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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT: JANUARY 29, 1998
(Date of earliest event reported)
U.S. XPRESS ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 0-24806 62-1378182
(State of (Commission File No.) (IRS Employer
incorporation) Identification No.)
2931 SOUTH MARKET STREET, CHATTANOOGA, TENNESSEE 37410
(Address of principal executive offices, including zip code)
(423) 697-7377
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On January 29, 1998, U.S. Xpress Enterprises, Inc. (the "Company")
completed the acquisition of privately-held Victory Express, Inc. for $51
million in cash and the assumption of approximately $2 million in debt. The
acquired company will be operated by existing management as the Victory division
of the Company's U.S. Xpress, Inc. subsidiary. Victory Express, Inc. is a
truckload carrier based in Ohio with annual revenue of approximately $65
million. The acquisition was financed with proceeds from a recently consummated
$200 million long-term unsecured line of credit facility arranged through a
syndicate of banks.
The Company operates through two subsidiaries: U.S. Xpress, Inc. and
CSI/Crown, Inc., U.S. Xpress, Inc. is a national truckload carrier that operates
over 3,500 tractors providing time-definite and expedited services in the United
States, Canada and Mexico; regional truckload services in the Midwest, Southeast
and Western United States; and logistics services that specialize in serving the
air-freight industry. CSI/Crown, Inc. provides logistics services to the
floorcovering industry, including national and local distribution, freight
consolidation and warehousing services.
The foregoing description does not purport to be complete and is
qualified in its entirety be reference to the Asset Purchase Agreement and the
Credit Agreement attached hereto as Exhibits 10.1 and 10.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Financial Statements of Business Acquired:
It is impracticable to provide the required financial statements at
this time. They will be filed as soon as they are available, but not later than
60 days after the date this report is due to be filed.
(b) Pro Forma Financial Information:
It is impracticable to provide the required pro forma financial
statements at this time. They will be filed as soon as they are available, but
not later than 60 days after the date this report is due to be filed.
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(c) Exhibits:
Exhibit No. Description
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10.1 Stock Purchase Agreement dated as of December 24, 1997 by and
between U.S. Xpress Enterprises, Inc. and Richard H. Schaffer,
Richard H. Schaffer Irrevocable Trust dated December 24, 1991 and
Richard H. Schaffer Irrevocable Non-Withdrawal Trust dated
December 24, 1991.
10.2 Credit Agreement dated as of January 13, 1998 among U.S. Xpress
Enterprises, Inc., Wachovia Bank, N.A., NationsBank, N.A.,
BankBoston, N.A., SunTrust Bank, Chattanooga, N.A. and the banks
listed therein.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
U.S. XPRESS ENTERPRISES, INC.
(Registrant)
By: /s/ Ray M. Harlin
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Name: Ray M. Harlin, Executive
Vice President, Chief
Financial Officer
Date: February 13, 1998
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EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
RICHARD H. SCHAEFER,
RICHARD H. SCHAEFER
IRREVOCABLE WITHDRAWAL TRUST
DATED DECEMBER 24, 1991,
AND
RICHARD H. SCHAEFER
IRREVOCABLE NON-WITHDRAWAL TRUST
DATED DECEMBER 24, 1991
AND
U.S. XPRESS ENTERPRISES, INC.
December 16, 1997
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT made by and between U.S. Xpress Enterprises, Inc., a Nevada
corporation (the "BUYER"), and Richard H. Schaefer ("SCHAEFER"), Richard H.
Schaefer Irrevocable Withdrawal Trust Dated December 24, 1991, and Richard H.
Schaefer Irrevocable Non-Withdrawal Trust Dated December 24, 1991 (together, the
"TRUSTS") (Schaeffer and the Trusts are collectively referred to as the
"SELLERS") is entered into on December 16, 1997. The Buyer and the Sellers are
referred to collectively herein as the "PARTIES."
W I T N E S S E T H:
WHEREAS, the Sellers in the aggregate own all of the outstanding capital stock
of Victory Express, Inc., an Ohio corporation (the "TARGET"); and
WHEREAS, the Sellers desire to sell and the Buyer desires to purchase all of
the outstanding capital stock of the Target pursuant to the terms and conditions
of this Agreement.
NOW THEREFORE, in consideration of the mutual promises and conditions
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE I
PURCHASE AND SALE OF TARGET SHARES
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1.1 BASIC TRANSACTION. On and subject to the terms and conditions of this
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Agreement, the Buyer agrees to purchase from each of the Sellers, and each of
the Sellers agrees to sell, transfer, assign
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and deliver to the Buyer, all of his or its Shares of the Target for the
consideration specified below in Section 1.2.
1.2 PURCHASE PRICE. The Buyer agrees to pay to the Sellers at the Closing as
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consideration for the Shares Fifty-One Million Dollars ($51,000,000) (the
"PURCHASE PRICE") by delivery of the Purchase Price in cash payable by wire
transfer of immediately available funds pursuant to the wire transfer
instructions attached hereto as EXHIBIT 1.2(A). The Base Purchase Price shall
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be allocated among the Sellers in proportion to their respective holdings of
Shares as set forth in EXHIBIT 1.2(B). The Parties further agree that Five
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Million One Hundred Thousand Dollars ($5,100,000) (the "ESCROW FUNDS") shall be
withheld from the funds to be delivered pursuant to Schaefer's wire instructions
and be delivered instead to National City Bank, Dayton, Ohio (hereinafter the
"ESCROW AGENT") in cash payable by wire transfer of immediately available funds
pursuant to wire transfer instructions attached hereto as EXHIBIT 1.2(C). All
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Escrow Funds are to be held in escrow pursuant to the terms of an Escrow
Agreement in the form of EXHIBIT 1.2(D) hereto (the "ESCROW AGREEMENT") as a
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non-exclusive source of indemnification. All payments or distributions from the
Escrow Funds shall be made in accordance with the terms of the Escrow Agreement.
All income earned on the Escrow Funds shall be for the benefit of the Sellers in
accordance with the terms of the Escrow Agreement. All fees and expenses of the
Escrow Agent incurred in connection with the escrow shall be borne equally by
the Buyer and the Sellers.
1.3 THE CLOSING. The delivery of the Purchase Price pursuant to Section 1.2
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hereof, the sale, transfer, and delivery of the Shares pursuant to Section 1.1
hereof and the delivery of the other instruments, certificates and legal
opinions required hereunder (the "CLOSING"), shall take place at the law office
of Fred J. Andary, Esq., 1700 First National Plaza, Dayton, Ohio, at 11:00 A.M.
local time on January, 30, 1998 or on such other date or at such other time or
place as the parties hereto shall agree in writing (the date and time of the
Closing being referred to herein as the "CLOSING DATE").
1.4 DELIVERIES AT THE CLOSING. At the Closing, (i) the Sellers will deliver
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to the Buyer the various certificates, instruments, and documents referred to in
Section 6.1 below, (ii) the Buyer will deliver to the Sellers the various
certificates, instruments, and documents referred to in Section 6.2
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below, (iii) each of the Sellers will deliver to the Buyer stock certificates
representing all of his or its Target Shares, endorsed in blank or accompanied
by duly executed assignment documents, and (iv) the Buyer will deliver to each
of the Sellers the consideration specified in Section 1.2 above.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
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In order to induce the Buyer to enter into this Agreement and the consummate
the transactions contemplated hereby, Schaefer represents and warrants that as
of the date hereof and as of the Closing Date, the following representations and
warranties are true, complete and accurate, and all such representations and
warranties shall be continuing and shall survive the Closing pursuant to Section
7.1 below. The Trusts make the statements referenced in Sections 2.1, Section
2.2 and the last sentence of Section 2.4 and are not making any representations
or warranties involving any of the other Sections in this Article III.
2.1 ORGANIZATION OF THE TRUSTS. Each Seller represents and warrants that
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each of the Trusts is duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its organization. Attached hereto as
EXHIBIT 2.1 are a true, complete and correct copies of the trust agreements and
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all related documents governing the Trusts.
2.2 OWNERSHIP OF AND TITLE TO THE SHARES, ETC. Each Seller represents and
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warrants that as concerns the shares he or it possesses that he or it owns the
shares of the Target set forth opposite such Seller's name on EXHIBIT 1.2(B)
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hereof (the "SHARES"); that each such Seller has good and marketable title to
the Shares set forth after his or its name, free and clear of all liens,
encumbrances, restrictions on transfer, options, charges, security interests,
equities and claims whatsoever; that each has the full legal right, capacity and
power to execute, deliver and perform this Agreement; that this Agreement and
the collateral documents referenced herein executed by each such Seller
constitutes the legal, valid and binding obligation of each such Seller
according to its respective terms; that each such Seller has full legal right
and power to sell, transfer and deliver such Shares in the manner provided in
this Agreement; that upon delivery of, and payment for,
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such Shares pursuant to this Agreement, the Buyer will acquire good and
marketable title thereto, free and clear of all liens, encumbrances,
restrictions on transfer, options, charges, security interests, equities and
claims whatsoever; and that such Shares are at the date hereof and will on the
Closing Date be duly authorized, validly issued and outstanding, fully-paid and
non-assessable, with no personal liability attaching to the ownership thereof.
2.3 NO CONFLICT. Except as set forth on Schedule 2.3, neither the execution
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and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Sellers or the
Target are subject or any provision of the charter, bylaws or other
organizational document of the Target or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Sellers or the Target are a party or by which they are bound or to
which any of the Target's assets are subject which would have a material impact
or effect on this transaction or the operations of the Target, or (iii) result
in the imposition of any lien, charge, encumbrance or other security interest
upon any of the Target's assets. There is no option, warrant, purchase right, or
other contract or commitment that could require the sale, transfer, or other
disposal of any capital stock or other securities of the Target (other than this
Agreement). There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require the Target to issue, sell, or
otherwise cause to become outstanding any of its capital stock or any other
securities. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to the Target.
There are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of the Target. Neither the Sellers
nor the Target are required to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the parties to consummate the transactions contemplated by
this Agreement, other than compliance with the provisions of the Hart-Scott-
Rodino Antitrust Improvements Act.
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2.4 CAPITAL STOCK AND STOCKHOLDER RELATIONS The entire authorized capital
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stock of the Target consists of two hundred fifty (250) shares of common stock
no par value per share (the "TARGET SHARES"), of which 134.5 Target Shares are
issued and outstanding and 15.5 Target Shares are held in treasury. All of the
issued and outstanding Target Shares have been duly authorized, validly issued,
fully paid, and are nonassessable. The Shares constitute all of the issued and
(with the exception of any of the Target Shares held in treasury) outstanding
Target Shares. There are no outstanding options, warrants, contracts,
preemptive rights, proxies, calls, commitments or demands of rights of any
character obligating the Target to issue any Target Shares or options or rights
with respect thereto or any other securities, and there are not existing or
outstanding securities of any kind convertible into or exchangeable for Target
Shares. There are no outstanding obligations of the Target to repurchase,
redeem or otherwise acquire any Target Shares. No current or former stockholder
of the Target or of any corporation heretofore merged with or into the Target
has any claim or cause of action whatsoever against the Target arising out of or
in any way connected with any occurrence or state of facts in existence prior to
the Closing Date, and no such present or former stockholder shall come to have
any claim or cause of action whatsoever against the Target, or any officer,
director or stockholder of the Target, by virtue of, or in any way connected
with, the transactions contemplated by this Agreement or otherwise. By the
execution of this Agreement, the Sellers hereby waive any and all rights,
options, calls, equities or other claims (other than claims they may have
pursuant to this Agreement) which the Sellers may have with respect to the
Target Shares by reason of the transactions contemplated by this Agreement or
any prior transaction, or any other claim or demand whatsoever that they may
have against the Target.
2.5 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER OF THE TARGET. The
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Target is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Ohio. The Target is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, all such jurisdictions being set forth on Schedule
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2.5. The Target has all requisite authority, corporate or otherwise and all
- - ---
authorizations necessary to carry on and conduct the businesses in which it is
engaged and to own or lease and use the properties and
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assets owned and used by it. The Target is not in default under or in violation
of any provision of its charter, bylaws or other organizational or governing
instrument.
2.6 ORGANIZATIONAL DOCUMENTS. The Sellers have delivered to the Buyer (or
------------------------
will deliver within seven (7) days of the date hereof) correct, complete and
certified copies of the charter documents and bylaws of the Target (as amended
and in effect as of the date hereof), the minute books (containing complete,
correct and true records of meetings of the stockholders, the board of
directors, and any committees of the board of directors), the stock certificate
books, and the stock record books of the Target (containing the complete, true
and accurate record of stock issuances as of the date of delivery). Schedule
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2.6 contains a true and complete list of all of the current officers and
- - ---
directors of the Target.
2.7 BROKERS' FEES. Neither the Target nor the Sellers have any liability or
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obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
2.8 TITLE TO ASSETS. The Target has good and marketable title to, or a valid
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leasehold interest in, the properties and assets used by it, wherever located,
including those shown on the Baseline Financial Statement of the Target dated
September 30, 1997, or acquired after the date thereof, free and clear of all
security interests, except for properties and assets disposed of in the ordinary
course of business since the date of the aforesaid balance sheet.
2.9 SUBSIDIARIES AND AFFILIATES. Except as set forth on Schedule 2.9, the
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Target does not have any subsidiaries or affiliated businesses or operations,
and there are no other assets, operations, personnel, know how or the like
owned, employed or used by the Target in the operation of the transportation
business known as "Victory Express" that would not inure to the sole benefit and
control of the Buyer upon consummation of the transactions contemplated by the
Agreement.
2.10 FINANCIAL STATEMENTS. The Sellers have delivered to the Buyer financial
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statements of the Target for the fiscal years ended December 31, 1994, December
31, 1995, December 31, 1996,
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and, attached hereto as EXHIBIT 2.10, for the month ended September 30, 1997,
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(the "BASELINE FINANCIAL STATEMENT") and the month ended November 30, 1997
(collectively the "FINANCIAL STATEMENTS"). The Financial Statements (including
the notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of the Target as of such dates and the results of operations
of the Target for such periods, are correct and complete, and are consistent
with the books and records of the Target (which books and records are correct
and complete and kept in accordance with GAAP); provided, however, that the
Baseline Financial Statement is subject to year-end adjustments which will not
in the aggregate result in a material adverse change to the Baseline Financial
Statement. The Baseline Financial Statement will also lack footnotes and other
normal presentation items.
2.11 EVENTS SUBSEQUENT TO THE BASELINE FINANCIAL STATEMENT. Since September
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30, 1997 and other than as set forth in Schedule 2.11, Target has conducted its
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business in the ordinary course and there has not been any change in the
business, financial condition, operations, results of operations, relationships
with any suppliers or customers or future prospects of the Target which will or
is likely to have an adverse effect on either the net income or stockholders
equity of the Target. Without limiting the generality of the foregoing, since
that date and except as set forth on Schedule 2.11:
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(A) the Target has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, other than for a fair consideration in the
ordinary course of business;
(B) other than shipper contracts, the Target has not entered into any
material agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) or any agreement, contract,
lease, or license (or series of related agreements, contracts, leases and
licenses) outside the ordinary course of business;
(C) no party (including the Target) has accelerated, terminated, modified,
or canceled any material agreement, contract, lease, or license (or series
of related agreements, contracts, leases, and licenses) to which the Target
is a party or by which the Target is bound;
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(D) the Target has not granted or allowed to be imposed any lien, claim,
charge, security interest or other encumbrance upon any of its assets;
(E) the Target has not made any material capital expenditure (or series of
related capital expenditures) or any capital expenditure outside the
ordinary course of business that has not been reflected on the Baseline
Financial Statement;
(F) other than in the ordinary course of business, the Target has not made
any capital investment in, or any acquisition of the securities or assets
of, any third party;
(G) the Target has not made any loan or advance to, and has not received a
loan or advance from the Sellers which will remain outstanding at the
Closing;
(H) the Target has not issued any note, bond, or other debt instrument or
created, incurred, assumed, or guaranteed any indebtedness for borrowed
money or capitalized lease obligation;
(I) the Target has not unreasonably delayed or postponed the payment of
accounts payable or other liabilities beyond the payment terms applicable
to said accounts payable or liabilities;
(J) the Target has not canceled, compromised, waived, or released any
right or claim (or series of related rights and claims) either involving
more than Twenty-Five Thousand Dollars ($25,000.00) or outside the ordinary
course of business;
(K) the Target has not granted any license or sublicense of any rights
under or with respect to any of the Target Intellectual Property;
(L) other than as set forth in the documents delivered pursuant to Section
2.6, there has been no change made or authorized in the charter or bylaws
of the Target;
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(M) the Target has not issued, sold, or otherwise disposed of any of the
Target Shares, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any
of the Target Shares;
(N) the Target has not declared, set aside, nor paid any dividend or made
any distribution with respect to the Target Shares (whether in cash or in
kind) or redeemed, purchased, or otherwise acquired any of the Target
Shares;
(O) the Target has not experienced any damage, destruction, or loss
(whether or not covered by insurance) which materially adversely affect its
properties or business;
(P) the Target has not made any loan to, or entered into any other
transaction with or on behalf of (including but not limited to guarantees
of debt), any of its directors, officers, and employees other than normal
salary, bonuses and employee benefits paid or granted in the ordinary
course of business consistent with past practice; provided, however that
none of the Sellers will directly or indirectly have received any bonuses,
dividends or other forms of compensation (other than routine monthly salary
paid in the ordinary course) from January 1, 1997 through the Closing;
(Q) the Target has not granted any increase in the base compensation of
any of its directors, officers, and employees outside the ordinary course
of business, and has not adopted, amended, modified, or terminated any
bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and employees
(or taken any such action with respect to any other Employee Benefit Plan);
(R) the Target has not made any other change in employment terms for any
of its directors, officers, and employees;
(S) other than in the ordinary course of business, the Target has not made
or pledged to make any charitable or other capital contribution;
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(T) there has not been any other occurrence, event, incident, action,
failure to act, or transaction outside the ordinary course of business
involving the Target, and the Target has conducted its business in the
ordinary and usual course and in a reasonable business manner;
(U) the Target has not committed to any of the foregoing;
(V) the Target has not incurred any liability, contingent or otherwise,
except in the ordinary and usual course of business; and
(W) the Target has not made any change in any method of accounting or
principle of accounting.
2.12 UNDISCLOSED LIABILITIES. Except as set forth on Schedule 2.12, the
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Target does not have any liability or obligation whatsoever, whether accrued,
absolute, contingent or otherwise (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against it giving rise to any liability), except for
liabilities set forth and adequately reserved against in the Baseline Financial
Statement and all subsequent financial statements.
2.13 LEGAL COMPLIANCE. Except as set forth on Schedule 2.13, the Target
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has reasonably complied with all applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof), and no material action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed, commenced or
threatened against it alleging any failure so to comply.
2.14 TAX MATTERS.
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(A) The Target has filed all tax returns and reports that it was required
to file. All such tax returns and reports were correct and complete. All
taxes owed by the Target (whether or not
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shown on any tax return) have been paid or accrued on the Baseline
Financial Statement. The Target currently is not the beneficiary of any
extension of time within which to file any tax return or report or to make
any tax payment. No claim has ever been made by an authority in a
jurisdiction where the Target does not file tax returns or reports that the
Target is or may be subject to taxation by that jurisdiction.
(B) The Target has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.
(C) Schaefer does not expect any authority to assess any additional taxes
for any period for which tax returns have been filed. There is no dispute
or claim concerning any tax liability of the Target either (i) claimed or
raised by any authority in writing or (ii) as to which either Schaefer or
any of the officers and employees of the Target responsible for tax matters
has been notified or has knowledge based upon personal contact with any
agent of such authority. As concerns income tax, Schedule 2.14(c) sets
----------------
forth all federal, state and local tax returns filed with respect to the
Target for taxable periods ended on or after December 31, 1987, indicates
those tax returns that have been audited, and indicates those tax returns
that currently are the subject of audit, investigation or other inquiry.
Schaefer has delivered to the Buyer correct and complete copies of all
federal and state income tax returns, examination reports, and statements
of deficiencies assessed against or agreed to by the Target since December
31, 1987. Schedule 2.14(d) sets forth all other tax returns and reports
----------------
filed with respect to the Target for taxable periods ended on or after
December 31, 1996, indicates those tax returns that have been audited, and
indicates those tax returns that currently are the subject of audit,
investigation or other inquiry.
(D) The Target has not waived any statute of limitations in respect of
taxes or agreed to any extension of time with respect to a tax assessment
or deficiency.
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(E) The Target has not filed a consent under Code (S)341(f) concerning
collapsible corporations. The Target has not made any payments, is not
obligated to make any payments, nor is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not
be deductible under Code (S)280G. The Target has not been a United States
real property holding corporation within the meaning of Code (S)8979(c)(2)
during the applicable period specified in Code (S)8979(c)(1)(A)(ii). The
Target is not a party to any tax allocation or sharing agreement. The
Target (A) has not been a member of an affiliated group filing a
consolidated federal income tax return and (B) has no liability for the
taxes of any person or entity (other than the Target) under Reg.
(S)1.1502-6 (or any similar provision of state or local law), as a
transferee or successor, by contract, or otherwise.
(F) Schedule 2.14(f) sets forth the following information with respect to
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the Target as of the most recent practicable date: (i) the basis of the
Target in its assets; and (ii) the amount of any net operating loss, net
capital loss, unused investment or other credit, unused foreign tax, or
excess charitable contribution allocable to the Target.
(G) The unpaid taxes of the Target (i) did not, as of the Baseline
Financial Statement, exceed the reserve for tax liability set forth on the
face of the Baseline Financial Statement (rather than in any notes thereto)
and (ii) do not exceed that reserve as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of
the Target in filing tax returns.
2.15 REAL PROPERTY. Schedule 2.15(a) lists and briefly describes all real
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property that the Target leases for the operation of its terminal and general
offices (the "REAL ESTATE"). No real property is owned by the Target other than
a residential condominium located in Ft. Myers, Florida (copies of the deeds,
condominium governing documents and most recent condominium fee invoice being
attached as Schedule 2.15(b) (the "CONDOMINIUM")). Attached hereto as EXHIBIT
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2.15 is a true, complete and correct copy of the lease for the Real Estate (the
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"LEASE").
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(A) GENERAL. Except for the Real Estate and the Condominium, there is no
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real property owned, leased or occupied by the Target and used or connected with
its business.
(B) CODES, ORDINANCES, USE AND NOTICE OF CONDEMNATION. There are no
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existing, pending, or proposed violations of any fire or health codes, building
ordinances, or rules of the Board of Fire Underwriters (or organization
exercising functions similar thereto), with respect to the Real Estate, nor is
there, any defect in the Real Estate which would render all or any part thereof
unsuitable for its continued use by the Target in the manner historically used
by Target except that the Real Estate is located partially on wetlands and a
flood plain and the appropriate approval has been granted to so construct and
operate the Real Estate thereon. Neither Schaefer nor the Target has received
any notice of any condemnation proceeding in process or proposed that would
affect the Real Estate. Schaefer shall advise the Buyer forthwith of any notice
concerning violations, condemnation proceeding, and tax or utility rate
increases that may affect the Real Estate.
(C) LICENSES AND PERMITS. The Target holds all licenses, certificates,
--------------------
permits, franchises and rights from all appropriate federal, state, local and
other public authorities necessary for the conduct of its current operations,
which licenses, certificates, permits, franchises and rights are specified on
Schedule 2.15(c).
- - ----------------
(D) NO NOTICE OF VIOLATIONS. The Target is in reasonable compliance with
-----------------------
all applicable laws, rules and regulations. The Target has not received any
notice of violations of any federal, state or local laws, ordinances, rules,
regulations or orders relating to its business operations.
(E) UTILITY CONNECTIONS. All public utility connections located on or
-------------------
serving the Real Estate and the Condominium have been completed, installed,
activated, paid for and are in operational condition and are in compliance with
all appropriate codes, rules and regulations.
(F) TAXES AND UTILITIES. Sellers are not aware of, nor has the Target
-------------------
received, any notice or information of any condition which would result in an
increase in the assessments covering the Real Estate or the Condominium or
utility rates affecting the Real Estate or the Condominium.
13
<PAGE>
(G) ACCESS. The Target presently has the unencumbered right to use all
------
accesses from the Real Estate and the Condominium to and from public
thoroughfares, as such accesses are presently configured and utilized.
(H) RIGHT TO OPERATE. The Target has the legal right to operate all parts of
-----------------
the Real Estate in the manner in which it is currently being operated as a
terminal and general corporate office facility for an interstate trucking
company.
(I) GOOD TITLE. Except as set forth on Schedule 2.15(i), the lessor of the
---------- ----------------
Real Estate has good and marketable title to each parcel of Real Estate, free
and clear of any liens, mortgages, deeds to secure debt, security interests,
easement, covenant, or other restriction, except for recorded easements,
covenants, and other restrictions which do not impair the current use,
occupancy, or value, or the marketability of title, of the property subject
thereto. Except as set forth on Schedule 2.15(i), the Target has good and
----------------
marketable title to the Condominium, free and clear of any liens, mortgages,
deeds to secure debt, security interests, easement, covenant, or other
restriction, except for recorded easements, covenants, and other restrictions
which do not impair the current use, occupancy, or value, or the marketability
of title, of the property subject thereto.
(J) NO OTHER LEASES. Except for the Lease and as set forth in Schedule
--------------- --------
2.15(j), there are no leases, subleases, licenses, concessions, or other
- - ------
agreements, written or oral, granting to any party or parties the right of use
or occupancy of any portion of the Real Estate or the Condominium.
(K) STATUS OF THE LEASE.
-------------------
(I) the Lease is legal, valid, binding, enforceable, and in full force
and effect in accordance with its terms, including those terms that
will go into effect as of the Closing;
14
<PAGE>
(II) the Lease will continue to be legal, valid, binding, enforceable,
and in full force and effect (assuming no default by the Target
subsequent to the Closing) following the consummation of the
transactions contemplated hereby;
(III) no party to the Lease is in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or acceleration
thereunder;
(IV) no party to the Lease has repudiated any provision thereof;
(V) there are no disputes, oral agreements, or forbearance programs in
effect as to the Lease; and
(VI) except as noted in Schedule 2.15(i) the Target has not assigned,
----------------
transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the Lease, and the lessor of the Lease has not assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the Real Estate.
2.16 INTELLECTUAL PROPERTY. Set forth on Schedule 2.16 is a complete and
---------------------- -------------
accurate list of all intellectual property rights owned by or licensed to the
Target, including but not limited to all rights in and to servicemarks,
trademarks, tradenames (including the name "Victory Express" and all variations
thereof), copyrights, patents and the like whether or not subject to
registration (collectively the "TARGET INTELLECTUAL PROPERTY").
(A) There are no other forms of intellectual property rights necessary for
the operation of the businesses of the Target as presently conducted other
than the Target Intellectual Property. Each item of the Target Intellectual
Property owned or used by the Target immediately prior to the Closing
hereunder will be owned or available for use by the Target on identical
terms and conditions immediately subsequent to the Closing hereunder. The
Target has applied to register any trademark it owns with the Untied States
Patent and Trademark Office.
15
<PAGE>
(B) The Target has never interfered with, infringed upon, misappropriated
or otherwise come into conflict with any intellectual property rights of
third parties, other than as listed in Schedule 2.16(b), and none of the
----------------
Sellers and the directors and officers (and employees with responsibility
for intellectual property matters) of the Target has ever received any
charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that the
Target must license or refrain from using any intellectual property rights
of any third party). No third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any of the Target
Intellectual Property. The Target will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any intellectual
property rights of third parties as a result of the continued operation of
its businesses as presently conducted.
(C) With regard to each item of the Target Intellectual Property:
(I) the Target possess all right, title, and interest in and to the
item, free and clear of any security interest, license, or other
restriction;
(II) the item is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;
(III) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or threatened which challenges
the legality, validity, enforceability, use, or ownership of the item;
and
(IV) the Target has never agreed to indemnify any of Sellers or any
other third party for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.
16
<PAGE>
2.17 ROLLING STOCK AND OTHER TANGIBLE ASSETS. Other than those photocopiers
----------------------------------------
and fax machines and those items listed in Schedule 2.17 that are leased, the
-------------
Target has good, valid and marketable title to all personal and mixed, tangible
and intangible properties and assets all machinery, equipment, and other
tangible assets (including but not limited to the Rolling Stock (as herein
defined)) used in its business as presently conducted or which it otherwise
purports to own, free and clear of all liens, claims, charges and encumbrances
whatsoever. Each such tangible asset is free from defects (patent and latent),
has been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used. Schedule 2.17(a) sets
----------------
forth a list (by make, model, year, license plate/registration number and
vehicle identification number) of all power units and trailers used or usable by
the Target (the "ROLLING STOCK"). The Rolling Stock is "as is" and has operable
engines and drive trains except as noted in Schedule 2.17(a). Except as set
----------------
forth on Schedule 2.17(a), no item of Rolling Stock is due for major overhaul or
----------------
replacement during the next fifty thousand (50,000) miles of service. Schedule
--------
2.17(b) sets forth a list (by make, model, year, license plate/registration
- - -------
number and vehicle identification number) of all other motor vehicles and
equipment (other than Rolling Stock) used or usable by the Target. Schedule
--------
2.17(c) sets forth a list all other personal property owned by the Target. The
- - -------
location of all the Rolling Stock and other personal property located on
Schedule 2.17(a), Schedule 2.17(b) and Schedule 2.17(c) is set forth on such
- - ---------------- ---------------- ----------------
schedules, or if the location of any such Rolling Stock or other personal
property is unknown to the Target or in transit such information shall be noted
on such schedule.
2.18 CONTRACTS. Schedule 2.18 sets forth all oral or written contracts and
---------- -------------
other agreements to which the Target is a party, including but not limited to:
(A) any agreement (or group of related agreements) for the lease of
personal property to or from any of the Sellers or any third party
providing for lease payments in excess of Fifty Thousand Dollars ($50,000)
per annum;
(B) any agreement (or group of related agreements) for the purchase or sale
of supplies, products, or other personal property, or for the furnishing or
receipt of services, the
17
<PAGE>
performance of which will extend over a period of more than one year or
involve consideration in excess of Ten Thousand Dollars ($10,000);
(C) any agreement concerning a partnership or joint venture;
(D) any agreement (or group of related agreements) under which the Target
has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, in excess of Fifty Thousand
Dollars ($50,000) or under which it has imposed a lien on any of its
assets, tangible or intangible;
(E) any agreement concerning confidentiality or noncompetition;
(F) any agreement with any of the Sellers;
(G) any agreement for the employment of any individual on a full-time,
part-time, consulting, or other basis providing annual compensation in
excess of Ten Thousand Dollars ($10,000) or providing severance benefits or
other post-employment benefits of any amounts;
(H) any agreement under which it has advanced or loaned any amount to any
of its directors, officers, and employees other than driver advances issued
in the ordinary course of business;
(I) any agreement under which the consequences of a default or termination
could have an adverse effect on the business, financial condition,
operations, results of operations, or future prospects of the Target in
excess of Ten Thousand Dollars ($10,000) in earnings before interest,
taxes, depreciation and amortization;
(J) any other agreement (or group of related agreements) the performance of
which involves consideration in excess of Ten Thousand Dollars ($10,000);
or
18
<PAGE>
(K) all trucking, carrier, shipper, dedicated service, broker and transport
contracts which account for more than Five Hundred Thousand Dollars
($500,000) in annual revenues. Schaefer will make available to the Buyer
prior to the Closing the files containing all other such contracts.
Schaefer has delivered to the Buyer a correct and complete copy of each written
agreement set forth on Schedule 2.18 (as amended to date) and a written summary
-------------
setting forth the terms and conditions of each oral agreement referred to in
Schedule 2.18. With respect to each such agreement: (i) the agreement is legal,
- - -------------
valid, binding, enforceable, and in full force and effect; (ii) the agreement
will continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (iii) no party is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under the
agreement; (iv) no party has repudiated any provision of the agreement; and (v)
no party is the subject of bankruptcy proceedings, has had a trustee appointed
on its behalf or is insolvent.
2.19 EMPLOYEE ARRANGEMENTS, UNION AGREEMENTS AND BENEFIT PLANS AND GOVERNMENT
------------------------------------------------------------------------
COMPLIANCE.
- - ----------
(a) Schedule 2.19(a) sets forth a complete and accurate list and
----------------
description of all oral or written employment, consulting or collective
bargaining contracts, deferred compensation, change in control agreements,
golden parachute agreements, profit-sharing, bonus, option, share purchase
or other benefit or compensation commitment, benefit plans, arrangements,
policies or plans, including all welfare plans of or pertaining to the
present or former employees of the Target, or the Target's predecessors in
interest. Except as set forth on Schedule 2.19(a), the Target and its
----------------
predecessors in interest have reasonably complied with all of their
respective obligations, including the payment of all contributions, the
filing of all reports, and the payment or accrual of all expenses for the
period between the end of the previous plan year and the Closing Date, with
respect to such contracts, commitments, arrangements and plans. The plans
have been maintained in compliance with all applicable
19
<PAGE>
laws and regulations. The levels of insurance reserves and accrued
liabilities with regard to all such plans are reasonable and are sufficient
to provide for all incurred but unreported claims and any retroactive
premium adjustments.
(B) Except as set forth on Schedule 2.19(b), the Target has never had any
----------------
oral or written employment, consulting or collective bargaining contracts,
deferred compensation, change in control agreements, golden parachute
agreements, profit-sharing, bonus, option, share purchase or other benefit
or compensation commitment, benefit plans, arrangements or plans, including
all welfare plans of or pertaining to the present or former employees of
the Target, or the Target's predecessors in interest.
(C) Schedule 2.19(c) sets forth the name of each salaried employee of the
----------------
Target and such employee's annual salary, position and hire date.
(D) Except as disclosed on Schedule 2.19(d), the Target is reasonably in
----------------
compliance with all worker compensation laws and requirements of all
applicable states.
(E) Except to the extent set forth in Schedule 2.19(e):
----------------
(I) The Target is in compliance with all applicable laws and
collective bargaining agreements respecting employment (if any) and
employment practices, terms and conditions of employment and wages and
hours and occupational safety and health;
(II) There is no unfair labor practice, charge or complaint or any
other matter against or involving the Target or pending or, to the
Target's knowledge, threatened before the National Labor Relations
Board or any court of law;
(III) There is no labor strike, dispute, slowdown or stoppage actually
pending or, to the Target's knowledge, threatened against the Target;
20
<PAGE>
(IV) To the Target's knowledge, no certification or decertification
question or organizational drive exists or has existed within the past
twenty-four months respecting the employees of the Target;
(V) No grievance proceeding or arbitration proceeding arising out of
or under any collective bargaining agreement is pending against the
Target, or, to the knowledge of the Target, threatened; and, to the
knowledge of the Target, no basis for any claim therefor exists;
(VI) Except for general labor relation laws, no agreement (including
any collective bargaining agreement), arbitration or court decision or
governmental order which is binding on the Target in any way limits or
restricts the Target from relocating or closing any of its operations;
(VII) The Target has not experienced any organized work stoppage or
other labor difficulty since January 1, 1988; and
(VIII) There are no charges, or known administrative proceedings or
formal complaints of discrimination (including discrimination based
upon sex, age, marital status, race, national origin, sexual
preference, handicap or veteran status) pending before the Equal
Employment Opportunity Commission or any federal, state or local
agency or court against the Company. Except as disclosed in Schedule
--------
2.19(e), since January 1, 1992, there have been no governmental audits
-------
of the equal employment opportunity practices of the Target.
2.20 EMPLOYEE BENEFIT PLANS.
----------------------
(A) Target does not have and has never had an employee pension benefit
plan.
21
<PAGE>
(B) Schedule 2.20(b) lists any employee welfare benefit plan within the
----------------
meaning of Section 3(1) of the Employee Retirement Income Security Act of
1974 ("ERISA") maintained or contributed to by the Target during the last
five (5) years and with respect to any group health plan subject to COBRA,
maintained or contributed to by the Target during the last five (5) years.
"COBRA" means the provisions for the continuation of health care enacted by
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, as
set forth in Section 4080B of the Code (and any amendments or predecessor
or successor provisions) and Sections 601 through 608 of ERISA (and any
amendments or predecessor or successor provisions), including any
regulations promulgated under the applicable provisions of the Code and
ERISA. As of the Closing Date, each of the employee benefit plans set forth
in Schedule 2.20(b) and the Retirement Plan (collectively, the "EMPLOYEE
----------------
BENEFIT PLANS") are in material compliance with, and have been administered
in material compliance with, the provisions of ERISA and the Code.
(C) In connection with each Employee Benefit Plan:
(I) The Target has provided to the Buyer true, complete and correct
copies of (A) each Employee Benefit Plan (or, in the case of any
unwritten Employee Benefit Plan, a description thereof), (B) each
trust agreement, group annuity contract, and any other contract
relating to any Employee Benefit Plan, (C) the three (3) most recent
Forms 990 and the three most recent Annual Reports, including all
schedules, exhibits, and audits (Form 5500) filed for each Employee
Benefit Plan for which such a filing is required; and there has been
no material change or amendment to any of such documents or filings
relating to the Employee Benefit Plans as of the Closing Date; (D) the
most recent Summary Plan Descriptions and all Summary of Material
Modifications prepared subsequent to such Summary Plan Descriptions,
(E) the three (3) most recent Summary Annual Reports prepared and
distributed for each Employee Benefit Plan for which such document is
required, (F) the three most recent actuarial reports for the
Retirement Plan, (G) all Notices of Reportable Events filed with the
Pension Benefit Guaranty
22
<PAGE>
Corporation, (H) with respect to the Retirement Plans, a copy (or if
not formally published, a description) of the established policies and
procedures reasonably designed to promote and facilitate overall
compliance with the requirements of Section 401(a) of the Code and all
corrections made since January 1, 1997, as a result of such policies
and procedures, and (I) a copy of all Forms 5330.
(II) Neither the Target nor any fiduciary as defined in Section 3(21)
of ERISA has taken any action or failed to take any action which would
result in any liability to the Target after the Closing Date for
matters prior to the Closing Date with respect to any Employee Benefit
Plan, other than the payment of the specified benefits.
(III) There is not any contract, plan or commitment or legal
requirement (other than the funding requirement of ERISA with respect
to the Retirement Plan), that would require the Target to create any
additional employee benefit plan to provide or designed to provide
benefits for any its employees or their dependents or beneficiaries or
that would require the Target to make any additional contribution to
or to pay any expense of the Retirement Plan or to any Employee
Benefit Plan for matters occurring prior to the Closing Date.
(IV) There is no action, suit, grievance, arbitration or other manner
of litigation, or claim with respect to the assets of any Employee
Benefit Plan (other than routine claims for benefits made in the
ordinary course of Employee Benefit Plan administration for which
administrative review procedures have not been exhausted) pending,
threatened or imminent against or with respect to the Employee Benefit
Plan, the Target or any other fiduciary (as defined in Section 3(21)
of ERISA) of any Employee Benefit Plan (including any action, suit,
grievance, arbitration or other manner of litigation, or claim
regarding conduct which allegedly interferes with the attainment of
rights under any Employee Benefit Plan).
23
<PAGE>
(V) Neither the Target nor any other fiduciary (as defined in
Section 3(21) of ERISA) has any knowledge of any facts which would
give rise to or could give rise to any action, suit, grievance,
arbitration or other manner of litigation, or claim with respect to
any Employee Benefit Plan.
(D) Schedule 2.20(e) sets forth the names of claimants, the relationship
----------------
to the employee and amount and description of all claims made under any
policy or plan of health benefits sponsored by the Target, whether or not
insured, during the last five years that aggregate Five Thousand Dollars
($5,000) or more with respect to any claimant.
2.21 NOTES AND ACCOUNTS RECEIVABLE. In the ordinary course of business all
------------------------------
notes and accounts receivable of the Target are reflected properly on its books
and records, are valid receivables subject to no refunds, adjustments, defenses,
restrictions, assignments, disputes, setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts within 120 days of the date incurred without resort to legal
process, subject only to the reserve for bad debts set forth on the face of the
Baseline Financial Statement (rather than in any notes thereto) as adjusted for
the passage of time through the Closing Date in accordance with the past custom
and practice of the Target.
2.22 POWERS OF ATTORNEY. There are no outstanding powers of attorney
------------------
executed on behalf of the Target.
2.23 INSURANCE. Schedule 2.23 sets forth the following information with
---------- -------------
respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which the Target has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five (5)
years:
(A) the name, address, and telephone number of the agent;
24
<PAGE>
(B) the name of the insurer, the name of the policyholder, and the name of
each covered insured;
(C) the policy number and the period of coverage;
(D) the scope (including an indication of whether the coverage was on a
claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
(E) a description of any retroactive premium adjustments or other loss-
sharing arrangements.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect; (ii) the policy will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby (subject to (A) the terms of the policy, (B) the payment of premiums and
(C) to no notice of cancellation by the Target subsequent to the Closing); (iii)
neither the Target nor any other party to the policy is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification, or
acceleration, under the policy; and (iv) no party to the policy has repudiated
any provision thereof. The Target has been covered during the past five (5)
years by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. Schedule
--------
2.23 describes any self-insurance arrangements affecting the Target.
- - ----
2.24 LITIGATION AND CLAIMS. Schedule 2.24(a) sets forth each instance in
---------------------- ----------------
which the Target (i) is subject to any outstanding injunction, judgment, order,
decree, ruling, claim or charge, or (ii) is a party or is threatened to be made
a party to any action, claim, suit, proceeding, hearing, or investigation of,
in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator. Set
forth on Schedule 2.24(b) are copies of all accident registers and loss runs
----------------
relating to all open matters not totally resolved and closed. Set forth on
25
<PAGE>
Schedule 2.24(c) are copies of the cargo loss log relating to all open matters
- - ----------------
not totally resolved and closed. Schedule 2.24(d) sets out all facts of which
----------------
the Target is aware involving any bodily injury, property, vehicular or cargo
incident between the Target and a third party occurring since January 1, 1998,
where no claim has yet been made or threatened and which is not reflected on
either Schedule 2.24(a), Schedule 2.24(b) or Schedule 2.24(c). Schedule 2.24(a),
---------------- ---------------- ---------------- ----------------
Schedule 2.24(b) and Schedule 2.24(c) each set forth in individual detail all
- - ---------------- ----------------
liabilities recorded in the financial statements, including booked reserves and
accruals relating to each entry.
2.25 GUARANTIES. The Target is not a guarantor or otherwise is liable for
----------
any liability or obligation (including indebtedness) of any other person or
entity.
2.26 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS. ENVIRONMENTAL PROTECTION.
----------------------------------------- ------------------------
The Target has reasonably obtained all permits, licenses and other
authorizations and filed all notices and reports which are required to be
obtained or filed by it for the operation of its business under federal, state
and local laws relating to environmental matters, health and safety, pollution,
or protection of the environment (the "HSE LAWS"). The Target is in compliance
in all material respects with all terms and conditions of such required permits,
licenses and authorizations. The Target is in compliance in all material
respects with all other applicable limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in the HSE Laws or contained in any law, regulation, code, plan,
order, decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder. In addition to the foregoing, the Target specifically
warrants that all underground storage tanks ("USTS") presently or previously
located on the Real Estate at all times were in compliance in all material
respects with the HSE Laws or that any violations have been properly corrected
to the satisfaction of the appropriate governmental authority, and further
warrants that all USTs presently on the Real Estate are in reasonable compliance
with the 1998 UST upgrade requirements. Except as disclosed on Schedule 2.26,
-------------
there are no past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
continued compliance in all material respects with, or which may give rise to
any material common law or statutory liability, or otherwise form the basis of
any material claim, action, suit, notice of
26
<PAGE>
violation, proceeding, or hearing pursuant to the HSE Laws, nor has there been
any distribution, use, treatment, storage, disposal, transport, handling,
emission, discharge, release or threatened release into the environment of any
pollutant, contaminant, or hazardous or toxic material or waste with respect to
the Target or its business. Except as disclosed on Schedule 2.26, the Target has
-------------
received no notice of violation or the like or any complaint or other threat of
any actions by any party related in any way to the HSE laws. The Real Estate
does not contain any asbestos, urea-formaldehyde, lead-based paint, or PCBs in
any form. The Buyer will conduct a Phase I Environmental Site Assessment
("ESA") of the Real Estate at the Buyer's expense not later than January 15,
1998. The Buyer may, at its option conduct a Phase II ESA on any item of concern
noted in the Phase I ESA. Any material violation of the HSE Laws documented by
the Phase II ESA but not reported by the Target on Schedule 2.26, shall be, at
-------------
the Buyer's option, corrected to the satisfaction of the appropriate
governmental authority by or at the cost of the Seller, or corrected by the
Buyer with the cost of correction deducted from the purchase price hereunder.
2.27 ABSENCE OF CERTAIN PAYMENTS. Other than for services legitimately and
---------------------------
openly performed under applicable law, business discounts customarily granted in
the ordinary course of business and nominal non-cash gifts (with a total per
donee retail value of less than $100 in any year), neither the Target, nor, to
Schaefer's knowledge, any agent, employee or representative of the Target has
made or offered to make to any customer, supplier, government official,
insurance carrier, referral source, employee or agent or any other person or
entity, any payment, gratuity, gift, service or thing of material value. For
purposes of this Section, "material" shall mean a fair market value of One
Hundred Dollars ($100.00) or more, and "person" shall not include the Sellers.
2.28 ANTITRUST MATTERS. The Target is and throughout any applicable
-----------------
statutory period of limitation has been in compliance with all laws, regulations
and/or ordinances, whether federal, state or municipal, pertaining or relating
in any way to the regulation of competition or trade among or between business
entities, including but not limited to, Sections 1 and 2 of the Sherman Act,
Section 3 of the Clayton Act, the Robinson-Patman Act, the Lanham Act, Section 5
of the Federal Trade Commission Act and applicable state or municipal antitrust
and trade laws,
27
<PAGE>
regulations and/or ordinances. The business and operations of the Target, or any
predecessor, affiliate, parent or subsidiary thereof, have been conducted in
full and complete compliance with any and all such laws, regulations and/or
ordinances.
2.29 SAFETY RATING. Except as noted in Schedule 2.29, the Target holds a
------------- -------------
Satisfactory safety rating from the United States Department of Transportation
and has always held same since such ratings were first issued.
2.30 ORGANIZATIONS AND CLUBS. Set forth on Schedule 2.30 is a listing of
----------------------- -------------
all organizations and clubs of which the Target is a member or to which it pays
dues or fees on behalf of itself or any person, which person shall be identified
in the schedule.
2.31 BANK ACCOUNTS. Schedule 2.31 sets forth a complete and accurate list
-------------- -------------
of each bank or financial institution at which the Target has an account or safe
deposit box (giving the address and account numbers) and the names of the
persons authorized to draw thereon or to have access thereto.
2.32 MAJOR SUPPLIERS AND CUSTOMERS. Schedule 2.32 sets forth a list of the
----------------------------- -------------
Target's fifty (50) largest suppliers and fifty (50) largest customers for the
year ended December 31, 1997, together with in each case the amount paid or
billed during such period. To Schaefer's knowledge, the Target, other than as
noted in Schedule 2.32 is not engaged in any material dispute with any of such
-------------
suppliers or customers. None of the officers or directors of the Target, or any
person related to any officer or director of the Target, or any company or other
organization in which any officer or director of the Target, or any person
related to any officer or director of the Target has a direct or indirect
financial interest, has any material financial interest in any supplier or
customer of the Target.
2.33 DISCLOSURE. The representations and warranties contained in this
-----------
Article II do not contain any untrue statement of a material fact nor omit to
state any material fact necessary in order to make the statements and
information contained in this Article II not misleading.
28
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
In order to induce the Sellers to enter into this Agreement and the consummate
the transactions contemplated hereby, the Buyer represents and warrants that as
of the date hereof and as of the Closing Date, the following representations and
warranties are true, complete and accurate, and all such representations and
warranties shall be continuing and shall survive the Closing pursuant to Section
7.1 below.
3.1 ORGANIZATION OF THE BUYER. The Buyer is a corporation duly organized,
--------------------------
validly existing, and in good standing under the laws of the State of Nevada.
3.2 AUTHORIZATION OF TRANSACTION. The Buyer has full power and authority
-----------------------------
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Buyer, enforceable in accordance
with its terms and conditions. Except as set forth on Schedule 3.2 and
------------
compliance with the provisions of the Hart-Scott-Rodino Antitrust Improvements
Act, the Buyer need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement.
3.3 NONCONTRAVENTION. Except as set forth on Schedule 3.3, neither the
----------------- ------------
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the Buyer
is subject or any provision of its charter or bylaws or (b) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument,
or other
29
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arrangement to which the Buyer is a party or by which it is bound or to which
any of its assets is subject.
3.4 BROKERS' FEES. The Buyer has no liability or obligation to pay any fees
--------------
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any Seller could become liable or
obligated.
3.5 INVESTMENT. The Buyer is not acquiring the Shares with a view to or for
-----------
sale in connection with any distribution thereof within the meaning of the
Securities Act of 1933.
ARTICLE IV
PRE-CLOSING COVENANTS
---------------------
The Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.
4.1 GENERAL. Each of the Parties will use his or its best efforts to take all
--------
action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Article VI below).
4.2 NOTICES AND CONSENTS. Schaefer will cause the Target to give any notices
---------------------
to third parties, and will cause the Target to use its best efforts to obtain
any third party consents, that the Buyer may request in connection with the
matters referred to in Section 2.3 above. Each of the Parties will (and
Schaefer will cause the Target to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents, and approvals
of governments and governmental agencies in connection with the matters referred
to in Section 2.3, Section 3.2 and Section 3.3 above. Without limiting the
generality of the foregoing, each of the Parties will file (and Schaefer will
cause the Target to file) any Notification and Report Forms and related material
that he or it may be required to file with
30
<PAGE>
the Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the Hart-Scott-Rodino Act, will use his or its best
efforts to obtain (and Schaefer will cause the Target to use its best efforts to
obtain) an early termination of the applicable waiting period, and will make
(and Schaefer will cause the Target to make) any further filings pursuant
thereto that may be necessary, proper, or advisable in connection therewith.
Schaefer, without prior consultation with the Buyer, shall not cause or permit
the Target to purchase or contract to purchase any equipment or Rolling Stock,
regardless of whether such purchase is in the ordinary course of business.
4.3 OPERATION OF BUSINESS. Schaefer will not cause or permit the Target to
----------------------
engage in any practice, take any action, or enter into any transaction outside
the ordinary course of business. Without limiting the generality of the
foregoing, Schaefer without prior written consent from the Buyer will not cause
or permit the Target to (a) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock, (b) enter into a transaction with the Sellers,
or (c) otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section 2.11 above.
4.4 PRESERVATION OF BUSINESS. Schaefer will cause the Target to keep its
-------------------------
business and properties substantially intact, including its present operations,
Rolling Stock, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees. Schaefer will
immediately notify the Buyer upon Schaefer or the Target receiving any
indication that a customer or certain customers intends to reduce substantially
or cease doing business with the Target. For purposes of this Section,
"customer" shall mean a customer who individually accounts for five per cent
(5%) of the Target's annual gross revenue and "certain customers" shall mean
customers who in the aggregate (whether related or not) account for five per
cent (5%) of the Target's annual gross revenue.
4.5 FULL ACCESS. Schaefer will permit, and Schaefer will cause the Target to
------------
permit, representatives of the Buyer to have full access at all reasonable
times, including permitting the Buyer's independent accountants to conduct on
audit of the Target, and in a manner so as not to interfere with
31
<PAGE>
the normal business operations of the Target, to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to the Target.
4.6 NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice to the
-----------------------
others of any material adverse development causing a breach of any of their
respective representations and warranties in Article II and Article III above.
4.7 EXCLUSIVITY. None of the Sellers will (and Schaefer will not cause or
------------
permit the Target to) (a) solicit, initiate, or encourage the submission of any
proposal or offer from any person or entity relating to the acquisition of any
capital stock or other voting securities, or any substantial portion of the
assets, of the Target (including any acquisition structured as a merger,
consolidation, or share exchange) or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
person or entity to do or seek any of the foregoing. None of the Sellers will
vote their respective Shares in favor of any such acquisition structured as a
merger, consolidation, share exchange or purchase of assets. Schaefer will
notify the Buyer immediately if any person or entity makes any proposal, offer,
inquiry, or contact with respect to any of the foregoing.
4.8 SURVEY. With respect to the Real Estate, Schaefer will cause the Target
-------
to procure in preparation for the Closing a current survey of the Real Estate
certified to the Buyer, prepared by a licensed surveyor and conforming to
current ALTA Minimum Detail Requirements for Land Title Surveys, disclosing the
location of all improvements, easements, party walls, sidewalks, roadways,
utility lines, and other matters shown customarily on such surveys, and showing
access affirmatively to public streets and roads (the "SURVEY"). There shall be
no any survey defect or encroachment from or onto the Leased Property which has
not been cured or insured over prior to the Closing.
4.9 SETTLEMENT OF DEBT. Schaefer shall ensure that on or before the Closing
-------------------
that all outstanding debts and liabilities between the Sellers and the Target
are settled in cash.
32
<PAGE>
4.10 TRANSFER OF THE BUYER'S PROPERTY TO THE REAL PROPERTY. Schaefer shall
------------------------------------------------------
cause the Target to allow the Buyer to move certain of its assets to and store
and manage them at and from the Real Estate prior to the Closing Date if the
Closing Date occurs after January 15, 1998.
ARTICLE V
POST-CLOSING COVENANTS
----------------------
The Parties agree as follows with respect to the period following the Closing.
5.1 GENERAL. In case at any time after the Closing any further action is
-------
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will promptly take without further consideration such further action
(including the execution and delivery of such further instruments and documents)
as any other Party reasonably may request. Schaefer acknowledges and agrees
that from and after the Closing the Buyer will be entitled to possession of all
documents, books, records (including tax records), agreements, and financial
data of any sort relating to the Target.
5.2 LITIGATION SUPPORT. In the event and for so long as any Party actively is
-------------------
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (a) any
transaction contemplated under this Agreement or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Target, each of the other Parties will cooperate with him or it
and his or its counsel in the contest or defense, make available their
personnel, and provide such testimony and access to their books and records as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Article VIII
below).
5.3 TRANSITION. Schaefer will not take any action that is designed or
-----------
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Target from maintaining the same
business relationships with the Target after the Closing as it maintained with
33
<PAGE>
the Target prior to the Closing. Schaefer will refer all customer inquiries
relating to the businesses of the Target to the Buyer from and after the
Closing.
5.4 CONFIDENTIALITY. Schaefer will treat and hold all nonpublic information
----------------
of the Target as confidential information for a period of three (3) years
subsequent to the Closing and refrain from using any of the confidential
information except in connection with this Agreement, and deliver promptly to
the Buyer or destroy, at the request and option of the Buyer, all tangible
embodiments (and all copies) of the confidential information which are in his or
its possession. In the event that any of the Sellers is requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any confidential information, that Seller will notify the
Buyer promptly of the request or requirement so that the Buyer may seek an
appropriate protective order or waive compliance with the provisions of this
Section. If, in the absence of a protective order or the receipt of a waiver
hereunder, any of the Sellers is, on the advice of counsel, compelled to
disclose any confidential information to any tribunal or else stand liable for
contempt, that Seller may disclose the confidential information to the tribunal;
provided, however, that the disclosing Seller shall use his or its reasonable
- - -----------------
best efforts to obtain, at the reasonable request of the Buyer, an order or
other assurance that confidential treatment will be accorded to such portion of
the confidential information required to be disclosed as the Buyer shall
designate. The foregoing provisions shall not apply to any confidential
information which is generally available to the public immediately prior to the
time of disclosure so long as such general availability is not due to a breach
by the Sellers with the provisions of this Section.
ARTICLE VI
CONDITIONS TO OBLIGATION TO CLOSE
---------------------------------
6.1 CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer to
--------------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
34
<PAGE>
(A) the representations and warranties set forth in Article II shall be
true and correct in all material respects at and as of the Closing Date;
(B) the Sellers shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(C) the Target shall have procured all of the third party consents
specified in Section 2.3 above and the Survey (except for those consents
covered under Section 6.1(f) below);
(D) no action, suit, or proceeding shall be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (iii) affect adversely
the right of the Buyer to own the Shares and to control the Target, or (iv)
affect adversely the right of the Target to own its assets and to operate
its businesses (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
(E) Schaefer shall have delivered to the Buyer a certificate to the effect
that each of the conditions specified above in Section 6.1(a)-(d) is
satisfied in all respects;
(F) all applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act shall have expired or
otherwise been terminated and the Parties and the Target shall have
received all other authorizations, consents, and approvals of governments
and governmental agencies referred to in Section 3.2;
(G) Schaefer shall have executed the Escrow Agreement;
35
<PAGE>
(H) Schaefer shall have entered into a non-competition and consulting
agreement with the Target and the Buyer in the form of EXHIBIT 6.1(H)
--------------
hereto (the "NON-COMPETITION AND CONSULTING AGREEMENT");
(I) the Buyer shall have received from counsel for Schaefer, an opinion,
dated the Closing Date and in form and substance reasonably satisfactory to
the Buyer's counsel, to the effect that:
(I) the Target is a corporation validly existing and in good
standing under the laws of the State of Ohio;
(II) this Agreement and the collateral documents to be executed in
connection herewith constitute the valid and binding obligations of
Schaefer, enforceable in accordance with their terms except as
enforcement may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally and except
that the availability of the remedy of specific performance or other
equitable relief is subject to the discretion of the court before
which any proceeding therefor may be brought;
(III) the authorized capital stock of the Target consists of Two
Hundred Fifty (250) shares of common stock, no par value per share,
and, based upon a review of the minute books and stock books of the
Target and upon specified certificates of appropriate officers of the
Target, there are 134.5 shares of such stock issued and outstanding
and there are 15.5 shares held as treasury stock, all of which issued
and outstanding shares are owned of record by the Sellers, have been
duly authorized, are validly issued and outstanding, and are fully
paid and nonassessable;
(IV) insofar as such counsel are aware, and based upon a review of
the minute books and stock books of the Target, neither the Target nor
the Sellers are a party
36
<PAGE>
to, or bound by, any outstanding option, warrant, agreement (other
than this Agreement), preemptive right, proxy, call, commitment or
demand or right of any character obligating the Target or the Sellers
to sell, issue or otherwise dispose of any capital stock of the Target
or any option or rights with respect thereto;
(V) Insofar as such counsel are aware, neither the execution and
delivery of this Agreement by Schaefer nor compliance with the terms
and provisions hereof by Schaefer will violate any provision of any
injunction, order or decree of any governmental agency, authority or
court of which such counsel are aware; and
(VI) The Non-Competition and Consulting Agreement hereto constitutes
the valid and binding obligation of Schaefer, enforceable in
accordance with its terms except as enforcement may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally and except that the availability of the
remedy of specific performance or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may
be brought;
(J) the Buyer shall have received the resignations, effective as of the
Closing, of each director and officer of the Target other than those whom
the Buyer shall have specified in writing at least five (5) business days
prior to the Closing; such resignation to be accompanied by a waiver of any
and all claims against the Target (such resignation and waiver to be in
form and content reasonably acceptable to the Buyer and its counsel);
(K) there shall not have occurred any material adverse change since
December 31, 1996 in the business, properties, assets, liabilities, results
of operations, prospects or financial condition of the Target or physical
loss or damage to any of the properties or assets (which, if covered by
insurance could not be fully replaced within thirty (30) days of such loss
or damage without payment by the Target of a deductible in excess of three
(3) per cent of the loss amount) of the Target which materially and
adversely affects or impairs
37
<PAGE>
the business now being or to be conducted by the Target, and the Sellers
shall have delivered to the Buyer a certificate, signed by the Sellers and
dated the Closing Date, to all such effects. For purposes of this Section,
a "material adverse change" shall be as determined by the Buyer in its sole
discretion;
(L) Schaefer shall have entered into an amendment of the Lease that
provides: (i) for the continuation of the present term through December 31,
2007 at the present lease rate; (ii) that upon termination of that present
Lease term, the Target shall have an option to extend the Lease for four
(4) consecutive terms of five (5) years each, each renewal term subject to
adjustment based upon the Consumer Price Index and at such other terms
satisfactory to the Buyer; (iii) that the Target shall have a right of
first refusal to purchase the Real Estate should Schaefer ever sell the
Real Estate; and (iv) that there are no defaults existing under the Lease
as of the Closing Date, nor any condition which, with notice or the passage
of time, or both, will result in a default under the Lease;
(m) Schaefer shall have delivered to the Buyer: (i) a certified copy of
the charter of the Target from the Ohio Secretary of State; (ii) a
certificate of good standing from the Ohio Secretary of State (and any
other state in which the Target is qualified); and (iii) a certified copy
of the Target's bylaws;
(N) the Schedules and Exhibits hereto, certified as true and correct by
Schaefer under Section 9.1(b), shall have been delivered to the Buyer and
such schedules and exhibits shall be satisfactory in the sole opinion of
the Buyer. At Closing, Schaefer shall issue a "bring down" certificate
certifying that there have been no material changes in the information
contained in the Schedules and Exhibits since the date of the prior
certification, or if there have been changes, specifying the changes. The
Buyer shall have the right to approve or reject any such changes in its
sole discretion, provided that it acts in good faith in doing so;
38
<PAGE>
(O) the Buyer shall have been given an opportunity to review all financial
and legal aspects of the Target's business, including an inspection of its
facilities and a review of its accounting and tax records, and to conduct
interviews of its officers and employees, and shall have discovered no
information or circumstances that cause it to believe that the Target may
suffer a material liability in the future that has not been adequately
disclosed and/or reserved for on the Financial Statements;
(P) all actions to be taken by the Sellers in connection with consummation
of the transactions contemplated hereby and all schedules hereto, exhibits
hereto, certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be satisfactory in form
and substance to the Buyer and its counsel;
(Q) the execution and performance of this Agreement and the transactions
contemplated hereby shall have been approved by the Buyer's Board of
Directors; and
(R) Schaefer shall have executed a Memorandum of Lease substantially in the
form of EXHIBIT 6.1(R).
--------------
The Buyer may waive any condition specified in this Section 6.1 if it executes a
writing so stating at or prior to the Closing.
6.2 CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of the Sellers
---------------------------------------
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(A) the representations and warranties set forth in Article III above shall
be true and correct in all material respects at and as of the Closing Date;
(B) the Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;
39
<PAGE>
(C) no action, suit, or proceeding shall be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would
(i) prevent consummation of any of the transactions contemplated by this
Agreement or (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(D) the Buyer shall have delivered to the Sellers a certificate to the
effect that each of the conditions specified above in Section 6.2(a)-(c) is
satisfied in all respects;
(E) all applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act shall have expired or
otherwise been terminated and the Parties and the Target shall have
received all other authorizations, consents, and approvals of governments
and governmental agencies referred to in Section 3.2;
(F) the Buyer shall have executed the Escrow Agreement;
(G) the Buyer shall have executed the Non-competition and Consulting
Agreement;
(H) the Sellers shall have received from Witt, Gaither and Whitaker, P.C.,
counsel for the Buyer, an opinion, dated the Closing Date and in form and
substance reasonably satisfactory to counsel for Stockholders, to the
effect that:
(I) the Buyer is a corporation validly existing and in good
standing under the laws of the State of Nevada;
(II) the Buyer has the corporate power to execute and deliver this
Agreement and to carry out the terms and conditions hereof;
40
<PAGE>
(III) the execution, delivery and performance of this Agreement by
the Buyer has been duly authorized by all necessary corporate action;
and
(IV) This Agreement and the collateral documents to be executed in
connection herewith constitute the valid and binding obligations of
the Buyer, enforceable in accordance with their terms (except as
enforcement may be limited by bankruptcy, insolvency or other laws
affecting enforcement of creditors' rights generally and except that
the availability of the remedy of specific performance or other
equitable relief is subject to the discretion of the court before
which any proceeding therefor may be brought);
(I) the Buyer shall have delivered to the Sellers a certificate of good
standing from the Nevada Secretary of State certifying the good standing of
the Buyer;
(J) the Buyer shall have delivered to the Sellers a copy of the resolutions
of the Buyer's Board of Directors or duly authorized committee thereof that
approve this transaction, said copy being certified by the corporate
secretary of the Buyer; and
(K) all actions to be taken by the Buyer in connection with consummation of
the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance
to the Sellers.
The Sellers may waive any condition specified in this Section 6.2 if they
execute a writing so stating at or prior to the Closing.
41
<PAGE>
ARTICLE VII
REMEDIES FOR BREACHES OF THIS AGREEMENT
---------------------------------------
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
-------------------------------------------
representations and warranties of the Parties contained in this Agreement shall
survive the Closing hereunder (even if the damaged party knew or had reason to
know of any misrepresentation or breach of warranty or covenant at the time of
Closing) and continue in full force and effect subject to any applicable
statutory period of limitations.
7.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
----------------------------------------------------
(A) Schaefer agrees to defend, indemnify and hold the Buyer harmless from
and against and with respect to any and all loss, damage, liability,
deficiency, cost, obligation, or expense resulting from or with respect to
(i) any breach of any covenant or warranty or representation or any
material inaccuracy or material misrepresentation by him or the Trusts
contained in this Agreement or any certificate or document delivered to the
Buyer by Schaefer or the Trusts in connection with the transactions
contemplated hereby; (ii) the failure of the Sellers, or any of the
Sellers, to perform or comply with any covenant, agreement or obligation
required by this Agreement to be performed or compiled with by the Sellers;
and (iii) all undisclosed, unbooked, under accrued or under reserved
liabilities, including, but not limited to, assessments, taxes, penalties,
interest, claims, losses, fines and judgments. All claims for
indemnification shall bear interest at a rate equal to the rate earned on
the Escrow Funds from the date of receipt of notice of claim as provided in
Section 7.5 until the date such claim is satisfied.
(B) Notwithstanding anything contained herein, no claim for indemnification
shall be made by the Buyer hereunder against Schaefer for any claims under
Section 7.2(a) that does not exceed Twenty Thousand Dollars ($20,000). And
in any event, Schaefer shall have no liability hereunder for any and all
claims in excess of Twenty Thousand Dollars ($20,000) of every type and
description until such claims exceed the aggregate sum of
42
<PAGE>
Five Hundred Thousand Dollars ($500,000), at which time Schaefer shall
incur liability for the entire amount of all subsequent claims in excess of
Twenty Thousand Dollars ($20,000). The aggregate sum of Five Hundred
Thousand Dollars ($500,000) will be increased by the difference between the
amount of the reserve, accrual or booked amount for any claim and the
amount for which such liability is actually settled.
7.3 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS. The Buyer
------------------------------------------------------
agrees to defend, indemnify and hold the Sellers harmless from and against and
with respect to any and all loss, damage, liability, deficiency, cost,
obligation, or expense resulting from or with respect to (i) any breach of any
covenant or warranty or representation or any material inaccuracy or material
misrepresentation by the Buyer contained in this Agreement or any certificate or
document delivered by the Buyer to the Sellers in connection with the
transactions contemplated hereby; and (ii) the failure of the Buyer to perform
or comply with any covenant, agreement or obligation required by this Agreement
to be performed or compiled with by the Buyer. All claims for indemnification
shall bear interest at a rate equal to the rate earned on the Escrow Funds from
the date of receipt of notice of claim as provided in Section 7.5 until the date
such claim is satisfied.
7.4 MATTERS INVOLVING THIRD PARTIES.
--------------------------------
(A) If any third party shall notify any Party (the "INDEMNIFIED PARTY")
with respect to any matter (a "THIRD PARTY CLAIM") which may give rise to a
claim for indemnification against any other Party (the "INDEMNIFYING
PARTY") under this Article VII, then the Indemnified Party shall promptly
notify each Indemnifying Party thereof in writing; provided, however, that
-----------------
no delay on the part of the Indemnified Party in notifying any Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder
unless (and then solely to the extent) the Indemnifying Party thereby is
prejudiced.
(B) Any Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen (15)
43
<PAGE>
days after the Indemnified Party has given notice of the Third Party Claim
that the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any losses the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by
the Third Party Claim, (ii) the Indemnifying Party provides the Indemnified
Party with evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend against the
Third Party Claim and fulfill its indemnification obligations hereunder,
(iii) the Third Party Claim involves only money damages and does not seek
an injunction or other equitable relief, (iv) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good faith
judgment of the Indemnified Party, likely to establish a precedential
custom or practice materially adverse to the continuing business interests
of the Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(C) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 7.4(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party (not to be withheld
unreasonably), and (iii) the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably).
(D) In the event any of the conditions in Section 7.4(b) above is or
becomes unsatisfied, however, (i) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (iii) the
Indemnifying Parties will remain responsible for any adverse consequences
the
44
<PAGE>
Indemnified Party may suffer resulting from, arising out of, relating to,
in the nature of, or caused by the Third Party Claim to the fullest extent
provided in this Article VII.
7.5 NOTICE OF CLAIM. When a Party determines in good faith that it has a
----------------
claim or potential claim for indemnification pursuant to this Article VII it
shall deliver notice thereof to the other Party at the address specified in
Section 12.7. Such notice shall set forth the section or sections under this
Agreement pursuant to which such claim is made and the amount or estimate of the
claim and shall state, in reasonable detail, the basis for such claim. The
Indemnifying Party shall have twenty (20) days after receipt of a notice of
claim within which to either pay such claim or notify the Indemnified Party of
the Indemnifying Party's disagreement with all or a portion of said claim. If
the Indemnified Party has not received notice of disagreement from the
Indemnifying Party within the twenty (20) day period, the amount of the claim
shall be compensible in full. If the Indemnified Party receives within the
twenty (20) day period a notice of disagreement regarding only a portion of a
claim, the portion of the claim not subject to disagreement shall be
compensible. If the Parties are unable to resolve the validity or the amount of
a claim after said twenty (20) day period, then the dispute may be resolved by
arbitration to be conducted in Chattanooga, Tennessee, in accordance with the
then existing rules of the American Arbitration Association, and the decision
rendered by the arbitrator (who shall be selected by mutual consent by the
Parties and, if the Parties are unable to agree on an arbitrator, submitted to
American Arbitration Association office in Nashville, Tennessee, for resolution)
shall be binding upon the Parties. Any judgment upon any arbitration award may
be entered in the highest state or federal court having jurisdiction thereof. In
the event the Buyer makes any claim against the Escrow Funds, the Buyer shall
provide the Escrow Agent with notice in accordance with the Escrow Agreement and
the Escrow Agent shall, pending resolution of such claim, withhold payment to
the Sellers of that portion of the Escrow Funds that are reasonably necessary to
satisfy the claim. Nothing herein shall be deemed to prevent the Buyer from
making a claim for indemnification hereunder for potential or contingent claims
or demands provided the notice sets forth the specific basis for any such
potential or contingent claim or demand to the extent then feasible and the
Buyer has reasonable grounds to believe that such a claim or demand may be made.
45
<PAGE>
7.6 OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
---------------------------------
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy (including without limitation any such remedy
arising under HSE Laws) any Party may have with respect to the Target or the
transactions contemplated by this Agreement. Schaefer hereby agrees that he
will not make any claim for indemnification against the Target by reason of the
fact that he was a director, officer, employee, or agent of any such entity or
was serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement, losses,
expenses, or otherwise and whether such claim is pursuant to any statute,
charter document, bylaw, agreement, or otherwise) with respect to any action,
suit, proceeding, complaint, claim, or demand brought by the Buyer against
Schaefer (whether such action, suit, proceeding, complaint, claim, or demand is
pursuant to this Agreement, applicable law, or otherwise).
ARTICLE VIII
TAX MATTERS
------------
The following provisions shall govern the allocation of responsibility as
between the Buyer and Schaefer for certain tax matters following the Closing
Date:
8.1 TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE. The Buyer shall
-------------------------------------------------
prepare or cause to be prepared and file or cause to be filed all tax returns
for the Target for all periods ending on or prior to the Closing Date which are
filed after the Closing Date. The Buyer shall permit Schaefer to review and
comment on each such tax return described in the preceding sentence prior to
filing. Schaefer's obligation to reimburse the Buyer for taxes of the Target
with respect to such period to the extent such taxes are not reflected in the
reserve for tax liability is set forth in Section 7.2.
8.2 TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING DATE. The
---------------------------------------------------------------
Buyer shall prepare or cause to be prepared and file or cause to be filed any
tax returns of the Target for tax periods which begin before the Closing Date
and end after the Closing Date. Schaefer's obligation to reimburse the Buyer an
amount equal to the portion of such taxes which relates to the portion of such
46
<PAGE>
taxable period ending on the Closing Date to the extent such taxes are not
reflected in the reserve for tax liability is set forth in Section 7.2. For
purposes of this Section, in the case of any taxes that are imposed on a
periodic basis and are payable for a taxable period that includes (but does not
end on) the Closing Date, the portion of such tax which relates to the portion
of such taxable period ending on the Closing Date shall (a) in the case of any
taxes other than taxes based upon or related to income or receipts, be deemed to
be the amount of such tax for the entire taxable period multiplied by a fraction
the numerator of which is the number of days in the taxable period ending on the
Closing Date and the denominator of which is the number of days in the entire
taxable period, and (b) in the case of any tax based upon or related to income
or receipts be deemed equal to the amount which would be payable if the relevant
taxable period ended on the Closing Date. Any credits relating to a taxable
period that begins before and ends after the Closing Date shall be allocated in
the same manner. All determinations necessary to give effect to the foregoing
allocations shall be made in a manner consistent with prior practice of the
Target.
8.3 COOPERATION ON TAX MATTERS.
---------------------------
(A) The Buyer and Schaefer shall cooperate fully, as and to the extent
reasonably requested by the other Party, in connection with the filing of
tax returns pursuant to this Section and any audit, litigation or other
proceeding with respect to taxes. Such cooperation shall include the
retention and (upon the other Party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other proceeding and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder.
(B) the Buyer and Schaefer further agree, upon request, to use their best
efforts to obtain any certificate or other document from any governmental
authority or any other person or entity as may be necessary to mitigate,
reduce or eliminate any tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
47
<PAGE>
(C) the Buyer and Schaefer further agree, upon request, to provide the
other Party with all information that either party may be required to
report pursuant to Section 6043 of the Code and all Treasury Department
regulations promulgated thereunder.
8.4 TAX SHARING AGREEMENTS. Schaefer shall cause all tax sharing
-----------------------
agreements or similar agreements with respect to or involving the Target shall
to be terminated as of the Closing Date and, after the Closing Date, the Target
shall not be bound thereby or have any liability thereunder.
8.5 CERTAIN TAXES. All transfer, documentary, sales, use, stamp,
--------------
registration and other such taxes and fees (including any penalties and
interest) incurred in connection with this Agreement, shall be paid by Schaefer
when due, and Schaefer will, at his own expense, file all necessary tax returns
and other documentation with respect to all such transfer, documentary, sales,
use, stamp, registration and other taxes and fees, and, if required by
applicable law, the Buyer will, and will cause its affiliates to, join in the
execution of any such tax returns and other documentation.
ARTICLE IX
TERMINATION
-----------
9.1 TERMINATION OF AGREEMENT. The Parties may terminate this Agreement
-------------------------
as provided below:
(A) the Buyer and the Sellers may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(B) Notwithstanding any other provision in this Agreement, it is understood
that this Agreement has been executed without the Schedules and Exhibits
contemplated hereby and that Schaefer shall have until January 9, 1998,
unless otherwise extended by the Buyer, to deliver all of such Schedules
and Exhibits to the Buyer under the certificate of Schaefer stating that
the attachments constitute all the Schedules and Exhibits contemplated in
this Agreement for which Schaefer is responsible and that such Schedules
48
<PAGE>
and Exhibits are true and correct to the best of his knowledge, information
and belief. Upon receipt of such certificate and schedules, the Buyer shall
have a period of fifteen days in which to review and satisfy itself with
respect to the content of such schedules (the "REVIEW PERIOD"), and
Schaefer will, and Schaefer will cause the Target to, cooperate fully with
the Buyer in connection with its review and due diligence with respect to
such schedules during the Review Period. If, prior to the expiration of the
Review Period, the Buyer finds any matter or items disclosed on such
Schedules and Exhibits, or which should have been disclosed and was not so
disclosed on such Schedules and Exhibits, which the Buyer determines in
good faith to be material and to cause the Buyer not to proceed with the
acquisition of the Shares, then Buyer shall give notice in writing to the
Sellers on or before the Closing Date of its election to terminate this
Agreement and not to purchase the Shares;
(C) the Buyer may terminate this Agreement by giving written notice to the
Sellers on or before the Closing Date if the Buyer's continuing business,
legal, environmental, and accounting due diligence regarding the Target
reveals any fact or facts that would or could reasonably likely result in
materially adverse consequences or changes to the business of the Target as
presently conducted subsequent to the consummation of the transactions
contemplated by this Agreement;
(D) the Buyer may terminate this Agreement by giving written notice to the
Sellers at any time prior to the Closing (i) in the event any of the
Sellers have breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified
the Sellers of the breach, and the breach has continued without cure for a
period of thirty (30) days after the notice of breach or (ii) if the
Closing shall not have occurred on or before January 31, 1998, by reason of
the failure of any condition precedent under Section 6.1 hereof (unless the
failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
49
<PAGE>
(E) the Sellers may terminate this Agreement by giving written notice to
the Buyer at any time prior to the Closing in the event the Buyer has
breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, any of the Sellers has notified the
Buyer of the breach, and the breach has continued without cure for a period
of thirty (30) days after the notice of breach.
9.2 EFFECT OF TERMINATION. If any Party terminates this Agreement
----------------------
pursuant to Section 9.1 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach), including any obligation
of Schaefer relating to the Non-Compete and Consulting Agreement and the Lease
(as amended per Section 6.1(l)).
ARTICLE X
DEFINITIONS, SCHEDULES AND EXHIBITS
-----------------------------------
10.1 DEFINITIONS.
-----------
<TABLE>
<CAPTION>
DEFINED TERM SECTION WHERE DEFINED
- - ------------ ---------------------
<S> <C>
Baseline Financial Statement Section 2.10
Buyer Preamble
Closing Section 1.3
Closing Date Section 1.3
COBRA Section 2.20(b)
Condominium Section 2.15
Employee Benefits Plans Section 2.20(b)
ERISA Section 2.20(b)
ESA Section 2.26
Escrow Agent Section 1.2
Escrow Agreement Section 1.2
Escrow Funds Section 1.2
Financial Statements Section 2.10
HSE Laws Section 2.26
Indemnified Party Section 7.4(a)
Indemnifying Party Section 7.4(a)
Lease Section 2.15
Non-Competition Consulting Agreement Section 6.1(h)
Parties Preamble
</TABLE>
50
<PAGE>
<TABLE>
<S> <C>
Purchase Price Section 1.2
Real Estate Section 2.15
Review Period Section 9.1(b)
Rolling Stock Section 2.17
Schaefer Preamble
Sellers Preamble
Shares Section 2.2
Survey Section 4.8
Target Recitals
Target Intellectual Property Section 2.16
Target Shares Section 2.4
Third Party Claim Section 7.4(a)
Trusts Preamble
USTs Section 2.26
</TABLE>
10.2 LIST OF SCHEDULES AND EXHIBITS.
------------------------------
<TABLE>
<CAPTION>
SCHEDULES DESCRIPTION
- - --------- -----------
<S> <C>
Schedule 2.3 Conflicts and Consents
Schedule 2.5 Jurisdictions in which the Target is Qualified
Schedule 2.6 Officers & Directors
Schedule 2.9 Subsidiaries & Affiliates
Schedule 2.11 Events Subsequent to Baseline Financial Statement
Schedule 2.12 Undisclosed Liabilities
Schedule 2.13 Legal Compliance
Schedule 2.14(c) Income Taxes
Schedule 2.14(d) Other Taxes
Schedule 2.14(f) Tax Basis, NOL's, etc.
Schedule 2.15(a) Leased Real Property
Schedule 2.15(b) Condominium Documents
Schedule 2.15(c) Licenses & Permits
Schedule 2.15(i) Good Title
Schedule 2.15(j) Leases & Subleases
Schedule 2.16 Intellectual Property
Schedule 2.16(b) Intellectual Property Infringement
Schedule 2.17 Leased Tangible Assets
Schedule 2.17(a) Rolling Stock
Schedule 2.17(b) Motor Vehicle & Equipment
Schedule 2.17(c) Personal Property
Schedule 2.18 Contracts
Schedule 2.19(a) Employment Policies & Contracts
Schedule 2.19(b) Employee Benefits
</TABLE>
51
<PAGE>
<TABLE>
<S> <C>
Schedule 2.19(c) Salaried Employees
Schedule 2.19(d) Workers' Compensation Compliance
Schedule 2.19(e) Labor Relations & Compliance
Schedule 2.20(b) Employee Benefit Plans
Schedule 2.20(e) Employee Claims
Schedule 2.23 Insurance
Schedule 2.24(a) Litigation Claims
Schedule 2.24(b) Accident Registers & Loss Runs
Schedule 2.24(c) Cargo Loss Logs
Schedule 2.24(d) Incidents since January 1, 1998
Schedule 2.26 Environmental, Health & Safety Matters
Schedule 2.29 Safety Rating
Schedule 2.30 Organizations & Clubs
Schedule 2.31 Bank Accounts
Schedule 2.32 Major Suppliers & Customers
Schedule 3.2 Authorization of Transaction
Schedule 3.3 Noncontravention
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
- - -------- ------------
<S> <C>
Exhibit 1.2(a) Sellers' Wire Transfer Instructions
Exhibit 1.2(b) Outstanding Stock of the Target
Exhibit 1.2(c) Escrow Agent's Wire Transfer Instructions
Exhibit 1.2(d) Escrow Agreement
Exhibit 2.1 Trust Agreements
Exhibit 2.10 Baseline Financial Statement
Exhibit 2.15 Lease
Exhibit 6.1(h) Non-Competition Consulting Agreement
Exhibit 6.1(r) Memorandum of Lease
</TABLE>
ARTICLE XI
MISCELLANEOUS
-------------
11.1 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. It is the understanding of
----------------------------------------
the parties that on the date of execution of this Agreement, Schaefer with the
Buyer will jointly announce the subject matter of this Agreement to the
employees of the Target and the Buyer, issue press releases and make the
requisite government notice filings.
52
<PAGE>
11.2 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
-----------------------------
rights or remedies upon any person or entity other than the Parties and their
respective successors and permitted assigns.
11.3 ENTIRE AGREEMENT. This Agreement (including the documents referred
-----------------
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
11.4 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the Parties named herein and their respective heirs,
personal representative, estates, successors and permitted assigns. No Party may
assign either this Agreement or any of his or its rights, interests, or
obligations hereunder without the prior written approval of the Buyer and The
Sellers; provided, however, that the Buyer may (i) assign any or all of its
-----------------
rights and interests in the assets hereunder to one or more of its affiliated
companies and (ii) designate one or more of its affiliate companies to perform
its obligations hereunder (in any or all of which cases the Buyer nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).
11.5 COUNTERPARTS. This Agreement may be executed in one or more
-------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.6 HEADINGS. The section headings contained in this Agreement are
---------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.7 NOTICES. All notices, requests, demands, claims, and other
--------
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
53
<PAGE>
If to the Buyer:
----------------
U.S. Xpress Enterprises, Inc.
2931 South Market Street
Chattanooga, TN 37410
Attn: Patrick E. Quinn
Fax: (423) 265-5715
With a Copy to:
---------------
Witt, Gaither & Whitaker, P.C.
1100 SunTrust Bank Building
Chattanooga, TN 37402
Attn: Carter J. Lynch, III, Esq.
Fax: (423)266-4138
If to the Sellers:
------------------
SCHAEFER:
Richard H. Schaefer
78 Lochinvar Court
Xenia, OH 45385
Fax: (937) 376-0410
With a Copy to:
---------------
Fred J. Andary, Esq.
1700 First National Plaza
Dayton, OH 45402
Fax: (937) 228-0331
If to the Trusts:
-----------------
National City Bank
Attn: Trust Department
6 North Main Street
Dayton, OH 45412
Fax: (937) 226-2451
54
<PAGE>
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy or ordinary mail), but no such notice, request, demand, claim,
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.
11.8 GOVERNING LAW. This Agreement shall be governed by and construed in
--------------
accordance with the domestic laws of the State of Tennessee without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Tennessee or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Tennessee.
11.9 AMENDMENTS AND WAIVERS. No amendment of any provision of this
-----------------------
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and Schaefer. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence. The course of conduct or
course of dealing of the parties shall not operate to modify or waive the
provisions of this Section.
11.10 SEVERABILITY. Any term or provision of this Agreement that is
-------------
inavalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. In such event, the offending provision
shall be modified to the minimum extent necessary to make it valid and
enforceable.
11.11 EXPENSES. Each of the Parties shall bear its own costs and expenses
---------
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
55
<PAGE>
11.12 CONSTRUCTION. The Parties have participated jointly in the
-------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
11.13 INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The Exhibits,
--------------------------------------------------
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
11.14 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
--------------------
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which they may be
entitled, at law or in equity.
11.15 SUBMISSION TO JURISDICTION. Each of the Parties submits to the
---------------------------
jurisdiction of any state or federal court sitting in Chattanooga, Tennessee, in
any action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of
56
<PAGE>
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
Party with respect thereto. Each Party agrees that a final judgment in any
action or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment or in any other manner provided by law or at equity.
*****
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
U.S. XPRESS ENTERPRISES, INC.
By:____________________________
Max L. Fuller
Title: Co-Chairman and Secretary
SELLERS:
_______________________________
RICHARD H. SCHAEFER
Owner of 71.5 shares of Common Stock
RICHARD H. SCHAEFER
IRREVOCABLE WITHDRAWAL TRUST
DATED DECEMBER 24, 1991
_______________________________
By:____________________________
Position:________________________
NATIONAL CITY BANK, F/K/A
THE FIRST NATIONAL BANK,
DAYTON, OHIO, TRUSTEE
Owner of 4 shares of Common Stock
57
<PAGE>
RICHARD H. SCHAEFER
IRREVOCABLE NON-WITHDRAWAL TRUST
DATED DECEMBER 24, 1991
_______________________________
By:____________________________
Position:________________________
NATIONAL CITY BANK, F/K/A
THE FIRST NATIONAL BANK,
DAYTON, OHIO, TRUSTEE
Owner of 59 shares of Common Stock
58
<PAGE>
EXHIBIT 10.2
$200,000,000
CREDIT AGREEMENT
DATED AS OF
JANUARY 15, 1998
AMONG
U. S. XPRESS ENTERPRISES, INC.
WACHOVIA BANK, N.A.,
AS ADMINISTRATIVE AGENT
NATIONSBANK, N.A.,
AS SYNDICATION AGENT
BANKBOSTON, N.A.,
AS DOCUMENTATION AGENT
SUNTRUST BANK, CHATTANOOGA, N.A.,
AS CO-AGENT
AND
THE BANKS LISTED HEREIN
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS.............................................. 1
SECTION 1.01. Definitions.............................................. 1
-----------
SECTION 1.02. Accounting Terms and Determinations...................... 19
-----------------------------------
SECTION 1.03. References............................................... 20
----------
SECTION 1.04. Use of Defined Terms..................................... 20
--------------------
SECTION 1.05. Terminology.............................................. 20
-----------
ARTICLE II THE REVOLVING CREDIT FACILITY........................... 20
SECTION 2.01. Commitments to Lend Revolving Loans...................... 20
-----------------------------------
SECTION 2.02. Method of Borrowing Revolving Loans...................... 21
-----------------------------------
SECTION 2.03. Notes.................................................... 23
-----
SECTION 2.04. Maturity of Loans........................................ 24
-----------------
SECTION 2.05. Interest Rates........................................... 25
--------------
SECTION 2.06. Fees..................................................... 28
----
SECTION 2.07. Optional Termination or Reduction of Commitments......... 29
------------------------------------------------
SECTION 2.08. Termination of Commitments............................... 29
--------------------------
SECTION 2.09. Optional Prepayments..................................... 29
--------------------
SECTION 2.10. Mandatory Prepayments.................................... 30
---------------------
SECTION 2.11. General Provisions as to Payments........................ 30
---------------------------------
SECTION 2.12. Computation of Interest and Fees......................... 32
--------------------------------
ARTICLE III LETTER OF CREDIT FACILITY.............................. 32
SECTION 3.01. Obligation to Issue...................................... 32
-------------------
SECTION 3.02. Types and Amounts........................................ 32
-----------------
SECTION 3.03. Conditions............................................... 33
----------
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
SECTION 3.04. Issuance of Letters of Credit.............................. 34
-----------------------------
SECTION 3.05. Reimbursement Obligations; Duties of the Issuing Bank...... 34
-----------------------------------------------------
SECTION 3.06. Participations............................................. 36
--------------
SECTION 3.07. Payment of Reimbursement Obligations....................... 38
------------------------------------
SECTION 3.08. Compensation for Letters of Credit......................... 40
----------------------------------
SECTION 3.09. Indemnification; Exoneration............................... 40
----------------------------
SECTION 3.10. Credit Yield Protection; Capital Adequacy.................. 41
-----------------------------------------
ARTICLE IV CONDITIONS TO BORROWINGS.................................. 44
SECTION 4.01. Conditions to First Borrowing.............................. 44
-----------------------------
SECTION 4.02. Conditions to All Borrowings............................... 47
----------------------------
ARTICLE V REPRESENTATIONS AND WARRANTIES............................. 47
SECTION 5.01. Corporate Existence and Power.............................. 47
-----------------------------
SECTION 5.02. Corporate and Governmental Authorization;
-----------------------------------------
No Contravention........................................... 48
----------------
SECTION 5.03. Binding Effect............................................. 48
------------------
SECTION 5.04. Financial Information...................................... 48
---------------------
SECTION 5.05. No Litigation.............................................. 48
-------------
SECTION 5.06. Compliance with ERISA...................................... 49
---------------------
SECTION 5.07. Compliance with Laws; Payment of Taxes..................... 49
--------------------------------------
SECTION 5.08. Subsidiaries............................................... 49
------------
SECTION 5.09. Investment Company Act..................................... 50
----------------------
SECTION 5.10. Public Utility Holding Company Act......................... 50
----------------------------------
SECTION 5.11. Ownership of Property; Liens............................... 50
----------------------------
SECTION 5.12. No Default................................................. 50
---------
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
SECTION 5.13. Full Disclosure.......................................... 50
---------------
SECTION 5.14. Environmental Matters.................................... 50
---------------------
SECTION 5.15. Capital Stock............................................ 51
-------------
SECTION 5.16. Margin Stock............................................. 51
------------
SECTION 5.17. Insolvency............................................... 52
----------
SECTION 5.18. Insurance................................................ 52
---------
ARTICLE VI COVENANTS............................................... 52
SECTION 6.01. Information.............................................. 52
-----------
SECTION 6.02. Inspection of Property, Books and Records................ 54
-----------------------------------------
SECTION 6.03. Maintenance of Existence................................. 55
------------------------
SECTION 6.04. Dissolution.............................................. 55
-----------
SECTION 6.05. Consolidations, Mergers and Sales of Assets.............. 55
-------------------------------------------
SECTION 6.06. Use of Proceeds.......................................... 56
---------------
SECTION 6.07. Compliance with Laws; Payment of Taxes................... 56
--------------------------------------
SECTION 6.08. Insurance................................................ 56
---------
SECTION 6.09. Change in Fiscal Year.................................... 57
---------------------
SECTION 6.10. Maintenance of Property.................................. 57
-----------------------
SECTION 6.11. Environmental Notices.................................... 57
---------------------
SECTION 6.12. Environmental Matters.................................... 57
---------------------
SECTION 6.13. Environmental Release.................................... 57
---------------------
SECTION 6.14. Transactions with Affiliates............................. 57
----------------------------
SECTION 6.15. Restricted Payments...................................... 58
-------------------
SECTION 6.16. Loans or Advances........................................ 58
-----------------
SECTION 6.17. Investments.............................................. 58
-----------
</TABLE>
(iii)
<PAGE>
<TABLE>
<S> <C>
SECTION 6.18. Liens.................................................... 59
-----
SECTION 6.19. Restrictions on Ability of Subsidiaries to Pay Dividends. 59
--------------------------------------------------------
SECTION 6.20. Limitation on Debt....................................... 60
------------------
SECTION 6.21. Ratio of Consolidated Total Adjusted Debt to
-------------------------------------------
Consolidated EBILTDA..................................... 60
--------------------
SECTION 6.22. Ratio of Consolidated EBILT to Consolidated Fixed Charges 60
-------------------------------------------
SECTION 6.23. Minimum Consolidated Net Worth........................... 60
------------------------------
SECTION 6.24. Limitation on Negative Pledge Clauses.................... 60
-------------------------------------
SECTION 6.25. Limitation on Acquisitions............................... 61
--------------------------
SECTION 6.26. Creation of Subsidiaries................................. 62
------------------------
ARTICLE VII DEFAULTS............................................... 62
SECTION 7.01. Events of Default........................................ 62
-----------------
SECTION 7.02. Notice of Default........................................ 66
-----------------
ARTICLE VIII THE ADMINISTRATIVE AGENT.............................. 66
SECTION 8.01. Appointment; Powers and Immunities....................... 66
----------------------------------
SECTION 8.02. Reliance by Administrative Agent......................... 67
--------------------------------
SECTION 8.03. Defaults................................................. 68
--------
SECTION 8.04. Rights of Administrative Agent and its
--------------------------------------
Affiliates as a Bank..................................... 68
--------------------
SECTION 8.05. Indemnification.......................................... 69
---------------
SECTION 8.06. Consequential Damages.................................... 69
---------------------
SECTION 8.07. Payee of Note Treated as Owner........................... 69
------------------------------
SECTION 8.08. Nonreliance on Administrative Agenta nd Other Banks...... 70
---------------------------------------------------
</TABLE>
(iv)
<PAGE>
<TABLE>
<S> <C>
SECTION 8.09. Failure to Act.......................................... 70
--------------
SECTION 8.10. Resignation or Removal of Administrative
-----------------------------------------
Agent................................................... 70
-----
ARTICLE IX CHANGE IN CIRCUMSTANCES; COMPENSATION.................. 71
SECTION 9.01. Basis for Determining Interest Rate
-----------------------------------
Inadequate or Unfair.................................... 71
--------------------
SECTION 9.02. Illegality.............................................. 72
----------
SECTION 9.03. Increased Cost and Reduced Return....................... 72
---------------------------------
SECTION 9.04. Base Rate Loans Substituted for Affected
----------------------------------------
Euro-Dollar Loans....................................... 75
-----------------
SECTION 9.05. Compensation............................................ 75
------------
ARTICLE X MISCELLANEOUS........................................... 76
SECTION 10.01. Notices................................................. 76
-------
SECTION 10.02. No Waivers.............................................. 76
----------
SECTION 10.03. Expenses; Documentary Taxes............................. 77
---------------------------
SECTION 10.04. Indemnification......................................... 77
---------------
SECTION 10.05. Setoff; Sharing of Setoffs.............................. 78
--------------------------
SECTION 10.06. Amendments and Waivers.................................. 79
----------------------
SECTION 10.07. No Margin Stock Collateral.............................. 80
--------------------------
SECTION 10.08. Successors and Assigns.................................. 80
----------------------
SECTION 10.09. Confidentiality......................................... 83
---------------
SECTION 10.10. Representation by Banks................................. 83
-----------------------
SECTION 10.11. Obligations Several..................................... 84
-------------------
SECTION 10.12. Georgia Law............................................. 84
-----------
SECTION 10.13. Severability............................................ 84
------------
SECTION 10.14. Interest................................................ 84
--------
</TABLE>
(v)
<PAGE>
<TABLE>
<S> <C>
SECTION 10.15. Interpretation.......................................... 85
--------------
SECTION 10.16. Waiver of Jury Trial; Consent to Jurisdiction........... 85
---------------------------------------------
SECTION 10.17. Counterparts............................................ 86
------------
SECTION 10.18. Source of Funds -- ERISA................................ 86
------------------------
SECTION 10.19. Survival................................................ 86
--------
</TABLE>
(vi)
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of January 15, 1998 among U.S. XPRESS
ENTERPRISES, INC., the BANKS listed on the signature pages hereof, WACHOVIA
BANK, N.A., as Administrative Agent, NATIONSBANK, N.A., as Syndication Agent,
BANKBOSTON, N.A.,as Documentation Agent, and SUNTRUST BANK, CHATTANOOGA, N.A.,
as Co-Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
-----------
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Affiliate" of any relevant Person means (i) any Person that directly,
or indirectly through one or more intermediaries, controls the relevant Person
(a "Controlling Person"), (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is under common
control with a Controlling Person, or (iii) any Person (other than a Subsidiary
of the relevant Person) of which the relevant Person owns, directly or
indirectly, 20% or more of the common stock or equivalent equity interests. As
used herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Administrative Agent" means Wachovia Bank, N.A., a national banking
association organized under the laws of the United States of America, in its
capacity as Administrative Agent for the Banks hereunder, and its successors and
permitted assigns in such capacity.
<PAGE>
"Administrative Agent's Letter Agreement" means that certain letter
agreement, dated as of November 17, 1997 between the Borrower and the
Administrative Agent relating to the structure of the Loans, and certain fees
from time to time payable by the Borrower to the Administrative Agent, together
with all amendments and supplements thereto.
"Agreement" means this Credit Agreement, together with all amendments
and supplements hereto.
"Applicable Margin" has the meaning set forth in Section 2.05(a).
"Assignee" has the meaning set forth in Section 10.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 10.08(c) in the form attached hereto as
Exhibit D.
- - ---------
"Authority" has the meaning set forth in Section 9.02.
"Bank" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half
of one percent above the Federal Funds Rate. For purposes of determining the
Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall
be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear interest at a
rate based upon the Base Rate, and is to be made as a Base Rate Loan pursuant to
the applicable Notice of Borrowing, Section 2.02(f), or Article VIII, as
applicable.
"Borrower" means U. S. Xpress Enterprises, Inc., a Nevada corporation,
and its successors and its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the Borrower at the same time by all of the Banks. A Borrowing is a "Base Rate
Borrowing" if such Loans are Base Rate Loans or a "Euro-Dollar Borrowing" if
such Loans are Euro-Dollar Loans.
2
<PAGE>
"Borrowing Base" means, as of the last day of any fiscal quarter, an
amount equal to the sum of (i) 85% of all Eligible Receivables as of such date
of determination plus (ii) 90% of Eligible Revenue Equipment as of such date of
determination.
"Borrowing Base Certificate" means a certificate, duly executed by the
chief financial officer, chief accounting officer or treasurer of the Borrower,
appropriately completed and substantially in the form of Exhibit I hereto.
----------
"Capital Lease" means any lease or rental of real or personal property
which, under GAAP, is or will be required to be capitalized on the balance sheet
of the Borrower or any Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with such principles.
"Capital Stock" means any nonredeemable capital stock of the Borrower
or any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. (S) 9601 et. seq. and its implementing regulations
and amendments.
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 9.02.
"Closing Certificate" has the meaning set forth in Section 4.01(f).
"Closing Date" means January 15, 1998.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitment" means, with respect to each Bank, (i) the amount set
forth opposite the name of such Bank on the signature pages hereof, and (ii)as
to any Bank which enters into any Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment
after giving effect to such Assignment and
3
<PAGE>
Acceptance, in each case as such amount may be reduced from time to time
pursuant to Sections 2.07 and 2.08.
"Commitment Share" means, for any Bank, the percentage that such
Bank's Commitment bears to the aggregate Commitments of all the Banks hereunder,
as set forth opposite the name of such Bank on the signature pages hereof, and
as such percentage may be adjusted from time to time pursuant to Section
10.08(c).
"Compliance Certificate" has the meaning set forth in Section 6.01(c).
"Consolidated Current Assets" and "Consolidated Current Liabilities"
mean, at any time, all assets or liabilities, respectively, of the Borrower and
its Consolidated Subsidiaries that, in accordance with GAAP, should be
classified as current assets or current liabilities, respectively, on a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries.
"Consolidated Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"Consolidated EBILT" means the sum of the following, calculated on a
consolidated basis in accordance with GAAP for the Borrower and the Consolidated
Subsidiaries, for the Fiscal Quarter just ended and the 3 immediately preceding
Fiscal Quarters: (i) Consolidated Net Income; plus (ii) income tax expenses
included in Consolidated Net Income; plus (iii) all payment obligations of the
Borrower and the Consolidated Subsidiaries under all operating leases and
operating rental agreements (other than between or among the Borrower and the
Consolidated Subsidiaries); plus (iv) Consolidated Interest Expense.
"Consolidated EBILTDA" means the sum of the following, calculated on a
consolidated basis in accordance with GAAP for the Borrower and the Consolidated
Subsidiaries, for the Fiscal Quarter just ended and the 3 immediately preceding
Fiscal Quarters: (i) Consolidated Net Income; plus (ii) income tax expenses
included in Consolidated Net Income; plus (iii) all payment obligations of the
Borrower and the Consolidated Subsidiaries under all operating leases and
operating rental agreements (other than between or among the Borrower and the
Consolidated Subsidiaries); plus (iv) Consolidated Interest Expense; plus (v)
depreciation and
4
<PAGE>
amortization expense. In computing Consolidated EBILTDA, any of the foregoing
items realized or accrued for such period and prior to the date of any
acquisition permitted by Section 6.25 by the Person so acquired or attributable
to the assets so acquired shall be included in Consolidated EBILTDA, but only to
the extent that such items of such Person or attributable to such assets would
have been available to the Borrower or such Subsidiary had the Borrower or such
Subsidiary acquired such Person or such assets at the beginning of such period.
"Consolidated Fixed Charges" for any period means the sum of (i)
Consolidated Interest Expense for such period, and (ii) all payment obligations
of the Borrower and its Consolidated Subsidiaries for such period under all
operating leases and rental agreements, specifically including payment
obligations of the Borrower under the Synthetic Lease Documents, the Lease and
the other Operative Documents.
"Consolidated Interest Expense" for any period means interest, whether
expensed or capitalized, in respect of Debt of the Borrower or any of its
Consolidated Subsidiaries outstanding during such period.
"Consolidated Liabilities" means the sum of (i) all liabilities that,
in accordance with GAAP, should be classified as liabilities on a consolidated
balance sheet of Borrower and its Consolidated Subsidiaries, and (ii) to the
extent not included in clause (i) of this definition, all Redeemable Preferred
Stock.
"Consolidated Net Income" means, for any period, the Net Income of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis,
but excluding (i) extraordinary items and (ii) any equity interests of the
Borrower or any Subsidiary in the unremitted earnings of any Person that is not
a Subsidiary.
"Consolidated Net Worth" means, at any time, the shareholders' equity
of the Borrower and its Consolidated Subsidiaries, as set forth or reflected on
the most recent consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
--- ---------
Preferred Stock of the Borrower or any of its Consolidated Subsidiaries.
Shareholders' equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of
treasury stock, (B) valuation allowances, (C)
5
<PAGE>
receivables due from an employee stock ownership plan, (D) employee stock
ownership plan debt guarantees, and (E) translation adjustments for foreign
currency transactions.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Borrower and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"Consolidated Total Adjusted Debt" means, at any time, all
Consolidated Debt, plus all amounts outstanding under the Synthetic Lease
Documents, plus an amount equal to the present value (using a discount rate of
10%) of all other operating leases of the Borrower and its Consolidated
Subsidiaries, less any obligations of the Borrower and its Consolidated
Subsidiaries with respect to interest rate protection agreements, foreign
currency exchange agreements or other hedging arrangements (valued as the
termination value thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such Person in the
applicable hedging agreement, if any).
"Consolidated Total Assets" means, at any time, the total assets of
the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries, prepared in accordance with
GAAP.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under Capital Leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect
6
<PAGE>
of amounts payable under a banker's acceptance, (vi) all Redeemable Preferred
Stock of such Person (in the event such Person is a corporation), (vii) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts paid or to be paid or to be paid under a letter of credit or similar
instrument, (viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, (ix) all obligations
of such Person with respect to interest rate protection agreements, foreign
currency exchange agreements or other hedging arrangements (valued as the
termination value thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such Person in the
applicable hedging agreement, if any) and (x) all Debt of others Guaranteed by
such Person, and, as to the Borrower, shall also include all obligations under
the Synthetic Lease Documents.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum of
2% plus the then highest interest rate (including the Applicable Margin) which
may be applicable to any Loans hereunder (irrespective of whether any such type
of Loans are actually outstanding hereunder).
"Depreciation" means for any period the sum of all depreciation
expenses of the Borrower and its Consolidated Subsidiaries for such period, as
determined in accordance with GAAP.
"Dividends" means for any period the sum of all dividends and other
distributions paid or declared during such period in respect of any Capital
Stock and Redeemable Preferred Stock (other than dividends paid or payable in
the form of additional Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia are authorized by law to close.
"Eligible Account Debtor" means, as at any date of determination
thereof, any account debtor other than:
7
<PAGE>
(a) the Borrower or any of its Subsidiaries or Affiliates; and
(b) any account debtor that is the subject of any bankruptcy or
insolvency proceeding of any kind other than any such account debtor which
has been approved by the Required Banks.
"Eligible Receivables" means, at any date of determination thereof,
the aggregate of all Receivables at such date due to the Borrower or one of its
Subsidiaries other than the following (determined without duplication):
(i) any Receivable due from an account debtor which to the Borrower's
knowledge is organized under the laws of a jurisdiction outside the United
States of America or Canada unless such Receivable is supported by a letter
of credit (including standby letters of credit) or a bank guaranty in an
amount equal to the amount of such Receivable issued by a financial
institution satisfactory to the Administrative Agent and containing terms
and provisions satisfactory to the Administrative Agent;
(ii) any Receivable that does not comply with all applicable legal
requirements, including, without limitation, all laws, rules, regulations
and orders of any governmental or judicial authority having jurisdiction
with respect thereto;
(iii) any Receivable that remains unpaid for more than 90 days from
the original invoice date specified at the time of the original issuance of
the invoice therefor;
(iv) any Receivable arising outside the ordinary course of business of
the Borrower or any of its Subsidiaries;
(v) any Receivable the terms of payment of which have been extended or
rewritten (other than to correct a manifest administrative error) in a
manner more favorable to such account debtor after the time of the original
issuance of the invoice therefor;
(vi) any Receivable due from an account debtor that is not an Eligible
Account Debtor;
(vii) any Receivable subject to a Lien to any Person other than a Lien
in favor of the Administrative Agent;
8
<PAGE>
(viii) any Receivable which fails to represent a bona fide transaction
or with respect to which further acts (other than the completion of the
shipment or delivery process) are required on the part of the Borrower or
any of its Subsidiaries, as appropriate, to make such Receivable payable;
and
(ix) any Receivable the goods giving rise to which were subject at the
time of sale, to a Lien to any person other than a Lien in favor of the
Administrative Agent.
"Eligible Revenue Equipment" means, as at any date of determination
thereof, the recorded book value at such date of all Revenue Equipment owned by
the Borrower or any of its Subsidiaries and located in any jurisdiction in the
United States of America excluding in any event any Revenue Equipment subject to
a Lien to any Person other than a Lien in favor of the Administrative Agent.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower or any Subsidiary required by any Environmental
Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent, or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or
9
<PAGE>
any investigations concerning any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or the Properties, including but not limited to any such requirement under
CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at
a rate based upon the Adjusted London Interbank Offered Rate, and to be made as
a Euro-Dollar Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(c).
"Event of Default" has the meaning set forth in Section 7.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
-------
be determined is not a
10
<PAGE>
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the Administrative Agent on such day on such transactions, as
determined by the Administrative Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
--------
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranty Agreement" means a guaranty agreement, substantially in the
form of Exhibit J, guaranteeing the repayment in full of all obligations of the
---------
Borrower under the Loan Documents and executed and delivered by all of the
Borrower's Subsidiaries.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. (S) 6901 et seq.
11
<PAGE>
and its implementing regulations and amendments, or in any applicable state or
local law or regulation, (b) "hazardous substance", "pollutant", or
"contaminant" as defined in CERCLA, or in any applicable state or local law or
regulation, (c) gasoline, or any other petroleum product or by-product,
including, crude oil or any fraction thereof, (d) toxic substances, as defined
in the Toxic Substances Control Act of 1976, or in any applicable state or local
law or regulation and (e) insecticides, fungicides, or rodenticides, as defined
in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or in any
applicable state or local law or regulation, as each such Act, statute or
regulation may be amended from time to time.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
- - --------
(a) any Interest Period (subject to paragraph (c) below) which would
otherwise end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-
Dollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall,
subject to paragraph (c) below, end on the last Euro-Dollar Business Day of
the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
--------
(a) any Interest Period (subject to paragraph (b) below) which would
otherwise end on a day which is not a
12
<PAGE>
Domestic Business Day shall be extended to the next succeeding Domestic
Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, Guarantee or assumption of any obligation of such
Person or otherwise.
"Investment Agreement" means the Investment and Participation
Agreement between the Borrower and Wachovia Capital Markets, Inc., pursuant to
which the Borrower has financed (through a tax ownership operating lease
arrangement) the acquisition and construction of its corporate headquarters
facility in Chattanooga, Tennessee, and may (subject to certain conditions)
finance the acquisition and/or construction of up to 3 terminal facilities.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower and the
Administrative Agent.
"Letter of Credit" shall mean a commercial letter of credit issued by
the Administrative Agent for the account of the Borrower pursuant to Article
III.
"Letter of Credit Fee" shall have the meaning ascribed to it in
Section 3.08.
"Letter of Credit Obligations" shall mean, at any particular time, the
sum of (a) the Reimbursement Obligations at such time, (b) the aggregate maximum
amount available for drawing under the Letters of Credit at such time and (c)
the aggregate maximum amount available for drawing under Letters of Credit the
issuance of which has been authorized by the Administrative Agent but which have
not yet been issued.
"Letter of Credit Application Agreement" shall mean, with respect to a
Letter of Credit, such form of application
13
<PAGE>
therefor (whether in a single or several documents) as the Administrative Agent
may employ in the ordinary course of business for its own account, whether or
not providing for collateral security, with such modifications thereto as may be
agreed upon by the Administrative Agent and the Borrower and are not materially
adverse to the interests of the Banks; provided, however, that in the event of
any conflict between the terms of any Letter of Credit Application Agreement and
this Agreement, the terms of this Agreement shall control.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For
the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or Euro-Dollar Loan.
"Loan Documents" means this Agreement, the Notes, the Guaranty
Agreement, the Contribution Agreement, any other document evidencing, relating
to or securing the Loans or the Letters of Credit, and any other document or
instrument delivered from time to time in connection with this Agreement, the
Notes, the Loans or the Letters of Credit, as such documents and instruments may
be amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Margin Stock" means "margin stock" as defined in Regulations G, T, U
or X.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or
14
<PAGE>
events, act or acts, condition or conditions, occurrence or occurrences, whether
or not related, a material adverse change in, or a material adverse effect upon,
any of (a) the financial condition, operations, business, properties or
prospects of the Borrower and its Consolidated Subsidiaries taken as a whole,
(b) the rights and remedies of the Administrative Agent or the Banks under the
Loan Documents, or the ability of the Borrower to perform its obligations under
the Loan Documents to which it is a party, as applicable, or (c) the legality,
validity or enforceability of any Loan Document.
"Moody's" means Moody's Investor Service, Inc.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Net Proceeds of Capital Stock" means any proceeds received by the
Borrower or a Consolidated Subsidiary in respect of the issuance of Capital
Stock, after deducting therefrom all reasonable and customary costs and expenses
incurred by the Borrower or such Consolidated Subsidiary directly in connection
with the issuance of such Capital Stock, including without limitation any
underwriter's discounts and commissions.
"Notes" means each of the Revolving Loan Notes, or any or all of them,
as the context shall require.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Officer's Certificate" has the meaning set forth in Section 4.01(g).
"Operating Profits" means, as applied to any Person for any period,
the operating income of such Person for such period, as determined in accordance
with GAAP.
"Participant" has the meaning set forth in Section 10.08(b).
15
<PAGE>
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set forth in
Section 2.05(a).
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or otherwise used
or occupied by the Borrower or any Subsidiary, wherever located.
"Receivable" means, as at any date of determination thereof, the
unpaid portion of the obligation, as stated in the respective invoice, or, in
the case of any such obligation of which no invoice has been issued, as
certified in a Borrowing Base Certificate, of a customer of the Borrower or any
of its Subsidiaries in respect of goods sold or services rendered in the
ordinary course, in each case which amount has been earned by performance under
the terms of the related contract and recognized as revenue on the books of the
Borrower or such Subsidiary.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable
16
<PAGE>
(by sinking fund or similar payments or otherwise) or (ii) redeemable at the
option of the holder thereof.
"Refunding Loan" means a new Revolving Loan made on the day on which
an outstanding Euro-Dollar Loan is maturing or a Base Rate Borrowing is being
converted to a Euro-Dollar Borrowing, if and to the extent that the proceeds
thereof are used entirely for the purpose of paying such maturing Loan or Loan
being converted, excluding any difference between the amount of such maturing
Loan or Loan being converted and any greater amount being borrowed on such day
and actually either being made available to the Borrower pursuant to Section
2.02(c) or remitted to the Administrative Agent as provided in Section 2.12, in
each case as contemplated in Section 2.02(d).
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Reimbursement Obligations" means the reimbursement or repayment
obligations of the Borrower to the Administrative Agent pursuant to Section 3.05
with respect to Letters of Credit.
"Reported Net Income" means, for any period, the Net Income of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis.
"Required Banks" means at any time Banks having at least 66 2/3% of
the aggregate amount of the Commitments or, if the Commitments are no longer in
effect, Banks holding at least
17
<PAGE>
66 2/3% of the aggregate outstanding principal amount of the Revolving Loans and
the Letters of Credit.
"Restricted Payment" means (i) any Dividend, or (ii) any payment on
account of the purchase, redemption, retirement or acquisition of (a) any shares
of the Borrower's Capital Stock (except shares acquired upon the conversion
thereof into other shares of its Capital Stock) or (b) any option, warrant or
other right to acquire shares of the Borrower's Capital Stock.
"Revenue Equipment" means tractors and trailers used in the ordinary
course of business and tagged and permitted to be used in the ordinary course of
business.
"Revolving Loans" means Base Rate Loans or Euro-Dollar Loans made
pursuant to the terms and conditions set forth in Section 2.01.
"Revolving Loan Notes" means the promissory notes of the Borrower,
substantially in the form of Exhibit A, evidencing the obligation of the
---------
Borrower to repay Revolving Loans, together with all amendments, consolidations,
modifications, renewals and supplements thereto.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-
Hill, Inc.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower.
"Synthetic Lease Documents" means the Investment Agreement, the
"Lease" and the other "Operative Documents" (as those terms are defined in
Schedule 1.02 to the Investment Agreement).
"Taxes" has the meaning set forth in Section 2.11(c).
"Termination Date" means whichever is applicable of (i) January 14,
2001,(ii) such later date to which it is extended by the Banks pursuant to
Section 2.04(b), in their sole and absolute discretion,(iii)the date the
Commitments are terminated pursuant to Section 7.01 following the occurrence of
an Event of Default, or (iv) the date the Borrower terminates the Commitments
entirely pursuant to Section 2.08.
18
<PAGE>
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 10.08(d).
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) 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, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
"Unused Commitment" means at any date, (a) with respect to all Banks,
an amount equal to the aggregate Commitments less the sum of (i) the aggregate
outstanding principal amount of the Revolving Loans and (ii) the aggregate
outstanding Letter of Credit Obligations, and (b) with respect to any Bank, an
amount equal to the aggregate Unused Commitment determined in clause (a) above
multiplied by such Bank's Commitment Share .
"Wachovia" means Wachovia Bank, N.A., a national banking association,
and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in determining
compliance with
19
<PAGE>
any of the provisions of this Agreement or any of the other Loan Documents: (i)
the Borrower shall have objected to determining such compliance on such basis at
the time of delivery of such financial statements, or (ii) the Required Banks
shall so object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if objection is made
in respect of the first financial statements delivered under Section 6.01, shall
mean the financial statements referred to in Section 5.04).
SECTION 1.03. References. Unless otherwise indicated, references in
----------
this Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other
Subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this
--------------------
Agreement shall have the same defined meanings when used in any of the other
Loan Documents, unless otherwise defined therein or unless the context shall
require otherwise.
SECTION 1.05. Terminology. 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. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
ARTICLE II
THE REVOLVING CREDIT FACILITY
SECTION 2.01. Commitments to Lend Revolving Loans. Each Bank severally
-----------------------------------
agrees, on the terms and conditions set forth herein, to make Revolving Loans to
the Borrower from time to time before the Termination Date; provided that,
--------
immediately after each such Revolving Loan is made,
(i) the aggregate outstanding principal amount of Revolving Loans and
Letter of Credit Obligations of such Bank shall not exceed the amount of
its Commitment, and
20
<PAGE>
(ii) the aggregate outstanding principal amount of all Revolving Loans
and all Letter of Credit Obligations shall not exceed the lesser of (A) the
aggregate amount of the Commitments, and (B) the Borrowing Base.
Each Euro-Dollar Borrowing under this Section shall be in an aggregate principal
amount of $3,000,000 or any larger integral multiple of $1,000,000, and each
Base Rate Borrowing under this Section shall be in an aggregate principal amount
of $3,000,000 or any larger integral multiple of $1,000,000(except that any such
Borrowing may be in the aggregate amount of the Unused Commitments) and shall be
made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, repay or, to the extent permitted by Section 2.09, prepay Revolving
Loans and reborrow under this Section at any time before the Termination Date.
SECTION 2.02. Method of Borrowing Revolving Loans.
-----------------------------------
(a) The Borrower shall give the Administrative Agent notice (a "Notice
of Borrowing"), which shall be substantially in the form of Exhibit E, prior to
---------
11:00 A.M. (Atlanta, Georgia time) on the Domestic Business Day of each Base
Rate Borrowing, and at least 3 Euro-Dollar Business Days before each Euro-Dollar
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Revolving Loans comprising such Borrowing are to be
Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share of such Borrowing and such Notice of Borrowing, once received by
the Administrative Agent, shall thereafter be irrevocable by the Borrower.
21
<PAGE>
(c) Not later than 1:00 P.M. (Atlanta, Georgia time) on the date of
each Borrowing, each Bank shall (except as provided in paragraph (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds immediately available in Atlanta, Georgia, to the Administrative Agent at
its address determined pursuant to Section 10.01. Unless the Administrative
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Administrative Agent will make the funds so received from
the Banks available to the Borrower at the Administrative Agent's aforesaid
address. Unless the Administrative Agent receives notice from a Bank, at the
Administrative Agent's address referred to in or specified pursuant to Section
10.01 (i) no later than 4:00 P.M. (local time at such address) on the Domestic
Business Day before the date of a Euro-Dollar Borrowing or (ii) no later than
1:00 P.M. (Atlanta, Georgia time) on the date of a Base Rate Borrowing, stating
that such Bank will not make a Revolving Loan in connection with such Borrowing,
the Administrative Agent shall be entitled to assume that such Bank will make a
Revolving Loan in connection with such Borrowing and, in reliance on such
assumption, the Administrative Agent may (but shall not be obligated to) make
available such Bank's ratable share of such Borrowing to the Borrower for the
account of such Bank. If the Administrative Agent makes such Bank's ratable
share available to the Borrower and such Bank does not in fact make its ratable
share of such Borrowing available on such date, the Administrative Agent shall
be entitled to recover such Bank's ratable share from such Bank or the Borrower
(and for such purpose shall be entitled to charge such amount to any account of
the Borrower maintained with the Administrative Agent), together with interest
thereon for each day during the period from the date of such Borrowing until
such sum shall be paid in full at a rate per annum equal to the rate at which
the Administrative Agent determines that it obtained (or could have obtained)
overnight Federal funds to cover such amount for each such day during such
period, provided that (i) any such payment by the Borrower of such Bank's
--------
ratable share and interest thereon shall be without prejudice to any rights that
the Borrower may have against such Bank and (ii) until such Bank has paid its
ratable share of such Borrowing, together with interest pursuant to the
foregoing, it will have no interest in or rights with respect to such Borrowing
for any purpose hereunder. If the Administrative Agent does not exercise its
option to advance funds for the account of such Bank, it shall forthwith notify
the Borrower of such decision.
22
<PAGE>
(d) If any Bank makes a new Revolving Loan hereunder on a day on
which the Borrower is to repay all or any part of an outstanding Revolving Loan
from such Bank, such Bank shall apply the proceeds of its new Revolving Loan to
make such repayment as a Refunding Loan and only an amount equal to the
difference (if any) between the amount being borrowed and the amount of such
Refunding Loan shall be made available by such Bank to the Administrative Agent
as provided in paragraph (c) of this Section, or remitted by the Borrower to the
Administrative Agent as provided in Section 2.11, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived, and all Refunding Loans shall be made as Base Rate Loans
(but shall bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to specify whether
the Revolving Loans comprising such Borrowing are to be Base Rate Loans or Euro-
Dollar Loans, such Revolving Loans shall be made as Base Rate Loans. If the
Borrower is otherwise entitled under this Agreement to repay any Revolving Loans
maturing at the end of an Interest Period applicable thereto with the proceeds
of a new Borrowing, and the Borrower fails to repay such Revolving Loans and
fails to give a Notice of Borrowing in connection with such new Borrowing, a new
Borrowing shall be deemed to be made on the date such Revolving Loans mature in
an amount equal to the principal amount of the Revolving Loans so maturing, and
the Revolving Loans comprising such new Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than eight (8) Euro-Dollar Borrowings outstanding at any given
time.
SECTION 2.03. Notes. (a) The Revolving Loans of each Bank shall be
-----
evidenced by a single Revolving Loan Note payable to the order of such Bank for
the account of its Lending Office in an amount equal to the original principal
amount of such Bank's Commitment.
(b) Upon receipt of each Bank's Notes pursuant to Section 4.01, the
Administrative Agent shall deliver such Notes to such Bank. Each Bank shall
record, and prior to any
23
<PAGE>
transfer of its Notes shall endorse on the schedules forming a part thereof
appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Loan made by it, the date and amount of each
payment of principal made by the Borrower with respect thereto, and such
schedules of each such Bank's Notes shall constitute rebuttable presumptive
evidence of the respective principal amounts owing and unpaid on such Bank's
Notes; provided that the failure of any Bank to make, or any error in making,
--------
any such recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Notes or the ability of any Bank to assign its
Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse
its Notes and to attach to and make a part of any Note a continuation of any
such schedule as and when required.
SECTION 2.04. Maturity of Loans. (a) Each Loan included in any
-----------------
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal amount of
the Loans, if any, together with all accrued but unpaid interest thereon, if
any, shall be due and payable on January 14, 2001, unless the Termination Date
is otherwise extended by the Banks, in their sole and absolute discretion. Upon
the written request of the Borrower, which request shall be delivered to the
Administrative Agent at least 60 days prior to each Extension Date (as such term
is hereinafter defined), the Banks shall have the option (without any obligation
whatsoever so to do) of extending the Termination Date for additional one-year
periods on each of January 15, 1999 and January 15, 2000 (each, an "Extension
Date"). In the event that a Bank does not notify the Borrower and the
Administrative Agent at least 15 days prior to the relevant Extension Date of
its agreement to extend the Termination Date for such an additional one-year
period, such Bank shall be deemed a "Terminating Bank" and shall have no
obligations hereunder after the relevant Termination Date; provided, that the
Termination Date shall not be extended with respect to any of the Banks unless
the Required Banks are willing to extend the Termination Date and (x) the
remaining Banks shall be entitled to purchase, effective on the Termination Date
(prior to its extension hereunder), ratable assignments (without any obligation
so to do) from such Terminating Bank (in the form of an Assignment and
Acceptance) in accordance with their respective percentage of the remaining
Aggregate Commitments; provided, that, such Banks shall be
-------- ----
24
<PAGE>
provided such opportunity (which opportunity shall allow such Banks at least
five Domestic Business Days in which to make a decision) prior to the Borrower
finding another bank pursuant to the immediately succeeding clause (y); and,
provided, further, that, should any of the remaining Banks elect not to
- - -------- ------- ----
purchase such an assignment, then, such other remaining Banks shall be entitled
to purchase, effective on the Termination Date (prior to its extension
hereunder), an assignment from any Terminating Bank which includes the ratable
interest that was otherwise available to such non-purchasing remaining Bank or
Banks, as the case may be, (y) the Borrower shall find another bank, acceptable
to the Administrative Agent, willing to accept an assignment from such
Terminating Bank (in the form of an Assignment and Acceptance), effective on the
Termination Date (prior to its extension hereunder), or (z) the Borrower shall
reduce the aggregate Commitments in an amount equal to the Commitment of any
such Terminating Bank.
SECTION 2.05. Interest Rates. (a) "Applicable Margin" means:
--------------
(i) for the period commencing on the Closing Date to and including the
first Performance Pricing Determination Date, (x) for any Base Rate Loan, 0.00%,
and (y) for any Euro-Dollar Loan, 0.75%; and
(ii) from and after the first Performance Pricing Determination Date, (x)
for any Base Rate Loan, 0.00%, (y) for each Euro-Dollar Loan, the percentage
determined on each Performance Pricing Determination Date by reference to the
table set forth below as to the ratio of Consolidated Total Adjusted Debt to
Consolidated EBILTDA for the quarterly or annual period ending immediately prior
to such Performance Pricing Determination Date.
Ratio Applicable Margin
------ -----------------
less than and equal to 1.50 to 1.00 0.55%
greater than 1.50 to 1.00 but
less than and equal to 2.00 0.625%
greater than 2.00 to 1.00 but
less than and equal to 2.50 to 1.00 0.75%
greater than 2.50 to 1.00 but
less than and equal to 2.75 to 1.00 0.875%
25
<PAGE>
less than 2.75 1.10%
provided that on any Performance Pricing Determination Date on which the
Borrower's ratio of (a) Consolidated EBILT to (b) Consolidated Fixed Charges is
greater than or equal to 2.25 to 1.00, the Applicable Margin shall be 0.100%
less than that set forth in the table above.
In determining interest for purposes of this Section 2.05 and fees for
purposes of Section 2.06, the Borrower and the Banks shall refer to the
Borrower's most recent consolidated quarterly and annual (as the case may be)
financial statements delivered pursuant to Section 6.01(a) or (b), as the case
may be. If such financial statements require a change in interest pursuant to
this Section 2.05 or fees pursuant to Section 2.06, the Borrower shall deliver
to the Administrative Agent, along with such financial statements, a notice to
that effect, which notice shall set forth in reasonable detail the calculations
supporting the required change. The "Performance Pricing Determination Date" is
the date which is the last date on which such financial statements are permitted
to be delivered pursuant to Section 6.01(a) or (b), as applicable. Any such
required change in interest and fees shall become effective on such Performance
Pricing Determination Date, and shall be in effect until the next Performance
Pricing Determination Date, provided that: (i) changes in interest shall only be
--------
effective for Interest Periods commencing on or after the Performance Pricing
Determination Date; and (ii) no fees or interest shall be decreased pursuant to
this Section 2.05 or Section 2.06 if a Default is in existence on the
Performance Pricing Determination Date.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus the
Applicable Margin. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
London Interbank
26
<PAGE>
Offered Rate for such Interest Period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than 3 months, at intervals of 3 months after the first day thereof. Any overdue
principal of and, to the extent permitted by law, overdue interest on any Euro-
Dollar Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rates appear on the Telerate
Page 3750 effective as of 11:00 A.M., London time, 2 Euro-Dollar Business Days
prior to the first day of such Interest Period, provided that if no such offered
--------
rates appear on such page, the "London Interbank Offered Rate" for such Interest
Period will be the arithmetic average (rounded upward, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than 2 major banks in New York
City, selected by the Administrative Agent, at approximately 10:00 A.M., New
York City time, 2 Euro-Dollar Business Days prior to the first day of such
Interest Period, for deposits in Dollars offered by leading European banks for a
period comparable to such Interest Period in an amount comparable to the
principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and
27
<PAGE>
as of the effective date of any change in the Euro-Dollar Reserve Percentage.
(d) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the Banks by telecopier of each rate of interest so
determined, and its determination thereof shall be conclusive in the absence of
manifest error.
(e) After the occurrence and during the continuance of an Event of
Default, the principal amount of the Loans (and, to the extent permitted by
applicable law, all accrued interest thereon) may, at the election of the
Required Banks, bear interest at the Default Rate.
SECTION 2.06. Fees. (a) The Borrower shall pay to the Administrative
----
Agent, for the ratable account of each Bank, a commitment fee, calculated in the
manner provided in the last paragraph of Section 2.05(a)(ii), on the average
daily amount of such Bank's Unused Commitment, at a rate per annum equal to: (i)
for the period commencing on the Closing Date to and including the first
Performance Pricing Determination Date, 0.225%; and (ii) from and after the
first Performance Pricing Determination Date, the percentage determined on each
Performance Pricing Determination Date by reference to the table set forth below
as to the ratio of Consolidated Total Adjusted Debt to Consolidated EBILTDA for
the quarterly or annual period ending immediately prior to such Performance
Pricing Determination Date:
Ratio Commitment Fee
------ --------------
less than and equal to 1.50 to 1.00 0.15%
greater than 1.50 to 1.00 but
less than and equal to 2.00 0.1875%
greater than 2.00 to 1.00 but
less than and equal to 2.50 to 1.00 0.225%
greater than 2.50 to 1.00 0.25%
Such commitment fees shall accrue from and including the Closing Date to but
excluding the Termination Date and shall be
28
<PAGE>
payable on each March 31, June 30, September 30 and December 31 and on the
Termination Date.
(b) The Borrower shall pay to the Administrative Agent, for the
account and sole benefit of the Administrative Agent, such fees and other
amounts at such times as set forth in the Administrative Agent's Letter
Agreement.
SECTION 2.07. Optional Termination or Reduction of Commitments. The
------------------------------------------------
Borrower may, upon at least 3 Domestic Business Days' notice to the
Administrative Agent, terminate at any time, or proportionately reduce the
Unused Commitments from time to time by an aggregate amount of at least
$10,000,000 or any larger integral multiple of $1,000,000. If the Commitments
are terminated in their entirety, all accrued fees (as provided under Section
2.06) shall be due and payable on the effective date of such termination.
SECTION 2.08. Termination of Commitments. The Commitments shall
--------------------------
terminate on the Termination Date and any Loans then outstanding (together with
accrued interest thereon) shall be due and payable on such date.
SECTION 2.09. Optional Prepayments. (a) The Borrower may, upon at
--------------------
least 1 Domestic Business Days' notice to the Administrative Agent, prepay any
Base Rate Borrowing in whole at any time, or from time to time in part in
amounts aggregating at least $3,000,000, by paying the principal amount to be
prepaid together with accrued interest thereon to the date of prepayment. Each
such optional prepayment shall be applied to prepay ratably the Base Rate Loans
of the several Banks included in such Base Rate Borrowing.
(b) Subject to any payments required pursuant to the terms of Article
IX for such Euro-Dollar Loan, upon 3 Domestic Business Days' prior written
notice, the Borrower may prepay in minimum amounts of $3,000,000 with additional
increments of $1,000,000 (or any lesser amount equal to the outstanding balance
of such Loan) all or any portion of the principal amount of any Euro-Dollar Loan
prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section
2.09, the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such notice,
once received by the Administrative Agent, shall thereafter be irrevocable by
the Borrower.
29
<PAGE>
SECTION 2.10. Mandatory Prepayments. On each date on which (w) the
---------------------
Commitments are reduced pursuant to Section 2.07 or Section 2.08, or (x) the
aggregate amount of all outstanding Revolving Loans and Letter of Credit
Obligations exceeds the Borrowing Base, the Borrower shall repay or prepay such
principal amount of the outstanding Loans, if any (together with interest
accrued thereon and any amount due under Section 9.05(a)), as may be necessary
so that after such payment the aggregate unpaid principal amount of the Loans
does not exceed (y) the aggregate amount of the Commitments as then reduced, or
(z) the Borrowing Base as then in effect. Each such payment or prepayment shall
be applied ratably to the Loans of the Banks outstanding on the date of payment
or prepayment in the following order of priority:(i) first, to Base Rate Loans;
and (ii) secondly to Euro-Dollar Loans.
SECTION 2.11. General Provisions as to Payments.
---------------------------------
(a) The Borrower shall make each payment of principal of, and interest
on, the Loans and of fees hereunder, not later than 11:00 A.M. (Atlanta, Georgia
time) on the date when due, in Federal or other funds immediately available in
Atlanta, Georgia, to the Administrative Agent at its address referred to in
Section 10.01. The Administrative Agent will promptly distribute to each Bank
its ratable share of each such payment received by the Administrative Agent for
the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Base
Rate Loans or of fees hereunder shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of or
interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-
Dollar Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls
in another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day.
(c) All payments of principal, interest and fees and all other amounts
to be made by the Borrower pursuant to this Agreement with respect to any Loan
or fee relating thereto shall be paid without set-off, counterclaim, or
deduction, including but not limited to any deduction for,(and shall be free
from), any tax, imposts, levies, duties, deductions, or withholdings of any
nature now or at anytime hereafter imposed by any governmental authority or by
any taxing authority thereof or therein excluding in the case of each Bank,
taxes
30
<PAGE>
imposed on or measured by its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank's applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, imposts, levies, duties, deductions or withholdings of any
nature being "Taxes"). In the event that the Borrower is required by applicable
law to make any such withholding or deduction of Taxes with respect to any Loan
or fee or other amount, the Borrower shall pay such deduction or withholding to
the applicable taxing authority, shall promptly furnish to any Bank in respect
of which such deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such Bank additional amounts as may be
necessary in order that the amount received by such Bank after the required
withholding or other payment shall equal the amount such Bank would have
received had no such withholding or other payment been made. If no withholding
or deduction of Taxes are payable in respect to any Loan or fee relating
thereto, the Borrower shall furnish any Bank, at such Bank's request, a
certificate from each applicable taxing authority or an opinion of counsel
acceptable to such Bank, in either case stating that such payments are exempt
from or not subject to withholding or deduction of Taxes. If the Borrower fails
to provide such original or certified copy of a receipt evidencing payment of
Taxes or such certificate(s) or opinion of counsel, the Borrower hereby agrees
to compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.
Each Bank which is not organized under the laws of the United States
or any state thereof agrees, as soon as practicable after receipt by it of a
request by the Borrower to do so, to file all appropriate forms and take other
appropriate action to obtain a certificate or other appropriate document from
the appropriate governmental authority in the jurisdiction imposing the relevant
Taxes, establishing that it is entitled to receive payments of principal and
interest under this Agreement and the Notes without deduction and free from
withholding of any Taxes imposed by such jurisdiction; provided that if it is
--------
unable, for any reason, to establish such exemption, or to file such forms and,
in any event, during such period of time as such request for exemption is
pending, the Borrower shall nonetheless remain obligated under the terms of the
immediately preceding paragraph.
31
<PAGE>
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.11(c), it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided that if at any
--------
time thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower and the Banks
contained in this Section 2.11(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by such
provisions (i) shall be made based upon the circumstances of such Participant,
Assignee or other Transferee, and (ii) constitute a continuing agreement and
shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.12. Computation of Interest and Fees. Interest on Base Rate
--------------------------------
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Commitment fees and any other fees payable hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.01. Obligation to Issue. Subject to the terms and
--------------------
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrower herein set forth, the Administrative Agent shall
issue for the account of Borrower, one or more Letters of Credit denominated in
Dollars, in accordance with this Article III, from time to time during the
period commencing on the Closing Date and ending on the Domestic Business Day
prior to the Termination Date.
SECTION 3.02. Types and Amounts. The Administrative Agent shall have
------------------
no obligation to issue any Letter of Credit at any time:
32
<PAGE>
(a) if the aggregate maximum amount then available for drawing under
Letters of Credit, after giving effect to the issuance of the requested
Letter of Credit, shall exceed any limit imposed by law or regulation upon
the Administrative Agent;
(b) if, after giving effect to the issuance of the requested Letter of
Credit, (i) the aggregate Letter of Credit Obligations would exceed
$10,000,000, or (ii) the sum of the aggregate Letter of Credit Obligations,
plus the aggregate principal amount of the Loans outstanding at such time,
would exceed the Borrowing Base;
(c) which has an expiration date (i) more than 360 days after the date
of issuance or (ii) after the Termination Date.
SECTION 3.03. Conditions. In addition to being subject to the
-----------
satisfaction of the conditions contained in Article IV, the obligation of the
Administrative Agent to issue any Letter of Credit is subject to the
satisfaction in full of the following conditions:
(a) the Borrower shall have delivered to the Administrative Agent at
such times and in such manner as the Administrative Agent may prescribe, a
Letter of Credit Application Agreement and such other documents and
materials as may be required pursuant to the terms thereof all satisfactory
in form and substance to the Administrative Agent and the terms of the
proposed Letter of Credit shall be satisfactory in form and substance to
the Administrative Agent;
(b) as of the date of issuance no order, judgment or decree of any
court, arbitrator or Authority shall purport by its terms to enjoin or
restrain the Administrative Agent from issuing the Letter of Credit and no
law, rule or regulation applicable to the Administrative Agent and no
request or directive (whether or not having the force of law) from any
Authority with jurisdiction over the Administrative Agent shall prohibit or
request that the Agent refrain from the issuance of letters of credit
generally or the issuance of that Letter of Credit;
(c) the Unused Commitment shall not be less than the amount of the
requested Letter of Credit; and
33
<PAGE>
(d) the expiration date of the Letter of Credit shall not extend
beyond the Termination Date.
SECTION 3.04. Issuance of Letters of Credit.
------------------------------
(a) At least two Domestic Business Days before the effective date for
any Letter of Credit, the Borrower shall give the Administrative Agent a written
notice containing the original signature of an authorized officer or employee of
the Borrower. Such notice shall be irrevocable and shall specify the original
face amount of the Letter of Credit requested (which original face amount shall
not be less than $100,000), the effective date (which day shall be a Domestic
Business Day) of issuance of such requested Letter of Credit, the date on which
such requested Letter of Credit is to expire, the amount of then outstanding
Letter of Credit Obligations, the purpose for which such Letter of Credit is to
be issued, whether such Letter of Credit may be drawn in single or partial draws
and the person for whose benefit the requested Letter of Credit is to be issued.
(b) Issuance; Notice of Issuance. If the original face amount of the
-----------------------------
requested Letter of Credit is less than or equal to the Unused Commitment at
such time and the applicable conditions set forth in this Agreement are
satisfied, the Administrative Agent shall issue the requested Letter of Credit.
The Administrative Agent shall give each Bank written or telex notice in
substantially the form of Exhibit K, or telephonic notice confirmed promptly
---------
thereafter in writing, of the issuance of a Letter of Credit and shall deliver
to each Bank in connection with such notice a copy of the Letter of Credit
issued by the Administrative Agent.
(c) No Extension or Amendment. The Administrative Agent shall not
--------------------------
extend or amend any Letter of Credit if the issuance of a new Letter of Credit
having the same terms as such Letter of Credit as so amended or extended would
be prohibited by Section 3.02 or Section 3.03.
SECTION 3.05. Reimbursement Obligations; Duties of the Issuing Bank.
------------------------------------------------------
(a) Reimbursement. Notwithstanding any provisions to the contrary in
--------------
any Letter of Credit Application Agreement:
(i) the Borrower shall reimburse the Administrative Agent for
drawings under a Letter of Credit issued by it no later than the earlier of
(A) the time
34
<PAGE>
specified in such Letter of Credit Application Agreement, or (B) 1 Domestic
Business Day after the payment by the Administrative Agent;
(ii) any Reimbursement Obligation with respect to any Letter of
Credit shall bear interest from the date of the relevant drawing under the
pertinent Letter of Credit until the date of payment in full thereof at a
rate per annum equal to (A) prior to the date that is 3 Domestic Business
Days after the date of the related payment by the Administrative Agent, the
Base Rate and (B) thereafter, the Default Rate; and
(iii) in order to implement the foregoing, upon the occurrence of
a draw under any Letter of Credit, unless the Administrative Agent is
reimbursed in accordance with subsection (i) above, the Borrower
irrevocably authorizes the Administrative Agent to treat such nonpayment as
a Notice of Borrowing in the amount of such Reimbursement Obligation and to
make Loans to Borrower in such amount regardless of whether the conditions
precedent to the making of Loans hereunder have been met. The Borrower
further authorizes the Administrative Agent to credit the proceeds of such
Loan so as to immediately eliminate the liability of the Borrower for
Reimbursement Obligations under such Letter of Credit.
(b) Duties of the Administrative Agent. Any action taken or omitted
-----------------------------------
to be taken by the Administrative Agent in connection with any Letter of Credit,
if taken or omitted in the absence of willful misconduct or gross negligence,
shall not put the Administrative Agent under any resulting liability to any
Bank, or assuming that the Administrative Agent has complied with the procedures
specified in Section 3.04 and such Bank has not given a notice contemplated by
Section 3.06(a) that continues in full force and effect, relieve that Bank of
its obligations hereunder to the Administrative Agent. In determining whether
to pay under any Letter of Credit, the Administrative Agent shall have no
obligation relative to the Banks other than to confirm that any documents
required to have been delivered under such Letter of Credit appear to comply on
their face, with the requirements of such Letter of Credit.
35
<PAGE>
SECTION 3.06. Participations.
---------------
(a) Purchase of Participations. Immediately upon issuance by the
---------------------------
Administrative Agent of any Letter of Credit in accordance with the procedures
set forth in Section 3.04, each Bank shall be deemed to have irrevocably and
unconditionally purchased and received from the Administrative Agent, without
recourse or warranty, an undivided interest and participation, to the extent of
such Bank's Commitment Share, in such Letter of Credit (or guaranty pertaining
thereto); provided, that a Letter of Credit shall not be entitled to the
--------
benefits of this Section 3.06 if the Administrative Agent shall have received
written notice from any Bank on or before the Domestic Business Day immediately
prior to the date of the Administrative Agent's issuance of such Letter of
Credit that one or more of the conditions contained in Section 3.03 or Article
IV is not then satisfied, and, in the event the Administrative Agent receives
such a notice, it shall have no further obligation to issue any Letter of Credit
until such notice is withdrawn by that Bank or until the Required Banks have
effectively waived such condition in accordance with the provisions of this
Agreement.
(b) Sharing of Letter of Credit Payments. In the event that the
-------------------------------------
Administrative Agent makes any payment under any Letter of Credit for which the
Borrower shall not have repaid such amount to the Administrative Agent pursuant
to Section 3.07 or which cannot be paid by a Loan pursuant to subsection (iii)
of Section 3.05, the Administrative Agent shall promptly notify each Bank of
such failure, and each Bank shall promptly and unconditionally pay to the
Administrative Agent such Bank's Commitment Share of the amount of such payment
in Dollars and in same day funds. If the Administrative Agent so notifies such
Bank prior to 10:00 A.M. (Atlanta, Georgia time) on any Domestic Business Day,
such Bank shall make available to the Administrative Agent its Commitment Share
of the amount of such payment on such Domestic Business Day in same day funds.
If and to the extent such Bank shall not have so made its Commitment Share of
the amount of such payment available to the Administrative Agent, such Bank
agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date such payment was
first due until the date such amount is paid to the Administrative Agent at a
rate per annum equal to the rate at which the Administrative Agent determines
that it obtained (or could have obtained) overnight federal funds to cover such
amount for each such day during such period. The failure of any Bank to make
available to the Administrative Agent its
36
<PAGE>
Commitment Share of any such payment shall neither relieve nor increase the
obligation of any other Bank hereunder to make available to the Administrative
Agent its Commitment Share of any payment on the date such payment is to be
made.
(c) Sharing of Reimbursement Obligation Payments. Whenever the
---------------------------------------------
Administrative Agent receives a payment on account of a Reimbursement
Obligation, including any interest thereon, as to which the Administrative Agent
has received any payments from the Banks pursuant to this Section 3.06, it shall
promptly pay to each Bank which has funded its participating interest therein,
in Dollars and in the kind of funds so received, an amount equal to such Bank's
Commitment Share thereof. Each such payment shall be made by the Administrative
Agent on the Domestic Business Day on which the funds are paid to such Person,
if received prior to 10:00 am. (Atlanta, Georgia time) on such Domestic Business
Day, and otherwise on the next succeeding Domestic Business Day.
(d) Documentation. Upon the request of any Bank, the Administrative
--------------
Agent shall furnish to such Bank copies of any Letter of Credit, Letter of
Credit Application Agreement and other documentation relating to Letters of
Credit issued pursuant to this Agreement.
(e) Obligations Irrevocable. The obligations of the Banks to make
------------------------
payments to the Administrative Agent with respect to a Letter of Credit shall be
irrevocable, not subject to any qualification or exception whatsoever and shall
be made in accordance with, but not subject to, the terms and conditions of this
Agreement under all circumstances (assuming that the Administrative Agent has
issued such Letter of Credit in accordance with Section 3.04 and such Bank has
not given a notice contemplated by Section 3.06(a) that continues in full force
and effect), including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative Agent, any
Bank or any other Person, whether in connection with this Agreement, any
Letter of
37
<PAGE>
Credit, the transactions contemplated herein or any unrelated transactions;
(iii) any draft, certificate or any other document presented
under the Letter of Credit proves to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) payment by the Administrative Agent 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;
(vi) payment by the Administrative Agent under any Letter of
Credit against presentation of any draft or certificate that does not
comply with the terms of such Letter of Credit, except payment resulting
from the gross negligence or willful misconduct of the Administrative
Agent; or
(vii) any other circumstances or happenings whatsoever, whether
or not similar to any of the foregoing, except circumstances or happenings
resulting from the gross negligence or willful misconduct of the
Administrative Agent.
SECTION 3.07. Payment of Reimbursement Obligations.
-------------------------------------
(a) Payments to Issuing Bank. The Borrower agrees to pay to the
-------------------------
Administrative Agent the amount of all Reimbursement Obligations, interest and
other amounts payable to the Administrative Agent under or in connection with
any Letter of Credit issued for such Borrower's account immediately when due,
irrespective of:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the
38
<PAGE>
Administrative Agent, any Bank or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions;
(iii) any draft, certificate or any other document presented
under the Letter of Credit proves to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) payment by the Administrative Agent 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;
(vi) payment by the Administrative Agent under any Letter of
Credit against presentation of any draft or certificate that does not
comply with the terms of such Letter of Credit, except payment resulting
from the gross negligence or willful misconduct of the Administrative
Agent; or
(vii) any other circumstances or happenings whatsoever, whether
or not similar to any of the foregoing, except circumstances or happenings
resulting from the gross negligence or willful misconduct of the
Administrative Agent.
(b) Recovery or Avoidance of Payments. In the event any payment by or
----------------------------------
on behalf of the Borrower received by the Administrative Agent with respect to a
Letter of Credit and distributed by the Administrative Agent to the Banks on
account of their participations is thereafter set aside, avoided or recovered
from the Administrative Agent in connection with any receivership, liquidation
or bankruptcy proceeding, each Bank that received such distribution shall, upon
demand by such Administrative Agent, contribute such Bank's Commitment Share of
the amount set aside, avoided or recovered together with interest at the rate
required to be paid by the Administrative Agent upon the amount required to be
repaid by it.
39
<PAGE>
SECTION 3.08. Compensation for Letters of Credit.
-----------------------------------
(a) Letter of Credit Fees. The Borrower shall pay to the Administrative
----------------------
Agent with respect to each Letter of Credit issued hereunder a per annum letter
of credit fee ("Letter of Credit Fee") equal to the Applicable Margin for Euro-
Dollar Loans from time to time as set forth in Section 2.05(a)(ii) on the
average daily maximum amount available to be drawn under such Letter of Credit,
accruing from the date of issuance to the date of expiration, and payable on
each March 31, June 30, September 30 and December 31 and on the Termination
Date. Letter of Credit Fees payable hereunder shall be computed on the basis of
a year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day). The Administrative Agent shall promptly
remit such Letter of Credit Fees, when paid, to the Banks in accordance with
their Commitment Shares thereof.
(b) Administrative Agent Charges. The Borrower shall pay to the
-----------------------------
Administrative Agent, solely for its own account on the date of issuance of each
Letter of Credit, an issuance fee for each Letter of Credit equal to .125% of
the face amount of the Letter of Credit, as well as the standard charges
assessed by the Administrative Agent in connection with the issuance,
administration, amendment and payment or cancellation of Letters of Credit
issued hereunder, which charges shall be those typically charged by the
Administrative Agent to its customers generally having credit and other
characteristics similar to the Borrower, as determined in good faith by the
Administrative Agent.
SECTION 3.09. Indemnification; Exoneration.
-----------------------------
(a) Indemnification. In addition to amounts payable as elsewhere
----------------
provided in this Article III, the Borrower shall protect, indemnify, pay and
save the Administrative Agent and each Bank harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which the Administrative Agent, or any
Bank may incur or be subject to as a consequence of the issuance of any Letter
of Credit for the Borrower's account other than as a result of its gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction.
40
<PAGE>
(b) Assumption of Risk by Borrower. As between the Borrower, the
-------------------------------
Administrative Agent and the Banks, the Borrower assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit issued for such Borrower's
account by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Administrative Agent and
the Banks shall not be responsible for (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Letters of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged, (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
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) failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit, (iv) 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,
for errors in interpretation of technical terms, (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof, (vii) the misapplication
by the beneficiary of a Letter of Credit of the proceeds of any drawing under
such Letter of Credit; and (viii) any consequences arising from causes beyond
the control of the Administrative Agent and the Banks.
(c) Exoneration. In furtherance and extension and not in limitation
------------
of the specific provisions hereinabove set forth, any action taken or omitted by
the Administrative Agent under or in connection with the Letters of Credit or
any related certificates if taken or omitted in good faith and with reasonable
care, shall not put the Administrative Agent or any Bank under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to any such Person.
SECTION 3.10. Credit Yield Protection; Capital Adequacy. If the
------------------------------------------
adoption after the date hereof of any applicable law, statute, rule, regulation,
ordinance, writ, injunction, decree, order, judgment, guideline or decision of
any Authority ("Governmental Rule"), any change after the date hereof in any
interpretation or administration of any applicable Governmental Rule by any
Person charged with its
41
<PAGE>
interpretation or administration or compliance by the Administrative Agent or
any Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any such Person:
(a) shall subject the Administrative Agent or any Bank (or its Lending
Office) to any tax (other than overall net income taxation), duty or other
charge with respect to any amount drawn on any Letter of Credit or its
obligation to make any payment under the Letters of Credit, or to maintain
the Letters of Credit, or shall change the basis of taxation (other than
overall net income taxation) of payments to the Administrative Agent or any
Bank (or its Lending Office) of any amounts due under this Agreement or any
amount drawn on the Letters of Credit; or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System or any Person regulating insurance activities or insurance
companies), special deposit or similar requirements against assets of,
deposits with or for the account of, credit extended by, letters of credit
issued or maintained by, or collateral subject to a lien in favor of the
Administrative Agent or any Bank (or its Lending Office) any other
condition affecting any amount drawn on the Letters of Credit, or its
obligation to make any payment under the Letters of Credit, as the case may
be, or to maintain the Letters of Credit; then the remaining provisions of
this Section 3.10 shall apply. If the result of any of the foregoing
(without regard to whether the Administrative Agent or any Bank shall have
sold participations in its respective obligations under this Agreement) is
to increase the cost to or to impose a cost on the Administrative Agent or
any Bank (or its Lending Office) of making or maintaining any amounts
payable hereunder, of maintaining the Letters of Credit, or to reduce the
amount of any sum received or receivable by the Administrative Agent or any
Bank (or its Lending Office) under any Letter of Credit, then:
(i) the Administrative Agent or such Bank shall promptly
deliver to the Borrower a certificate stating the change which
has occurred or the reserve requirements or other conditions
which have been imposed on the Administrative Agent or such Bank
(or its
42
<PAGE>
Lending Office) or the request, direction or requirement with
which it has complied, together with the date hereof; and
(ii) the Borrower shall pay to the Administrative Agent or such
Bank within 30 days of written request (which request shall state the
amount of increased cost, reduction or payment and the way in which
such amount has been calculated), such amount or amounts as will
compensate the Administrative Agent or such Bank for the additional
cost, reduction of return or payment incurred by the Administrative
Agent or such other Bank and, at the option of the Borrower at any
time while the Administrative Agent or such Bank is requesting such
additional amount or amounts, upon the giving of notice to the Bank
and payment to such Bank of all amounts owing to such Bank hereunder,
the Borrower may require such Bank to enter into an Assignment and
Assumption Agreement pursuant to which such Bank shall transfer all of
its rights and interests hereunder and under the other Loan Documents
to a third party selected by the Borrower and consented to by the
Administrative Agent. If such written request is given within 30 days
after the event which results in such increased cost, reduction of
return or reduction of payments, such amounts will be calculated from
the date of such event; otherwise, such amounts will be calculated as
of the date on which the Administrative Agent or such Bank makes the
aforesaid written request. The written request of the Administrative
Agent or such Bank as to the additional amounts payable pursuant to
this paragraph delivered to the Borrower shall be conclusive evidence
of the amount thereof in the absence of manifest error.
(c) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office)
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any Authority, has or would have the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder to a level below that which
43
<PAGE>
such Bank could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time
to time, within 30 days after demand by such Bank, the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank
for such reduction.
(d) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. A certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
(e) The provisions of this Section 3.10 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any
calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.
ARTICLE IV
CONDITIONS TO BORROWINGS
SECTION 4.01. Conditions to First Borrowing. The obligation of each
-----------------------------
Bank to make a Loan on the occasion of the first Borrowing (or the obligation of
the Administrative Agent to issue the first Letter of Credit, whichever occurs
first) is subject to the satisfaction of the conditions set forth in Section
4.02 and receipt by the Administrative Agent of the following (as to the
documents described in paragraphs (a),(c), (d)and (e) below, in sufficient
number of counterparts for delivery of a counterpart to each Bank and retention
of one counterpart by the Administrative Agent):
(a) from each of the parties hereto of either (i) a duly executed
counterpart of this Agreement signed by such party or (ii) a facsimile
transmission of such executed
44
<PAGE>
counterpart, with the original to be sent to the Administrative Agent by
overnight courier);
(b) a duly executed Revolving Loan Note for the account of each Bank
complying with the provisions of Section 2.03;
(c) the Guaranty Agreement, duly executed and delivered by each
Subsidiary of the Borrower;
(d) an opinion letter (together with any opinions of local counsel
relied on therein) of Miller & Martin, counsel for the Borrower, dated as
of the Closing Date, substantially in the form of Exhibit B and covering
---------
such additional matters relating to the transactions contemplated hereby as
the Administrative Agent or any Bank may reasonably request;
(e) an opinion of Jones, Day, Reavis & Pogue, special counsel for the
Agent, dated as of the Closing Date, substantially in the form of Exhibit C
---------
and covering such additional matters relating to the transactions
contemplated hereby as the Agent may reasonably request;
(f) a certificate (the "Closing Certificate") substantially in the
form of Exhibit G), dated as of the earlier of the date of the first
---------
Borrowing or the date of the issuance of the first Letter of Credit, signed
by a principal financial officer of the Borrower, to the effect that (i) no
Default has occurred and is continuing on such date and (ii) the
representations and warranties of the Borrower contained in Article V are
true on and as of such date;
(g) all documents which the Administrative Agent or any Bank may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement and the Notes, and any
other matters relevant hereto, all in form and substance satisfactory to
the Administrative Agent, including, without limitation, a certificate of
the Borrower and of each Subsidiary substantially in the form of Exhibit H
---------
(the "Officer's Certificate"), signed by the Secretary or an Assistant
Secretary of the Borrower or the Subsidiary, as the case may be, certifying
as to the names, true signatures and incumbency of the officer or officers
of the Borrower or the Subsidiary authorized to execute and deliver the
Loan Documents, and certified copies of the
45
<PAGE>
following items: (i) the Borrower's and each Subsidiary's Certificate of
Incorporation, (ii) the Borrower's and each Subsidiary's Bylaws, (iii) a
certificate of the Secretary of State of the State of Nevada as to the good
standing of the Borrower as a Nevada corporation, and a certificate of the
Secretary of State of the State of incorporation of each Subsidiary as to
the good standing of such Subsidiary, and (iv) the action taken by the
Board of Directors of the Borrower authorizing the Borrower's execution,
delivery and performance of this Agreement, the Notes and the other Loan
Documents to which the Borrower is a party, and the action taken by the
Board of Directors of each Subsidiary authorizing such Subsidiary's
execution, delivery and performance of the Guaranty and the Contribution
Agreement;
(h) a Notice of Borrowing;
(i) a Borrowing Base Certificate, dated as of the Closing Date;
(j) the Contribution Agreement, in form and substance as set forth on
Exhibit L, duly executed and delivered, from each Subsidiary of the
---------
Borrower and the Borrower;
(k) evidence satisfactory to the Agent that arrangements have been
made by the Borrower for the payment in full, with the initial proceeds of
the Loans, and the termination of (x) the indebtedness outstanding under
the Credit Agreement dated as of November 21, 1995, among the Borrower and
certain banks, and (y) the $10,000,000 Term Loan outstanding from Wachovia
to the Borrower; and
(l) receipt of any necessary fees.
In addition, if the Borrower desires funding of a Euro-Dollar Loan on the
Closing Date, the Administrative Agent shall have received, the requisite number
of days prior to the Closing Date, a funding indemnification letter satisfactory
to it, pursuant to which (i) the Administrative Agent and the Borrower shall
have agreed upon the interest rate, amount of Borrowing and Interest Period for
such Euro-Dollar Loan , and (ii) the Borrower shall indemnify the Banks from any
loss or expense arising from the failure to close on the anticipated Closing
Date identified in such letter or the failure to borrow such Euro-Dollar Loan on
such date.
46
<PAGE>
SECTION 4.02. Conditions to All Borrowings. The obligation of each
----------------------------
Bank to make a Revolving Loan on the occasion of each Borrowing (and, with
respect to clauses (b), (c),and (d) below, the obligations of the Administrative
Agent to issue each Letter of Credit) is subject to the satisfaction of the
following conditions :
(a) receipt by the Administrative Agent of a Notice of Borrowing;
(b) the fact that, immediately before and after such Borrowing or
Letter of Credit issuance, no Default or Event of Default shall have
occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
contained in Article V of this Agreement shall be true on and as of the
date of such Borrowing or Letter of Credit issuance; and
(d) the fact that, immediately after such Borrowing or Letter of
Credit issuance, as appropriate, the conditions set forth in clauses (i)
and (ii) of Section 2.01 shall have been satisfied.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in paragraphs (b), (c) and (d) of this Section.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 5.01. Corporate Existence and Power. The Borrower is a
-----------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary except where the failure to be so qualified could not have a
Material Adverse Effect, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
47
<PAGE>
SECTION 5.02. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by the Borrower of this
- - -------------
Agreement, the Notes and the other Loan Documents (i) are within the Borrower's
corporate powers, (ii) have been duly authorized by all necessary corporate
action, (iii) require no action by or in respect of or filing with, any
governmental body, agency or official, (iv) do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower or any of its Subsidiaries, and (v) do not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 5.03. Binding Effect. This Agreement constitutes a valid and
--------------
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes, the Guaranty Agreements, and the other Loan Documents, when executed
and delivered in accordance with this Agreement, will constitute valid and
binding obligations of the Borrower or a Subsidiary, as the case may be,
enforceable in accordance with their respective terms, provided that the
--------
enforceability hereof and thereof is subject in each case to general principles
of equity and to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally.
SECTION 5.04. Financial Information. (a) The consolidated balance
---------------------
sheet of the Borrower and its Consolidated Subsidiaries as of March 31, 1997 and
the related consolidated statements of income, shareholders' equity and cash
flows for the Fiscal Year then ended, reported on by Arthur Andersen, LLP,
copies of which have been delivered to each of the Banks, and the unaudited
consolidated financial statements of the Borrower for the interim period ended
September 30, 1997, copies of which have been delivered to each of the Banks,
fairly present, in conformity with GAAP, the consolidated financial position of
the Borrower and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations and cash flows for such periods stated.
(b) Since March 31, 1997 there has been no event, act, condition or
occurrence having a Material Adverse Effect.
SECTION 5.05. No Litigation. There is no action, suit or proceeding
-------------
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its
48
<PAGE>
Subsidiaries before any court or arbitrator or any governmental body, agency or
official which would be reasonably likely to have a Material Adverse Effect or
which in any manner draws into question the validity of or could impair the
ability of the Borrower or any Subsidiary to perform its obligations under this
Agreement, the Notes or any of the other Loan Documents.
SECTION 5.06. Compliance with ERISA. (a) The Borrower and each member
---------------------
of the Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the PBGC or a Plan
under Title IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group
has incurred any withdrawal liability with respect to any Multiemployer Plan
under Title IV of ERISA, and no such liability is expected to be incurred.
SECTION 5.07. Compliance with Laws; Payment of Taxes. The Borrower and
--------------------------------------
its Subsidiaries are in material compliance with all applicable laws,
regulations and similar requirements of governmental authorities, except where
such compliance is being contested in good faith through appropriate
proceedings. There have been filed on behalf of the Borrower and its
Subsidiaries, or proper extensions have been obtained for, all Federal, state
and local income, excise, property and other tax returns which are required to
be filed by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Borrower or any Subsidiary have been
paid. The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate. United States income tax returns of the
Borrower and its Subsidiaries have been examined and closed through the Fiscal
Year ended March 31, 1992.
SECTION 5.08. Subsidiaries. Each of the Borrower's Subsidiaries is a
------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary except where the failure to be so qualified could not have a Material
Adverse Effect, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted. The Borrower has no Subsidiaries except for those
49
<PAGE>
Subsidiaries listed on Schedule 5.08, which accurately sets forth each such
Subsidiary's complete name and jurisdiction of incorporation.
SECTION 5.09. Investment Company Act. Neither the Borrower nor any of
----------------------
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 5.10. Public Utility Holding Company Act. Neither the Borrower
----------------------------------
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 5.11. Ownership of Property; Liens. Each of the Borrower and
----------------------------
its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
as permitted in Section 6.18.
SECTION 5.12. No Default. Neither the Borrower nor any of its
----------
Consolidated Subsidiaries is in default under or with respect to any agreement,
instrument or undertaking to which it is a party or by which it or any of its
property is bound which could have or cause a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing under any such
agreement, instrument, or undertaking.
SECTION 5.13. Full Disclosure. All information heretofore furnished
---------------
by the Borrower to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Administrative
Agent or any Bank will be, true, accurate and complete in every material respect
or based on reasonable estimates on the date as of which such information is
stated or certified. The Borrower has disclosed to the Banks in writing any and
all facts which could have or cause a Material Adverse Effect.
SECTION 5.14. Environmental Matters. (a) Neither the Borrower nor any
---------------------
Subsidiary is subject to any Environmental Liability which could have or cause a
Material Adverse Effect and neither the Borrower nor any Subsidiary has been
designated as a potentially responsible party under CERCLA or under any state
statute similar to CERCLA. None of the Properties has
50
<PAGE>
been identified on any current or proposed (i) National Priorities List under 40
C.F.R. (S) 300, (ii) CERCLIS list or (iii) any list arising from a state statute
similar to CERCLA.
(b) No Hazardous Materials have been or are being used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of,
managed or otherwise handled at, or shipped or transported to or from the
Properties or are otherwise present at, on, in or under the Properties, or, to
the best of the knowledge of the Borrower, at or from any adjacent site or
facility, except for Hazardous Materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed, or
otherwise handled or shipped or transported to or from the Properties in the
ordinary course of business and in compliance with all applicable Environmental
Requirements.
(c) The Borrower, and each of its Subsidiaries and Affiliates,
has procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection
with the operation of the Properties and the Borrower's, and each of its
Subsidiary's and Affiliate's, respective businesses.
SECTION 5.15. Capital Stock. All Capital Stock, debentures, bonds,
-------------
notes and all other securities of the Borrower and its Subsidiaries presently
issued and outstanding are validly and properly issued in accordance with all
applicable laws, including, but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws. The issued shares of Capital
Stock of the Borrower's Wholly Owned Subsidiaries are owned by the Borrower free
and clear of any Lien or adverse claim. At least a majority of the issued
shares of capital stock of each of the Borrower's other Subsidiaries (other than
Wholly Owned Subsidiaries) is owned by the Borrower free and clear of any Lien
or adverse claim.
SECTION 5.16. Margin Stock. Neither the Borrower nor any of its
------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock, or be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulation G, T, U or X.
51
<PAGE>
SECTION 5.17. Insolvency. After giving effect to the execution and
----------
delivery of the Loan Documents and the making of the Loans under this Agreement:
(i) neither the Borrower nor any Subsidiary will (x) be "insolvent," within the
meaning of such term as used in O.C.G.A. (S) 18-2-22 or as defined in (S) 101 of
the "Bankruptcy Code", or Section 2 of either the "UFTA" or the "UFCA", or as
defined or used in any "Other Applicable Law" (as those terms are defined
below), or (y) be unable to pay its debts generally as such debts become due
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA
or Section 6 of the UFCA, or (z) have an unreasonably small capital to engage in
any business or transaction, whether current or contemplated, within the meaning
of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section 5 of the
UFCA; and (ii) the obligations of the Borrower and each Subsidiary under the
Loan Documents and with respect to the Loans will not be rendered avoidable
under any Other Applicable Law. For purposes of this Section 4.17, "Bankruptcy
Code" means Title 11 of the United States Code, "UFTA" means the Uniform
Fraudulent Transfer Act, "UFCA" means the Uniform Fraudulent Conveyance Act, and
"Other Applicable Law" means any other applicable law pertaining to fraudulent
transfers or acts voidable by creditors, in each case as such law may be amended
from time to time.
SECTION 5.18. Insurance. The Borrower and each of its Subsidiaries
---------
has (either in the name of the Borrower or in such Subsidiary's own name), with
financially sound and reputable insurance companies, insurance in at least such
amounts and against at least such risks (including on all its property, and
public liability and worker's compensation) as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
ARTICLE VI
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable hereunder or under any Note remains unpaid:
SECTION 6.01. Information. The Borrower will deliver to each of the
-----------
Banks:
52
<PAGE>
(a) as soon as available and in any event within 90 days after the end
of each Fiscal Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income, shareholders' equity and cash flows for
such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, all certified by Arthur Andersen,
LLP, or other independent public accountants of nationally recognized
standing, with such certification to be free of exceptions and
qualifications not reasonably acceptable to the Required Banks;
(b) as soon as available and in any event within 45 days after the end
of each of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the
end of such Fiscal Quarter and the related statement of income and
statement of cash flows for such Fiscal Quarter and for the portion of the
Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each
case in comparative form the figures for the corresponding Fiscal Quarter
and the corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
GAAP and consistency by the chief financial officer or the chief accounting
officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of the
---------
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
6.05, 6.15 through 6.16, 6.18, 6.20 through 6.23, and 6.25, on the date of
such financial statements and (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of annual financial
statements referred to in paragraph (a) above, a statement of the firm of
independent public accountants which reported on such statements to the
effect that nothing has come to their attention to cause
53
<PAGE>
them to believe that any Default existed on the date of such financial
statements;
(e) within 5 Domestic Business Days after the Borrower becomes aware
of the occurrence of any Default, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth the
details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or monthly reports
which the Borrower shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA,
a copy of such notice; or (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, a copy of such notice;
(i) within 20 days after the end of each calendar month, a
Borrowing Base Certificate computed as of the last day of such calendar month
; and
(j) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
SECTION 6.02. Inspection of Property, Books and Records. The Borrower
-----------------------------------------
will (i) keep, and cause each Subsidiary
54
<PAGE>
to keep, proper books of record and account in which full, true and correct
entries in conformity with GAAP shall be made of all dealings and transactions
in relation to its business and activities; and (ii) permit, and cause each
Subsidiary to permit, representatives of any Bank at such Bank's expense prior
to the occurrence of a Default and at the Borrower's expense after the
occurrence of a Default to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books and records and
to discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants. The Borrower agrees to
cooperate and assist in such visits and inspections, in each case at such
reasonable times and as often as may reasonably be desired.
SECTION 6.03. Maintenance of Existence. The Borrower shall, and shall
------------------------
cause each Subsidiary to, maintain its corporate existence and carry on its
business in substantially the same manner and in substantially the same fields
as such business is now carried on and maintained.
SECTION 6.04. Dissolution. Neither the Borrower nor any of its
-----------
Subsidiaries shall suffer or permit dissolution or liquidation either in whole
or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except through corporate reorganization to the extent permitted by
Section 6.05.
SECTION 6.05. Consolidations, Mergers and Sales of Assets. The
-------------------------------------------
Borrower will not, nor will it permit any Subsidiary to, consolidate or merge
with or into, or sell, lease or otherwise transfer all or any substantial part
of its assets to, any other Person, or discontinue or eliminate any business
line or segment, provided that (a) the Borrower may merge with another Person if
--------
(i) such Person was organized under the laws of the United States of America or
one of its states, (ii) the Borrower is the corporation surviving such merger
and (iii) immediately after giving effect to such merger, no Default shall have
occurred and be continuing, (b) Subsidiaries of the Borrower may merge with one
another, and (c) the foregoing limitation on the sale, lease or other transfer
of assets and on the discontinuation or elimination of a business line or
segment shall not prohibit, during any Fiscal Quarter, a transfer of assets or
the discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all
55
<PAGE>
other assets transferred, and all other assets utilized in all other business
lines or segments discontinued, during such Fiscal Quarter and the immediately
preceding 3 Fiscal Quarters, either (x) constituted more than 10% of
Consolidated Total Assets at the end of the most recent Fiscal Year immediately
preceding such Fiscal Quarter, or (y) contributed more than 10% of Consolidated
Operating Profits during the 4 Fiscal Quarters immediately preceding such Fiscal
Quarter.
SECTION 6.06. Use of Proceeds. No portion of the proceeds of the
---------------
Loans will be used by the Borrower or any Subsidiary (i) in connection with,
whether directly or indirectly, any tender offer for, or other acquisition of,
stock of any corporation with a view towards obtaining control of such other
corporation, unless such tender offer or other acquisition is to be made on a
negotiated basis and with the approval (where the Person being acquired is a
publicly traded company) of the Board of Directors of the Person to be acquired,
and the provisions of Section 6.17 would not be violated, (ii) directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any Margin Stock, or (iii) for any purpose in violation
of any applicable law or regulation.
SECTION 6.07. Compliance with Laws; Payment of Taxes. The Borrower
--------------------------------------
will, and will cause each of its Subsidiaries and each member of the Controlled
Group to, be in material compliance with applicable laws (including but not
limited to ERISA), regulations and similar requirements of governmental
authorities (including but not limited to PBGC), except where the necessity of
such compliance is being contested in good faith through appropriate proceedings
diligently pursued. The Borrower will, and will cause each of its Subsidiaries
to, pay promptly when due all taxes, assessments, governmental charges, claims
for labor, supplies, rent and other obligations which: (A) if unpaid, might
become a lien against the property of the Borrower or any Subsidiary, except
liabilities being contested in good faith and against which, if requested by the
Administrative Agent, the Borrower will set up reserves in accordance with GAAP;
and (B) when combined with all other such taxes, assessments, governmental
charges, claims for labor, supplies, rent and other obligations not paid
promptly when due during the current Fiscal Quarter and the immediately
preceding three Fiscal Quarters is greater than $500,000.
SECTION 6.08. Insurance. The Borrower will maintain, and will cause
---------
each of its Subsidiaries to maintain (either in the name of the Borrower or in
such Subsidiary's own name),
56
<PAGE>
with financially sound and reputable insurance companies, insurance on all its
property in at least such amounts and against at least such risks (including on
all its property, and public liability and worker's compensation) as are usually
insured against in the same general area by companies of established repute
engaged in the same or similar business.
SECTION 6.09. Change in Fiscal Year. The Borrower will not change its
---------------------
Fiscal Year without the consent of the Required Banks.
SECTION 6.10. Maintenance of Property. The Borrower shall, and shall
-----------------------
cause each Subsidiary to, maintain all of its properties and assets in good
condition, repair and working order, ordinary wear and tear excepted.
SECTION 6.11. Environmental Notices. The Borrower shall furnish to
---------------------
the Banks and the Administrative Agent prompt written notice of all
Environmental Liabilities, pending, threatened in writing or anticipated (if
material) Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in, under or in any way
affecting the Properties or, to the extent the Borrower is aware, any adjacent
property, and all facts, events, or conditions that could lead to any of the
foregoing.
SECTION 6.12. Environmental Matters. The Borrower and its
---------------------
Subsidiaries will not, and will not permit any Third Party to, use, produce,
manufacture, process, treat, recycle, generate, store, dispose of, manage at, or
otherwise handle, or ship or transport to or from the Properties any Hazardous
Materials except for Hazardous Materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed, managed, or otherwise
handled in the ordinary course of business in compliance with all applicable
Environmental Requirements.
SECTION 6.13. Environmental Release. The Borrower agrees that upon
---------------------
the occurrence of an Environmental Release at or on any of the Properties it
will act immediately to investigate the extent of, and to take appropriate
remedial action to eliminate, such Environmental Release, whether or not ordered
or otherwise directed to do so by any Environmental Authority.
SECTION 6.14. Transactions with Affiliates. Neither the Borrower nor
----------------------------
any of its Subsidiaries shall enter into, or be a party to, any transaction with
any Affiliate of the
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Borrower or such Subsidiary (which Affiliate is not the Borrower or a Wholly
Owned Subsidiary), except as permitted by law and in the ordinary course of
business and pursuant to reasonable terms which are fully disclosed in public
documents which have been delivered to the Banks, and are no less favorable to
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person which is not an Affiliate.
SECTION 6.15. Restricted Payments. The Borrower will not declare or
-------------------
make any Restricted Payment unless, after giving effect thereto, the aggregate
of all Restricted Payments declared or made since the Closing Date does not
exceed an amount equal to the sum of (i)$1,000,000 plus (ii) 25% of cumulative
Consolidated Net Income since the Closing Date, and no Default shall be in
existence or be created thereby.
SECTION 6.16. Loans or Advances. Neither the Borrower nor any of its
-----------------
Subsidiaries shall make loans or advances to any Person except as permitted by
Section 6.17 and except: (i) loans or advances to employees not exceeding
$2,000,000 in the aggregate principal amount outstanding at any time, in each
case made in the ordinary course of business and consistent with practices
existing on the Closing Date; and (ii) deposits required by government agencies
or public utilities; and (iii) loans and advances to Wholly Owned Subsidiaries;
and (iv) advances to drivers made in the ordinary course of business and
consistent with practices existing on the Closing Date; provided that after
--------
giving effect to the making of any loans, advances or deposits permitted by this
Section, no Default shall be in existence or be created thereby.
SECTION 6.17. Investments. Neither the Borrower nor any of its
-----------
Subsidiaries shall make Investments in any Person except as permitted by Section
6.16 and except Investments in (i) direct obligations of the United States
Government maturing within one year, (ii) certificates of deposit issued by a
commercial bank whose credit is satisfactory to the Administrative Agent, (iii)
commercial paper rated A1 or the equivalent thereof by S&P or P1 or the
equivalent thereof by Moody's and in either case maturing within 6 months after
the date of acquisition,(iv) tender bonds the payment of the principal of and
interest on which is fully supported by a letter of credit issued by a United
States bank whose long-term certificates of deposit are rated at least AA or the
equivalent thereof by S&P and Aa or the equivalent thereof by Moody's, and/or
(v) acquisitions of the stock of a Person permitted by
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Section 6.25; provided, however, immediately after giving effect to the making
-----------------
of any Investment, no Default shall have occurred and be continuing.
SECTION 6.18. Liens. Neither the Borrower nor any Consolidated
-----
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $34,000,000;
(b) any Lien on any specific fixed asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring or constructing such asset, provided that, such Lien attaches to
-------- ----
such asset within 30 days of the acquisition or completion of construction
thereof;
(c) Liens on Revenue Equipment;
(d) Liens securing Debt owing by any Subsidiary to the Borrower;
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
paragraphs of this Section, provided that (i) such Debt is not secured by
--------
any additional assets, and (ii) the amount of such Debt secured by any such
Lien is not increased; and
(f) Liens incidental to the conduct of its business or the ownership
of its assets which (i) do not secure Debt and (ii) do not in the aggregate
materially detract from the value of its assets or materially impair the
use thereof in the operation of its business.
SECTION 6.19. Restrictions on Ability of Subsidiaries to Pay
----------------------------------------------
Dividends. The Borrower shall not permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (i) pay any
dividends or make any other distributions on its Capital Stock or any other
interest or (ii) make or repay any loans or advances to the Borrower or the
parent of such Subsidiary.
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SECTION 6.20. Limitation on Debt. Neither the Borrower nor any
------------------
Subsidiary will create, assume or suffer to exist any Debt, except:
(a) Debt hereunder and under the Notes;
(b) Debt owing to the Borrower or another Wholly Owned Subsidiary;
and
(b) other Debt, provided that the aggregate amount of all such Debt
outstanding at any one time shall not exceed $75,000,000.
SECTION 6.21. Ratio of Consolidated Total Adjusted Debt to
--------------------------------------------
Consolidated EBILTDA. The ratio of Consolidated Total Adjusted Debt to
- - --------------------
Consolidated EBILTDA will not at any time exceed 3.00 to 1.00.
SECTION 6.22. Ratio of Consolidated EBILT to Consolidated Fixed
-------------------------------------------------
Charges. The ratio of (a) Consolidated EBILT to (b) Consolidated Fixed Charges
- - -------
will at all times exceed 1.25 to 1.00.
SECTION 6.23. Minimum Consolidated Net Worth. Consolidated Net Worth
------------------------------
will at no time be less than 90% of the Consolidated Net Worth reflected on the
balance sheet of the Borrower as at September 30, 1997, plus the sum of (i) 50%
of the cumulative Reported Net Income of the Borrower and its Consolidated
Subsidiaries during any period after September 30, 1997 (taken as one accounting
period), calculated quarterly at the end of each Fiscal Quarter but excluding
from such calculations of Reported Net Income for purposes of this clause (i),
any Fiscal Quarter in which the Reported Net Income of the Borrower and its
Consolidated Subsidiaries is negative, and (ii) 100% of the cumulative Net
Proceeds of Capital Stock received during any period after the Closing Date,
calculated quarterly at the end of each Fiscal Quarter.
SECTION 6.24. Limitation on Negative Pledge Clauses. The Borrower will
-------------------------------------
not, nor will it permit any Subsidiary to, enter into any agreement with any
Person other than the Banks pursuant to this Agreement or any other Loan
Document which prohibits or limits the ability of the Borrower or any Subsidiary
to create, incur, assume or suffer to exist any Lien upon any of its properties,
assets, or revenues, whether now owned or hereafter acquired.
60
<PAGE>
SECTION 6.25. Limitation on Acquisitions. The Borrower will not, nor
--------------------------
will it permit any Subsidiary to, agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary course
of business consistent with past practices and other than the acquisition of
100% of the capital stock of Victory Express, Inc. pursuant to the terms of that
certain Stock Purchase Agreement between the Borrower and certain Sellers dated
December 16, 1997), except that the Borrower and its Subsidiaries may acquire
the stock or assets of any Person provided that:
(a) the aggregate total consideration for all such acquisitions made
during calendar year 1998 (other than the acquisition of 100% of the
capital stock of Victory Express, Inc.) shall not exceed $50,000,000, and
thereafter the aggregate total consideration for all such acquisitions made
in any Fiscal Year shall not exceed $75,000,000;
(b) if a stock acquisition, the Person acquired is in the same line of
business as the Borrower, 100% of such Person's stock is acquired, and the
acquisition is made on a negotiated basis with the approval (where the
Person being acquired is a publicly traded company) of the Board of
Directors of the Person acquired;
(c) if an asset acquisition, the assets acquired are useful in the
then business of the Borrower;
(d) no Default or Event of Default has occurred or is continuing or
would exist after giving effect thereto;
(e) the Borrower has provided the Administrative Agent with prior
written notice of such acquisition;
(f) the Borrower has demonstrated to the Administrative Agent, based
on a pro forma Compliance Certificate, compliance with Sections 6.21, 6.22,
--- -----
and 6.23 on a pro forma basis immediately prior to and after giving effect
--- -----
to each such acquisition on the assumption that such acquisition occurred
twelve months previously; and
(g) the Borrower has received the approval of the Required Banks for
any acquisition or series of related acquisitions where the aggregate total
consideration for any such acquisition or series of acquisitions during
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calendar year 1998 exceeds $25,000,000 or in any Fiscal Year thereafter
exceeds $50,000,000.
SECTION 6.26. Creation of Subsidiaries. The Borrower will not, nor
------------------------
will it permit any Subsidiary to, create any Subsidiary except for the creation
of a Wholly Owned Subsidiary of the Borrower or of a Wholly Owned Subsidiary,
provided that (i) such Subsidiary is organized under the laws of a jurisdiction
within the United States of America, (ii) such Subsidiary executes at the time
of its creation the Guaranty Agreement, (iii) an opinion of counsel, acceptable
to the Administrative Agent, is delivered to the Banks confirming the due
organization of such Subsidiary, the enforceability of the Guaranty Agreement
against such Subsidiary, and such other matters as the Administrative Agent may
reasonably request, and (iv) no Default exists immediately prior to or after the
creation of the Subsidiary.
ARTICLE VII
-----------
DEFAULTS
SECTION 7.01. Events of Default. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan
or any Reimbursement Obligations with respect to any Letter of Credit or
shall fail to pay any interest on any Loan within 5 Domestic Business Days
after such interest shall become due, or shall fail to pay any fee or other
amount payable hereunder within 5 Domestic Business Days after such fee or
other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 6.01(e), 6.02(ii), 6.03 through 6.06, inclusive, or
Sections 6.15 through 6.25, inclusive; or
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained or incorporated by reference in this Agreement (other
than those covered by paragraph (a) or (b) above) and such failure shall
not have been cured within 30 days after the earlier to occur of (i)
written notice thereof has been given to the Borrower by the Administrative
Agent at the request of any
62
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Bank or (ii) the Borrower otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or statement made by
the Borrower in Article V of this Agreement or by the Borrower or any
Subsidiary in any certificate, financial statement or other document
delivered pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of Debt in an aggregate amount in excess of $1,000,000 outstanding
(other than the Notes) when due or within any applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt in an aggregate amount in excess of
$1,000,000 outstanding of the Borrower or any Subsidiary (including,
without limitation, any required mandatory prepayment or "put" of such Debt
to the Borrower or any Subsidiary) or enables (or, with the giving of
notice or lapse of time or both, would enable) the holders of such Debt or
commitment or any Person acting on such holders' behalf to accelerate the
maturity thereof or terminate any such commitment (including, without
limitation, any required mandatory prepayment or "put" of such Debt to the
Borrower or any Subsidiary); or
(g) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally,
or shall admit in writing its inability, to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
or
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Subsidiary seeking
63
<PAGE>
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall fail to
pay when due any material amount which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of ERISA by the
Borrower, any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any such Plan or Plans or a proceeding shall be instituted by a
fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must
be terminated; or
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $500,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against the Borrower or any
Subsidiary under Section 6323 of the Code or a lien of the PBGC shall be
filed against the Borrower or any Subsidiary under Section 4068 of ERISA
and in either case such lien shall remain undischarged for a period of 25
days after the date of filing; or
(l) (i) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934) of outstanding shares of the voting stock of the Borrower
64
<PAGE>
representing 20% or more of the votes eligible to be cast for the election
of the Borrower's Board of Directors; or (ii) as of any date a majority of
the Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board
of Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors
by the Board of Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described in clause
(B); or
(m) the occurrence of any event, act, occurrence, or condition which
the Required Banks determine either does or has a reasonable probability of
causing a Material Adverse Effect.
then, and in every such event, (i) the Administrative Agent shall, if requested
by the Required Banks, by notice to the Borrower terminate the Commitments and
they shall thereupon terminate, and (ii) the Administrative Agent shall, if
requested by the Required Banks, by notice to the Borrower declare the Notes
(together with accrued interest thereon), and all other amounts payable
hereunder and under the other Loan Documents, to be, and the Notes (together
with accrued interest thereon), and all other amounts payable hereunder and
under the other Loan Documents shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower together with interest at the Default
Rate accruing on the principal amount thereof from and after the date of such
Event of Default; provided that if any Event of Default specified in paragraph
--------
(g) or (h) above occurs with respect to the Borrower, without any notice to the
Borrower or any other act by the Administrative Agent or the Banks, the
Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) and all other amounts payable hereunder and under the other
Loan Documents shall automatically and without notice become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower together with interest thereon at the
Default Rate accruing on the principal amount thereof from and after the date of
such Event of Default. In addition, upon the occurrence of an Event of Default,
to the extent of any existing Letter of Credit Obligations, the Administrative
Agent may immediately advance the principal amount thereof and set aside the
amounts so advanced as a collateral reserve for
65
<PAGE>
payment of the Reimbursement Obligations relating to Letters of Credit which are
subsequently funded. After all Letters of Credit have been cancelled and all
Reimbursement Obligations have been satisfied, and the Administrative Agent has
been reimbursed all amounts funded by it with respect thereto, any balance
remaining in said collateral reserve may be applied to other amounts owed by the
Borrower hereunder, and, if none, shall be remitted to Borrower. Notwithstanding
the foregoing, the Administrative Agent shall have available to it all other
remedies at law or equity, and shall exercise any one or all of them at the
request of the Required Banks.
SECTION 7.02. Notice of Default. The Administrative Agent shall give
-----------------
notice to the Borrower of any Default under Section 7.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Appointment; Powers and Immunities. (a) Each Bank
----------------------------------
hereby irrevocably appoints and authorizes the Administrative Agent to act as
its Administrative Agent hereunder and under the other Loan Documents with such
powers as are specifically delegated to the Administrative Agent by the terms
hereof and thereof, together with such other powers as are reasonably incidental
thereto. The Administrative Agent: (a) shall have no duties or responsibilities
except as expressly set forth in this Agreement and the other Loan Documents,
and shall not by reason of this Agreement or any other Loan Document be a
trustee for any Bank; (b) shall not be responsible to the Banks for any
recitals, statements, representations or warranties contained in this Agreement
or any other Loan Document, or in any certificate or other document referred to
or provided for in, or received by any Bank under, this Agreement or any other
Loan Document, or for the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or any other
document referred to or provided for herein or therein or for any failure by the
Borrower to perform any of its obligations hereunder or thereunder; (c) shall
not be required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by the
Required Banks, and then only on terms and conditions satisfactory to the
Administrative Agent, and (d) shall not be responsible for any action taken or
omitted to be
66
<PAGE>
taken by it hereunder or under any other Loan Document or any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or wilful misconduct.
The Administrative Agent may employ Agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such Agents or attorneys-
in-fact selected by it with reasonable care. The provisions of this Article VIII
are solely for the benefit of the Administrative Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Administrative Agent shall act solely as
Administrative Agent of the Banks and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for the Borrower. The duties of the Administrative Agent shall be ministerial
and administrative in nature, and the Administrative Agent shall not have by
reason of this Agreement or any other Loan Document a fiduciary relationship in
respect of any Bank.
(b) Each Bank hereby designates NationsBank, N.A. as Syndication
Agent, BankBoston, N.A. as Documentation Agent, and SunTrust Bank, Chattanooga,
N.A. as Co-Agent. Each of the Syndication Agent, Documentation Agent and Co-
Agent, in such capacities, shall have no duties or obligations whatsoever under
this Agreement or any other Loan Document or any other document or any matter
related hereto and thereto, but shall nevertheless be entitled to all the
indemnities and other protection afforded to the Administrative Agent under this
Article VIII.
SECTION 8.02. Reliance by Administrative Agent. The Administrative
--------------------------------
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telecopier, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants or other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this
Agreement or any other Loan Document, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Required Banks, and
such instructions of the Required Banks in any action taken or
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failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 8.03. Defaults. The Administrative Agent shall not be deemed
--------
to have knowledge of the occurrence of a Default or an Event of Default (other
than the nonpayment of principal of or interest on the Loans) unless the
Administrative Agent has received notice from a Bank or the Borrower specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default or an Event of Default, the Administrative Agent
shall give prompt notice thereof to the Banks. The Administrative Agent shall
give each Bank prompt notice of each nonpayment of principal of or interest on
the Loans whether or not such Bank has received any notice of the occurrence of
such nonpayment. The Administrative Agent shall (subject to Section 10.06) take
such action hereunder with respect to such Default or Event of Default as shall
be directed by the Required Banks, provided that, unless and until the
--------
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such 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 Banks.
SECTION 8.04. Rights of Administrative Agent and its Affiliates as a
------------------------------------------------------
Bank. With respect to the Loans made by the Administrative Agent and any
- - ----
Affiliate of the Administrative Agent, Wachovia in its capacity as a Bank
hereunder and any Affiliate of the Administrative Agent or such Affiliate in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though Wachovia were not acting as
the Administrative Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Wachovia in its individual capacity and any
Affiliate of the Administrative Agent in its individual capacity. The
Administrative Agent and any Affiliate of the Administrative Agent may (without
having to account therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with the
Borrower (and any of the Borrower's Affiliates) as if Wachovia were not acting
as the Administrative Agent, and the Administrative Agent and any Affiliate of
the Administrative Agent may accept fees and other consideration from the
Borrower (in addition to any agency fees and arrangement fees heretofore agreed
to between the Borrower and the Administrative Agent) for services in connection
with
68
<PAGE>
this Agreement or any other Loan Document or otherwise without having to account
for the same to the Banks.
SECTION 8.05. Indemnification. Each Bank severally agrees to
---------------
indemnify the Administrative Agent, to the extent the Administrative Agent shall
not have been reimbursed by the Borrower, ratably in accordance with its
Commitment, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (excluding,
unless an Event of Default has occurred and is continuing, the normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or
any such other documents; provided that no Bank shall be liable for any of the
--------
foregoing to the extent they arise from the gross negligence or wilful
misconduct of the Administrative Agent. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the Administrative
Agent, be insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
SECTION 8.06 Consequential Damages. THE ADMINISTRATIVE AGENT SHALL
---------------------
NOT BE RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR
ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED
AS A RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.07. Payee of Note Treated as Owner. The Administrative
------------------------------
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes hereof unless and until a written notice of the assignment or transfer
thereof shall have been filed with the Administrative Agent and the provisions
of Section 10.08(c) have been satisfied. Any requests, authority or consent of
any Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor or replacement thereof.
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SECTION 8.08. Nonreliance on Administrative Agent and Other Banks.
---------------------------------------------------
Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. The
Administrative Agent shall not be required to keep itself (or any Bank) informed
as to the performance or observance by the Borrower of this Agreement or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
other Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Administrative Agent
hereunder or under the other Loan Documents, the Administrative Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any other Person (or any of their Affiliates) which may come into
the possession of the Administrative Agent.
SECTION 8.09. Failure to Act. Except for action expressly required of
--------------
the Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Banks of their indemnification obligations
under Section 8.05 against any and all liability and expense which may be
incurred by the Administrative Agent by reason of taking, continuing to take, or
failing to take any such action.
SECTION 8.10. Resignation or Removal of Administrative Agent. Subject
----------------------------------------------
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Banks and the Borrower and the Administrative Agent may be
removed at any time with or without cause by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the
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retiring Administrative Agent's notice of resignation or the Required Banks'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent. Any
successor Administrative Agent shall be a bank which has a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article
VIII shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder.
ARTICLE IX
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 9.01. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period:
- - ------
(a) the Administrative Agent determines that deposits in Dollars (in
the applicable amounts) are not being offered in the relevant market for
such Interest Period, or
(b) the Required Banks advise the Administrative Agent that the London
Interbank Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding the Euro-
Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make the Euro-Dollar Loans specified in such notice
shall be suspended. Unless the Borrower notifies the Administrative Agent at
least 2 Domestic Business Days before the date of any Borrowing of such Euro-
Dollar Loans for which a Notice of Borrowing has previously been given that it
elects
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not to borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 9.02. Illegality. If, after the date hereof, the adoption of
----------
any applicable law, rule or regulation, or any change therein or any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Administrative Agent, the Administrative Agent shall forthwith give
notice thereof to the other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Administrative Agent that the circumstances giving
rise to such suspension no longer exist, the obligation of such Bank to make
Euro-Dollar Loans shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Lending Office if such designation will avoid the need for giving such
notice and will not, in the judgment of such Bank, be otherwise disadvantageous
to such Bank. If such Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to maturity and shall
so specify in such notice, the Borrower shall immediately prepay in full the
then outstanding principal amount of each Euro-Dollar Loan of such Bank,
together with accrued interest thereon and any amount due such Bank pursuant to
Section 9.05(a). Concurrently with prepaying each such Euro-Dollar Loan, the
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans of the other Banks), and such Bank shall make such
a Base Rate Loan.
SECTION 9.03. Increased Cost and Reduced Return.
---------------------------------
(a) If after the date hereof, a Change of Law or compliance by any
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority:
(i) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement
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(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding with
respect to any Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage) against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its
Lending Office); or
(ii) shall impose on any Bank (or its Lending Office) or on the
United States market for certificates of deposit or the London
interbank market any other condition affecting its Euro-Dollar Loans,
its Notes or its obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Lending Office) under
this Agreement or under its Notes with respect thereto, by an amount deemed by
such Bank to be material, then,
(iii) the Administrative Agent or such Bank shall promptly
deliver to the Borrower a certificate stating the change which has
occurred or the reserve requirements or other conditions which have
been imposed on the Administrative Agent or such Bank (or its Lending
Office) or the request, direction or requirement with which it has
complied, together with the date hereof; and
(iv) the Borrower shall pay to the Administrative Agent or such
Bank within 30 days of written request (which request shall state the
amount of increased cost, reduction or payment and the way in which
such amount has been calculated), such amount or amounts as will
compensate the Administrative Agent or such Bank for the additional
cost, reduction of return or payment incurred by the Administrative
Agent or such other Bank and, at the option of the Borrower at any
time while the Administrative Agent or such Bank is requesting such
additional amount or amounts, upon the giving of notice to the Bank
and payment to such Bank of all amounts owing to such Bank hereunder,
the Borrower may require such Bank to enter into an Assignment and
Assumption Agreement pursuant to which such Bank
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shall transfer all of its rights and interests hereunder and under the
other Loan Documents to a third party selected by the Borrower and
consented to by the Administrative Agent. If such written request is
given within 30 days after the event which results in such increased
cost, reduction of return or reduction of payments, such amounts will
be calculated from the date of such event; otherwise, such amounts
will be calculated as of the date on which the Administrative Agent or
such Bank makes the aforesaid written request. The written request of
the Administrative Agent or such Bank as to the additional amounts
payable pursuant to this paragraph delivered to the Borrower shall be
conclusive evidence of the amount thereof in the absence of manifest
error.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office)
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any Authority, has or would have the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
30 days after demand by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such
reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. A certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In
determining such
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amount, such Bank may use any reasonable averaging and attribution methods.
(d) The provisions of this Section 9.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any
calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.
SECTION 9.04. Base Rate Loans Substituted for Affected Euro-Dollar
----------------------------------------------------
Loans. If (i) the obligation of any Bank to make or maintain Euro-Dollar Loans
- - -----
has been suspended pursuant to Section 9.02 or (ii) any Bank has demanded
compensation under Section 9.03, and the Borrower shall, by at least 5 Euro-
Dollar Business Days' prior notice to such Bank through the Administrative
Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as Euro-
Dollar Loans shall be made instead as Base Rate Loans (in all cases
interest and principal on such Loans shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
SECTION 9.05. Compensation. Upon the request of any Bank, delivered
------------
to the Borrower and the Administrative Agent, the Borrower shall pay to such
Bank such amount or amounts as shall compensate such Bank for any loss, cost or
expense incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.10, 2.11, 7.01,
9.02 or otherwise) of a Euro-Dollar Loan on a date other than the last day
of an Interest Period for such Loan; or
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder; or
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(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the
date for the Euro-Dollar Borrowing specified in the applicable Notice of
Borrowing delivered pursuant to Section 2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other
-------
communications to any party hereunder shall be in writing (including telecopier
or similar writing) and shall be given to such party at its address or
telecopier number set forth on the signature pages hereof or such other address
or telecopier number as such party may hereafter specify for the purpose by
notice to each other party. Each such notice, request or other communication
shall be effective (i) if given by telecopier, when such telecopy is transmitted
to the telecopier number specified in this Section and the confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article II or
--------
Article IX shall not be effective until received.
SECTION 10.02. No Waivers. No failure or delay by the Administrative
----------
Agent or any Bank in exercising any right, power or privilege hereunder or under
any Note or other Loan Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further
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exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.03. Expenses; Documentary Taxes. The Borrower shall pay
---------------------------
(i) all out-of-pocket expenses of the Administrative Agent, including fees and
disbursements of special counsel for the Banks and the Administrative Agent, in
connection with the preparation of this Agreement and the other Loan Documents,
any waiver or consent hereunder or thereunder or any amendment hereof or thereof
or any Default or alleged Default hereunder or thereunder and (ii) if a Default
occurs, all out-of-pocket expenses incurred by the Administrative Agent and the
Banks, including fees and disbursements of counsel, in connection with such
Default and collection and other enforcement proceedings resulting therefrom,
including out-of-pocket expenses incurred in enforcing this Agreement and the
other Loan Documents. The Borrower shall indemnify the Administrative Agent and
each Bank against any transfer taxes, documentary taxes, assessments or charges
made by any Authority by reason of the execution and delivery of this Agreement
or the other Loan Documents.
SECTION 10.04. Indemnification. The Borrower shall indemnify the
---------------
Administrative Agent, the Banks and each Affiliate thereof and their respective
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages to which any of them
may become subject, insofar as such losses, liabilities, claims or damages arise
out of, result from, or are in any way directly or indirectly related to (a)
this Agreement or any other Loan Document or the transactions contemplated
thereby, or (b) any actual or proposed use by the Borrower of the proceeds of
any extension of credit by any Bank hereunder, or (c) any breach by the Borrower
of this Agreement or any other Loan Document, or (d) any investigation,
litigation (including, without limitation, any actions taken by the
Administrative Agent or any of the Banks to enforce this Agreement or any of the
other Loan Documents) or other proceeding (including, without limitation, any
threatened investigation or proceeding) relating to the foregoing, and the
Borrower shall reimburse the Administrative Agent and each Bank, and each
Affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any expenses (including, without limitation, legal fees)
incurred in connection with any such investigation or proceeding; but excluding
any such losses, liabilities, claims, damages or
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expenses incurred by reason of the gross negligence or wilful misconduct of the
Person to be indemnified.
SECTION 10.05. Setoff; Sharing of Setoffs. (a) The Borrower hereby
--------------------------
grants to the Administrative Agent and each Bank a lien for all indebtedness and
obligations owing to them from the Borrower upon all deposits or deposit
accounts, of any kind, or any interest in any deposits or deposit accounts
thereof, now or hereafter pledged, mortgaged, transferred or assigned to the
Administrative Agent or any such Bank or otherwise in the possession or control
of the Administrative Agent or any such Bank for any purpose for the account or
benefit of the Borrower and including any balance of any deposit account or of
any credit of the Borrower with the Administrative Agent or any such Bank,
whether now existing or hereafter established hereby authorizing the
Administrative Agent and each Bank at any time or times with or without prior
notice to apply such balances or any part thereof to such of the indebtedness
and obligations owing by the Borrower to the Banks and/or the Administrative
Agent then past due and in such amounts as they may elect, and whether or not
the collateral, if any, or the responsibility of other Persons primarily,
secondarily or otherwise liable may be deemed adequate. For the purposes of
this paragraph, all remittances and property shall be deemed to be in the
possession of the Administrative Agent or any such Bank as soon as the same may
be put in transit to it by mail or carrier or by other bailee.
(b) Each Bank agrees that if it shall, by exercising any right of
setoff or counterclaim or resort to collateral security or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest owing
with respect to the Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of all principal
and interest owing with respect to the Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks owing to such other Banks,
and such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
owing to such other Banks shall be shared by the Banks pro rata; provided that
--------
(i) nothing in this Section shall impair the right of any Bank to exercise any
right of setoff or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes, and (ii) if all or any portion of such payment
received by the purchasing Bank is
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thereafter recovered from such purchasing Bank, such purchase from each other
Bank shall be rescinded and such other Bank shall repay to the purchasing Bank
the purchase price of such participation to the extent of such recovery together
with an amount equal to such other Bank's ratable share (according to the
proportion of (x) the amount of such other Bank's required repayment to (y) the
total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
setoff or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 10.06. Amendments and Waivers. (a) Any provision of this
----------------------
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the
Administrative Agent are affected thereby, by the Administrative Agent);
provided that, no such amendment or waiver shall, unless signed by all Banks,
- - --------
(i) change the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) change the principal of or lower the rate of interest on any
Loan or lower any fees (other than fees payable to the Administrative Agent)
hereunder, (iii) change the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder, including any mandatory prepayments
as required under Section 2.10, (iv) change the amount of principal, interest or
fees due on any date fixed for the payment thereof, including any mandatory
prepayments as required under Section 2.10, (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
percentage of Banks, which shall be required for the Banks or any of them to
take any action under this Section or any other provision of this Agreement,
(vi) change the manner of application of any payments made under this Agreement
or the Notes, (vii) release or substitute all or any substantial part of the
collateral (if any) held as security for the Loans, viii) release any Guarantee
given to support payment of the Loans, or (ix) extend the expiration date of any
Letter of Credit beyond the Termination Date.
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(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrower and shall
be afforded an opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Agreement shall be delivered
by the Borrower to each Bank forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks.
The Borrower will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
SECTION 10.07. No Margin Stock Collateral. Each of the Banks
--------------------------
represents to the Administrative Agent and each of the other Banks that it in
good faith is not, directly or indirectly (by negative pledge or otherwise),
relying upon any Margin Stock as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 10.08. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Borrower may not
--------
assign or otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. In no event shall a Bank
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that sells a participation be obligated to the Participant to take or refrain
from taking any action hereunder except that such Bank may agree that it will
not (except as provided below), without the consent of the Participant, agree
to (i) the change of any date fixed for the payment of principal of or interest
on the related loan or loans, (ii) the change of the amount of any principal,
interest or fees due on any date fixed for the payment thereof with respect to
the related loan or loans, (iii) the change of the principal of the related loan
or loans, (iv) any change in the rate at which either interest is payable
thereon or (if the Participant is entitled to any part thereof) fee is payable
hereunder from the rate at which the Participant is entitled to receive interest
or fee (as the case may be) in respect of such participation, (v) the release or
substitution of all or any substantial part of the collateral (if any) held as
security for the Loans, or (vi) the release of any Guarantee given to support
payment of the Loans. Each Bank selling a participating interest in any Loan,
Note, Commitment or other interest under this Agreement shall, within 10
Domestic Business Days of such sale, provide the Borrower and the Administrative
Agent with written notification stating that such sale has occurred and
identifying the Participant and the interest purchased by such Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Article IX with respect to its participation in Loans outstanding from time to
time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all or a proportionate part of its rights and
obligations under this Agreement, the Notes and the other Loan Documents, and
such Assignee shall assume all such rights and obligations, pursuant to an
Assignment and Acceptance, executed by such Assignee, such transferor Bank and
the Administrative Agent (and, in the case of an Assignee that is not then a
Bank, subject to clause (iii) below, by the Borrower); provided that (i) no
--------
interest may be sold by a Bank pursuant to this paragraph (c) unless the
Assignee shall agree to assume ratably equivalent portions of the transferor
Bank's Commitment, (ii) if a Bank is assigning only a portion of its Commitment,
then, the amount of the Commitment being assigned (determined as of the
effective date of the assignment) shall be in an amount not less than
$5,000,000, (iii) except during the continuance of a Default, no interest may be
sold by a Bank pursuant to this paragraph (c) to any Assignee that is not then a
Bank (or an Affiliate of a Bank) without the consent of the Borrower and the
Administrative Agent, which consent shall not be unreasonably withheld, and (iv)
a Bank may not have more than two Assignees
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that are not then Banks at any one time. Upon (A) execution of the Assignment
and Acceptance by such transferor Bank, such Assignee, the Administrative Agent
and (if applicable) the Borrower, (B) delivery of an executed copy of the
Assignment and Acceptance to the Borrower and the Administrative Agent, (C)
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, and (D)
payment of a processing and recordation fee of $2,500 to the Administrative
Agent, such Assignee shall for all purposes be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank under this Agreement to
the same extent as if it were an original party hereto with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by the Borrower, the Banks or the Administrative Agent
shall be required. Upon the consummation of any transfer to an Assignee pursuant
to this paragraph (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note is
issued to each of such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 10.09, the Borrower
authorizes each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial information in such Bank's possession concerning the Borrower which
has been delivered to such Bank by the Borrower pursuant to this Agreement or
which has been delivered to such Bank by the Borrower in connection with such
Bank's credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 9.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 9.02
or 9.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 10.08 to the contrary notwithstanding,
any Bank may assign and pledge all or any portion of the Loans and/or
obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
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Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such assigned
--------
Loans and/or obligations made by the Borrower to the assigning and/or pledging
Bank in accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans and/or obligations to
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
SECTION 10.09. Confidentiality. Each Bank agrees to exercise
---------------
commercially reasonable efforts to keep any information delivered or made
available by the Borrower to it which is clearly indicated to be confidential
information, confidential from anyone other than persons employed or retained by
such Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
--------
prevent any Bank from disclosing such information (i) to any other Bank, (ii)
upon the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over such Bank,
(iv) which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Administrative Agent, any Bank or
their respective Affiliates may be a party, (vi) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vii) to such
Bank's legal counsel and independent auditors and (viii) to any actual or
proposed Participant, Assignee or other Transferee of all or part of its rights
hereunder which has agreed in writing to be bound by the provisions of this
Section 10.09; provided that should disclosure of any such confidential
--------
information be required by virtue of clause (ii) of the immediately preceding
sentence, to the extent permitted by law, any relevant Bank shall promptly
notify the Borrower of same so as to allow the Borrower to seek a protective
order or to take any other appropriate action; provided, further, that, no Bank
-------- ------- ----
shall be required to delay compliance with any directive to disclose any such
information so as to allow the Borrower to effect any such action.
SECTION 10.10. Representation by Banks. Each Bank hereby represents
-----------------------
that it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided that, subject
--------
to Section 10.08, the disposition of the Note or Notes held by that Bank shall
at all times be within its exclusive control.
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SECTION 10.11. Obligations Several. The obligations of each Bank
-------------------
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 10.12. Georgia Law. This Agreement and each Note shall be
-----------
construed in accordance with and governed by the law of the State of Georgia.
SECTION 10.13. Severability. In case any one or more of the
------------
provisions contained in this Agreement, the Notes or any of the other Loan
Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 10.14. Interest. In no event shall the amount of interest,
--------
and all charges, amounts or fees contracted for, charged or collected pursuant
to this Agreement, the Notes or the other Loan Documents and deemed to be
interest under applicable law (collectively, "Interest") exceed the highest rate
of interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by any Bank, then the excess sum (the
"Excess") shall be credited as a payment of principal, unless the Borrower shall
notify such Bank in writing that it elects to have the Excess returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Banks not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
The right to accelerate maturity of any of the Loans does not include the right
to accelerate any interest that has not otherwise accrued on the date of such
acceleration, and the Administrative Agent and the Banks do not intend to
collect any unearned interest in the event of any such acceleration. All monies
paid to the Administrative Agent or the Banks hereunder or under any of the
Notes or the other Loan Documents, whether at maturity or by prepayment, shall
be subject to rebate of
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unearned interest as and to the extent required by applicable law. By the
execution of this Agreement, the Borrower covenants, to the fullest extent
permitted by law, that (i) the credit or return of any Excess shall constitute
the acceptance by the Borrower of such Excess, and (ii) the Borrower shall not
seek or pursue any other remedy, legal or equitable , against the Administrative
Agent or any Bank, based in whole or in part upon contracting for charging or
receiving any Interest in excess of the Maximum Rate. For the purpose of
determining whether or not any Excess has been contracted for, charged or
received by the Administrative Agent or any Bank, all interest at any time
contracted for, charged or received from the Borrower in connection with this
Agreement, the Notes or any of the other Loan Documents shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Commitments. The Borrower, the
Administrative Agent and each Bank shall, to the maximum extent permitted under
applicable law, (i) characterize any non-principal payment as an expense, fee or
premium rather than as Interest and (ii) exclude voluntary prepayments and the
effects thereof. The provisions of this Section shall be deemed to be
incorporated into each Note and each of the other Loan Documents (whether or not
any provision of this Section is referred to therein). All such Loan Documents
and communications relating to any Interest owed by the Borrower and all figures
set forth therein shall, for the sole purpose of computing the extent of
obligations hereunder and under the Notes and the other Loan Documents be
automatically recomputed by the Borrower, and by any court considering the same,
to give effect to the adjustments or credits required by this Section.
SECTION 10.15. Interpretation. No provision of this Agreement or any
--------------
of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 10.16. Waiver of Jury Trial; Consent to Jurisdiction. The
---------------------------------------------
Borrower (a) and each of the Banks and the Administrative Agent irrevocably
waives, to the fullest extent permitted by law, any and all right to trial by
jury in any legal proceeding arising out of this Agreement, any of the other
Loan Documents, or any of the transactions contemplated hereby or thereby, (b)
submits to the nonexclusive personal jurisdiction in the State of Georgia, the
courts thereof and the United States District Courts sitting therein, for the
enforcement of this Agreement, the Notes and the other Loan
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Documents, (c) waives any and all personal rights under the law of any
jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of Georgia for
the purpose of litigation to enforce this Agreement, the Notes or the other Loan
Documents, and (d) agrees that service of process may be made upon it in the
manner prescribed in Section 10.01 for the giving of notice to the Borrower.
Nothing herein contained, however, shall prevent the Administrative Agent from
bringing any action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower, within any
other state or jurisdiction.
SECTION 10.17. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 10.18. Source of Funds -- ERISA. Each of the Banks hereby
------------------------
severally (and not jointly) represents to the Borrower that no part of the funds
to be used by such Bank to fund the Loans hereunder from time to time
constitutes (i) assets allocated to any separate account maintained by such Bank
in which any employee benefit plan (or its related trust) has any interest nor
(ii) to the best of its knowledge, any other assets of any employee benefit
plan. As used in this Section, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
SECTION 10.19. Survival. The provisions of Sections 3.09, 8.05 and
--------
10.04 shall survive payment or satisfaction in full of all obligations of the
Borrower hereunder and the termination of this Agreement.
[Signatures are contained on the following pages.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
U.S. XPRESS ENTERPRISES, INC.
(SEAL)
By:_______________________________
Title:
2931 S. Market Street
Chattanooga, Tennessee 37410
Attention: Ray Harlin
Telecopier number: 423-265-5715
Confirmation number:
[Signatures continued on the following pages.]
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<PAGE>
COMMITMENT
COMMITMENTS SHARE
- - ----------- ---------
WACHOVIA BANK, N.A.,
as Administrative Agent and as a Bank
(SEAL)
$30,000,000 15% By:___________________________________
Title:
Lending Office
--------------
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: John B. Tibe
Telecopier number: 404-332-5016
Confirmation number:__________________
[Signatures continued on the following pages.]
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<PAGE>
NATIONSBANK, N.A. (SEAL)
$27,500,000 13.75% By:___________________________________
Title:
Lending Office
--------------
NationsBank, N.A.
Corporate Finance
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308-2213
Attention: Nancy S. Goldman
Telecopier number: 404-607-6484
Confirmation number:_________________
[Signatures continued on the following pages.]
89
<PAGE>
$27,500,000 13.75% BANKBOSTON, N.A. (SEAL)
By:_________________________________
Title:
Lending Office
--------------
BankBoston, N.A.
Transportation Division
Mail Stop: 01-08-01
100 Federal Street
Boston, Massachusetts 02110
Attention: Andrew K. Michaud
Telecopier number: 617-434-1955
Confirmation number: ___________
[Signatures continued on the following pages.]
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<PAGE>
$22,500,000 11.25% SUNTRUST BANK, CHATTANOOGA, N.A.
(SEAL)
By:_______________________________________
Title:
By:_______________________________________
Title:
Lending Office
--------------
SunTrust Bank, Chattanooga, N.A.
Corporate Lending Department
Mail Code M0125
736 Market Street
Chattanooga, Tennessee 37402
Attention: Jon C. Long
Telecopier number: 423-757-3437
Confirmation number: ____________
[Signatures continued on the following pages.]
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<PAGE>
$15,500,000 7.75% TEXAS COMMERCE BANK
NATIONAL ASSOCIATION (SEAL)
By:____________________________________
Title:
Lending Office
--------------
Texas Commerce Bank
National Association
Corporate Banking
2200 Ross Avenue
3rd Floor
Dallas, Texas 75201
Attention: Ana Moreira
Telecopier number: 214-965-2044
Confirmation number:___________________
[Signatures continued on the following pages.]
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<PAGE>
$15,500,000 7.75% THE SUMITOMO BANK, LIMITED (SEAL)
By:____________________________________
Title:
By:____________________________________
Title:
Lending Office
--------------
The Sumitomo Bank, Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606
Attention: Diane Rhoades
Telecopier number: 404-523-7983
Confirmation number:___________________
For Business Purposes Only: U.S. Commercial Banking Depart.
Atlanta Peachtree Center Office
303 Peachtree Street, N.E.
Suite 4420
Atlanta, Georgia 30308
Attention: Lauren P. Carrigan
Telecopier number: 404-523-7983
Confirmation number:___________________
[Signatures continued on the following pages.]
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<PAGE>
$15,500,000 7.75% BANK OF AMERICA (SEAL)
By:____________________________________
Title:
Lending Office
--------------
Bank of America
Leasing, Finance & Transportation
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Bonita J. Althoff
Telecopier number: 312-828-1997
Confirmation number:___________________
[Signatures continued on the following pages.]
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<PAGE>
$15,500,000 7.75% ABN-AMRO BANK, N.A. (SEAL)
By:____________________________________
Title:
By:____________________________________
Title:
Lending Office
--------------
ABN-Amro Bank, N.A.
Surface Transportation
135 South LaSalle Street
Chicago, Illinois 60674-9135
Attention: Dave Thomas
Telecopier number: 312-904-2849
Confirmation number:___________________
[Signatures continued on the following pages.]
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<PAGE>
$15,500,000 7.75% AMSOUTH BANK (SEAL)
By:____________________________________
Title:
Lending Office
--------------
AmSouth Bank
Commercial Banking Division
601 Market Center
Chattanooga, Tennessee 37402
Attention: Steve C. Anderson
Telecopier number: 423-752-1558
Confirmation number:___________________
[Signatures continued on the following pages.]
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<PAGE>
$7,500,000 3.75% FIRST AMERICAN NATIONAL BANK
(SEAL)
By:____________________________________
Title:
Lending Office
--------------
First American National Bank
Corporate Bank
Chattanooga Division
1 Union Square
Suite 100
Chattanooga, Tennessee 37402-2583
Attention: Mary E. Buckner
Telecopier number: 423-755-6014
Confirmation number: 423-755-6062
[Signatures continued on the following pages.]
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<PAGE>
$7,500,000 3.75% FIRST TENNESSEE BANK, N.A. (SEAL)
By:____________________________________
Title:
Lending Office
--------------
First Tennessee Bank, N.A.
Corporate Group
701 Market Street
Chattanooga, Tennessee 37402
Attention: Brett P. Johnson
Telecopier number: 423-757-4028
Confirmation number:___________________
TOTAL COMMITMENTS:
$200,000,000
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