AMENDED AND RESTATED SECURED LOAN AGREEMENT
This Amended and Restated Secured Loan Agreement ("Agreement") is made and
entered into this 5th day of July, 2000, by and among Bankers Trust Company,
N.A., of Des Moines, Iowa ("Bank"), TransFinancial Holdings, Inc.
("TransFinancial") and Xxxxxx Cartage Company ("Xxxxxx"), (TransFinancial and
Xxxxxx being hereinafter collectively referred to as the "Borrowers" and
individually as a "Borrower"), and Specialized Transport, Inc. ("Specialized
Transport"), TFH Logistics & Transportation Services, Inc., Transport Brokerage,
Inc., Phoenix Computer Services, Inc., Custom Client Services, Inc. and TFH
Properties, Inc. f/k/a Anuhco Properties, Inc. ("TFH Properties") (hereinafter
collectively referred to as the "Co-Borrowers" and individually as a "Co-
Borrower").
WITNESSETH
WHEREAS, on or about September 30, 1998, Bank and Borrowers entered into a
certain Secured Loan Agreement wherein, among other things, Bank extended to
Borrowers a term loan in the principal sum of $10,000,000.00 ("Term Loan"), and
Borrowers granted to Bank a lien on certain collateral therein described; and
WHEREAS, on or about October 31, 1998 Bank and Xxxxxx entered into a
certain Secured Loan Agreement, which renewed and replaced a Security Agreement
dated January 5, 1998, wherein, among other things, Bank extended to Xxxxxx a
working capital line of credit loan in the principal sum of $4,500,000.00
("Working Capital Line of Credit Loan"), and Xxxxxx granted to Bank a lien on
certain collateral therein described; and
WHEREAS, on or about March 25, 1999, Bank and Borrowers entered into a
certain Secured Loan Agreement wherein, among other things, Bank extended to
Borrowers $5,000,000.00 which was merged into the $10,000.000.00 Term Loan dated
September 30, 1998; and
WHEREAS, on or about June 23, 2000, Bank extended to Borrowers a loan in
the principal sum of $700,000.00, to cover certain overdrafts then existing in
Borrowers' account ("Overdraft Loan"), which loan matured and became due and
payable in full on June 30, 2000, and is now in default; and
WHEREAS, Borrowers are now in default under certain terms of the two
Secured Loan Agreements described above, which defaults Borrowers are unable to
timely cure; and
WHEREAS, as a result of Borrowers' defaults, Bank could accelerate the
indebtedness owing under the Term Loan, the Working Capital Line of Credit Loan
and the Overdraft Loan; and
WHEREAS, Borrowers are seeking replacement financing from other lenders
sufficient in amount to pay in full all indebtedness now or hereafter owing to
Bank, which refinancing Borrowers believe, in good faith, they can obtain prior
to December 31, 2000; and
WHEREAS, Borrowers have requested Bank to modify and replace the aforesaid
loans in accordance with the terms of this Agreement; and
WHEREAS, Borrowers have further requested Bank to waive all defaults
existing as of the date of this Agreement; and
WHEREAS, Borrowers have further requested Bank to extend them additional
credit of $1,500,000.00; and
WHEREAS, Co-Borrowers are willing to be co-obligors of all indebtedness now
or hereafter owing to Bank pursuant to this Agreement; and
WHEREAS, in consideration for Borrowers and Co-Borrowers' compliance with
the terms and conditions of this Agreement and the other loan documents executed
in connection herewith, Bank is willing to modify and replace the aforesaid
loans, waive the existing defaults and extend additional credit to Borrowers and
Co-Borrowers; and
WHEREAS, as of the date of this Agreement, the unpaid principal balances
owing or commitments on the Term Loan, Working Capital Line of Credit Loan and
Overdraft Loan are $14,200,000.00, $4,500,000.00 and $700,000.00, respectively,
plus accrued interest thereon.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree that the two Secured Loan Agreements
described above shall be deemed amended, restated and superseded by this
Agreement.
I. DEFINITIONS. For purpose of this Agreement and in addition to the terms
defined above, the following terms shall have the following meanings:
"AFFILIATE" shall mean: (i) any natural person who is a controlling shareholder
of any Obligor or who is an officer, director or managing agent of any Obligor;
(ii) any corporation, partnership or entity that is a controlling shareholder of
any Obligor; and (iii) any person who directly or indirectly controls, is
controlled by or is under common control or ownership with any Obligor any
controlling shareholder of any Obligor. For the purposes of this definition,
the term "control" or "controlling" shall mean the ownership of ten percent
(10%) or more of the beneficial interest in the entity being referred to.
"AGREEMENT" shall mean this Amended and Restated Secured Loan Agreement, as
amended or modified from time to time, together with all exhibits or schedules
attached hereto or hereafter.
"BANK'S PRIME RATE" shall mean the fluctuating interest rate per annum from time
to time designated by Bank as its prime rate. The Bank's Prime Rate shall not
be deemed the lowest rate or most favored rate charged by Bank to its customers.
Changes in the Bank's Prime Rate shall be effective without notice to Obligors
on the date of each change.
"BORROWING BASE" shall mean an amount equal to eighty-five percent (85%) of
Xxxxxx'x Eligible Accounts Receivable owned by Xxxxxx as of the date of each
Borrowing Base Certificate.
"BORROWING BASE CERTIFICATE" shall mean a document duly certified by an
authorized officer of Xxxxxx and TransFinancial in the form attached hereto as
Exhibit "A".
"CENTRAL STATES PENSION FUNDS" means Central States, Southeast and Southwest
Areas Health and Welfare Pension Funds.
"COLLATERAL" shall mean without limitation the various assets pledged to Bank as
security for the Notes, now or in the future, as more particularly described in
Section 4 of this Agreement.
"COVENANT COMPLIANCE CERTIFICATE" shall mean a document duly certified by an
authorized officer of TransFinancial, Xxxxxx, and Specialized Transport in the
form attached hereto as Exhibit "B".
"XXXXXX'X REVENUE EQUIPMENT" shall mean and include all of Xxxxxx'x (i)
commercial and highway trucks, (ii) commercial and highway tractors and
trailers, (iii) automobiles and (iv) pickup and delivery vehicles, all for which
titles have been issued in the name of Xxxxxx; and (v) all mechanical
refrigeration units attached to, or held for use upon, such trucks, tractors and
trailers.
"CURRENT ASSETS" shall mean TransFinancial's current assets which shall be
determined on a consolidated basis and in accordance with GAAP.
"CURRENT LIABILITIES" shall mean TransFinancial's current liabilities which
shall be determined on a consolidated basis and in accordance with GAAP.
"CURRENT RATIO" shall be calculated by dividing TransFinancial's Current Assets
by its Current Liabilities.
"DEBT TO TANGIBLE NET WORTH RATIO" shall be determined on a consolidated basis
and in accordance with GAAP and shall mean that number calculated by dividing
TransFinancial's aggregate liabilities by its Tangible Net Worth.
"DEFAULT" OR "EVENT OF DEFAULT" shall have the meaning delineated in Section 9
of this Agreement.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean those accounts receivable owing to
Xxxxxx which are free and clear of any security interest, lien or encumbrance
except that previously granted or herein granted to Bank, and which are not more
than eighty-four (84) days past due from date of original invoice or with
respect to which there exists no dispute with Xxxxxx. Further, to be an
Eligible Accounts Receivable, the receivable must not be subject to any dispute,
counterclaim or defense asserted by the account debtor thereunder and the
account debtor must not be insolvent or be the subject of any bankruptcy or
reorganization proceedings or other proceedings for relief of debtors. An
account receivable shall be deemed to exist when the invoice giving rise to such
account receivable is mailed or when debt to Xxxxxx from its customers arises,
whichever shall first occur. Receivables due Xxxxxx from any Affiliate or
employee(s) shall not be included in calculating Eligible Accounts Receivable.
"GAAP" shall mean those Generally Accepted Accounting Principles and Practices
that are recognized as such by the American Institute of Certified Public
Accountants and by the Financial Accounting Standards Board.
"HAZARDOUS SUBSTANCES." The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. section
9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 49
U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules
or regulations adopted pursuant to any of the foregoing.
"INDEBTEDNESS" shall mean and include without limitation all Notes and/or Loans,
together with all other obligations, debts and liabilities of Obligors to Bank
as well as all claims by Bank against Obligors, whether now or hereafter
existing, voluntary or involuntary, due or not due, absolute or contingent,
liquidated or unliquidated; whether Obligors may be liable individually or
jointly with others; whether Obligors may be obligated as a guarantor, surety,
or otherwise; whether recovery upon such indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such indebtedness may
be or hereafter may become otherwise unenforceable.
"LOAN" OR "LOANS" means and includes any and all extensions of credit and
financial accommodations from Bank to Obligors, whether now or hereafter
existing, and however evidenced, including without limitation those loans and
financial accommodations described herein or described on any exhibit or
schedule attached to this Agreement from time to time.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security Agreements,
the Mortgages and any other instrument executed in connection with or evidencing
the Indebtedness.
"MAXIMUM CREDIT" shall mean Twenty Million Nine Hundred Thousand Dollars
($20,900,000.00), which represents the maximum credit Bank is willing to extend
to Obligors, jointly or severally.
"MORTGAGES" means collectively the Xxxxxx Mortgages and the TFH Properties
Mortgage.
"NOTES" shall refer to the promissory notes more particularly described in
Section 2 of this Agreement executed by Obligors in favor of Bank, together with
any and all extensions, modifications, substitutions or renewals thereof. "NOTE"
shall refer to any one of such Notes.
"OBLIGORS" shall refer collectively to Borrowers and Co-Borrowers and "Obligor"
shall refer to any of the Obligors.
"SECURITY AGREEMENTS" shall mean any and all Security Agreements executed by
Xxxxxx, TransFinancial or Specialized Transport in favor of Bank prior to,
contemporaneously with, or subsequent to the execution of this Agreement,
granting Bank a lien on Xxxxxx'x Eligible Accounts Receivable, Xxxxxx'x Revenue
Equipment, TransFinancial's stock in UPAC, or Specialized Transport's Revenue
Equipment, as well as any other Security Agreements executed by any other
Obligor granting Bank a lien on assets therein described.
"SPECIALIZED TRANSPORT'S REVENUE EQUIPMENT" shall mean and include all of
Specialized Transport's (i) commercial and highway trucks, (ii) commercial and
highway tractors and trailers, (iii) automobiles, and (iv) pickup and delivery
vehicles, all for which titles have been issued in the name of Specialized
Transport, and (v) all mechanical refrigeration units attached to, or held for
use upon, such trucks, tractors and trailers.
"TANGIBLE NET WORTH" shall be determined on a consolidated basis and in
accordance with GAAP and shall mean that number calculated by subtracting from
the sum of TransFinancial's equity, all sums relating to goodwill, patents,
copyrights, trademarks, licenses, franchises, or other assets normally
considered an intangible asset under GAAP.
"UPAC" shall mean Universal Premium Acceptance Corporation, a wholly owned
subsidiary of TransFinancial.
II. LOANS. Subject to the terms and conditions of this Agreement and the other
Loan Documents, the Bank agrees to lend to Obligors, or modify and replace
existing loans to Borrowers, the following:
A. Term Loan. A term loan in the principal amount of $14,200,000.00,
which shall constitute a modification and replacement of the term loan
previously executed by Borrowers to Bank on March 25, 1999 and
Obligors shall execute and deliver to Bank a promissory note ("Term
Note") for $14,200,000.00 dated as of the date of this Agreement. No
additional funds shall be advanced by Bank to Obligors pursuant to the
Term Note other than those funds already advanced. Interest and
principal payments shall be payable on the dates and in the manner set
forth in the Term Note. Interest shall accrue at a floating rate
which shall at all times equal the Bank's Prime Rate, as adjusted to
the date of change. The Term Note shall mature and be due and payable
in full on July 5, 2001.
B. Working Capital Line of Credit Loan. A working capital line of credit
loan in the principal amount of $4,500,000.00 which shall constitute a
modification and replacement of the working capital line of credit
note executed by Xxxxxx to Bank on October 31, 1998, and Obligors
shall execute and deliver to Bank a promissory note ("Working Capital
Line of Credit Note") for $4,500,000.00 dated as of the date of this
Agreement. Although all Obligors are executing such Note, it is
understood and agreed that all advances thereunder shall only be made
to Xxxxxx, which may borrow, repay and re-borrow under the Working
Capital Line of Credit Note during the term of this Agreement provided
such funds are used solely to provide working capital for Xxxxxx.
Interest and principal payments shall be payable on the dates and in
the manner set forth in the Working Capital Line of Credit Note.
Interest shall accrue at a floating rate which shall at all times
equal the Bank's Prime Rate, as adjusted to the date of change. The
Working Capital Line of Credit Note shall mature and be due and
payable in full on July 5, 2001.
C. Bridge Loan. Contemporaneously with the execution of this Agreement,
and for the purpose of providing Xxxxxx with additional working
capital until replacement financing is realized, Bank will extend to
Obligors a loan in the principal amount of $2,200,000.00 which shall
consist of $1,500,000.00 of new advances and $700,000.00 evidenced by
the Overdraft Note, and the Overdraft Note shall be deemed replaced
and incorporated into the Bridge Loan. Obligors shall execute and
deliver to Bank a promissory note ("Bridge Note") for $2,200,000.00
dated as of the date of this Agreement. Although all Obligors are
executing such Note, it is understood and agreed that all advances
thereunder shall only be made to Xxxxxx. Interest and principal
payments shall be payable on the dates and in the manner set forth in
the Bridge Note. Interest shall accrue at a floating rate which shall
at all times equal the Bank's Prime Rate, as adjusted to the date of
change. The Bridge Note shall mature and be due and payable in full
on July 5, 2001.
Bank's determination as to the outstanding principal balance owed by
Obligors under the respective Notes shall be presumed to be correct
and binding on all parties whomsoever and Bank's documentation to
support said outstanding balances will be sufficient to establish and
sustain Obligors' obligations under the Notes, unless Obligors are
able to provide documentation to the contrary satisfactory to Bank
which is sufficient to rebut the aforesaid presumption. Obligors'
liability under the Notes is joint and several.
III. ADVANCES.
A. Each request by Xxxxxx for an advance of funds shall be made by Xxxxxx
either orally or in writing not later than 2:00 o'clock P.M. on the
day such advance is requested. Upon receipt by Bank of each request
for advance, Bank shall lend to Xxxxxx the amount requested provided,
however, that Bank shall not be obligated to make any advance (i)
during the existence of any Event of Default; or (ii) if Bank has
given notice to Obligors of the violation of any terms or conditions
of this Agreement, the Notes, or any other Loan Documents, which
violation(s) remain unremedied by Obligors; or (iii) if Obligors are
out of compliance with any of the Affirmative Covenants or Negative
Covenants required by this Agreement, or (iv) if the amount of the
advance requested together with the unpaid principal balance of the
Working Capital Line of Credit Note exceeds the lesser of
$4,500,000.00 or the Borrowing Base, or (v) any Obligor becomes
insolvent, or voluntarily or involuntarily becomes a debtor in
bankruptcy; or (vi) there occurs a material adverse change in any
Obligor's financial condition, or in the value of the Collateral; or
(vii) any Obligor seeks, claims or otherwise attempts to limit, modify
or revoke its unconditional and unlimited liability for the
Indebtedness.
B. Any checks or other charges presented against the account of any
Obligors in excess of the balance of said account may be treated by
the Bank as a request for an advance under the Working Capital Line of
Credit Note, and payment by the Bank of any check may at its option
constitute a loan to the Obligors pursuant to this Agreement of the
amounts so paid.
C. In the event Obligors shall fail to: provide adequate insurance, pay
taxes, or pay any other charges which may affect the assets
collateralized to Bank, Bank may, at its option, without notice, but
without any obligation or liability to do so, procure insurance, pay
taxes or pay any other charges and add said sum to the balance of the
Working Capital Line of Credit Note.
D. Although it is contemplated that at no time during the term of this
Agreement shall the outstanding principal amount of the Notes exceed
the Maximum Credit, it is understood and agreed that the contemplated
Maximum Credit may be exceeded at any time, in Bank's sole discretion,
and Obligors shall nevertheless remain liable for the repayment in
full of all sums advanced by Bank on Obligors' behalf, together with
interest, late charges, attorneys' fees and costs, if any, as more
fully set forth herein.
IV. COLLATERAL. As security for the Notes and all advances made pursuant to
this Agreement, and any renewals, modifications, substitutions or
extensions thereof, and any other Loans or advances made by Bank to
Obligors, the Bank is herein granted (or previous security grants are
renewed) a security interest in and lien against, but not limited to the
following assets:
X. Xxxxxx'x Eligible Accounts Receivable and Revenue Equipment. Xxxxxx
herein grants and/or renews its grant to Bank of a first lien on all
of Xxxxxx'x Eligible Accounts Receivable and all of Xxxxxx'x Revenue
Equipment, together with all proceeds therefrom. Xxxxxx shall
cooperate with Bank to take all requisite action to cause Bank's lien
to be affixed to all of Xxxxxx'x Revenue Equipment now or hereafter
existing or now owned or hereafter acquired and to otherwise assist
Bank in the perfection of its liens thereon.
B. Specialized Transport's Revenue Equipment. Specialized Transport
herein grants to Bank a first lien on all of Specialized Transport's
Revenue Equipment together with all proceeds therefrom. Specialized
Transport shall cooperate with Bank to take all requisite action to
cause Bank's lien to be affixed to all of Specialized Transport's
Revenue Equipment now or hereafter existing or now owned or hereafter
acquired, and to otherwise assist Bank in the perfection of its liens
thereon.
X. Xxxxxx Real Estate. Xxxxxx herein grants to bank a lien on all of its
real estate, as more particularly described in Exhibit "C" attached
hereto (collectively the "Xxxxxx Real Estate"), and all proceeds from
the sale thereof, which shall be evidenced by real estate mortgages or
deeds of trust, as the case may be (collectively the "Xxxxxx
Mortgages"), previously executed and/or executed contemporaneously
with this Agreement. Additionally, Xxxxxx shall assign to Bank all
rents, profits or other income generated by or from the Xxxxxx Real
Estate which shall be evidenced by an Assignment of Rents executed
contemporaneously with this Agreement.
D. TFH Properties Real Estate. TFH Properties herein grants to Bank a
lien on its property located in Lenexa, Kansas, more particularly
described in Exhibit "D" attached hereto ("TFH Properties Real
Estate") and all proceeds from the sale thereof, which shall be
evidenced by a real estate mortgage or deed of trust, as the case may
be ("TFH Properties Mortgage"), previously executed and/or executed
contemporaneously with this Agreement. Additionally, TFH Properties
shall assign to Bank all rents, profits or other income generated by
or from TFH Properties Real Estate which shall be evidenced by an
Assignment of Rents executed contemporaneously with this Agreement.
E. UPAC Stock. TransFinancial herein grants to Bank a security interest
in 400 shares of UPAC stock, which constitutes all outstanding shares
of UPAC Stock, owned by TransFinancial evidenced by Certificate No. 14
issued March 29, 1996, the original of which shall be delivered to
Bank along with appropriate stock powers on Bank's standard form for
same. The Bank will at all times have a security interest in One
Hundred Percent of the outstanding shares of the UPAC stock.
V. REPRESENTATIONS AND WARRANTIES. Obligors herein represent and warrant to
Bank the following:
A. Obligors' Authority. (1) Each Obligor as full power, right and
authority to make and execute this Agreement, the Notes, and all other
documents Bank may reasonably request be executed in connection
herewith; (2) the execution of this Agreement and the Notes, and all
other related documents will not conflict with any agreement or
instrument to which any Obligor is a party or by which any Obligor or
any of its property may be bound or affected; (3) the individuals who,
on behalf of Obligors, execute and deliver this Agreement, Notes, and
the other related documents are authorized to do so and have provided
Bank the appropriate authorizations evidencing same.
B. No Litigation. No litigation or governmental proceedings are pending
or threatened against any Obligor and no Obligor has any liabilities,
actual or contingent, not previously disclosed to Bank.
C. First Lien For Bank. The lien of the Bank on all of the Collateral
described in Section 4 above shall be a first lien at all times during
the term of this Agreement, except as otherwise disclosed to and
approved by Bank. In such regard, Bank acknowledges the mortgage lien
of Central States Pension Funds on certain parcels of Xxxxxx'x Real
Estate.
D. No Other Liens. None of Obligors' assets are subject to any mortgage,
pledge, encumbrance or other lien, except as otherwise disclosed to
the Bank in writing. In such regard, Bank acknowledges the mortgage
lien of Central States Pension Funds on certain parcels of Xxxxxx'x
Real Estate.
E. Tax Returns. Obligors have filed all federal and state income tax
returns which are required to be filed and have paid all taxes and
assessments which are due.
F. Financial Statements. All financial statements previously delivered
to Bank by Obligors are true and correct in all respects and
accurately represent the financial condition of Obligors as of the
respective dates thereof. No adverse change in the financial
condition of Obligors has occurred since the date of the most recent
financial statement given to Bank.
G. No Violation of Occupational Safety and Environmental Protection.
Obligors are not in violation in any material manner of any federal,
state, county or city statutes, orders, rules or regulations
pertaining to occupational safety or environmental protection, nor do
Obligors presently anticipate that future expenditures needed to meet
the provisions of existing federal, state, county or city statutes,
orders, rules or regulations will be so burdensome as to affect or
impair in a materially adverse manner Obligors' financial conditions.
H. Indemnification and Hold Harmless Obligation. None of the Xxxxxx Real
Estate or the TFH Properties Real Estate or other collateral given to
Bank as security for the Notes, nor any other assets owned by Obligors
have been, or ever will be, so long as any of the Notes remain unpaid,
used for the generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substances, provided
however, it is understood that Xxxxxx in the ordinary course of its
business, does transport items which may be deemed Hazardous
Substances. The representations and warranties contained herein are
based on Obligors' due diligence in investigating the collateralized
properties for Hazardous Substances. Obligors hereby (i) release and
waive any future claims against Bank for indemnity or contribution in
the event Obligors become liable for cleanup or other costs under any
such laws; (ii) agree that Bank may recover against Obligors to the
full extent of any damages, claims or other liabilities suffered by
Bank as a result of the violation of any such environmental laws,
whether or not such violation occurred while any real estate or other
collateral was owned by a predecessor or successor in interest to
Obligors; and (iii) agree to indemnify and hold Bank harmless against
any and all claims and losses resulting from a breach of this
provision, including reasonable attorney's fees and expenses. This
obligation to indemnify and hold Bank harmless shall survive the
payment of the Notes.
I. No Damage to Collateral. None of the Collateral is now damaged or
injured as a result of any uninsured fire, explosion, accident, flood
or other casualty.
J. Collateral Not in Flood Zone. None of the Collateral is situated in
any federal or state designated flood zone. Should it be determined
that a property is located in a flood zone, Obligors shall obtain
flood insurance coverage, issued by a company or companies approved by
the Bank and in amounts acceptable to Bank which policy or policies
shall name the Bank as loss payee thereunder, and Bank shall also have
been provided with such additional policies of insurance as Bank may
reasonably require insuring against such risks and in such amounts as
are customarily carried by like businesses operating in the same
vicinity.
K. Ownership of Collateral. The entire legal and beneficial ownership in
all assets pledged as Collateral hereunder is held by the entity
representing to Bank its ownership thereunder.
L. Addresses of Obligors. The addresses appearing on the signature page
of this Agreement represent the chief executive offices of the
Obligors.
VI. AFFIRMATIVE COVENANTS. From the date of this Agreement and thereafter
until all Indebtedness is paid in full, Obligors will:
A. Accounting. Maintain a modern system of accounting in accordance with
GAAP.
B. Financial Statements. Furnish to Bank (i) within one hundred twenty
(120) days of each fiscal year end, consolidated, audited and
unqualified financial statements from TransFinancial prepared by an
independent certified public accountant acceptable to Bank in
reasonable detail and dated as of the immediately preceding fiscal
year end, and prepared in accordance with GAAP; (ii) within forty-five
(45) days following the end of each calendar quarter, a consolidated,
unaudited financial statement of TransFinancial which shall contain a
balance sheet, statement of income and retained earnings, and cash
flow, each as of the end of such calendar quarter; (iii) within forty-
five (45) days following the end of each calendar quarter, the 10-K
Report filed by TransFinancial with the Securities and Exchange
Commission; and (iv) within one week following the end of each
business week, a duly completed Borrowing Base Certificate; (v) within
one week following the end of each business week, a duly completed
Covenant Compliance Certificate; and (vi) at such times as requested
by Bank, any Obligors' cash flow projections and such other
information as the Bank may reasonably request.
C. Access to Books and Collateral. At all times, keep proper books of
account in a manner satisfactory to Bank, and permit the Bank and its
agents access to the books, records, premises, assets and operations
of Obligors at all reasonable times.
D. Notification of Legal Proceedings. Notify the Bank promptly of any
litigation or legal proceedings involving any Obligor as a party
defendant wherein the amount at issue exceeds $100,000.00.
E. Insurance. Obtain such insurance or evidence of insurance as Bank may
reasonably require, including but not limited to, an all-risk policy
of casualty insurance, and such other hazard insurance in such amount,
form and substance as Bank will require with Bank named as loss payee
thereunder as it pertains to the Collateral and with standard waiver
of subrogation clauses, it being understood by Bank that Obligors
self-insure the first $100,000.00 of casualty damages. This insurance
shall be issued by such companies as shall be approved by Bank, and
the originals of such policies (together with appropriate endorsements
thereto, evidence of payment of premiums thereon and written agreement
by the insurers therein to give Bank 30 days prior written notice of
intention to cancel) shall be promptly delivered to Bank. This
insurance shall be kept in full force and effect at all times
hereafter until the Notes have been paid in full.
F. Maintenance and Preservation of Collateral. At all times maintain,
preserve and protect the Collateral and keep the same in good repair,
working order and condition.
G. Submission of Environmental Reports. Promptly upon receipt thereof,
Obligors shall submit to Bank copies of any reports, inspectors or
examinations conducted by the Iowa Department of Natural Resources or
the Federal Environmental Protection Agency, or any similar agency,
with respect to the assets of Obligors,
H. Operating Accounts at Bank. Xxxxxx shall maintain its primary cash
concentration accounts with Bank.
I. Tangible Net Worth. TransFinancial, on a consolidated basis, shall
always maintain a Tangible Net Worth of no less than $23,000,000.00.
J. Debt To Tangible Net Worth Ratio. TransFinancial on a consolidated
basis, shall always maintain a Debt to Tangible Net Worth Ratio no
greater than 1.20 to 1.00.
K. Current Ratio. TransFinancial, on a consolidated basis, shall always
maintain a Current Ratio of not less than 1.0 to 1.0.
L. Receivables and Revenue Equipment Valuation. The aggregate value of
Xxxxxx'x Eligible Accounts Receivable, Xxxxxx'x Revenue Equipment and
Specialized Transport's Revenue Equipment shall always total at least
115% of the Indebtedness. The value of Xxxxxx'x Revenue Equipment and
Specialized Transport's Revenue Equipment shall equal the Net
Depreciated Value. "Net Depreciated Value" shall mean the actual
original cost of those items comprising such Revenue Equipment, as of
the date of acquisition thereof, minus the related accumulated
depreciation as reflected on the books of Xxxxxx or Specialized
Transport as of the date of the Covenant Compliance Certificate then
submitted to Bank.
M. New Entities. If any Obligor causes any new entities to be created to
conduct business activities similar to, or related to, its current
business activities, such new entities shall immediately execute
unlimited guaranties of the Indebtedness.
N. ERISA Compliance. Obligors shall meet their minimum funding
requirements under the Employee Retirement Income Security Act of 1974
(ERISA), as amended, with respect to any employee benefit plan or
other class of benefit plan, which the Pension Benefit Guaranty
Corporation, established under ERISA (PBGC), has elected to insure, in
either case, whether now in existence or hereafter instituted by
Obligors.
O. Collected Funds. At all times maintain in Obligors accounts at Bank
collected funds sufficient to pay all items presented for payment from
such accounts and sufficient to pay service charges imposed by Bank.
Obligors agree to pay to Bank interest on any overdraft or deficit
balance in any such account at the rate set forth in the Working
Capital Line of Credit Note. Obligors acknowledge that any and all
drafts or checks drawn on any of their accounts which cause an
overdraft to occur will be returned by Bank.
P. Expenses. Obligors shall pay all of Bank's out-of-pocket costs
incurred in connection with the preparation, closing and
administration of this Agreement, which costs include but are not
limited to attorneys' fees, environmental and other consultant fees,
appraisal costs, filing and recording expenses, long distance
telephone charges, hand delivery and telefax charges, overnight and
other mail charges, and similar items.
Q. Collateral Proceeds. In the event Obligors, or any of them, sell any
of the Collateral other than in the ordinary course of their business,
all of the net proceeds therefrom, after payment of any sale-related
expenses, shall be remitted to Bank for paydown of the Term Note.
Such paydown shall not alter or modify the monthly payment of
principal and interest otherwise required of Obligors pursuant to the
Term Note.
R. Replacement Financing. Obligors shall utilize their best efforts to
procure, on or before December 31, 2000, but no later than July 5,
2001 replacement financing sufficient to pay in full the Indebtedness.
VII. NEGATIVE COVENANTS. From the date of this Agreement and thereafter until
all of the Indebtedness is paid in full, Obligors will not, without the
prior written consent of Bank:
A. Incur Debt. Incur, permit or remain outstanding, assume or in any way
become committed for indebtedness except the indebtedness incurred
herein, the indebtedness incurred with Central States Pension Funds,
and those debts incurred in the ordinary course of Obligors'
businesses consistent with past practices, or as otherwise approved by
Bank.
X. Xxxxx Liens. Pledge, mortgage, lease or otherwise encumber, or permit
any lien to exist on any asset or property of any kind owned by
Obligors, except for the mortgage lien granted to Central States
Pension Funds, and except as may exist at and be reflected on the
financial statements provided at the time of this Agreement, other
than accounts payable to suppliers incurred in the normal course of
Obligors' businesses, or as otherwise approved by Bank.
C. Sell Assets Out of Ordinary Course. Sell, lease or otherwise dispose
of any part of Obligors' real or personal property other than in the
ordinary course of Obligors' businesses without Bank's permission.
D. Dividends. Declare and/or distribute in cash or other assets any
dividends on any Obligors' outstanding stock, or redeem any Obligors'
outstanding stock.
E. Sale, Change In Control, Merger, Etc. Suffer or permit majority
control of any Obligor to be sold, assigned or otherwise transferred,
or change management, or merge or consolidate with any entity or
enterprise.
F. No Other Guaranties. Grant guarantees to any other financial
institutions or entities.
G. Acquisitions. Acquire other entities.
VIII.CONDITIONS OF BANK'S OBLIGATIONS. Bank's obligations to perform hereunder
shall be subject to satisfaction of the following conditions on or before
closing:
A. No Breach of Covenants. Obligors shall have substantially performed
all agreements required to be performed hereunder, and shall not be in
any material breach of any covenant, agreement, representation or
warranty made herein or in any other loan document.
B. No Default. No Event of Default and no event or condition which, with
notice or the lapse of time, or both, would constitute an Event of
Default, shall exist.
C. No Material Change in Financial Condition. Obligors shall not have
incurred any material liabilities, direct or contingent, other than in
the ordinary course of business, since the dates of the last financial
statements given to Bank by Obligors.
D. Insurance. Obligors shall have obtained hazard or fire and extended
coverage insurance (and flood insurance if any Collateral is located
in a flood zone) on the Collateral, issued by a company or companies
approved by Bank and in amounts acceptable to Bank which policy or
policies shall name Bank as loss payee thereunder, and Bank shall also
have been provided with such additional policies of insurance as Bank
may reasonably require insuring against such risks and in such amounts
as are customarily carried by like businesses operating in the same
vicinity.
E. Reimbursement of Bank's Expense. The payment by Obligors of all out-
of-pocket expenses incurred by Bank in the preparation, closing and
administration of this Agreement as provided in Section 6.P. above.
F. Authorized Action. Receipt by Bank of duly executed certificates from
Obligors authorizing the execution of this Agreement, the Notes, the
Mortgages, and all other documents contemplated by this Agreement.
G. Legal Opinion. Receipt by Bank of an opinion from each Obligors'
legal counsel to the effect that (i) each Obligor is a corporation
duly organized, validly existing and in good standing under the laws
of the state of its incorporation and to the best of such counsel's
knowledge and belief, is duly qualified and in good standing as a
foreign corporation authorized to do business in Iowa (if not
incorporated in Iowa) and in each state where, because of the nature
of its activities or properties, such qualification is required; (ii)
each Obligor has full power to execute and deliver this Agreement, the
Notes and other loan documents, and to perform its obligations
thereunder; (iii) such actions have been duly authorized by all
necessary corporate action, and are not in conflict with any provision
of the law or of the articles of incorporation or bylaws of each
Obligor, nor in conflict with any agreement binding upon each Obligor
of which such counsel has knowledge; and (iv) this Agreement, the
Notes, and the other loan documents are the legal and binding
obligations of each Obligor, enforceable in accordance with their
terms.
H. Title Opinion or Lender's Policy. Receipt by Bank of an attorney's
title opinion, from an attorney acceptable to Bank, or receipt by Bank
of an ALTA lender's policy, from a title insurance company acceptable
to Bank, at the expense of Obligors, confirming that Xxxxxx or TFH
Properties, as the case may be, has merchantable title to the real
estate parcels offered as Collateral, and that the lien of Bank, does
or will constitute a first lien thereon, except for the prior lien on
certain parcels granted to Central States Pension Funds.
I. Loan Documents. Receipt by Bank of the Notes, the Xxxxxx Mortgages,
the TFH Properties Mortgage, any requested Security Agreements, title
certificates with Bank's lien noted thereon on Xxxxxx'x Revenue
Equipment, on Specialized Transport's Revenue Equipment and on any
other Revenue Equipment of any of the Borrowers or Co-Borrowers, and
all other loan documents requested by Bank, duly executed by an
authorized officer of the respective entity.
J. Environmental Reports. Receipt by Bank of environmental reports,
satisfactory to Bank, on all of the Xxxxxx Real Estate and the TFH
Properties Real Estate, from firms acceptable to Bank.
K. Appraisals. Receipt by the Bank of appraisals, satisfactory to Bank,
on all of the Xxxxxx Real Estate and the TFH Properties Real Estate,
Xxxxxx'x Revenue Equipment and Specialized Transport's Revenue
Equipment, from appraisers acceptable to Bank.
L. Deferral By Central States Pension Funds. Receipt by Bank of written
confirmation from an authorized officer of Central States Pension
Funds that such entity is deferring any principal installments now due
from Obligors until July 5, 2001, or any of them, and waiving existing
defaults or penalty payments under loan documents executed by
Obligors, or any of them.
IX. EVENTS OF DEFAULT. If any of the following events occur, Bank may, at its
option, without notice or demand, except as otherwise specifically
provided, declare the entire Indebtedness of Obligors to Bank immediately
due and payable.
A. Late Payment. Any payment of principal or interest due under the
terms of any Note is not made on the due date and such default
continues unremedied for ten (10) days after written notice thereof
shall have been given to Obligors by Bank.
B. Misrepresentation. Any representation or warranty made by Obligors in
this Agreement shall prove to be materially incorrect or untrue, or
any statement, report or writing furnished by Obligors to Bank is
untrue in any material aspect.
C. Breach of Covenants. Obligors fail to perform or observe any term,
covenant or condition of this Agreement and such failure is not
remedied or corrected within thirty (30) days after written notice
thereof shall have been given to Obligors by Bank.
D. Breach Under Other Loan Documents. Any breach of any provisions
contained in the Notes, or any other loan documents and such breach is
not remedied within thirty (30) days after written notice thereof
shall have been sent to Obligors by Bank.
E. Bankruptcy, Etc. If any Obligor becomes insolvent or bankrupt or
makes an assignment for the benefit of creditors, or is petitioned
into bankruptcy, either voluntarily or involuntarily.
F. Adverse Impairment in Collateral. Bank's interest in any portion of
the Collateral is adversely impaired in any manner, and Obligors are
unable to remedy, to the Bank's satisfaction, such adverse impairment
within 30 days after written notice from the Bank.
G. Adverse Change in Financial Condition. Any adverse material change in
any Obligor's financial condition shall have occurred.
H. Bank Deems Itself Insecure. If Bank at any time reasonably deems
itself insecure.
X. REMEDIES. Upon the occurrence of a Default, it being understood that a
Default under any Note shall constitute a Default under all of the Notes,
Bank may, after expiration of any notice period referenced above, declare
the unpaid principal balance and interest on the Notes immediately due and
payable, together with any other debt owed by Obligors to Bank, and all
such principal, interest and other debt shall thereupon be immediately due
and payable in full. Bank shall thereupon have all remedies set forth in
the Notes, Security Agreements, Mortgages and any other Loan Documents, and
all remedies otherwise available to a mortgagee or secured creditor under
the laws of Iowa or any other state where any portion of the Collateral is
located.
XI. NO ADDITIONAL LOANS OR ADVANCES. Obligors acknowledge that Bank has made
no commitment, and has no intention, of making any additional loans or
advances to Obligors or any of them, except as specifically provided in
this Agreement.
XII. WAIVER OF EXISTING DEFAULTS. Upon execution of this Agreement by all
parties, together with satisfaction of all the conditions of Bank's
obligations described in Section 8 above, Bank shall be deemed to have
waived all defaults existing as of the date of this Agreement. Any
defaults under this Agreement or any other Loan Documents hereinafter
occurring are not waived by Bank and will be enforced.
XIII.FEE. As an inducement to Bank to enter into this Agreement, Obligors agree
to pay Bank a fee determined as follows: (i) if the Indebtedness is paid
in full within 30 days of the date of this Agreement, there shall be no
fee; (ii) if the Indebtedness is paid in full more than 30 but less than 60
days from the date of this Agreement, the fee shall be $25,000.00; (iii) if
the Indebtedness is paid in full more than 60 but less than 90 days from
the date of this Agreement , the fee shall be $50,000.00; (iv) if the
Indebtedness is paid in full more than 90 days but less than 120 days from
the date of this Agreement the fee shall be $75,000.00; and (v) if the
Indebtedness is paid in full more than 120 days from the date of this
Agreement, the fee shall be $100,000.00. Obligors herein authorize Bank to
debit any of their accounts to pay such fee.
MISCELLANEOUS
A. The Bank As Attorney-In-Fact. In the event of a Default, Obligors
hereby appoint Bank to be Obligors' attorney-in-fact, without
requiring Bank to act as such, for the purpose of carrying out the
provisions hereof and taking any action and executing any document or
instrument which Bank may deem necessary or advisable to accomplish
the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest.
B. Waiver Not Binding. Any waiver of any default by Bank is not a waiver
of any subsequent default. Further, no delay on the part of Bank in
the exercise of any power or right shall constitute a waiver thereof,
nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof.
C. Notice. Any notice hereunder to Obligors shall be in writing, and
shall be deemed to be given on the date delivered, personally, or on
the date when mailed by ordinary mail, postage prepaid, or by
facsimile and addressed to Obligors as appearing on the signature page
of this Agreement, or at such other address as Obligors may, by
written notice received by Bank, designate as their addresses for
purposes of notice hereunder.
D. Governing Law. This Agreement, the Notes, the Mortgages and all other
loan documents shall be covered in all respects by the laws of the
State of Iowa, except to the extent the law of the state in which any
Collateral is located, provides otherwise. A determination that any
provision of this Agreement is unenforceable or invalid shall not
affect the validity or enforceability of any other provision.
E. Enforcement in Iowa. Obligors acknowledge that this Agreement is
being entered into by Bank in partial consideration of Bank's right to
enforce in Iowa the terms and provisions of this Agreement and the
other loan documents. Obligors consent to jurisdiction in Iowa and
construction of this Agreement under the laws of the State of Iowa.
Obligors waive any right to commence any action against Bank except in
Iowa.
F. Term of Agreement. The term of this Agreement shall coincide with the
terms of the Notes executed by Obligors in favor of Bank, as modified,
extended, substituted, renewed or until all of the Indebtedness is
paid in full.
G. Assignment. This Agreement shall not be assigned by Obligors.
H. Participation. Bank may enter into participation agreements with
other financial institutions with regard to the Indebtedness.
I. Successors and Assigns. This Agreement shall be binding upon
Obligors' successors and assigns.
J. Additional Documents. Obligors agree to execute and cause to be
executed such additional documents as Bank may require in order to
effectuate the terms of this Agreement. All documents shall be on
Bank's standard forms for the same or forms otherwise acceptable to
Bank.
K. Conflict in Documents. In the event of a conflict between the terms
and conditions of this Agreement and those of any other documents
pertaining to Obligors' indebtedness to Bank, the Bank, in its sole
discretion, shall determine which document is controlling.
L. Survival of Representations and Warranties. All representations,
warranties, covenants, and agreements of Obligors herein shall survive
the execution and delivery of this Agreement and shall be deemed
continuing until the Indebtedness is paid in full to Bank.
M. Release of Bank. Obligors hereby release and forever discharge Bank
and any participants, their officers, directors, employees,
shareholders, agents and representatives, from all claims or causes of
actions of every kind or character, known or unknown, without limit,
which Obligors allegedly may have as of the date of this Agreement.
N. Collection Costs. If Bank hires an attorney to assist in collecting
any amount due or enforcing any right or remedy under this Agreement,
the Notes, the Mortgages, or any other loan document, Obligors agree
to pay the reasonable attorney fees and expenses incurred by Bank.
IMPORTANT - READ BEFORE SIGNING, THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS
OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
Obligors warrant that they have received a copy of this Agreement and
further state that they understand fully the terms and conditions described
herein.
BANKERS TRUST COMPANY, N.A.
By: /s/ Xxxxx Xxxxx
Its: Vice President
X.X. Xxx 000
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
"BANK"
XXXXXX CARTAGE COMPANY
By: /s/ Xxxxxxx X. X'Xxxx
Its: Vice President
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
TRANSFINANCIAL HOLDINGS, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: President & CEO
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
"BORROWERS"
SPECIALIZED TRANSPORT, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: Vice President
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
TFH LOGISTICS & TRANSPORTATION SERVICES, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: CEO
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
TRANSPORT BROKERAGE, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: Vice President
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
PHOENIX COMPUTER SERVICES, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: Vice President
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
CUSTOM CLIENT SERVICES, INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: Vice President
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
TFH PROPERTIES, INC. F/K/A ANUHCO PROPERTIES,
INC.
By: /s/ Xxxxxxx X. X'Xxxx
Its: President
0000 Xxxxxx Xxxx, Xxxxx #000
Xxxxxx, Xxxxxx 00000
"CO-BORROWERS"
