FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.3
FIRST AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated
December 22, 2009, is entered into by and among XXXX, INC., a Delaware corporation (the
“Borrower”), the undersigned Banks, and BANK OF OKLAHOMA, NATIONAL ASSOCIATION, as Administrative
Agent.
RECITALS:
A. The Borrower, the Banks, Bank of Oklahoma, National Association, as Lead Arranger and as
Administrative Agent and Collateral Agent, Bank of America, N.A., as successor by merger to LaSalle
Bank National Association, as Syndication Agent, and U.S. Bank National Association, as
Documentation Agent, are parties to that certain Third Amended and Restated Credit Agreement dated
June 26, 2009 (the “Credit Agreement”). Capitalized terms used in this Amendment that are not
otherwise defined herein have the respective meanings assigned to them in the Credit Agreement.
B. The Borrower has requested that certain provisions of the Credit Agreement be amended upon
consummation of a Successful Stock Offering (as defined in Paragraph 2.G below).
C. The undersigned Banks have agreed to such request, subject to the terms and conditions set
forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
amend the Credit Agreement, effective as of consummation of a Successful Stock Offering, as
follows:
1. REVOLVING CREDIT COMMITMENT. The Revolving Credit Commitment shall be permanently
reduced from $160,000,000 to $120,000,000. Accordingly, (i) the reference to “$160,000,000”
appearing in the definition of “Revolving Credit Commitment” in Section 1.1.113 of the Credit
Agreement is hereby replaced with a reference to “$120,000,000,” and (ii) in order to
proportionately reduce each Bank’s Commitment to correspond with the reduction in the Revolving
Credit Commitment, each Bank’s Commitment is hereby reduced to the amount set forth on Schedule
I attached hereto.
2. AMENDMENTS TO DEFINITIONS APPEARING IN SECTION 1.1 OF THE CREDIT AGREEMENT. The
following changes are made to the definitions appearing in Section 1 of the Credit Agreement (and
such defined terms shall also have the same meanings when used in this Amendment):
A. The definition of “Adjusted Covenant Period” appearing at Section 1.1.6 of the Credit
Agreement shall be amended and restated in its entirety to read as follows:
1.1.6. “Adjusted Covenant Period” means the period commencing on the Effective
Date and ending on March 31, 2011 (or such later date as the Borrower and the
Majority Banks may mutually establish).
B. The definition of “EBITDAR” appearing at Section 1.1.42 of the Credit Agreement shall be
amended and restated in its entirety to read as follows:
1.1.42 “EBITDAR” means, for any period, the sum of Net Income plus, to the
extent deducted in the determination of Net Income, (i) all provisions for federal,
state and other income tax of the Borrower and its Subsidiaries, (ii) Interest
Expense, (iii) provisions for depreciation and amortization, and (iv) Rental
Expense, excluding (a) any gains or losses resulting from the sale, conversion or
other disposition of capital assets (i.e., assets other than current assets), (b)
any gains resulting from the write-up of assets, (c) any earnings of any Person
acquired by the Borrower or any Subsidiary through purchase, merger or consolidation
or otherwise for any period prior to the date of Acquisition, (d) any deferred
credit representing the excess of equity in any such Subsidiary at the date of
Acquisition over the cost of the investment in such Subsidiary, (e) any gains or
losses from the acquisition of securities or the retirement or extinguishment of
Indebtedness, (f) any gains on collections from the proceeds of insurance policies
or settlements, (g) 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, (h) any income, gain or loss during such period from any discontinued
operations or the disposition thereof, from any extraordinary items or from any
prior period adjustments, and (i) any interest of the Borrower or any Subsidiary in
the undistributed earnings (but not losses) of any Person which is not a Subsidiary
of the Borrower, which in the aggregate will be deducted only to the extent they are
positive, adjusted for minority interests in Subsidiaries. Furthermore, for all
periods ending on or before Xxxxx 00, 0000, XXXXXXX shall also include (and shall be
increased by the amount of) the net proceeds of a Successful Stock Offering.
C. The definition of “Excess Cash on Hand” appearing at Section 1.1.49 of the Credit Agreement
shall be amended and restated in its entirety to read as follows:
1.1.49 “Excess Cash on Hand” means, as of any date, the amount (but only if a
positive number) by which total cash and cash equivalents (except for cash and cash
equivalents encumbered by Liens or restrictions in favor of Persons other than the
Collateral Agent) of the Borrower and its Subsidiaries on hand on such date exceeds
the sum of the following:
| (i) | $5,000,000; plus | ||
| (ii) | the total principal amount of all Loans outstanding hereunder on such date; plus |
2
| (iii) | for purposes of any financial ratios used in this Agreement for which “Excess Cash on Hand” is a component in the calculation thereof during the Adjusted Covenant Period (but not for purposes of calculating the Available Borrowing Base during the Adjusted Covenant Period), the total amount received by the Borrower in cash as net proceeds from a Successful Stock Offering. |
D. The definition of “Maintenance Capital Expenditures” appearing at Section 1.1.72 of the
Credit Agreement shall be deleted in its entirety and in its place, Section 1.1.72 shall now read
“[INTENTIONALLY OMITTED].”
E. The definition of “Net Cash Flow” appearing at Section 1.1.79 of the Credit Agreement shall
be amended and restated in its entirety to read as follows:
1.1.79 “Net Cash Flow” means Adjusted EBITDAR less the sum of Rental Expense,
cash taxes, Unfinanced Capital Expenditures, distributions (to the extent payment of
such distributions was consented to by the Majority Banks), and treasury stock
purchases (to the extent permitted by Section 7.13(b)).
F. The definition of “Total Debt Service” appearing at Section 1.1.133 of the Credit Agreement
shall be amended and restated in its entirety to read as follows:
1.1.133. “Total Debt Service” means for any period means the sum of (i)
Interest Expense, (ii) scheduled principal payments on long-term debt (whether or
not scheduled principal payments are prepaid), and (iii) Capital Lease payments.
G. A new definition of “Successful Stock Offering” shall be added to the Credit Agreement at
Section 1.1.141 reading as follows:
“Successful Stock Offering” means the closing and settlement of funds on or
before February 16, 2010, of an offering of common stock of the Borrower resulting
in cash proceeds to the Borrower (net of placement agent fees) in excess of
$25,000,000. All references to the net proceeds of a Successful Stock Offering
shall mean the total issuance proceeds, net of placement agent fees only.
H. A new definition of “Unfinanced Capital Expenditures” shall be added to the Credit
Agreement at Section 1.1.142 reading as follows:
“Unfinanced Capital Expenditures” means Capital Expenditures by the Borrower
and its Subsidiaries during a particular period of determination financed with funds
other than funds financed through Revolving Credit Loans or with the proceeds of a
Successful Stock Offering.
3
3. FINANCIAL COVENANT AMENDMENTS.
A. Section 6.1 of the Credit Agreement shall be amended and restated in its entirety to read
as follows:
6.1 Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge Coverage
Ratio, determined as of the last day of each fiscal quarter beginning with the fiscal
quarter ending December 31, 2009, for the four fiscal quarters then ended, to be less than
the minimum required Fixed Charge Coverage Ratio set forth below.
| Minimum Required Fixed Charge | ||
| Period | Coverage Ratio | |
| December 31, 2009, March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011 |
1.00 to 1.00 | |
| June 30, 2011 and thereafter | 1.10 to 1.00 |
B. Section 6.2 of the Credit Agreement shall be amended and restated in its entirety to read
as follows:
6.2 Leverage Ratio. The Borrower will not permit the Leverage Ratio, determined as of
the last day of each fiscal quarter beginning with the fiscal quarter ending December 31,
2009, to be greater than the maximum permitted Leverage Ratio set forth below.
| Maximum Permitted Leverage | ||
| Calculation Date | Ratio | |
| December 31, 2009, March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011 |
4.25 to 1.00 | |
| June 30, 2011 and thereafter | 3.25 to 1.00 |
C. Section 6.3 of the Credit Agreement shall be amended and restated in its entirety to read
as follows:
6.3 Adjusted Leverage Ratio. The Borrower will not permit the Adjusted Leverage Ratio,
determined as of the last day of each fiscal quarter beginning with the fiscal quarter
ending December 31, 2009, to be greater than the maximum permitted Adjusted Leverage Ratio
set forth below.
| Maximum Permitted Adjusted | ||
| Calculation Date | Leverage Ratio | |
| December 31, 2009, March 31, 2010 and June 30, 2010 |
4.75 to 1.00 |
4
| Maximum Permitted Adjusted | ||
| Calculation Date | Leverage Ratio | |
| September 30, 2010, December 31, 2010 and March 31, 2011 |
5.00 to 1.00 | |
| June 30, 2011 and thereafter | 3.75 to 1.00 |
D. A new Section 6.6 shall be added to the Credit Agreement reading as follows:
6.6 Rental Expense. The Borrower shall not allow aggregate Rental Expense,
determined as of the last day of each fiscal quarter for the twelve months then
ending, beginning with the fiscal quarter ending December 31, 2009, and continuing
through March 31, 2011, to exceed $19,000,000.
4. OTHER AMENDMENTS TO CREDIT AGREEMENT.
A. Section 5.2.3 of the Credit Agreement shall be amended and restated in its entirety to read
as follows:
5.2.3 The Borrower will permit the Administrative Agent, through its authorized
agents and representatives (who need not be employees of the Administrative Agent),
to conduct periodic field audits of the Borrower and its Subsidiaries and to review
its operations, books and records, credit policies, charge-off policies, collection
procedures, methodology for eligibility calculations, and other matters relating to
the value and maintenance of the Eligible Accounts and the Borrower’s financial
reporting. Field audits will be conducted semi-annually. Additional field audits
may be conducted at any time in the Administrative Agent’s reasonable exercise of
its sole discretion. The Borrower will pay all reasonable costs and expenses
actually incurred by the Administrative Agent in connection with each field audit;
provided, however, that prior to the occurrence of any Default or
Matured Default, the Borrower shall not be required to pay the costs of more than
two field audits per year.
B. Section 5.2.4 of the Credit Agreement shall be amended and restated in its entirety to read
as follows:
5.2.4 The Borrower will permit the Administrative Agent to order and obtain
desktop appraisals of the Borrower’s Rolling Stock (meaning appraisals of limited
scope whereby the appraiser estimates the value of the Rolling Stock from his or her
desk based on a current listing supplied to him or her, but without conducting a
physical inspection of the Rolling Stock). Each desk-top appraisal shall be
conducted by a qualified appraiser selected by the Administrative Agent and shall
set forth the appraiser’s estimate of the Net Orderly Liquidation Value of the
Borrower’s Rolling Stock. Desktop appraisals will be obtained semi-annually.
Additional desktop appraisals may be conducted at any time in the Administrative
Agent’s reasonable exercise of its sole discretion. The Borrower will pay all
reasonable costs and expenses actually incurred by the Administrative Agent in
connection with each desktop appraisal; provided, however, that prior to the
5
occurrence of any Default or Matured Default, the Borrower shall not be
required to pay the costs of more than two desktop appraisals per year.
5. AMENDMENT FEE. On the date of consummation of a Successful Stock Offering, the Borrower
shall pay an amendment fee to each Bank that is a party to this Amendment in an amount equal to
0.25% (25 basis point) of such Bank’s reduced Commitment as set forth on Schedule I hereto.
6. CONDITIONS PRECEDENT; POST-CLOSING CONDITIONS.
A. This Amendment shall not become effective, or legally binding on the parties to the Credit
Agreement, and neither the Borrower not the Banks shall have any rights under this Amendment, until
(i) the Borrower shall have entered into definitive stock purchase agreements for the issuance and
sale of shares of its common stock which upon consummation would result in net proceeds to the
Borrower of more than $25,000,000 in the aggregate, and (ii) the Administrative Agent shall have
received each of the following documents:
(a) a counterpart of this Amendment, duly executed by the Majority Banks, the Borrower
and SMF; and
(b) a copy of that certain “First Amendment to Amended and Restated Master Shelf
Agreement” dated as of the date hereof and in the form annexed hereto (the “Prudential
Amendment”), duly executed by the Borrower, SMF and Prudential.
Notwithstanding the foregoing, it is expressly understood and agreed that the modifications to the
Credit Agreement set forth in Paragraphs 1, 2, 3 and 4 hereof shall become effective upon, and only
upon, (i) consummation of a Successful Stock Offering and (ii) payment of the amendment fees set
forth in Paragraph 5 hereof.
B. Not later than 15 days after the execution and delivery of this Amendment, the Borrower
shall deliver to the Administrative Agent copies of the definitive stock purchase agreements for
the issuance and sale of shares of its common stock resulting in aggregate net proceeds to the
Borrower of more than $25,000,000.
C. Not later than 15 days after consummation of a Successful Stock Offering, the Borrower
shall (i) prepay the principal and interest installments that would otherwise be due and payable
during 2010 on the Prudential Term Notes in the aggregate sum of $24,498,125, and (ii) pay to the
Administrative Agent the sum of $2,000,000, for the pro-rata benefit of all Banks, in partial
prepayment of and for application to the Letter of Credit fees that would otherwise be due and
payable during 2010 under Section 2.2.4 of the Credit Agreement (it being understood that any
remaining fees due under Section 2.2.4 of the Credit Agreement for 2010 will be paid during the
fourth quarter of 2010).
6
7. REPRESENTATIONS AND WARRANTIES.
A. The Borrower confirms that all representations and warranties made by it in the Credit
Agreement are true and correct in all material respects and will be true and correct upon
consummation of a Successful Stock Offering, and all of such representations and warranties are
hereby remade and restated on the date hereof and on the date of consummation of a Successful Stock
Offering and shall survive the execution and delivery of this Amendment and consummation of a
Successful Stock Offering.
B. The Borrower further represents and warrants that:
(i) The Borrower is duly authorized and empowered to execute, deliver and perform this
Amendment and the Credit Agreement (as amended by this Amendment), and all action necessary
for such execution, delivery and performance has been duly and validly taken;
(ii) This Amendment and the Credit Agreement (as amended by this Amendment) are valid
and legally binding obligations of the Borrower, enforceable in accordance with their
respective terms (subject to any applicable bankruptcy, insolvency or other laws affecting
the enforcement of creditors’ rights generally);
(iii) The execution, delivery and performance by the Borrower of this Amendment do not
and will not (a) conflict with, or result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in any violation of any of its charter or
by-laws, or any material agreement to which it is a party or by which it is bound, or any
judgment, decree, order, writ, injunction, or law to which it is subject, (b) result in the
creation or imposition of any Lien on any Property of Borrower or any of its Subsidiaries
pursuant to the provisions of any mortgage, indenture, security agreement, contract,
undertaking or other agreement other than the Liens in favor of the Collateral Agent created
by the Collateral Documents, or (c) require any authorization, consent, license, approval or
authorization of or other action by, or notice or declaration to, or registration with, any
governmental authority, or, to the extent that any such consent or other action may be
required, it has been validly procured or duly taken; and
(iv) All financial statements, balance sheets, income statements and financial data
which have been or are hereafter furnished to the Administrative Agent by the Borrower do,
and as to subsequent financial statements will, fairly represent Borrower’s financial
condition as of the dates for which the same are furnished, and will be complete insofar as
completeness may be necessary to give the Administrative Agent a true and accurate knowledge
of the subject matter. Since the date of the last such financial statements or other
financial data provided to the Administrative Agent, no material adverse change has occurred
in the operations or condition, financial or otherwise, of, nor, has the Borrower incurred,
any material liabilities or made any material investment or guarantees, direct or
contingent, in any single case or in the aggregate, which has not been disclosed to the
Administrative Agent.
7
8. REAFFIRMATION OF GUARANTY. SMF hereby ratifies, confirms, and acknowledges that its
obligations under the Restated Guaranty Agreement dated as of June 26, 2009 (the “Guaranty”), are
in full force and effect and that SMF continues to unconditionally and irrevocably, jointly and
severally, guarantee the full and punctual payment, when due, whether at stated maturity or earlier
by acceleration or otherwise, all of the Obligations. Nothing contained herein to the contrary
shall release, discharge, modify, change or affect the original liability of SMF under the
Guaranty. SMF hereby acknowledges that its execution and delivery of this Amendment does not
indicate or establish an approval or consent requirement by SMF in connection with the execution
and delivery of amendments to the Credit Agreement or any of the other Loan Documents.
9. CONSENT TO PRUDENTIAL AMENDMENT. The Administrative Agent and the undersigned Banks
hereby (i) acknowledge and consent to the execution, delivery and performance by the Borrower and
SMF of the Prudential Amendment, and (ii) acknowledge and consent, notwithstanding anything
contained in the Credit Agreement or the Intercreditor Agreement to the contrary, to the Borrower’s
prepaying the principal and interest installments that would otherwise be due and payable during
2010 on the Prudential Term Notes in the aggregate sum of $24,498,125.
10. MISCELLANEOUS.
A. From and after the date of the consummation of a Successful Stock Offering, all references
to the Credit Agreement shall mean the Credit Agreement as modified by this Amendment. The Credit
Agreement, as amended, modified and supplemented by this Amendment upon the consummation of a
Successful Stock Offering, shall continue in full force and effect in accordance with its terms and
is hereby reaffirmed in every respect. To the extent that the terms of this Amendment are
inconsistent with the terms of the Credit Agreement, this Amendment shall control and the Credit
Agreement shall be amended, modified or supplemented so as to give full effect to the transactions
contemplated by this Amendment.
B. The form of Officer’s Certificate annexed to this Amendment is hereby substituted for
Exhibit E to the Credit Agreement.
C. The descriptive headings of the several paragraphs of this Amendment are inserted for
convenience only and shall not be used in the construction of the content of this Amendment.
D. The Borrower agrees to pay all reasonable out-of-pocket expenses, including, without
limitation, attorney’s fees and expenses, incurred by the Administrative Agent in connection with
the negotiation and preparation of this Amendment (whether or not a Successful Stock Offering is
consummated).
E. This Amendment shall be construed in accordance with the laws of the State of Oklahoma.
8
F. This Amendment may be executed in multiple counterparts, each of which shall be deemed an
original hereof and all of which shall be but one and the same original instrument. Transmission
by facsimile or portable electronic format (pdf) of an executed counterpart of this Amendment by
any party shall be deemed to constitute due and sufficient delivery of such counterpart and such
facsimile or pdf shall be deemed to be an original counterpart of this Amendment.
G. This Amendment shall not establish a course of dealing or be construed as evidence of any
willingness or commitment on the part of the Administrative Agent or of any Bank to agree to other
or future amendments to or modifications of the Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON FOLLOWING PAGES.]
SIGNATURES APPEAR ON FOLLOWING PAGES.]
9
IN WITNESS WHEREOF, the Borrower and the undersigned Banks have caused this Amendment to be
duly executed in multiple counterparts, each of which shall be considered an original, on the date
first set forth above.
| Borrower: | XXXX, INC. |
|||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Xxxxx X. Xxxxx, | ||||
| Vice President — Finance Chief Financial Officer and Secretary |
||||
| Guarantor: | XXXX MOTOR FREIGHT LINE, LLC |
|||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Vice President — Finance Chief Financial Officer and Secretary |
|||
Signature Page to First Amendment to Third
Amended and Restated Credit Agreement
Amended and Restated Credit Agreement
| BANK OF OKLAHOMA, NATIONAL ASSOCIATION, as a
Bank and as Administrative Agent |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Xxxxxx X. Xxxxxx, Senior Vice President | ||||
Signature Page to First Amendment to Third
Amended and Restated Credit Agreement
Amended and Restated Credit Agreement
| U.S. BANK NATIONAL ASSOCIATION |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Assistant Vice President | |||
Signature Page to First Amendment to Third
Amended and Restated Credit Agreement
Amended and Restated Credit Agreement
| JPMORGAN CHASE BANK, N.A. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Xxxxxx X. Xxxxxxxx, Senior Underwriter | ||||
Signature Page to First Amendment to Third
Amended and Restated Credit Agreement
Amended and Restated Credit Agreement
| SUNTRUST BANK |
||||
| By | /s/ Xxxxx Xxxxxxx | |||
| Xxxxx Xxxxxxx, Portfolio Manager | ||||
Signature Page to First Amendment to Third
Amended and Restated Credit Agreement
Amended and Restated Credit Agreement
Schedule I
BANKS’ COMMITMENTS
| BANK | COMMITMENT | |||
BANK OF OKLAHOMA,
NATIONAL ASSOCIATION |
$ | 26,250,000 | ||
U.S. BANK NATIONAL ASSOCIATION |
$ | 26,250,000 | ||
JPMORGAN CHASE BANK, N.A. |
$ | 17,250,000 | ||
BANK OF AMERICA, N.A. |
$ | 26,250,000 | ||
SUNTRUST BANK |
$ | 24,000,000 | ||
