FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated as of January 16, 2004, is entered into by and among Fleet Capital
Corporation, as Administrative Agent (the "Administrative Agent"), Fleet Capital
Canada Corporation, as Canadian Agent (the "Canadian Agent"), the Lenders and
Canadian Participating Lenders party to the Loan Agreement (as defined below),
Celadon Group, Inc., a Delaware corporation ("CGI"), Celadon Trucking Services,
Inc., a New Jersey corporation ("CTSI"), TruckersB2B, Inc., a Delaware
corporation ("TB2B"), and Celadon Canada, Inc., an Ontario corporation ("CCI"
and together with CGI, CTSI and TB2B, collectively, the "Borrowers"), with
reference to the following facts:
RECITALS
A. The Administrative Agent, the Canadian Agent, the Lenders, the Canadian
Participating Lenders and the Borrowers are parties to the Loan and Security
Agreement, dated as of September 26, 2002, as amended by the Waiver and First
Amendment to Loan and Security Agreement, dated as of January 31, 2003, the
Waiver and Second Amendment to Loan and Security Agreement, dated as of April
24, 2003, and the Third Amendment to Loan and Security Agreement, dated as of
August 21, 2003 (collectively, the "Loan Agreement"), pursuant to which the
Lenders have provided the Borrowers with certain credit facilities.
B. The Borrowers have requested that the Lenders consent to the following:
(i) CTSI's use of Revolving Credit Loan proceeds to repay its existing
$565,000 first mortgage loan indebtedness to Citizens National Bank in
Waxahachie (the "Waxahachie Senior Mortgage Loan");
(ii) Celadon International Corporation's entry into a service
arrangement with Celadon East Transportation and Logistics, a new
transportation and logistics venture to be formed by Kuwaiti Partners, and
to the treatment of Celadon International Corporation as a Restricted
Subsidiary notwithstanding that it will be an active Subsidiary;
(iii) TB2B's entry into a joint venture with DBG Benefits Solution, to
be known as Truckers Insurance and Health Benefits Solutions, L.L.C.,
notwithstanding the restrictions on joint ventures set forth in Section
8.2.15 of the Loan Agreement; and
(iv) The amendment of the definition of Fixed Charge Coverage Ratio to
treat the Capital Expenditures made by CTSI with respect to its Waxahachie,
Texas terminal as "financed" Capital Expenditures for the purpose of such
covenant.
-1-
C. The Lenders are willing to consent to the foregoing on the terms and
conditions set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. Defined Terms. Any and all initially capitalized terms used in this
Amendment (including, without limitation, in the recitals hereto) without
definition shall have the respective meanings specified in the Loan Agreement.
2. Consent to Repayment of Waxahachie Senior Mortgage Loan. The Lenders
hereby consent to CTSI's payment in full of the Waxahachie Senior Mortgage Loan
with Revolving Credit Loan proceeds, provided that the Borrowers have
availability under the Revolving Credit Loans facility of not less than
$10,000,000 after giving effect to such payment.
3. Consent to Service and Management Agreement with Celadon East
Transportation and Logistics. The Lenders hereby consent to Celadon
International Corporation's entry into and performance under its proposed
service and management arrangement with Celadon East Transportation and
Logistics.
4. Consent to Joint Venture With DBG Benefits Solutions. The Lenders hereby
consent to TB2B's entry into and performance under its joint venture with DBG
Benefits Solution, to be known as Truckers Insurance and Health Benefits
Solutions, L.L.C.
5. Amendment to Definition of Fixed Charge Ratio to Treat Capital
Expenditures on Waxahachie Terminal as "Financed" Capital Expenditures. Appendix
A to the Loan Agreement is hereby amended such that the definition of "Fixed
Charge Coverage Ratio" shall read in full as follows:
"'Fixed Charge Coverage Ratio' - as of the last day of any fiscal
quarter of CGI, and for the fiscal period consisting of the consecutive
four (4) fiscal quarters of CGI ending on such day, the ratio of (a)(i)
EBITDA for such fiscal period, minus (ii) Consolidated payments made in
cash with respect to tax expense of CGI for such fiscal period, minus (iii)
Consolidated unfinanced Capital Expenditures of CGI for such period other
than Capital Expenditures of CGI for the calendar year ended December 31,
2003 relating to its Waxahachie, Texas terminal to (b) Consolidated Fixed
Charges of CGI for such period."
6. Amendment to Definition of Restricted Subsidiary to Classify Celadon
International Corporation as a Restricted Subsidiary. Appendix A to the Loan
Agreement is hereby further amended such that the definition of "Restricted
Subsidiary" shall read in full as follows:
"'Restricted Subsidiary' - as of any date of determination, a
Subsidiary of CGI which (a) is inactive as of such date (except in the case
of Celadon International Corporation) and has total assets of less than
$10,000 as of such date, determined in accordance with GAAP, or (b) is an
Exempt Foreign Subsidiary; provided, however, that (i) the term 'Restricted
Subsidiary' shall not
-2-
include Canadian Borrower, and (ii) Celadon CT&L, Inc.; CBW, Inc.;
International Freight Holding Corporation; JML Freight Forwarding, Inc.;
RIL, Inc.; Xxxxx Express, Inc.; Celadon Xxxxx Xxxxxx Co.; and Celadon
Transportation, L.L.P., which entities Borrowers are in the process of
dissolving, shall in any event be "Restricted Subsidiaries" hereunder;
provided, further, however, if any entity identified in this clause (ii) is
not, in fact, dissolved after the Closing Date and hereafter becomes active
and acquires total assets of $10,000 or more, such entity shall cease to be
a Restricted Subsidiary."
7. Deposit of Fees Payable to Celadon International Corporation into a
Dominion Account. The Borrowers hereby agree promptly to deposit into one or
more of the Dominion Accounts all management fees, success fees and other
payments, including expense reimbursements, received by Celadon International
Corporation in connection with its services rendered to Celadon East
Transportation and Logistics.
8. Conditions Precedent. The effectiveness of this Amendment shall be
subject to the prior satisfaction of each of the following conditions:
(a) This Amendment. The Administrative Agent shall have received this
Amendment, duly executed by the Borrowers, Majority Lenders and the
Administrative Agent;
(b) Secretary's Certificate. The Secretary of each of the Borrowers
shall have executed the Certificate of Resolution attached to this
Amendment.
9. Miscellaneous.
(a) Survival of Representations and Warranties. All representations
and warranties made in the Loan Agreement or in any other document or
documents relating thereto, including, without limitation, any Loan
Document furnished in connection with this Amendment, shall survive the
execution and delivery of this Amendment.
(b) Reference to Loan Agreement. The Loan Agreement, each of the other
Loan Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof, or
pursuant to the terms of the Loan Agreement as amended hereby, are hereby
amended so that any reference therein to the Loan Agreement shall mean a
reference to the Loan Agreement as amended by this Amendment.
(c) Loan Agreement Remains in Effect. The Loan Agreement and the other
Loan Documents remain in full force and effect and the Borrowers ratify and
confirm their agreements and covenants contained therein. The Borrowers
hereby confirm that no Event of Default or Default exists as of the date of
this Amendment.
(d) Reaffirmation of Obligations. The Borrowers hereby reaffirm,
ratify and confirm their Obligations under the Loan Agreement,
-3-
acknowledge that they have no offset rights or defenses to the payment of
such Obligations, and acknowledge that all of the terms and provisions of
the Loan Agreement and the other Loan Documents (except as amended hereby)
remain in full force and effect.
(e) Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
(f) Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument.
(g) Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
(h) Expenses of the Administrative Agent. Borrowers agree to pay on
demand all costs and expenses reasonably incurred by the Administrative
Agent in connection with the preparation, negotiation and execution of this
Amendment and the other Loan Documents executed pursuant hereto, and any
and all subsequent amendments, modifications, and supplements hereto or
thereto, including, without limitation, the costs and fees of legal counsel
to the Administrative Agent.
(i) NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
(j) GOVERNING LAW; JURY TRIAL WAIVER. THE VALIDITY OF THIS AMENDMENT,
ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT, AND THE RIGHTS OF THE
PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES TO THIS AMENDMENT
HEREBY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING IN CONNECTION WITH THIS AMENDMENT.
-4-
IN WITNESS WHEREOF, the parties have entered into this Amendment by their
respective duly authorized officers as of the date first above written.
CELADON GROUP, INC.,
a Delaware corporation
By: /s/ Xxxx Will
----------------------------------
Xxxx Will
Secretary
CELADON TRUCKING SERVICES, INC.,
a New Jersey corporation
By: /s/ Xxxx Will
----------------------------------
Xxxx Will
Secretary
TRUCKERSB2B, INC.,
a Delaware corporation
By: /s/ Xxxx Will
----------------------------------
Xxxx Will
Secretary
CELADON CANADA, INC.,
an Ontario corporation
By: /s/ Xxxx Will
----------------------------------
Xxxx Will
Secretary
-5-
FLEET CAPITAL CORPORATION, a Rhode
Island corporation, as Administrative
Agent and a Lender
By: /s/ Xxxxxxx X. Xxx Xxxxxxxxxx
----------------------------------
Xxxxxxx X. Xxx Xxxxxxxxxx
Senior Vice President
FIFTH THIRD BANK,
as a Lender
By: /s/ Xxxxx X. X'Xxxx
----------------------------------
Xxxxx X. X'Xxxx
Vice President
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxxx X Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
Senior Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
Officer
FLEET CAPITAL CANADA CORPORATION,
as Canadian Agent and Canadian Lender
By: /s/ Xxxxxxx X. Xxx Xxxxxxxxxx
----------------------------------
Xxxxxxx X. Xxx Xxxxxxxxxx
Senior Vice President
-6-
CERTIFICATE OF RESOLUTION
I, Xxxx Will, hereby certify that:
I am the duly qualified and acting Secretary of each of Celadon Group,
Inc., a Delaware corporation, Celadon Trucking Services, Inc., a New Jersey
corporation, TruckersB2B, Inc., a Delaware corporation, and Celadon Canada,
Inc., an Ontario corporation (collectively, the "Borrowers").
The following is a true copy of identical resolutions duly adopted by
the respective boards of directors of each of the Borrowers by either a
special meeting or by unanimous written consent in lieu of a meeting:
"RESOLVED that the terms of the Fourth Amendment to Loan and
Security Agreement among this corporation and the other Borrowers
party thereto, the financial institutions which are signatories
thereto, Fleet Capital Corporation, as Administrative Agent (the
'Agent'), and Fleet Capital Canada Corporation, as Canadian Agent, are
hereby approved and ratified; and
FURTHER RESOLVED, that any one officer of this corporation is
hereby authorized and directed, on behalf of this corporation, to
make, execute, and deliver to the Agent any and all documents and to
do any and all acts necessary or desirable to effectuate the foregoing
resolution."
These resolutions are in conformity with the respective articles or
certificate of incorporation and bylaws of the Borrowers, have never been
modified or repealed, and are now in full force and effect.
-7-
IN WITNESS WHEREOF, I have set my hand and the seal of the corporation
as of January 16, 2004.
/s/ Xxxx Will
------------------------------
Xxxx Will
Secretary of Celadon Group, Inc.
Celadon Trucking Services, Inc.,
TruckersB2B, Inc., and
Celadon Canada, Inc.
