Exhibit 10.02
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this
"Amendment"), is made and entered into as of February 19, 2002
(the "Effective Date"), by and among CONSOLIDATED FREIGHTWAYS
CORPORATION, a Delaware corporation ("Borrower"), the other
Credit Parties signatory to the Credit Agreement described below
(collectively, together with the Borrower, the "Credit Parties")
and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
("Lender").
W I T N E S S E T H:
WHEREAS, Borrower, the other Credit Parties and Lender
are parties to that certain Credit Agreement, dated as of October
24, 2001 (as amended to the date hereof, the "Credit Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Credit
Agreement), pursuant to which Lender has committed to make
certain loans to Borrower upon the terms and conditions set forth
therein; and
WHEREAS, Borrower, the other Credit Parties and Lender
desire to modify the Credit Agreement in certain respects in
accordance with and subject to the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower, the other Credit Parties and
Lender do hereby agree that all capitalized terms used herein
shall have the meanings ascribed thereto in the Credit Agreement
(except as otherwise expressly defined or limited herein) and do
hereby further agree as follows:
1. Waiver. Subject to the terms and conditions of
this Amendment, including without limitation the fulfillment of
the conditions to effectiveness specified in Section 8 below, the
Lender hereby waives any Default or Event of Default arising
under Sections 6.1, 6.2, 6.4, 6.5 and 6.8 of the Credit Agreement
solely as a result of (a) the formation of CFL Holding Ltd, an
Alberta corporation ("CFLH") as a new Subsidiary of CF Delaware
and the issuance of stock by CFLH to CF Delaware in connection
therewith, and (b) CF Delaware's exchange of shares of Canadian
Freightways, Ltd. with CFLH for shares of CFLH prior to the date
hereof, without Lender's prior written consent. Lender hereby
further waives any Default or Event of Default (i) arising under
Sections 4.1 and paragraph (f) of Annex C as a result of the
failure by Borrower to give Lender timely notice of any of the
foregoing Events of Default described in the immediately
preceding sentence and (ii) solely for the period commencing on
December 31, 2001 and ending on the Effective Date, any Default
or Event of Default resulting from the failure of Borrower to
meet the Minimum EBITDA financial covenant in paragraph (c) of
Annex D solely for the Fiscal Quarter ending December 31, 2001,
as such financial covenant is in effect immediately prior to the
date of this Amendment.
2. Amendments to the Credit Agreement. Subject to
the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions precedent specified
in Section 8 below, the Credit Agreement is hereby amended as
follows:
(A) Section 1.2(b)(ii) to the Credit Agreement is
hereby amended by deleting such subsection in its
entirety and substituting in lieu thereof the following
amended Section 1.2(b)(ii) to read in its entirety as
follows:
(ii) Immediately upon receipt by any Credit
Party or any Foreign or Domestic Subsidiary of any
Credit Party of: (i) the proceeds of any Asset
Disposition by such Credit Party or such
Subsidiary (excluding (x) proceeds received by CF
Delaware from any sales of accounts receivables
and related rights made prior to an Incipient
Termination Event or a Termination Event by CF
Delaware to the Receivables Subsidiary pursuant to
the Receivables Sale and Contribution Agreement
and (y) proceeds received by one or more of the
SPE Subsidiaries in connection with their
formation and proceeds received by CF Delaware in
connection with the transfer of the Conveyed
Properties by CF Delaware to one or more of the
SPE Subsidiaries), other than (1) the proceeds
from Real Property Asset Dispositions occurring
after the Sixth Amendment Effective Date, provided
that the aggregate amount of net proceeds from all
such Real Property Asset Dispositions does not at
any time exceed $5,000,000, and (2) the proceeds
from any other Asset Dispositions that
individually are not in excess of $100,000; or
(iii) the proceeds of any sale of Stock of any
Credit Party or any Foreign or Domestic Subsidiary
of any Credit Party (excluding any sale of Stock
from the SPE Subsidiaries to any Credit Party in
connection with the formation of the SPE
Subsidiaries), Borrower shall prepay the Loans in
an amount equal to all such proceeds, net of (A)
commissions and other reasonable and customary
transaction costs, fees and expenses properly
attributable to such transaction and payable by
Borrower in connection therewith (in each case,
paid to non-Affiliates), (B) transfer taxes, (C)
amounts payable to holders of senior Liens (to the
extent such Liens constitute Permitted
Encumbrances hereunder), if any, and (D) an
appropriate reserve for income taxes in accordance
with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with
Section 1.2(c) below.
(B) Section 1.2(b)(iii) to the Credit Agreement
is hereby amended by deleting such subsection in its
entirety and substituting in lieu thereof the following
amended Section 1.2(b)(iii) to read in its entirety as
follows:
(iii) If any Credit Party or any Foreign or
Domestic Subsidiary of any Credit Party (1) issues
any Stock or debt securities (other than Excluded
Debt Securities), or (2) incurs any Funded Debt
(other than Excluded Funded Debt), no later than
the Business Day following the date of receipt of
the proceeds thereof, Borrower shall prepay the
Loans in an amount equal to (x) in the case of any
issuance of Stock, one hundred percent (100%) of
all such proceeds, net of underwriting discounts
and commissions and other reasonable costs paid to
non-Affiliates in connection therewith, and (y) in
the case of any issuance of debt securities or the
incurrence of any Funded Debt, fifty percent (50%)
of all such proceeds, net of underwriting
discounts and commissions (in the case of the
issuance of any debt securities) and other
reasonable costs paid to non-Affiliates in
connection therewith, provided, however, that no
such prepayment of Loans shall be required
pursuant to clause (y) of this Section 1.2(b)(iii)
if at the time of receipt of such proceeds, the
Revolving Loan Commitment has been permanently
reduced to $25,000,000 or less. Any such
prepayment shall be applied in accordance with
Section 1.2(c) below.
(C) Section 1.4(a) to the Credit Agreement is
hereby amended by deleting such subsection in its
entirety and substituting in lieu thereof the following
amended Section 1.4(a) to read in its entirety as
follows:
(a) Borrower shall pay interest to Lender in
arrears on each applicable Interest Payment Date
at a rate per annum for each day during the
calculation period related to such Interest
Payment Date equal to the greater of (i) the Index
Rate as then in effect plus the Applicable
Revolver Index Margin as then in effect and (ii)
ten percent (10%), computed in either case on the
aggregate principal amount of Loans outstanding
from time to time.
(D) Section 5.10 to the Credit Agreement is
hereby amended by deleting said Section and
substituting in lieu thereof the following new Section
5.10 to read in its entirety as follows:
Section 5.10 Additional Subsidiary
Guarantors. Promptly (and in any event within
five (5) Business Days) after the creation or
acquisition of any Domestic Subsidiary of Borrower
(other than the Receivables Subsidiary and the SPE
Subsidiaries), Borrower shall cause to be executed
and delivered, (i) by such new Domestic
Subsidiary, a supplement to the Subsidiary
Guaranty in substantially the form of Schedule 1
to the Subsidiary Guaranty, (ii) by such new
Subsidiary, an Acknowledgement to the Security
Agreement in substantially the form of Exhibit B
to the Security Agreement, and (iii) such other
related documents (including closing certificates
and legal opinions) as Lender may reasonably
request, all in form and substance reasonably
satisfactory to Lender.
(E) Section 6.1 to the Credit Agreement is hereby
amended by deleting the word "or" from the end of
clause (iii) and adding the word "or" to the end of
clause (iv) and adding a new clause (v) to read in its
entirety as follows:
(v) the formation of the SPE Subsidiaries.
(F) Section 6.2 to the Credit Agreement is hereby
amended by deleting the word "and" from the end of
clause (h) and adding the word "and" to the end of
clause (i) and adding a new clause (j) to read in its
entirety as follows:
(j) Credit Parties may invest up to $1,000
in each of the SPE Subsidiaries. The Bayview
Letter of Credit shall also constitute permitted
investments under this Section 6.2.
(G) Section 6.3 to the Credit Agreement is hereby
amended by deleting the word "and" from the end of
clause (m) and adding the word "and" to the end of
clause (n) and adding a new clause (o) to read in its
entirety as follows:
(o) Indebtedness for borrowed money incurred
by one or more of the SPE Subsidiaries from
Bayview and any reimbursement obligations incurred
by Borrower in respect of any Bayview Letters of
Credit or other Letters of Credit (as defined in
the Letter of Credit Agreement) issued after the
date hereof in favor of Bayview as required under
the Bayview Commitment Letter (each such
Indebtedness being herein called a "Bayview
Indebtedness"), provided that (i) the aggregate
outstanding principal amount of all Bayview
Indebtedness shall not exceed $45,000,000 plus any
capitalized fees at any one time, (ii) the terms
and conditions of all Bayview Indebtedness,
including, without limitation, the interest, fees,
other charges and payments of principal to be paid
by the SPE Subsidiaries to Bayview under any
notes, instruments or other documents from time to
time evidencing any or all of the Bayview
Indebtedness, are substantially the same as those
set forth in the Bayview Commitment Letter, (iii)
the form and substance of any note, instrument or
other documents from time to time evidencing the
Bayview Indebtedness shall be substantially the
same as set forth as Exhibit B to the Sixth
Amendment to Credit Agreement, (iv) all Bayview
Indebtedness shall be secured only by Liens on
assets of the SPE Subsidiaries permitted under
Section 6.7(g), (v) the scheduled final maturity
of all Bayview Indebtedness shall be at least
fifteen years from the date of funding of the
initial advance of funds pursuant to the Bayview
Commitment Letter, and (vi) the proceeds of such
Bayview Indebtedness shall be used to finance the
transfer and lease-back transaction permitted
under the proviso to Section 6.8(i) and closing
costs and fees payable on account of the Bayview
Commitment Letter.
(H) Section 6.6 to the Credit Agreement is hereby
amended by deleting the word "and" from the end of
clause (e) and adding the word "and" to the end of
clause (f) and adding a new clause (g) to read in its
entirety as follows:
(g) for unsecured Guaranteed Indebtedness of
Borrower and CF Delaware incurred as a result of
the guaranty by Borrower and CF Delaware of any
Bayview Indebtedness to the extent such Bayview
Indebtedness is permitted under Section 6.3(o).
(I) Section 6.7 to the Credit Agreement is hereby
amended by deleting the word "and" from the end of
clause (e) and adding the word "and" to the end of
clause (f) and adding a new clause (g) to read in its
entirety as follows:
(g) Liens granted by any SPE Subsidiaries in
favor of Bayview in the Conveyed Property and any
other assets (including real property) owned by
the SPE Subsidiaries securing any Bayview
Indebtedness to the extent such Bayview
Indebtedness is permitted under Section 6.3(o),
provided that such Liens do not attach to any of
the Collateral, the "Collateral" (as such term is
defined in the Letter of Credit Agreement) or the
Receivables.
(J) Section 6.8 to the Credit Agreement is hereby
amended by deleting the word "and" from the end of
clause (g) and adding the word "and" to the end of
clause (h) and adding a new clause (i) to read in its
entirety as follows:
(i) the transfer of the Conveyed Properties
or any other real property (provided that such
real property does not constitute any of the
Collateral, the "Collateral" (as such term is
defined in the Letter of Credit Agreement) or the
Receivables), by CF Delaware to CFCD 2002 LLC, a
Delaware limited liability company ("CFCD 2002
LLC"), and the lease-back of such Conveyed
Properties or other real property (provided that
such real property does not constitute any of the
Collateral, the "Collateral" (as such term is
defined in the Letter of Credit Agreement) by CFCD
2002 LLC to CF Delaware provided that (a) the
aggregate rent paid or payable by CF Delaware
under all such lease-back transactions does not
exceed an amount equal to the aggregate fixed
monthly payment of principal and interest under
all of the Bayview Indebtedness permitted under
Section 6.3(o), subject to adjustments based on
changes in the consumer price index as set forth
in the leases between CF Delaware and CFCD 2002
LLC, (b) all such rent shall be used by the SPE
Subsidiaries to pay such principal and interest
when due and (c) the proceeds received by CF
Delaware from CFCD 2002 LLC in connection with
such transfer made (i) on the Sixth Amendment
Effective Date, shall be used by CF Delaware to
create additional Net Availability under and as
defined in the Letter of Credit Agreement, and
(ii) after the Sixth Amendment Effective Date, to
be used by CF Delaware for working capital and
general corporate purposes.
(K) Section 6.18 to the Credit Agreement is
hereby amended by adding a sentence to the to the end
of Section 6.18 to read in its entirety as follows:
Subject to compliance with all of the terms
and conditions set forth in the Sixth
Amendment to Credit Agreement and the
compliance with all of the covenants
contained in the Credit Agreement, as amended
by the Sixth Amendment to Credit Agreement,
Lender hereby agrees that this Section 6.18
shall not prohibit (i) the incurrence by any
SPE Subsidiary of any Bayview Indebtedness to
the extent permitted to be incurred under
Section 6.3(o) and (ii) the formation by CF
Delaware of the SPE Subsidiaries.
(L) Section 8.1 to the Credit Agreement is hereby
amended by adding a new subsection (p) and a new
subsection (q) to read in their entirety as follows:
(p) A drawing is made by Bayview under any
Bayview Letter of Credit.
(q) A default or breach occurs under any
agreement, document or instrument relating to any
Bayview Indebtedness that is not cured within the
applicable grace period therefor and such default
or breach (i) involves the failure to make any
payment when due in respect of such Bayview
Indebtedness or (ii) causes, or permits any holder
of such Bayview Indebtedness to cause, such
Bayview Indebtedness to become due prior to its
stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in
respect thereof to be demanded, in each case,
regardless of whether such default is waived, or
such right is exercised, by such holder.
(M) Disclosure Schedule 3.8 to the Credit
Agreement is hereby amended by adding to such schedule
the following Subsidiaries:
CF XxxxxX.xxx Incorporated, a Delaware
corporation
CFCD 2002 Member LLC, a Delaware limited
liability company
CFCD 2002 LLC, a Delaware limited liability
company
CFL Holding Ltd., an Alberta corporation
(N) Annex A to the Credit Agreement is hereby
amended by deleting therefrom definitions of
"Applicable Revolver Index Margin," "Borrowing Base,"
"Commitment Termination Date," "Guarantors," "Index
Rate," and "Subsidiary Guaranty" in their entirety and
substituting the following amended definitions of such
terms in lieu thereof:
"Applicable Revolver Index Margin" means the
per annum interest rate equal to five percent
(5%).
"Borrowing Base" shall mean, as of any date
of determination by Lender, from time to time, an
amount equal to the sum of (a) forty-two percent
(42%) of the Appraised Value of Eligible Mortgaged
Property less (b) any and all Reserves established
by Lender at such time including, without
limitation, Reserves for environmental remediation
costs, accrued but unpaid taxes, insurance and
other Charges and expenses pertaining to such
Mortgaged Property. Notwithstanding the
foregoing, irrespective of whether any of the
conditions in Section 2 have been satisfied, the
Borrowing Base shall not at any time exceed an
amount equal to $42,000,000 less the following
amounts (x) the total amount of any mandatory
prepayments required to be made pursuant to
Section 1.2(b)(ii) as a result of the consummation
from time to time of any Asset Dispositions, (y)
the total amount of any mandatory prepayments
required to be made pursuant to Section
1.2(b)(iii) as a result of any issuance from time
to time of Stock and (z) the total amount of any
mandatory prepayments required to be made pursuant
to Section 1.2(b)(iii) as a result of the issuance
from time to time of any debt securities or the
incurrence from time to time of any Funded Debt,
provided, however, that the amount in this clause
(z) shall be deemed to be Zero Dollars ($0) if at
the time of receipt of the proceeds from the
issuance of such debt securities or the incurrence
of such Funded Debt, the Revolving Loan Commitment
is then equal to or less than $25,000,000.
"Commitment Termination Date" means the
earliest of (a) February 18, 2004, (b) the date of
termination of Lender's obligation to make
Revolving Credit Advances or permit existing Loans
to remain outstanding pursuant to Section 8.2(b),
and (c) the date of indefeasible prepayment in
full by Borrower of the Loans and other
Obligations (other than Letter of Credit
Obligations and Other Secured Obligations) and the
permanent reduction of the Revolving Loan
Commitment to zero dollars ($0).
"Guarantors" means each Domestic Subsidiary
of Borrower (other than the Receivables Subsidiary
and SPE Subsidiaries) and each other Person, if
any, which executes a guarantee or other similar
agreement in favor of Lender in connection with
the transactions contemplated by this Agreement
and the other Loan Documents.
"Index Rate" means, for any day, a floating
rate equal to the higher of (i) the rate publicly
quoted from time to time by The Wall Street
Journal as the "base rate on corporate loans
posted by at least 75% of the nation's 30 largest
banks" (or, if The Wall Street Journal ceases
quoting a base rate of the type described, the
highest per annum rate of interest published by
the Federal Reserve Board in Federal Reserve
statistical release H.15 (519) entitled "Selected
Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus
50 basis points per annum. Each change in any
interest rate provided for in the Agreement based
upon the Index Rate shall take effect at the time
of such change in the Index Rate.
"Subsidiary Guaranty" shall mean the
Subsidiary Guaranty, dated as of April 27, 2001,
executed by all Domestic Subsidiaries of Borrower
(other than the Receivables Subsidiary and SPE
Subsidiaries) in favor of Lender.
(O) Annex A to the Credit Agreement is hereby
further amended by adding in alphabetical order the
following definitions:
"Bayview" shall mean Bayview Financial
Trading Group, L.P., together with its successors
and assigns.
"Bayview Commitment Letter" shall mean that
certain commitment letter dated as of January 18,
2002 from Bayview to Borrower, as amended by that
certain letter amendment dated as of February 1,
2002 from Bayview to Borrower and that certain
letter amendment dated as of February 7, 2002 from
Bayview to Borrower, and without giving effect to
any other amendments, supplements, replacements or
restatements thereof or thereto that have not been
consented to in writing by Lender.
"Bayview Indebtedness" shall have the meaning
ascribed to such term in Section 6.3(o).
"Bayview Letters of Credit" shall mean ,
collectively, those certain Letters of Credit
issued by Lender under the Letter of Credit
Agreement to Bayview on the Sixth Amendment
Effective Date and identified on Schedule 1 to the
Sixth Amendment to Credit Agreement, to secure a
portion of (i) the principal and interest payments
owing by the SPE Subsidiaries to Bayview in
respect of the Bayview Indebtedness and (ii) the
obligations of the SPE Subsidiaries in respect of
real estate taxes or property or casualty
insurance covering the Conveyed Properties..
"Conveyed Properties" shall mean and include
the real properties listed on Schedule 2 to the
Sixth Amendment to Credit Agreement, together with
all buildings and improvements located thereon and
all fixtures, equipment and appliances used in the
operation of such buildings as buildings,
including heating and air conditioning systems and
other building systems used to provide utility
services, heating, air conditioning and
ventilation, life safety, or other services
thereto, but excluding the trucks, forklifts,
scales, computers, trade signage showing any
Credit Party's name, and other personal property
which is part of any Credit Party's business
operations being conducted on such real properties
or accounts receivable arising from any Credit
Party's business operations being conducted on
such real properties.
"Excluded Debt Securities" means (a) debt
securities issued by one or more of the SPE
Subsidiaries to Bayview evidencing any Bayview
Indebtedness incurred in accordance with Section
6.3(o) and (b) debt securities issued by any
Credit Party or any Foreign or Domestic Subsidiary
of any Credit Party evidencing the obligations of
such Person or Persons under the Canadian Credit
Facility, provided, however, that to the extent
any or all of such debt securities evidence
obligations of any Credit Party or any Foreign or
Domestic Subsidiary of any Credit Party to repay
an aggregate outstanding principal amount of
Indebtedness in excess of Cnd$6,500,000, such debt
securities to the extent of such excess shall not
be deemed to be "Excluded Debt Securities" within
the meaning of this definition.
"Excluded Funded Debt" means (a) any Bayview
Indebtedness incurred in accordance with Section
6.3(o), and (b) any Indebtedness incurred by any
Credit Party or any Foreign or Domestic Subsidiary
of any Credit Party under the Canadian Credit
Facility, provided, however, that to the extent
the aggregate outstanding principal amount of such
Funded Debt at any time exceeds Cnd$6,500,000,
such Funded Debt to the extent of such excess
shall not be deemed to be "Excluded Funded Debt"
within the meaning of this definition.
"SPE Subsidiaries" shall mean, collectively,
CFCD 2002 Member LLC, a Delaware limited liability
company, and CFCD 2002 LLC, a Delaware limited
liability company.
"Sixth Amendment Effective Date" shall mean
February 19, 2002.
"Sixth Amendment to Credit Agreement" shall
mean that certain Sixth Amendment to Credit
Agreement dated as of February 19, 2002 by and
among Borrower, the other Credit Parties signatory
thereto and Lender.
(P) Annex D to the Credit Agreement is hereby
amended by deleting such annex in its entirety and
replacing it with a new Annex D in the form attached
hereto as Exhibit A.
3. No Other Amendments. Except for the waiver
expressly set forth and referred to in Section 1 and the
amendments expressly set forth and referred to in Section 2, the
Credit Agreement shall remain unchanged and in full force and
effect. Nothing in this Amendment is intended or shall be
construed to be a novation of any of the Credit Agreement or to
affect, modify or impair the continuity or perfection of the
Lenders Liens under the Collateral Documents. Without limiting
the generality of the foregoing, the parties hereto hereby
acknowledge and agree that this Amendment is not intended to nor
shall it be construed as waiving any Default or Event of Default
that now or hereafter may exist as a result of any transactions
between or among CFLH and CF Delaware, except for those
transactions specifically described in clauses (a) and (b) of
Section 1 of this Amendment.
4. Representations and Warranties. To induce Lender
to enter into this Amendment, Borrower and each of the other
Credit Parties hereby warrant, represent and covenant to Lender
that: (a) this Amendment has been duly authorized, executed and
delivered by Borrower and each other Credit Party signatory
thereto, (b) after giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing as of this date,
(c) after giving effect to this Amendment, all of the
representations and warranties made by Borrower and each other
Credit Party in the Credit Agreement are true and correct in all
material respects on and as of the date of this Amendment (except
to the extent that any such representations or warranties
expressly referred to a specific prior date) and (d) the Credit
Parties have provided GE Capital with a true, correct and
complete copy of the Bayview Commitment Letter and no amendment,
supplement, replacement or restatement thereof or thereto has
been made except as reflected in the copy of the Bayview
Commitment Letter delivered to GE Capital. Any breach in any
material respect by Borrower or any other Credit Party of any of
its representations and warranties contained in this Section 4
shall be an Event of Default under the Credit Agreement.
5. Ratification and Acknowledgment. Borrower and
each of the other Credit Parties hereby ratify and reaffirm each
and every term, covenant and condition set forth in the Credit
Agreement and all other documents delivered by such company in
connection therewith (including without limitation the other Loan
Documents to which Borrower or any other Credit Party is a
party), effective as of the date hereof.
6. Estoppel. To induce Lender to enter into this
Amendment, Borrower and each of the other Credit Parties hereby
acknowledge and agree that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of Borrower
or any Credit Party as against Lender with respect to the
obligations of Borrower or any Credit Party to Lender under the
Credit Agreement or the other Loan Documents, either with or
without giving effect to this Amendment.
7. Release of Additional Mortgaged Properties.
Lender hereby agrees to promptly release its Lien on the
Additional Mortgaged Property located at 00000 Xxxxxxx Xxxxxxxxx,
Xxxx Xxxx, Xxxxxxxxxx upon a permanent reduction in the Revolving
Loan Commitment to $35,000,000 or less, provided that no Default
or Event of Default then exists. Lender hereby further agrees to
promptly release its Lien on the Additional Mortgaged Properties
located at 000 Xxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx, and 0000
Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx upon a permanent reduction in
the Revolving Loan Commitment to $25,000,000 or less, provided
that no Default or Event of Default then exists.
8. Conditions to Effectiveness. This Amendment shall
become effective, as of the Effective Date, subject to the prior
or subsequent receipt by the Lender of the following, in each
case, in form and substance satisfactory to Lender:
(a) this Amendment, duly executed, completed and
delivered by Borrower and each other Credit Party.
(b) the Sixth Amendment to Credit Agreement/Fee
Letter dated the date hereof, duly executed, completed and
delivered by Borrower and Lender.
(c) a copy of the fully executed and effective notes,
mortgages, deeds of trust or other instruments entered into as of
the Sixth Amendment Effective Date by and among Bayview and any
SPE Subsidiary.
(d) evidence that, as of the Effective Date, the SPE
Subsidiaries shall have incurred not less than $20,000,000 in
Bayview Indebtedness in accordance with the terms of Section
6.3(o) of the Credit Agreement as amended hereby and evidence
satisfactory to Lender that net proceeds of such Bayview
Indebtedness shall have been applied or used in accordance with
the requirements of Section 6.3(o) and Section 6.8(i)(c)(i) of
the Credit Agreement as amended hereby.
(e) evidence of the issuance of (i) that certain
Letter of Credit in the face amount of $20,000,000 to United
States Fidelity and Guaranty, Co. and (ii) the Bayview Letters of
Credit, each issued pursuant to the Letter of Credit Agreement.
Upon the effective date of this Amendment, all of the waivers set
forth in Section 1 and the amendments set forth in Section 2 of
this Amendment shall become effective as of the effective date of
this Amendment.
9. Reimbursement of Expenses. Borrower and each of
the other Credit Parties hereby agree that Borrower and each of
the other Credit Parties shall reimburse Lender on demand for all
costs and expenses (including without limitation reasonable
attorney's fees) incurred by Lender in connection with the
negotiation, documentation and consummation of this Amendment and
the other documents executed in connection herewith and therewith
and the transactions contemplated hereby and thereby.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID
STATE.
11. Severability of Provisions. Any provision of this
Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law,
Borrower and each of the other Credit Parties hereby waive any
provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
12. Counterparts. This Amendment may be executed in
any number of several counterparts, all of which shall be deemed
to constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
13. Entire Agreement. The Credit Agreement as amended
by this Amendment embodies the entire agreement between the
parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
[Remainder of page intentionally blank; next page is signature
page]
IN WITNESS WHEREOF, the parties have caused this Sixth
Amendment to Credit Agreement to be duly executed by their
respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
CONSOLIDATED FREIGHTWAYS CORPORATION
By /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Its Duly Authorized Signatory
CREDIT PARTIES:
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
By /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CF AIRFREIGHT CORPORATION
By /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
REDWOOD SYSTEMS, INC.
By /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
XXXXXX XXXXX XXXXXXX CORPORATION
By /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CF XXXXXX.XXX INCORPORATED
By /s/Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT A
ANNEX D (Section 6.10)
to
CREDIT AGREEMENT
FINANCIAL COVENANTS
(a) Minimum Fixed Charge Coverage Ratio. The Borrower
and its Subsidiaries shall have on a consolidated basis, as of
the end of each Fiscal Quarter set forth below, a Fixed Charge
Coverage Ratio for the period set forth below of not less than
the following:
Fiscal Quarter Minimum Fixed
Charge
Coverage Ratio
for the Rolling Period 0.20 to 1.00
ending September 30,
2001
for the Rolling Period 0.01 to 1.00
ending December 31, 2001
for the three month -1.00 to 1.00
period ending March 31,
2002
for the sixth month -0.10 to l.00
period ending June 30,
2002
for the nine month 0.50 to 1.00
period ending September
30, 2002
for the Rolling Period 0.80 to 1.00
ending December 31, 2002
for the Rolling Period 1.70 to 1.00
ending on each Fiscal
Quarter thereafter
(b) Minimum Tangible Net Worth. Borrower and its
Subsidiaries on a consolidated basis shall have a Tangible Net
Worth, (i) as of the Closing Date and as of the end of each of
the second and third Fiscal Quarters of the Fiscal Year ending
December 31, 2001, of not less than $180,000,000, (ii) as of the
end of the fourth Fiscal Quarter of the Fiscal Year ending
December 31, 2001, of not less than $150,000,000, (iii) as of the
end of each of the first, second and third Fiscal Quarters of the
Fiscal Year ending December 31, 2002, of not less than
$120,000,000, and (iv) as of the end of the fourth Fiscal Quarter
of the Fiscal Year ending December 31, 2002 and as of the end of
each of the first, second and third Fiscal Quarters of the Fiscal
Year ending December 31, 2003, of not less than $130,000,000.
Thereafter, Borrower and its Subsidiaries on a consolidated basis
shall have, as of the end of each Fiscal Year ending on or after
December 31, 2003 (each such Fiscal Year herein called the
"Subject Fiscal Year") and as of the end of the first three
Fiscal Quarters of the immediately succeeding Fiscal Year, a
Tangible Net Worth of not less than the sum of (i) the minimum
Tangible Net Worth required hereunder for the Fiscal Year which
immediately preceded the Subject Fiscal Year (or, where the
Subject Fiscal Year is the Fiscal Year ending December 31, 2003,
the sum of $130,000,000) plus (ii) an amount equal to fifty
percent (50%) of the positive net income of the Borrower and its
Subsidiaries on a consolidated basis for the Subject Fiscal Year
plus (iii) an amount equal to one hundred percent (100%) of the
amount of any equity raised by or capital contributed to the
Borrower during the Subject Fiscal Year (in the case of equity
raised or capital contributed, net of the bona fide, reasonable
expenses, if any, relating to the raising of such equity or such
capital contribution and paid to Persons who are not Affiliates
of the Borrower).
(c) Minimum EBITDA. Borrower and its Subsidiaries
shall have on a consolidated basis, for each period set forth
below, an EBITDA for such period of not less than the following:
Fiscal Quarter Minimum EBITDA
for the Rolling Period $8,000,000
ending September 30,
2001
for the Rolling Period -$3,200,000
ending December 31, 2001
for the three month -$7,900,000
period ending March 31,
2002
for the sixth month $5,600,000
period ending June 30,
2002
for the nine month $24,400,000
period ending September
30, 2002
for the Rolling Period $43,800,000
ending December 31, 2002
for the Rolling Period $80,000,000
ending on each Fiscal
Quarter thereafter
(d) Maximum Capital Expenditures. Borrower and its
Subsidiaries shall not make or incur any Capital Expenditures if,
after giving effect thereto, the aggregate amount of all Capital
Expenditures made or incurred by Borrower and its Subsidiaries
during any period of four (4) consecutive Fiscal Quarters would
exceed the amounts set forth below for such period:
Four Consecutive Fiscal Maximum Capital
Quarters Ending Expenditures
Fiscal Quarter ending $35,000,000
June 30, 2001
Fiscal Quarter ending $36,000,000
September 30, 2001
Fiscal Quarter ending $30,000,000
December 31, 2001
Fiscal Quarter ending $25,000,000
March 31, 2002 and for
each Fiscal Quarter
thereafter
Capitalized terms used in this Annex D and not
otherwise defined below shall have the respective meanings
ascribed to them in Annex A to this Agreement. The following
terms shall have the respective meanings set forth below:
"Capital Expenditures" shall mean, with respect to any
Person, all expenditures (by the expenditure of cash or the
incurrence of Indebtedness) by such Person during any measuring
period for any fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under
GAAP, but excluding (i) Capital Expenditures of the Borrower or
any Subsidiary Guarantor financed by the incurrence of Term Debt
to the extent that such Term Debt is permitted to be incurred
under Section 6.3, provided that on or prior to the date of
incurrence of such Term Debt, Borrower has furnished to Lender a
written statement of sources and uses of such Term Debt, which
statement describes with particularity the principal amount of
the Term Debt to be used for the proposed Capital Expenditure and
the fixed assets or improvements to be acquired, replaced,
substituted or added to in connection with such proposed Capital
Expenditure, (ii) the purchase of the Vancouver Property by the
Borrower, provided that to the extent the purchase price of the
Vancouver Property exceeds $25,000,000, such excess shall be
included as a Capital Expenditure for purposes of determining
compliance with the Maximum Capital Expenditure covenant set
forth in paragraph (d) of this Annex D, (iii) any Capital
Expenditures incurred by the Borrower in connection with the
refinancing of the Participation Agreement, provided that to the
extent that such Capital Expenditures exceed $22,500,000, such
excess shall be included as a Capital Expenditure for purposes of
determining compliance with the Maximum Capital Expenditure
covenant set forth in paragraph (d) of this Annex D, (iv) any
purchase by the Borrower or any Subsidiary of fixed assets or
improvements to the extent that such purchase qualifies for like-
kind tax treatment under Section 1031 of the IRC, provided that
such exclusion from Capital Expenditures under this clause (iv)
shall be limited to an amount not to exceed the lesser of (x) the
cash proceeds received from the transfer of the property
relinquished in the like-kind exchange, assuming for purposes
hereof that the Borrower or Subsidiary does not qualify for like-
kind tax treatment under Section 1031 of the IRC in connection
with such transfer and (y) the value of the fixed assets or
improvements purchased by the Borrower in the subject transaction
which qualifies for like-kind tax treatment under Section 1031 of
the IRC, (v) any purchase by the Borrower or any Subsidiary of
fixed assets or improvements with the proceeds received from the
sale of the Menlo Park Property, provided that on or prior to the
date of any such Capital Expenditures, Borrower has furnished to
Lender a written statement of sources and uses of the proceeds
from the sale of the Menlo Park Property, which statement
describes with particularity the amount of the proceeds from the
sale of the Menlo Park Property to be used for the proposed
Capital Expenditure and the fixed assets or improvements to be
acquired, replaced, substituted or added to in connection with
such proposed Capital Expenditures, and (vi) such other items as
Borrower and Lender may agree in writing to exclude.
"EBITDA" shall mean, with respect to any Person for any
fiscal period, the amount equal to (a) consolidated net income of
such Person for such period, plus (b) the sum of (i) any
provision for income taxes, (ii) Interest Expense, (iii) loss
from extraordinary items for such period, (iv) depreciation and
amortization for such period, (v) amortized debt discount for
such period, (vi) the amount of any deduction to consolidated net
income as the result of any grant to any members of the
management of such Person of any Stock, and (vii) Lease Expenses,
in each case to the extent included in the calculation of
consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, minus (c) the sum
of (i) income tax credits, (ii) interest income, (iii) gain from
extraordinary items for such period, (iv) any aggregate net gain
(but not any aggregate net loss) during such period arising from
the sale, exchange or other disposition of capital assets by such
Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities), provided that
there shall be excluded from the amount of any aggregate net gain
under this clause (iv), in solely the Fiscal Quarter ending March
31, 2001, an amount equal to the lesser of (x) $19,200,000 and
(y) the actual gain recognized by the Borrower and its
Subsidiaries from the sale of its Portland, Oregon administrative
complex and (v) any other non-cash gains that have been added in
determining consolidated net income (including LIFO adjustments),
in each case to the extent included in the calculation of
consolidated net income of such Person for such period in
accordance with GAAP, but without duplication. For purposes of
this definition, the following items shall be excluded in
determining consolidated net income of a Person: (A) the income
(or deficit) of any other Person accrued prior to the date it
became a Subsidiary of, or was merged or consolidated into, such
Person or any of such Person's Subsidiaries; (B) the income (or
deficit) of any other Person (other than a Subsidiary) in which
such Person has an ownership interest, except to the extent any
such income has actually been received by such Person in the form
of cash dividends or distributions; (C) the undistributed
earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any
contractual obligation or requirement of law applicable to such
Subsidiary; (D) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was
made out of income accrued during such period; (E) any write-up
of any asset; (F) any net gain from the collection of the
proceeds of life insurance policies; (G) any net gain arising
from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (H) in the case
of a successor to such Person by consolidation or merger or as a
transferee of its assets, any earnings of such successor prior to
such consolidation, merger or transfer of assets, and (I) any
deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such
Subsidiary over the cost to such Person of the investment in such
Subsidiary.
"Fixed Charges" shall mean, with respect to any Person
for any fiscal period, the aggregate of, without duplication, (a)
all Interest Expense and Lease Expense paid or accrued during
such period, plus (b) all regularly scheduled payments of
principal or implied principal with respect to Indebtedness
(including any lease payments by any Person in respect of any
Capital Leases, any Sale-Leaseback Debt, any Vancouver Secured
Debt or any Bayview Indebtedness) due or made during such period,
plus (c) all Restricted Payments made during such period (other
than Permitted Stock Repurchases covered by Section 6.14(vii) of
the Letter of Credit Agreement), plus (d) any cash payments made
by such Person in connection with any Permitted Acquisitions (as
such term is defined in the Letter of Credit Agreement).
"Fixed Charge Coverage Ratio" shall mean, with respect
to any Person for any fiscal period, the ratio of (i) the sum of
(x) EBITDA for such period less (y) cash taxes made during such
period to (ii) Fixed Charges for such period.
"Interest Expense" shall mean, with respect to any
Person for any fiscal period, the sum of (a) interest expense
(whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date,
including (i) amortization of original issue discount on any
Indebtedness and of all fees payable in connection with the
incurrence of such Indebtedness (to the extent included in
interest expense), (ii) the interest portion of any deferred
payment obligation, (iii) the interest component of any Capital
Lease Obligation plus (b) the amount of any Letter of Credit Fee
(as such term is defined in the Letter of Credit Agreement) paid
during the relevant period ended on such date, plus (c) the
amount of any payments by such Person, as lessee, under any sale-
leaseback or synthetic lease transaction.
"Lease Expenses" shall mean, with respect to any Person
for any fiscal period, the aggregate rental obligations of such
Person determined in accordance with GAAP that are payable in
respect of such period under operating leases of equipment having
an original non-cancelable term (as determined in accordance with
GAAP) in excess of twelve months (net of income from subleases
thereof, but including taxes, insurance, maintenance and similar
expenses that the lessee is obligated to pay under the terms of
such leases), whether or not such obligations are reflected as
liabilities or commitments on a consolidated balance sheet of
such Person or in the notes thereto, excluding, however, any such
obligations under Capital Leases.
"Net Worth" shall mean, with respect to any Person as
of any date of determination, (a) the book value of the assets of
such Person, minus (b) reserves applicable thereto, minus (c) all
of such Person's liabilities on a consolidated basis (including
accrued and deferred income taxes), all as determined in
accordance with GAAP.
"Rolling Period" shall mean, as of the end of any
Fiscal Quarter, the immediately preceding four (4) Fiscal
Quarters, including the Fiscal Quarter then ending.
"Tangible Net Worth" shall mean, with respect to any
Person at any date, the Net Worth of such Person at such date,
(x) excluding, however, from the determination of the total
assets at such date, (a) all goodwill, capitalized organizational
expenses, capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent
applications, licenses (excluding software licenses) and rights
in any thereof, and other intangible items (other than software
licenses), (b) all unamortized debt discount and expense, (c)
treasury Stock, and (d) any write-up in the book value of any
asset resulting from a revaluation thereof, but (y) including any
non-cash valuation reserves for deferred taxes and any foregone
tax benefits provided that such reserves are established in
accordance with Financial Accounting Standard Number 109 and do
not result in an increase in such Person's future cash tax
payments.
Rules of Construction Concerning Financial Covenants.
Unless otherwise specifically provided therein, any accounting
term used in any Loan Document shall have the meaning customarily
given such term in accordance with GAAP, and all financial
computations thereunder shall be computed in accordance with GAAP
consistently applied. That certain items or computations are
explicitly modified by the phrase "in accordance with GAAP" shall
in no way be construed to limit the foregoing. If any Accounting
Changes occur and such changes result in a change in the
calculation of the financial covenants, standards or terms used
in any Loan Document, then the parties thereto agree to enter
into negotiations in order to amend such provisions so as to
equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating the financial condition of such
Persons and their Subsidiaries shall be the same after such
Accounting Changes as if such Accounting Changes had not been
made. If the parties thereto agree upon the required amendments
thereto, then after appropriate amendments have been executed and
the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained therein shall, only
to the extent of such Accounting Change, refer to GAAP
consistently applied after giving effect to the implementation of
such Accounting Change. If such parties cannot agree upon the
required amendments within 30 days following the date of
implementation of any Accounting Change, then all financial
statements delivered and all calculations of financial covenants
and other standards and terms in accordance with the Related
Documents shall be prepared, delivered and made without regard to
the underlying Accounting Change.
