FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT 10.2
FIRST
AMENDMENT TO SECOND AMENDED AND RESTATED
THIS
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (herein called
this “Amendment”) made as of November 4, 2009 by and among FFE TRANSPORTATION
SERVICES, a Delaware corporation (“Borrower”), FROZEN FOOD EXPRESS INDUSTRIES,
INC., a Texas corporation (“Parent”), XXXXXXX CORPORATION, a Delaware
corporation (“Xxxxxxx”), FX HOLDINGS, INC., a Delaware corporation
(“FX”), XXXX MOTOR LINES, INC., a Delaware corporation (“LML”), COMPRESSORS
PLUS, INC., a Texas corporation (“CPI”), FFE LOGISTICS, INC., a
Delaware corporation (“Logistics’), XXXXXXX LLC, a Delaware limited
liability company (“Xxxxxxx LLC”), and COMERICA BANK (“Comerica”), as
Administrative Agent, Collateral Agent, Issuing Bank and Bank.
W I T N E
S S E T H:
WHEREAS,
Borrower and Comerica have entered into that certain Second Amended and Restated
Credit Agreement dated as of September 2, 2009 (as amended, supplemented, or
restated prior to the date hereof, the “Original Credit Agreement”), for the
purposes and consideration therein expressed, pursuant to which Comerica became
obligated to make loans to Borrower as therein provided; and
WHEREAS,
Borrower and Comerica desire to amend the Original Credit Agreement as provided
herein;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and in the Original Credit Agreement, in
consideration of the loans which may hereafter be made by Comerica to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as
follows:
ARTICLE
I.
Definitions and
References
1.1. Terms Defined in the
Original Credit Agreement. Unless the context otherwise
requires or unless otherwise expressly defined herein, the terms defined in the
Original Credit Agreement shall have the same meanings whenever used in this
Amendment.
1.2. Other Defined
Terms. Unless the context otherwise requires, the following
terms when used in this Amendment shall have the meanings assigned to them in
this § 1.2.
“Amendment” means this
First Amendment to Credit Agreement.
“Amendment Documents”
means, collectively, this Amendment, the Renewal Note, and the confirmation by
Guarantor with respect to this Amendment and any other document required to be
delivered by Borrower pursuant to Article III hereof.
“Credit Agreement”
means the Original Credit Agreement as amended hereby.
“Original Omnibus
Certificate” means the Omnibus Certificate dated September 2, 2009
executed and delivered by officers of Borrower pursuant to the Original Credit
Agreement.
“Renewal Note” means a
promissory note in the form attached hereto as Exhibit A.
ARTICLE
II.
Amendments to Original
Credit Agreement
2.1. Definitions. The
following definitions in Section 1.1 of the Original Credit Agreement are hereby
amended in their entirety to read as follows:
“‘Base Rate’ means the
Daily Adjusting LIBOR Rate, with each change in the Base Rate to become
effective, without notice to Borrower, as of the opening of business on the
effective date of each change in the Base Rate. If, at any time, Bank
determines that it is unable to determine or ascertain the Daily Adjusting LIBOR
Rate for any day, the Base Rate for each such day shall be the Prime Rate in
effect at such time, but not less than two and one-half percent (2.50%) per
annum.”
“‘Base Rate Margin’
means, on any date, the rate per annum set forth below, based on the Fixed
Charge Coverage Ratio as most recently determined:
|
Tier
|
Fixed
Charge Coverage Ratio
|
Base
Rate Margin
|
|
|
| I | Less than 1.25 to 1.00 | 4.375% | ||
| II | Equal to or greater than 1.25 to 1.00, but less than 1.50 to 1.00 | 3.875% | ||
| III | Equal to or greater than 1.50 to 1.00 | 3.375% |
Any
increase or decrease in the Base Rate Margin resulting from a change in the
Fixed Charge Coverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 5.1(a);
provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then, upon the request of Administrative Agent, the pricing set forth
in Tier 1 above in this definition shall apply, as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered and shall remain in effect until the date on which such Compliance
Certificate is delivered.
Notwithstanding
anything to the contrary contained in this definition, the determination of the
Applicable Rate for any period shall be subject to the last sentence of Section
5.1(b).”
“‘Facility Fee Rate’
means, on any date, the rate per annum set forth below, based on the Fixed
Charge Coverage Ratio as most recently determined:
| Tier | Fixed Charge Coverage Ratio | Facility Fee Rate | ||
| I | Less than 1.25 to 1.00 | 0.500% | ||
| II | Equal to or greater than 1.25 to 1.00, but less than 1.50 to 1.00 |
0.375%
|
||
| III |
Equal
to or greater than 1.50 to 1.00
|
0.375%
|
Any
increase or decrease in the Facility Fee Rate resulting from a change in the
Fixed Charge Coverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 5.1(a);
provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then, upon the request of Administrative Agent, the rate set forth in
Tier 1 above shall apply, as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered and shall remain
in effect until the date on which such Compliance Certificate is
delivered.
Notwithstanding
anything to the contrary contained in this definition, the determination of the
Applicable Rate for any period shall be subject to the last sentence of Section
5.1(b).”
2.2. Affirmative
Covenants.
(a)
Section 5.1(b) of the Original Credit Agreement is hereby amended in its
entirety to read as follows:
“(b) Financial
Statements. Deliver to each Bank, as soon as practicable, and
(i) in any event within one hundred twenty (120) days after the end of each
fiscal year of Parent, complete and detailed Financial Statements (prepared on a
consolidated basis), including balance sheet, operating statement,
reconciliation of earned surplus and such supporting schedules as any
Bank may request, accompanied by the certificate of a firm of independent public
accountants reasonably acceptable to the Banks that such statements have been
prepared in accordance with GAAP and fairly present the consolidated financial
condition of the Companies during the fiscal year just ended, and that during
the course of their audit of the Companies, nothing came to their attention that
caused them to believe the Companies were not in compliance with the terms of
Subsections
5.1(f), 5.1(k), 5.2(a) and 5.2(f), (ii) in any
event within thirty (30) days after the end of each calendar month, consolidated
balance sheets of the Companies as of the close of such calendar month, and
consolidated operating statements of the Companies for the part of the fiscal
year ended at the close of such calendar month, accompanied by the certificate
of the Chief Financial Officer or Treasurer of Parent that such statements are
true and correct, were prepared in accordance with GAAP and fairly present the
consolidated financial conditions and results of operations of the Companies,
and (iii) after a request by any Bank, such other information pertaining to the
Companies and their affairs as such Bank shall from time to time request in
writing. If, as a result of any restatement of or other adjustment to
the financial statements of Borrower or for any other reason, Borrower or the
Administrative Agent determine that (i) the Fixed Charge Coverage Ratio as
calculated by Borrower as of any applicable date was inaccurate and (ii) a
proper calculation of the Fixed Charge Coverage Ratio would have resulted in
higher pricing for such period, Borrower shall immediately and retroactively be
obligated to pay to the Administrative Agent for the account of the applicable
Banks or the Issuing Bank, as the case may be, promptly on demand by the
Administrative Agent (or, after the occurrence of a voluntary or involuntary
entry of an order for relief with respect to Borrower under the Bankruptcy Code
of the United States, automatically and without further action by the
Administrative Agent, any Bank or the Issuing Bank), an amount equal to the
excess of the amount of interest and fees that should have been paid for such
period over the amount of interest and fees actually paid for such
period. This paragraph shall not limit the rights of the
Administrative Agent, any Bank or the Issuing Bank, as the case may be, under
Section 2.4, 2.11,
2.14(d) or under Article
VII. Borrower’s obligations under this paragraph shall survive
the termination of the Commitments and the repayment of all other Obligations
hereunder.”
(b) The
first sentence of subsection (f) of Section 5.1 of the Original Credit Agreement
is hereby amended in its entirety to read as follows:
“Maintain
during each period set forth below a Fixed Charge Coverage Ratio
equal to or greater than the ratio set forth below with respect to such
period:
From and
including November 4, 2009 until
and
including March 30,
2010 1.05
to 1.00
From and
including March 31, 2010 until
and
including June 29,
2010
1.10 to 1.00
From and
including June 30, 2010 until
and
including September 29,
2010
1.20 to 1.00
From and
including September 30, 2010 and
thereafter 1.25
to 1.00”
(c) The
first sentence of subsection (k) of Section 5.1 of the Original Credit Agreement
is hereby amended in its entirety to read as follows:
“Maintain
during each period set forth below a Leverage Ratio equal to or less than the
ratio set forth below with respect to such period:
From and
including November 4, 2009 until
and
including September 29,
2010 2.75
to 1.00
From and
including September 30, 2010 and
thereafter 2.50
to 1.00”
2.3. Negative
Covenants.
(a)
Subsection (a) of Section 5.2 of the Original Credit Agreement is hereby amended
in its entirety to read as follows:
“(a) Minimum Consolidated
Tangible Net Worth. Permit, (i) as of the last day of the
fiscal quarters ending December 31, 2009 and March 31, 2010, Parent’s
Consolidated Tangible Net Worth to be less than $80,000,000 and (ii) as of the
last day of the fiscal quarters ending June 30, 2010, September 30, 2010,
December 31, 2010, and each fiscal quarter thereafter, Parent’s Consolidated
Tangible Net Worth to be less than $75,000,000.”
(b) Subsection
(c)(viii) of Section 5.2 of the Original Credit Agreement is hereby amended in
its entirety to read as follows:
“(viii)
expenditures for acquisitions involving a Person other than a Company in an
amount not to exceed $3,500,000 during any fiscal year of
Borrower.”
(c) Section
(h) of Section 5.2 of the Original Credit Agreement is hereby amended in its
entirety to read as follows:
“(h) Capital
Expenditures. Permit the aggregate amount of all Capital
Expenditures made by the Companies, during any twelve (12) month period (net of
the proceeds of the sale or exchange of any fixed assets), to exceed
$12,500,000.”
2.4. Schedules and
Exhibits. Schedule 1, Lenders Schedule, and Exhibit A ,
Promissory Note, to this Amendment are hereby substituted for Schedule 1 and
Exhibit A, respectively, to the Original Credit Agreement.
ARTICLE
III.
Conditions of
Effectiveness
3.1. Effective
Date. This Amendment shall become effective as of the date
first above written when and only when Comerica shall have received, at
Comerica’s office,
(a) a
duly executed counterpart of this Amendment and the Renewal Note,
(b) a
duly executed Consent and Agreement from Guarantor in the form of Annex I
hereto,
(c) a
duly executed certificate of the secretary and chief financial officer of
Borrower certifying that (i) resolutions of its board of directors attached to
the Original Omnibus Certificate authorizing the execution, delivery, and
performance of this Amendment and identifying the officers authorized to sign
such instrument are in full force and effect, (ii) the specimen signatures of
the officers so authorized which were attached to the Original Omnibus
Certificate are true and correct, and (iii) the certificate of incorporation and
all amendments thereto and the bylaws and all amendments thereto of
Borrower attached to the Original Omnibus Certificate are in full force and
effect,
(d) a
payment of an amendment fee by Borrower to Comerica in the amount of $62,500,
and
(e) each
other document to be executed and delivered by Borrower pursuant hereto or
thereto.
ARTICLE
IV.
Representations and
Warranties
4.1. Representations and
Warranties of Borrower. In order to induce Comerica to enter
into this Amendment,
Borrower represents and warrants to Comerica that:
(a) The
representations and warranties contained in Article IV of the Original Credit
Agreement are true and correct at and as of the time of the effectiveness
hereof;
(b) Borrower
is duly authorized to execute and deliver this Amendment and the other Amendment
Documents and is and will continue to be duly authorized to borrow and to
perform its obligations under the Credit Agreement. Borrower has duly
taken all corporate action necessary to authorize the execution and delivery of
this Amendment and the other Amendment Documents and to authorize the
performance of the obligations of Borrower hereunder and
thereunder;
(c) The
execution and delivery by Borrower of this Amendment and the other Amendment
Documents, the performance by Borrower of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby do not
and will not conflict with any provision of law, statute, rule or regulation or
of the certificate of incorporation and bylaws of Borrower, or of any material
agreement, judgment, license, order or permit applicable to or binding upon
Borrower, or result in the creation of any lien, charge or encumbrance upon any
assets or properties of Borrower. Except for those which have been
duly obtained, no consent, approval, authorization or order of any court or
governmental authority or third party is required in connection with the
execution and delivery by Borrower of this Amendment and the other Amendment
Documents or to consummate the transactions contemplated hereby and
thereby;
(d) When
duly executed and delivered, each of this Amendment and the other Amendment
Documents will be a legal and binding instrument and agreement of Borrower,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency and similar laws applying to creditors’ rights generally and by
principles of equity applying to creditors’ rights generally; and
(e) The
audited annual consolidated financial statements of Borrower dated as of
December 31, 2008 and the unaudited quarterly consolidated financial statements
of Borrower dated as of June 30, 2009 fairly present the consolidated financial
position at such dates and the consolidated statement of operations and the
changes in consolidated financial position for the periods ending on such dates
for Borrower. Copies of such financial statements have heretofore
been delivered to Comerica. Since such dates no material adverse
change has occurred in the financial condition or businesses or in the
consolidated financial condition or businesses of Borrower.
ARTICLE
V.
Miscellaneous
5.1. Ratification of
Agreement. The Original Credit Agreement as hereby amended is
hereby ratified and confirmed in all respects. Any reference to the
Credit Agreement in any Loan Document shall be deemed to refer to this Amendment
also. Any reference to the Note in any other Loan Document shall be
deemed to be a reference to the Renewal Note issued and delivered pursuant to
this Amendment. The execution, delivery and effectiveness of this
Amendment and the other Amendment Documents shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Comerica
under the Credit Agreement or any other Loan Document nor constitute a waiver of
any provision of the Credit Agreement or any other Loan Document.
5.2. Survival of
Agreements. All representations, warranties, covenants and
agreements of Borrower herein shall survive the execution and delivery of this
Amendment and the performance hereof, and shall further survive until all of the
Obligations are paid in full. All statements and agreements contained
in any certificate or instrument delivered by Borrower hereunder or under the
Credit Agreement to Comerica shall be deemed to constitute representations and
warranties by, or agreements and covenants of, Borrower under this Amendment and
under the Credit Agreement.
5.3. Loan
Documents. This Amendment and the other Amendment Documents
are each a Loan Document, and all provisions in the Credit Agreement pertaining
to Loan Documents apply hereto and thereto.
5.4. Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Texas and any applicable laws of the
United States of America in all respects, including construction, validity and
performance.
5.5. Counterparts;
Fax. This Amendment may be separately executed in counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed shall be deemed to constitute one and the same
Amendment. This Amendment may be duly executed by facsimile or other
electronic transmission.
THIS
AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[The
remainder of this page is intentionally left blank.]
IN
WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
FFE
TRANSPORTATION SERVICES, INC.
By: /s/ Xxxxxx X.
Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior
Vice President and Chief Financial Officer
COMERICA
BANK
By: /s/ Xxxxxx
Xxxxxx
Xxxxxx Xxxxxx
Vice President
ANNEX
I
CONSENT AND
AGREEMENT
Each of
the undersigned Guarantors hereby (i) consents to the provisions of this
Amendment and the transactions contemplated herein, (ii) ratifies and
confirms the Second Amended and Restated Guaranty and Second Amended and
Restated Security Agreement, each dated as of September 2, 2009, made by it for
the benefit of Comerica pursuant to the Credit Agreement, (iii) ratifies
and confirms all other Loan Documents made by it for the benefit of Comerica,
(iv) agrees that all of its respective obligations and covenants thereunder
shall remain unimpaired by the execution and delivery of this Amendment and the
other documents and instruments executed in connection herewith, and
(v) agrees that such Guaranty, such Security Agreement and such other Loan
Documents shall remain in full force and effect.
FROZEN
FOOD EXPRESS INDUSTRIES, INC.
By: /s/ Xxxxxx X.
Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior
Vice President and Chief Financial Officer
XXXXXXX
CORPORATION
By: /s/ Xxxxxxx X.
Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary
FX
HOLDINGS, INC.
By: /s/ Xxxxxxx X.
Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary
XXXX
MOTOR LINES, INC.
By: /s/ Xxxxxxx X.
Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary
COMPRESSORS
PLUS, INC.
By: /s/ Xxxxxxx X.
Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary
FFE
LOGISTICS, INC.
By: /s/ Xxxxxxx X.
Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary
XXXXXXX,
LLC
By: /s/ Xxxxxxx X.
Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Secretary
SCHEDULE
1.1
TO
CREDIT
AGREEMENT
FFE
TRANSPORTATION SERVICES, INC.
Commitments
Comerica
Bank $25,000,000
Total
$25,000,000
EXHIBIT
A
REVOLVING
NOTE
REVOLVING
CREDIT NOTE
$25,000,000
Dallas,
Texas
November
4, 2009
FOR VALUE
RECEIVED, the undersigned, FFE TRANSPORTATION SERVICES, INC. (“Borrower”), a
Delaware corporation, hereby unconditionally promises to pay to the order of
COMERICA BANK (“Bank”), at the
principal offices of Comerica Bank, in Dallas, Texas or at such other address in
Dallas County, Texas, as may be designated by Administrative Agent from time to
time, the lesser of (i) the principal sum of TWENTY FIVE MILLION AND 00/100
Dollars ($25,000,000), or (ii) the aggregate unpaid principal amount of all
Loans made by Bank to Borrower pursuant to Article II of the Agreement (as such
term is defined below), together with interest on the unpaid principal balance
from the date hereof until maturity at such varying rates per annum (but in no
event in excess of the Highest Lawful Rate) as determined in accordance with the
provisions of Article II of the Agreement. Borrower promises to pay
such principal of, and interest on, this Note on the dates and in the manner
provided in the Agreement. If not sooner paid, the unpaid principal
balance of this Note and all accrued interest hereon shall be due and payable in
full on the Termination Date. All such payments of both principal and
interest shall be made in lawful money of the United States of America and in
immediately available funds.
All Loans
made by Bank to Borrower pursuant to the Agreement and all payments of the
principal thereof may be noted by Bank on schedules from time to time attached
hereto, or on a continuation of such schedules or otherwise recorded in Bank’s
records; provided, however, that the failure of Bank to make any such notation
shall not limit or otherwise affect the obligations of Borrower hereunder or
under the Agreement.
This Note
has been executed and delivered pursuant to the terms of that certain Second
Amended and Restated Credit Agreement dated as of September 2, 2009, among
Comerica Bank, as Administrative Agent and as Collateral Agent, Borrower, Frozen
Food Express Industries, Inc., Xxxxxxx Corporation, FX Holdings, Inc., Xxxx
Motor Lines, Inc., Compressors Plus, Inc., FFE Logistics, Inc., and
Xxxxxxx LLC (as the same may be renewed, extended, amended, modified and/or
restated from time to time, the “Agreement”), and is
one of the “Revolving
Credit Notes” referred to therein. The holder of this Note is
entitled to the benefits of the Agreement and may enforce the agreements
contained therein and exercise the remedies provided for thereby, and reference
is hereby made to the Agreement for a statement of the payment and prepayment
rights and obligations of Borrower and for a statement of the events upon which
and the terms and conditions under which the maturity of this Note may be
accelerated.
All
defined terms used herein shall have the meanings respectively assigned to them
in the Agreement.
If this
Note is placed in the hands of an attorney for collection, or if it is collected
through any legal proceedings, at law or in equity, or in bankruptcy,
receivership or other court proceedings, Borrower agrees to pay all costs of
collection, including, but not limited to, court costs and reasonable attorneys’
fees.
Borrower
and each surety, endorser, guarantor and other party ever liable for payment of
any sums of money payable on this Note, jointly and severally waive presentment
and demand for payment, protest, notice of protest, intention to accelerate,
acceleration and nonpayment, or other notice of default, and all other notices
other than as expressly provided in the Agreement, and agree that their
liability under this Note shall not be affected by any renewal or extension in
the time of payment hereof, or by any indulgences, or by any release or change
in any security for the payment of this Note, and each such Borrower, surety,
endorser, guarantor and other party hereby consents to any and all renewals,
extensions, indulgences, releases or changes directly affecting any such party
other than itself, regardless of the number of such renewals, extensions,
indulgences, releases or changes.
THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH APPLICABLE FEDERAL
LAW AND THE LAWS OF THE STATE OF TEXAS.
It is the
intention of the parties hereto to conform strictly to usury laws applicable to
Bank. Accordingly, if the transactions contemplated hereby would be
usurious under applicable law (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable notwithstanding the provisions of the Agreement), then in
the event, notwithstanding anything to the contrary in this Note, the Agreement
or in any agreement entered into in connection with or as security for this
Note, it is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under law applicable to Bank that is contracted for, taken,
reserved, charged or received under this Note, the Agreement or under any of the
other aforesaid agreements or otherwise in connection with this Note shall under
no circumstances exceed the maximum amount allowed by such applicable law, and
any excess shall be credited by Bank on the principal amount of the Obligations
(or, if the principal amount of the Obligations shall have been paid in full,
refunded to Borrower); and (ii) in the event that the maturity of this Note is
accelerated by reason of an election of Administrative Agent or any Bank
resulting from any Default under the Agreement or otherwise, or in the event of
any required or permitted prepayment, then such consideration that constitutes
interest under law applicable to Bank may never include more than the maximum
amount allowed by such applicable law, and excess interest, if any, provided for
in this Note, the Agreement or otherwise shall be canceled automatically as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by Bank on the principal amount of the Obligations (or, if the
principal amount of the obligations shall have been paid in full, refunded by
Bank to Borrower).
The
indebtedness evidenced by this Note is in renewal, extension and modification,
but not in extinguishment or novation, of the principal indebtedness evidenced
by that certain promissory note dated September 2, 2009, in the original
principal amount of $35,000,000 executed by the undersigned payable to the order
of the Bank.
| FFE TRANSPORTATION SERVICES, INC. | |||
| By: | |||
| Xxxxxx X. Xxxxxxx | |||
| Senior Vice President and Chief Financial Officer |
