1
Exhibit (b)(1)
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$250,000,000
CREDIT AGREEMENT
Dated as of June 12, 1998
Among
ARKANSAS BEST CORPORATION
as the Borrower,
SOCIETE GENERALE, SOUTHWEST AGENCY
as Administrative Agent,
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
and
XXXXX FARGO BANK (TEXAS), N.A.,
as Co-Documentation Agents,
and
THE BANKS NAMED HEREIN
as the Banks
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.3 Accounting Terms; Changes in GAAP . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 1.4 Types of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 1.5 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE II THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.1 The Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.2 Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.4 Reduction of the Revolving Commitments . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.5 Repayment of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.6 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.7 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.8 Breakage Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.9 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.10 Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.12 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.13 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.14 Determination of Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.15 Bank Replacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.16 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.17 Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III CONDITIONS OF LENDING
Section 3.1 Conditions Precedent to Effectiveness of this Agreement . . . . . . . . . . . . . . 41
Section 3.2 Conditions Precedent for each Borrowing or Letter of Credit . . . . . . . . . . . . 42
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.1 Corporate Existence; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.2 Corporate Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.3 Authorization and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.4 Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.6 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.8 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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Section 4.9 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.11 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.12 Condition of Property; Casualties . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.14 No Burdensome Restrictions; No Defaults . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.15 Environmental Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.16 Permits, Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.17 Existing Mortgage Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.18 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE V AFFIRMATIVE COVENANTS
Section 5.1 Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.2 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.3 Preservation of Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . 49
Section 5.4 Payment of Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.5 Visitation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.6 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.7 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.8 Ownership of ABF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VI NEGATIVE COVENANTS
Section 6.1 Liens, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.2 Amendment of Material Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.3 Agreements Restricting Distributions From Subsidiaries . . . . . . . . . . . . . . . 54
Section 6.4 Merger or Consolidation; Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.5 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.6 Investments, Loans, Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.7 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.8 Maintenance of Ownership of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.9 No Further Negative Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.10 Other Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.11 Debt Service Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.12 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.14 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.15 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 6.16 Acquisition Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE VII REMEDIES
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 7.2 Optional Acceleration of Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.3 Automatic Acceleration of Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.4 Cash Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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Section 7.5 Non-exclusivity of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.6 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VIII AGENCY AND ISSUING BANK PROVISIONS
Section 8.1 Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.2 Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.3 The Agent and Its Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.4 Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.6 Successor Agent and Issuing Banks . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 8.7 Co-Documentation Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE IX MISCELLANEOUS
Section 9.1 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 9.2 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.3 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.4 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 9.5 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 9.6 Bank Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 9.8 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 9.9 Survival of Representations, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 9.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.11 Business Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.12 Usury Not Intended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.14 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.15 Banks Not in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.16 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.17 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 9.18 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
EXHIBITS:
Exhibit A - Form of Note
Exhibit B - Form of Subsidiary Guaranty and Contribution Agreement
Exhibit C - Form of Borrower Security Agreement
Exhibit D - Form of Guarantors Security Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Borrower's/Guarantors' Counsel Opinion
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Exhibit I - Form of Agent's Counsel Opinion
Exhibit J - Form of Compliance Certificate
Exhibit K - Form of Borrowing Base Certificate
Exhibit L - Form of Swingline Note
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SCHEDULES:
Schedule 1.1(a) - Revolving Commitments
Schedule 1.1(b) - Letters of Credit Outstanding
Schedule 2.17 - Locations of Certificates of Title
Schedule 4.1 - Subsidiaries
Schedule 4.7 - Litigation
Schedule 4.10 - Tax Disclosure
Schedule 6.1 - Existing Liens and Secured Indebtedness
Schedule 6.7 - Certain Intercompany Arrangements
Schedule 6.15 - Outstanding Indebtedness
Schedule 9.2 - Notice Information for Banks
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CREDIT AGREEMENT
This Credit Agreement dated as of June 12, 1998 is among Arkansas Best
Corporation, a Delaware corporation, as the Borrower, Societe Generale,
Southwest Agency, as Administrative Agent, Bank of America National Trust and
Savings Association and Xxxxx Fargo Bank (Texas), N.A., as Co-Documentation
Agents, and the Banks.
The parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section I.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Acceptable Security Interest" means a valid, binding, and enforceable
Lien in any collateral (a) which exists in favor of the Agent for the benefit
of the Agent, the Co-Documentation Agents and the Banks, (b) which upon
perfection will be superior to all other Liens, other than Liens permitted
under Section 6.1 of this Agreement, (c) which secures the Obligations, and (d)
which (i) is perfected, except to the extent nonperfection is expressly
permitted by the Credit Documents or (ii) will be perfected upon filing or
recording under applicable law all documents or instruments necessary to
perfect the same and all such documents and instruments have been duly executed
by the Borrower or a Guarantor, as the case may be, and delivered to the Agent
on or prior to the Effective Date.
"Accession Agreement" means an Accession Agreement in the form attached to
the Guaranty as Annex 2 thereto, which agreement causes the Person executing
and delivering the same to the Agent to become a party to the Guaranty and to
the Guarantors Security Agreement.
"Acquisition Expenditures" means, for any period, the aggregate of all
expenditures and costs of the Borrower and its Subsidiaries paid in cash, debt
securities, Property other than common stock, or the assumption of Indebtedness
during such period for (a) the purchase or acquisition of assets of a business
of another Person other than the Borrower and any of its Subsidiaries, and (b)
the acquisition of stock, partnership, joint venture interests or other equity
interests in any Person other than the Borrower and any of its Subsidiaries.
"Adjusted Consolidated" means Consolidated (as herein defined) less
accounts of Treadco.
"Adjusted Prime Rate" means, for any day, the fluctuating rate per annum
of interest equal to the greater of (a) the Prime Rate in effect on such day
and (b) the Federal Funds Rate in effect on such day plus 1/2%.
"Advance" means either a Revolving Advance or a Swingline Advance, any
such Revolving Advance being either a Prime Rate Advance or a Eurodollar Rate
Advance.
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"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person.
The term "control" (including the terms "controlled by" or "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of a Control Percentage, by contract or otherwise.
"Agent" means Societe Generale, Southwest Agency in its capacity as
Administrative Agent for the Banks pursuant to Article VIII and any successor
Administrative Agent pursuant to Section 8.6.
"Agent's Fee Letter" means the letter agreement dated as of April 13, 1998
between the Borrower and the Agent.
"Agreement" means this Credit Agreement dated as of June 12, 1998 among
the Borrower, the Agent, the Co-Documentation Agents and the Banks, as it may
be amended hereafter in accordance with its terms.
"Applicable Lending Office" means, with respect to each Bank, such Bank's
Domestic Lending Office in the case of a Prime Rate Advance and such Bank's
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time with respect to any Revolving
Advance, commitment fees or letter of credit fees hereunder (except as
otherwise provided below), the lesser of the applicable percentages set forth
in the following two tables. Except as otherwise provided herein, the
"Applicable Margin" shall mean the following percentages determined as a
function of the Borrower's Leverage Ratio:
Eurodollar Letter of
Tier Leverage Rate Prime Rate Commitment Credit
Level Ratio Advances Advances Fees Fees
----- ----- -------- -------- ---- ----
I $3.25 1.250% 0.250% 0.375% 1.125%
II $2.75 and <3.25 1.125% 0.125% 0.375% 1.000%
III $2.25 and <2.75 0.875% 0.000% 0.250% 0.750%
IV $2.00 and <2.25 0.750% 0.000% 0.250% 0.625%
V $1.50 and <2.00 0.625% 0.000% 0.200% 0.500%
VI $1.25 and <1.50 0.500% 0.000% 0.200% 0.375%
VII less than 1.25 0.400% 0.000% 0.200% 0.275%
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The foregoing ratio (a) shall be established at Tier Level III for the
period from the Effective Date through June 30, 1998, and (b) shall thereafter
be determined from the financial statements of the Borrower and its
Consolidated Subsidiaries most recently delivered pursuant to Section 5.6(a) or
Section 5.6(b) and certified to by an authorized financial officer of the
Borrower in accordance with such Sections. Any change in the Applicable Margin
shall be effective upon the date of delivery of the financial statements
pursuant to Section 5.6(a) or Section 5.6(b), as the case may be, and receipt
by the Agent of the Compliance Certificate required by such Sections. If the
Borrower fails to deliver any financial statements within the times specified
in Section 5.6(a) or 5.6(b), as the case may be, such ratio shall be (i)
established at Tier Level I from the date such financial statements should have
been delivered until the Borrower delivers such financial statements to the
Agent and the Banks, and (ii) when such financial statements are in fact
received by the Agent and the Banks, if it is determined that the actual ratio
was less than that established at Tier Level I, then the Applicable Margin for
the period from the date such financial statements should have been delivered
until the date the Agent and the Banks actually received such financial
statements shall be recalculated to reflect the actual ratio for such period of
time, and if interest or fees have been paid in the period prior to such
recalculation, appropriate adjustment shall be made to the next scheduled
payment of interest or fees to be made by the Borrower.
Notwithstanding the foregoing but subject to the paragraph below, if at
any time, the Borrower's Senior Debt is rated BB+ or higher by S&P or Ba1 or
higher by Xxxxx'x, then "Applicable Margin" shall mean, at any time with
respect to any Revolving Advance, commitment fees or letter of credit fees
hereunder, the following percentages determined as a function of the ratings by
S&P or Xxxxx'x applicable on such date of the Borrower's Senior Debt as set
forth below:
Senior Eurodollar Letter of
Tier Debt Rating Rate Prime Rate Commitment Credit
Level ----------- Advances Advances Fees Fees
----- -------- -------- ---- ----
S&P Xxxxx'x
--- -------
I BBB+or Baa1 0.300% 0.000% 0.1250% 0.175%
higher or
higher
II BBB Baa2 0.350% 0.000% 0.1500% 0.225%
III BBB- Baa3 0.400% 0.000% 0.1875% 0.275%
IV BB+ Ba1 0.625% 0.000% 0.2000% 0.500%
If ratings fall within different Tier Levels, the Applicable Margin shall be
based on the numerically lower of the two Tier Levels (where Tier I is the
numerically lowest such Tier and Tier IV is the numerically highest such Tier)
unless the numerically higher Tier Level is two or more Tier Levels above the
numerically lower Tier Level, in which case the Tier Level which is one level
above the numerically lower Tier Level will apply. In the event that one
rating falls within Tier Level IV and the other such rating is one rating level
immediately below (ie. either
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BB or Ba2), then the Applicable Margin will be based on Tier Level IV;
provided, however that if the other such rating differs by more than one rating
immediately below (ie. either BB- or Ba3 or lower), then the Applicable Margin
shall be determined by reference to the Leverage Ratio as provided above. If
the ratings established by Xxxxx'x or S&P for Senior Debt change (other than as
a result of a change in the rating system of Xxxxx'x or S&P), such change shall
be effective as of the date on which it is first announced by the applicable
rating agency. If the rating system of either Xxxxx'x or S&P shall change when
a rating for Senior Debt exists from both Xxxxx'x and S&P or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations while the other remains in such business, the Applicable Margin
shall be based on the rating of the agency that has not changed its rating
system or that remains in the business of rating corporate debt obligations.
If both Xxxxx'x and S&P shall change their rating system, cease rating the
Borrower's Senior Debt or cease to be in the business of rating corporate debt
obligations, then the Borrower and the Agent shall select a substitute
nationally recognized statistical rating agency or agencies, as the case may
be; provided, however that if the Borrower and the Agent cannot mutually agree
on such a substitute rating agency, the Applicable Margin shall be determined
by reference to the Borrower's Leverage Ratio as provided above.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of the attached Exhibit G.
"Authorized Sale of Property" means any sale by the Borrower or any
Guarantor of (a) real property owned by the Borrower or such Guarantor which is
to be sold to a third party for fair market value, or (b) Revenue Equipment
owned by the Borrower or such Guarantor, to the extent such sale is in the
ordinary course of business; provided that in each case, such sale would not,
after giving effect to such sale, cause any Default.
"Banks" means each of the lenders party to this Agreement, including
without limitation each Eligible Assignee that shall become a party to this
Agreement pursuant to Section 9.6.
"Borrower" means Arkansas Best Corporation, a Delaware corporation, and
any successor, legal representative or permitted assignee thereof.
"Borrower Security Agreement" means the Security Agreement dated of even
date herewith executed by the Borrower in substantially the form of Exhibit C,
as it may be amended from time to time in accordance with its terms.
"Borrowing" means a Revolving Borrowing or the making of a Swingline
Advance by SG.
"Borrowing Base" means an amount equal to the sum of (a) 80% of the Net
Depreciated Value of Eligible Revenue Equipment, plus (b) 50% of the Current
Market Value of Treadco Shares, plus (c) 85% of the aggregate outstanding
amount of Eligible Receivables, plus (d) 50% of the Net Depreciated Value of
Eligible Other Equipment, plus (e) 70% of the Real Estate Value of Eligible
Real Property.
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"Borrowing Base Certificate" means a certificate of the Borrower in
substantially the form of the attached Exhibit K.
"Borrowing Base Determination Date" means any date the Borrowing Base is
determined in accordance with Section 2.14.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City or Dallas, Texas and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on by banks in the London interbank market.
"Calculation Day" means the last day of each calendar quarter.
"Calculation Period" means, with respect to any Calculation Day, the
period of the four consecutive calendar quarters ending on such day.
"Canadian Subsidiaries" means, collectively, ABF Freight System (B.C.)
Ltd., a British Columbia corporation, ABF Freight System Canada, Ltd., a
Canadian corporation, and CaroTrans Canada, Ltd., a Canadian corporation.
"Capital Expenditure" means any payment made directly or indirectly for
the purpose of acquiring or constructing fixed assets, real property or
equipment which in accordance with GAAP would be added as a debit to the fixed
asset account of such Person making such expenditure, including, without
limitation, amounts paid or payable for such purpose under any conditional sale
or other title retention agreement or under any Capital Lease, but excluding
repairs of Property made during such period in the normal and ordinary course
of business in keeping with past practices.
"Capital Lease" means, for any Person, any lease of any Property (whether
real, personal or mixed) by that Person as lessee which, in accordance with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.
"Cash Collateral Account" means a special cash collateral account
containing cash deposited pursuant to Sections 2.7(c), 7.2(b) or 7.3(b) to be
maintained at the Agent's office in accordance with Section 7.4.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Co-Documentation Agents" means Bank of America National Trust and Savings
Association and Xxxxx Fargo Bank (Texas), N.A., as co-documentation agents for
the Banks pursuant to Article VIII.
"Collateral" shall have the meaning set forth in the Security Agreements.
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"Commitment" means, with respect to any Bank, such Bank's Revolving
Commitment.
"Compliance Certificate" means a certificate of the Borrower in
substantially the form of the attached Exhibit J.
"Consolidated" refers to the consolidation of the accounts of the Borrower
and its Subsidiaries in accordance with GAAP, including, when used in reference
to the Borrower, principles of consolidation consistent with those applied in
the preparation of the Financial Statements.
"Control Percentage" means, with respect to any Person, the percentage of
the outstanding capital stock of such Person having ordinary voting power which
gives the direct or indirect holder of such stock the power to elect a majority
of the Board of Directors of such Person.
"Controlled Group" means all members of a controlled group of corporations
and all trades (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.
"Convert", "Conversion", and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.2(b).
"Credit Documents" means this Agreement, the Notes, the Guaranty, the
Security Agreements, Hedge Agreements between the Borrower and any Bank or any
Affiliate of any Bank, the Agent's Fee Letter, and each other agreement,
instrument or document executed by the Borrower or any of its Subsidiaries at
any time in connection with this Agreement.
"Current Market Value of Treadco Shares" means, as of any date of
determination thereof, (a) the number of shares of Treadco owned by the
Borrower or a wholly-owned Subsidiary of the Borrower and free and clear of all
Liens, other than Liens in favor of the Agent and the Agent for the benefit of
the Banks multiplied by (b) the most recent closing price of shares of Treadco
reported on the National Association of Securities Dealers Automated Quotations
System ("NASDAQ") National Market System or, if applicable, the average of the
closing bid and asked quotations for such security as reported on NASDAQ, or if
such shares become listed on another recognized national securities exchange,
the most recent closing price of such shares on such other exchange.
"Debt Service" means, for any Person for the period for which such amount
is being determined, (a) the amount (without duplication) of all scheduled
principal payments actually made and interest accrued with respect to any
Indebtedness of such Person and all payments made in respect of Capital Leases
of such Person, less (b) interest income earned by such Person.
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
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"Dollar Equivalent" means the equivalent in another currency of an amount
in Dollars to be determined by reference to the rate of exchange quoted by the
Agent, at 10:00 a.m. (Dallas, Texas time) on the date of determination, for the
spot purchase in the foreign exchange market of such amount of Dollars with
such other currency.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "Domestic Lending Office" opposite its name on
Schedule 9.2 or such other office of such Bank as such Bank may from time to
time specify to the Borrower and the Agent.
"EBITDA" means, without duplication, for any period for which such amount
is being determined, the sum of the amounts for such period of (a) Adjusted
Consolidated operating income plus (b) to the extent deducted in determining
Adjusted Consolidated operating income, depreciation, amortization and surety
bonds and letter of credit fees.
"Effective Date" means the date all of the conditions precedent set forth
in Section 3.1 have been satisfied, and the Agent shall have confirmed the same
in writing to the Banks.
"Eligible Assignee" means (a) a commercial bank organized under the laws
of the United States, or any State thereof, and having primary capital of not
less than $250,000,000 and approved by the Agent, the Issuing Banks, and
(provided no Default has occurred and is continuing) the Borrower, which
approvals will not be unreasonably withheld, (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development and having primary capital (or its
equivalent) of not less than $250,000,000 (or its Dollar Equivalent) and
approved by the Agent, the Issuing Banks, and (provided no Default has occurred
and is continuing) the Borrower, which approvals will not be unreasonably
withheld, (c) a Bank and approved by the Agent, the Issuing Banks, and
(provided no Default has occurred and is continuing) the Borrower, which
approvals will not be unreasonably withheld, and (d) an Affiliate of the
respective assigning Bank, without approval of any Person but otherwise meeting
the eligibility requirements of (a) or (b) above.
"Eligible Other Equipment" means, as of any Borrowing Base Determination
Date, all Other Equipment which is owned by the Borrower or any Guarantor other
than a Canadian Subsidiary on such date and was so owned on the date of the
most recent Borrowing Base Certificate delivered to the Banks.
"Eligible Real Property" means, as of any Borrowing Base Determination
Date, any real property (other than Properties which are acquired after the
date hereof and which are unacceptable to the Agent, in its sole reasonable
discretion) which is owned by the Borrower or any Guarantor on such date and
was so owned on the date of the most recent Borrowing Base Certificate
delivered to the Banks.
"Eligible Receivables" means, as of any Borrowing Base Determination Date,
all Receivables of the Borrower or any Guarantor other than a Canadian
Subsidiary as of the date of the most recent Borrowing Base Certificate
delivered to the Banks, except:
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(1) any Receivable which remains unpaid more than 90 days
after the date of the original invoice for such Receivable;
(2) any Receivable which is from an obligor which is to the
Borrower's or any Guarantor's knowledge Insolvent;
(3) any Receivable which is not to the Borrower's or any
Guarantor's knowledge free and clear of all Liens except (i) Liens in favor of
the Agent for the benefit of the Banks and (ii) Permitted Liens on Receivables
of a Intermodal Subsidiary described in Section 6.1(l) to the extent the
aggregate obligations secured by such Liens do not exceed $3,000,000 in the
aggregate;
(4) any Receivable which does not arise under a contract
representing the legal, valid and binding payment obligation of the obligor
thereon, enforceable by the Borrower or such Guarantor in accordance with its
terms;
(5) any Receivable which together with the related contract
does not comply in all material respects with all Legal Requirements of the
jurisdictions where it originated;
(6) any Receivable which does not provide, according to its
original terms, that the amount payable thereunder will be due within 60 days
following the date upon which the related obligor became obligated thereon;
(7) any Receivable which is payable by an obligor which is
located in any jurisdiction outside of the United States of America, Puerto
Rico or Canada;
(8) any Receivable which is unacceptable to the Majority
Banks for credit reasons in their reasonable discretion; and
(9) any Receivable which is payable by an Affiliate of the
Borrower (other than Treadco);
(10) any Receivable which is subject to setoff, counterclaim,
defense, allowance, dispute or adjustment other than allowances or discounts in
the ordinary course of business consistent with past practices.
"Eligible Revenue Equipment" means, as of any Borrowing Base Determination
Date, all Revenue Equipment which is owned by the Borrower or any Guarantor
other than a Canadian Subsidiary as of such date and was so owned as of the
date of the most recent Borrowing Base Certificate delivered to the Banks.
"Environment" or "Environmental" shall have the meanings set forth in 42
U.S.C. ' 9601(8) (1998).
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree,
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15
consent agreement or notice of potential or actual responsibility or violation
(including claims or proceedings under the Occupational Safety and Health Acts
or similar laws or requirements relating to health or safety of employees)
which seeks to impose liability under any Environmental Law.
"Environmental Law" means all Legal Requirements arising from, relating
to, or in connection with the Environment, health, or safety, including without
limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other natural
resources; (b) solid, gaseous or liquid waste generation, treatment,
processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, hazardous, medical,
infectious, or toxic substances, materials or wastes; (d) the safety or health
of employees; or (e) the manufacture, processing, handling, transportation,
distribution in commerce, use, storage or disposal of hazardous, medical,
infectious, or toxic substances, materials or wastes.
"Environmental Permit" means any permit, license, order, approval or other
authorization under Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule 9.2 (or, if no such office is specified, its Domestic Lending Office)
or such other office of such Bank as such Bank may from time to time specify to
the Borrower and the Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing, the interest rate per annum
(rounded upward to the nearest whole multiple of 1/100 of 1% per annum) equal
to (a) the rate set forth on the applicable Telerate Page as the London
Interbank Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England
time) two Business Days before the first day of such Interest Period and for a
period equal to such Interest Period; provided that, if no such quotation
appears on the applicable Telerate Page, the Eurodollar Rate shall be an
interest rate per annum equal to the rate per annum at which deposits in
Dollars are offered by the principal office of SG in London, England to prime
banks in the London interbank market at 11:00 a.m. (London, England time) two
Business Days before the first day of such Interest Period, in the case of
Advances made in Dollars in each case in an amount substantially equal to SG's
Eurodollar Rate Advance comprising part of such Borrowing and for a period
equal to such Interest Period divided by (b) one minus the applicable statutory
reserve requirements of the Agent, expressed as a decimal (including without
duplication or limitation, basic, supplemental, marginal and emergency
reserves), from time to time in effect under Regulation D or similar
regulations of the Federal Reserve Board. It is
-9-
16
agreed that for purposes of this definition, Eurodollar Rate Advances made
hereunder shall be deemed to constitute Eurocurrency Liabilities as defined in
Regulation D and to be subject to the reserve requirements of Regulation D.
"Eurodollar Rate Advance" means an Advance which bears interest as
provided in Section 2.6(b).
"Events of Default" has the meaning set forth in Section 7.1.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement dated as of February 21, 1996, as amended, among the Borrower, the
banks party thereto, SG, as Managing Agent and Administrative Agent, and
NationsBank of Texas, N.A., as Documentation Agent.
"Existing Lien" means a mortgage Lien on real property which is existing
on the Effective Date and which is identified on Schedule 6.1.
"Expiration Date" means, with respect to any Letter of Credit, the date on
which such Letter of Credit will expire or terminate in accordance with its
terms.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for any such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any of its successors.
"Financial Statements" means the financial statements described in Section
4.5.
"Fuel Hedge Agreement" means a swap, collar, floor, cap, option, forward
sale or purchase or other similar arrangement between the Borrower or any of
its Subsidiaries and a financial institution which is intended to reduce or
eliminate the risk of fluctuations in the price of fuel.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance
Response Trust Fund, established pursuant to 42 U.S.C. ' 9631 (1988) and the
Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. ' 9641
(1988), which statutory provisions have been amended or repealed by the
Superfund Amendments and Reauthorization Act of 1986, and the "Fund," "Trust
Fund," or "Superfund" that are now maintained pursuant to ' 9507 of the Code.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements
of Section 1.3.
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17
"Governmental Authority" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Borrower, or the Borrower's Subsidiaries or any of their
respective Properties.
"Governmental Proceedings" means any action or proceedings by or before
any Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"Guarantor" means each Subsidiary of the Borrower that is a party to the
Guaranty, and "Guarantors" means such Persons collectively. The Guarantors on
the Effective Date are identified on Schedule 4.1.
"Guarantors Security Agreement" means the Security Agreement dated of even
date herewith executed by the Guarantors in substantially the form of Exhibit
D, as it may be amended from time to time in accordance with its terms.
"Guaranty" means the Subsidiary Guaranty and Contribution Agreement dated
of even date herewith in substantially the form of the attached Exhibit B
executed by certain Subsidiaries of the Borrower, as it may be amended
hereafter in accordance with its terms.
"Hazardous Substance" means the substances identified as such pursuant to
CERCLA and those regulated under any other Environmental Law, including without
limitation pollutants, contaminants, petroleum, petroleum products,
radionuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any
Environmental Law.
"Hedge Agreement" means any Interest Hedge Agreement or any Fuel Hedge
Agreement.
"Hedging Obligations" means all obligations of the Borrower or any of its
Subsidiaries under any Hedge Agreement.
"Indenture" means the Indenture dated as of April 15, 1986 between the
Borrower (as successor in interest to Carolina Freight Corporation) and First
Union National Bank of North Carolina, N.A. (formerly known as First Union
National Bank), as Trustee, as it may be amended or supplemented in accordance
with its terms.
"Indebtedness" means (without duplication), at any time and with respect
to any Person, (a) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
price of property or services purchased (other than amounts constituting trade
payables or bank drafts (payable within 120 days) arising in the ordinary
course); (b) indebtedness of others which such Person has directly or
indirectly
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assumed or guaranteed or otherwise provided credit support therefor; (c)
indebtedness of others secured by a Lien on assets of such Person, whether or
not such Person shall have assumed such indebtedness; (d) obligations of such
Person in respect of letters of credit, surety bonds, acceptance facilities, or
drafts or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person (other than trade payables or bank
drafts (payable within 120 days) arising in the ordinary course); (e)
obligations of such Person under Capital Leases; and (f) outstanding amount of
preferred trust securities or other similar arrangements.
"Insolvent" means, with respect to any Person, that (a) the present fair
saleable value of such Person's assets is less than the amount that will be
required to pay its probable liability on its then existing legal liabilities,
either matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent, as they become absolute or matured, or (b) the property remaining
in its hands is an unreasonably small capital for the business or transaction
in which it is engaged or is about to engage.
"Interest Expense" means, for any Person, for any period for which such
amount is being determined, total interest expense (including that properly
attributable to Capital Leases in accordance with GAAP and amortization of debt
discount and debt issuance costs), including, without limitation, all
capitalized interest if such interest would be in excess of $100,000 in any
fiscal year, all commissions and other fees, discounts, and charges incurred
with respect to surety bonds and letters of credit.
"Interest Hedge Agreement" means an interest hedge, rate swap or cap or
other similar arrangement between the Borrower or any of its Subsidiaries and a
financial institution providing for the exchange of nominal interest
obligations or the cap of the interest rate on the Advances made under this
Agreement.
"Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Prime Rate Advance into such an Advance and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.2 and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.2. The duration of each such Interest Period
shall be one, two or three weeks (with respect to the initial Advances only),
or one, two, three or six (or to the extent available to all of the Banks,
twelve) months, in each case as the Borrower may, upon notice received by the
Agent not later than 11:00 a.m. (Dallas, Texas time) on the third Business Day
prior to the first day of such Interest Period (except as otherwise provided in
Section 2.2(a)), select; provided, however, that:
(1) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
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(2) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided that if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(3) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month in which it would have
ended if there were a numerically corresponding day in such calendar month.
"Intermodal Subsidiary" means any Subsidiary of the Borrower which
contracts for the benefit of its customers the railroad shipment of such
customer's goods with any railroad company.
"Issuing Bank" means SG or any other Bank which agrees at the request of
the Borrower to act as issuer of a Letter of Credit hereunder, or any Bank
acting as a successor issuing bank pursuant to Section 8.6, and "Issuing Banks"
means, collectively, all of such Banks.
"Legal Requirement" means any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation of
any of the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"Letter of Credit" means, individually, any letter of credit issued by an
Issuing Bank which is subject to this Agreement, including, without limitation,
the letters of credit described on Schedule 1.1(b), and "Letters of Credit"
means all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
such Letter of Credit and any agreements, documents, and instruments entered
into in connection with or relating to such Letter of Credit.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit at such time and
(b) the aggregate unpaid amount of all Reimbursement Obligations at such time.
"Letter of Credit Obligations" means any obligations of the Borrower under
this Agreement in connection with the Letters of Credit.
"Leverage Ratio" means the ratio of the Borrower's Adjusted Consolidated
Indebtedness to its EBITDA.
"Lien" means any mortgage, lien, pledge, charge, deed of trust, security
interest, encumbrance or other type of preferential arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law or otherwise (including, without limitation, the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement).
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"Liquid Investments" means:
(1) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States;
(2) (i) negotiable or nonnegotiable certificates of deposit,
time deposits, or other similar banking arrangements maturing within 180 days
from the date of acquisition thereof ("bank debt securities"), issued by (A)
any Bank or (B) any other bank or trust company which has a combined capital
surplus and undivided profit of not less than $250,000,000 or the Dollar
Equivalent thereof, if at the time of deposit or purchase, such bank debt
securities are rated not less than "A" (or the then equivalent) by the rating
service of S&P or of Moody's, and (ii) commercial paper issued by (A) any Bank
or (B) any other Person if at the time of purchase such commercial paper is
rated not less than "A-2" (or the then equivalent) by the rating service of S&P
or not less than "P-2" (or the then equivalent) by the rating service of
Moody's, or upon the discontinuance of both of such services, such other
nationally recognized rating service or services, as the case may be, as shall
be selected by the Borrower with the consent of the Majority Banks;
(3) repurchase agreements relating to investments described
in clauses (a) and (b) above with a market value at least equal to the
consideration paid in connection therewith, with any Person who regularly
engages in the business of entering into repurchase agreements and has a
combined capital surplus and undivided profit of not less than $250,000,000 or
the Dollar Equivalent thereof, if at the time of entering into such agreement
the debt securities of such Person are rated not less than "A" (or the then
equivalent) by the rating service of S&P or of Moody's; and
(4) shares of any mutual fund registered under the Investment
Company Act of 1940, as amended, which invests solely in underlying securities
of the types described in clauses (a), (b) and (c) above and which do not
constitute "margin stock" within the meaning of Regulation U of the Federal
Reserve Board; and
(5) such other instruments (within the meaning of Article 9
of the Texas Business and Commerce Code) as the Borrower may request and the
Majority Banks may approve in writing, which approval will not be unreasonably
withheld.
"Majority Banks" means, at any time, Banks holding at least 51% of the
then aggregate unpaid principal amount of the Notes held by the Banks and the
participation interest in the Letter of Credit Exposure of the Banks at such
time, or, if no such principal amount and Letter of Credit Exposure is then
outstanding, Banks having at least 51% of the aggregate amount of the Revolving
Commitments at such time.
"Mandatory Revolving Borrowing" means a Revolving Borrowing comprised of
Prime Rate Advances made to repay a Swingline Advance which has not been repaid
to SG on the date due.
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21
"Material Adverse Change" shall mean a material adverse change in the
business, financial condition, or results of operations of the Borrower or any
Guarantor, in each case since the date of the Financial Statements.
"Maturity Date" means June 12, 2003.
"Maximum Rate" means the maximum nonusurious interest rate under
applicable law.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor thereto
which is a nationally recognized statistical rating organization.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any member of the Controlled Group
is making or accruing an obligation to make contributions.
"Net Cash Proceeds" means (a) the aggregate cash proceeds (including
without limitation, insurance proceeds) received by the Borrower or any
Guarantor in connection with any sales, transfers or dispositions of assets,
minus (b) the reasonable expenses of the Borrower or such Guarantor in
connection with any such sales, transfers or dispositions of assets.
"Net Depreciated Value" means, with respect to Revenue Equipment and Other
Equipment, the aggregate value of such Revenue Equipment and Other Equipment on
the books of the Borrower or any Guarantor as of the date of acquisition
thereof by the Borrower or such Guarantor or the actual cost of such Revenue
Equipment or Other Equipment to the Borrower or such Guarantor, whichever is
less (the "Cost"), minus depreciation computed to the date of the most recent
Borrowing Base Certificate delivered to the Banks at a rate sufficient to
depreciate such Revenue Equipment and Other Equipment, as appropriate, to the
extent, and in the periods, set forth below on a straight-line basis to a
customary residual value:
city tractors: within seven years
trucks: within five years
tractors (other than city tractors): within three years
trailers: within seven years
Other Equipment: within fifteen years
"Net Income" means, for any Person for any period for which such amount is
being determined, the net income of such Person after taxes, as determined in
accordance with GAAP, excluding, however, extraordinary items, including but
not limited to (a) any net gain or loss during such period arising from the
sale, exchange, or other disposition of capital assets (such term to include
all fixed assets and all securities) other than in the ordinary course of
business and (b) any write-up or write-down of assets.
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"Net Purchase Price" means the aggregate cash consideration paid in
connection with any Acquisition Expenditure plus any assumptions of
Indebtedness in connection with such Acquisition Expenditure.
"Net Worth" means, for any Person, stockholders' equity of such Person
determined in accordance with GAAP.
"Note" means a Revolving Note or the Swingline Note.
"Notice of Borrowing" means a notice of borrowing in the form of the
attached Exhibit E signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
continuation in the form of the attached Exhibit F signed by a Responsible
Officer of the Borrower.
"Obligations" means all Advances, Reimbursement Obligations, Hedging
Obligations owing to any Bank or any Affiliate of a Bank and other amounts
payable by the Borrower to the Agent or the Banks under the Credit Documents.
"Other Equipment" means, with respect to any Person, equipment other than
Revenue Equipment, free and clear of all Liens other than Permitted Liens.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means the Liens permitted to exist pursuant to Section
6.1.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
limited liability company, joint venture or other entity, or a government or
any political subdivision or agency thereof or any trustee, receiver, custodian
or similar official.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.
"Prime Rate" means a fluctuating interest rate per annum as shall be in
effect from time to time equal to the rate of interest publicly announced by
Societe Generale, New York Branch as its prime commercial lending rate (which
may not be the lowest rate offered to its customers), whether or not the
Borrower has notice thereof.
"Prime Rate Advance" means an Advance which bears interest as provided in
Section 2.6(a).
"Property" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
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"Pro Rata Share" means, at any time with respect to any Bank, either (a)
the ratio (expressed as a percentage) of such Bank's Revolving Commitment at
such time to the aggregate Revolving Commitments at such time or (b) if the
Revolving Commitments have been terminated, the ratio (expressed as a
percentage) of such Bank's aggregate outstanding Advances and participation
interest in the Letter of Credit Exposure at such time to the aggregate
outstanding Advances and Letter of Credit Exposure of all the Banks at such
time.
"Real Estate Value" means, with respect to any Eligible Real Property, (a)
the net book value of such Eligible Real Property as of the date of the most
recent Borrowing Base Certificate delivered to the Banks less (b) the aggregate
amount of Indebtedness (other than bond Indebtedness which is supported by a
Letter of Credit) secured by Liens on such Property.
"Receivables" means all rights to receive payment for goods sold or for
services rendered in the ordinary course of business.
"Register" has the meaning set forth in paragraph (c) of Section 9.6.
"Reimbursement Obligations" means all of the obligations of the Borrower
set forth in Section 2.13(c).
"Release" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA.
"Response" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Responsible Officer" means the Chief Executive Officer, President, Chief
Financial Officer, any Treasurer or Secretary of any Person.
"Restricted Payment" means (a) any direct or indirect payment, prepayment,
redemption, purchase, or deposit of funds or Property for the payment
(including any sinking fund or defeasance), prepayment, redemption or purchase
of Subordinated Debt, and (b) the making by any Person of any dividends or
other distributions (in cash, property, or otherwise) on, or payment for the
purchase, redemption or other acquisition of, any shares of any capital stock
or other ownership interests of such Person, other than dividends payable in
such Person's stock or ownership interests.
"Revenue Equipment" means, with respect to any Person, trucks, tractors,
trailers, city tractors, converter gears and all accessories and parts attached
thereto, owned by such Person as of the date of determination free and clear of
all Liens other than Permitted Liens.
"Revolving Advance" means any advance by a Bank to the Borrower pursuant
to Section 2.1(a).
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"Revolving Borrowing" means a borrowing consisting of simultaneous
Revolving Advances of the same Type made by each Bank pursuant to Section
2.1(a) or Converted by each Bank to Revolving Advances of a different Type
pursuant to Section 2.2(b).
"Revolving Commitment" means, with respect to any Bank, the amount set
opposite such Bank's name on Schedule 1.1(a) as its Revolving Commitment, or if
such Bank has entered into any Assignment and Acceptance, the amount set forth
for such Bank as its Revolving Commitment in the Register maintained by the
Agent pursuant to Section 9.6(c), as such amount may be reduced pursuant to
Section 2.4.
"Revolving Note" means a promissory note of the Borrower payable to the
order of any Bank, in substantially the form of the attached Exhibit A,
evidencing indebtedness of the Borrower to such Bank resulting from Revolving
Advances owing to such Bank.
"Rolling Period" means with respect to any fiscal quarter of the Borrower,
such fiscal quarter and the three immediately preceding fiscal quarters.
"S&P" means Standard & Poor's Ratings Service, a division of XxXxxx-Xxxx
Companies, Inc., or any successor thereof which is a nationally recognized
statistical rating organization.
"Security Agreements" means, collectively, the Borrower Security
Agreement, the Guarantors Security Agreement, and any other agreement executed
in connection with the Liens in favor of the Agent for the benefit of the Banks
securing the Obligations.
"Senior Debt" means the Senior Secured Debt or the Senior Unsecured Debt;
provided however, that if Xxxxx'x and/or S&P have different ratings for both
the Senior Secured Debt and the Senior Unsecured Debt, then "Senior Debt" shall
mean the Senior Secured Debt; provided further however, that if the Collateral
securing this Agreement has been released pursuant to Section 2.17(f), then
"Senior Debt" shall mean the Senior Unsecured Debt.
"Senior Secured Debt" means the Borrower's senior, secured, non-credit
enhanced, long-term indebtedness for borrowed money.
"Senior Unsecured Debt" means the Borrower's senior, unsecured, non-credit
enhanced, long-term indebtedness for borrowed money; provided however, that if
either Xxxxx'x or S&P does not rate the Borrower's Senior Unsecured Debt, then
"Senior Unsecured Debt" shall mean for the purposes of determining such rating
agency's applicable rating, the Borrower's "corporate credit rating".
"SG" means Societe Generale, Southwest Agency.
"Subordinated Debentures" means the 6 1/4% Convertible Subordinated
Debentures Due 2011 issued by the Borrower pursuant to the Indenture in the
original aggregate principal amount of $50,000,000, of which $44,883,000 is
outstanding on the date of this Agreement.
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"Subordinated Debt" means (a) the Subordinated Debentures, and (b) any
Indebtedness of the Borrower or any of its Subsidiaries which is subordinated
to their respective obligations under the Credit Documents and which is on
terms and conditions satisfactory to the Agent and the Banks.
"Subordinated Debt Documents" means the Indenture, the Subordinated
Debentures and all documents, instruments and agreements now or hereafter
executed by the Borrower or any of its Subsidiaries in respect of Subordinated
Debt and any and all amendments, modifications, supplements, renewals or
restatements thereof approved in accordance with Section 6.2.
"Subsidiary" of a Person means any corporation, association, partnership
or other business entity of which more than 50% of the outstanding shares of
capital stock (or other equivalent interests) having by the terms thereof
ordinary voting power under ordinary circumstances to elect a majority of the
board of directors or Persons performing similar functions (or, if there are no
such directors or Persons, having general voting power) of such entity
(irrespective of whether at the time capital stock (or other equivalent
interests) of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person.
"Swingline Advance" has the meaning set forth in Section 2.1(b).
"Swingline Note" means a promissory note of the Borrower payable to the
order of SG in substantially the form of the attached Exhibit L, evidencing the
indebtedness of the Borrower to SG from Swingline Advances owing to SG.
"Termination Event" means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of
the Borrower or any of its Affiliates from a Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c)
the giving of a notice of intent to terminate a Plan under Section 4041(c) of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or
(e) any other event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan.
"Treadco" means Treadco, Inc., a Delaware corporation, which is an
Affiliate of the Borrower.
"Type" has the meaning set forth in Section 1.4.
"Year 2000 Compliant" means that all software, embedded microchips, and
other processing capabilities utilized by, and material to the business
operations or financial condition of, the Borrower and its Subsidiaries are
able to correctly perform all date-sensitive functions prior to and after
December 31, 1999.
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Section I.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section I.3 Accounting Terms; Changes in GAAP.
(1) All accounting terms not specifically defined in this
Agreement shall be construed in accordance with GAAP applied on a consistent
basis with those applied in the preparation of the Financial Statements.
(2) Unless otherwise indicated, all financial statements of
the Borrower, all calculations for compliance with covenants in this Agreement,
and all calculations of any amounts to be calculated under the definitions in
Section 1.1 shall be based upon the Consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP.
(3) If any changes in accounting principles after the
Effective Date are required by GAAP or the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or similar agencies
results in a change in the method of calculation of, or affects the results of
such calculation of, any of the financial covenants, standards or terms found
in this Agreement, then the parties shall enter into and diligently pursue
negotiations in order to amend such financial covenants, standards or terms so
as to equitably reflect such change, with the desired result that the criteria
for evaluating the Borrower's and its Consolidated Subsidiaries' financial
condition shall be the same after such change as if such change had not been
made.
Section I.4 Types of Advances. Advances are distinguished by "Type".
The "Type" of an Advance refers to the determination whether such Advance is a
Eurodollar Rate Advance or Prime Rate Advance, each of which constitutes a Type.
Section I.5 Miscellaneous. Article, Section, Schedule and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section II.1 The Advances.
(1) Revolving Advances. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make Revolving Advances to
the Borrower from time to time on any Business Day prior to the Maturity Date
in an aggregate amount not to exceed at any time outstanding an amount equal to
such Bank's Revolving Commitment less such Bank's Pro Rata Share of the Letter
of Credit Exposure at such time. The aggregate amount of all
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outstanding Revolving Advances, Swingline Advances and Letter of Credit
Exposure at any time may not exceed the lesser of (i) the aggregate Revolving
Commitments at such time or (ii) the Borrowing Base at such time. Within the
limits of each Bank's Revolving Commitment and the Borrowing Base limitation
set forth above, the Borrower may from time to time prepay pursuant to Section
2.7 and reborrow under this Section 2.1(a).
(2) Swingline Advances. On the terms and conditions set
forth in this Agreement, SG may, in its sole discretion from time-to-time on
any Business Day during the period from the date of this Agreement until the
Maturity Date, make advances ("Swingline Advances") under the Swingline Note to
the Borrower in an aggregate principal amount not to exceed $15,000,000
outstanding at any time; provided that the aggregate principal amount of
outstanding Revolving Advances, Swingline Advances, and Letter of Credit
Exposure may not exceed the lesser of (i) the aggregate Revolving Commitments
at such time or (ii) the Borrowing Base at such time; and provided further than
no Swingline Advance shall be made by SG if the statements set forth in Section
3.2(a) are not true on the date of such Swingline Advance, it being agreed by
the Borrower that the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of such Swingline Advance shall
constitute a representation and warranty by the Borrower that on the date of
such Swingline Advance such statements are true. Subject to the other
provisions hereof, the Borrower may from time-to-time borrow, prepay (in whole
or in part) and reborrow Swingline Advances.
(1) Except as provided in the following clause (B)
below, each request for a Swingline Advance shall be made pursuant to
telephone notice to SG given no later than 11:00 a.m. (Dallas, Texas time)
on the date of the proposed Swingline Advance, promptly confirmed by a
completed and executed Notice of Borrowing telecopied to the Agent. SG
will promptly make the Swingline Advance available to the Borrower at the
Borrowers' account with the Agent.
(2) The Borrower and the Banks agree that in the
event any Swingline Advance is not repaid on the date due to SG, each Bank
shall pay to the Agent its Pro Rata Share of such Swingline Advance and
such payment shall be deemed to be a Prime Rate Advance made pursuant to
such Bank's Revolving Commitment, whether made before or after termination
of the Commitments, acceleration of the Advances, or otherwise, and
whether or not the conditions precedent in Section 3.2 have been
satisfied. The Agent shall give each Bank notice of such Mandatory
Revolving Borrowing by 11:00 a.m. (Dallas, Texas time) on the date the
Mandatory Revolving Borrowing is to be made. Each Bank shall make its
Advance available to the Agent for the account of SG in immediately
available funds by 1:00 p.m. (Dallas, Texas time) on the date requested,
and the Borrower hereby irrevocably instructs SG to apply the proceeds of
such Mandatory Revolving Borrowing to the payment of the outstanding
Swingline Advances.
Section II.2 Method of Borrowing.
(1) Notice. Each Revolving Borrowing shall be made pursuant
to a Notice of Borrowing, given not later than (i) 11:00 a.m. (Dallas, Texas
time) on the third Business Day before the date of the proposed Borrowing, in
the case of a Eurodollar Rate Advance or
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(ii) 11:00 a.m. (Dallas, Texas time) on the Business Day of the proposed
Borrowing, in the case of a Prime Rate Advance, by the Borrower to the Agent,
which shall give to each Bank prompt notice on the day of receipt of timely
Notice of Borrowing of such proposed Borrowing by telecopier; provided however
that the Agent and each of the Banks hereby waive the requirement in subsection
(i) of this Section 2.2(a) that the Borrower provide three Business Days
advance written notice of the date of the initial Borrowing. Each Swingline
Advance shall be made pursuant to a Notice of Borrowing, given not later than
11:00 a.m. (Dallas, Texas time) on the day of the proposed Borrowing. Each
Notice of Borrowing shall be in writing or by telecopier specifying the
requested (a) date of such Borrowing, (b) Type of Advances comprising such
Borrowing, (c) aggregate amount of such Borrowing, and (d) if such Borrowing is
to be comprised of Eurodollar Rate Advances, the Interest Period for each such
Advance. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Agent shall promptly notify each Bank of the applicable interest
rate under Section 2.6(b). Each Bank shall (1) in the case of all Revolving
Borrowings other than Borrowings made on the same day as the day the Notice of
Borrowing is received, before 11:00 a.m. (Dallas, Texas time) on the date of
such Borrowing and (2) in the case of Revolving Borrowings made on the same day
as the date of the Notice of Borrowing or Mandatory Revolving Borrowings,
before 1:00 p.m. (Dallas, Texas time), make available for the account of its
Applicable Lending Office to the Agent at its address referred to in Section
9.2, or such other location as the Agent may specify by notice to the Banks, in
same day funds, such Bank's Pro Rata Share of such Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Agent will make such funds available to the
Borrower at its account with the Agent.
(2) Conversions and Continuations. In order to elect to
Convert or continue Advances comprising part of the same Revolving Borrowing
under this Section, the Borrower shall deliver an irrevocable Notice of
Conversion or Continuation to the Agent at the Agent's office no later than
11:00 a.m. (Dallas, Texas time) (i) on the Business Day of the proposed
conversion date in the case of a Conversion of such Advances to Prime Rate
Advances and (ii) at least three Business Days in advance of the proposed
Conversion or continuation date in the case of a Conversion to, or a
continuation of, Eurodollar Rate Advances. Each such Notice of Conversion or
Continuation shall be in writing or by telecopier, specifying (a) the requested
Conversion or continuation date (which shall be a Business Day), (b) the
Borrowing amount and Type of the Advances to be Converted or continued, (c)
whether a Conversion or continuation is requested, and if a Conversion, into
what Type of Advances, and (d) in the case of a Conversion to, or a
continuation of, Eurodollar Rate Advances, the requested Interest Period.
Revolving Advances may only be Converted or continued as Revolving Advances.
Swingline Advances may not be converted or continued. Promptly after receipt
of a Notice of Conversion or Continuation under this paragraph, the Agent shall
provide each Bank with a copy thereof and, in the case of a Conversion to or a
Continuation of Eurodollar Rate Advances, notify each Bank of the applicable
interest rate under Section 2.6(b). For purposes other than the conditions set
forth in Section 3.2, the portion of Revolving Advances comprising part of the
same Revolving Borrowing that are Converted to Revolving Advances of another
Type shall constitute a new Revolving Borrowing.
(3) Certain Limitations. Notwithstanding anything in
paragraphs (a) and (b) above:
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(1) each Borrowing (other than a Borrowing
of Swingline Advances) shall be in an aggregate amount not less
than $2,000,000 or greater multiples of $1,000,000, in the case
of Eurodollar Rate Advances, or $1,000,000 or greater multiples
of $100,000, in the case of Prime Rate Advances, and shall
consist of Advances of the same Type made on the same day by the
Banks ratably according to their respective Commitments.
(2) at no time shall there be more than five
Interest Periods applicable to outstanding Eurodollar Rate
Advances;
(3) the Borrower may not select Eurodollar
Rate Advances for any Borrowing to be made, Converted or
continued if (A) the aggregate amount of such Borrowing is less
than $2,000,000 or (B) a Default has occurred and is continuing;
(4) (A) if any Bank shall, at any time prior
to the making of any requested Borrowing comprised of Eurodollar
Rate Advances, notify the Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes
it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Bank or its
Eurodollar Lending Office to perform its obligations under this
Agreement to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances, such Bank's Pro Rata Share of such
Borrowing shall be made as a Prime Rate Advance of such Bank, but
otherwise shall be considered part of the same Borrowing and
interest on such Prime Rate Advance shall be due and payable at
the same time that interest on the Eurodollar Rate Advances
comprising the remainder of such Borrowing shall be due and
payable; and (B) such Bank agrees to use commercially reasonable
efforts (consistent with its internal policies and legal and
regulatory restrictions) to designate a different Applicable
Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable
judgment of such Bank, be otherwise disadvantageous to such Bank;
(5) if the Agent is unable to determine the
Eurodollar Rate for Eurodollar Rate Advances comprising any
requested Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Borrowing or for any subsequent
Borrowing shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such
suspension no longer exist, and each Advance comprising such
Borrowing shall be a Prime Rate Advance;
(6) if the Majority Banks shall, at least
one Business Day before the date of any requested Borrowing,
notify the Agent that the Eurodollar Rate for Eurodollar Rate
Advances comprising such Borrowing will not adequately reflect
the cost to such Banks of making or funding their respective
Eurodollar Rate Advances, as the case may be, for such Borrowing,
the right of the Borrower to select
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Eurodollar Rate Advances for such Borrowing or for any subsequent
Borrowing shall be suspended until the Agent shall notify the
Borrower and the Banks that the circumstances causing such
suspension no longer exist, and each Advance comprising such
Borrowing shall be a Prime Rate Advance; and
(7) if the Borrower shall fail to select the
duration or continuation of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.1
and paragraph (a) or (b) above, the Agent will forthwith so
notify the Borrower and the Banks and such Advances will be made
available to the Borrower on the date of such Borrowing as Prime
Rate Advances or, if an existing Advance, Converted into Prime
Rate Advances.
(4) Notices Irrevocable. Each Notice of Borrowing and Notice
of Conversion or Continuation shall be irrevocable and binding on the Borrower.
In the case of any Borrowing which the related Notice of Borrowing specifies is
to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Bank against any loss, out-of-pocket cost or expense incurred by such Bank as a
result of any condition precedent for Borrowing set forth in Article III not
being satisfied for any reason, including, without limitation, any loss, cost
or expense actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to fund the Advance to be made by
such Bank as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(5) Agent Reliance. Unless the Agent shall have received
notice from a Bank before the date of any Revolving Borrowing or Mandatory
Revolving Borrowing that such Bank will not make available to the Agent such
Bank's Pro Rata Share of the Borrowing, the Agent may assume that such Bank has
made its Pro Rata Share of such Borrowing available to the Agent on the date of
such Borrowing in accordance with paragraph (a) of this Section 2.2 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Bank shall
not have so made its Pro Rata Share of such Borrowing available to the Agent,
such Bank and the Borrower severally agree to immediately repay to the Agent on
demand such corresponding amount, together with interest on such amount, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid to the Agent, at (i) in the case of the Borrower,
the interest rate applicable on such day to Advances comprising such Borrowing
and (ii) in the case of such Bank, the Federal Funds Rate for such day. If
such Bank shall repay to the Agent such corresponding amount and interest as
provided above, such corresponding amount so repaid shall constitute such
Bank's Advance as part of such Borrowing for purposes of this Agreement even
though not made on the same day as the other Advances comprising such
Borrowing.
(6) Bank Obligations Several. The failure of any Bank to
make the Advance to be made by it as part of any Borrowing shall not relieve
any other Bank of its obligation, if any, to make its Advance on the date of
such Borrowing. No Bank shall be responsible for the failure of any other Bank
to make the Advance to be made by such other Bank on the date of any Borrowing.
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(7) Notes. The indebtedness of the Borrower to each Bank
resulting from Revolving Advances owing to such Bank shall be evidenced by the
Revolving Note of the Borrower payable to the order of such Bank in
substantially the form of Exhibit A. The indebtedness of the Borrower to SG
resulting from Swingline Advances owing to SG shall be evidenced by the
Swingline Note of the Borrower payable to the order of SG in substantially the
form of Exhibit L.
Section II.3 Fees.
(1) Commitment Fees. The Borrower agrees to pay to the Agent
for the account of each Bank a commitment fee on the average daily amount by
which such Bank's Revolving Commitment exceeds the sum of such Bank's
outstanding Revolving Advances and Pro Rata Share of the Letter of Credit
Exposure at a rate per annum equal to the Applicable Margin for the period from
the Effective Date until the Maturity Date, such fees due and payable quarterly
in arrears on the last Business Day of each March, June, September and December
and on the Maturity Date.
(2) Letter of Credit Fees. The Borrower agrees to pay to the
Agent for the pro rata benefit of the Banks, fees in respect of all Letters of
Credit outstanding at a rate per annum equal to the Applicable Margin
calculated on the maximum amount available from time to time to be drawn under
such outstanding Letters of Credit, payable in arrears (i) on and through the
last Business Day of each March, June, September and December and (ii) on the
Maturity Date. In addition, the Borrower agrees to pay to each Issuing Bank
for its own account fees in respect of all Letters of Credit outstanding and
issued by such Issuing Bank equal to one-eighth percent (1/8%) per annum of the
maximum amount available from time to time to be drawn under such outstanding
Letters of Credit, payable in arrears on the last Business Day of each March,
June, September and December and on the Maturity Date.
(3) Agent Fees. The Borrower agrees to pay to the Agent for
its benefit the fees set forth in the Agent's Fee Letter.
Section II.4 Reduction of the Revolving Commitments.
(1) Voluntary Reduction. The Borrower shall have the right,
upon at least three Business Days' irrevocable notice to the Agent, to
terminate in whole or reduce ratably in part the unused portion of the
Revolving Commitments; provided that each partial reduction shall be in the
aggregate amount of $1,000,000 or an integral multiple of $1,000,000. Any
reduction or termination of the Revolving Commitments pursuant to this Section
2.4 shall be permanent, with no obligation of the Banks to reinstate such
Revolving Commitments and the commitment fees provided for in Section 2.3(a)
shall thereafter be computed on the basis of the Revolving Commitments, as so
reduced.
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(2) Change of Control. Upon the occurrence of any of the
following:
(i) a change in control is reported by the Borrower in response
to either Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act"),
or (ii) any "person" (as such term is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Borrower
representing the Control Percentage or more of the combined
voting power of the Borrower's then outstanding securities;
then, in such event the Majority Banks may, at their sole option
upon written notice to the Borrower (a "Termination Notice"),
declare the obligation of each Bank to make Advances and the
obligation of each Issuing Bank to issue, increase, or extend
Letters of Credit to be terminated, whereupon the same shall
forthwith terminate and the Revolving Commitments shall reduce to
zero.
Section II.5 Repayment of Advances.
(1) Revolving Advances. The Borrower shall repay the
outstanding principal amount of each Revolving Advance on the Maturity Date.
(2) Swingline Advances. The Borrower shall repay the
outstanding principal amount of each Swingline Advance on the earlier of the
Maturity Date or the date which is three Business Days after the date such
Swingline Advance was made.
Section II.6 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(1) Prime Rate Advances. If such Advance is a Prime Rate
Advance, a rate per annum equal at all times to the lesser of (i) the Adjusted
Prime Rate in effect from time to time plus the Applicable Margin and (ii) the
Maximum Rate, payable in arrears on the last Business Day of each calendar
quarter and on the date such Prime Rate Advance shall be paid in full, provided
that any amount of principal which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear interest from the date on
which such amount is due until such amount is paid in full, payable on demand,
at a rate per annum equal at all times to the lesser of (a) the rate required
to be paid on such Advance immediately prior to the date on which such amount
becomes due plus two percent (2%) and (b) the Maximum Rate.
(2) Eurodollar Rate Advances. If such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during the
Interest Period for such Advance to the lesser of (i) the Eurodollar Rate for
such Interest Period plus the Applicable Margin and (ii) the Maximum Rate,
payable in arrears on the last day of such Interest Period, and on the date
such Eurodollar Rate Advance shall be paid in full; provided that any amount of
principal which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to the lesser of (A) the greater of (1) the
Adjusted Prime Rate in effect from time to time plus two percent (2%) and (2)
the rate required to be paid on such Advance immediately prior to the date on
which such amount became due plus two percent (2%) and (B) the Maximum Rate.
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(3) Swingline Advances. If such Advance is a Swingline
Advance, a rate per annum equal at all times to the lesser of (i) the rate
agreed to pursuant to the Letter Agreement dated as of April 17, 1998 between
SG and the Borrower and (ii) the Maximum Rate, payable in arrears on the date
such Advance shall be paid in full, provided that any amount of principal which
is not paid when due (whether at stated maturity, by acceleration or otherwise)
shall bear interest from the date on which such amount is due until such amount
is paid in full, payable on demand, at a rate per annum equal at all times to
the lesser of (A) the rate required to be paid on such Advance immediately
prior to the date on which such amount becomes due plus two percent (2%) and
(B) the Maximum Rate.
(4) Usury Recapture. In the event the rate of interest
chargeable under this Agreement or the Notes at any time is greater than the
Maximum Rate, the unpaid principal amount of the Notes shall bear interest at
the Maximum Rate until the total amount of interest paid or accrued on the
Notes equals the amount of interest which would have been paid or accrued on
the Notes if the stated rates of interest set forth in this Agreement had at
all times been in effect. In the event, upon payment in full of the Notes, the
total amount of interest paid or accrued under the terms of this Agreement and
the Notes is less than the total amount of interest which would have been paid
or accrued if the rates of interest set forth in this Agreement had, at all
times, been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Agent for the account of the Banks an amount equal to
the difference between (i) the lesser of (A) the amount of interest which would
have been charged on the Notes if the Maximum Rate had, at all times, been in
effect and (B) the amount of interest which would have accrued on the Notes if
the rates of interest set forth in this Agreement had at all times been in
effect and (ii) the amount of interest actually paid or accrued under this
Agreement on the Notes. In the event the Banks ever receive, collect or apply
as interest any sum in excess of the Maximum Rate, such excess amount shall, to
the extent permitted by law, be applied to the reduction of the principal
balance of the Notes, and if no such principal is then outstanding, such excess
or part thereof remaining shall be paid to the Borrower.
(5) Other Amounts Overdue. If any amount payable under this
Agreement other than the Advances is not paid when due and payable, including
without limitation, accrued interest and fees, then such overdue amount shall
accrue interest hereon due and payable on demand at a rate per annum equal to
the Adjusted Prime Rate plus two percent (2%), from the date such amount became
due until the date such amount is paid in full.
Section II.7 Prepayments.
(1) Right to Prepay. The Borrower shall have no right to
prepay any principal amount of any Advance except as provided in this Section
2.7.
(2) Optional Prepayments. The Borrower may elect to prepay
any of the Advances, after giving notice thereof to the Agent (i) by 11:00 a.m.
(Dallas, Texas time) on the day of prepayment of any Swingline Advance, and
(ii) by 11:00 a.m. (Dallas Texas time) at least
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three Business Days' prior to the day of prepayment of any Eurodollar Rate
Advances, and at least one Business Day prior to the day of prepayment of any
Prime Rate Advances. Such notice must state the proposed date and aggregate
principal amount of such prepayment, whether such prepayment should be applied
to reduce outstanding Revolving Advances or Swingline Advances, and if
applicable, the relevant Interest Period for the Advances to be prepaid. If
any such notice is given, the Borrower shall prepay Advances comprising part of
the same Borrowing in whole or ratably in part in an aggregate principal amount
equal to the amount specified in such notice, and shall also pay accrued
interest to the date of such prepayment on the principal amount prepaid and
amounts, if any, required to be paid pursuant to Section 2.8 as a result of
such prepayment being made on such date; provided, however, that each partial
prepayment of Eurodollar Rate Advances shall be in an aggregate principal
amount not less than $1,000,000 or an integral multiple of $1,000,000.
(3) Mandatory Prepayments.
(1) Change of Control. On the fifth Business Day
following the Borrower's receipt of a Termination Notice pursuant to
Section 2.4(b) hereof, the Borrower shall be required to prepay all
outstanding Advances in full and to deposit with the Agent into the Cash
Collateral Account an amount equal to the Letter of Credit Exposure.
(2) Borrowing Base Deficiency. On each Borrowing
Base Determination Date, the Borrower shall be required to prepay the
Advances in an aggregate amount equal to the excess of (A) the aggregate
amount of outstanding Advances and Letter of Credit Exposure on such date
over (B) the Borrowing Base, as determined on such Borrowing Base
Determination Date (or, upon payment in full of all outstanding Advances,
to deposit with the Agent into the Cash Collateral Account an amount equal
to the amount of the Letter of Credit Exposure which exceeds the Borrowing
Base).
(3) Reduction of Revolving Commitments. In the
event the Revolving Commitments are reduced in accordance with Section
2.4(a), the Borrower shall prepay the Advances to the extent the
outstanding Advances plus the Letter of Credit Exposure exceed the reduced
Revolving Commitments (or, upon payment in full of all outstanding
Advances, to deposit with the Agent into the Cash Collateral Account an
amount equal to the amount of the Letter of Credit Exposure which exceeds
the Revolving Commitments as so reduced).
(4) Accrued Interest. Each prepayment pursuant to
this Section 2.7(c) shall be accompanied by accrued interest on the amount
prepaid to the date of such prepayment and amounts, if any, required to be
paid pursuant to Section 2.8 as a result of such prepayment being made on
such date.
(5) Avoidance of Breakage Costs. In the event that
the amount of any mandatory prepayment of Advances under this Section
2.7(c) exceeds the aggregate principal amount of Advances which consist of
Prime Rate Advances (the amount of such excess being the "Excess Amount"),
the Borrower shall have the right, in lieu of making such prepayment in
full, to prepay such outstanding Advances which are Prime Rate
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Advances and to deposit an amount equal to the Excess Amount with the
Agent in the Cash Collateral Account maintained by and in the sole
dominion and control of the Agent for the ratable benefit of the Banks.
Any amount so deposited shall be held by the Agent as collateral for the
Obligations and applied to the prepayment of Advances which are Eurodollar
Rate Advances at the end of the current Interest Period(s) applicable
thereto. On any day on which amounts collected in the Cash Collateral
Account remain on deposit in or to the credit of the Cash Collateral
Account after giving effect to the payment made on such day pursuant to
this Section 2.7(c), and the Borrower shall have delivered to the Agent a
written request or a telephonic request (which shall be promptly confirmed
in writing) prior to 10:00 am (Dallas, Texas time) that such remaining
collected amounts be invested in cash equivalents specified in such
request, the Agent shall invest such funds, to the extent the Agent is
reasonably able to do so, in such cash equivalents as are acceptable to,
and with no risk to, the Agent on an overnight basis or with maturities
such that amounts will be available to pay the Obligations secured thereby
as they become due, whether at maturity, by acceleration or otherwise;
provided, however, that any loss resulting from such investments shall be
charged to and be immediately payable by the Borrower on demand by the
Agent.
(4) Ratable Payments. Each payment of any Advance pursuant
to this Section 2.7 or any other provision of this Agreement shall be made in a
manner such that all Advances comprising part of the same Borrowing are paid in
whole or ratably in part.
(5) Effect of Notice. All notices given pursuant to this
Section 2.7 shall be irrevocable and binding upon the Borrower.
Section II.8 Breakage Costs. If (a) any payment of principal of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance as a result of any payment pursuant to Section 2.7 or
the acceleration of the maturity of the Notes pursuant to Article VIII or
otherwise; (b) any Conversion of a Eurodollar Rate Advance is made other than
on the last day of the Interest Period for such Advance pursuant to Section
2.12 or otherwise; or (c) the Borrower fails to make a principal or interest
payment with respect to any Eurodollar Rate Advance on the date such payment is
due and payable, the Borrower shall, within 10 days of any written demand sent
by any Bank to the Borrower through the Agent, pay to the Agent for the account
of such Bank any amounts (without duplication of any other amounts payable in
respect of breakage costs) required to compensate such Bank for any additional
losses, out-of-pocket costs or expenses which it may reasonably incur as a
result of such payment or nonpayment, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any Bank
to fund or maintain such Advance.
Section II.9 Increased Costs.
(1) Eurodollar Rate Advances. If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the calculation of the Eurodollar
Rate) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental
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Authority (whether or not having the force of law), there shall be any increase
in the cost to any Bank of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon
demand by such Bank (with a copy of such demand to the Agent), immediately pay
to the Agent for the account of such Bank additional amounts (without
duplication of any other amounts payable in respect of increased costs)
sufficient to compensate such Bank for such increased cost; provided, however,
that, before making any such demand, each Bank agrees to use commercially
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost and would not, in the reasonable judgment of such Bank,
be otherwise disadvantageous to such Bank. A certificate as to the amount of
such increased cost and detailing the calculation of such cost submitted to the
Borrower and the Agent by such Bank at the time such Bank demands payment under
this Section shall be conclusive and binding for all purposes, absent manifest
error.
(2) Capital Adequacy. If any Bank or any Issuing Bank
determines in good faith that compliance with any law or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) implemented or effective after the
date of this Agreement affects or would affect the amount of capital required
or expected to be maintained by such Bank or such Issuing Bank and that the
amount of such capital is increased by or based upon the existence of such
Bank's commitment to lend or such Issuing Bank's commitment to issue Letters of
Credit or any Bank's commitment to risk participate in Letters of Credit and
other commitments of this type, then, upon 30 days prior written notice by such
Bank or such Issuing Bank (with a copy of any such demand to the Agent), the
Borrower shall immediately pay to the Agent for the account of such Bank or to
such Issuing Bank, as the case may be, from time to time as specified by such
Bank or such Issuing Bank, additional amounts (without duplication of any other
amounts payable in respect of increased costs) sufficient to compensate such
Bank or such Issuing Bank, in light of such circumstances, (i) with respect to
such Bank, to the extent that such Bank reasonably determines such increase in
capital to be allocable to the existence of such Bank's commitment to lend
under this Agreement or its commitment to risk participate in Letters of Credit
and (ii) with respect to such Issuing Bank, to the extent that such Issuing
Bank reasonably determines such increase in capital to be allocable to the
issuance or maintenance of the Letters of Credit. A certificate as to such
amounts and detailing the calculation of such amounts submitted to the Borrower
by such Bank or such Issuing Bank shall be conclusive and binding for all
purposes, absent manifest error.
(3) Letters of Credit. If any change in any law or
regulation or in the interpretation thereof by any court or administrative or
Governmental Authority charged with the administration thereof shall either (i)
impose, modify, or deem applicable any reserve, special deposit, or similar
requirement against letters of credit issued by, or assets held by, or deposits
in or for the account of, any Issuing Bank or any Bank or (ii) impose on such
Issuing Bank or any Bank any other condition regarding the provisions of this
Agreement relating to the Letters of Credit or any Letter of Credit
Obligations, and the result of any event referred to in the preceding clause
(i) or (ii) shall be to increase the cost to such Issuing Bank of issuing or
maintaining any Letter of Credit, or increase the cost to such Bank of its risk
participation in any Letter of Credit
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(which increase in cost shall be determined by such Issuing Bank's or such
Bank's reasonable allocation of the aggregate of such cost increases resulting
from such event), then, upon demand by such Issuing Bank or such Bank (with a
copy sent to the Agent), as the case may be, the Borrower shall pay to the
Agent (for the account of such Issuing Bank), as the case may be, from time to
time as specified by such Issuing Bank or such Bank, additional amounts which
shall be sufficient to compensate such Issuing Bank or such Bank for such
increased cost. Each Issuing Bank and each Bank agrees to use commercially
reasonable efforts (consistent with internal policy and legal and regulatory
restrictions) to designate a different Applicable Lending Office for the
booking of its Letters of Credit or risk participations if the making of such
designation would avoid the effect of this paragraph and would not, in the
reasonable judgment of such Issuing Bank or such Bank, be otherwise
disadvantageous to such Issuing Bank or such Bank, as the case may be. A
certificate as to such increased cost incurred by such Issuing Bank or such
Bank, as the case may be, as a result of any event mentioned in clause (i) or
(ii) above, and detailing the calculation of such increased costs submitted by
such Issuing Bank or such Bank to the Borrower, shall be conclusive and binding
for all purposes, absent manifest error.
Section II.10 Payments and Computations.
(1) Payment Procedures. Except if otherwise set forth
herein, the Borrower shall make each payment under this Agreement and under the
Notes not later than 11:00 a.m. (Dallas, Texas time) on the day when due in
Dollars to the Agent at the location referred to in the Notes (or such other
location as the Agent shall designate in writing to the Borrower) in same day
funds. The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal, interest or fees ratably (other than
amounts payable solely to the Agent, the Issuing Banks, or a specific Bank
pursuant to Section 2.1(b), 2.3(b), 2.3(c), 2.6(c), 2.8, 2.9, 2.11, 2.12, or
2.13(c) but after taking into account payments effected pursuant to Section
9.4) to the Banks in accordance with each Bank's Pro Rata Share for the account
of their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Bank or any Issuing Bank to such
Bank or such Issuing Bank for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.
(2) Computations. All computations of interest based on the
Adjusted Prime Rate shall be made by the Agent on the basis of a year of 365 or
366 days, as the case may be, and all computations of fees and interest based
on the Eurodollar Rate and the Federal Funds Rate shall be made by the Agent on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day, but excluding the last day) occurring in the period
for which such interest or fees are payable. Each determination by the Agent
of an interest rate shall be conclusive and binding for all purposes, absent
manifest error.
(3) Non-Business Day Payments. Whenever any payment shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
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(4) Agent Reliance. Unless the Agent shall have received
written notice from the Borrower prior to the date on which any payment is due
to the Banks that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such date an amount equal to the amount then due
such Bank. If and to the extent the Borrower shall not have so made such
payment in full to the Agent, each Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank, together with interest, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate for such day.
(5) Application of Payments. Unless otherwise specified in
Section 2.7 hereof, whenever any payment received by the Agent under this
Agreement is insufficient to pay in full all amounts then due and payable under
this Agreement and the Notes, such payment shall be distributed and applied by
the Agent and the Banks in the following order: first, to the payment of fees
and expenses due and payable to the Agent under and in connection with this
Agreement or any other Credit Document; second, to the payment of all expenses
due and payable under Section 2.11(c), ratably among the Banks in accordance
with the aggregate amount of such payments owed to each such Bank; third, to
the payment of fees due and payable to the Issuing Banks pursuant to Section
2.3(b); fourth, to the payment of all other fees due and payable under Section
2.3 ratably among the Banks in accordance with their applicable Commitments;
and fifth, to the payment of the interest accrued on and the principal amount
of all of the Notes and the interest accrued on and all Reimbursement
Obligations, regardless of whether any such amount is then due and payable,
ratably among the Banks in accordance with the aggregate accrued interest plus
the aggregate principal amount owed to such Bank.
Section II.11 Taxes.
(1) No Deduction for Certain Taxes. Any and all payments by
the Borrower shall be made, in accordance with Section 2.10, free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank, each Issuing Bank, and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Bank, such Issuing Bank, or the Agent (as the case
may be) is organized or any political subdivision of the jurisdiction (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes") and, in the case of each
Bank and each Issuing Bank, Taxes by the jurisdiction of such Bank's Applicable
Lending Office or any political subdivision of such jurisdiction. If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable to any Bank, any Issuing Bank, or the Agent, (i) the sum payable
shall be increased as may be necessary so that, after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.11), such Bank, such Issuing Bank, or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made; provided, however, that if the Borrower's obligation to
deduct or withhold Taxes is caused solely by such
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Bank's, such Issuing Bank's, or the Agent's failure to provide the forms
described in paragraph (e) of this Section 2.11 and such Bank, such Issuing
Bank, or the Agent could have provided such forms, no such increase shall be
required; (ii) the Borrower shall make such deductions; and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(2) Other Taxes. In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes, or the other Credit Documents (hereinafter referred to as
"Other Taxes").
(3) Indemnification. The Borrower indemnifies each Bank,
each Issuing Bank, and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.11) paid by such Bank,
such Issuing Bank, or the Agent (as the case may be) and any liability
(including interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Each payment required to be made by the Borrower in respect of this
indemnification shall be made to the Agent for the benefit of any party
claiming such indemnification within 30 days from the date the Borrower
receives written demand detailing the calculation of such amounts therefor from
the Agent on behalf of itself as Agent, any Issuing Bank, or any such Bank. If
any Bank, the Agent, or any Issuing Bank receives a refund in respect of any
taxes paid by the Borrower under this paragraph (c), such Bank, the Agent, or
such Issuing Bank, as the case may be, shall promptly pay to the Borrower the
Borrower's share of such refund.
(4) Evidence of Tax Payments. The Borrower will pay prior to
delinquency all Taxes payable in respect of any payment. Within 30 days after
the date of any payment of Taxes, the Borrower will furnish to the Agent, at
its address referred to in Section 9.2, the original or a certified copy of a
receipt evidencing payment of such Taxes.
(5) Foreign Bank Withholding Exemption. Each Bank and each
Issuing Bank that is not incorporated under the laws of the United States of
America or a state thereof agrees that it will deliver to the Borrower and the
Agent on the date of this Agreement or upon the effectiveness of any Assignment
and Acceptance (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Bank is entitled to receive payments under
this Agreement and the Notes payable to it, without deduction or withholding of
any United States federal income taxes, (ii) if applicable, an Internal Revenue
Service Form W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding tax, and (iii) any
other governmental forms which are necessary or required under an applicable
tax treaty or otherwise by law to reduce or eliminate any withholding tax,
which have been reasonably requested by the Borrower. Each Bank which delivers
to the Borrower and the Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant
to the next preceding sentence further undertakes to deliver to the Borrower
and the Agent two further copies of Form 1001 or 4224
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and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower and
the Agent, and such extensions or renewals thereof as may reasonably be
requested by the Borrower and the Agent certifying in the case of a Form 1001
or 4224 that such Bank is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes. If
an event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any delivery required by the preceding
sentence would otherwise be required which renders all such forms inapplicable
or which would prevent any Bank from duly completing and delivering any such
letter or form with respect to it and such Bank advises the Borrower and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of a Form W-8
or W-9, establishing an exemption from United States backup withholding tax,
such Bank shall not be required to deliver such forms. The Borrower shall
withhold tax at the rate and in the manner required by the laws of the United
States with respect to payments made to a Bank failing to timely provide the
requisite Internal Revenue Service forms.
Section II.12 Illegality. If any Bank shall notify the Agent and the
Borrower that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful for such Bank or its
Eurodollar Lending Office to perform its obligations under this Agreement to
maintain any Eurodollar Rate Advances of such Bank then outstanding hereunder,
then, notwithstanding anything herein to the contrary, the Borrower shall, if
demanded by such Bank in its notice, no later than 11:00 a.m. (Dallas, Texas
time), (a) if not prohibited by law or regulation to maintain such Eurodollar
Rate Advances for the duration of the Interest Period, on the last day of the
Interest Period for each outstanding Eurodollar Rate Advance of such Bank or
(b) if prohibited by law or regulation to maintain such Eurodollar Rate
Advances for the duration of the Interest Period, on the second Business Day
following its receipt of such notice from such Bank, Convert all Eurodollar
Rate Advances of such Bank then outstanding to Prime Rate Advances, and pay
accrued interest on the principal amount Converted to the date of such
Conversion and amounts, if any, required to be paid pursuant to Section 2.8 as
a result of such Conversion being made on such date. Each Bank agrees to use
commercially reasonable efforts (consistent with its internal policies and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such designation would avoid the effect of this
paragraph and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank.
Section II.13 Letters of Credit.
(1) Issuance. From time to time from the date of this
Agreement until three months before the Maturity Date, at the request of the
Borrower, each Issuing Bank shall, on any Business Day and on the terms and
conditions hereinafter set forth, issue, increase, decrease, amend, or extend
the expiration date of Letters of Credit for the account of the Borrower (for
its own benefit or for the benefit of any of its Subsidiaries). No Letter of
Credit will be issued, increased, or extended (i) if such issuance, increase,
or extension would cause the
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Letter of Credit Exposure to exceed the lesser of (A) $75,000,000 or (B) an
amount equal to (1) the lesser of the Borrowing Base or the aggregate Revolving
Commitments less (2) the aggregate outstanding Revolving Advances, Swingline
Advances and Letter of Credit Exposure at such time; (ii) unless such Letter of
Credit has an Expiration Date not later than the earlier of (A) one year after
the date of issuance thereof and (B) five days before the Maturity Date; (iii)
unless such Letter of Credit is in form and substance acceptable to the
respective Issuing Bank in its sole discretion; (iv) unless such Letter of
Credit is a standby letter of credit not supporting the repayment of
indebtedness for borrowed money of any Person, other than a Letter of Credit
issued in substitution of any letter of credit outstanding on the Effective
Date and listed on Schedule 1.1(b); (v) unless the Borrower has delivered to
the respective Issuing Bank a completed and executed letter of credit
application on such Issuing Bank's standard form, which shall contain terms no
more restrictive than the terms of this Agreement; and (vi) unless such Letter
of Credit is governed by the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500
("UCP") or any successor to the UCP. If the terms of any letter of credit
application referred to in the foregoing clause (v) conflicts with the terms of
this Agreement, the terms of this Agreement shall control.
(2) Participations. With respect to each Letter of Credit
described on Schedule 1.1(b) which is outstanding on the Effective Date, each
Bank agrees that it has a participation in the related Letter of Credit
Exposure equal to such Bank's Pro Rata Share on the Effective Date. On the
date of the issuance or increase of any Letter of Credit on or after the
Effective Date, each Issuing Bank shall be deemed to have sold to each other
Bank and each other Bank shall have been deemed to have purchased from such
Issuing Bank a participation in the Letter of Credit Exposure related to the
Letters of Credit issued by such Issuing Bank equal to such Bank's Pro Rata
Share at such date and such sale and purchase shall otherwise be in accordance
with the terms of this Agreement. Each Issuing Bank shall promptly notify each
such participant Bank by telex, telephone, or telecopy of each Letter of Credit
of such Issuing Bank issued, increased or decreased, and the actual dollar
amount of such Bank's participation in such Letter of Credit. Each Bank's
obligation to purchase participating interests pursuant to this Section and to
reimburse the respective Issuing Bank for such Bank's Pro Rata Share of any
payment under a Letter of Credit by such Issuing Bank not reimbursed in full by
the Borrower shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any of the circumstances
described in paragraph (d) below, (ii) the occurrence and continuance of a
Default, (iii) an adverse change in the financial condition of the Borrower or
any Guarantor, or (iv) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing, except for any such
circumstance, happening or event constituting or arising from gross negligence
or willful misconduct on the part of such Issuing Bank.
(3) Reimbursement. The Borrower hereby agrees to pay on
demand to each Issuing Bank in respect of each Letter of Credit issued by such
Issuing Bank an amount equal to any amount paid by such Issuing Bank under or
in respect of such Letter of Credit. In the event any Issuing Bank makes a
payment pursuant to a request for draw presented under a Letter of Credit and
such payment is not promptly reimbursed by the Borrower upon demand, such
Issuing Bank shall give notice of such payment to the Agent and the Banks, and
each Bank shall promptly reimburse such Issuing Bank for such Bank's Pro Rata
Share of such payment, and such
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reimbursement shall be deemed for all purposes of this Agreement to constitute
a Prime Rate Advance to the Borrower from such Bank. If such reimbursement is
not made by any Bank to any Issuing Bank on the same day on which such Issuing
Bank shall have made payment on any such draw, such Bank shall pay interest
thereon to such Issuing Bank at a rate per annum equal to the Federal Funds
Rate. The Borrower hereby unconditionally and irrevocably authorizes,
empowers, and directs the Agent and the Banks to record and otherwise treat
each payment under a Letter of Credit not immediately reimbursed by the
Borrower as a Borrowing comprised of Prime Rate Advances to the Borrower.
(4) Obligations Unconditional. The obligations of the
Borrower under this Agreement in respect of each Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, notwithstanding the
following circumstances:
(1) any lack of validity or enforceability of any
Letter of Credit Documents;
(2) any amendment or waiver of or any consent to
departure from any Letter of Credit Documents;
(3) the existence of any claim, set-off, defense or
other right which the Borrower or any Bank or any other Person
may have at any time against any beneficiary or transferee of
such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the respective
Issuing Bank or any other Person or entity, whether in connection
with this Agreement, the transactions contemplated in this
Agreement or in any Letter of Credit Documents or any unrelated
transaction;
(4) any statement or any other document presented
under such 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 to the extent the
respective Issuing Bank would not be liable therefor pursuant to
the following paragraph (e);
(5) payment by the respective Issuing Bank under
such Letter of Credit against presentation of a draft or
certificate which does not comply with the terms of such Letter
of Credit; or
(6) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;
provided, however, that nothing contained in this paragraph (d) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.
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(5) Liability of Issuing Banks. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter
of Credit with respect to its use of such Letter of Credit. No Issuing Bank
nor any of its officers or directors shall be liable or responsible for:
(1) the use which may be made of any Letter of
Credit or any acts or omissions of any beneficiary or transferee
in connection therewith;
(2) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged;
(3) payment by such Issuing Bank against
presentation of documents which do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the relevant Letter of Credit;
or
(4) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit (including
such Issuing Bank's own negligence),
except that the Borrower shall have a claim against such Issuing Bank, and such
Issuing Bank shall be liable to, and shall promptly pay to, the Borrower, to
the extent of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by (A) such Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (B) such Issuing Bank's willful failure to make lawful payment under
any Letter of Credit after the presentation to it of a draft and certificate
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing, any Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
Section II.14 Determination of Borrowing Base. The Borrowing Base
shall be determined by the Agent, as follows:
(1) Monthly. On the 25th day of each calendar month the
Agent shall determine the Borrowing Base upon receipt of a Borrowing Base
Certificate dated as of the last day of the immediately preceding calendar
month.
(2) Acceptable Security Interest. Each of the Eligible
Revenue Equipment, the Treadco Shares and the Eligible Receivables shall be
subject to an Acceptable Security Interest in favor of the Agent for the
benefit of the Banks until the Liens held by the Agent for the benefit of the
Banks upon the Collateral have been released pursuant to Section 2.17(f).
(3) Property Adjustments. Following (i) any sale by the
Borrower or any Guarantor of any Property included in the Borrowing Base with a
sales value in excess of $25,000,000 individually or in the aggregate since the
most recent month end, (ii) any loss or casualty not covered by insurance
resulting in destruction of any Property included in the
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Borrowing Base if the loss or casualty exceeds $25,000,000 individually or in
the aggregate since the most recent month end, and (iii) any permitted purchase
by the Borrower or any Guarantor of any Property which can be included in the
Borrowing Base with a purchase price in excess of $25,000,000 individually or
in the aggregate since the most recent month end (each of such events
hereinafter called an "Adjustment Event"), the Borrower shall (in the case of
(i) and (ii) above) or may (in the case of (iii) above) give the Agent notice
of such Adjustment Event within five Business Days of the closing of such
Adjustment Event, and the Agent may in its sole reasonable discretion (in the
case of (i) and (ii) above) or shall (in the case of (iii) above) further
adjust the appropriate Borrowing Base components set forth in the most recent
month end Borrowing Base Certificate delivered by the Borrower to the Banks to
reflect the Adjustment Events occurring since the date of such Borrowing Base
Certificate.
(4) Notice of Borrowing Base Change. Promptly following any
date the Borrowing Base is redetermined in accordance with the preceding
paragraphs, the Agent shall give notice to the Banks and the Borrower of the
new Borrowing Base.
Section II.15 Bank Replacement.
(1) Right to Replace. The Borrower shall have the right to
replace each Bank affected by a condition under Section 2.2(c)(iv), 2.9, or
2.12 for more than 90 days (each such affected Bank, an "Affected Bank") in
accordance with the procedures in this Section 2.15 and provided that no
reduction of the total Revolving Commitments occurs as a result thereof.
(2) First Right of Refusal; Replacement.
(1) Upon the occurrence of any condition permitting
the replacement of a Bank, each Bank which is not an Affected
Bank shall have the right, but not the obligation, to elect to
increase its respective Revolving Commitment by an amount not to
exceed the amount of the Revolving Commitments of the Affected
Banks, which election shall be made by written notice from each
such Bank to the Agent and the Borrower given within 30 days
after the date such condition occurs specifying the amount of
such proposed increase in such Bank's Revolving Commitment.
(2) If the aggregate amount of the proposed
increases in Revolving Commitments of all such Banks making such
an election is in excess of the Revolving Commitments of the
Affected Banks, (A) the Revolving Commitments of the Affected
Banks shall be allocated pro rata among such Banks based on the
respective amounts of the proposed increases to Revolving
Commitments elected by each of such Banks, and (B) the respective
Commitments of such Banks shall be increased by the respective
amounts as so allocated so that after giving effect to such
termination and increases the aggregate amount of the Revolving
Commitments of the Banks will be the same as prior to such
termination.
(3) If the aggregate amount of the proposed
increases to Revolving Commitments of all Banks making such an
election equals the Revolving
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Commitments of the Affected Banks, the respective Revolving
Commitments of such Banks shall be increased by the respective
amounts of their proposed increases, so that after giving effect
to such termination and increase the aggregate amount of the
Revolving Commitments of all of the Banks will be the same as
prior to such termination.
(4) If the aggregate amount of the proposed
increases to Revolving Commitments of all Banks making such an
election is less than the Revolving Commitments of the Affected
Banks, (A) the respective Revolving Commitments of such Banks
shall be increased by the respective amounts of their proposed
increases, and (B) the Borrower shall add additional Banks which
are Eligible Assignees to this Agreement to replace such Affected
Banks, which additional Banks would have aggregate Revolving
Commitments no greater than those of the Affected Banks minus the
amounts thereof assumed by the other Banks pursuant to such
increases.
(3) Procedure. Any assumptions of Revolving Commitments
pursuant to this Section 2.15 shall be (i) made by the purchasing Bank or
Eligible Assignee and the selling Bank entering into an Assignment and
Assumption and by following the procedures in Section 9.6 for adding a Bank.
In connection with the increase of the Revolving Commitments of any Bank
pursuant to the foregoing paragraph (b), each Bank with an increased Revolving
Commitment shall purchase from the Affected Banks at par such Bank's ratable
share of the outstanding Advances of the Affected Banks and assume such Bank's
ratable share of the Affected Banks' Letter of Credit Exposure.
Section II.16 Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of its Advances or its share of Letter of
Credit Obligations in excess of its Pro Rata Share of payments on account of
the Advances or Letter of Credit Obligations obtained by all the Banks, such
Bank shall notify the Agent and forthwith purchase from the other Banks such
participations in the Advances made by them or Letter of Credit Obligations
held by them as shall be necessary to cause such purchasing Bank to share the
excess payment ratably in accordance with the requirements of this Agreement
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such Bank's ratable share (according to the
proportion of (a) the amount of the participation sold by such Bank to the
purchasing Bank as a result of such excess payment to (b) the total amount of
such excess payment) of such recovery, together with an amount equal to such
Bank's ratable share (according to the proportion of (i) the amount of such
Bank's required repayment to the purchasing Bank to (ii) the total amount of
all such required repayments to 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 that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.16 may, to the fullest extent
permitted by law, unless and until rescinded as provided above, exercise all
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation.
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Section II.17 Collateral.
(1) Creation and Perfection of Liens. Prior to the
termination of the Revolving Commitments and the repayment in full of the
Obligations, a perfected Lien shall exist on all Collateral in favor of the
Agent for the benefit of the Banks to secure the Obligations in accordance with
the terms of the Security Agreements, except that to the extent any Lien
previously granted to the Agent for the benefit of the Banks on Revenue
Equipment is unperfected as of the Effective Date, the Borrower shall cause
such Liens to be perfected as promptly as practicable.
(2) Further Assurances. The Borrower agrees to promptly, on
demand, execute and deliver, and cause the Guarantors to execute and deliver,
at the Borrower's expense, such security agreements, pledge agreements,
assignments, mortgages, financing statements, stock powers, and other
collateral documentation, and take such other actions deemed by the Agent and
its counsel to be necessary in order to effect the foregoing.
(3) Appraisals. The Borrower agrees to obtain, at its own
expense and as promptly as practicable, such other appraisals as any
Governmental Authority may require the Agent to obtain from time to time to
satisfy any applicable Legal Requirement.
(4) Certificates of Title. The Borrower agrees to hold, and
to cause each Guarantor to hold, the certificates of title relating to titled
Revenue Equipment of the Borrower or any Guarantor only at the offices listed
on Schedule 2.17 attached hereto and in the custody of the Custodians described
in the Borrower Security Agreement and the Guarantors Security Agreement.
(5) Authorized Sales of Property and Release of Liens by
Agent. The Banks hereby acknowledge and agree that the Borrower and any
Guarantor may from time to time elect to make an Authorized Sale of Property.
In connection with any such Authorized Sale of Property, each of the Banks
hereby agrees that the Agent is authorized to release, or to provide for the
release, of any Lien held by the Agent for the benefit of the Banks upon the
Property to be sold without further notice to, or consent from, the Banks;
provided that on the date of the requested release of Lien and on the date of
the sale of any such Property, no Default has occurred which is continuing (it
being agreed by the Borrower that each request for a release of Lien shall
constitute a representation and warranty from the Borrower in favor of the
Banks, effective on the date of such release of Lien and on the date of the
sale of such Property, that no Default has occurred and is continuing on such
date or would result from the sale of such Property).
(6) Release of Collateral. If at any time, (a) either (i)
the Borrower's Senior Unsecured Debt is rated BBB- or higher by S&P and Baa3 or
higher by Xxxxx'x, or (ii) the Borrower's Leverage Ratio is 1.90 to 1.00 or
less for a period of three consecutive fiscal quarters, and (b) no Default has
occurred and is continuing, then the Agent and the Banks agree that all Liens
and security interest they may have on all Collateral shall terminate, and each
of the Banks
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hereby agrees that the Agent is authorized to release, or to provide for the
release, of any Lien held by the Agent for the benefit of the Banks upon the
Collateral without further notice to, or consent from the Banks. The Agent
agrees to promptly notify the Banks upon the release of the Liens held by the
Agent for the benefit of the Banks upon all of the Collateral under this
Section 2.17(f).
ARTICLE III
CONDITIONS OF LENDING
Section III.1 Conditions Precedent to Effectiveness of this Agreement.
This Agreement shall become effective upon the following conditions precedent
having been satisfied:
(1) Documentation. The Agent shall have received
counterparts of this Agreement executed by the Borrower and the Banks, and the
following duly executed by all the parties thereto, in form and substance
satisfactory to the Agent, and in sufficient copies for each Bank:
(1) the Guaranty, the Borrower Security Agreement,
the Guarantors Security Agreement, and any related Uniform
Commercial Code financing statements;
(2) a certificate from the Chief Executive Officer,
President or Chief Financial Officer of the Borrower dated as of
the Effective Date stating that as of the Effective Date (A) all
representations and warranties of the Borrower set forth in this
Agreement and the Security Agreements are true and correct in all
material respects; (B) no Default has occurred and is continuing;
and (C) the conditions in this Section 3.1 have been met;
(3) a certificate of the Secretary or an Assistant
Secretary of the Borrower and each Guarantor dated as of the date
of this Agreement certifying as of the date of this Agreement (A)
the names and true signatures of officers of the Borrower and
such Guarantor authorized to sign the Credit Documents to which
such Person is a party, (B) resolutions of the Board of Directors
of such Person with respect to the transactions herein
contemplated, and (C) copies of the articles or certificate of
incorporation and bylaws of such Person;
(4) a favorable opinion of Xxxxxxx X. Xxxxxx,
General Counsel to the Borrower and Guarantors, dated as of the
Effective Date and in substantially the form of Exhibit H;
(5) a favorable opinion of Xxxxxxxxx & Xxxxxxxxx,
L.L.P., counsel to the Agent, dated as of the Effective Date and
in substantially in the form of the attached Exhibit I;
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(6) the audited Consolidated and unaudited
consolidating balance sheet of the Borrower and its Subsidiaries
as at December 31, 1997, and the related Consolidated and
consolidating statements of operations, shareholders' equity and
cash flows, of the Borrower and its Subsidiaries for the fiscal
year then ended, duly certified by the Chief Financial Officer or
Treasurer of the Borrower;
(7) a Borrowing Base Certificate dated as of April
30, 1998 duly completed and executed by the Chief Financial
Officer or Treasurer of the Borrower; and
(8) such other documents, governmental certificates,
agreements, lien searches as the Agent may reasonably request.
(2) Representations and Warranties. The representations and
warranties contained in Article IV hereof and Section 7 of the Guaranty and in
each Security Agreement shall be true and correct in all material respects.
(3) Certain Payments. The Borrower shall have paid the fees
required to be paid as of the Effective Date pursuant to the Agent's Fee
Letter.
(4) Termination of Existing Credit Agreement. The Agent and
the Banks shall have received sufficient evidence indicating that
contemporaneously with the making of the initial Advances, the obligations of
the Borrower under the Existing Credit Agreement will be repaid with the
proceeds of such Advances and thereafter all obligations of the Borrower and
the lenders under the Existing Credit Agreement shall be terminated (including,
without limitation, any obligations of any Subsidiary of the Borrower in
respect of guaranties, security agreements executed in connection with such
Existing Credit Agreement but excluding any obligations which expressly survive
the repayment of the amounts owing under the Existing Credit Agreement).
Section III.2 Conditions Precedent for each Borrowing or Letter of
Credit. The obligation of each Bank to fund an Advance on the occasion of each
Borrowing (other than the Conversion or continuation of any existing Borrowing
and other than a Mandatory Revolving Borrowing) and of any Issuing Bank to
issue or increase or extend any Letter of Credit shall be subject to the
further conditions precedent that on the date of such Borrowing or the issuance
or increase or extension of such Letter of Credit the following statements
shall be true (and each of the giving of the applicable Notice of Borrowing and
the acceptance by the Borrower of the proceeds of such Borrowing or the
issuance or increase or extension of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
or the issuance or increase or extension of such Letter of Credit such
statements are true):
(1) the representations and warranties contained in Article
IV hereof and Section 7 of the Guaranty and in each Security Agreement are
correct in all material respects on and as of the date of such Borrowing or the
issuance or increase or extension of such Letter of
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Credit, before and after giving effect to such Borrowing or to the issuance or
increase or extension of such Letter of Credit and to the application of the
proceeds from such Borrowing, as though made on and as of such date and
(2) no Default has occurred and is continuing or would result
from such Borrowing or from the application of the proceeds therefrom.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section IV.1 Corporate Existence; Subsidiaries. The Borrower is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware and in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its
business requires such qualification and where a failure to be qualified could
reasonably be expected to cause a Material Adverse Change. Each Subsidiary of
the Borrower is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and in good
standing and qualified to do business in each jurisdiction where its ownership
or lease of property or conduct of its business requires such qualification and
where a failure to be qualified could reasonably be expected to cause a
Material Adverse Change. The Borrower has no Subsidiaries on the date of this
Agreement other than the Subsidiaries listed on the attached Schedule 4.1, and
Schedule 4.1 lists the jurisdiction of incorporation and the address of the
principal office of each such Subsidiary existing on the date of this
Agreement.
Section IV.2 Corporate Power. The execution, delivery, and
performance by the Borrower and each Guarantor of the Credit Documents to which
it is a party and the consummation of the transactions contemplated hereby and
thereby (a) are within the Borrower's and the Guarantors' corporate powers, (b)
have been duly authorized by all necessary corporate action, (c) do not
contravene (i) the Borrower's or any Guarantor's certificate or articles, as
the case may be, of incorporation or by-laws or (ii) any law or any contractual
restriction binding on or affecting the Borrower or any Guarantor, the
contravention of which could reasonably be expected to cause a Material Adverse
Change, and (d) will not result in or require the creation or imposition of any
Lien prohibited by this Agreement. At the time of each Borrowing, such
Borrowing and the use of the proceeds of such Borrowing will be within the
Borrower's corporate xxxxxx, xxxx have been duly authorized by all necessary
corporate action, (A) will not contravene (1) the Borrower's certificate of
incorporation or by-laws or (2) any law or any contractual restriction binding
on or affecting the Borrower, the contravention of which could reasonably be
expected to cause a Material Adverse Change, and (B) will not result in or
require the creation or imposition of any Lien prohibited by this Agreement.
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Section IV.3 Authorization and Approvals. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required for the due execution, delivery and performance by the
Borrower or any Guarantor of the Credit Documents to which it is a party or the
consummation of the transactions contemplated thereby. At the time of each
Borrowing, no authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority will be required for such Borrowing or
the use of the proceeds of such Borrowing.
Section IV.4 Enforceable Obligations. This Agreement, the Notes, and
the other Credit Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower and the Guaranty and the Guarantors
Security Agreement and the other Credit Documents to which each Guarantor is a
party have been duly executed and delivered by such Guarantor. Each Credit
Document is the legal, valid, and binding obligation of the Borrower and each
Guarantor which is a party to it enforceable against the Borrower and each such
Guarantor in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium,
or similar law affecting creditors' rights generally and by general principles
of equity (whether considered in proceeding at law or in equity).
Section IV.5 Financial Statements.
(1) The audited Consolidated and unaudited consolidating
balance sheet of the Borrower and its Subsidiaries as at December 31, 1997, and
the related Consolidated and consolidating statements of operations,
shareholders' equity and cash flows, of the Borrower and its Subsidiaries for
the fiscal year then ended, copies of which have been furnished to each Bank
duly certified by the Chief Financial Officer or Treasurer of the Borrower,
fairly present the financial condition of the Borrower and its Subsidiaries as
at such date and the results of the operations of the Borrower and its
Subsidiaries for the year ended on such date, and such balance sheet and
statements were prepared in accordance with GAAP.
(2) No Material Adverse Change has occurred.
Section IV.6 True and Complete Disclosure. No representation,
warranty, or other statement made by the Borrower (or on behalf of the
Borrower) in this Agreement or any other Credit Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which they were made as of the date of this Agreement. There
is no fact known to any Responsible Officer of the Borrower on the date of this
Agreement and on the Effective Date that has not been disclosed to the Agent
which they reasonably expect to cause a Material Adverse Change. All
projections, estimates, and pro forma financial information furnished by the
Borrower or on behalf of the Borrower were prepared on the basis of
assumptions, data, information, tests, or conditions believed to be reasonable
at the time such projections, estimates, and pro forma financial information
were furnished.
Section IV.7 Litigation. Except as set forth in the attached Schedule
4.7, there is no pending or, to the best knowledge of the Borrower, threatened
action or proceeding affecting the
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Borrower or any of its Subsidiaries before any court, Governmental Authority or
arbitrator, which could reasonably be expected to cause a Material Adverse
Change or which purports to affect the legality, validity, binding effect or
enforceability of this Agreement, any Note, or any other Credit Document.
Section IV.8 Use of Proceeds.
(1) Revolving Advances. The proceeds of the Revolving
Advances have been, and will be used by the Borrower to refinance existing
indebtedness under the Existing Credit Agreement and for general corporate
purposes of the Borrower and its Subsidiaries.
(2) Swingline Line Advances. The proceeds of the Swingline
Line Advances will be used by the Borrower for general corporate purposes of
the Borrower and its Subsidiaries.
(3) Regulations. No proceeds of Advances will be used to
purchase or carry any margin stock in violation of Regulations G, T, U or X of
the Federal Reserve Board, as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof. The Borrower is
not engaged in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U of the Federal
Reserve Board).
Section IV.9 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section IV.10 Taxes. Except as set forth on Schedule 4.10, all
federal, state, local and foreign tax returns, reports and statements required
to be filed (after giving effect to any extension granted in the time for
filing) by the Borrower, its Subsidiaries or any member of the Controlled Group
(hereafter collectively called the "Tax Group") have been filed with the
appropriate governmental agencies in all jurisdictions in which such returns,
reports and statements are required to be filed, and where the failure to file
could reasonably be expected to cause a Material Adverse Change, except where
contested in good faith and by appropriate proceedings; and all material taxes
and other material impositions due and payable have been timely paid prior to
the date on which any material fine, penalty, interest, late charge or loss may
be added thereto for non-payment thereof except where contested in good faith
and by appropriate proceedings. Neither the Borrower nor any member of the Tax
Group has given, or been requested to give, a waiver of the statute of
limitations relating to the payment of any federal, state, local or foreign
taxes or other impositions. None of the property owned by the Borrower or any
other member of the Tax Group is property which the Borrower or any member of
the Tax Group is required to treat as being owned by any other Person pursuant
to the provisions of Section 168(f)(8) of the Code. Proper and accurate
amounts have been withheld by the Borrower and all other members of the Tax
Group from their employees for all periods to comply in all material respects
with the tax, social security and unemployment withholding provisions of
applicable federal, state, local and foreign law. Timely payment of all
material sales and use taxes required by applicable law have been made by the
Borrower and all other members of the Tax Group, the failure to timely pay of
which could reasonably be expected to
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cause a Material Adverse Change. The amounts shown on all tax returns to be
due and payable have been paid in full or adequate provision therefor is
included on the books of the appropriate member of the Tax Group.
Section IV.11 Pension Plans. All Plans are in compliance in all
material respects with all applicable provisions of ERISA. No Termination
Event has occurred with respect to any Plan, and each Plan has complied with
and been administered in all material respects in accordance with applicable
provisions of ERISA and the Code. No "accumulated funding deficiency" (as
defined in Section 302 of ERISA) has occurred and there has been no excise tax
imposed under Section 4971 of the Code. To the knowledge of any Responsible
Officer of the Borrower, no Reportable Event has occurred with respect to any
Multiemployer Plan, and each Multiemployer Plan has complied with and been
administered in all material respects with applicable provisions of ERISA and
the Code. To the knowledge of any Responsible Officer of the Borrower, neither
the Borrower nor any member of the Controlled Group has had a complete or
partial withdrawal from any Multiemployer Plan for which there is any material
withdrawal liability. As of the most recent valuation date applicable thereto,
neither the Borrower nor any member of the Controlled Group has received notice
that any Multiemployer Plan is insolvent or in reorganization.
Section IV.12 Condition of Property; Casualties. The material
Properties used or to be used in the continuing operations of the Borrower and
each of its Subsidiaries, taken as a whole, are and will continue to be in good
repair, working order and condition, normal wear and tear excepted. Since
December 31, 1997, neither the business nor the material Properties of the
Borrower and its Subsidiaries, taken as a whole, has been materially and
adversely affected as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by a Governmental Authority, riot, activities of armed forces or
acts of God or of any public enemy.
Section IV.13 Insurance. The Borrower and each of its Subsidiaries
carry insurance with reputable insurers in respect of such of their respective
Properties, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar businesses or, self-insure
to the extent that is customary for Persons of similar size engaged in similar
businesses.
Section IV.14 No Burdensome Restrictions; No Defaults.
(1) Neither the Borrower nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction or
provision of applicable law or governmental regulation which could reasonably
be expected to cause a Material Adverse Change. The Borrower and the
Guarantors are not in default under or with respect to any contract, agreement,
lease or other instrument to which the Borrower or any Guarantor is a party and
which could reasonably be expected to cause a Material Adverse Change. Neither
the Borrower nor any Guarantor has received any notice of default under any
material contract, agreement, lease or other instrument to which the Borrower
or such Guarantor is a party which is continuing and which, if not cured, could
reasonably be expected to cause a Material Adverse Change.
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(2) No Default has occurred and is continuing.
Section IV.15 Environmental Condition.
(1) The Borrower and its Subsidiaries, taken as a whole, (i)
have obtained all Environmental Permits necessary for the ownership and
operation of their respective material Properties and the conduct of their
respective businesses; (ii) have been and are in compliance with all terms and
conditions of such Environmental Permits and with all other material
requirements of applicable Environmental Laws of which the failure to comply
could reasonably be expected to cause a Material Adverse Change; (iii) have not
received notice of any violation or alleged violation of any Environmental Law
or Environmental Permit, which violation could reasonably be expected to cause
a Material Adverse Change; and (iv) are not subject to any actual or contingent
material Environmental Claim, which Environmental Claim could reasonably be
expected to cause a Material Adverse Change.
(2) None of the present or previously owned or operated
Property of the Borrower or of any of its present or former Subsidiaries,
wherever located, (i) has been placed on or proposed to be placed on the
National Priorities List, the Comprehensive Environmental Response Compensation
Liability Information System list, or their state or local analogs, or have
been otherwise investigated, designated, listed, or identified as a potential
site for removal, remediation, cleanup, closure, restoration, reclamation, or
other response activity under any Environmental Laws which could reasonably be
expected to cause a Material Adverse Change; (ii) is subject to a Lien, arising
under or in connection with any Environmental Laws, that attaches to any
revenues or to any Property owned or operated by the Borrower or any of its
Subsidiaries, wherever located, which Lien could reasonably be expected to
cause a Material Adverse Change; or (iii) has been the site of any Release of
Hazardous Substances or Hazardous Wastes from present or past operations which
has caused at the site or at any third-party site any condition that has
resulted in or could reasonably be expected to result in the need for Response
that could cause a Material Adverse Change.
(3) Without limiting the foregoing, the present and, to the
best knowledge of any Responsible Officer of the Borrower, future liability, if
any, of the Borrower and its Subsidiaries, taken as a whole, which could
reasonably be expected to arise in connection with requirements under
Environmental Laws will not result in a Material Adverse Change.
Section IV.16 Permits, Licenses, etc. The Borrower and its
Subsidiaries possess all certificates of public convenience, authorizations,
permits, licenses, patents, patent rights or licenses, trademarks, trademark
rights, trade names rights and copyrights which are material to the conduct of
its business. The Borrower and its Subsidiaries manage and operate their
business in accordance with all applicable Legal Requirements which the failure
to so manage or operate could reasonably be expected to cause a Material
Adverse Change.
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Section IV.17 Existing Mortgage Debt. All outstanding Indebtedness
secured by a Lien on real property of the Borrower or any Guarantor existing as
of the Effective Date is described on Schedule 6.1, and the amount of such
Indebtedness shown on such Schedule is the aggregate outstanding amount as of
the Effective Date. No "default" or "event of default", however defined, has
occurred and is continuing under any documentation evidencing such Indebtedness
or the Lien securing such Indebtedness.
Section IV.18 Year 2000. (a) The Borrower has (i) begun analyzing the
operations of the Borrower and its Subsidiaries and Affiliates that could be
adversely affected by the failure to become Year 2000 Compliant and (ii)
developed a plan for becoming Year 2000 Compliant in a timely manner, the
implementation of which is on schedule in all material respects and (iii) as of
the Effective Date, implemented that plan in accordance with that schedule in
all material respects. The Borrower reasonably believes that it will become
Year 2000 compliant for its operations and those of its Subsidiaries and
Affiliates on a timely basis except to the extent that a failure to do so could
not reasonably be expected to cause a Material Adverse Change.
(b) The Borrower reasonably believes any suppliers and vendors that
are material to the operations of the Borrower or its Subsidiaries and
Affiliates will be Year 2000 Compliant for their own computer applications
except to the extent that a failure to do so could not reasonably be expected
to cause a Material Adverse Change.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Revolving Commitment hereunder, the Borrower agrees, unless the Majority
Banks shall otherwise consent in writing, to comply with the following
covenants.
Section V.1 Compliance with Laws, Etc. The Borrower will comply, and
cause each of its Subsidiaries to comply, with all Legal Requirements of which
the failure to comply could reasonably be expected to cause a Material Adverse
Change; provided, however, that this Section 5.1 shall not prevent the
Borrower, or any of its Subsidiaries from, in good faith and with reasonable
diligence, contesting the validity or application of any such laws or
regulations by appropriate legal proceedings.
Section V.2 Insurance. The Borrower will maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates, provided that the Borrower or such Subsidiary may
self-insure to the extent and in the manner normal for similarly situated
companies of like size, type and financial condition that are part of a group
of companies under common control. All policies shall
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expressly protect or recognize the Agent's interest as required by the Agent.
Upon request the Borrower shall deliver certificates evidencing such insurance
and copies of the underlying policies as they are available.
Section V.3 Preservation of Corporate Existence, Etc. The Borrower
will preserve and maintain, and cause each of the Guarantors to preserve and
maintain, its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified, and cause
each such Guarantor to qualify and remain qualified, as a foreign corporation
in each jurisdiction in which qualification is necessary or desirable in view
of its business and operations or the ownership of its properties, and, in each
case, where failure to qualify or preserve and maintain its rights and
franchises could reasonably be expected to cause a Material Adverse Change;
provided, however, that nothing contained in this Section 5.3 shall prevent any
transaction permitted by Sections 6.4 or 6.9.
Section V.4 Payment of Taxes, Etc. The Borrower will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent and which the failure to timely pay or discharge
could reasonably be expected to cause a Material Adverse Change, (a) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or Property that are material in amount, prior to the date on
which penalties attach thereto and (b) all lawful claims that are material in
amount which, if unpaid, might by law become a Lien upon its Property;
provided, however, that neither the Borrower nor any such Subsidiary shall be
required to pay or discharge any such tax, assessment, charge, levy, or claim
which is being contested in good faith and by appropriate proceedings, and
(except with respect to the claim described on Schedule 4.10) with respect to
which reserves in conformity with GAAP have been provided.
Section V.5 Visitation Rights. At any reasonable time and from time
to time and so long as any visit or inspection will not unreasonably interfere
with the Borrower's or any of its Subsidiaries operations, upon reasonable
notice, the Borrower will, and will cause its Subsidiaries to, permit the Agent
and any Bank or any of its agents or representatives thereof, to examine and
make copies of and abstracts from the records and books of account of, and
visit and inspect at its reasonable discretion the properties of, the Borrower
and any such Subsidiary, to discuss the affairs, finances and accounts of the
Borrower and any such Subsidiary with any of their respective officers or
directors.
Section V.6 Reporting Requirements. The Borrower will furnish to the
Agent and each Bank:
(1) Quarterly Financials. As soon as available and in any
event not later than 45 days after the end of each of the first three quarters
of each fiscal year of the Borrower and not later than 60 days after the end of
the fourth quarter of each fiscal year of the Borrower, the unaudited
Consolidated and consolidating balance sheets of Borrower and its Subsidiaries
as of the end of such quarter and the related unaudited statements of income,
shareholders' equity and cash flows of the Borrower and its Subsidiaries for
the period commencing at the end of the previous year and ending with the end
of such quarter, and the corresponding figures as at the end of, and for, the
corresponding period in the preceding fiscal year, all in reasonable detail and
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duly certified with respect to such statements (subject to year-end audit
adjustments) by an authorized financial officer of the Borrower as having been
prepared in accordance with GAAP, together with a Compliance Certificate duly
executed by a Responsible Officer;
(2) Annual Financials. As soon as available and in any event
not later than 90 days after the end of each fiscal year of the Borrower, a
copy of the annual audit report for such year for the Borrower and its
Subsidiaries, including therein audited Consolidated balance sheets 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 of the Borrower and its Subsidiaries for such fiscal year, and the
corresponding figures as at the end of, and for, the preceding fiscal year, in
each case certified by Ernst & Young L.L.P. or other independent certified
public accountants of recognized standing acceptable to the Agent and
including, if requested by the Agent, any management letters delivered by such
accountants to the Borrower in connection with such audit together with a
certificate of such accounting firm to the Banks stating that, in the course of
the regular audit of the business of the Borrower and its Subsidiaries, which
audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge
that a Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as to
the nature thereof, together with a Compliance Certificate;
(3) Annual Projections. As soon as available and in any
event not later than March 31st of each calendar year, the Consolidated annual
projections of the Borrower and its Subsidiaries for such year in reasonable
detail and duly certified by an authorized financial officer of the Borrower as
the projections presented or to be presented to the Borrower's Board of
Directors for their review;
(4) Securities Law Filings. Promptly and in any event within
15 days after the sending or filing thereof, copies of all proxy material,
reports and other information which the Borrower or any of its Subsidiaries
sends to or files with the United States Securities and Exchange Commission or
sends to any shareholder of the Borrower or of any of its Subsidiaries;
(5) Defaults. As soon as possible and in any event within
five days after the occurrence of each Default known to a Responsible Officer
of the Borrower or any of its Subsidiaries, a statement of an authorized
financial officer of the Borrower setting forth the details of such Default and
the actions which the Borrower has taken and proposes to take with respect
thereto;
(6) ERISA Notices. Except as to any matter which could not
reasonably be expected to cause a Material Adverse Change, as soon as possible
and in any event (i) within 30 days after the Borrower or any of its
Subsidiaries knows or has reason to know that any Termination Event described
in clause (a) of the definition of Termination Event with respect to any Plan
has occurred, (ii) within 10 days after the Borrower or any of its Subsidiaries
knows or has reason to know that any other Termination Event with respect to
any Plan has occurred, a statement of the Chief Financial Officer of the
Borrower describing such Termination Event and the action, if any, which the
Borrower or such Subsidiary proposes to take with respect thereto; (iii) within
10 days after receipt thereof by the Borrower or any of its Subsidiaries from
the
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PBGC, copies of each notice received by the Borrower or any such Subsidiary of
the PBGC's intention to terminate any Plan or to have a trustee appointed to
administer any Plan; and (iv) within 10 days after receipt thereof by the
Borrower or any of its Subsidiaries from a Multiemployer Plan sponsor, a copy
of each notice received by the Borrower or any of its Subsidiaries concerning
the imposition or amount of withdrawal liability pursuant to Section 4202 of
ERISA;
(7) Environmental Notices. Promptly upon the knowledge of
any Responsible Officer of the Borrower of receipt thereof by the Borrower or
any of its Subsidiaries, a copy of any form of notice, summons or citation
received from the United States Environmental Protection Agency, or any other
Governmental Authority directly engaged in protection of the Environment,
concerning (i) material violations or alleged violations of Environmental Laws,
which seeks to impose liability therefor and which, based upon information
reasonably available to the Borrower at the time or after such violation, could
reasonably be expected to cause a Material Adverse Change, (ii) any action or
omission on the part of the Borrower or any of its present or former
Subsidiaries in connection with Hazardous Waste or Hazardous Substances which,
based upon information reasonably available to the Borrower at the time of such
receipt, could reasonably be expected to cause a Material Adverse Change, (iii)
any notice of potential responsibility under CERCLA which could reasonably be
expected to cause a Material Adverse Change, or (iv) concerning the filing of a
Lien other than a Permitted Lien upon, against or in connection with the
Borrower, its present or former Subsidiaries, or any of their leased or owned
Property, wherever located;
(8) Other Governmental Notices or Actions. Promptly and in
any event within five Business Days after receipt thereof by the Borrower or
any of its Subsidiaries, and the knowledge of such receipt by a Responsible
Officer of the Borrower or any inside counsel of the Borrower, (i) a copy of
any notice, summons, citation, or proceeding seeking to adversely modify in any
material respect, revoke, or suspend any license, permit, or other
authorization from the United States Department of Transportation, or any other
Governmental Authority, which action could reasonably be expected to cause a
Material Adverse Change, and (ii) any revocation or involuntary termination of
any license, permit or other authorization from the United States Department of
Transportation, or any other Governmental Authority, which revocation or
termination could reasonably be expected to cause a Material Adverse Change;
(9) Borrowing Base Certificate. On or prior to the 25th day
of each calendar month, a completed Borrowing Base Certificate setting forth
the components of the Borrowing Base as of the last day of the immediately
preceding calendar month;
(10) Other Notices. Promptly following any merger or
dissolution of any Subsidiary of the Borrower which is permitted hereunder,
notice thereof;
(11) Material Litigation. As soon as possible and in any
event within five days of any Responsible Officer of the Borrower or any of its
Subsidiaries having knowledge thereof, notice any litigation, claim or any
other event which could reasonably be expected to cause a Material Adverse
Change;
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(12) Year 2000. The Borrower will promptly notify the Agent
in the event the Borrower determines that any computer application which is
material to the operations of the Borrower, its Subsidiaries or any of its
material vendors or suppliers will not be fully Year 2000 compliant on a timely
basis, except to the extent that such failure could not be reasonably be
expected to cause a Material Adverse Change; and
(13) Other Information. Such other information respecting the
business or Properties, or the condition or operations, financial or otherwise,
of the Borrower, or any of its Subsidiaries, as any Bank through the Agent may
from time to time reasonably request.
Section V.7 Maintenance of Property. The Borrower will, and will
cause each of its Subsidiaries to, (a) maintain their material owned, leased,
or operated property, equipment, buildings and fixtures in substantially the
same or better condition and repair as the condition and repair as of December
31, 1997, normal wear and tear excepted and (b) not knowingly or willfully
permit the commission of waste or other injury, or the occurrence of pollution,
contamination or any other condition in, on or about the owned or operated
property involving the Environment that could reasonably be expected to cause a
Material Adverse Change.
Section V.8 Ownership of ABF. The Borrower will maintain its
ownership of 100% of the common stock of ABF Freight System, Inc., a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Revolving Commitment, the Borrower agrees, unless the Majority Banks
otherwise consent in writing, to comply with the following covenants.
Section VI.1 Liens, Etc. The Borrower will not create, assume, incur
or suffer to exist, or permit any of its Subsidiaries to create, assume, incur,
or suffer to exist, any Lien on or in respect of any of its Property whether
now owned or hereafter acquired, or assign any right to receive income, except
that the Borrower and its Subsidiaries may create, incur, assume or suffer to
exist Liens:
(1) securing the Obligations;
(2) for taxes, assessments or governmental charges or levies
on Property of the Borrower or any Guarantor to the extent not required to be
paid pursuant to Sections 5.1 and 5.4;
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(3) imposed by law, such as landlords', carriers',
warehousemen's and mechanics' liens and other similar Liens arising in the
ordinary course of business securing obligations which are not overdue for a
period of more than 15 days or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Borrower and its Subsidiaries in accordance with
GAAP;
(4) arising in the ordinary course of business out of pledges
or deposits under workers' compensation laws, unemployment insurance, old age
pensions or other social security or retirement benefits, bonds or letters of
credit, or similar legislation or to secure public or statutory obligations of
the Borrower or any of its Subsidiaries;
(5) existing on Property acquired by the Borrower or any of
its Subsidiaries in the ordinary course of business prior to the Borrower's or
such Subsidiaries' acquisition of such Property;
(6) securing Indebtedness incurred after the Effective Date
(other than secured Indebtedness permitted by the following paragraphs (g),
(j), (k), and (l) below) in an amount not to exceed $5,000,000 in the aggregate
at any time; provided that the fair market value of the collateral securing any
such Indebtedness may exceed the outstanding principal amount of such
Indebtedness only to the extent such excess is within customary commercial bank
lending and collateralization requirements;
(7) securing Indebtedness existing on the Effective Date and
listed on the attached Schedule 6.1; provided that the Indebtedness secured by
such Liens shall not be renewed, refinanced or extended if the amount of such
Indebtedness so renewed, refinanced or extended is greater than the outstanding
amount of such Indebtedness on the date of this Agreement;
(8) constituting easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title thereto
which, in the aggregate, are not material in amount, and which do not in any
case materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries;
(9) arising from litigation and which are effectively stayed
from execution and would not otherwise cause a Default to occur;
(10) on real property to secure the purchase price of such
Property or improvements thereon;
(11) on leased real and personal property to secure solely the
lease obligations associated with such property;
(12) on certain Receivables of any Intermodal Subsidiary in
favor of any railroad company which secures the obligations of such Intermodal
Subsidiary to such railroad company
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in connection with rail shipments with such railroad company contracted for by
such Intermodal Subsidiary for the benefit of the obligors of such Receivables;
and
(13) on real property securing surety bonds in an amount not
to exceed $10,000,000.
Section VI.2 Amendment of Material Documents. The Borrower will not,
nor will it permit any of its Subsidiaries to, enter into any amendment of the
Subordinated Debt Documents.
Section VI.3 Agreements Restricting Distributions From Subsidiaries.
The Borrower will not, nor will it permit any of its Subsidiaries to, enter
into any agreement (other than a Credit Document) which limits distributions to
or any advance by any of the Borrower's Subsidiaries to the Borrower.
Section VI.4 Merger or Consolidation; Asset Sales. The Borrower will
not, and will not permit any of its Subsidiaries to, (a) merge or consolidate
with or into any other Person, unless (i) the Borrower (in the case of any
transaction involving the Borrower) or such Subsidiary (unless such Subsidiary
is merged into the Borrower or another Subsidiary) is the surviving
corporation, and (ii) immediately after giving effect to any such proposed
transaction no Default would exist; or (b) sell, transfer, or otherwise dispose
of any of the Borrower's or such Subsidiary's Property (unless, in the case of
a Subsidiary, such assets are sold, leased, transferred or otherwise conveyed
to another Subsidiary which is a Guarantor) except for (i) sales, transfers and
dispositions in the ordinary course of business for a fair and adequate
consideration, (ii) sales, transfers or dispositions of assets which are
obsolete or are no longer in use and which are not significant to the
continuation of the Borrower or any of its Subsidiaries business; (iii) sales,
transfers or dispositions of assets, other than sales, transfer or dispositions
otherwise permitted by (i), (ii) or (iv) hereof, the Net Cash Proceeds of which
do not exceed $40,000,000 in the aggregate for all such sales, transfers or
dispositions of assets during any fiscal year; or (iv) sales of the assets or
capital stock of any Affiliate of the Borrower other than any of its
Subsidiaries.
Section VI.5 Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, make any Restricted Payment, except that (a)
a wholly-owned Subsidiary of the Borrower may make a Restricted Payment to the
Borrower or another wholly-owned Subsidiary of the Borrower, (b) provided no
Default has occurred and is continuing or would result therefrom, the Borrower
may pay or prepay the sinking fund payments which are required to be made by
the Borrower under Section 3.4 of the Indenture, provided that the Borrower may
not purchase Subordinated Debentures the aggregate face value of which exceeds
$5,000,000 in any fiscal year, and (c) provided no Default has occurred and is
continuing or would result therefrom, the Borrower or any Subsidiary may make
Restricted Payments of the kind described in clause (b) of the definition of
the term "Restricted Payments" in an aggregate amount not to exceed $9,000,000
in any fiscal year, provided further that if the Borrower's Senior Debt is
rated BBB- or higher by S&P or Baa3 or higher by Xxxxx'x, then the Borrower or
any Subsidiary may make Restricted Payments of the kind described in clause (b)
of the definition of the term "Restricted Payments" in an aggregate amount not
to exceed $18,000,000 in any fiscal year.
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Section VI.6 Investments, Loans, Advances. The Borrower will not, and
will not permit any of its Subsidiaries to, make or permit to exist any loans,
advances or capital contributions to, or make any investment in, or purchase or
commit to purchase any stock or other securities or evidences of indebtedness
of or interests in any Person, except the following (provided that after giving
effect thereto there shall exist no Default):
(1) the purchase of Liquid Investments with a Bank and the
purchase of Subordinated Debentures to the extent permitted by Section 6.5(b);
(2) trade and customer accounts receivable which are for
goods furnished or services rendered in the ordinary course of business and are
payable in accordance with customary trade terms;
(3) ordinary course of business contributions, loans or
advances to, or investments in, (i) a direct or indirect Subsidiary of the
Borrower, provided that if, at any time the aggregate amount of all such
contributions, loans or advances to, or investments in, any such Subsidiary
occurring exceeds $5,000,000, the Borrower shall have caused such Subsidiary
(if not then a Guarantor) to have executed and delivered to the Agent an
Accession Agreement, related financing statements and a certificate covering
the same matters described in Section 3.1(a)(iii) with respect to such
Guarantor and the Borrower's counsel shall deliver an opinion with respect
thereto covering the matters previously opined on with respect to each
Guarantor or (ii) the Borrower;
(4) contributions to, or capital investments in a Person
which, prior to such contribution or investment, is not a Subsidiary but which
becomes a Subsidiary as a result of such contribution or investment, provided
that (i) if the aggregate amount of such contributions to or investments in any
such Person exceeds $5,000,000, the Borrower shall have caused such Person to
have executed and delivered to the Agent an Accession Agreement, related
financing statements and a certificate covering the same matters described in
Section 3.1(a)(iii) with respect to such Person, and the Borrowers' counsel
shall deliver an opinion with respect thereto covering the matters previously
opined on with regard to each Guarantor; (ii) the aggregate amount of all such
contributions to, or investments in any such Persons which have not so executed
and delivered an Accession Agreement plus the aggregate amount of investments
under paragraph (e) below shall not exceed $5,000,000; and (iii) the aggregate
consideration paid (other than in the form of common stock of the Borrower)
after the Effective Date for such contributions or investments shall not exceed
$5,000,000 in any fiscal year; and
(5) other capital investments not otherwise permitted by this
Section 6.6 in any Person which is not, and will not become a Subsidiary of the
Borrower as a result of such capital investment provided that (i) the aggregate
amount of such investments outstanding at any time plus the aggregate amount of
contributions to, or investments in any Persons as contemplated under paragraph
(d) above which have not executed and delivered an Accession Agreement shall
not exceed $5,000,000; (ii) such Person shall be in the same or substantially
similar line or lines of business as the Borrower and its Subsidiaries or a
line of business directly related to providing services of the nature the
Borrower and its Subsidiaries provide on the date this Agreement is executed;
and (iii) the liabilities of such other Person shall be nonrecourse to the
Borrower and its Subsidiaries.
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Section VI.7 Affiliate Transactions. Except as expressly permitted
elsewhere in this Agreement, the Borrower will not, and will not permit any of
its Subsidiaries to, make, directly or indirectly: (a) any transfer, sale,
lease, assignment or other disposal of any assets to any Affiliate of the
Borrower or any purchase or acquisition of assets from any such Affiliate; or
(b) any arrangement or other transaction directly or indirectly with or for the
benefit of any such Affiliate (including without limitation, guaranties and
assumptions of obligations of an Affiliate); provided that the Borrower and its
Subsidiaries (i) may enter into any arrangement or other transaction with any
such Affiliate providing for the leasing of property, the rendering or receipt
of services or the purchase or sale of inventory and other assets in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Borrower and its
Subsidiaries as the monetary or business consideration which it would obtain in
a comparable arm's length transaction with a Person not such an Affiliate, (ii)
the Borrower and any of its Subsidiaries may guaranty or otherwise assume
obligations of an Affiliate to the extent permitted under Section 6.16 hereof,
and (iii) may maintain the arrangements listed on the attached Schedule 6.7.
Section VI.8 Maintenance of Ownership of Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, sell or otherwise
dispose of any shares of capital stock of any Guarantor except as otherwise
provided in Section 6.4. Upon the sale or disposition of any Guarantor to any
Person other than the Borrower or any other Guarantor, the Agent will, at the
Borrower's expense, execute and deliver to such Guarantor such documents as
such Guarantor shall reasonably require and take any other actions reasonably
required to evidence or effect the release of such Guarantor's Guaranty and the
termination of the Liens held by the Agent for the benefit of the Banks upon
the Collateral (unless such Liens have been released pursuant to Section
2.17(f)) pursuant to the Guarantors Security Agreement.
Section VI.9 No Further Negative Pledges. Except as set forth in
agreements and documentation governing Indebtedness of the Borrower or any of
its Subsidiaries existing on the Effective Date, or with respect to
prohibitions against other encumbrances on specific Property encumbered to
secure payment of particular Indebtedness (which Indebtedness related solely to
such specific Property, and improvements and accretions thereto, and is
otherwise permitted hereby), the Borrower will not, and will not permit any of
its Subsidiaries to, enter into or suffer to exist any agreement (other than
this Agreement and the Credit Documents) (a) prohibiting the creation or
assumption of any Lien upon the Properties of the Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or (b) requiring an
obligation to be secured if some other obligation is or becomes secured.
Section VI.10 Other Businesses. The Borrower will not, and will not
permit the Guarantors to, substantially alter the character of their respective
businesses from that conducted as of the Effective Date.
Section VI.11 Debt Service Ratio. The Borrower will not permit its
ratio, calculated as of the most recent Calculation Day for the applicable
Calculation Period, of (a) EBITDA for the
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Rolling Period ending on such date to (b) Adjusted Consolidated Debt Service
for such Rolling Period to be less than (i) 2.0 to 1.0 through the fiscal
quarter ending December 31, 1999 and (ii) 2.5 to 1.0 thereafter; provided,
however that if the Borrower sells, transfers or otherwise disposes of the
capital stock or all or substantially all of the Property of any of its
Subsidiaries (other than to another Subsidiary which is a Guarantor) which
Subsidiary generates in excess of $5,000,000 of annual EBITDA (as determined in
accordance with the Consolidated annual projections of the Borrower and its
Subsidiaries delivered on or before the Effective Date), then the ratio shall
not be less than 2.25 to 1.0 for each such Calculation Period during fiscal
year 2000 and 2001.
Section VI.12 Net Worth. The Borrower will not permit its Consolidated
Net Worth as of the most recent Calculation Day to be less than an amount equal
to $125,000,000 plus (A) 50% of cumulative Consolidated Net Income of the
Borrower (without deduction for quarterly losses) from January 1, 1998 to the
date of determination plus (B) 75% of the net cash proceeds of any issuance of
equity, including any conversion of the Subordinated Debentures by the Borrower
after the Effective Date; provided, however that if the Borrower sells,
transfers or otherwise disposes of the capital stock or all or substantially
all of the Property of any of its Subsidiaries (other than to another
Subsidiary which is a Guarantor) then the minimum Consolidated Net Worth shall
be reduced by up to $30,000,000 in book losses resulting from such sale,
transfer or disposition, on a dollar for dollar basis. For purposes of
calculating "Net Worth" pursuant to this Section 6.12, all earnings and losses
of Treadco after December 31, 1997 shall be excluded therefrom.
Section VI.13 Maximum Leverage Ratio. The Borrower will not permit its
Leverage Ratio to be greater than 3.75 to 1.0 calculated as of the most recent
Calculation Day for the applicable Calculation Period; provided, however that
if the Liens held by the Agent for the benefit of the Banks upon the Collateral
have been released pursuant to Section 2.17(f), then the Borrower's Leverage
Ratio shall not be greater than 3.45 to 1.0 calculated as of the most recent
Calculation Day for the applicable Calculation Period.
Section VI.14 Capital Expenditures. The Borrower may make or permit
any of its Subsidiaries to make or commit to make any Capital Expenditure;
provided, however, that Capital Expenditures may not exceed $85,000,000 in an
aggregate amount per fiscal year so long as the Borrower's Senior Debt is not
rated either BBB- or higher by S&P or Baa3 or greater by Xxxxx'x. For purposes
of calculating "Capital Expenditures" pursuant to this Section 6.14, all
Acquisition Expenditures permitted pursuant to Section 6.16 and any Net Cash
Proceeds received pursuant to Section 6.4 shall be excluded.
Section VI.15 Indebtedness. The Borrower will not incur or permit to
exist, or permit any of its Subsidiaries to incur or permit to exist, any
Indebtedness other than the Obligations and the following:
(1) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or another Subsidiary;
(2) Indebtedness outstanding on the Effective Date and listed
on Schedule 6.15;
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(3) Indebtedness of a corporation which becomes a Subsidiary
after the date hereof, provided that (i) such Indebtedness existed at the time
such corporation became a Subsidiary and was not created in anticipation
thereof and (ii) immediately after giving effect to the acquisition of such
corporation by the Borrower or a Subsidiary thereof, no Default shall have
occurred and be continuing;
(4) Capital Leases in connection with permitted Capital
Expenditures pursuant to Section 6.14;
(5) Subordinated Debt and other unsecured senior Indebtedness
incurred after the Effective Date (other than Indebtedness permitted pursuant
to paragraphs (a)-(d) above), provided that the Net Cash Proceeds of such
Subordinated Debt and such other unsecured Indebtedness are simultaneously used
to prepay Advances; and
(6) extensions, renewals and refinancing of any of the
Indebtedness specified in paragraphs (a) - (c) above so long as the principal
amount of such Indebtedness is not thereby increased.
Section VI.16 Acquisition Expenditures. The Borrower shall not and
shall not permit any of its Subsidiaries to make any Acquisition Expenditure,
unless (a) such Acquisition Expenditure is made in substantially the same or
complementary lines of business of the Borrower and does not violate any other
provision of this Agreement; (b) the aggregate amount of the Net Purchase
Prices made during any fiscal year does not exceed $40,000,000; (c) the
aggregate consideration paid in common stock for all Acquisition Expenditures
made during any fiscal year does not exceed $40,000,000; (d) at the time of
such Acquisition Expenditure no Default has occurred and is continuing or would
occur upon the consummation of such acquisition and the Agent shall have
received a Compliance Certificate demonstrating pro forma financial covenant
compliance; and (e) immediately following the making of such Acquisition
Expenditure, the lesser of (i) the aggregate amount of the Commitments or (ii)
the Borrowing Base exceeds the aggregate outstanding principal amount of the
Advances and the Letter of Credit Exposure by at least $20,000,000.
ARTICLE VII
REMEDIES
Section VII.1 Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default" under any Credit
Document:
(1) Payment. The Borrower shall fail to pay any principal of
any Note or any Reimbursement Obligation when the same becomes due and payable
as set forth in this Agreement, or any interest on any Note or any fee or other
amount payable hereunder or under any other Credit Document within five days
after the same becomes due and payable;
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(2) Representation and Warranties. Any representation or
warranty made or deemed to be made (i) by the Borrower in this Agreement or in
any other Credit Document, (ii) by the Borrower (or any of its officers) in
connection with this Agreement or any other Credit Document, or (iii) by any
Subsidiary in any Credit Document shall prove to have been incorrect in any
material respect when made or deemed to be made;
(3) Covenant Breaches. (i) The Borrower shall fail to
perform or observe any covenant contained in Sections 5.3 or 5.4, or Section
5.6(e), (f), (g), (h) or (i) or Article VI of this Agreement or the Borrower
shall fail to perform or observe its covenant in Section 4.4 of the Borrower
Security Agreement, or shall fail to cause any Guarantor to perform or observe
its covenant in Section 4.4 of the Guarantors Security Agreement or (ii) the
Borrower or any Guarantor shall fail to perform or observe any term or covenant
set forth in any Credit Document which is not covered by clause (i) above or
any other provision of this Section 7.1 if such failure shall remain unremedied
for 30 days after the earlier of the date written notice of such default shall
have been given to the Borrower or such Guarantor by the Agent or any Bank or
the date a Responsible Officer of the Borrower or any Guarantor has actual
knowledge of such default;
(4) Cross-Defaults. (i) The Borrower or any its Subsidiaries
shall fail to pay any principal of or premium or interest on its Indebtedness
which is outstanding in a principal amount of at least $15,000,000 individually
or when aggregated with all such Indebtedness of the Borrower or its
Subsidiaries so in default (but excluding Indebtedness evidenced by the Notes)
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness; (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to
Indebtedness which is outstanding in a principal amount of at least $15,000,000
individually or when aggregated with all such Indebtedness of the Borrower and
its Subsidiaries so in default, and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or (iii) any such Indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(5) Insolvency. The Borrower or any of its Subsidiaries
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Borrower or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against the
Borrower or any such Subsidiary, either such proceeding shall remain
undismissed for a period of 30 days or any of the actions sought in such
proceeding shall occur; or the Borrower or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
paragraph (e);
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(6) Judgments. Any judgment or order for the payment of
money in excess of $15,000,000 (reduced for purposes of this paragraph for the
amount in respect of such judgment or order that a reputable insurer has
acknowledged being payable under any valid and enforceable insurance policy)
shall be rendered against the Borrower or any of its Subsidiaries which, within
30 days from the date such judgment is entered, shall not have been discharged
or execution thereof stayed pending appeal;
(7) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is likely to result in the termination
of such Plan for purposes of Title IV of ERISA, unless such Reportable Event,
proceedings or appointment are being contested by the Borrower in good faith
and by appropriate proceedings, (iv) any Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower or any member of the Controlled Group shall
incur any liability in connection with a withdrawal from a Multiemployer Plan
or the insolvency (within the meaning of Section 4245 of ERISA) or
reorganization (within the meaning of Section 4241 of ERISA) of a Multiemployer
Plan, unless such liability is being contested by the Borrower in good faith
and by appropriate proceedings, or (vi) any other event or condition shall
occur or exist, with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events or
conditions, if any, could subject the Borrower or any Guarantor to any tax,
penalty or other liabilities in the aggregate exceeding $15,000,000;
(8) Guaranty. Any provision of the Guaranty requiring the
payment of the Guaranteed Obligations (as defined in the Guaranty) shall for
any reason cease to be valid and binding on any Guarantor or any Guarantor
shall so state in writing;
(9) Invalidity of Subordination Provisions. The
subordination provisions of the Subordinated Debentures shall be invalidated or
otherwise cease to be in full force and effect.
Section VII.2 Optional Acceleration of Maturity. If any Event of
Default (other than an Event of Default pursuant to paragraph (e) of Section
7.1) shall have occurred and be continuing, then, and in any such event,
(1) the Agent (i) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare the
obligation of each Bank to make Advances and the obligation of each Issuing
Bank to issue, increase, or extend Letters of Credit to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Majority Banks, by notice to the Borrower, declare
the Notes, all interest thereon, the Letter of Credit Obligations, and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Notes, all such interest, all such Letter of Credit Obligations
and all such amounts shall become and be
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forthwith due and payable in full, without presentment, demand, protest or
further notice of any kind (including, without limitation, any notice of intent
to accelerate or notice of acceleration), all of which are hereby expressly
waived by the Borrower, and
(2) the Borrower shall, on demand of the Agent at the request
or with the consent of the Majority Banks, deposit with the Agent into the Cash
Collateral Account an amount of cash equal to the Letter of Credit Exposure as
security for the Obligations to the extent the Letter of Credit Obligations are
not otherwise paid at such time.
Section VII.3 Automatic Acceleration of Maturity. If any Event of
Default pursuant to paragraph (e) of Section 7.1 shall occur,
(1) the obligation of each Bank to make Advances and the
obligation of each Issuing Bank to issue, increase, or extend Letters of Credit
shall immediately and automatically be terminated and the Notes, all interest
on the Notes, all Letter of Credit Obligations, and all other amounts payable
under this Agreement shall immediately and automatically become and be due and
payable in full, without presentment, demand, protest or any notice of any kind
(including, without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower and
(2) to the extent permitted by law or court order, the
Borrower shall deposit with the Agent into the Cash Collateral Account an
amount of cash equal to the outstanding Letter of Credit Exposure as security
for the Obligations to the extent the Letter of Credit Obligations are not
otherwise paid at such time.
Section VII.4 Cash Collateral Account.
(1) Pledge. The Borrower hereby pledges, and grants to the
Agent for the benefit of the Banks, a security interest in all funds held in
the Cash Collateral Account from time to time and all proceeds thereof, as
security for the payment of the Obligations, including without limitation all
Letter of Credit Obligations owing to any Issuing Bank or any other Bank due
and to become due from the Borrower to any Issuing Bank or any other Bank under
this Agreement in connection with the Letters of Credit.
(2) Application against Letter of Credit Obligations. The
Agent may, at any time or from time to time apply funds then held in the Cash
Collateral Account to the payment of any Letter of Credit Obligations owing to
any Issuing Bank, in such order as the Agent may elect, as shall have become or
shall become due and payable by the Borrower to any Issuing Bank under this
Agreement in connection with the Letters of Credit.
(3) Duty of Care. The Agent shall exercise reasonable care
in the custody and preservation of any funds held in the Cash Collateral
Account and shall be deemed to have exercised such care if such funds are
accorded treatment substantially equivalent to that which
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the Agent accords its own property, it being understood that the Agent shall
not have any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any such funds.
Section VII.5 Non-exclusivity of Remedies. No remedy conferred upon
the Agent or the Banks is intended to be exclusive of any other remedy, and
each remedy shall be cumulative of all other remedies existing by contract, at
law, in equity, by statute or otherwise.
Section VII.6 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 7.2 to authorize the
Agent to declare the Notes and any other amount payable hereunder due and
payable pursuant to the provisions of Section 7.2 or the automatic acceleration
of the Notes and all amounts payable under this Agreement pursuant to Section
7.3, each Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Bank to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement, the Note held by such Bank, and
the other Credit Documents, irrespective of whether or not such Bank shall have
made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured. Each Bank agrees to
promptly notify the Borrower after any such set-off and application made by
such Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under this
Section are in addition to any other rights and remedies (including, without
limitation, other rights of set-off) which such Bank may have.
ARTICLE VIII
AGENCY AND ISSUING BANK PROVISIONS
Section VIII.1 Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Credit Documents as are
delegated to the Agent by the terms hereof and of the other Credit Documents,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement or any other Credit
Document (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions
of the Majority Banks, and such instructions shall be binding upon all Banks
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement, any other Credit Document, or applicable
law.
Section VIII.2 Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken (including the Agent's own negligence) by it or them
under or in connection with this Agreement or the other
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Credit Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent:
(a) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties or
representations made in or in connection with this Agreement or the other
Credit Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Credit Document on the part of the Borrower or its
Subsidiaries or to inspect the property (including the books and records) of
the Borrower or its Subsidiaries; (e) shall not be responsible to any Bank for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Credit Document; and (f) shall incur no
liability under or in respect of this Agreement or any other Credit Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
Section VIII.3 The Agent and Its Affiliates. With respect to its
Revolving Commitment, the Advances made by it and the Notes issued to it, the
Agent shall have the same rights and powers under this Agreement as any other
Bank and may exercise the same as though it were not the Agent. The term
"Bank" or "Banks" shall, unless otherwise expressly indicated, include the
Agent in its individual capacity. The Agent and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower or any of its Subsidiaries,
and any Person who may do business with or own securities of the Borrower or
any such Subsidiary, all as if the Agent were not an agent hereunder and
without any duty to account therefor to the Banks.
Section VIII.4 Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent, any Co-Documentation
Agent or any other Bank and based on the financial statements referred to in
Section 4.5 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent, any Co-Documentation 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 credit decisions in taking or not taking action under
this Agreement.
Section VIII.5 Indemnification. The Banks severally agree to indemnify
the Agent, the Co-Documentation Agents and each Issuing Bank (to the extent not
reimbursed by the Borrower), according to their respective Pro Rata Shares from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent, any Co-Documentation Agent or such Issuing Bank in any way relating to
or arising out of this Agreement or any action taken or omitted by the Agent,
any Co-Documentation Agent or such
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Issuing Bank under this Agreement or any other Credit Document (including the
Agent's, such Co-Documentation Agent's or such Issuing Bank's own negligence),
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's, such Co-Documentation
Agent's and such Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Credit Document, to the extent that the Agent is not reimbursed
for such expenses by the Borrower.
Section VIII.6 Successor Agent and Issuing Banks. The Agent or any
Issuing Bank may resign at any time by giving written notice thereof to the
Banks and the Borrower and may be removed at any time with or without cause by
the Majority Banks upon receipt of written notice from the Majority Banks to
such effect. Upon receipt of notice of any such resignation or removal, the
Majority Banks shall have the right to appoint a successor Agent or Issuing
Bank with, if an Event of Default has not occurred and is not continuing, the
consent of the Borrower, which consent shall not be unreasonably withheld. If
no successor Agent or Issuing Bank shall have been so appointed, and shall have
accepted such appointment, within 30 days after the retiring Agent's or Issuing
Bank's giving of notice of resignation or the Majority Banks' removal of the
retiring Agent or Issuing Bank, then the retiring Agent or Issuing Bank may, on
behalf of the Banks and the Borrower, appoint a successor Agent or Issuing
Bank, which shall be a commercial bank meeting the financial requirements of an
Eligible Assignee and, in the case of an Issuing Bank, a Bank. Upon the
acceptance of any appointment as Agent or Issuing Bank by a successor Agent or
Issuing Bank, such successor Agent or Issuing Bank shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent or Issuing Bank, and the retiring Agent or Issuing Bank shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents, except that the retiring Issuing Bank shall remain an Issuing
Bank with respect to any Letters of Credit issued by such Issuing Bank and
outstanding on the effective date of its resignation or removal and the
provisions affecting such Issuing Bank with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Bank until the termination
of all such Letters of Credit. After any retiring Agent's or Issuing Bank's
resignation or removal hereunder as Agent or Issuing Bank, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent or Issuing Bank under this Agreement and
the other Credit Documents.
Section VIII.7 Co-Documentation Agents. The Co-Documentation Agents
shall have no duties, obligations or liabilities in their capacity as
Co-Documentation Agents.
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ARTICLE IX
MISCELLANEOUS
Section IX.1 Amendments, Etc. No amendment or waiver of any provision
of this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Banks
and the Borrower, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment shall increase the Commitment of any Bank without
the written consent of such Bank, and no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following: (a)
increase the aggregate Commitments of the Banks, (b) reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder or
under any other Credit Document, (c) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, (d) amend Section 2.16 or this Section 9.1, (e) release any
Guarantor from its obligations under the Guaranty, other than the release of
any Guarantor's obligations under the Guaranty in accordance with Section 6.8,
(f) release any Lien in favor of the Agent for the benefit of the Banks on
Property of the Borrower or Guarantors, except as contemplated by the Security
Agreements or as provided in Section 2.17(e) and (f), or (g) amend the
definition of "Majority Banks"; and provided, further, that (i) no amendment,
waiver or consent shall, unless in writing and signed by the Agent, any
Co-Documentation Agent or any Issuing Bank in addition to the Banks required
above to take such action, affect the rights or duties of the Agent, such
Co-Documentation Agent or such Issuing Bank, as the case may be, under this
Agreement or any other Credit Document, and (ii) no waiver or consent to
departure from any of the conditions specified in Section 3.1 or 3.2 shall be
effective unless in writing and signed by the Majority Banks and the Agent.
Section IX.2 Notices, Etc. All notices and other communications shall
be in writing (including telecopy or telex) and mailed, telecopied, telexed,
hand delivered or delivered by a nationally recognized overnight courier, if to
the Borrower, at its address at 0000 Xxx Xxxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxxx
00000, Attention: Chief Financial Officer, with a copy to the General
Counsel (telecopy: (000) 000-0000; telephone: (000) 000-0000); if to any Bank
at its Domestic Lending Office specified opposite its name on Schedule 9.2; if
to the Agent or to SG in its capacity as Agent or as an Issuing Bank, at its
address at 4800 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000,
Attention: Xxxxx Xxxxxx, Associate and Ms. Xxxxx Xxxxx, Operations (telecopy:
(000) 000-0000; telephone: (214) 000- 0000); and if a Notice of Borrowing or
a Notice of Conversion or Continuation to the Agent at the Domestic Lending
Office for the Agent specified opposite its name on Schedule 9.2 or, as to each
party, at such other address or teletransmission number as shall be designated
by such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telecopied, telexed or hand delivered or
delivered by overnight courier, be effective three days after deposited in the
mails, when telecopy transmission is completed, when confirmed by telex
answer-back or when delivered, respectively, except that notices and
communications to the Agent pursuant to Article II or VIII shall not be
effective until received by the Agent.
Section IX.3 No Waiver; Remedies. No failure on the part of any Bank,
the Agent, or any Issuing Bank to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any
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other or further exercise thereof or the exercise of any other right. The
remedies provided in this Agreement and the other Credit Documents are
cumulative and not exclusive of any remedies provided by law.
Section IX.4 Costs and Expenses. The Borrower agrees to pay on demand
all out-of-pocket costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other Credit Documents including, without
limitation, (a) the fees set forth in the letter agreement dated as of May 29,
1998 between the Borrower and counsel for the Agent, and (b) all reasonable
out-of-pocket costs and expenses, if any, of the Agent, each Co-Documentation
Agent, each Issuing Bank, and each Bank (including, without limitation,
reasonable counsel fees and expenses of the Agent, such Co-Documentation Agent,
such Issuing Bank, and each Bank) in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement and the
other Credit Documents after an Event of Default has occurred and is
continuing, and (c) to the extent not included in the foregoing, the costs of
any appraisals, title policies, mortgage and intangible taxes, costs of
recordation of any mortgages or Uniform Commercial Code financing statement or
continuation statement, and any related title or Uniform Commercial Code search
conducted subsequent to such recordation, any flood plain search costs, and
other costs usual and customary in connection with the taking of a Lien on real
property.
Section IX.5 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent, and when the
Agent shall have, as to each Bank, either received a counterpart hereof
executed by such Bank or been notified by such Bank that such Bank has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent, each Co-Documentation Agent, each Issuing Bank, and each
Bank and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or delegate its duties under this
Agreement or any interest in this Agreement without the prior written consent
of each Bank.
Section IX.6 Bank Assignments and Participations.
(1) Assignments. Any Bank may assign to one or more banks or
other entities all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Revolving
Commitment, the Advances owing to it, the Notes held by it, and the
participation interest in the Letter of Credit Obligations held by it);
provided, however, that (i) each such assignment shall be of a constant, and
not a varying, percentage of all of such Bank's rights and obligations under
this Agreement and shall involve a ratable assignment of such Bank's Revolving
Commitment and such Bank's Revolving Advances, (ii) the amount of the resulting
Revolving Commitment and Revolving Advances of the assigning Bank (unless it is
assigning all its Revolving Commitment) and the assignee Bank pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $10,000,000 and
shall be an integral multiple of $1,000,000, (iii) each such assignment shall
be to an Eligible Assignee, (iv) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with the Revolving Note
subject to such
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assignment, and (v) each Eligible Assignee (other than the Eligible Assignee of
the Agent or an Eligible Assignee which is an Affiliate of the assigning Bank)
shall pay to the Agent a $3,000 administrative fee. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto for all purposes and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder and (B) such Bank
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of
such Bank's rights and obligations under this Agreement, such Bank shall cease
to be a party hereto). Notwithstanding anything herein to the contrary, any
Bank may assign, as collateral or otherwise, any of its rights under the Credit
Documents to any Federal Reserve Bank.
(2) Term of Assignments. By executing and delivering an
Assignment and Acceptance, the Bank thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such Bank makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency of value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the Guarantors or the performance or observance by the Borrower or
the Guarantors of any of their obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.5 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Bank or any other Bank
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Bank.
(3) The Register. The Agent shall maintain at its address
referred to in Section 9.2 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks and the Revolving Commitments of, and principal amount
of the Advances owing to, each Bank from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent, the Issuing Banks, and the
Banks may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this
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Agreement. The Register shall be available for inspection by the Borrower or
any Bank at any reasonable time and from time to time upon reasonable prior
notice.
(4) Procedures. Upon its receipt of an Assignment and
Acceptance executed by a Bank and an Eligible Assignee, together with the
Revolving Note or, in the case of an assignment to another Bank, Revolving
Notes subject to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of the attached
Exhibit G, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for such Note or Notes, a new Revolving Note payable to the
order of such Eligible Assignee in amount equal to the Revolving Commitment
assumed by it pursuant to such Assignment and Acceptance, and if the assigning
Bank has retained any Revolving Commitment hereunder, a new Revolving Note
payable to the order of such Bank in an amount equal to, respectively, the
Revolving Commitment retained by it hereunder. Such new Notes shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the attached Exhibit A.
(5) Participations. Each Bank may sell participations to one
or more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Commitment, the Advances owing to it, its
participation interest in the Letter of Credit Obligations, and the Revolving
Note held by it); provided, however, that (i) such Bank's obligations under
this Agreement (including, without limitation, its Revolving Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent, and the Issuing Banks
and the other Banks shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement, (v)
such Bank shall not require the participant's consent to any matter under this
Agreement, except for change in the principal amount of any Note in which the
participant has an interest, reductions in fees or interest, or extending the
Maturity Date, and (vi) such Bank shall give prompt prior notice to the
Borrower of each such participation to be sold by such Bank. The Borrower
hereby agrees that participants shall have the same rights under Sections 2.8,
2.9, 2.11(c), and 9.7 hereof as the Bank to the extent of their respective
participations. Notwithstanding the foregoing, upon the receipt of notice by
the Borrower of the sale of a participation by any Bank to one or more banks or
other entities (other than an Affiliate of such Bank) in or to all or a portion
of its rights and obligations under this Agreement (each such bank or other
entity, a "Proposed Participant"), the Borrower shall have the right, but not
the obligation, to select additional banks to replace such Proposed Participant
on the same terms and conditions as the Proposed Participant upon prompt
written notice from the Borrower to the Agent and the Bank selling such
participation. The Borrower shall have ten days from the date of its receipt of
notice of the proposed sale of such participation to the Proposed Participant
to select replacement banks to replace such Proposed Participant. If the
Borrower does not select any replacement banks or does not elect to select any
replacement banks the applicable Bank may sell such participation to the
Proposed Participant.
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(6) Confidentiality. Each Bank may furnish any information
concerning the Borrower and its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including prospective
assignees and participants); provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree in
writing to preserve the confidentiality of any confidential information
relating to the Borrower and its Subsidiaries received by it from such Bank.
Such Bank shall promptly deliver a signed copy of any such confidentiality
agreement to the Borrower.
Section IX.7 Indemnification. The Borrower shall indemnify the Agent,
the Co-Documentation Agents, the Banks (including any lender which was a Bank
hereunder prior to any full assignment of its Revolving Commitment), the
Issuing Banks, and each affiliate thereof and their respective directors,
officers, employees and agents from, and discharge, release, 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 or result from (i) any actual or proposed use by
the Borrower or any Affiliate of the Borrower of the proceeds of any Advance,
(ii) any breach by the Borrower or any Guarantor of any provision of this
Agreement or any other Credit Document, (iii) any investigation, litigation or
other proceeding (including any threatened investigation or proceeding)
relating to the foregoing, or (iv) any Environmental Claim or requirement of
Environmental Laws concerning or relating to the present or previously-owned or
operated properties, or the operations or business, of the Borrower or any of
its Subsidiaries, and the Borrower shall reimburse the Agent, each
Co-Documentation Agent, each Issuing Bank, and each Bank, and each affiliate
thereof and their respective directors, officers, employees and agents, upon
demand for any reasonable out-of-pocket expenses (including legal fees)
incurred in connection with any such investigation, litigation or other
proceeding; and EXPRESSLY INCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS,
DAMAGES, OR EXPENSE INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED'S OWN
NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES OR
EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PERSON TO BE INDEMNIFIED.
Section IX.8 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section IX.9 Survival of Representations, etc. All representations
and warranties contained in this Agreement or made in writing by or on behalf
of the Borrower in connection herewith shall survive the execution and delivery
of this Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Banks, none of which investigations
shall diminish any Bank's right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.8, 2.9, 2.11(c), and
9.7 shall survive any termination of this Agreement and repayment in full of
the Obligations.
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Section IX.10 Severability. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein
shall not be affected or impaired thereby.
Section IX.11 Business Loans. The Borrower warrants and represents
that the Advances evidenced by the Notes are and shall be for business,
commercial, investment or other similar purposes and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One ("Chapter One") of the Texas Credit Code. At all such times, if
any, as Chapter One shall establish a Maximum Rate, the Maximum Rate shall be
the "indicated rate ceiling" (as such term is defined in Chapter One) from time
to time in effect.
Section IX.12 Usury Not Intended. It is the intent of the Borrower and
each Bank in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Bank
including such applicable laws of the State of Texas and the United States of
America from time to time in effect. In furtherance thereof, the Banks and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create
a contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under
this Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Bank receiving same shall credit the same on the principal of
its Notes (or if such Notes shall have been paid in full, refund said excess to
the Borrower). In the event that the maturity of the Notes is accelerated by
reason of any election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest may
never include more than the Maximum Rate and excess interest, if any, provided
for in this Agreement or otherwise shall be canceled automatically as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited on the applicable Notes (or, if the applicable Notes shall have been
paid in full, refunded to the Borrower). The provisions of this Section shall
control over all other provisions of this Agreement or the other Credit
Documents which may be in apparent conflict herewith.
Section IX.13 Governing Law. This Agreement, the Notes and the other
Credit Documents shall be governed by, and construed and enforced in accordance
with, the laws of the State of Texas.
Section IX.14 Consent to Jurisdiction. The Borrower hereby irrevocably
submits to the jurisdiction of any Texas state or federal court sitting in
Dallas, Texas in any action or proceeding arising out of or relating to this
Agreement, the Notes and the other Credit Documents, and the Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such court. The Borrower hereby irrevocably
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waives, to the fullest extent it may effectively do so, any right it may have
to the defense of an inconvenient forum to the maintenance of such action or
proceeding. The Borrower hereby agrees that service of copies of the summons
and complaint and any other process which may be served in any such action or
proceeding may be made by mailing or delivering a copy of such process to the
Borrower at its address specified in Section 9.2. The Borrower agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section shall affect the rights of any Bank,
the Agent, or any Co-Documentation Agent to serve legal process in any other
manner permitted by the law or affect the right of any Bank, the Agent or any
Co-Documentation Agent to bring any action or proceeding against the Borrower
or its Property in the courts of any other jurisdiction.
Section IX.15 Banks Not in Control. None of the covenants or other
provisions contained in the Credit Documents shall or shall be deemed to, give
the Banks the rights or power to exercise control over the affairs and/or
management of the Borrower, any of its Subsidiaries or any Guarantor, the power
of the Banks being limited to the right to exercise the remedies provided in
the Credit Documents; provided, however, that if any Bank becomes the owner of
any stock, or other equity interest in, any Person whether through foreclosure
or otherwise, such Bank shall be entitled (subject to requirements of law) to
exercise such legal rights as it may have by being owner of such stock, or
other equity interest in, such Person.
Section IX.16 Headings Descriptive. The headings of the several
Sections and paragraphs of the Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.
SECTION IX.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER CREDIT DOCUMENT
OR TO ANY COUNTERCLAIM THEREIN.
SECTION IX.18 ENTIRE AGREEMENT. PURSUANT TO SECTION 26.02 OF THE TEXAS
BUSINESS AND COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN
THE LOAN AGREEMENT EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN
AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S
AUTHORIZED REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO THE
PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN AGREEMENT,
AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY AND MERGED
INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS
DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY
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EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
[Remainder of page left intentionally blank]
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EXECUTED as of the date first referenced above.
BORROWER:
ARKANSAS BEST CORPORATION
----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial Officer
and Treasurer
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AGENT:
SOCIETE GENERALE, SOUTHWEST AGENCY
----------------------------------------
Xxxxxxxxxxx X. Xxxxxx
Director - Head of SG-Dallas
----------------------------------------
Xxxxx X. Xxxxxx
Associate
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CO-DOCUMENTATION AGENTS:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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XXXXX FARGO BANK (TEXAS), N.A.
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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BANKS:
SOCIETE GENERALE, SOUTHWEST AGENCY
----------------------------------------
Xxxxxxxxxxx X. Xxxxxx
Director - Head of SG-Dallas
----------------------------------------
Xxxxx X. Xxxxxx
Associate
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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XXXXX FARGO BANK (TEXAS), N.A.
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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ABN AMRO BANK N.V.
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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CREDIT LYONNAIS NEW YORK BRANCH
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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DEPOSIT GUARANTY NATIONAL BANK
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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THE FIRST NATIONAL BANK OF CHICAGO
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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NATEXIS BANQUE BFCE
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
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EXHIBIT A
REVOLVING NOTE
$ ________________________ ___________. 19__
For value received, the undersigned Arkansas Best Corporation, a
Delaware corporation ("Borrower"), hereby promises to pay to the order of
_________________________ ("Bank") the principal amount of _______________ and
____/100 Dollars ($__________) or, if less, the aggregate outstanding principal
amount of each Revolving Advance (as defined in the Credit Agreement referred
to below) made by the Bank to the Borrower, together with interest on the
unpaid principal amount of each such Revolving Advance from the date of such
Revolving Advance until such principal amount is paid in full, at such interest
rates, and at such times, as are specified in the Credit Agreement.
This Note is one of the Revolving Notes referred to in, and is
entitled to the benefits of, and is subject to the terms of, the Credit
Agreement dated as of June 12, 1998 (as the same may be further amended or
modified from time to time, the "Credit Agreement"), among the Borrower, the
Banks, Bank of America National Trust and Savings Association and Xxxxx Fargo
Bank (Texas), N.A., as Co-Documentation Agents and Societe Generale, Southwest
Agency, as Administrative Agent. Capitalized terms used in this Note that are
defined in the Credit Agreement and not otherwise defined in this Note have the
meanings assigned to such terms in the Credit Agreement. The Credit Agreement,
among other things, (a) provides for the making of Revolving Advances by the
Bank to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the Dollar amount first above mentioned, the indebtedness
of the Borrower resulting from each such Revolving Advance being evidenced by
this Note and (b) contains provisions for acceleration of the maturity of this
Note upon the happening of certain events stated in the Credit Agreement and
for prepayments of principal prior to the maturity of this Note upon the terms
and conditions specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Agent at 4800 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxxx 00000 (or at such other location or address as may be specified
by the Agent to the Borrower) in same day funds. The Bank shall record all
Revolving Advances and payments of principal made under this Note, but no
failure of the Bank to make such recordings shall affect the Borrower's
repayment obligations under this Note.
92
Except as specifically provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, and any other notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder of this Note shall operate as a waiver of such rights.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the state of Texas (except that Tex. Rev. Civ.
Stat. Xxx. Art. 0000, Xx. 15, which regulates certain revolving credit loan
accounts shall not apply to this Note).
ARKANSAS BEST CORPORATION
By:
-----------------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial Officer,
and Treasurer
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EXHIBIT B
SUBSIDIARY GUARANTY AND CONTRIBUTION AGREEMENT
This Subsidiary Guaranty and Contribution Agreement dated as of June
12, 1998 (this "Agreement") is executed by the parties signatory hereto or to an
Accession Agreement in favor of the Agent, the Co-Documentation Agents and the
Banks parties to the Credit Agreement herein described.
INTRODUCTION
A. This Agreement is given in connection with the Credit Agreement
dated as of June 12, 1998 (as the same may be further amended or modified from
time to time, the "Credit Agreement") among Arkansas Best Corporation, a
Delaware corporation (the "Borrower"), the Banks, Bank of America National Trust
and Savings Association and Xxxxx Fargo Bank (Texas), N.A., as Co-Documentation
Agents, and Societe Generale, Southwest Agency, as Administrative Agent.
B. The Borrower is the principal financing entity for all capital
requirements of its Subsidiaries, and from time to time the Borrower has made
and will continue to make capital contributions and advances to its
Subsidiaries, including each of the parties hereto (such parties herein called
the "Guarantors"). Each Guarantor is a direct or indirect subsidiary of the
Borrower and will derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement.
C. Under the Credit Agreement, it is a condition to the making of the
Advances by the Banks and the issuance of the Letters of Credit by the Issuing
Bank that each Guarantor shall have executed and delivered this Agreement.
Therefore, in order to induce the Banks to make the Advances and the
Issuing Bank to issue its Letters of Credit, each Guarantor hereby agrees as
follows:
Section 1. Definitions. All capitalized terms not otherwise defined in this
Agreement that are defined in the Credit Agreement shall have the meaning
assigned to such terms by the Credit Agreement.
Section 2. Guaranty. Each Guarantor hereby unconditionally guarantees the
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all obligations of the Borrower now or hereafter existing under
the Credit Agreement, the Notes, and any other Credit Document, whether for
principal, Reimbursement Obligations, Hedging Obligations owing to any Bank or
any Affiliate of any Bank, interest, fees, expenses, or otherwise (such
obligations being the "Guaranteed
94
Obligations"), and any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agent, any Co-Documentation Agent or any Bank in
enforcing any rights under this Agreement. Each Guarantor agrees that its
guaranty obligation under this Agreement is a guarantee of payment, not of
collection and that such Guarantor is primarily liable for the payment of the
Guaranteed Obligations.
Section 3. Limit of Liability. Each Guarantor shall be liable under this
Agreement with respect to the Guaranteed Obligations only for amounts
aggregating up to the largest amount that would not render its guaranty
obligation hereunder subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provisions of any state law.
Section 4. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Credit
Agreement and the other Credit Documents, regardless of any law, regulation, or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Agent, the Co-Documentation Agents or the Banks with
respect thereto. The liability of each Guarantor under this Agreement shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit Agreement, any
other Credit Document, or any other agreement or instrument relating thereto;
(b) any change in the time, manner, or place of payment of, or in any
other term of, any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from the Credit Agreement or any Credit
Document;
(c) any exchange, release, or nonperfection of any collateral, or any
release or amendment or waiver of or consent to departure from any other
agreement or guaranty, for any of the Guaranteed Obligations; or
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of the Borrower or a Guarantor.
Section 5. Continuation and Reinstatement, Etc. Each Guarantor agrees
that, to the extent that the Borrower makes payments to the Agent, any
Co-Documentation Agent or any Bank, or the Agent, any Co-Documentation Agent or
any Bank receives any proceeds of collateral, and such payments or proceeds or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, or otherwise required to be repaid, then to the extent
of such repayment the Guaranteed Obligations shall be reinstated and continued
in full force and effect as of the date such initial payment or collection of
proceeds occurred. The Guarantor shall defend and indemnify the Agent, each
Co-Documentation Agent and each Bank from and against any claim or loss under
this Section 5 (including reasonable attorneys' fees and expenses) in the
defense of any such action or suit.
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Section 6. Certain Waivers.
6.01. Notice. Each Guarantor hereby waives promptness, diligence,
notice of acceptance, notice of acceleration, notice of intent to accelerate,
and any other notice with respect to any of the Guaranteed Obligations and this
Agreement.
6.02. Other Remedies. Each Guarantor hereby waives any requirement that
the Agent, any Co-Documentation Agent or any Bank protect, secure, perfect, or
insure any Lien or any Property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any collateral, including any
action required by Chapter 34 of the Texas Business and Commerce Code.
6.03. Waiver of Subrogation. (a) Each Guarantor hereby irrevocably
waives, until payment in full of all Guaranteed Obligations and termination of
all Commitments, any claim or other rights which it may acquire against the
Borrower that arise from such Guarantor's obligations under this Agreement or
any other Credit Document, including, without limitation, any right of
subrogation (including, without limitation, any statutory rights of subrogation
under Section 509 of the Bankruptcy Code, 11 U.S.C. ' 509, or otherwise),
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of the Agent, any Co-Documentation Agent or
any Bank against the Borrower or any collateral which the Agent, any
Co-Documentation Agent or any Bank now has or acquires. If any amount shall be
paid to any Guarantor in violation of the preceding sentence and the Guaranteed
Obligations shall not have been paid in full and all of the Commitments
terminated, such amount shall be held in trust for the benefit of the Agent, the
Co-Documentation Agents and the Banks, and shall promptly be paid to the Agent
for the benefit of the Agent, the Co-Documentation Agents and the Banks to be
applied to the Guaranteed Obligations, whether matured or unmatured, as the
Agent may elect. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Section 6.03(a) is knowingly
made in contemplation of such benefits.
(b) Each Guarantor further agrees that it will not enter into any
agreement providing, directly or indirectly, for any contribution,
reimbursement, repayment, or indemnity by the Borrower or any other Person on
account of any payment by such Guarantor to the Agent or the Banks under this
Agreement.
Section 7. Representations and Warranties. Each Guarantor hereby represents and
warrants as follows:
7.01. Corporate Authority. Such Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, which is set forth on Schedule 4.1 to the
Credit Agreement. The execution, delivery and performance by such Guarantor of
this Agreement are within such Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not
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contravene (a) such Guarantor's charter or bylaws or (b) any law or material
contractual restriction affecting such Guarantor or its Property.
7.02. Government Approval. No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority is required for
the due execution, delivery, and performance by such Guarantor of this
Agreement.
7.03. Binding Obligations. This Agreement is the legal, valid, and
binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, or similar law affecting creditors'
rights (whether considered in a proceeding at law or in equity).
Section 8. Covenants. Each Guarantor will comply with all covenant provisions of
Article V and Article VI of the Credit Agreement to the extent such provisions
are applicable to a Subsidiary of the Borrower.
Section 9. Contribution. As a result of the transactions contemplated by the
Credit Agreement, each of the Guarantors will benefit, directly and indirectly,
from the Obligations and in consideration thereof desire to enter into a
contribution agreement among themselves as set forth in this Section 9 to
allocate such benefits among themselves and to provide a fair and equitable
arrangement to make contributions in the event any payment is made by any
Guarantor hereunder to the Agent or the Banks (such payment being referred to
herein as a "Contribution," and for purposes of this Agreement, includes any
exercise of recourse by the Agent against any Property of a Contributor
designated as collateral under the Guarantors Security Agreement and application
of proceeds of such collateral in satisfaction of such Guarantor's obligations
under this Agreement). The Guarantors hereby agree as follows:
9.01. Calculation of Contribution. In order to provide for just and
equitable contribution among the Guarantors in the event any Contribution is
made by a Guarantor (a "Funding Guarantor"), such Funding Guarantor shall be
entitled to a contribution from certain other Guarantors for all payments,
damages and expenses incurred by that Funding Guarantor in discharging any of
the Obligations, in the manner and to the extent set forth in this Section. The
amount of any Contribution under this Agreement shall be equal to the payment
made by the Funding Guarantor to the Agent or any other Beneficiary pursuant to
this Agreement and shall be determined as of the date on which such payment is
made.
9.02. Benefit Amount Defined. For purposes of this Agreement, the
"Benefit Amount" of any Guarantor as of any date of determination shall be the
net value of the benefits to such Guarantor and all of its Subsidiaries
(including any Subsidiaries which may be Guarantors) from extensions of credit
made by the Banks to the Borrower under the Credit Agreement; provided, that in
determining the contribution liability of any Guarantor which is a Subsidiary to
its direct or indirect parent corporation or of any
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Guarantor to its direct or indirect Subsidiary, the Benefit Amount of such
Subsidiary and its Subsidiaries, if any, shall be subtracted in determining the
Benefit Amount of the parent corporation. Such benefits shall include benefits
of funds constituting proceeds of Advances made to the Borrower by the Banks
which are in turn advanced or contributed by the Borrower to such Guarantor or
its Subsidiaries and benefits of Letters of Credit issued pursuant to the Credit
Agreement on behalf of, or the proceeds of which are advanced or contributed or
otherwise benefit, directly or indirectly, such Guarantor and its Subsidiaries
(collectively, the "Benefits"). In the case of any proceeds of Advances or
Benefits advanced or contributed to a Person (an "Owned Entity") any of the
equity interests of which are owned directly or indirectly by a Guarantor, the
Benefit Amount of a Guarantor with respect thereto shall be that portion of the
net value of the benefits attributable to Advances or Benefits equal to the
direct or indirect percentage ownership of such Guarantor in its Owned Entity.
9.03. Contribution Obligation. Each Guarantor shall be liable to a
Funding Guarantor in an amount equal to the greater of (A) the (i) ratio of the
Benefit Amount of such Guarantor to the total amount of Obligations, multiplied
by (ii) the amount of Obligations paid by such Funding Guarantor and (B) 95% of
the excess of the fair saleable value of the property of such Guarantor over the
total liabilities of such Guarantor (including the maximum amount reasonably
expected to become due in respect of contingent liabilities) determined as of
the date on which the payment made by a Funding Guarantor is deemed made for
purposes of this Agreement (giving effect to all payments made by other Funding
Guarantors as of such date in a manner to maximize the amount of such
contributions).
9.04. Allocation. In the event that at any time there exists more than
one Funding Guarantor with respect to any Contribution (in any such case, the
"Applicable Contribution"), then payment from other Guarantors pursuant to this
Agreement shall be allocated among such Funding Guarantors in proportion to the
total amount of the Contribution made for or on account of the Borrower by each
such Funding Guarantor pursuant to the Applicable Contribution. In the event
that at any time any Guarantor pays an amount under this Agreement in excess of
the amount calculated pursuant to clause (A) of Subsection 9.03 above, that
Guarantor shall be deemed to be a Funding Guarantor to the extent of such excess
and shall be entitled to contribution from the other Guarantors in accordance
with the provisions of this Section.
9.05. Subsidiary Payment. The amount of contribution payable under this
Section by any Guarantor shall be reduced by the amount of any contribution paid
hereunder by a Subsidiary of such Guarantor.
9.06. Equitable Allocation. If as a result of any reorganization,
recapitalization, or other corporate change in the Borrower or any of its
Subsidiaries, or as a result of any amendment, waiver or modification of the
terms and conditions of other Sections of this Agreement or the Obligations, or
for any other reason, the contributions under this Section become inequitable as
among the Guarantors, the Guarantors shall promptly
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modify and amend this Section to provide for an equitable allocation of
contributions. Any of the foregoing modifications and amendments shall be in
writing and signed by all Guarantors.
9.07. Asset of Party to Which Contribution is Owing. The Guarantors
acknowledge that the right to contribution hereunder shall constitute an asset
in favor of the Guarantor to which such contribution is owing.
9.08. Subordination. No payments payable by a Guarantor pursuant to the
terms of this Section 9 shall be paid until all amounts then due and payable by
the Borrower to any Bank, pursuant to the terms of the Credit Documents, are
paid in full in cash. Nothing contained in this Section 9 shall affect the
obligations of any Guarantor to any Bank under the Credit Agreement or any other
Credit Documents.
Section 10. Miscellaneous.
10.01. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing, including telegraphic communication,
and delivered or teletransmitted to the Agent, as set forth in the Credit
Agreement, and to each Guarantor, at the address set forth beside such
Guarantor's name on Annex 1 hereto or in the Accession Agreement executed by
such Guarantor, or to such other address as shall be designated by any Guarantor
or the Agent in written notice to the other parties. All such notices and other
communications shall be effective when delivered or teletransmitted to the above
addresses.
10.02. Amendments, Etc. No waiver of any provision of this Agreement
nor consent to any departure by any Guarantor therefrom shall be effective
unless the same shall be in writing and signed by the Agent, Majority Banks and
the Borrower, and no amendment of this Agreement shall be effective unless the
same shall be in writing and signed by each Guarantor and the Agent, with the
consent of the Majority Banks; provided that any amendment or waiver releasing
any Guarantor from any liability hereunder shall be signed by all the Banks; and
provided further that any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Notwithstanding
the foregoing, in the event that any Subsidiary of the Borrower hereafter is
required in a accordance with the terms of the Credit Agreement or otherwise
agrees to become a guarantor of the Borrower's obligations under the Credit
Documents, then such Subsidiary may become a party to this Agreement by
executing an Accession Agreement ("Accession Agreement") in the form attached
hereto as Annex 2, and each Guarantor and the Agent hereby agrees that upon such
Subsidiary's execution of such Accession Agreement, this Agreement shall be
deemed to have been amended to make such Person a Guarantor hereunder for all
purposes and a party hereto and no signature is required on behalf of the other
Guarantors or the Agent to make such an amendment to this Agreement effective.
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10.03. No Waiver; Remedies. No failure on the part of the Agent, or any
Bank to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
10.04. Right of Set-Off. Upon the occurrence and during the continuance
of any Event of Default, the Agent, the Co-Documentation Agents and the Banks
are hereby authorized at any time, to the fullest extent permitted by law, to
set off and apply any deposits (general or special, time or demand, provisional
or final) and other indebtedness owing by the Agent, the Co-Documentation Agents
or the Banks to the account of any Guarantor against any and all of the
obligations of such Guarantor under this Agreement, irrespective of whether or
not the Agent, the Co-Documentation Agents or the Banks shall have made any
demand under this Agreement and although such obligations may be contingent and
unmatured. The Agent, the Co-Documentation Agents and the Banks agree promptly
to notify each Guarantor affected by any such set-off after any such set-off and
application made by the Agent, the Co-Documentation Agents or the Banks provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Agent, the Co-Documentation Agents
and the Banks under this Section 10.04 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Agent, the Co-Documentation Agents and the Banks may have.
10.05. Continuing Guaranty; Transfer of Interest. This Agreement shall
create a continuing guaranty and shall (a) remain in full force and effect until
payment in full and termination of the Guaranteed Obligations, (b) be binding
upon each Guarantor, its successors, and assigns, and (c) inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent, the
Co-Documentation Agents, the Banks, and their respective successors,
transferees, and assigns. Without limiting the generality of the foregoing
clause, when any Bank assigns or otherwise transfers any interest held by it
under the Credit Agreement or other Credit Document to any other Person pursuant
to the terms of the Credit Agreement or other Credit Document, that other Person
shall thereupon become vested with all the benefits held by such Bank under this
Agreement. Upon the payment in full and termination of the Guaranteed
Obligations, the guaranties granted hereby shall terminate and all rights
hereunder shall revert to each Guarantor to the extent such rights have not been
applied pursuant to the terms hereof. Upon any such termination, the Agent will,
at each Guarantor's expense, execute and deliver to such Guarantor such
documents as such Guarantor shall reasonably request and take any other actions
reasonably requested to evidence or effect such termination.
10.06. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas. Each
Guarantor hereby irrevocably submits to the jurisdiction of any Texas state or
federal court sitting in Dallas, Texas in any action or proceeding arising out
of or relating to this Agreement and the other Credit Documents, and such
Guarantor hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court. Each
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Guarantor hereby irrevocably waives, to the fullest extent it may effectively do
so, any right it may have to the defense of an inconvenient forum to the
maintenance of such action or proceeding. Each Guarantor hereby agrees that
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding may be made by mailing or delivering
a copy of such process to such Guarantor at its address specified below. Each
Guarantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Section shall affect the
rights of any Bank, the Agent, or any Co-Documentation Agent to serve legal
process in any other manner permitted by the law or affect the right of any
Bank, any Co-Documentation Agent or the Agent to bring any action or proceeding
against any Guarantor or its Property in the courts of any other jurisdiction.
SECTION 10.07. WAIVERS OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY OR TO ANY
COUNTERCLAIM THEREIN.
SECTION 10.08. ENTIRE AGREEMENT. PURSUANT TO SECTION 26.02 OF THE TEXAS
BUSINESS AND COMMERCE CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE
LOAN AGREEMENT EXCEEDS $50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN
AGREEMENT IS IN WRITING AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S
AUTHORIZED REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO
THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN
AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT
DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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Each Guarantor has caused this Agreement to be duly executed as of the
date first above written.
GUARANTORS:
ABF CARTAGE, INC.
ABF FARMS, INC.
ABF FREIGHT SYSTEM (B.C.) LTD.
ABF FREIGHT SYSTEM CANADA, LTD.
ABF FREIGHT SYSTEM, INC.
AGILE FREIGHT SYSTEM, INC.
AGRICULTURAL EXPRESS OF AMERICA, INC.
BEST SERVICE CORP.
CAROTRANS INTERNATIONAL, INC.
CLIPPER EXXPRESS COMPANY
DATA-TRONICS CORP.
FLEETNET AMERICA, INC.
G.I. TRUCKING COMPANY
LAND-MARINE CARGO, INC.
TRANSPORT REALTY, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxxxx
Authorized Agent
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ANNEX 1
to Subsidiary Guaranty and Contribution Agreement
ADDRESSES OF GUARANTORS FOR NOTICES
ABF Cartage, Inc. Clipper Exxpress Company
0000 Xxx Xxxxxxxxx Xxxx 00000 Xxxx 000xx Xxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000 Xxxxxx, Xxxxxxxx 00000
ABF Farms, Inc. Data-Tronics Corp.
0000 Xxx Xxxxxxxxx Xxxx 0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000 Xxxx Xxxxx, Xxxxxxxx 00000
ABF Freight System (B.C.), Ltd. FleetNet America, Inc.
0000 Xxx Xxxxxxxxx Xxxx 000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000 Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
ABF Freight System Canada, Ltd. G. I. Trucking Company
0000 Xxx Xxxxxxxxx Xxxx 00000 Xxxxxxx Xxxxxxxxx
Xxxx Xxxxx, Xxxxxxxx 00000 Xx Xxxxxx, Xxxxxxxxxx 00000
ABF Freight System, Inc. Land-Marine Cargo, Inc.
0000 Xxx Xxxxxxxxx Xxxx 0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000 Xxxx Xxxxx Xxxxxxxx 00000
Agile Freight System, Inc. Transport Realty, Inc.
00000 Xxxx 000xx Xxxxxx 0000 Xxx Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000 Xxxx Xxxxx, Xxxxxxxx 00000
Agricultural Express of America, Inc.
00000 Xxxx 000xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Best Service Corp.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
CaroTrans International, Inc.
00000 Xxxx 000xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
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ANNEX 2
to Subsidiary Guaranty and Contribution Agreement
ACCESSION AGREEMENT
___________[NAME OF SUBSIDIARY], a ________________ corporation (the
"Company"), hereby agrees with (i) Societe Generale, Southwest Agency, as
Administrative Agent (the "Agent") under the Credit Agreement dated as of June
12, 1998 among Arkansas Best Corporation, a Delaware corporation which is the
direct or indirect shareholder of the Company, the lenders parties thereto, Bank
of America National Trust and Savings Association and Xxxxx Fargo Bank (Texas),
N.A., as Co-Documentation Agents, and Societe Generale, Southwest Agency as
Administrative Agent (as such agreement is further amended from time to time in
accordance with its terms, the "Credit Agreement"; capitalized terms used herein
and not otherwise defined having the meanings set forth therein), and (ii) the
parties to the Subsidiary Guaranty and Contribution Agreement dated as of June
12, 1998 and the Guarantors Security Agreement dated as of June 12, 1998 each
executed in connection with the Credit Agreement, as follows:
The Company hereby agrees and confirms that, as of the date hereof, it
(a) intends to be a party to the Guaranty and a party to the Guarantors Security
Agreement and undertakes to perform all the obligations expressed therein,
respectively, of a Guarantor (as defined in the Guaranty) and a Grantor (as
defined in the Guarantors Security Agreement), (b) agrees to be bound by all of
the provisions of the Guaranty and of the Guarantors Security Agreement as if it
had been an original party to such Guaranty and such Guarantors Security
Agreement, and (c) confirms that the representations and warranties set forth in
the Guaranty and the Guarantors Security Agreement with respect to the Company,
a party thereto, are true and correct in all material respects as of the date of
this Accession Agreement.
For purposes of notices under the Guaranty and under the Guarantors
Security Agreement, the address for the Company is as follows:
Attention:
-------------------------------
Telephone:
-------------------------------
Telecopy:
--------------------------------
For purposes of Section 3.2 of the Guarantors Security Agreement, the
address of the Company where all of its books and records concerning its
Accounts is [the same as the address set forth above] [as set forth below:].
For purposes of Section 3.5 of the Guarantors Security Agreement, a UCC
Financing Statement for the Company should be filed in the following office(s):
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-------------------------
-------------------------
This Accession Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF this Accession Agreement was executed and delivered
as of the ___ day of _________, 19__.
[NAME OF SUBSIDIARY]
-----------------------------------------
By:
--------------------------------------
Title:
-----------------------------------
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EXHIBIT C
SECURITY AGREEMENT
This Security Agreement dated as of June 12, 1998 (as amended or
otherwise modified from time to time, the "Security Agreement") is by and
between Arkansas Best Corporation, a Delaware corporation (the "Grantor"), and
Societe Generale, Southwest Agency, as Administrative Agent for the Banks
parties to the Credit Agreement described below (the "Agent").
INTRODUCTION
The Grantor, Societe Generale, Southwest Agency, as Administrative
Agent, Bank of America National Trust and Savings Association and Well Fargo
Bank (Texas), N.A., as Co-Documentation Agents, and the Banks have entered into
an Credit Agreement dated as of June 12, 1998 (as amended or otherwise modified
from time to time, the "Credit Agreement"). Under the Credit Agreement, the
Grantor is required to execute and deliver this Security Agreement. Therefore,
in order to induce the Banks to enter into the Credit Agreement and to make the
Advances and the Issuing Banks to issue the Letters of Credit in accordance
with the terms of the Credit Agreement, the Grantor hereby agrees with the
Agent for its benefit and the ratable benefit of the Banks as follows:
Section 1. Definitions.
(a) All capitalized terms not otherwise defined in this Security
Agreement that are defined in the Credit Agreement shall have the meaning
assigned to such terms by the Credit Agreement.
(b) Any terms used in this Security Agreement that are defined in the
Texas Business and Commerce Code ("UCC") shall have the meaning assigned to
those terms by the UCC, whether specified elsewhere in this Security Agreement
or not.
Section 2. Security Interest.
2.1. Grant of Security Interest. The Grantor hereby grants to the
Agent for its benefit and the ratable benefit of the Banks security interests
in the Collateral (as defined in Section 2.2 below) to secure the performance
and payment of all obligations of the
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Grantor now or hereafter existing under the Credit Agreement and the other
Credit Documents, including any extensions, modifications, substitutions,
amendments and renewals thereof, whether for principal, interest, Hedging
Obligations owing to any Bank or any Affiliate of any Bank, fees, expenses,
indemnification, or otherwise (collectively, the "Secured Obligations").
2.2. Collateral. "Collateral" shall mean all of the Grantor's right,
title, and interest in the following, whether now owned or hereafter acquired:
(a) Revenue Equipment. All trucks, tractors, trailers and city
tractors, and all accessories and parts therefor or attached thereto (the
"Revenue Equipment");
(b) Accounts. All accounts and all rights to payment owing or to
be owing to the Grantor, wherever the records for such accounts and rights to
payment are held, including all instruments and chattel paper, wherever
located, that represent any right of the Grantor to payment for services
rendered, whether or not it has been earned by performance (all such accounts,
instruments and chattel paper being the "Accounts");
(c) Stock. All shares of capital stock of Treadco, Inc., a
Delaware corporation, and each Subsidiary of the Grantor (collectively herein
all of such shares are called the "Pledged Shares");
(d) Collateral Account. The Collateral Account referred to in
Section 4.7 of this Security Agreement and all Liquid Investments held in the
Collateral Account;
(e) Records. All ledger sheets, files, records, computer
databases and software and documents relating to the foregoing Collateral; and
(f) Proceeds. All proceeds of the foregoing Collateral and, to
the extent not otherwise included, all payments under any insurance, indemnity,
warranty, or guaranty of or for the foregoing Collateral.
Section 3. Representations and Warranties. The Grantor hereby
represents and warrants the following to the Agent and the Banks:
3.1. Revenue Equipment. All Revenue Equipment which, under applicable
law, is required to be registered, is properly registered in the name of the
Grantor or, in the case of newly acquired Revenue Equipment, the Grantor is
diligently pursuing the process of causing such Revenue Equipment to be
registered in the Grantor's name. All Revenue Equipment, the ownership of
which, under applicable law, is evidenced by a certificate of title, is
properly titled in the name of the Grantor. All certificates of title with
respect to the Revenue Equipment owned by the Grantor will be maintained by the
Custodians (as defined in Section 4.9 of this Security Agreement) at the
address of the Grantor referenced on Schedule 2.17 in the Credit Agreement.
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3.2. Accounts. The chief place of business and chief executive office
of the Grantor and the office where the Grantor keeps its records concerning
the Accounts are located at the address for the Grantor on Annex 1 attached
hereto. None of the Accounts are evidenced by a promissory note or other
instrument.
3.3. Pledged Shares. The Pledged Shares are duly authorized, validly
issued and fully paid and non-assessable, and the Agent will be in possession
of all certificates evidencing the Pledged Shares, accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, and accompanied in each case by any required transfer tax stamps,
all in form and substance reasonably satisfactory to the Agent.
3.4. Other Liens. The Grantor is, and will be the record and
beneficial owner of all Collateral pledged by the Grantor free and clear of any
Lien, except for Liens created hereby or Liens or interests otherwise permitted
by the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is, or will be on
file in any recording office, except such as may be filed in connection with
this Security Agreement or in connection with Liens or interests otherwise
permitted by the Credit Agreement.
3.5. Lien Priority and Perfection.
(a) This Security Agreement creates valid security interests in
the Collateral, securing the payment of the Secured Obligations, and such
security interests are or will be perfected first priority security interests,
second only to perfected Liens or interests otherwise permitted by the Credit
Agreement, (i) in the case of Collateral other than as described in clause (ii)
and (iii) below following the filing of a UCC Financing Statement in the form
of Annex 2 attached hereto (with the Grantor's name and address filled in under
the title "Debtor") in the office(s) set forth on Annex 3 attached hereto, (ii)
in the case of Pledged Shares, provided that the Agent retains possession of
such Pledged Shares and instruments of transfer or assignment related thereto
which were executed in blank and delivered by the Grantor to the Agent prior to
the date hereof, and (iii) in the case of titled Revenue Equipment, when the
Agent's interest as a secured party is recorded on the certificates of title
relating to the Grantor's titled Revenue Equipment (other than certificates of
title for Revenue Equipment which is already subject to a Lien permitted by the
Credit Agreement) as contemplated by the Custodial Agreement described in
Section 4.9 of this Security Agreement.
(b) No other authorization, approval, or other action by, and no
notice to or filing with, any Governmental Authority is necessary to grant the
security interests contemplated hereby, or to allow the Grantor to perform its
obligations hereunder, or to permit the Agent to exercise its rights and
remedies hereunder.
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Section 4. Grantor Covenants.
4.1. Further Assurances. The Grantor agrees that at any time, at the
Grantor's expense, the Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary or that the Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
the Grantor will at the Agent's request: (a) deliver and pledge to the Agent
any instrument representing any Account, duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Agent, (b) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices as may
be reasonably necessary, or as the Agent may reasonably request, in order to
perfect and preserve the security interests granted or purported to be granted
hereby, and (c) if the Grantor is an owner of Pledged Shares issued by Treadco,
Inc., notify Treadco, Inc. of the Lien on such Pledged Shares created hereby
and cause Treadco, Inc. to send written notice to the Agent acknowledging such
Lien and expressly agreeing to remit any and all dividends and distributions on
account of such Pledged Shares remitted after the date of this Security
Agreement directly to the Agent.
4.2. Revenue Equipment. The Grantor shall:
(a) cause the Revenue Equipment owned by the Grantor to be
maintained and preserved in accordance with Section 5.7 of the Credit
Agreement, and shall in accordance with past practices, make or cause to be
made all repairs, replacements, and other improvements which are necessary or
desirable to restore the Revenue Equipment to good working order;
(b) promptly furnish to the Agent a statement respecting any
material loss or damage to any of the Revenue Equipment owned by the Grantor
which is not repaired;
(c) promptly pay or cause to be paid prior to delinquency all
property and other taxes, assessments, and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Revenue Equipment owned by the Grantor, except to the
extent permitted by the Credit Agreement;
(d) promptly cause all Revenue Equipment owned by the Grantor
which, under applicable law, is required to be registered, to be properly
registered in the name of the Grantor, and cause all Revenue Equipment, the
ownership of which, under applicable law, is evidenced by a certificate of
title to be properly titled in the name of the Grantor, and to have the Agent's
interest in such Revenue Equipment properly noted on the
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certificate of title with respect thereof (it being agreed that a Grantor will
not be in default under this provision if the Grantor is diligently pursuing
the process, as applicable, of causing such Revenue Equipment to be registered
in the Grantor's name or to be titled in the Grantor's name or to have the
Agent's interest noted on such certificate of title, provided, however, that
with respect to any newly acquired Revenue Equipment if the process of titling
such Revenue Equipment in the Grantor's name and recording the Agent's interest
on such title is not completed within 120 days after the Grantor's acquisition
of the applicable unit of Revenue Equipment, such unit of Revenue Equipment
shall not be counted in determining the Borrowing Base until such process is
completed). Until the Agent exercises remedies under this Security Agreement,
the certificates of title with respect to Revenue Equipment owned by the
Grantor shall be maintained by the Custodians at one of the addresses
referenced on Schedule 2.17 of the Credit Agreement as the location of such
certificates of title.
4.3. Insurance.
(a) The Grantor shall, at its own expense, maintain, or cause to
be maintained, insurance with respect to the Revenue Equipment owned by the
Grantor in such amounts, against such risks, in such form, and with such
insurers, as the Credit Agreement requires. Further, the Grantor shall, at the
request of the Agent, duly deliver certificates of loss casualty insurance to
the Agent showing the Agent as loss payee as its interests may appear.
(b) During the continuance of any Event of Default, all loss
casualty insurance payments in respect of such Revenue Equipment shall be paid
to and applied by the Agent as specified in Section 6.
4.4. Accounts. The Grantor shall keep its chief place of business and
chief executive office and the office where it keeps the instruments, chattel
paper, or contracts representing Accounts and the records concerning the
Accounts at the location therefor specified in Section 3.2 or, upon 30 days'
prior written notice to the Agent, at such other locations in a jurisdiction
where all actions required by Section 4.1 shall have been taken with respect to
the Accounts. The Grantor will hold and preserve such instruments, chattel
paper, contracts, and records and will permit representatives of the Agent at
any time during normal business hours to inspect and copy them.
4.5. Liability Under Contracts. Notwithstanding anything in this
Security Agreement to the contrary, (a) the execution of this Security
Agreement shall not release the Grantor from its obligations and duties under
the contracts and agreements included in the Collateral to the extent set forth
therein, (b) the exercise by the Agent of any of its rights hereunder shall not
release the Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral, and (c) neither the Agent nor any
Bank shall have any obligation or liability under the contracts and
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agreements included in the Collateral by reason of the execution and delivery
of this Security Agreement, nor shall the Agent or any Bank be obligated to
perform any of the obligations or duties of the Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
4.6. Pledged Shares.
(a) Following the Grantor's acquisition of any Pledged Shares, the
Grantor shall deliver or cause to be delivered to the Agent all certificates
evidencing such Pledged Shares, accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed, and
accompanied in each case by any required transfer tax stamps, all in form and
substance reasonably satisfactory to the Agent.
(b) At any time during the continuation of an Event of Default,
the Agent may from time to time in its sole discretion, cause any or all of the
Pledged Shares to be transferred of record into the name of the Agent or a
nominee. The Grantor will promptly give to the Agent copies of any notices and
other communications received by it with respect to Pledged Shares registered
in the name of the Grantor, and the Agent will promptly give the Grantor copies
of any notices and other communications received by the Agent with respect to
Pledged Shares registered in the name of the Agent or a nominee.
(c) Provided that no Event of Default shall be continuing, the
Grantor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Pledged Shares, and the Agent
shall, upon receiving a written request from the Grantor, which request shall
be deemed to be a representation and warranty by the Grantor that no Event of
Default is continuing, deliver to the Grantor or as specified in such request
such proxies, powers of attorney, consents, ratifications and waivers in
respect of any Subsidiary Shares which are registered in the name of the Agent
or a nominee as shall be specified in such request and be in form and substance
satisfactory to the Agent.
(d) While an Event of Default shall be continuing, all rights of
the Grantor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (c) above shall end
upon notice from the Agent to the Grantor and thereafter the Agent shall have
the right to the extent permitted by law for so long as such Event of Default
continues, and the Grantor shall take all such action as may be necessary or
appropriate to give effect to such right, to vote and to give consents,
ratifications and waivers, and take any other action with respect to all
Pledged Shares with the same force and effect as if the Agent were the absolute
and sole owner thereof.
(e) While an Event of Default shall be continuing, the Agent shall
be entitled to receive and retain as Collateral all dividends and distributions
made in respect of the Pledged Shares, and shall deposit all cash dividends
into the Collateral Account described
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in Section 4.7 hereof. Any such dividends or distributions on account of
Pledged Shares shall, if received by the Grantor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Grantor, and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary endorsement).
4.7. Collateral Account.
(a) There is hereby established with the Agent a cash collateral
account (the "Collateral Account") in the name and under the control of the
Agent into which there shall be deposited from time to time the cash proceeds
of the Collateral required to be delivered to the Agent pursuant to any
provision of this Agreement. Any income received by the Agent with respect to
the balance from time to time of the Collateral Account, including any interest
or capital gains on Liquid Investments, shall remain, or be deposited, in the
Collateral Account. All right, title and interest in and to the cash amounts
on deposit from time to time in the Collateral Account together with any Liquid
Investments from time to time made pursuant to paragraph (c) of this Section
shall vest in the Agent, shall constitute part of the Collateral hereunder and
shall not constitute payment of the Secured Obligations until applied thereto
as hereinafter provided.
(b) At any time during the continuation of an Event of Default,
the Agent shall, if so instructed by the Majority Banks, apply or cause to be
applied (subject to collection) any or all of the balance from time to time of
the Collateral Account in the manner specified in Section 6.
(c) Amounts on deposit in the Collateral Account shall be invested
and re-invested from time to time in such Liquid Investments as the Grantor
shall determine, which Liquid Investments shall be held in the name and be
under the control of the Agent, provided that, at any time during the
continuation of an Event of Default, the Agent shall, if instructed by the
Majority Banks, liquidate any such Liquid Investments and apply or cause to be
applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 6. In order to provide the Agent, for the benefit
of the Banks, with a perfected security interest therein, each Liquid
Investment shall be either:
(i) evidenced by negotiable certificates or instruments,
or if non-negotiable then issued in the name of the Agent, which
(together with any appropriate instruments of transfer) are delivered
to, and held by, the Agent or an agent thereof (which shall not be the
Grantor or any of its Affiliates) in the State of Texas; or
(ii) in book-entry form and issued by the United States
and subject to pledge under applicable state law and treasury
regulations and as to which (in the
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opinion of counsel to the Agent) appropriate measures shall have been
taken for perfection of the security interests.
4.8. Transfer of Certain Collateral; Release of Certain Security
Interest. The Grantor agrees that it shall not sell, assign, or otherwise
dispose of any Collateral other than Revenue Equipment sold in the ordinary
course of the Grantor's business and in accordance with the terms of the Credit
Agreement without the prior written consent of the Agent and the Majority
Banks. The Agent shall promptly, at a Grantor's expense, execute and deliver
all further instruments and documents, and take all further action that the
Grantor may reasonably request in order to release its security interest in any
Collateral which is disposed of in accordance with the terms of this Security
Agreement.
4.9.Release of Security Interest in Revenue Equipment. (a) The
Grantor shall be entitled to sell its Revenue Equipment in the ordinary course
of business, prior to the occurrence of any Default and in accordance with the
terms of the Credit Agreement. In connection with any such sale, the Agent
agrees for its benefit and the benefit of the Banks that the lien of the Agent
recorded on any certificate of title with respect to any Revenue Equipment to
be sold may be released by the Agent's custodians (the "Custodians") pursuant
to a custodial agreement substantially in the form attached hereto as Annex 5
("Custodial Agreement"), with a power of attorney, effective for a period of
one calendar quarter (or the remaining portion thereof) which shall authorize
the Custodians to execute, on behalf of the Agent, all documents and
instruments necessary to release the security interest granted hereunder with
respect to the Revenue Equipment to be sold or transferred, subject to the
limitations set forth in the Custodial Agreement and such power of attorney.
Upon the occurrence of any Default under the Credit Agreement, the Agent may
revoke any then outstanding power of attorney provided in accordance with this
Section, by giving notice of such revocation to the Custodians, and the
Grantor. Upon the resignation of any individual holding a power of attorney
hereunder, the Agent may designate an agent (whether or not such agent is an
employee of the Grantor or any of its Subsidiaries) to hold a power of
attorney, and such agent may enter onto any premises where the Grantor retains
certificates of title on behalf of the Agent for the purpose of fulfilling such
agent's obligations to the Agent under said power of attorney.
(b) At the request of the Agent, the Grantor shall provide the
Agent with a report listing Revenue Equipment owned by the Grantor as of the
end of the most recent fiscal period.
Section 5. Remedies. If any Event of Default shall have occurred and
be continuing
5.1. UCC Remedies.
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(a) To the extent permitted by law, and in the case of Accounts,
the Agent may exercise in respect of the Collateral, in addition to other
rights and remedies provided for in this Security Agreement or otherwise
available to it, all the rights and remedies of a secured party under the UCC
(whether or not the UCC applies to the affected Collateral).
(b) All payments received by the Grantor under or in connection
with or in respect of the Collateral shall be deposited with the Agent.
5.2. Assembly of Collateral. The Agent may require the Grantor to, at
the Grantor's expense, promptly assemble all or part of the Collateral in
Little Rock, Arkansas; Springfield, Illinois; Atlanta, Georgia; Dallas, Texas;
Los Angeles, California; Denver, Colorado; Salt Lake City, Utah; Dayton, Ohio;
Cherryville, North Carolina; or such other cities as the Grantor and the Agent
may agree at such time; and make it available to the Agent at a place in each
such city to be designated by the Agent which is reasonably convenient to both
parties. The Agent may occupy any premises owned or leased by the Grantor
where the Collateral or any part thereof is assembled for a reasonable period
in order to effectuate its rights and remedies hereunder or under law, without
obligation to the Grantor in respect of such occupation.
5.3. Sale of Collateral. The Agent may sell all or part of the
Collateral at a public or private sale, at any of the Agent's offices or
elsewhere, for cash, on credit, or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. The Grantor agrees that
to the extent permitted by law such sales may be made without notice. If
notice is required by law, the Grantor hereby deems 10 days advance notice of
the time and place of any public sale or the time after which any private sale
is to be made reasonable notification, recognizing that if the Collateral is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market shorter notice may be reasonable. The
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.
5.4. Contract Rights. The Agent may exercise any rights and remedies
of the Grantor under or in connection with the instruments, chattel paper, or
contracts which represent Accounts or otherwise relate to the Collateral,
including, without limitation, any rights of the Grantor to demand or otherwise
require payment of any amount under, or performance of any provisions of, the
instruments, chattel paper, or contracts which represent Accounts.
5.5. Accounts.
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(a) The Agent may, or may direct the Grantor to, take any action
the Agent deems necessary or advisable to enforce collection of the Accounts
including, without limitation, notifying the account debtors or obligors under
any Accounts of the assignment of such Accounts to the Agent and directing such
account debtors or obligors to make payment of all amounts due or to become due
directly to the Agent. Upon such notification and direction, and at the
expense of the Grantor, the Agent may enforce collection of any such Accounts,
and adjust, settle, or compromise the amount or payment thereof in the same
manner and to the same extent as the Grantor might have done.
(b) After receipt by the Grantor of the notice referred to in
paragraph (a) above, all amounts and proceeds (including instruments) received
by the Grantor in respect of the Accounts shall be received in trust for the
benefit of the Agent hereunder, shall be segregated from other funds of the
Grantor, and shall promptly be paid over to the Agent in the same form as so
received (with any necessary indorsement) to be held as Collateral. The
Grantor shall not adjust, settle, or compromise the amount or payment of any
receivable, or release wholly or partly any account debtor or obligor thereof,
or allow any credit or discount thereon other than in the ordinary course of
business and consistent with past practices.
5.6. Pledged Shares.
(a) The Agent is authorized in connection with any sale of Pledged
Shares (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Shares to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any such
Collateral, (ii) to cause to be placed on certificates for any or all of the
Pledged Shares a legend to the effect that such security has not been
registered under the Securities Act of 1933 ("Securities Act") and may not be
disposed of in violation of the provisions of the Securities Act, and (iii) to
impose such other limitations or conditions in connection with any such sale as
the Agent reasonably deems necessary or advisable in order to comply with the
Securities Act or any other law or regulation.
(b) If the Agent shall determine to exercise its right to sell all
or any of the Pledged Shares and if in the opinion of counsel for the Agent it
is necessary, or if in the opinion of the Agent it is advisable, to have the
Pledged Shares registered under the provisions of the Securities Act, the
Grantor agrees, at its own expense, through the exercise of registration rights
or otherwise, (i) to use its best efforts to cause the issuer of such Pledged
Shares and its officers to execute and deliver, all such instruments and
documents, and to do or cause to be done all other such acts and things,
through the exercise of registration rights or otherwise, as may be necessary
or, in the opinion of the Agent, advisable to register such securities under
the provisions of the Securities Act and to cause the registration statement
relating thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make
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or cause to be made all amendments and supplements thereto and to the related
prospectus which, in the opinion of the Agent, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, (ii) to use
its best efforts to cause the issuer of such Pledged Shares to agree to make,
and to make available to its security holders as soon as practicable, an
earning statement (which need not be audited) covering a period of at least 12
months, beginning with the first month after the effective date of any such
registration statement, which earning statement will satisfy the provisions of
Section 11(a) of the Securities Act, (iii) to use its best efforts to qualify
such securities under state Blue Sky or securities laws and to obtain the
approval of any governmental authorities for the sale of such securities, as
requested by the Agent, and (iv) to indemnify and hold harmless and use its
best efforts to cause the issuer of such Pledged Shares to indemnify and hold
harmless the Agent, and any underwriters (and any Person controlling any of the
foregoing) from and against any loss, liability, claim, damage and expense (and
reasonable counsel fees incurred in connection therewith) under the Securities
Act or otherwise insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in such registration statement or prospectus or in
any preliminary prospectus or any amendment or supplement thereto, or arises
out of or is based upon any omission or alleged omission to state therein a
material fact required to be stated or necessary to make the statements therein
not misleading, such indemnification to remain operative regardless of any
investigation made by or on behalf of the Secured Parties or any underwriters
(or any person controlling any of the foregoing); provided that the Grantor
shall not be liable in any case to the extent that any such loss, liability,
claim, damage or expense arises out of or is based on an untrue statement or
alleged untrue statement or an omission with written information furnished to
such corporation by the Agent or any underwriter expressly for use in such
registration statement or prospectus. The rights of the Agent under this
subsection (b) are in addition to and not in limitation of the rights of the
Agent as assignee of any registration rights included in the Collateral.
(c) Undertakings to Apply Reports. If the Agent shall determine
to exercise its right to sell all or any of the Pledged Shares pursuant to Rule
144 of the General Rules and Regulations of the Securities Act ("Rule 144"), at
the request of the Agent, the Grantor shall exercise best efforts to cause the
issuer of such Pledged Shares to file, on a timely basis, all annual quarterly
and other reports required to be filed by it under Sections 13 and 15(d) of the
Exchange Act, and the rules and regulations of the Securities and Exchange
Commission thereunder, as amended from time to time. In addition, at the
request of the Agent, the Grantor shall exercise best efforts to cause the
issuer of such Pledged Shares to cooperate with the Agent so as to enable such
sales to be made in accordance with applicable laws, rules, and regulations and
the requirements of the broker through which the sales are proposed to be
executed, and shall, upon request and assuming that the requirements of Rule
144 have been complied with, furnish at the Grantor's expense an opinion of
counsel to the issuer of such Pledged Shares that the proposed sale is in
compliance with Rule 144.
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(d) Treadco Right of First Refusal. Notwithstanding anything in
this Section 5.6 to the contrary, at any time prior to the date (the "First
Refusal Termination Date") which is 90 days after the first date the Agent
begins to exercise its remedies under Section 6 hereof with respect to any
Collateral covered hereby and gives notice of such exercise of remedies to the
Grantor, the Agent shall give a right of first refusal to Treadco, Inc. to buy
any Pledged Shares issued by Treadco, Inc. to be sold by the Agent in
accordance with this Section; provided, however, that Treadco, Inc. must
exercise its right to purchase such Pledged Shares (a) prior to the 10th
Business Day following the date the Agent receives a binding letter of intent
from any other potential purchaser of such Pledged Shares setting forth the
price such purchaser is willing to pay for such Pledged Shares and other
material terms, which letter of intent was received by the Agent on or prior to
the First Refusal Termination Date, and (b) by paying to the Agent a price
equal or greater to the price for such Pledged Shares specified in such letter
of intent by such other purchaser.
Section 6. Application of Collateral. The proceeds of any sale, or
other realization upon all or any part of the Collateral pledged by the Grantor
shall be applied by the Agent in the following order:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to the Agent and its agents and counsel, and
all expenses, liabilities and advances incurred or made by the Agent in
connection therewith, and to the ratable payment of any other unreimbursed
expenses for which the Agent or any Bank is to be reimbursed pursuant to
Section 9.4 of the Credit Agreement;
second, to the ratable payment of accrued but unpaid interest on the
Secured Obligations;
third, to the ratable payment of unpaid principal of the Secured
Obligations;
fourth, to cash secure the Secured Obligations relating to the Letter
of Credit Exposure by depositing necessary amounts in the Collateral Account;
and
fifth, to the ratable payment of all other amounts payable by the
Grantor under the Credit Agreement and this Security Agreement.
Any surplus of such cash or cash proceeds held by the Agent and
remaining after payment in full of all the Secured Obligations of the Grantor
shall be paid over to the Grantor or to whomever may be lawfully entitled to
receive such surplus.
Section 7. Agent as Attorney-in-Fact for Grantor.
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7.1. Attorney-In-Fact. The Grantor hereby irrevocably appoints the
Agent as the Grantor's attorney-in-fact, with full authority to act for the
Grantor and in the name of the Grantor to, in the Agent's discretion:
(a) filing one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of the Grantor where permitted by law;
(b) to obtain and adjust insurance required as pursuant to Section
5.3 to the extent the Grantor has failed to provide such insurance;
(c) to receive, indorse, and collect any drafts or other
instruments, documents, and chattel paper which are part of the Collateral
pledged by the Grantor; and
(d) during the continuance of any Event of Default, to ask,
demand, collect, xxx for, recover, compromise, receive, and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral pledged by the Grantor and to file any claims or take any action or
institute any proceedings which the Agent may deem necessary or desirable for
the collection of any of such Collateral or otherwise to enforce the rights of
the Agent with respect to any of such Collateral.
The power of attorney granted hereby is coupled with an interest and
is irrevocable.
7.2. Agent Performance. If the Grantor fails to perform any covenant
contained herein, the Agent may itself perform, or cause performance of, such
covenant, and the Grantor shall pay for the expenses of the Agent incurred in
connection therewith in accordance with Section 9.1.
7.3. Agent's Duties. The powers conferred on the Agent under this
Security Agreement are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for monies
actually received by it hereunder, the Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.
Section 8. Miscellaneous.
8.1. Expenses. The Grantor will upon demand pay to the Agent the
amount of any reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Agent may
incur in connection with (a) the custody, preservation, use, or operation of,
or the sale, collection, or other realization of,
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any of the Collateral, (b) the exercise or enforcement of any of the rights of
the Agent or the Banks hereunder, and (c) the failure by the Grantor to perform
or observe any of the provisions hereof.
8.2. Amendments; Etc. No waiver of any provision of this Security
Agreement nor consent to any departure by the Grantor herefrom shall be
effective unless the same shall be in writing and signed by the Agent (with the
consent of such Banks as may be required pursuant to the Credit Agreement) and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. Any amendment of this Security
Agreement (except as provided in the foregoing sentence) shall be in writing
and signed each of the parties hereto.
8.3. Addresses for Notices. All notices and other communications
provided for hereunder shall be made to the parties at their addresses and as
provided in the Credit Agreement. All such notices and other communications
shall be effective as provided in the Credit Agreement.
8.4. Continuing Security Interest; Transfer of Interest. This
Security Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until payment in full
and termination of the Secured Obligations, (b) be binding upon the Grantor,
its successors, and assigns, and (c) inure, together with the rights and
remedies of the Agent hereunder, to the benefit of the Agent, the Banks, and
their respective successors, transferees, and assigns. Without limiting the
generality of the foregoing clause, when any Bank assigns or otherwise
transfers any interest held by it under the Credit Agreement or other Credit
Document to any other Person pursuant to the terms of the Credit Agreement or
other Credit Document, that other Person shall thereupon become vested with all
the benefits held by such Bank under this Security Agreement. Upon the payment
in full and termination of the Secured Obligations, the security interest
granted hereby shall terminate and all rights to the Collateral pledged by the
Grantor shall revert to the Grantor to the extent such Collateral shall not
have been sold or otherwise applied pursuant to the terms hereof. Upon any
such termination, the Agent will, at the Grantor's expense, execute and deliver
to the Grantor such documents as the Grantor shall reasonably request and take
any other actions reasonably requested to evidence or effect such termination.
8.5. Concerning the Agent. The provisions of Article VIII of the
Credit Agreement shall inure to the benefit of the Agent in respect of this
Security Agreement and shall be binding upon the parties to the Credit
Agreement in such respect. In furtherance and not in derogation of the rights,
privileges and immunities of the Agent in its capacity as Agent hereunder:
(a) The Agent is authorized to take all such action as is provided
to be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any
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matters not expressly provided for herein (including, without limitation, the
timing and methods of realization upon the Collateral) the Agent shall act or
refrain from acting in accordance with written instructions from the Majority
Banks or, in the absence of such instructions, in accordance with its
discretion.
(b) The Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the security interests granted hereby in any of
the Collateral, whether impaired by operation of law or by reason of any action
or omission to act on its part hereunder. The Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of the terms of
this Security Agreement by the Grantor.
8.6. Choice of Law. This Security Agreement shall be governed by and
construed and enforced in accordance with the laws of the state of Texas,
except to the extent that the validity or perfection of the security interests
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the state of Texas.
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The parties hereto have caused this Security Agreement to be duly
executed as of the date first above written.
ARKANSAS BEST CORPORATION,
a Delaware corporation
-----------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial
Officer, and Treasurer
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Agent
----------------------------------
Xxxxxxxxxxx Xxxxxx
First Vice President
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ANNEX 1
to Borrower Security Agreement
ADDRESS WHERE RECORDS FOR ACCOUNTS AND
GENERAL INTANGIBLES ARE KEPT
Arkansas Best Corporation
0000 Xxx Xxxxxxxxx Xx.
Xxxx Xxxxx, Xxxxxxxx 00000
122
ANNEX 2
to Borrower Security Agreement
UCC-1 FINANCING STATEMENT
1. The name and address of the DEBTOR is:
Arkansas Best Corporation
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
2. The name and address of the SECURED PARTY is:
Societe Generale, Southwest Agency
4800 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
3. The federal tax I.D. number of the Debtor is: 00-0000000
4. This Financing Statement covers the following assets or types of
Collateral:
(a) Revenue Equipment. All now owned or hereafter
acquired trucks, tractors, trailers and city tractors, and all
accessories and parts therefor or attached thereto;
(b) Accounts. All now owned or hereafter acquired
accounts and all rights to payment owing or to be owing to the
Debtor, wherever the records for such accounts and rights to payment
are held, including all instruments and chattel paper, wherever
located, that represent any right of the Debtor to payment for services
rendered, whether or not it has been earned by performance;
(c) Stock. All shares of capital stock of Treadco, Inc.,
a Delaware corporation, and each subsidiary of the Debtor;
(d) Records. All now owned or hereafter acquired ledger
sheets, files, records, computer databases and software and documents
relating to the foregoing Collateral; and
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(e) Proceeds. All proceeds of the foregoing Collateral
and, to the extent not otherwise included, all payments under any
insurance, indemnity, warranty, or guaranty of or for the foregoing
Collateral.
DEBTOR:
------
ARKANSAS BEST CORPORATION
---------------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial Officer,
and Treasurer
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ANNEX 3
to Borrower Security Agreement
UCC FILING LOCATIONS
Arkansas Secretary of State
Office of the County Clerk of Sebastian County, Arkansas
125
ANNEX 4
to Borrower Security Agreement
CUSTODIAL AGREEMENT
This Custodial Agreement ("Agreement") dated as of June 12, 1998, is
among the individuals signatory hereto as Custodians below, each such
individual residing at the address set forth below his or her name below (such
individuals each herein called the "Custodian"), and Societe Generale,
Southwest Agency, as Administrative Agent (the "Agent") under the Credit
Agreement (as amended or otherwise modified from time to time, the "Credit
Agreement") dated as of June 12, 1998 among Arkansas Best Corporation, a
Delaware corporation (the "Borrower"), the lenders parties thereto (the
"Banks"), Bank of America National Trust and Savings Association and Xxxxx
Fargo Bank (Texas), N.A., as Co-Documentation Agents, and the Agent. All
capitalized terms defined in the Credit Agreement and used herein without
definition shall have the same meanings herein as therein defined.
WHEREAS, the Agent has requested the Custodian to act on the Agent's
behalf to protect and preserve the Agent's rights, for the benefit of the
Banks, with respect to certain Revenue Equipment pledged as collateral and
securing the obligations of the Borrower and each Guarantor to the Banks; and
WHEREAS, the Custodian has agreed so to act on behalf of the Agent
under the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
(a) As described in the Borrower Security Agreement and the
Guarantors Security Agreement, and subject to the limitations described
therein, any Grantor (as defined in such Security Agreements) may sell or
transfer Revenue Equipment constituting Collateral (as defined in such Security
Agreements) in the ordinary course of business. Due to the difficulty of
administering such sales if the Agent were to hold the certificates of title
with respect to all Revenue Equipment at its offices in Dallas, Texas, the
Agent hereby designates each Custodian, as agent for the Agent, and by this
Agreement authorizes such Custodian to hold such certificates of title for the
Agent at the offices specified on Schedule 2.17 to the Credit Agreement. By
execution hereof, each Custodian agrees that he or she shall act as Custodian
for the Agent as herein provided and shall not take any action to release the
Agent's lien on any of such certificates of title except as may from time to
time be necessary to permit ordinary course of business sales of Revenue
Equipment prior to the occurrence of a Default under the Credit Agreement in
accordance with the terms of a power of attorney which will from time to time
be executed and delivered to such Custodian by the Agent.
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(b) The Agent and each Custodian agree that such Custodian will
act in accordance with the terms hereof on behalf of the Agent, to protect the
Agent's interest in said Revenue Equipment for which ownership is evidenced by
a certificate of title and in which the Agent has an interest. Each Custodian
shall take reasonable measures and exercise reasonable care to prevent any
Person other than any additional Custodian appointed by the Agent under the
terms of an agreement substantially similar to this Agreement, from releasing
or causing to be released the Agent's lien on any such Revenue Equipment, and
will promptly notify the Agent of any such actions of which such Custodian
becomes aware.
(c) The Agent anticipates issuing a power of attorney
substantially in the form of the Schedule attached hereto to the Custodian on a
periodic basis, each for a limited duration, as described in Section 4.9 of the
Borrower Security Agreement and the Guarantors Security Agreement to permit the
Custodian to act on behalf of the Agent in releasing the Agent's lien on
Revenue Equipment sold in accordance with the Credit Agreement and such
Security Agreements and in supplying lienholder information to the proper
governmental authorities for title processing and licensing necessary to
reflect the Agent's continuing security interest in Revenue Equipment. Each
Custodian recognizes that the power of attorney received by him or her shall be
broad to enable the release of the Agent's lien as contemplated by the Security
Agreements but nevertheless agrees that he or she will only release liens on
Revenue Equipment in accordance with the terms of the Security Agreements and
this Agreement, and such Custodian is hereby authorized to do so and to supply
lienholder information. No Custodian will release or take any action toward
releasing any liens if such Custodian has reason to believe that (a) such
release would not be in compliance with the terms of the Security Agreements or
this Agreement, or (b) representations by employees, officers or other agents
of the Grantor to the effect that certain sales or transfers comply with the
terms of the Security Agreements are untrue, and such Custodian will promptly
notify the Agent thereof.
(d) Upon the occurrence of any Default under the Credit Agreement,
the Agent may by notice to each Custodian, immediately revoke the power of
attorney in effect at such time, and upon receipt of such notice which may be
by telephone, telecopy or telex, such Custodian shall not take any further
action to release any lien until instructed otherwise by the Agent.
(e) Any Custodian may resign as Custodian hereunder upon 14 days'
advance written notice to the Agent and the Borrower. Without limiting any
rights of the Agent under the Credit Agreement and the Security Agreements, the
Agent may terminate any Custodian's responsibilities hereunder (a) immediately
in the event that such Custodian breaches his agreements, covenants or
responsibilities hereunder or (b) upon 14 days' written notice, without cause,
with the consent of the Borrower. Upon the resignation or termination of any
Custodian, such Custodian shall have no further rights or responsibilities
hereunder and shall immediately return to the Agent any then effective
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power of attorney; such Custodian will not hold himself or herself out as
having any authority as a Custodian, and such Custodian shall notify all
Persons as may be reasonably necessary to resolve any confusion, that such
individual is no longer a Custodian hereunder.
(f) This Agreement may be amended or waived only by a writing
signed by the Agent, the Borrower and each Custodian. This Agreement shall be
construed in accordance with and governed by the laws of the State of Texas.
If any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall be in no way
affected thereby, and this Agreement shall be construed and be enforceable as
if such invalid, illegal or unenforceable term had not been included herein.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as an instrument under seal as of the date first above written.
SOCIETE GENERALE, SOUTHWEST
AGENCY, as Agent
----------------------------------------------
By:
-------------------------------------------
Title:
----------------------------------------
CUSTODIANS:
---------------------------------------------
Name:
----------------------------------------
Address:
---------------------------------------------
---------------------------------------------
Telephone:
-----------------------------------
Telecopy:
------------------------------------
The undersigned, Arkansas Best Corporation, hereby recognizes that any
Custodian referred to above shall, as agent for the Agent, hold certificates of
title to Revenue Equipment which is subject to a Lien in favor of the Agent for
the benefit of the Banks at the office referred to in the foregoing Custodial
Agreement and, accordingly, for valuable consideration, receipt of which is
hereby acknowledged, the undersigned grants such Custodian on behalf of itself
and its Subsidiaries a continuing right to use its offices for such purpose as
may be necessary and convenient to carry out the provisions of the foregoing
Custodial Agreement.
ARKANSAS BEST CORPORATION
-----------------------------------------
Xxxxx X. Xxxxxxxx Vice President, Chief
Financial Officer, and Treasurer
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SCHEDULE TO CUSTODIAL AGREEMENT
POWER OF ATTORNEY
This Power of Attorney is made the ___ day of _________, 19__, by
Societe Generale, Southwest Agency, as Administrative Agent (the "Agent") for
itself and the lenders which are or may become parties to the Credit Agreement
dated as of June 12, 1998 among Arkansas Best Corporation, such lenders, Bank
of America National Trust and Savings Association and Xxxxx Fargo Bank (Texas),
N.A., as Co-Documentation Agents, and the Agent (as it may be amended or
otherwise modified from time to time, the "Credit Agreement").
KNOW ALL PERSONS BY THESE PRESENTS, that the Agent does hereby
constitute and appoint ______________________________ as the Agent's true and
lawful attorney and in the name, place, and stead of the Agent to execute, on
behalf of the Agent, such documents and instruments necessary to release the
security interest or lien granted by the Grantor (as defined in the Borrower
Security Agreement and the Guarantors Security Agreement referenced in the
Credit Agreement) on the revenue equipment for which a certificate of title has
been issued and which designates the Agent as the secured party on the
application for certificate of title or certificate of title, as appropriate,
with respect to any revenue equipment of the Grantor the ownership of which is
evidenced by a certificate of title.
This Power of Attorney shall expire at the close of business on ______'
19__.
IN WITNESS WHEREOF, the Agent has caused this Power of Attorney to be
duly executed this ___ day of ___________, 19__.
SOCIETE GENERALE, SOUTHWEST
AGENCY, as Agent
--------------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
130
I attest to the fact that this is a true and
exact copy of the Original Power of Attorney
Subscribed and sworn to before me
this _____ day of __________, 199__.
Notary Public
My Commission Expires:__________
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EXHIBIT D
SECURITY AGREEMENT
This Security Agreement dated as of June 12, 1998 (as amended or
otherwise modified from time to time, the "Security Agreement") is by and among
the parties named as Grantors on the signature pages hereto or on the signature
page of an Accession Agreement (as herein defined) executed after the date
hereof (collectively herein such parties are called the "Grantors", and each a
"Grantor"), and Societe Generale, Southwest Agency, as Administrative Agent for
the Banks parties to the Credit Agreement described below (the "Agent").
INTRODUCTION
The Agent, Arkansas Best Corporation, a Delaware corporation (the
"Borrower") which is the direct or indirect sole shareholder of each Grantor,
Societe Generale, Southwest Agency, as Administrative Agent, Bank of America
National Trust and Savings Association and Xxxxx Fargo Bank (Texas) N.A., as
Co-Documentation Agents, and the Banks have entered into a Credit Agreement
dated as of June 12, 1998, (as amended or otherwise modified from time to time,
the "Credit Agreement"). Each Grantor has guaranteed the Borrower's obligations
under the Credit Agreement pursuant to the Guaranty dated as of June 12, 1998,
each among the Grantors in favor of the Banks, the Co-Documentation Agents and
the Agent (as amended or otherwise modified from time to time, the "Guaranty").
Under the Credit Agreement, each Grantor is required to execute and deliver this
Security Agreement. Therefore, in order to induce the Banks to enter into the
Credit Agreement and to make the Advances and the Issuing Banks to issue the
Letters of Credit in accordance with the terms of the Credit Agreement, each
Grantor hereby agrees with the Agent for its benefit and the ratable benefit of
the Banks as follows:
Section 1. Definitions.
(a) All capitalized terms not otherwise defined in this Security
Agreement that are defined in the Credit Agreement shall have the meaning
assigned to such terms by the Credit Agreement.
(b) Any terms used in this Security Agreement that are defined in the
Texas Business and Commerce Code ("UCC") shall have the meaning assigned to
those terms
132
by the UCC, whether specified elsewhere in this Security Agreement
or not.
Section 2. Security Interest.
2.1. Grant of Security Interest. Each Grantor hereby grants to the
Agent for its benefit and the ratable benefit of the Banks security interests in
the Collateral (as defined in Section 2.2 below) to secure the performance and
payment of all obligations of such Grantor now or hereafter existing under the
Guaranty, including any extensions, modifications, substitutions, amendments and
renewals thereof, whether for principal, interest, fees, Hedging Obligations
owing to any Bank or any Affiliate of any Bank, expenses, indemnification, or
otherwise (collectively, the "Secured Obligations").
2.2. Collateral. "Collateral" shall mean all of each Grantor's right,
title, and interest in the following, whether now owned or hereafter acquired:
(a) Revenue Equipment. All trucks, tractors, trailers and city
tractors, and all accessories and parts therefor or attached thereto (the
"Revenue Equipment");
(b) Accounts. All accounts and all rights to payment owing or to be
owing to each Grantor, wherever the records for such accounts and rights to
payment are held, including all instruments and chattel paper, wherever located,
that represent any right of such Grantor to payment for services rendered,
whether or not it has been earned by performance (all such accounts,
instruments, and chattel paper being the "Accounts");
(c) Stock. All shares of each Subsidiary of each Grantor (collectively
herein all of such shares are called the "Pledged Shares");
(d) Collateral Account. The Collateral Account referred to in Section
4.7 of this Security Agreement and all Liquid Investments held in the Collateral
Account;
(e) Records. All ledger sheets, files, records, computer databases and
software and documents relating to the foregoing Collateral; and
(f) Proceeds. All proceeds of the foregoing Collateral and, to the
extent not otherwise included, all payments under any insurance, indemnity,
warranty, or guaranty of or for the foregoing Collateral.
Section 3. Representations and Warranties. Each Grantor hereby
represents and warrants the following to the Agent and the Banks:
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3.1. Revenue Equipment. All Revenue Equipment which, under applicable
law, is required to be registered, is properly registered in the name of such
Grantor or, in the case of newly acquired Revenue Equipment, such Grantor is
diligently pursuing the process of causing such Revenue Equipment to be
registered in such Grantor's name. All Revenue Equipment, the ownership of
which, under applicable law, is evidenced by a certificate of title, is properly
titled in the name of such Grantor. All certificates of title with respect to
the Revenue Equipment owned by such Grantor will be maintained by the Custodians
(as defined in Section 4.9 of this Security Agreement) at the address referenced
for such Grantor on Schedule 2.17 to the Credit Agreement.
3.2. Accounts. The chief place of business and chief executive office
of each Grantor and the office where such Grantor keeps its records concerning
the Accounts are located at the address for such Grantor on Annex 1 attached
hereto or as set forth in the Accession Agreement executed by such Grantor. None
of the Accounts is evidenced by a promissory note or other instrument.
3.3. Pledged Shares. The Pledged Shares are duly authorized, validly
issued and fully paid and non-assessable, and the Agent will be in possession of
all certificates evidencing the Pledged Shares, accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, and accompanied in each case by any required transfer tax stamps,
all in form and substance reasonably satisfactory to the Agent.
3.4. Other Liens. Each Grantor is, and will be the record and
beneficial owner of all Collateral pledged by such Grantor free and clear of any
Lien, except for Liens created hereby or Liens or interests otherwise permitted
by the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is, or will be on
file in any recording office, except such as may be filed in connection with
this Security Agreement or in connection with Liens or interests otherwise
permitted by the Credit Agreement.
3.5. Lien Priority and Perfection. (a) This Security Agreement creates
valid security interests in the Collateral, securing the payment of the Secured
Obligations, and such security interests (other than security interests in
Property of any Canadian Subsidiary) are or will be perfected first priority
security interests, second only to interests otherwise permitted by the Credit
Agreement, with respect to each Grantor's Collateral (i) in the case of
Collateral other than as described in clauses (ii) and (iii) below following the
filing of a UCC Financing Statement in the form of Annex 2 attached hereto (with
each Grantor's name and address filed in under the title "Debtor") in the
office(s) set forth on Annex 3 attached hereto with respect to such Grantor or
in the Accession Agreement executed by such Grantor, (ii) in the case of the
Pledged Shares owned by such Grantor, provided that the Agent retains possession
of such Pledged Shares and instruments of transfer or assignment related thereto
which were executed in blank by such Grantor and
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delivered by such Grantor to the Agent prior to the date hereof, and (iii)
in the case of titled Revenue Equipment of such Grantor, when the Agent's
interest as a secured party is recorded on the certificates of title relating to
such Grantor's titled Revenue Equipment (other than certificates of title for
Revenue Equipment which is already subject to a Lien permitted by the Credit
Agreement) as contemplated by the Custodial Agreement described in Section 4.9
of this Security Agreement.
(b) No other authorization, approval, or other action by, and no notice
to or filing with, any Governmental Authority is necessary to grant the security
interests contemplated hereby, or to allow any Grantor to perform its
obligations hereunder, or to permit the Agent to exercise its rights and
remedies hereunder.
Section 4. Grantor Covenants.
4.1. Further Assurances. Each Grantor agrees that at any time, at such
Grantor's expense, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be reasonably
necessary or that the Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor will at the Agent's request: (a) deliver and pledge to the Agent
any instrument representing any Account, duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Agent, and (b) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices as may be reasonably necessary, or as the Agent may reasonably request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby.
4.2. Revenue Equipment. Each Grantor shall:
(a) cause the Revenue Equipment owned by such Grantor to be maintained
and preserved in accordance with Section 5.7 of the Credit Agreement, and shall
in accordance with past practices, make or cause to be made all repairs,
replacements, and other improvements which are necessary or desirable to restore
the Revenue Equipment to good working order;
(b) promptly furnish to the Agent a statement respecting any material
loss or damage to any of Revenue Equipment owned by such Grantor which is not
repaired;
(c) promptly pay or cause to be paid prior to delinquency all property
and other taxes, assessments, and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against, the
Revenue Equipment owned by such Grantor, except to the extent permitted by the
Credit
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Agreement;
(d) promptly cause all Revenue Equipment owned by such Grantor which,
under applicable law, is required to be registered, to be properly registered in
the name of such Grantor, and cause all Revenue Equipment, the ownership of
which, under applicable law, is evidenced by a certificate of title to be
properly titled in the name of such Grantor, and to have the Agent's interest in
such Revenue Equipment properly noted on the certificate of title with respect
thereof (it being agreed that a Grantor will not be in default under this
provision if such Grantor is diligently pursuing the process, as applicable, of
causing such Revenue Equipment to be registered in such Grantor's name or to be
titled in such Grantor's name or to have the Agent's interest noted on such
certificate of title, provided, however, that with respect to any newly acquired
Revenue Equipment if the process is not completed within 120 days after such
Grantor's acquisition of the applicable unit of Revenue Equipment, such unit of
Revenue Equipment shall not be counted in determining the Borrowing Base until
such process is completed). Until the Agent exercises remedies under this
Security Agreement, the certificates of title with respect to Revenue Equipment
owned by each Grantor shall be maintained by the Custodians at one of the
addresses referenced on Schedule 2.17 of the Credit Agreement as the location of
such certificates of title.
4.3. Insurance.
(a) Each Grantor shall, at its own expense, maintain, or cause to be
maintained, insurance with respect to the Revenue Equipment owned by such
Grantor in such amounts, against such risks, in such form, and with such
insurers, as the Credit Agreement requires. Further, such Grantor shall, at the
request of the Agent, duly deliver certificates of loss casualty insurance to
the Agent showing the Agent as loss payee and additional insured as its
interests may appear.
(b) During the continuance of any Event of Default, all loss casualty
insurance payments in respect of such Revenue Equipment shall be paid to and
applied by the Agent as specified in Section 6.
4.4. Accounts. Each Grantor shall keep its chief place of business and
chief executive office and the office where it keeps the instruments, chattel
paper, or contracts representing Accounts and the records concerning the
Accounts at the location therefor specified in Section 3.2 or, upon 30 days'
prior written notice to the Agent, at such other locations in a jurisdiction
where all actions required by Section 4.1 shall have been taken with respect to
the Accounts. Each Grantor will hold and preserve such instruments, chattel
paper, contracts, and records and will permit representatives of the Agent at
any time during normal business hours to inspect and copy them.
4.5. Liability Under Contracts. Notwithstanding anything in this
Security
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Agreement to the contrary, (a) the execution of this Security Agreement
shall not release any Grantor from its obligations and duties under the
contracts and agreements included in the Collateral to the extent set forth
therein, (b) the exercise by the Agent of any of its rights hereunder shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral, and (c) neither the Agent nor any
Bank shall have any obligation or liability under the contracts and agreements
included in the Collateral by reason of the execution and delivery of this
Security Agreement, nor shall the Agent or any Bank be obligated to perform any
of the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
4.6. Pledged Shares.
(a) Following any Grantor's acquisition of any Pledged Shares, such
Grantor shall deliver or cause to be delivered to the Agent all certificates
evidencing such Pledged Shares, accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed, and
accompanied in each case by any required transfer tax stamps, all in form and
substance reasonably satisfactory to the Agent.
(b) At any time during the continuation of an Event of Default, the
Agent may from time to time in its sole discretion, cause any or all of the
Pledged Shares to be transferred of record into the name of the Agent or a
nominee. Each Grantor will promptly give to the Agent copies of any notices and
other communications received by it with respect to Pledged Shares registered in
the name of such Grantor, and the Agent will promptly give such Grantor copies
of any notices and other communications received by the Agent with respect to
Pledged Shares registered in the name of the Agent or a nominee.
(c) Provided that no Event of Default shall be continuing, each Grantor
shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Pledged Shares, and the Agent
shall, upon receiving a written request from such Grantor, which request shall
be deemed to be a representation and warranty by such Grantor that no Event of
Default is continuing, deliver to such Grantor or as specified in such request
such proxies, powers of attorney, consents, ratifications and waivers in respect
of any Pledged Shares which are registered in the name of the Agent or a nominee
as shall be specified in such request and be in form and substance satisfactory
to the Agent.
(d) While an Event of Default shall be continuing, all rights of any
Grantor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to paragraph (c) above with respect
to the Pledged Shares shall end upon notice from the Agent to such Grantor and
thereafter the Agent shall have the right to the extent permitted by law for so
long as such Event of Default continues, and such
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Grantor shall take all such action as may be necessary or appropriate to give
effect to such right, to vote and to give consents, ratifications and waivers,
and take any other action with respect to such Pledged Shares with the same
force and effect as if the Agent were the absolute and sole owner thereof.
(e) While an Event of Default shall be continuing, the Agent shall be
entitled to receive and retain as Collateral all dividends and distributions
made in respect of the Pledged Shares, and shall deposit all cash dividends into
the Collateral Account described in Section 4.7 hereof. Any such dividends or
distributions on account of Pledged Shares shall, if received by any Grantor, be
received in trust for the benefit of the Agent, be segregated from the other
property or funds of such Grantor, and be forthwith delivered to the Agent as
Collateral in the same form as so received (with any necessary endorsement).
4.7. Collateral Account.
(a) There is hereby established with the Agent a cash collateral
account (the "Collateral Account") in the name and under the control of the
Agent into which there shall be deposited from time to time the cash proceeds of
the Collateral required to be delivered to the Agent pursuant to any provision
of this Agreement. Any income received by the Agent with respect to the balance
from time to time of the Collateral Account, including any interest or capital
gains on Liquid Investments, shall remain, or be deposited, in the Collateral
Account. All right, title and interest in and to the cash amounts on deposit
from time to time in the Collateral Account together with any Liquid Investments
from time to time made pursuant to paragraph (c) of this Section shall vest in
the Agent, shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied thereto as
hereinafter provided.
(b) At any time during the continuation of an Event of Default, the
Agent shall, if so instructed by the Majority Banks, apply or cause to be
applied (subject to collection) any or all of the balance from time to time of
the Collateral Account in the manner specified in Section 6.
(c) Amounts on deposit in the Collateral Account shall be invested and
re-invested from time to time in such Liquid Investments as the Borrower shall
determine on behalf of the Grantor which deposited such amounts, which Liquid
Investments shall be held in the name and be under the control of the Agent,
provided that, at any time during the continuation of an Event of Default, the
Agent shall, if instructed by the Majority Banks, liquidate any such Liquid
Investments and apply or cause to be applied the proceeds thereof to the payment
of the Secured Obligations in the manner specified in Section 6. In order to
provide the Agent, for the benefit of the Banks, with a perfected security
interest therein, each Liquid Investment shall be either:
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(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Agent, which (together
with any appropriate instruments of transfer) are delivered to, and
held by, the Agent or an agent thereof (which shall not be the Grantor
or any of its Affiliates) in the State of Texas; or
(ii) in book-entry form and issued by the United States and
subject to pledge under applicable state law and treasury regulations
and as to which (in the opinion of counsel to the Agent) appropriate
measures shall have been taken for perfection of the security
interests.
4.8. Transfer of Certain Collateral; Release of Certain Security
Interest. Each Grantor agrees that it shall not sell, assign, or otherwise
dispose of any Collateral other than Revenue Equipment sold in the ordinary
course of such Grantor's business and in accordance with the terms of the Credit
Agreement without the prior written consent of the Agent and the Majority Banks.
The Agent shall promptly, at a Grantor's expense, execute and deliver all
further instruments and documents, and take all further action that such Grantor
may reasonably request in order to release its security interest in any
Collateral which is disposed of in accordance with the terms of this Security
Agreement.
4.9. Release of Security Interest in Revenue Equipment. (a) Each
Grantor shall be entitled to sell its Revenue Equipment in the ordinary course
of business prior to the occurrence of any Default and in accordance with the
terms of the Credit Agreement. In connection with any such sale, the Agent
agrees for its benefit and the benefit of the Banks that the lien of the Agent
recorded on any certificate of title with respect to any Revenue Equipment to be
sold may be released by the Agent's custodians (the "Custodians") pursuant to a
custodial agreement substantially in the form attached hereto as Annex 5
("Custodial Agreement"), with a power of attorney, effective for a period of one
calendar quarter (or the remaining portion thereof), which shall authorize the
Custodians to execute, on behalf of the Agent, all documents and instruments
necessary to release the security interest granted hereunder with respect to the
Revenue Equipment to be sold or transferred, subject to the limitations set
forth in the Custodial Agreement and such power of attorney. Upon the occurrence
of any Default under the Credit Agreement, the Agent may revoke any then
outstanding power of attorney provided in accordance with this Section, by
giving notice of such revocation to the Custodians, the Borrower and the
Grantors. Upon the resignation of any individual holding a power of attorney
hereunder, the Agent may designate an agent (whether or not such agent is an
employee of the Borrower or any of its Subsidiaries) to hold a power of
attorney, and such agent may enter onto any premises where any Grantor retains
certificates of title on behalf of the Agent for the purpose of fulfilling such
agent's obligations to the Agent under said power of attorney.
(b) At the request of the Agent, each Grantor shall provide the Agent
with a
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report listing Revenue Equipment owned by such Grantor as of the end of the most
recent fiscal period.
Section 5. Remedies. If any Event of Default shall have occurred and be
continuing:
5.1. UCC Remedies.
(a) To the extent permitted by law, and in the case of Accounts, the
Agent may exercise in respect of the Collateral, in addition to other rights and
remedies provided for in this Security Agreement or otherwise available to it,
all the rights and remedies of a secured party under the UCC (whether or not the
UCC applies to the affected Collateral).
(b) All payments received by any Grantor under or in connection with or
in respect of the Collateral shall be deposited with the Agent.
5.2. Assembly of Collateral. The Agent may require each Grantor to, at
such Grantor's expense, promptly assemble all or part of the Collateral in
Little Rock, Arkansas; Springfield, Illinois; Atlanta, Georgia; Dallas, Texas;
Los Angeles, California; Denver, Colorado; Salt Lake City, Utah; Dayton, Ohio;
Cherryville, North Carolina; or such other cities as such Grantor and the Agent
may agree at such time; and make it available to the Agent at a place in each
such city to be designated by the Agent which is reasonably convenient to both
parties. The Agent may occupy any premises owned or leased by any Grantor where
the Collateral or any part thereof is assembled for a reasonable period in order
to effectuate its rights and remedies hereunder or under law, without obligation
to such Grantor in respect of such occupation.
5.3. Sale of Collateral. The Agent may sell all or part of the
Collateral at a public or private sale, at any of the Agent's offices or
elsewhere, for cash, on credit, or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable. Each Grantor agrees that to
the extent permitted by law such sales may be made without notice. If notice is
required by law, such Grantor hereby deems 10 days advance notice of the time
and place of any public sale or the time after which any private sale is to be
made reasonable notification, recognizing that if the Collateral is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market shorter notice may be reasonable. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
5.4. Contract Rights. The Agent may exercise any rights and remedies of
each Grantor under or in connection with the instruments, chattel paper, or
contracts which
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represent Accounts, or otherwise relate to the Collateral, including, without
limitation, any rights of such Grantor to demand or otherwise require payment of
any amount under, or performance of any provisions of, the instruments, chattel
paper, or contracts which represent Accounts.
5.5. Accounts.
(a) The Agent may, or may direct any Grantor to, take any action the
Agent deems necessary or advisable to enforce collection of the Accounts
including, without limitation, notifying the account debtors or obligors under
any Accounts of the assignment of such Accounts to the Agent and directing such
account debtors or obligors to make payment of all amounts due or to become due
directly to the Agent. Upon such notification and direction, and at the expense
of each Grantor, the Agent may enforce collection of any such Accounts, and
adjust, settle, or compromise the amount or payment thereof in the same manner
and to the same extent as such Grantor might have done.
(b) After receipt by any Grantor of the notice referred to in paragraph
(a) above, all amounts and proceeds (including instruments) received by such
Grantor in respect of the Accounts shall be received in trust for the benefit of
the Agent hereunder, shall be segregated from other funds of such Grantor, and
shall promptly be paid over to the Agent in the same form as so received (with
any necessary indorsement) to be held as Collateral. No Grantor shall adjust,
settle, or compromise the amount or payment of any receivable, or release wholly
or partly any account debtor or obligor thereof, or allow any credit or discount
thereon other than in the ordinary course of business and consistent with past
practices.
5.6. Pledged Shares.
(a) The Agent is authorized in connection with any sale of Pledged
Shares (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Shares to a limited number of sophisticated investors who will represent
and agree that they are purchasing for their own account for investment and not
with a view to the distribution or sale of any such Collateral, (ii) to cause to
be placed on certificates for any or all of the Pledged Shares a legend to the
effect that such security has not been registered under the Securities Act of
1933 ("Securities Act") and may not be disposed of in violation of the
provisions of the Securities Act, and (iii) to impose such other limitations or
conditions in connection with any such sale as the Agent reasonably deems
necessary or advisable in order to comply with the Securities Act or any other
law or regulation.
(b) If the Agent shall determine to exercise its right to sell all or
any of the Pledged Shares and if in the opinion of counsel for the Agent it is
necessary, or if in the opinion of the Agent it is advisable, to have the
Pledged Shares registered under the provisions of the Securities Act, each
Grantor agrees, at its own expense, through the exercise of registration rights
or otherwise, (i) to use its best efforts to cause the issuer of
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such Pledged Shares and its officers to execute and deliver, all such
instruments and documents, and to do or cause to be done all other such acts and
things, through the exercise of registration rights or otherwise, as may be
necessary or, in the opinion of the Agent, advisable to register such securities
under the provisions of the Securities Act and to cause the registration
statement relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make or cause
to be made all amendments and supplements thereto and to the related prospectus
which, in the opinion of the Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, (ii) to use
its best efforts to cause the issuer of such Pledged Shares to agree to make,
and to make available to its security holders as soon as practicable, an earning
statement (which need not be audited) covering a period of at least 12 months,
beginning with the first month after the effective date of any such registration
statement, which earning statement will satisfy the provisions of Section 11(a)
of the Securities Act, (iii) to use its best efforts to qualify such securities
under state Blue Sky or securities laws and to obtain the approval of any
governmental authorities for the sale of such securities, as requested by the
Agent, and (iv) to indemnify and hold harmless and use its best efforts to cause
the issuer of such Pledged Shares to indemnify and hold harmless the Agent, and
any underwriters (and any Person controlling any of the foregoing) from and
against any loss, liability, claim, damage and expense (and reasonable counsel
fees incurred in connection therewith) under the Securities Act or otherwise
insofar as such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in such registration statement or prospectus or in any preliminary
prospectus or any amendment or supplement thereto, or arises out of or is based
upon any omission or alleged omission to state therein a material fact required
to be stated or necessary to make the statements therein not misleading, such
indemnification to remain operative regardless of any investigation made by or
on behalf of the Secured Parties or any underwriters (or any person controlling
any of the foregoing); provided that no Grantor shall be liable in any case to
the extent that any such loss, liability, claim, damage or expense arises out of
or is based on an untrue statement or alleged untrue statement or an omission
with written information furnished to such corporation by the Agent or any
underwriter expressly for use in such registration statement or prospectus. The
rights of the Agent under this subsection (b) are in addition to and not in
limitation of the rights of the Agent as assignee of any registration rights
included in the Collateral.
(c) Undertakings to File Reports. If the Agent shall determine to
exercise its right to sell all or any of the Pledged Shares pursuant to Rule 144
of the General Rules and Regulations of the Securities Act ("Rule 144"), at the
request of the Agent, each Grantor shall exercise best efforts to cause the
issuer of such Pledged Shares to file, on a timely basis, all annual quarterly
and other reports required to be filed by it under Sections 13 and 15(d) of the
Exchange Act, and the rules and regulations of the Securities and Exchange
Commission thereunder, as amended from time to time. In addition, at the
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request of the Agent, each Grantor shall exercise best efforts to cause the
issuer of such Pledged Shares to cooperate with the Agent so as to enable such
sales to be made in accordance with applicable laws, rules, and regulations and
the requirements of the broker through which the sales are proposed to be
executed, and shall, upon request and assuming that the requirements of Rule 144
have been complied with, furnish at such Grantor's expense an opinion of counsel
to the issuer of such Pledged Shares that the proposed sale is in compliance
with Rule 144.
Section 6. Application of Collateral. The proceeds of any sale, or
other realization upon all or any part of the Collateral pledged by any Grantor
shall be applied by the Agent in the following order:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to the Agent and its agents and counsel, and
all expenses, liabilities and advances incurred or made by the Agent in
connection therewith, and to the ratable payment of any other unreimbursed
expenses for which the Agent or any Bank is to be reimbursed pursuant to Section
9.4 of the Credit Agreement;
second, to the ratable payment of accrued but unpaid interest on the
Secured Obligations of such Grantor;
third, to the ratable payment of unpaid principal of the Secured
Obligations of such Grantor;
fourth, to cash secure the Secured Obligations of such Grantor relating
to the Letter of Credit Exposure by depositing necessary amounts in the
Collateral Account; and
fifth, to the ratable payment of all other amounts payable by such
Grantor under the Guaranty and this Security Agreement.
Any surplus of such cash or cash proceeds held by the Agent and
remaining after payment in full of all the Secured Obligations of such Grantor
shall be paid over to such Grantor or to whomever may be lawfully entitled to
receive such surplus.
Section 7. Agent as Attorney-in-Fact for Grantor.
7.1. Attorney-In-Fact. Each Grantor hereby irrevocably appoints the
Agent as such Grantor's attorney-in-fact, with full authority to act for such
Grantor and in the name of such Grantor to, in the Agent's discretion:
(a) filing one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of such Grantor where permitted by law;
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(b) to obtain and adjust insurance required as pursuant to Section 5.3
to the extent such Grantor has failed to provide such insurance;
(c) to receive, indorse, and collect any drafts or other instruments,
documents, and chattel paper which are part of the Collateral pledged by such
Grantor; and
(d) during the continuance of any Event of Default, to ask, demand,
collect, xxx for, recover, compromise, receive, and give acquittance and
receipts for moneys due and to become due under or in respect of any of the
Collateral pledged by such Grantor and to file any claims or take any action or
institute any proceedings which the Agent may deem necessary or desirable for
the collection of any of such Collateral or otherwise to enforce the rights of
the Agent with respect to any of such Collateral.
The power of attorney granted hereby is coupled with an interest and is
irrevocable.
7.2. Agent Performance. If any Grantor fails to perform any covenant
contained herein, the Agent may itself perform, or cause performance of, such
covenant, and such Grantor shall pay for the expenses of the Agent incurred in
connection therewith in accordance with Section 9.1.
7.3. Agent's Duties. The powers conferred on the Agent under this
Security Agreement are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Collateral in its possession and the accounting for monies
actually received by it hereunder, the Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
Section 8. Miscellaneous.
8.1. Expenses. Each Grantor will upon demand pay to the Agent the
amount of any reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Agent may
incur in connection with (a) the custody, preservation, use, or operation of, or
the sale, collection, or other realization of, any of the Collateral, (b) the
exercise or enforcement of any of the rights of the Agent or the Banks
hereunder, and (c) the failure by such Grantor to perform or observe any of the
provisions hereof.
8.2. Amendments; Etc. No waiver of any provision of this Security
Agreement nor consent to any departure by any Grantor herefrom shall be
effective unless the same shall be in writing and signed by the Agent (with the
consent of such Banks as may be required pursuant to the Credit Agreement) and
then such waiver or consent shall be
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effective only in the specific instance and for the specific purpose for which
given. Any amendment of this Security Agreement (except as provided in the
foregoing sentence) shall be in writing and signed by all of the parties hereto;
provided, however, that any Subsidiary of the Borrower that may hereafter become
a Guarantor in accordance with the provisions of the Credit Agreement and the
Guaranty may become a party to this Security Agreement by executing an Accession
Agreement ("Accession Agreement") in the form attached as Annex 2 to the
Guaranty, and each Grantor and the Agent hereby agrees that upon such
Guarantor's execution of such Accession Agreement, this Security Agreement shall
be deemed to have been amended to make such Person a Grantor hereunder for all
purposes and a party hereto and no signature is required on behalf of the other
Grantors or the Agent to make such an amendment to this Security Agreement
effective.
8.3. Addresses for Notices. All notices and other communications
provided for hereunder shall be made as provided in the Credit Agreement (i) in
the case of the Agent, at the address for the Agent provided in the Credit
Agreement and (ii) in the case of any Grantor, to such Grantor at the address
for such Grantor set forth on Annex 1 attached to the Guaranty or in the
Accession Agreement executed by such Grantor. All such notices and other
communications shall be effective as provided in the Credit Agreement.
8.4. Continuing Security Interest; Transfer of Interest. This Security
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until payment in full and termination
of the Secured Obligations, (b) be binding upon each Grantor, its successors,
and assigns, and (c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent, the Banks, and their respective
successors, transferees, and assigns. Without limiting the generality of the
foregoing clause, when any Bank assigns or otherwise transfers any interest held
by it under the Credit Agreement or other Credit Document to any other Person
pursuant to the terms of the Credit Agreement or other Credit Document, that
other Person shall thereupon become vested with all the benefits held by such
Bank under this Security Agreement. Upon the payment in full and termination of
the Secured Obligations, the security interest granted hereby shall terminate
and all rights to the Collateral pledged by any Grantor shall revert to such
Grantor to the extent such Collateral shall not have been sold or otherwise
applied pursuant to the terms hereof. Upon any such termination, the Agent will,
at each Grantor's expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request and take any other actions reasonably
requested to evidence or effect such termination.
8.5. Concerning the Agent. The provisions of Article VIII of the Credit
Agreement shall inure to the benefit of the Agent in respect of this Security
Agreement and shall be binding upon the parties to the Credit Agreement in such
respect. In furtherance and not in derogation of the rights, privileges and
immunities of the Agent in its capacity as Agent hereunder:
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(a) The Agent is authorized to take all such action as is provided to
be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including, without
limitation, the timing and methods of realization upon the Collateral) the Agent
shall act or refrain from acting in accordance with written instructions from
the Majority Banks or, in the absence of such instructions, in accordance with
its discretion.
(b) The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the security interests granted hereby in any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder. The Agent shall have no duty to ascertain
or inquire as to the performance or observance of any of the terms of this
Security Agreement by the Grantors.
8.6. Choice of Law. This Security Agreement shall be governed by and
construed and enforced in accordance with the laws of the state of Texas, except
to the extent that the validity or perfection of the security interests
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the state of Texas.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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The parties hereto have caused this Security Agreement to be duly
executed as of the date first above written.
GRANTORS:
ABF CARTAGE, INC.
ABF FARMS, INC.
ABF FREIGHT SYSTEM (B.C.) LTD.
ABF FREIGHT SYSTEM CANADA, LTD.
ABF FREIGHT SYSTEM, INC.
AGILE FREIGHT SYSTEM, INC.
AGRICULTURAL EXPRESS OF AMERICA, INC.
BEST SERVICE CORP.
CAROTRANS INTERNATIONAL, INC.
CLIPPER EXXPRESS COMPANY
DATA-TRONICS CORP.
FLEETNET AMERICA, INC.
G.I. TRUCKING COMPANY
LAND-MARINE CARGO, INC.
TRANSPORT REALTY, INC.
-----------------------------------
Xxxxx X. Xxxxxxxx
Authorized Agent
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ANNEX 1
to Guarantors Security Agreement
NAMES AND ADDRESSES OF EACH GRANTOR
WHERE RECORDS FOR ACCOUNTS ARE KEPT
ABF Cartage, Inc.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
ABF Farms, Inc.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
ABF Freight System (B.C.), Ltd.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
ABF Freight System Canada, Ltd.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
ABF Freight System, Inc.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Agile Freight System, Inc.
00000 Xxxx 000xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Agricultural Express of America, Inc.
00000 Xxxx 000xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Best Service Corp.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
CaroTrans International, Inc.
00000 Xxxx 000xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
148
Clipper Exxpress Company
00000 Xxxx 000xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Data-Tronics Corp.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
FleetNet America, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
G.I. Trucking Company
00000 Xxxxxxx Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
Land-Marine Cargo, Inc.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Transport Realty, Inc.
0000 Xxx Xxxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
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ANNEX 2
to Guarantors Security Agreement
FINANCING STATEMENT
1. The name and address of the DEBTOR is:
2. The name and address of the SECURED PARTY is:
Societe Generale, Southwest Agency
4800 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
3. The federal tax I.D. number of the Debtor is: ___________________.
4. This Financing Statement covers the following assets or types of Collateral:
(a) Revenue Equipment. All now owned or hereafter acquired
trucks, tractors, trailers and city tractors, and all accessories and
parts therefor or attached thereto;
(b) Accounts. All now owned or hereafter acquired accounts and
all rights to payment owing or to be owing to the Debtor, wherever the
records for such accounts and rights to payment are held, including all
instruments and chattel paper, wherever located, that represent any
right of the Debtor to payment for services rendered, whether or not it
has been earned by performance;
(c) Stock. All shares of capital stock of each Subsidiary of
the Debtor;
(d) Records. All now owned or hereafter acquired ledger
sheets, files, records, computer databases and software and documents
relating to the foregoing Collateral; and
(e) Proceeds. All proceeds of the foregoing Collateral and, to
the extent not otherwise included, all payments under any insurance,
indemnity, warranty, or guaranty of or for the foregoing Collateral.
DEBTOR:
150
--------------------------------------
--------------------------------------
By:
---------------------------------
Title:
------------------------------
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ANNEX 3
to Guarantors Security Agreement
UCC FILING LOCATIONS
ABF Cartage, Inc.
Arkansas Secretary of State
Sebastian County, Arkansas
Hawaii Secretary of State
ABF Farms, Inc.
Arkansas Secretary of State
Sebastian County, Arkansas
ABF Freight System (B.C.), Ltd.
Arkansas Secretary of State
Sebastian County, Arkansas
Illinois Secretary of State
ABF Freight System Canada, Ltd.
Arkansas Secretary of State
Sebastian County, Arkansas
Illinois Secretary of State
ABF Freight System, Inc.
Alabama Secretary of State
Arizona Secretary of State
Arkansas Secretary of State
Sebastian County, Arkansas
Garland County, Arkansas
Xxxxxxxxx County, Arkansas
Drew County, Arkansas
Jefferson County, Arkansas
Washington County, Arkansas
Pulaski County, Arkansas
California Secretary of State
Colorado Secretary of State
Connecticut Secretary of State
152
Florida Secretary of State
Xxxxxx County, Xxxxxxx
Xxxxxxx County, Xxxxxxx
Xxxxxx County, Xxxxxxx
Xxxxxxx County, Xxxxxxx
Xxxxxxxxx County, Xxxxxxx
Xxxxxxx County, Xxxxxxx
Xxxxxx County, Xxxxxxx
Xxxxxxx County, Georgia
DeKalb County, Georgia
Xxxx Xxxxx County, Xxxxxxx
Xxxx County, Xxxxxxx
Xxxxx County, Georgia
Hawaii Secretary of State
Idaho Secretary of State
Illinois Secretary of State
Indiana Secretary of State
Iowa Secretary of State
Kansas Secretary of State
Kentucky Secretary of State
Jefferson County, Kentucky
Rapides Parish, Louisiana
Xxxxxxxxx Xxxxxx, Louisiana
Caddo Parish, Louisiana
Maryland Secretary of State
Baltimore City, Maryland
Xxxxxx County, Maryland
Prince Xxxxxx County, Maryland
Massachusetts Secretary of State
Plymouth County, Massachusetts
Middlesex County, Massachusetts
Bristol County, Massachusetts
Worcester County, Massachusetts
Michigan Secretary of State
Minnesota Secretary of State
Mississippi Secretary of State
Xxxxxx County, Mississippi
Washington County, Mississippi
Xxxxx County, Mississippi
Missouri Secretary of State
Jackson County, Missouri
Cape Girardeau, Missouri
Independent City of St. Louis, Missouri
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Xxxxxx County, Missouri
Xxxxxxxx County, Missouri
Nebraska Secretary of State
Nevada Secretary of State
New Hampshire Secretary of State
New Jersey Secretary of State
New Mexico Secretary of State
New York Secretary of State
Albany County, New York
Kings County, New York
Erie County, New York
Suffolk County, New York
Monroe County, New York
Onondaga County, New York
North Carolina Secretary of State
Buncombe County, North Carolina
Mecklenberg County, North Carolina
Gaston County, North Carolina
Catawba County, North Carolina
Durham County, North Carolina
Henderson County, North Carolina
Guilford County, North Carolina
Cumberland County, North Carolina
Forsyth County, North Carolina
Union County, North Carolina
Nash County, North Carolina
Wake County, North Carolina
Oregon Secretary of State
Ohio Secretary of State
Summit County, Ohio
Franklin County, Ohio
Xxxxx County, Ohio
Xxxxxx County, Ohio
Xxxxxxxx County, Ohio
Cuyahoga County, Ohio
Xxxxxxxxxx County, Ohio
Portage County, Ohio
Belmont County, Ohio
Trumbull County, Ohio
Pennsylvania Secretary of State
Northumberland County, Pennsylvania
Allegheny County, Pennsylvania
Berks County, Pennsylvania
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154
Delaware County, Pennsylvania
Cumberland County, Pennsylvania
Erie County, Pennsylvania
Lehigh County, Pennsylvania
Philadelphia County, Pennsylvania
Luzerne County, Pennsylvania
York County, Pennsylvania
Oklahoma Secretary of Xxxxx
Xxxxx Xxxxxx Xxxxxxxxx xx Xxxxx
Xxxxx Xxxxxxxx Secretary of State
Tennessee Secretary of State
Texas Secretary of State
Utah Secretary of State
Vermont Secretary of State
Xxxxxxxxxx County, Vermont
Virginia Secretary of State
Independent City of Lynchburg, Virginia
Independent City of Norfolk, Virginia
Martinsville County, Xxxxxxxx
Xxxxxx Xxxxxxx County, Virginia
Chesapeake County, Virginia
Independent City of Richmond, Virginia
Washington Secretary of State
Wisconsin Secretary of State
West Virginia Secretary of State
Agile Freight System, Inc.
California Secretary of State
Agricultural Express of America, Inc.
Illinois Secretary of State
California Secretary of State
Best Service Corp.
Arkansas Secretary of State
Sebastian County, Arkansas
CaroTrans International, Inc.
California Secretary of State
Florida Secretary of State
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Georgia Secretary of State
DeKalb County, Georgia
Illinois Secretary of State
Xxxxxxxxx Xxxxxx, Louisiana
Maryland Secretary of State
Independent City of Baltimore, Maryland
New Jersey Secretary of State
North Carolina Secretary of State
Xxxxxx County, North Carolina
Mecklenburg County, North Carolina
South Carolina Secretary of State
Texas Secretary of State
Virginia Secretary of State
Virginia Beach County, Virginia
Clipper Exxpress Company
Illinois Secretary of State
Nevada Secretary of State
Ohio Secretary of State
Data-Tronics Corp.
Arkansas Secretary of State
Sebastian County, Arkansas
FleetNet America, Inc.
North Carolina Secretary of State
Xxxxxx County, North Carolina
G.I. Trucking Company
Arizona Secretary of State
California Secretary of State
Los Angeles County, California
Colorado Secretary of State
Oklahoma Secretary of State
Texas Secretary of State
Utah Secretary of State
Washington Secretary of State
Land-Marine Cargo, Inc.
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Illinois Secretary of State
Transport Realty, Inc.
Arkansas Secretary of State
Sebastian County, Arkansas
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ANNEX 4
to Guarantors Security Agreement
CUSTODIAL AGREEMENT
This Custodial Agreement ("Agreement") dated as of ______________, is
among the individuals signatory hereto as Custodians below, each such individual
residing at the address set forth below his or her name below (such individuals
each herein called the "Custodian"), and Societe Generale, Southwest Agency, as
Administrative Agent (the "Agent") under the Credit Agreement (as amended or
otherwise modified from time to time, the "Credit Agreement") dated as of June
12, 1998 among Arkansas Best Corporation, a Delaware corporation (the
"Borrower"), the lenders parties thereto (the "Banks"), Bank of America National
Trust and Savings Association and Xxxxx Fargo Bank (Texas), N.A., as
Co-Documentation Agents, and the Agent. All capitalized terms defined in the
Credit Agreement and used herein without definition shall have the same meanings
herein as therein defined.
WHEREAS, the Agent has requested the Custodian to act on the Agent's
behalf to protect and preserve the Agent's rights, for the benefit of the Banks,
with respect to certain Revenue Equipment pledged as collateral and securing the
obligations of the Borrower and each Guarantor to the Banks; and
WHEREAS, the Custodian has agreed so to act on behalf of the Agent
under the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
(a) As described in the Borrower Security Agreement and the Guarantors
Security Agreement, and subject to the limitations described therein, any
Grantor (as defined in such Security Agreements) may sell or transfer Revenue
Equipment constituting Collateral (as defined in such Security Agreements) in
the ordinary course of business. Due to the difficulty of administering such
sales if the Agent were to hold the certificates of title with respect to all
Revenue Equipment at its offices in Dallas, Texas, the Agent hereby designates
each Custodian, as agent for the Agent, and by this Agreement authorizes such
Custodian to hold such certificates of title for the Agent at the offices
specified on Schedule 2.17 to the Credit Agreement. By execution hereof, each
Custodian agrees that he or she shall act as Custodian for the Agent as herein
provided and shall not take any action to release the Agent's lien on any of
such certificates of title except as may from time to time be necessary to
permit ordinary course of business sales of Revenue Equipment prior to the
occurrence of a Default under the Credit Agreement in
158
accordance with the terms of a power of attorney which will from time to time be
executed and delivered to such Custodian by the Agent.
(b) The Agent and each Custodian agree that such Custodian will act in
accordance with the terms hereof on behalf of the Agent, to protect the Agent's
interest in said Revenue Equipment for which ownership is evidenced by a
certificate of title and in which the Agent has an interest. Each Custodian
shall take reasonable measures and exercise reasonable care to prevent any
Person other than any additional Custodian appointed by the Agent under the
terms of an agreement substantially similar to this Agreement, from releasing or
causing to be released the Agent's lien on any such Revenue Equipment, and will
promptly notify the Agent of any such actions of which such Custodian becomes
aware.
(c) The Agent anticipates issuing a power of attorney substantially in
the form of the Schedule attached hereto to the Custodian on a periodic basis,
each for a limited duration, as described in Section 4.9 of the Borrower
Security Agreement and the Guarantors Security Agreement to permit the Custodian
to act on behalf of the Agent in releasing the Agent's lien on Revenue Equipment
sold in accordance with the Credit Agreement and such Security Agreements and in
supplying lienholder information to the proper governmental authorities for
title processing and licensing necessary to reflect the Agent's continuing
security interest in Revenue Equipment. Each Custodian recognizes that the power
of attorney received by him or her shall be broad to enable the release of the
Agent's lien as contemplated by the Security Agreements but nevertheless agrees
that he or she will only release liens in accordance with the terms of the
Security Agreements and this Agreement, and such Custodian is hereby authorized
to do so and to supply lienholder information. No Custodian will release or take
any action toward releasing any liens if such Custodian has reason to believe
that (a) such release would not be in compliance with the terms of the Security
Agreements or this Agreement, or (b) representations by employees, officers or
other agents of the Grantor to the effect that certain sales or transfers comply
with the terms of the Security Agreements are untrue, and such Custodian will
promptly notify the Agent thereof.
(d) Upon the occurrence of any Default under the Credit Agreement, the
Agent may by notice to each Custodian, immediately revoke the power of attorney
in effect at such time, and upon receipt of such notice which may be by
telephone, telecopy or telex, such Custodian shall not take any further action
to release any lien until instructed otherwise by the Agent.
(e) Any Custodian may resign as Custodian hereunder upon 14 days'
advance
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159
written notice to the Agent and the Borrower. Without limiting any rights of the
Agent under the Credit Agreement and the Security Agreements, the Agent may
terminate any Custodian's responsibilities hereunder (a) immediately in the
event that such Custodian breaches his agreements, covenants or responsibilities
hereunder or (b) upon 14 days' written notice, without cause, with the consent
of the Borrower. Upon the resignation or termination of any Custodian, such
Custodian shall have no further rights or responsibilities hereunder and shall
immediately return to the Agent any then effective power of attorney; such
Custodian will not hold himself or herself out as having any authority as a
Custodian, and such Custodian shall notify all Persons as may be reasonably
necessary to resolve any confusion, that such individual is no longer a
Custodian hereunder.
(f) This Agreement may be amended or waived only by a writing signed by
the Agent, the Borrower and each Custodian. This Agreement shall be construed in
accordance with and governed by the laws of the State of Texas. If any term of
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity of all other terms hereof shall be in no way affected thereby, and this
Agreement shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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160
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal as of the date first above written.
SOCIETE GENERALE, SOUTHWEST
AGENCY, as Agent
--------------------------------------
By:
----------------------------------
Title:
-------------------------------
CUSTODIANS:
--------------------------------------
Name:
--------------------------------
Address:
--------------------------------------
--------------------------------------
Telephone:
--------------------------
Telecopy:
--------------------------
The undersigned, Arkansas Best Corporation, hereby recognizes that any
Custodian referred to above shall, as agent for the Agent, hold certificates of
title to Revenue Equipment which is subject to a Lien in favor of the Agent for
the benefit of the Banks at the office referred to in the foregoing Custodial
Agreement and, accordingly, for valuable consideration, receipt of which is
hereby acknowledged, the undersigned grants such Custodian on behalf of itself
and its Subsidiaries a continuing right to use its offices for such purpose as
may be necessary and convenient to carry out the provisions of the foregoing
Custodial Agreement.
ARKANSAS BEST CORPORATION
--------------------------------------
By:
----------------------------------
Title:
-------------------------------
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161
SCHEDULE TO CUSTODIAL AGREEMENT
POWER OF ATTORNEY
This Power of Attorney is made the ____ day of _________, 19___ by
Societe Generale, Southwest Agency, as Administrative Agent (the "Agent") for
itself and the lenders which are or may become parties to the Credit Agreement
dated as of June 12, 1998 among Arkansas Best Corporation, such lenders, Bank of
America National Trust and Savings Association and Xxxxx Fargo Bank (Texas),
N.A., as Co-Documentation Agents, and the Agent (as it may be amended or
otherwise modified from time to time, the "Credit Agreement").
KNOW ALL PERSONS BY THESE PRESENTS, that the Agent does hereby
constitute and appoint ______________________________ as the Agent's true and
lawful attorney and in the name, place, and stead of the Agent to execute, on
behalf of the Agent, such documents and instruments necessary to release the
security interest or lien granted by the Grantor (as defined in the Borrower
Security Agreement and Guarantors Security Agreement referenced in the Credit
Agreement) on revenue equipment for which a certificate of title has been issued
and which designates the Agent as the secured party on the application for
certificate of title or certificate of title, as appropriate, with respect to
any revenue equipment of the Grantor the ownership of which is evidenced by a
certificate of title.
This Power of Attorney shall expire on ___________, 19__.
IN WITNESS WHEREOF, the Agent has caused this Power of Attorney to be
duly executed this ___ day of __________, 19__.
SOCIETE GENERALE, SOUTHWEST
AGENCY, as Agent
--------------------------------------
By:
----------------------------------
Title:
-------------------------------
162
I attest to the fact that this is a true and
exact copy of the Original Power of Attorney
Subscribed and sworn to before me
this _____ day of __________, 199__.
- ---------------------------------------------
Notary Public
My Commission Expires:__________
-2-
163
EXHIBIT E
NOTICE OF BORROWING
[Date]
Societe Generale, Southwest Agency,
as Administrative Agent under the Credit Agreement herein described
4800 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Ms. Xxxxx Xxxxx and Xx. Xxxxx Xxxxxx
Ladies and Gentlemen:
The undersigned, Arkansas Best Corporation, a Delaware corporation (the
"Borrower"), refers to the Credit Agreement dated as of June 12, 1998 (as the
same may be further amended or modified from time to time, the "Credit
Agreement," the defined terms of which are used in this Notice of Borrowing
unless otherwise defined in this Notice of Borrowing) among the Borrower, the
Banks, the Co-Documentation Agents and the Agent, and hereby gives you
irrevocable notice pursuant to Section 2.2(a) of the Credit Agreement that the
undersigned hereby requests a Borrowing, and in connection with that request
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.2(a) of the Credit Agreement:
(a) The Business Day of the Proposed Borrowing is
_____________, 19_____.
(b) The Proposed Borrowing will be a Revolving Borrowing
composed of [Prime Rate Advances] [Eurodollar Rate Advances].
(c) The aggregate amount of the Proposed Borrowing is
$____________.
(d) The Interest Period for each Eurodollar Rate Advance made
as part of the Proposed Borrowing is [_____ month[s]].
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
(a) the representations and warranties contained in the
Credit Agreement and Section 7 of the Guaranty and in each Security
Agreement are correct in all
164
Societe Generale, Southwest Agency
[Date]
Page 2
material respects, before and after giving effect to the Proposed
Borrowing and the application of the proceeds therefrom, as though
made on the date of the Proposed Borrowing; and
(b) no Default has occurred and remains uncured, or would
result from such Proposed Borrowing or from the application of the
proceeds therefrom.
Very truly yours,
ARKANSAS BEST CORPORATION
By:
---------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial
Officer, and Treasurer
165
EXHIBIT F
NOTICE OF CONVERSION OR CONTINUATION
[Date]
Societe Generale, Southwest Agency,
as Administrative Agent under the Credit Agreement herein described
4800 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Ms. Xxxxx Xxxxx and Xx. Xxxxx Xxxxxx
Ladies and Gentlemen:
The undersigned, Arkansas Best Corporation, a Delaware corporation (the
"Borrower"), refers to the Credit Agreement dated as of June 12, 1998 (as the
same may be further amended or modified from time to time, the "Credit
Agreement," the defined terms of which are used in this Notice of Conversion or
Continuation unless otherwise defined in this Notice of Conversion or
Continuation), among the Borrower, the Banks, the Co-Documentation Agents, and
the Agent, and hereby gives you irrevocable notice pursuant to Section 2.2(b) of
the Credit Agreement that the undersigned hereby requests a Conversion or
continuation of an outstanding Borrowing, and in connection with that request
sets forth below the information relating to such Conversion or continuation
(the "Proposed Borrowing") as required by Section 2.2(b) of the Credit
Agreement:
(a) The Business Day of the Proposed Borrowing is
_______________, 19 ____.
(b) The Proposed Borrowing will be a composed of [Prime Rate
Advances] [Eurodollar Rate Advances].
(c) The aggregate amount of the Borrowing to be Converted or
continued is $ _______ and consists of [Prime Rate Advances]
[Eurodollar Rate Advances].
(d) The Proposed Borrowing consists of [a Conversion to [Prime
Rate Advances] [Eurodollar Rate Advances]] [a continuation of [Prime
Rate Advances] [Eurodollar Rate Advances]].
166
Societe Generale, Southwest Agency
[Date]
Page 2
(e) The Interest Period for each Eurodollar Rate Advance made
as part of the Proposed Borrowing is [____ month[s]].
Very truly yours,
ARKANSAS BEST CORPORATION
By:
--------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial
Officer, and Treasurer
167
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated ________________, 19__
Reference is made to the Credit Agreement dated as of June 12, 1998
(as the same may be further amended or modified from time to time, the "Credit
Agreement") among Arkansas Best Corporation, a Delaware corporation (the
"Borrower"), the Banks, Bank of America National Trust and Savings Association
and Xxxxx Fargo Bank (Texas), N.A., as Co-Documentation Agents, and Societe
Generale, Southwest Agency, as Administrative Agent. Capitalized terms not
otherwise defined in this Assignment and Acceptance shall have the meanings
assigned to them in the Credit Agreement.
Pursuant to the terms of the Credit Agreement, ________________ wishes
to assign and delegate 1 of its rights and obligations under the Credit
Agreement. Therefore, _________________ ("Assignor"), _______________
("Assignee"), and the Agent agree as follows:
1. As of the Effective Date (as defined below), the Assignor
hereby sells and assigns and delegates to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor and
without representation or warranty except for the representations and
warranties specifically set forth in clauses (i), (ii), and (iii) of Section 2,
a ___% interest in and to all of the Assignor's rights and obligations under
the Credit Agreement in connection with its Commitment, including, without
limitation, such percentage interest in the Assignor's Revolving Commitment and
the Advances owing to the Assignor, the participation interest in the Letter of
Credit Obligations held by the Assignor and the Term Note held by the Assignor.
2. The Assignor (i) represents and warrants that, prior to
executing this Assignment and Acceptance, its Revolving Commitment is
$__________, the aggregate outstanding principal amount of Revolving Advances
owed to it by the Borrower is $_____________, and its Pro Rata Share of the
Letter of Credit Exposure is $___________; (ii) represents and warrants that it
is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim; (iii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties, or representations made in or in connection with
the Credit Agreement or any other Credit Document or the execution, legality,
validity, enforceability, genuineness, sufficiency, or value of the Credit
Agreement or any other
- ---------------
(1) Specify percentage in no more than 5 decimal points.
168
Credit Document or any other instrument or document furnished pursuant thereto;
(iv) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or any Guarantor or the
performance or observance by the Borrower or any Guarantor of any of its
obligations under the Credit Agreement or any other Credit Document or any
other instrument or document furnished pursuant thereto; and (v) attaches the
Note referred to in paragraph 1 above and requests that the Agent exchange such
Note for a new Revolving Note dated ____________, 19__ in the principal amount
of $______________ payable to the order of the Assignee [, and a new Revolving
Note dated ___________, 19__ in the principal amount of $__________, payable to
the order of Assignor].
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.5 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Co-Documentation Agents, the Assignor, or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement or any other Credit Document; (iii) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and any other Credit Document as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement or any other Credit Document are required to be performed by it
as a Bank; (v) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth beneath its name on
the signature pages hereof; (vi) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
and its Notes or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty(2), and (vii) represents that it is an Eligible Assignee.
4. The effective date for this Assignment and Acceptance shall be
________________ (the "Effective Date")(3) and following the execution of this
Assignment and Acceptance, the Agent will record it.
5. Upon such recording, and as of the Effective Date, (i) the Assignee
shall be a _________
- ---------------
(2) If the Assignee is organized under the laws of a jurisdiction outside
the United States.
(3) See Section 9.6. Such date shall be at least three Business Days
after the execution of this Assignment and Acceptance.
-2-
169
party to the Credit Agreement for all purposes, and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights (other than rights against the
Borrower pursuant to Sections 2.9, 2.11(c) and 9.7 of the Credit Agreement,
which shall survive this assignment) and be released from its obligations under
the Credit Agreement.
6. Upon such recording, from and after the Effective Date, the
Agent shall make all payments under the Credit Agreement and the Notes in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest, and commitment fees) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas.
-3-
170
The parties hereto have caused this Assignment and Acceptance to be
duly executed as of the date first above written.
[ASSIGNOR]
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Address:
----------------------------------------
----------------------------------------
----------------------------------------
Attention:
--------------------------------------
Telecopy:
--------------------------------------
Telephone:
--------------------------------------
[ASSIGNEE]
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Domestic Lending Office:
Address:
--------------------------------------
--------------------------------------
Attention:
--------------------------------------
Telecopy:
--------------------------------------
Telephone:
--------------------------------------
-4-
171
Eurodollar Lending Office:
Address:
--------------------------------------
--------------------------------------
Attention:
--------------------------------------
Telecopy:
--------------------------------------
Telephone:
--------------------------------------
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Agent
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Address: 0000 Xxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
-5-
172
EXHIBIT H
June 12, 1998
To Each of the Banks Party to the
Credit Agreement and Societe Generale,
Southwest Agency, as Administrative
Agent for the Banks
Ladies and Gentlemen:
I have acted as counsel to Arkansas Best Corporation, a Delaware corporation
(the "Borrower"), and the Guarantors in connection with the Credit Agreement
dated as of June 12, 1998 (the "Credit Agreement"), among the Borrower, the
Banks, Bank of America National Trust and Savings Association and Xxxxx Fargo
Bank (Texas), N.A., as Co-Documentation Agents, and Societe Generale, Southwest
Agency, as Administrative Agent. I have been requested to render this opinion
pursuant to Section 3.01(a)(iv) of the Credit Agreement. Capitalized terms not
otherwise defined in this opinion that are defined in the Credit Agreement
shall have the meanings assigned to them in the Credit Agreement.
In connection with this opinion, I have examined and relied upon the originals,
or copies certified or otherwise identified to my satisfaction, of such
corporate documents and records of the Borrower and the Guarantors and have
received such information from officers and representatives of the Borrower and
the Guarantors as I have deemed necessary or appropriate to enable me to
express the opinions expressed below. I have also relied on certificates of
officers of the Borrower and the Guarantors and certificates of public
officials as to certain factual matters. For purposes of this opinion, I have
also examined each of the Credit Documents.
In rendering my opinion, I have assumed (a) the genuineness of all signatures,
(b) the authenticity of all documents submitted to me as originals, (c) the
conformity to authentic original documents of all documents submitted to me as
certified, conformed, or photostatic copies, and (d) the due authorization,
execution, and delivery of all documents referred to herein by the parties
thereto other than the Borrower and the Guarantors.
173
To Each of the Banks Party to the
Credit Agreement and Societe Generale,
Southwest Agency, as Administrative
Agent for the Banks
June 12, 1998
Page 2
Based on the foregoing and subject to the further assumptions, qualifications,
and limitations set forth below, and as may be disclosed in the Credit
Documents, I am of the opinion that:
1. The Borrower and the Guarantors are corporations duly incorporated,
validly existing, and in good standing under the laws of the
jurisdictions of their incorporation.
2. The Borrower and the Guarantors have the requisite corporate power to
own or hold under lease their assets and to carry on their businesses
as now being conducted and as proposed to be conducted.
3. The Borrower and the Guarantors are duly qualified as foreign
corporations and are authorized to do business in each jurisdiction
where the character of the properties owned or held under lease by
them or the nature of the business transacted by them makes such
qualification necessary and where failure to so qualify would have a
material adverse effect on the business, operations, or financial
condition of the Borrower or any of the Guarantors.
4. To my knowledge after due inquiry, there are no legal or arbitral
proceedings or any proceedings by or before any governmental or
regulatory authority or agency, now pending or threatened against or
affecting the Borrower or any of the Guarantors or the rights of the
Borrower or any of the Guarantors which could reasonably be expected
to have a material adverse effect on the financial condition,
operations, or business of the Borrower or any of the Guarantors or
the ability of the Borrower or any of the Guarantors to perform their
respective obligations under the Credit Documents.
5. None of (a) the execution and delivery of the Credit Documents, (b)
the consummation of the transactions therein contemplated, or (c)
compliance with the terms and provisions thereof will (i) conflict
with or result in a breach of, or require any consent under, the
certificate or articles, as the case may be, of incorporation or
bylaws of the Borrower or any of the Guarantors, or any law or
regulation applicable to the Borrower or any of the Guarantors, or any
of their respective properties, or any order, writ, injunction or
decree of any court or Governmental Authority or agency known to us
after due inquiry, (ii) conflict with any material agreement or
instrument to which the Borrower or any of the Guarantors is a party
or by which the Borrower or any of the Guarantors or their respective
properties are bound, known to us after due inquiry (a "Material
Contract"), or (iii) constitute a default under any Material Contract
or (except for the Liens permitted by the Agreement) result in the
creation or imposition of any
174
To Each of the Banks Party to the
Credit Agreement and Societe Generale,
Southwest Agency, as Administrative
Agent for the Banks
June 12, 1998
Page 3
Lien upon any of the revenues or assets of the Borrower or any of the
Guarantors pursuant to the terms of any such Material Contract.
6. The Borrower and the Guarantors have all necessary corporate power and
authority to execute, deliver and perform their respective obligations
under the Credit Documents to which they are a party and the
execution, delivery, and performance by the Borrower and the
Guarantors of the Credit Documents to which they are a party and the
obligations thereunder have been duly authorized by all necessary
corporate action.
7. The Credit Documents to which they are a party have been duly and
validly executed and delivered by the Borrower and the Guarantors and
constitute legal, valid, and binding obligations of the Borrower and
the Guarantors enforceable against them in accordance with their
respective terms, except that the enforceability thereof may be
limited (a) by bankruptcy, insolvency, reorganization, fraudulent
conveyance, or moratorium or other similar laws relating to the
enforcement of creditors' rights generally and (b) by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
8. No authorizations, approvals, or consents of, or filings or
registrations with, any governmental or regulatory authority or agency
are necessary for the execution, delivery, or performance by the
Borrower or any of the Guarantors of the Credit Documents to which
they are a party, except for authorizations, consents, and approvals
that have already been obtained and filings which have already been
made.
9. Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation_U or X of the Board of
Governors of the Federal Reserve System).
10. Neither the Borrower nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
11. The Borrower Security Agreement and the Guarantors Security Agreement
each create valid security interests in favor of the Agent for the
benefit of the Banks, enforceable against the Borrower and each
Guarantor, respectively, in all rights, titles and interests of the
Borrower in the Collateral (as defined in such Security Agreement), as
security for the Secured Obligations (as defined in such Security
Agreements). Upon (i) the filing of the UCC1 Financing Statements
executed by
175
To Each of the Banks Party to the
Credit Agreement and Societe Generale,
Southwest Agency, as Administrative
Agent for the Banks
June 12, 1998
Page 4
the Borrower and the respective Guarantors in the forms attached as
Annex 2to each such Security Agreement at the locations listed on
Annex 3 to each such Security Agreement and Annex 7 to the Guarantors
Security Agreement for the respective Grantor (as defined in such
Security Agreements), (ii) the delivery of the Pledged Shares (as such
terms are defined in each such Security Agreement), together with
stock powers executed in blank to the Agent, and (iii) the filing of
applications for certificates of title noting the Agent's lien thereon
with the appropriate Registry of Motor Vehicles or similar authority,
then such security interests granted by the Borrower and the
Guarantors (other than the Canadian Subsidiaries) under the Uniform
Commercial Code or other applicable law will be perfected security
interests in the Collateral described therein or evidenced thereby.
The foregoing opinion is, with your concurrence, predicated upon and qualified
in its entirety by the following:
I am a member of the Bar of the State of Arkansas, and I express no
opinion as to the laws of any jurisdiction, other than the Federal
Laws of the United States of America, the Laws of the State of
Arkansas, and the Delaware General Corporation Law. Insofar as the
foregoing opinion involves agreements that purport to be governed by
Texas or other states' laws, I have assumed that such law is the same
as the Law of the State of Arkansas.
This opinion is solely for your benefit and may not be relied upon by any
person other than you and your counsel and any of your assignees and
participants.
Very truly yours,
Xxxxxxx X. Xxxxxx
176
EXHIBIT I
June 12, 1998
To each of the Banks party to the
Credit Agreement and Societe Generale,
Southwest Agency, as Administrative Agent
for the Banks.
Ladies and Gentlemen:
We have acted as special counsel to Societe Generale, Southwest Agency, acting
for itself and as Administrative Agent, and Bank of America National Trust and
Savings Association and Xxxxx Fargo Bank (Texas), N.A., as Co-Documentation
Agents (the "Agents"), in connection with the preparation, execution and
delivery of the Credit Agreement dated as of June 12, 1998 (the "Credit
Agreement") among Arkansas Best Corporation, a Delaware corporation (the
"Borrower"), the Banks, Bank of America National Trust and Savings Association
and Xxxxx Fargo Bank (Texas), N.A., as Co-Documentation Agents, and Societe
Generale, Southwest Agency, as Administrative Agent. Capitalized terms not
otherwise defined in this opinion that are defined in the Credit Agreement shall
have the meaning assigned to them in the Credit Agreement.
In connection with our representation of the Agents, we have examined executed
counterparts of the Credit Agreement, the Notes, the Guaranty, the Security
Agreements, the opinions of legal counsel to the Borrower and the Guarantors,
delivered on the date hereof, and such other documents furnished by the Borrower
and the Guarantors pursuant to Section 3.1 of the Credit Agreement (the "Closing
Documents").
For purposes of this opinion, we have assumed (a) the authenticity of all such
documents submitted to us as originals, (b) the genuineness of all signatures,
and (c) the conformity to the originals of all such documents submitted to us as
copies. We have relied (a) as to factual matters, on the representations and
warranties and other statements of fact contained in the Closing Documents, and
(b) as to matters of law covered by the opinions of counsel to the Borrower and
Guarantors, on such opinions. We also have assumed that each of the Borrower,
the Guarantors, the Banks, the Co-Documentation Agents and the Administrative
Agent has duly executed and delivered the Closing Documents with all necessary
power and authority.
177
To each of the Banks party to the
Credit Agreement and Societe Generale,
Southwest Agency, as Agent for the Banks
June 12, 1998
Page 2
Based upon the foregoing examination of documents and assumptions and upon such
other investigation as we have deemed necessary, we are of the opinion that the
opinion of Borrower's and Guarantors' counsel and the other Closing Documents
are substantially responsive to the requirements of the Credit Agreement.
This opinion is solely for the benefit of the Banks and the Agents, their
respective successors, assigns, participants and other transferees and may be
relied upon only by such persons in connection with the transactions
contemplated by the Credit Agreement.
Very truly yours,
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
178
EXHIBIT J
COMPLIANCE CERTIFICATE
This certificate dated as of __________, 199__ is prepared pursuant to
Section 5.6 [(a)] [(b)] of the Credit Agreement dated as of June 12, (as it may
be amended in accordance with its terms, the "Credit Agreement") among Arkansas
Best Corporation (the "Borrower"), the Banks, Bank of America National Trust and
Savings Association and Xxxxx Fargo Bank (Texas), N.A., as Co-Documentation
Agents, and Societe Generale, Southwest Agency, as Administrative Agent. Unless
otherwise defined in this certificate, capitalized terms that are defined in the
Credit Agreement.
The Borrower hereby certifies (a) that no Default has occurred or is
continuing, (b) that all of the representations and warranties made by the
Borrower and its Subsidiaries in the Credit Agreement and Section 7 of the
Guaranty and each Security Agreement are true and correct in all material
respects as if made on this date, and (c) that as of the last day of the
previous quarter the amounts and calculations attached as Exhibit A hereto were
true and correct.
Executed this _____ day of __________, 199__.
ARKANSAS BEST CORPORATION
By:
--------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial
Officer, and Treasurer
179
EXHIBIT K
BORROWING BASE CERTIFICATE
Arkansas Best Corporation, a Delaware corporation (the "Borrower"),
pursuant to Section 5.6(i) of the Credit Agreement dated as of June 12, 1998
(terms defined therein used herein as so defined), among the Borrower, the
Banks, Bank of America National Trust and Savings Association and Xxxxx Fargo
Bank (Texas), N.A., as Co-Documentation Agents, and Societe Generale, Southwest
Agency, as Administrative Agent, does hereby certify the following as of
__________, 19__ [last day of immediately preceding calendar month]:
1. Net Depreciated Value of Eligible Revenue Equipment $
--------------------------
2. Borrowing Base Value of Eligible Revenue Equipment (80%) $
--------------------------
3. Aggregate Outstanding Eligible Receivables $
--------------------------
4. Borrowing Base Value of Eligible Receivables (85%) $
--------------------------
5. Real Estate Value of Eligible Real Property $
--------------------------
6. Borrowing Base Value of Eligible Real Property (70%) $
--------------------------
7. Current Market Value of Treadco Shares ($_____ per share) $
--------------------------
8. Borrowing Base Value of Treadco Shares (50%) $
--------------------------
9. Net Depreciated Value of Eligible Other Equipment $
--------------------------
10. Borrowing Base Value of Eligible Other Equipment (50%) $
--------------------------
11. TOTAL BORROWING BASE VALUE
(Sum of Lines 2, 4, 6, 8, and 10) $
--------------------------
12. Total Revolving Commitments $
--------------------------
13. BORROWING BASE LIMIT UNDER REVOLVING COMMITMENTS
(Lesser of Line 11 or Line 12) $
--------------------------
14. Outstanding Revolving Advances $
--------------------------
180
15. Letter of Credit Exposure $
--------------------------
16. Availability under Revolving Commitments
(Line 13 minus the sum of Lines 14 and 15) $
--------------------------
The Borrower has caused this Borrowing Base Certificate to be executed
this ____ day of ____, 199__.
ARKANSAS BEST CORPORATION
By:
--------------------------
Name:
------------------------
Title:
-----------------------
181
EXHIBIT L
FORM OF SWINGLINE NOTE
$15,000,000 June 12, 1998
For value received, the undersigned Arkansas Best Corporation, a
Delaware corporation ("Borrower"), hereby promises to pay to the order of
Societe Generale, Southwest Agency (the "Bank") the principal amount of Fifteen
Million and No/100 Dollars ($15,000,000) or, if less, the aggregate outstanding
principal amount of each Swingline Advance (as defined in the Credit Agreement
referred to below) made by the Bank to the Borrower, together with interest on
the unpaid principal amount of each such Swingline Advance from the date of such
Swingline Advance until such principal amount is paid in full, at such interest
rates, and at such times, as are specified in the Credit Agreement.
This Note is the Swingline Note referred to in, and is entitled to the
benefits of, and is subject to the terms of, the Credit Agreement dated as of
June 12, 1998 (as the same may be further amended or modified from time to time,
the "Credit Agreement"), among the Borrower, the Banks, Bank of America National
Trust and Savings Association and Xxxxx Fargo Bank (Texas), N.A., as
Co-Documentation Agents, and Societe Generale, Southwest Agency, as
Administrative Agent. Capitalized terms used in this Note that are defined in
the Credit Agreement and not otherwise defined in this Note have the meanings
assigned to such terms in the Credit Agreement. The Credit Agreement, among
other things, (a) provides for the making of Swingline Advances by the Bank to
the Borrower from time to time at the discretion of the Bank in an aggregate
amount not to exceed at any time outstanding the Dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Swingline
Advance being evidenced by this Note and (b) contains provisions for
acceleration of the maturity of this Note upon the happening of certain events
stated in the Credit Agreement and for prepayments of principal prior to the
maturity of this Note upon the terms and conditions specified in the Credit
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Agent at 4800 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxxx 00000 (or at such other location or address as may be specified by
the Agent to the Borrower) in same day funds. The Bank shall record all
Swingline Advances and payments of principal made under this Note, but no
failure of the Bank to make such recordings shall affect the Borrower's
repayment obligations under this Note.
Except as specifically provided in the Credit Agreement, the Borrower
hereby waives presentment, demand, protest, notice of intent to accelerate,
notice of acceleration, and any other notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder of this Note shall operate as a waiver of such rights.
182
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the state of Texas (except that Tex. Rev. Civ.
Stat. Xxx. Art. 0000, Xx. 15, which regulates certain revolving credit loan
accounts shall not apply to this Note).
ARKANSAS BEST CORPORATION
By:
-------------------------------------
Xxxxx X. Xxxxxxxx
Vice President, Chief Financial
Officer, and Treasurer
