations, and any right of the Borrowers to request Advances
or Letters of Credit under this Agreement, including without
limitation the Commitments, shall immediately terminate without any
notice.
1) Other Remedies. If any Event of Default shall have occurred, and
during the continuance of any such Event of Default, the Agent may,
and at the direction of the Required Lenders in their sole and
absolute discretion shall, upon and after giving notice in accordance
with Paragraph 8 of the Interim Order or the applicable notice
provision of the Final Order, without the necessity for application or
motion to, or any order from, the Court, and notwithstanding the
provisions of Section 362 of the Bankruptcy Code, do any of the
following:
1) unless already automatically accelerated pursuant to
Section 12.2(a), above, declare the principal of and interest on the
Loans and any Note at the time outstanding, and all other amounts owed
to the Agent or the Lenders under this Agreement or any of the Loan
Documents and all other Secured Obligations, to be forthwith due and
payable, whereupon the same shall immediately become due and payable
without presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything in this Agreement or the Loan
Documents to the contrary notwithstanding;
1) terminate any obligation of any Lender or the Agent to make
any Loans or incur Letter of Credit Obligations, including without
limitation the Commitments, and any right of the Borrowers to request
the same hereunder;
1) notify, or request each Borrower to notify, in writing or
otherwise, any Account Debtor or obligor with respect to any one or
more of the Receivables to make payment to the Agent, for the benefit
of the Lenders, or any agent or designee of the Agent, at such address
as may be specified by the Agent and if, notwithstanding the giving of
any notice, any Account Debtor or other such obligor shall make
payments to such Borrower, such Borrower shall hold all such payments
it receives in trust for the Agent, for the account of the Lenders,
without commingling the same with other funds or property of, or held
by, such Borrower, and shall deliver the same to the Agent or any such
agent or designee of the Agent immediately upon receipt by such
Borrower in the identical form received, together with any necessary
endorsements;
1) settle or adjust disputes and claims directly with Account
Debtors and other obligors on Receivables for amounts and on terms
which the Agent reasonably considers advisable and in all such cases
only the net amounts received by the Agent, for the account of the
Lenders, in payment of such amounts, after deductions of costs and
reasonable attorneys' fees, shall constitute Collateral and each
Borrower shall have no further right to make any such settlements or
adjustments or to accept any returns of merchandise;
1) through self-help, without notice, demand or judicial or
other process, enter upon any premises in which Collateral may be
located and, without resistance or interference by any Borrower, take
physical possession of any or all thereof and maintain such possession
on such premises or move the same or any part thereof to such other
place or places as the Agent shall choose, without being liable to any
Borrower on account of any loss, damage or depreciation that may occur
as a result thereof, so long as the Agent shall act reasonably;
1) require each Borrower to and each Borrower shall, without
charge to the Agent or any Lender, assemble the Collateral and
maintain or deliver it into the possession of the Agent or any agent
or representative of the Agent at such place or places as the Agent
may designate and as are reasonably convenient to both the Agent and
such Borrower;
1) at the expense of Borrowers, cause any of the Collateral to
be placed in a public or field warehouse, and the Agent shall not be
liable to any Borrower on account of any loss, damage or depreciation
that may occur as a result thereof, so long as the Agent shall act
reasonably and in its reasonable credit judgment;
1) through self-help and without notice, demand or judicial or
other process, and without payment of any rent or any other charge,
enter any of any Borrower's premises and, without breach of the peace,
until the Agent, on behalf of the Lenders, completes the enforcement
of its rights in the Collateral, take possession of such premises or
place custodians in exclusive control thereof, remain on such premises
and use the same and any of any Borrower's Collateral, for the purpose
of (A) completing any work in process, and (B) collecting any
Receivable, and the Agent for the benefit of the Lenders is hereby
granted a license or sublicense and all other rights as may be
necessary, appropriate or desirable to use the Proprietary Rights in
connection with the foregoing, and the rights of each and every
Borrower under all licenses, sublicenses and franchise agreements
shall inure to the Agent for the benefit of the Lenders (provided,
however, that any use of any federally registered trademarks as to any
goods shall be subject to the control as to the quality of such goods
of the owner of such trademarks and the goodwill of the business
symbolized thereby);
1) exercise any and all of its rights under any and all of the
Security Documents, the Interim Order or the Final Order;
1) apply any Collateral consisting of cash to the payment of
the Secured Obligations in any order in which the Agent, on behalf of
the Lenders, may elect or use such cash in connection with the
exercise of any of its other rights hereunder or under any of the
Security Documents;
1) establish or cause to be established one or more Lockboxes
or other arrangement for the deposit of proceeds of Receivables, and,
in such case, each Borrower shall cause to be forwarded to the Agent
at the Agent's Office, on a daily basis, copies of all checks and
other items of payment and deposit slips related thereto deposited in
such Lockboxes, together with collection reports in form and substance
satisfactory to the Agent; and
1) exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and under any other Applicable Law,
including, without limitation, the right, without notice except as
specified below and with or without taking the possession thereof, to
sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any location chosen by the Agent, for cash,
on credit or for future delivery, and at such price or prices and upon
such other terms as are commercially reasonable. Each Borrower agrees
that, to the extent notice of sale shall be required by law, at least
ten (10) days' notice to such Borrower of the time and place of any
public sale or the time after which any private sale is to be made
shall constitute reasonable notification, but notice given in any
other reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned.
SECTION Application of Proceeds. All proceeds from
each sale of, or other realization upon, all or any part of the
Collateral following an Event of Default shall be applied or paid
over as follows:
1.
1) First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including attorneys'
fees and expenses actually incurred (including, without limitation,
the expenses and other allocated costs of internal counsel);
1) Second: to the payment of (i) the Carve-Out Expenses and (ii) the
Secured Obligations or the creation of a Cash Collateral Account (with
each and every Borrower remaining liable for any deficiency) as the
Agent may elect;
1) Third: the balance (if any) of such proceeds shall be paid to the
Borrowers, subject to any duty imposed by law, or otherwise to
whomsoever shall be entitled thereto.
The Borrowers shall remain liable, jointly and severally, and
will pay, on demand, any deficiency remaining in respect of the
Secured Obligations, together with interest thereon at a rate per
annum equal to the highest rate then payable hereunder on such
Secured Obligations, which interest shall constitute part of the
Secured Obligations.
SECTION Miscellaneous Provision Concerning
Remedies.
1.
1) Rights Cumulative. The rights and remedies of the Agent and the
Lenders under this Agreement, the Notes and each of the other Loan
Documents shall be cumulative and not exclusive of any rights or
remedies which it or they would otherwise have. In exercising such
rights and remedies the Agent and the Lenders may be selective and no
failure or delay by the Agent or any Lender in exercising any right
shall operate as a waiver of it, nor shall any single or partial
exercise of any power or right preclude its other or further exercise
or the exercise of any other power or right.
1) Waiver of Marshaling. Each Borrower hereby waives any right to
require any marshaling of assets and any similar right.
1) Limitation of Liability. Nothing contained in this Article 12 or
elsewhere in this Agreement or in any of the Loan Documents shall be
construed as requiring or obligating the Agent, any Lender or any
agent or designee of the Agent or any Lender to make any demand, or to
make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any
action, with respect to any Receivable or any other Collateral or the
monies due or to become due thereunder or in connection therewith, or
to take any steps necessary to preserve any rights against prior
parties, and the Agent, the Lenders and their agents or designees
shall have no liability to any Borrower for actions taken pursuant to
this Article 12, any other provision of this Agreement or any of the
Loan Documents so long as the Agent or such Lender shall act
reasonably and in its reasonable credit judgment.
1) Appointment of Receiver. In any action under this Article 12,
the Agent shall be entitled during the continuance of an Event of
Default to the appointment of a receiver, without notice of any kind
whatsoever, to take possession of all or any portion of the Collateral
and to exercise such power as the court shall confer upon such
receiver.
SECTION Trademark License. Each Borrower hereby
grants to the Agent, for the benefit of the Lenders, to the
extent of such Borrower's rights therein and to the extent
permitted by the various license agreements relating thereto, the
nonexclusive right and license to use the trademarks set forth on
Schedule 6.1(y) and any other trademark then used by any
Borrower, for the purposes set forth in Section 12.2(b)(viii) and
for the purpose of enabling the Agent to realize on the
Collateral and to permit any purchaser of any portion of the
Collateral through a foreclosure sale or any other exercise of
the Agent's rights and remedies under the Loan Documents to use,
sell or otherwise dispose of the Collateral bearing any such
trademark. Such right and license is granted free of charge,
without the requirement that any monetary payment whatsoever be
made to any Borrower or any other Person by the Agent. Each
Borrower hereby represents, warrants, covenants and agrees that,
except as set forth in the license agreements, it presently has,
and shall continue to have, the right, without the approval or
consent of others, to grant the license set forth in this Section
12.5.
1.
ARTICLE
ASSIGNMENTS
SECTION Successors and Assigns; Participations.
1.
1) This Agreement shall be binding upon and inure to the benefit of
each Borrower, the Lenders, the Agent, all future holders of the
Notes, and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender, and
any such attempted assignment or transfer by any Borrower except in
strict compliance with the provisions hereof shall be null and void,
and of no force or effect.
1) Each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Loans at the
time owing to it and the Notes held by it); provided, however, that
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning
Lender that is subject to each such assignment (determined as of the
date the Assignment and Transfer with respect to such assignment is
delivered to the Agent) shall in no event be less than $5,000,000 (the
"Minimum Commitment"), (iii) in the case of a partial assignment, the
amount of the Commitment that is retained by the assigning Lender
(determined as of the date the Assignment and Transfer with respect to
such assignment is delivered to the Agent) shall in no event be less
than the Minimum Commitment, (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and
recording in the Register (as hereinafter defined) an Assignment and
Transfer, together with any Note or Notes subject to such assignment
and such assignee's commitment percentage of the Agent's syndication
expenses, (v) such assignment shall not, without the consent of the
Borrowers, require a Borrower to file a registration statement with
the Securities and Exchange Commission or apply to or qualify the
Loans or the Notes under the blue sky laws of any state, (vi) the
representation contained in Section 13.2 hereof shall be true with
respect to any such proposed assignee and (vii) such Lender provides
notice to the Borrowers of the identity of the Eligible Assignee.
Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Transfer,
which effective date shall be at least five (5) Business Days after
the execution thereof, (x) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Transfer,
have the rights and obligations of a Lender hereunder, and (y) the
Lender assignor thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
Notwithstanding anything to the contrary in this Section 13.1(b) or
elsewhere in this Agreement, CIT Group/Business Credit, Inc.
("CITBC") agrees that, except after the occurrence of an Event of
Default, the principal amount of the Commitment of CITBC during the
term hereof shall in no event be less than the highest Commitment of
any other Lender party to this Agreement.
1) By executing and delivering an Assignment and Transfer, the
Lender assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, which shall be deemed made upon such execution
and delivery, such Lender assignor makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower
or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the
financial statements refereed to in Section 6.1(m) and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Transfer; (iv) such assignee will, independently and without reliance
upon the Agent, such Lender assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee confirms that it
is an Eligible Assignee; (vi) such assignee appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with
such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
1) The Agent shall maintain a copy of each Assignment and Transfer
delivered to it and a register for the recordation of the names and
addresses of the Lenders and the Commitment Percentage of, and
principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive, in
the absence of manifest error, and each Borrower, the Agent and the
Lenders may treat each person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by any Borrower or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
1) Upon its receipt of an Assignment and Transfer executed by an
assigning Lender and an Eligible Assignee together with any Note or
Notes subject to such assignment and the written consent to such
assignment, the Agent shall, if such Assignment and Transfer has been
completed and is in the form of Exhibit J, (i) accept such Assignment
and Transfer, (ii) record the information contained therein in the
Register, (iii) give prompt notice thereof to the Lenders and each
Borrower, and (iv) promptly deliver a copy of such Assignment and
Transfer to each Borrower. Within five (5) Business Days after
receipt of notice, each Borrower shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or
Notes to the order of such Eligible Assignee in amounts equal to the
Commitment Percentage assumed by such Eligible Assignee pursuant to
such Assignment and Transfer and a new Note or Notes to the order of
the assigning Lender in an amount equal to the Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such
Assignment and Transfer and shall otherwise be in substantially the
form of the assigned Notes delivered to the assignor Lender. Each
surrendered Note or Notes shall be canceled and returned to Trism.
1) Each Lender may, without the consent of any Borrower, sell
participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its commitments hereunder and
the Loans owing to it and the Notes held by it); provided, however,
that (i) each such participation shall be in an amount not less than
the Minimum Commitment, (ii) such Lender's obligations under this
Agreement (including, without limitation, its commitments hereunder)
shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iv) such Lender shall remain the holder of the Notes
held by it for all purposes of this Agreement, (v) each Borrower, the
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; provided, that such Lender may agree
with any participant that such Lender will not, without such
participant's consent, agree to or approve any waivers or amendments
which would reduce the principal of or the interest rate on any Loans,
extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant
is entitled, extend any scheduled payment date for principal or
release Collateral securing the Loans (other than Collateral disposed
of pursuant to the terms of this Agreement or the Security Documents),
(vi) any such disposition shall not, without the consent of the
Borrowers, require any Borrower to file a registration statement with
the Securities and Exchange Commission to apply to qualify the Loans
or the Notes under the blue sky law of any state and (vii) such Lender
provides notice to the Borrower of the identity of the potential
participant. The Lender selling a participation to any bank or other
entity that is not an Affiliate of such Lender shall give prompt
notice thereof to each Borrower.
1) Any Lender may, in connection with any assignment, proposed
assignment, participation or proposed participation pursuant to this
Section 13.1, disclose to the assignee, participant, proposed assignee
or proposed participant, any information relating to any Borrower
furnished to such Lender by or on behalf of such Borrower; provided
that, prior to any such disclosure, each such-assignee, proposed
assignee, participant or proposed participant shall agree with such
Borrower or such Lender (which in the case of an agreement with only
such Lender, such Borrower shall be recognized as a third party
beneficiary thereof) to preserve the confidentiality of any
confidential information relating to such Borrower received from such
Lender.
1) Each Borrower shall assist any Lender permitted to sell
assignments or participations under this Section 13.1 as reasonably
required to enable the assigning or selling Lender to effect any such
assignment or participation, including, without limitation, (i) prompt
assistance in the preparation of an information memorandum and the
verification of the completeness and accuracy of the information
contained therein; (ii) preparation of offering materials and
projections by any Borrower and its advisors; (iii) providing the
Agent with all information reasonably deemed necessary by Agent to
successfully complete the syndication; (iv) confirmation as to the
accuracy and completeness of such offering materials, information and
projections; (v) participation of any Borrower's senior management in
meetings and conference calls with potential lenders at such times and
places as Agent may reasonable request; and (vi) the execution and
delivery of any and all agreements, notes and other documents and
instruments as shall be requested.
1) In the event that (i) an Event of Default has occurred hereunder
and (ii) CITBC intends to assign, whether through absolute assignment,
participation or otherwise, all or a portion of its interest, rights
and obligations under this Agreement to an Eligible Assignee pursuant
to the terms of this Section 13.1 (the "Proposed Assignment"), CITBC
shall, within fifteen (15) days prior to the closing of such Proposed
Assignment, deliver to each other Lender notice (the "Assignment
Notice") specifying (A) the amount of the Proposed Assignment and (B)
outlining the terms under which such Lender can participate in the
Proposed Assignment and simultaneously with the closing thereof assign
a portion of such Lender's Commitment in an amount equal to such
Lender's Commitment Percentage multiplied by the amount of the
Proposed Assignment (each, a "Pro-rata Assignment Right"). Each
Lender shall then have ten (10) days, from the date of the Assignment
Notice, to notify CITBC of its desire to exercise its Pro-rata
Assignment Right. In the event any Lender notifies CITBC (within the
time frame set forth above) of its desire to exercise its Pro-rata
Assignment Right, CITBC and such Lender shall enter into such
documents as CITBC deems necessary and appropriate in its sole
discretion to evidence and effect such an assignment.
SECTION Representation of Lenders. Each Lender
hereby represents that it will make each Loan hereunder as a
commercial loan for its own account in the ordinary course of its
business; provided, however, that subject to Section 13.1 hereof,
the disposition of the Notes or other evidence of the Secured
Obligations held by any Lender shall at all times be within its
exclusive control.
1.
ARTICLE
AGENT
SECTION Appointment of Agent. Each of the Lenders
hereby irrevocably designates and appoints The CIT Group/Business
Credit, Inc. as the Agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably
authorizes Agent, as the Agent for such Lender to take such
action on its behalf under the provisions of this Agreement and
the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms
of this Agreement and such other Loan Documents, including,
without limitation, to make determinations as to the eligibility
of Receivables and to adjust the advance ratios contained in the
definition of "Borrowing Base" (so long as such advance ratios,
as adjusted, do not exceed those set forth in the definition of
"Borrowing Base"), together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement or such other Loan
Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
the other Loan Documents or otherwise exist against the Agent.
1.
SECTION Delegation of Duties. The Agent may
execute any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
1.
SECTION Exculpatory Provisions. Neither the Agent
nor any of its trustees, officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable to any Lender
(or any Lender's participants) for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with this Agreement or the other Loan Documents (except for its
or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any Lender (or any Lender's
participants) for any recitals, statements, representations or
warranties made by any Borrower or any officer thereof contained
in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection
with, this Agreement or the other Loan Documents or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the other Loan Documents or for
any failure of any Borrower to perform its obligations hereunder
or thereunder. The Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or
records of any Borrower.
1.
SECTION Reliance by Agent. The Agent shall be
entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to any Borrower), independent accountants and
other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with
Section 13.1. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement and the other
Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or the unanimous consent of
the Lenders with respect to the matters set forth in Section
15.9(b)) as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under
this Agreement and the Notes in accordance with a request of the
Required Lenders, and, except where the consent or agreement of
all Lenders is required hereunder, such request and any action
taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
1.
SECTION Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Borrower referring to this
Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall promptly
give notice thereof to the Lenders. The Agent shall take such
action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided that
unless (a) Agent shall have received a notice from any Lender
under Section 4.6 (c)(ii) hereinabove, or (b) unless and until
the Agent shall have received directions from the Required
Lenders, the Agent may (but shall not be obligated to) continue
making Revolving Credit Loans to the Borrowers on behalf of the
Lenders in reliance on the provisions of Section 4.6 and take
such other action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
1.
SECTION Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any
review of the affairs of any Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of any Borrower and made its own
decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition
and creditworthiness of each Borrower. Except for notices,
reports and other documents expressly required to be furnished to
the Lenders by the Agent hereunder or by the other Loan
Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information
concerning the business, operations, property, financial and
other condition or creditworthiness of any Borrower which may
come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates,
unless a Lender shall in writing request specifically identified
information.
1.
SECTION Indemnification. The Lenders agree to
indemnify the Agent in its capacity as such (to the extent not
reimbursed by a Borrower and without limiting the obligation of
the Borrowers to do so), ratably according to their respective
Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out
of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence
or willful misconduct or resulting solely from transactions or
occurrences that occur at a time after such Lender has assigned
all of its interests, rights and obligations under this Agreement
pursuant to Section 13.1 or, in the case of a Lender to which an
assignment is made hereunder pursuant to Section 13.1, at a time
before such assignment. The agreements in this subsection shall
survive the payment of the Notes, the Secured Obligations and all
other amounts payable hereunder and the termination of this
Agreement.
1.
SECTION Agent in Its Individual Capacity. The Agent
and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with any Borrower and
any Guarantor and their respective Subsidiaries as if the Agent
were not the Agent hereunder. With respect to its Commitment,
the Loans made or renewed by it and any Note issued to it and any
Letter of Credit issued by it, the Agent shall have and may
exercise the same rights and powers under this Agreement and the
other Loan Documents and is subject to the same obligations and
liabilities as and to the extent set forth herein and in the
other Loan Documents for any other Lender. The terms "Lenders"
or "Required Lenders" or any other term shall, unless the context
clearly otherwise indicates, include the Agent in its individual
capacity as a Lender or one of the Required Lenders.
1.
SECTION Successor Agent. The Agent may resign as
Agent upon an Event of Default by providing thirty (30) days
written notice to the Lenders. The Agent may be removed by the
Required Lenders if the Agent is grossly negligent or engages in
willful misconduct in the performance of its duties under this
Agreement. If the Agent shall resign or be removed as Agent
under this Agreement, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders which
successor agent shall be approved by the Borrowers (which
approval shall not be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated, without any other
or further act or deed on the part of such former Agent or any of
the parties to this Agreement or any holders of the Notes. After
any Agent's resignation or removal hereunder as Agent, the
provisions of Section 14.7 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent
under this Agreement. Notwithstanding anything to the contrary
contained herein, the Agent's right to resign as Agent, or to
assign its status as Agent, pursuant to the terms of this Section
14.9 shall be expressly conditioned upon a successor Agent being
appointed simultaneously therewith.
1.
SECTION Notices from Agent to Lenders. The Agent
shall promptly, upon receipt thereof, forward to each Lender
copies of any written notices, reports or other information
supplied to it by the Borrowers (but which the Borrowers are not
required to supply directly to the Lenders).
1.
SECTION Direction from Lenders. Notwithstanding
anything contained in this Agreement or any other Loan Document
to the contrary, the Agent shall not exercise any of the remedies
set forth in Section 12.2 (or in any other provision of any Loan
Document) with respect to any of the Mortgaged Real Estate or
Pledged Collateral (as defined in the Pledge Agreement) without
the prior written consent of any combination of Lenders whose
Commitment Percentages at such time aggregate fifty percent (50%)
or more. The foregoing sentence shall not, as between the
Borrowers, the Guarantors and the Agent, limit or restrict the
Agent's right to pursue any remedy against the Collateral,
including the Mortgaged Real Estate and the Pledged Collateral.
1.
ARTICLE
MISCELLANEOUS
SECTION Notices.
1.
1) Method of Communication. Except as specifically provided in this
Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by
telephone, subsequently confirmed in writing. Notices in writing
shall be delivered personally or sent by certified or registered mail,
postage pre-paid, or by overnight courier, telex or facsimile
transmission and shall be deemed received in the case of personal
delivery, when delivered, in the case of mailing, when receipted for,
in the case of overnight delivery, on the next Business Day after
delivery to the courier, and in the case of telex and facsimile
transmission, upon transmittal, provided that in the case of notices
to the Agent, notice shall be deemed to have been given only when such
notice is actually received by the Agent. A telephonic notice to the
Agent, as understood by the Agent, will be deemed to be the
controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
1) Addresses for Notices. Notices to any party shall be sent to it
at the following addresses, or any other address of which all the
other parties are notified in writing
If to the Borrowers: c/o TRISM, Inc.
4174 Jiles Road
Kennesaw, Georgia 30144
Attn: Mr. James G. Overley, Chief Financial
Officer
Facsimile No.: (770) 795-4619
With a copy to: Proskauer Rose, LLP
1585 Broadway
New York, New York 10036
Attn: Alan Hyman, Esq.
Facsimile No.: (212) 969-2900
If to the Agent: The CIT Group/Business Credit, Inc.
1200 Ashwood Parkway
Atlanta, Georgia 30338
Attn: Mr. Jerrold Brown,
Vice President
Facsimile No.: (770) 552-7673
With a copy to: Smith, Gambrell & Russell, LLP
1230 Peachtree Street, N.E.
Suite 3100
Atlanta, Georgia 30309
Attn: Bruce W. Moorhead, Jr., Esq.
Facsimile: (404) 815-3509
If to a Lender: At the address of such Lender set
forth on the signature page hereof or to such Lender
in care of Agent.
1) Agent's Office. The Agent hereby designates its office located
at 1200 Ashwood Parkway, Atlanta, Georgia 30338, or any subsequent
office which shall have been specified for such purpose by written
notice to the Borrowers, as the office to which payments due are to be
made and at which Loans will be disbursed.
SECTION Expenses. The Borrowers agree, jointly and
severally, to pay or reimburse on demand all costs and expenses
incurred by the Agent, including, without limitation, the
reasonable fees and disbursements of counsel, in connection with
(a) the negotiation, preparation, execution, delivery,
administration, enforcement and termination of the Pre-Petition
Loan Agreement, the Proposal Letter, the Commitment Letter, this
Agreement and each of the other Loan Documents (collectively the
"Lending Documents"), whenever the same shall be executed and
delivered, including, without limitation (i) the out-of-pocket
costs and expenses incurred in connection with the administration
and interpretation of any of the Lending Documents; (ii) the
costs and expenses of appraisals of the Collateral; (iii) the
costs and expenses of lien and title searches and title
insurance; (iv) the costs and expenses of environmental reports
with respect to the Real Estate; (v) taxes, fees and other
charges for recording the Mortgages, filing the Financing
Statements and continuations and the costs and expenses of taking
other actions to perfect, protect, and continue the Security
Interests; (b) the preparation, execution and delivery of any
waiver, amendment, supplement or consent by the Agent and the
Lenders relating to any of the Lending Documents; (c) sums paid
or incurred to pay any amount or take any action required of the
Borrowers under any of the Lending Documents that the Borrowers
fail to pay or take; (d) out-of-pocket costs of field audits,
inspections and verifications of the Collateral by the Agent and
the Lenders, including, without limitation, standard per diem
fees charged by the Agent and the Lenders in the amount of $650
per diem per auditor and travel, lodging, and meals in connection
therewith, at or prior to the date on which a Person becomes a
Lender and up to two (2) times thereafter and whenever an Event
of Default exists provided, however, that unless and until a
Default or an Event of Default shall have occurred and be
continuing under this Agreement or any of the other Loan
Documents, (i) no field audit charges or expenses of any Lender
other than the Agent shall be charged to or reimbursable by
Borrowers, except for field audit charges incurred for a single
field audit by a prospective Lender, with a commitment of at
least $5 million, conducted in connection with an prospective
assignment or participation hereunder, and (ii) no Lender whose
aggregate commitment with respect to the Financing is less than
$5 million shall conduct, or require Borrowers to pay for, any
separate field audit by such Lender; (e) costs and expenses of
forwarding loan proceeds, collecting checks and other items of
payment, and establishing and maintaining each Controlled
Disbursement Account, Agency Account and Lockbox; (f) costs and
expenses of preserving and protecting the Collateral; (g)
consulting with one or more Persons, including appraisers,
accountants and lawyers, concerning the value of any Collateral
for the Secured Obligations or related to the nature, scope or
value of any right or remedy of the Agent or any Lender hereunder
or under any of the Loan Documents, or related in any manner to
the Chapter 11 Cases, including any review of factual matters in
connection with any of the foregoing, which expenses shall
include the fees and disbursements of such Persons; and (h)
reasonable costs and expenses paid or incurred to obtain payment
of the Secured Obligations, enforce the Security Interests, sell
or otherwise realize upon the Collateral, and otherwise enforce
the provisions of the Loan Documents, or to prosecute or defend
any claim in any way arising out of, related to or connected
with, any of the Lending Documents, which expenses shall include
the reasonable fees and disbursements of counsel and of experts
and other consultants retained by the Agent or, after default,
any Lender.
1.
The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to
be paid by the Borrowers. The Borrowers hereby authorize the
Agent and the Lenders to debit the Borrowers' Loan Accounts (by
increasing the principal amount of the Revolving Credit Loans) in
the amount of any such costs and expenses owed by the Borrowers
when due.
SECTION Stamp and Other Taxes. The Borrowers will
pay any and all stamp, registration, recordation and similar
taxes, fees or charges and shall indemnify the Agent and the
Lenders against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined
to be payable in connection with the execution, delivery,
performance or enforcement of this Agreement and any of the Loan
Documents or the perfection of any rights or security interest
thereunder, including, without limitation, the Security Interest.
1.
SECTION Setoff; Ratable Sharing.
1.
1) In addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, during
the continuance of any Event of Default, each Lender, any participant
with such Lender in the Loans and each Affiliate of each Lender are
hereby authorized by the Borrowers at any time or from time to time,
without notice to any Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or
owing by any Lender or any Affiliate of any Lender or any participant
to or for the credit or the account of any Borrower against and on
account of the Secured Obligations irrespective or whether or not the
Agent or such Lender shall have made any demand under this Agreement
or any of the Loan Documents, or the Agent or such Lender shall have
declared any or all of the Secured Obligations to be due and payable
as permitted by Section 12.2 and although such Secured Obligations
shall be contingent or unmatured.
1) If any Lender shall obtain payment of any principal of or
interest on any Loan made by it or on any other Secured Obligation
owing to such Lender through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise, it shall
promptly so notify the Agent (which shall promptly notify the other
Lenders). If, as a result of such payment, such Lender shall have
received a greater share of the principal of or interest on any Loan
than such Lender's ratable share thereof, than, it shall, at the
request of such other Lender or Lenders, promptly purchase from such
other Lender or Lenders participations in (or, if and to the extent
specified by such first Lender, direct interests in) the principal of
or interest on Loans owing to such other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable,
to the end that such first Lender and such other Lender or Lenders
(such first Lender and such other Lender or Lenders being collectively
referred to as the "Sharing Lenders") shall share the benefit of such
excess payment (net of any expenses which may be incurred by such
first Lender in obtaining or preserving such excess payment) ratably
in accordance with the unpaid amounts of such obligations owing to
each of the Sharing Lenders and their respective Commitment
Percentages. To such end all the Sharing 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.
1) The Borrowers agree that any Lender so purchasing a participation
in obligations hereunder of the Borrowers to another Lender or other
Lenders may exercise any and all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as
fully as if such first Lender were a direct holder of obligations of
the Borrowers in the amount of such participation. 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 the Borrowers.
1) If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off to which
Section 15.4(b) hereof 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 15.4 to share in the benefits of any recovery on such secured
claim.
SECTION Litigation. THE BORROWERS, THE AGENT AND
EACH LENDER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE
IN ANY COURT IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST
THE BORROWERS, THE AGENT AND SUCH LENDER ARISING OUT OF THIS
AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON
OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE BORROWERS
AND THE AGENT OR ANY LENDER OF ANY KIND OR NATURE. THE
BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE THAT THE
FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA SHALL HAVE
NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE BORROWERS AND THE AGENT OR SUCH LENDER,
PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN
DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. THE BORROWERS
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS, HEREBY WAIVING
PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS
OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE OF SUCH
SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWERS AT THE
ADDRESS OF THE BORROWERS SET FORTH IN SECTION 15.1. SHOULD ANY OF
THE BORROWERS FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT,
PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYS AFTER THE
MAILING THEREOF, IT SHALL BE DEEMED IN DEFAULT AND AN ORDER
AND/OR JUDGMENT MAY BE RENDERED AGAINST IT AS DEMANDED OR PRAYED
FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE
NONEXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT
BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN
SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY APPROPRIATE JURISDICTION.
1.
SECTION Reversal of Payments. The Agent and each
Lender shall have the continuing and exclusive right to apply,
reverse and re-apply any and all payments to any portion of the
Secured Obligations in a manner consistent with the terms of this
Agreement. To the extent the Borrowers make a payment or
payments to the Agent, for the account of the Lenders, or any
Lender receives any payment or proceeds of the Collateral for the
Borrowers' benefit, which payment(s) or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the
extent of such payment or proceeds received, the Secured
Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect, as if such
payment or proceeds had not been received by the Agent or such
Lender, and shall constitute a Prime Option Loan.
1.
SECTION Injunctive Relief. The Borrowers recognize
that, in the event the Borrowers fail to perform, observe or
discharge any of its obligations or liabilities under this
Agreement, any remedy at law may prove to be inadequate relief to
the Agent and the Lenders; therefore, the Borrowers agree that if
any Event of Default shall have occurred and be continuing, the
Agent and the Lenders, if the Agent or any Lender so requests,
shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages.
1.
SECTION Accounting Matters. All financial and
accounting calculations, measurements and computations made for
any purpose relating to this Agreement, including, without
limitation, all computations utilized by the Borrowers to
determine whether it is in compliance with any covenant contained
herein, shall, unless this Agreement otherwise provides or unless
Required Lenders shall otherwise consent in writing, be performed
in accordance with GAAP.
1.
SECTION Amendments.
1.
1) Except as set forth in subsection (b) below, any term, covenant,
agreement or condition of this Agreement or any of the Loan Documents
may be amended or waived, and any departure therefrom may be consented
to by the Required Lenders, if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders and, in the case
of an amendment (other than an amendment described in Section
15.9(d)), by the Borrowers and, if required, approved by the Court,
and in any such event, the failure to observe, perform or discharge
any such term, covenant, agreement or condition (whether such
amendment is executed or such waiver or consent is given before or
after such failure) shall not be construed as a breach of such term,
covenant, agreement or condition or as a Default or an Event of
Default. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given. In
the event that any such waiver or amendment is requested by the
Borrowers, the Agent and the Lenders may require and charge a fee in
connection therewith and consideration thereof in such amount as shall
be determined by the Agent and the Required Lenders in their
discretion.
1) Except as otherwise set forth in this Agreement, without the
prior unanimous written consent of the Lenders,
1) no amendment, consent or waiver shall affect the amount or
extend the time of the obligation of the Lenders to make Loans or
extend the originally scheduled time or times of payment of the
principal of any Loan or alter the time or times of payment of
interest on any Loan or the amount of the principal thereof or the
rate of interest thereon or the amount of any commitment fee payable
hereunder or permit any subordination of the principal or interest on
such Loan, permit the subordination of the Security Interests in any
material Collateral or amend the provisions of Article 12 or of this
Section 15.9(b),
1) no Collateral shall be released by the Agent other than as
specifically permitted in this Agreement,
1) except to the extent expressly provided herein, the
definition "Borrowing Base" (including defined terms used therein)
shall not be amended,
1) neither the Agent nor any Lender shall consent to any
amendment to or waiver of the amortization, deferral or subordination
provisions of any instrument or agreement evidencing or relating to
obligations of the Borrowers that are expressly subordinate to any of
the Secured Obligations if such amendment or waiver would be adverse
to the Lenders in their capacities as Lenders hereunder;
1) no Borrower or Guarantor shall be released from the Secured
Obligations; and
1) the Agent may not amend the provisions hereof with respect
to the Obligations of, or the pro-rata sharing among, the Lenders.
provided, however, that anything herein to the contrary
notwithstanding, Required Lenders shall have the right to
waive any Default or Event of Default and the consequences
hereunder of such Default or Event of Default and shall have
the right to enter into an agreement with the Borrowers or the
Guarantors providing for the forbearance from the exercise of
any remedies provided hereunder or under the other Loan
Documents without waiving any Default or Event of Default.
1) The making of Loans hereunder by the Lenders during the existence
of a Default or Event of Default shall not be deemed to constitute a
waiver of such Default or Event of Default.
1) Notwithstanding any provision of this Agreement or the other Loan
Documents to the contrary, no consent, written or otherwise, of the
Borrowers shall be necessary or required in connection with any
amendment to Article 14 or Section 4.6.
SECTION Assignment. All the provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns,
except that no Borrower may assign or transfer any of its rights
under this Agreement.
1.
SECTION Performance of Borrowers' Duties. The
Borrowers' obligations under this Agreement and each of the Loan
Documents shall be performed by the Borrowers at their joint and
several cost and expense. Upon the occurrence of a Default or
Event of Default (as those terms are defined herein and in any of
the other Loan Documents) under any of the Loan Documents, if the
Borrowers shall fail to do any act or thing which they have
covenanted to do under this Agreement or any of the Loan
Documents, the Agent, on behalf of the Lenders, may (but shall
not be obligated to) do the same or cause it to be done, at the
Borrowers' joint and several cost and expense, either in the name
of the Agent or the Lenders or in the name and on behalf of the
Borrowers, and the Borrowers hereby irrevocably authorize the
Agent so to act.
1.
SECTION Indemnification. The Borrowers agree,
jointly and severally, to reimburse the Agent and the Lenders for
all costs and expenses, including reasonable counsel fees and
disbursements, incurred, and to indemnify and hold the Agent and
the Lenders harmless from and against all losses suffered by, the
Agent or any Lender in connection with (a) the exercise by the
Agent or any Lender of any right or remedy granted to it under
this Agreement or any of the Loan Documents, (b) any claim, and
the prosecution or defense thereof, arising out of or in any way
connected with this Agreement, any of the Loan Documents, the Pre-
Petition Loan Agreement, the Proposal Letter or the Commitment
Letter, and (c) the collection or enforcement of the Secured
Obligations or any of them, other than such costs, expenses and
liabilities arising solely and directly from the Agent's or any
Lender's gross negligence or willful misconduct.
1.
SECTION All Powers Coupled with Interest. All
powers of attorney and other authorizations granted to the Agent
and the Lenders and any Persons designated by the Agent or the
Lenders pursuant to any provisions of this Agreement or any of
the Loan Documents shall be deemed coupled with an interest and
shall be irrevocable so long as any of the Secured Obligations
remain unpaid or unsatisfied.
1.
SECTION Survival. Notwithstanding any termination
of this Agreement, until all Secured Obligations have been
irrevocably paid in full or otherwise satisfied, the Agent, for
the benefit of the Lenders, shall retain its Security Interest
and shall retain all rights under this Agreement and each of the
Security Documents with respect to such Collateral as fully as
though this Agreement had not been terminated, the indemnities to
which the Agent and the Lenders are entitled under the provisions
of this Article 15 and any other provision of this Agreement and
the Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising
after such termination as well as before, and in connection with
the termination of this Agreement and the release and termination
of the Security Interests, the Agent, on behalf of itself as
agent and the Lenders, may require such assurances and
indemnities as it shall reasonably deem necessary or appropriate
to protect the Agent and the Lenders against loss on account of
such release and termination, including, without limitation, with
respect to credits previously applied to the Secured Obligations
that may subsequently be reversed or revoked.
1.
SECTION Severability of Provisions. Any provision
of this Agreement or any Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any
other jurisdiction.
1.
SECTION Governing Law. This Agreement and the
Notes shall be construed in accordance with and governed by the
law of the State of New York.
1.
SECTION Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
1.
SECTION Reproduction of Documents. This Agreement,
each of the Loan Documents and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents
received by the Agent or any Lender, and (c) financial
statements, certificates and other information previously or
hereafter furnished to the Agent or any Lender, may be reproduced
by the Agent or such Lender by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar
process and such Person may destroy any original document so
produced. Each party hereto stipulates that, to the extent
permitted by Applicable Law, any such reproduction shall be as
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original shall be
in existence and whether or not such reproduction was made by the
Agent or such Lender in the regular course of business), and any
enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
1.
SECTION Parties Including Trustees; Court
Proceedings. This Agreement, the other Loan Documents, and all
Security Interests or Liens created hereby or pursuant to the
Pledge Agreement or any other Loan Documents shall be binding
upon Borrowers, the estates of Borrowers, and any trustee or
successor in interest of any Borrower in its Chapter 11 Case, any
superceding proceeding or any subsequent case commenced under
Chapter 7 of the Bankruptcy Code, and shall not be subject to
Section 365 of the Bankruptcy Code. Subject to the provisions of
Section 13.1 hereof, this Agreement and the other Loan Documents
shall be binding upon, and inure to the benefit of, the
successors of the Borrowers, the Lenders and the Agent, and their
respective assigns, transferees and endorsees. The Security
Interests and Liens created in this Agreement, the Pledge
Agreement, and the other Loan Documents shall be and remain valid
and perfected in the event of the substantive consolidation or
conversion of the Chapter 11 Case(s) of any Borrower(s) to
case(s) under Chapter 7 of the Bankruptcy Code or in the event of
dismissal of any Chapter 11 Case or the release of any Collateral
from the property of any Borrower or jurisdiction of the Court
for any reason, without the necessity that Lenders file financing
statements or otherwise perfect their security interests or Liens
under applicable law.
1.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers in
several counterparts all as of the day and year first written
above.
BORROWERS:
TRISM, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM SECURED TRANSPORTATION, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRI-STATE MOTOR TRANSIT CO.
By:__________________________________
Name:_______________________________
Title:________________________________
DIABLO SYSTEMS INCORPORATED, d/b/a
DIABLO TRANSPORTATION, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM EASTERN, INC., d/b/a C. I.
WHITTEN TRANSFER
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM HEAVY HAUL, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM SPECIALIZED CARRIERS, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM SPECIAL SERVICES, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM LOGISTICS, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
TRISM EQUIPMENT, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
LENDERS:
Commitment Percentage 44.45% THE CIT GROUP/BUSINESS CREDIT, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
Commitment Percentage 33.33% FLEET CAPITAL CORPORATION
By:__________________________________
Name:_______________________________
Title:________________________________
Commitment Percentage 22.22% FINOVA CAPITAL CORPORATION
By:__________________________________
Name:_______________________________
Title:________________________________
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
SCHEDULE 4.9
Proskauer Rose, LLP
Young, Conway, Stargatt & Talor, LLP
Lazard Freres & Co. LLC
PricewaterhouseCoopers, LLP
Akin, Gump, Strauss, Hauer & Feld, LLP
Saul, Ewing, Remick & Saul LLP
