Exhibit 10.3
FIFTH AMENDMENT TO LETTER OF CREDIT AGREEMENTS
THIS FIFTH AMENDMENT TO LETTER OF CREDIT AGREEMENTS
(this "Amendment"), is made and entered into as of October 24,
2001 (the "Effective Date"), by and between CONSOLIDATED
FREIGHTWAYS CORPORATION, a Delaware corporation ("Debtor"), the
other Credit Parties signatory to the Letter of Credit Agreements
described below (collectively, together with the Debtor, the
"Credit Parties") and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation ("GE Capital").
W I T N E SS E T H:
WHEREAS, Debtor and GE Capital are parties to that
certain Letter of Credit Agreement, dated as of April 27, 2001
(as amended to the date hereof, the "Letter of Credit Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Letter of Credit
Agreement), pursuant to which GE Capital has committed to make
certain letters of credit available to Debtor; and
WHEREAS, Debtor, the other Credit Parties and GE
Capital desire to modify the Letter of Credit Agreement, the
Security Agreement, the Pledge Agreement and the Cash Collateral
Account Agreement and the Subsidiary Guaranty (collectively, the
"Letter of Credit Agreements") in certain respects and that
certain waivers with respect thereto be granted, all 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, the Debtor, the other Credit Parties and GE
Capital do hereby agree that all capitalized terms used herein
shall have the meanings ascribed thereto in the Letter of Credit
Agreement (except as otherwise expressly defined or limited
herein) and do hereby further agree as follows:
1. Consent and Waivers.
(A) Subject to the terms and conditions of this
Amendment, including without limitation the fulfillment of the
conditions to effectiveness specified in Section 7 below, the
Creditor hereby consents to (i) the formation of a new Domestic
Subsidiary to be known as "CF XxxxxX.xxx Incorporated" so long as
Debtor timely complies with all of the requirements set forth in
Section 5.10 of the Letter of Credit Agreement relating thereto,
and (ii) to the investment by the Credit Parties of up to $1,000
in a new Domestic Subsidiary to be known as "CF XxxxxX.xxx
Incorporated" prior to the date such Subsidiary becomes a
Subsidiary Guarantor.
(B) Subject to the terms and conditions of this
Amendment, including without limitation the fulfillment of the
conditions to effectiveness specified in Section 7 below, the
Creditor hereby waives the minimum Excess Liquidity requirements
in clauses (i)(B) and (ii)(B) of Section 2.2(f) of the Letter of
Credit Agreement solely with respect to the October Letter of
Credit; provided that the aforesaid waiver relates solely to the
issuance of the October Letter of Credit and to the specific
conditions precedent to issuance of such Letter of Credit, and
nothing in this Amendment is intended, or shall be construed, to
waive any of the conditions precedent in Section 2.2(f) with
respect to the issuance of any other Letters of Credit.
2. Amendments of the Letter of Credit Agreements. Subject to
the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions precedent specified
in Section 7 below, the Letter of Credit Agreements are hereby
amended as follows:
(A) Amendments to Letter of Credit Agreement. The
Letter of Credit Agreement shall be amended as follows:
(1) Section 1.7(a) of the Letter of Credit Agreement
is deleted in its entirety and the following new Section
1.7(a) is substituted in lieu thereof:
(a) As to all payments made on any of the
Obligations when a Default or Event of Default shall
have occurred and be continuing or following the
Commitment Termination Date, Debtor hereby irrevocably
waives the right to direct the application of any and
all payments received from or on behalf of Debtor, and
Debtor hereby irrevocably agrees that Creditor shall
have the continuing exclusive right to apply any and
all such payments against the Obligations as Creditor
may deem advisable notwithstanding any previous entry
by Creditor in the Letter of Credit Account or any
other books and records. In the absence of a specific
determination by Creditor with respect thereto,
payments shall be applied to amounts then due and
payable in the following order: (1) to Fees and
Creditor's expenses reimbursable hereunder; (2) to
accrued but unpaid interest on the Obligations (other
than the Other Secured Obligations); (3) to the
outstanding principal balance of the Obligations (other
than the Other Secured Obligations) and to provide cash
collateral for Letter of Credit Obligations in the
manner described in Section 1.1(c), ratably to the
aggregate, combined outstanding principal balance of
the Obligations (other than the Other Secured
Obligations) and outstanding Letter of Credit
Obligations; (4) to all other Obligations (other than
the Other Secured Obligations); and (5) to all Other
Secured Obligations. In the event of any conflict
between this Section 1.7(a) and Section 1.7(a) of the
Revolving Credit Agreement, this Section 1.7(a) shall
control for purposes of determining application and
allocation of any payments received by the Creditor
hereunder.
(2) Annex A to the Letter of Credit Agreement is
hereby amended by adding the following new definitions
thereto in the appropriate alphabetical order:
"October Letter of Credit" shall mean that certain
Letter of Credit in an amount not to exceed $15,000,000
to be issued to United States Fidelity and Guaranty (or
one of its subsidiaries) on or about October 24, 2001.
"Other Credit Documents" shall mean (i) any
agreement, note, instrument, lease or guarantee
heretofore, now or hereafter executed or issued by
any Credit Party in favor of any Affiliate of
Creditor or entered into by a Credit Party with
any Affiliate of Creditor, or held by any
Affiliate of Creditor, and evidencing any debt,
liabilities or obligations for the performance of
covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance
is then required or contingent, or such amounts
are liquidated or determinable) of any kind or
nature, present or future, owing by any Credit
Party to any Affiliate of Creditor or entered into
by a Credit Party with any Affiliate of Creditor,
in each case, as such agreements, notes,
instruments, leases and guarantees may be amended,
supplemented or replaced from time to time, and
(ii) any agreement, note, instrument, lease or
guarantee (other than this Agreement, the other
Letter of Credit Documents, the Revolving Credit
Agreement and the other Revolving Credit
Documents) heretofore, now or hereafter executed
or issued by any Credit Party in favor of Creditor
or entered into by a Credit Party with Creditor,
or held by Creditor, and evidencing any debt,
liabilities or obligations for the performance of
covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance
is then required or contingent, or such amounts
are liquidated or determinable) of any kind or
nature, present or future, owing by any Credit
Party to Creditor, in each case, as such
agreements, notes, instruments, leases and
guarantees may be amended, supplemented or
replaced from time to time; provided that the
Other Credit Documents shall not include any of
the Letter of Credit Documents or the Revolving
Credit Documents.
"Other Secured Obligations" shall mean (i)
all advances, debts, liabilities and obligations,
for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not
such performance is then required or contingent,
or such amounts are liquidated or determinable)
owing by any Credit Party to any Affiliate of
Creditor, and all covenants and duties regarding
such amounts, of any kind or nature, present or
future, whether or not evidenced by any Other
Credit Documents, including, without limitation,
all advances, debts, liabilities and obligations
arising under any Other Credit Documents and any
other agreement, note, instrument, lease or
guarantee heretofore, now or hereafter executed or
issued by any Credit Party in favor of any
Affiliate of Creditor, and (ii) all advances,
debts, liabilities and obligations for the
performance of covenants, tasks or duties or for
payment of monetary amounts (whether or not such
performance is then required or contingent, or
such amounts are liquidated or determinable) owing
by any Credit Party to Creditor, and all covenants
and duties regarding such amounts, of any kind or
nature, present or future, whether or not
evidenced by any Other Credit Documents,
including, without limitation, all advances,
debts, liabilities and obligations arising under
any Other Credit Documents and any other
agreement, note, instrument, lease or guarantee
heretofore, now or hereafter executed or issued by
any Credit Party in favor of Creditor. This term
includes all principal, interest (including all
interest which accrues after the commencement of
any case or proceeding in bankruptcy after the
insolvency of, or for the reorganization of any
Credit Party, whether or not allowed in such
proceeding), fees, charges, expenses, attorneys'
fees and any other sum chargeable by Creditor or
any Affiliate of Creditor to any Credit Party
under any Other Credit Document. Notwithstanding
anything herein to the contrary, the Other Secured
Obligations shall not include any of the
Obligations described in clauses (i) and (ii) of
the definition of such term in this Annex A.
(3) Annex A to the Letter of Credit Agreement is
hereby amended by deleting therefrom the definition of
"Obligations" in its entirety and by substituting the
following amended definition of such term in lieu thereof:
"Obligations" shall mean (i) all
Reimbursement Obligations, (ii) all advances, debts,
liabilities and obligations, for the performance of
covenants, tasks or duties or for payment of monetary
amounts (whether or not such performance is then
required or contingent, or such amounts are liquidated
or determinable) owing by any Credit Party to Creditor,
and all covenants and duties regarding such amounts, of
any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument,
arising under this Agreement, the Revolving Credit
Agreement, or any of the other Letter of Credit
Documents or Revolving Credit Documents, and (iii) all
Other Secured Obligations. This term includes all
principal, interest (including all interest which
accrues after the commencement of any case or
proceeding in bankruptcy after the insolvency of, or
for the reorganization of any Credit Party, whether or
not allowed in such proceeding), Fees, Charges,
expenses, attorneys' fees and any other sum chargeable
by Creditor or any Affiliate of any Creditor, as
applicable, to any Credit Party under this Agreement,
the Revolving Credit Agreement, any of the other
Revolving Credit Documents, any of the other Letter of
Credit Documents or any of the Other Credit Documents.
(B) Amendment of Security Agreement. Section 2 of the
Security Agreement shall be amended by deleting said Section 2 in
its entirety and substituting in lieu thereof the following new
Section 2 to read in its entirety as follows:
2. GRANT OF LIEN.
(a) To secure the prompt and complete payment, performance and
observance of all of the Obligations (as such term is defined in
the Letter of Credit Agreement), including, without limitation,
all of Debtor's Obligations under the Letter of Credit Agreement,
the Revolving Credit Agreement and the Other Credit Documents,
all of the Grantor Subsidiaries' payment and performance
obligations under the Guaranty and all obligations of the
Grantors now or hereafter existing under this Agreement
including, without limitation, all fees, costs and expenses
whether in connection with collection actions hereunder or
otherwise (collectively, the "Secured Obligations"), and subject
to the terms and conditions of this Agreement, each Grantor
hereby grants, assigns, conveys, mortgages, pledges, hypothecates
and transfers to Secured Party, for the benefit of itself and its
Affiliates, a Lien upon all of its right, title and interest in,
to and under the following property, whether now owned by or
owing to or hereafter acquired by or arising in favor of such
Grantor (including under any trade names, styles or derivations
thereof), and regardless of where located (all of which being
hereinafter collectively referred to as the "Collateral"):
(i) all Receivables;
(ii) all monies, securities and other property now or hereafter
in the possession or custody of, or in transit to, Secured Party,
for any purpose (including safekeeping, collection or pledge),
from or for any Grantor, or as to which any Grantor may have any
right or power, and all of Secured Party's credits and balances
with any Grantor existing at any time; and
(iii) to the extent not otherwise included, all proceeds and
products of the foregoing and all accessions to, and
substitutions and replacements for, each of the foregoing.
(b) In addition, to secure the prompt and complete payment,
performance and observance of the Secured Obligations and in
order to induce the Secured Party as aforesaid, each Grantor
hereby grants to Secured Party, for the benefit of itself and its
Affiliates, a right of setoff against the property of such
Grantor held by Secured Party, consisting of property described
above in Section 2(a) now or hereafter in the possession or
custody of or in transit to Secured Party, for any purpose,
including safekeeping, collection or pledge, for the account of
such Grantor, or as to which such Grantor may have any right or
power.
(c) All Liens, security interests and other rights, titles and
interests of Secured Party on behalf of itself and its Affiliates
under this Security Agreement in and to the Collateral and all
rights and remedies of Secured Party hereunder are subject to the
terms and conditions of the Intercreditor Agreement.
Notwithstanding anything herein to the contrary, the
grant of the foregoing security interest shall be
effective automatically (without notice or any other
action) on (but not prior to) the Initial Funding Date
and shall remain effective until the Termination Date.
(C) Amendment of Cash Collateral Agreement. The parties
hereto hereby agree that the security interest granted pursuant
to Section 1 of the Cash Collateral Account Agreement shall be
for the benefit of Creditor and its Affiliates and shall also
secure Debtor's obligations under the Revolving Credit Agreement,
the Revolving Credit Documents and the Other Credit Documents.
(D) Amendment of Pledge Agreement. Section 1 of the Pledge
Agreement shall be amended by deleting said Section in its
entirety and substituting in lieu thereof the following new
Section 1 to read in its entirety as follows:
1. SECURITY FOR OBLIGATIONS, ETC. This
Agreement is for the benefit of the Pledgee on
behalf of itself and its Affiliates and is
security for the prompt payment in full when due,
whether at stated maturity, by acceleration or
otherwise, and performance of all Pledgor's
payment and performance obligations of any kind
under or in connection with the Guaranty and all
obligations of Pledgor now or hereafter existing
under this Agreement including, without
limitation, all fees, costs and expenses whether
in connection with collection actions hereunder or
otherwise (collectively, the "Secured
Obligations").
(E) Amendment of Pledge Agreement. Section 3.1 of the
Pledge Agreement shall be amended by deleting said Section in its
entirety and substituting in lieu thereof the following new
Section 3.1 to read in its entirety as follows:
3.1 Pledge. Subject to the terms and conditions
hereof, and in order to secure the Secured
Obligations, the Pledgor hereby pledges to the
Pledgee, for the benefit of itself and its
Affiliates, all of its rights, titles and
interests in and to the Pledged Interests,
together with (i) subject to the rights of the
Pledgor set forth in Section 5, all dividends
(whether in cash, shares, warrants, options, or
other interests or securities), cash, instruments
or other property from time to time received,
receivable or otherwise distributed in respect of
or in exchange for any or all of the Pledged
Interests, and (ii) all cash and non-cash proceeds
of the foregoing, and the Pledgor hereby grants to
the Pledgee on behalf of itself and its Affiliates
a present and continuing security interests in,
and hereby assigns, transfers, interests,
hypothecates and sets over to the Pledgee, on
behalf of itself and its Affiliates all of
Pledgor's rights, titles and interests in and to
the Pledged Interests (and in and to the
certificates or instruments evidencing the items
described in clauses (i), and (ii) above) to be
held by the Pledgee, on behalf of itself and its
Affiliates upon the terms and conditions set forth
in this Agreement. The Pledgor agrees to deliver
to the Pledgee on the date hereof any and all
certificates representing the Pledged Interests
accompanied by undated transfer powers duly
executed in blank by the Pledgor and any and all
certificates and instruments evidencing the items
described in clauses (i) and (ii) above promptly
upon Pledgor's receipt thereof.
(F) Amendment of Subsidiary Guaranty. Section 1 of the
Subsidiary Guaranty shall be amended by deleting the first
sentence thereof in its entirety and by substituting the
following replacement sentence in lieu thereof:
Subject to the provisions of Section 7 below, each
Guarantor hereby jointly, severally, absolutely,
unconditionally and irrevocably guarantees to the
Guaranteed Party and its Affiliates the prompt
payment when due, whether at stated maturity, by
acceleration or otherwise, of all of the
Obligations (as defined in each of the Letter of
Credit Agreement, the Revolving Credit Agreement
and the Other Credit Documents, and including all
renewals, extensions, modifications, and
refinancings thereof) now or hereafter existing,
whether for principal, interest, fees, reasonable
expenses or otherwise, and all reasonable expenses
(including reasonable attorney's fees and
expenses) in enforcing any of its rights under the
Letter of Credit Agreement, the Revolving Credit
Agreement, the other Letter of Credit Documents,
the other Revolving Credit Documents, and the
Other Credit Documents (all of the foregoing,
collectively, the "Guaranteed Obligations").
3. No Other Waivers or Amendments. Except for the consent,
waiver and amendments expressly set forth and referred to in
Section 1 and Section 2 above, respectively, each of the Letter
of Credit Agreements 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 Letter of Credit
Agreements or to affect, modify or impair the continuity or
perfection of the Creditor's Liens under the Collateral
Documents.
4. Representations and Warranties. To induce GE Capital to
enter into this Amendment, Debtor and each of the other Credit
Parties hereby warrant, represent and covenant to GE Capital
that: (a) this Amendment has been duly authorized, executed and
delivered by Debtor and each Credit Party signatory thereto, (b)
after giving effect to this Amendment, no Termination Event or
Event of Default has occurred and is continuing as of this date,
and (c) after giving effect to this Amendment, all of the
representations and warranties made by Debtor and each Credit
Party in the Letter of 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). Any breach in any
material respect by Debtor or any Credit Party of any of its
representations and warranties contained in this Section 4 shall
be an Event of Default under the Letter of Credit Agreement.
5. Ratification and Acknowledgment. Debtor and each of the
other Credit Parties hereby ratify and reaffirm each and every
term, covenant and condition set forth in the Letter of Credit
Agreement and all other documents delivered by such company in
connection therewith (including without limitation the other
Letter of Credit Documents to which Debtor or any Credit Party is
a party), effective as of the date hereof. Without limiting the
generality of the foregoing, Debtor and each of the other Credit
Parties hereby acknowledge and agree that any and all Obligations
of the Debtor arising under the Revolving Credit Agreement, the
other Revolving Credit Documents and the Other Credit Documents
shall be guaranteed by the Domestic Subsidiaries of the Debtor
(other than the Receivables Subsidiary) pursuant to the
Subsidiary Guaranty and shall be secured by all of the Liens
granted to GE Capital pursuant to the Collateral Documents.
6. Estoppel. To induce GE Capital to enter into this
Amendment, Debtor 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 Debtor or
any Credit Party as against GE Capital with respect to the
obligations of Debtor or any Credit Party to GE Capital under the
Letter of Credit Agreement or the other Letter of Credit
Agreement Documents, either with or without giving effect to this
Amendment.
7. Conditions to Effectiveness. This Amendment shall become
effective, as of the Effective Date, subject to the prior or
subsequent receipt by the GE Capital of this Amendment, duly
executed, completed and delivered by Debtor and each Credit
Party. Upon the effective date of this Amendment, the consent
and waivers in Section 1 of this Amendment and all amendments set
forth in Section 2 of this Amendment shall become effective as of
the effective date of this Amendment.
8. Reimbursement of Expenses. Debtor and each of the other
Credit Parties hereby agree that Debtor and each of the other
Credit Parties shall reimburse GE Capital on demand for all costs
and expenses (including without limitation reasonable attorney's
fees) incurred by GE Capital 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.
9. 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.
10. 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, Debtor and each of the
other Credit Parties hereby waive any provision of law that
renders any provision hereof prohibited or unenforceable in any
respect.
11. 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.
12. Entire Agreement. The Letter of 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
Amendment to be duly executed by their respective officers
thereunto duly authorized, as of the date first above written.
DEBTOR:
CONSOLIDATED FREIGHTWAYS CORPORATION
By:/s/Xxxxxx X. Xxxxxxxxx
Name:Xxxxxx X. Xxxxxxxxx
Title:Executive Vice President and
Chief Financial Officer
CREDITOR:
GENERAL ELECTRIC CAPITAL CORPORATION
By:/s/Xxxxx Xxxxxxx
Name:Xxxxx Xxxxxxx
Title: Duly Authorized Signatory
SUBSIDIARY GUARANTORS:
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
