EXHIBIT 10.1
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT
THIS CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT ("Amendment"),
dated as of March 31, 2003 (the "Amendment Date"), is among EGL, Inc., each of
its Subsidiaries party hereto, Bank of America, National Association, in its
capacity as collateral and administrative agent for the Lenders, and each of the
lending institutions party hereto.
RECITALS:
A. The Loan Parties, the Lenders, and the Agent are parties to the
certain Credit Agreement dated as of December 20, 2001, as amended by the First
Amendment to Credit Agreement dated as of March 7, 2002 and the Consent and
Second Amendment to Credit Agreement dated as of October 14, 2002 (the "Credit
Agreement") pursuant to which the Lenders have provided certain credit
facilities to the Borrowers.
B. The Loan Parties have requested that the Lenders consent to the
acquisition by EGL Eagle Global Logistics L.P. (the "Purchaser") of
substantially all of the business operations and assets of Sig X. Xxxxxxxx,
Inc., a Florida corporation d/b/a Miami International Forwarders and MIF
("MIF"), Chamsey Transfer, Inc., a Florida corporation ("Chamsey"), and Surf
Carriers, Inc., a Florida corporation ("Surf Carriers").
C. The Loan Parties have proposed that the Credit Agreement be amended
in connection with such acquisition.
D. The undersigned Lenders are willing to consent to such acquisition
and to amend the Credit Agreement as, and subject to the terms and conditions,
provided hereinbelow.
NOW, THEREFORE, BE IT RESOLVED, THAT, in consideration of the premises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings herein as
in the Credit Agreement, as amended hereby.
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 1
ARTICLE 2
Consent to the MIF Acquisition and the Guaranty of Debt of Ashton Leasing
Section 2.1 Conditional Consent to the MIF Acquisition and Related Matters.
(a) Subject to the succeeding proviso, and notwithstanding anything to
the contrary contained in Section 7.10 of the Credit Agreement or clause (c) of
the definition of the term "Permitted Acquisition", the Majority Lenders hereby
consent to the acquisition by the Purchaser of substantially all of the business
operations and assets of each of MIF, Chamsey and Surf Carriers (the "MIF
Acquisition") in accordance with the terms and provisions of that certain Asset
Purchase Agreement dated as of March 31, 2003, among the Purchaser, MIF,
Chamsey, Surf Carriers and certain stockholders of MIF, Chamsey and Surf
Carriers (the "Asset Purchase Agreement") in the form attached hereto as Third
Amendment Exhibit A, and the Majority Lenders hereby waive any Default or Event
of Default occurring under Section 7.10 of the Credit Agreement which would, but
for the consent contained herein, consist of consummation of the MIF Acquisition
(it being agreed and understood by the parties hereto that, except as expressly
provided herein, such waiver shall not relate to any consequences of the MIF
Acquisition, but relates only to the act of consummation of the MIF Acquisition
itself) or result directly from compliance with the terms of the Asset Purchase
Agreement as they relate to the MIF Acquisition; provided, however, that such
consent is conditioned upon:
(i) the MIF Acquisition being consummated in accordance with
the Asset Purchase Agreement;
(ii) the satisfaction of each of the requirements set forth in
clauses (a), (e), (f), (g) and (h) of the definition of the term
"Permitted Acquisition";
(iii) the obligation to pay the $10,000,000 deferred portion
of the purchase price payable by the Purchaser in accordance with
Section 2.3 of the Asset Purchase Agreement (the "Deferred Payment
Obligation") not being secured by any Lien and being subject to a
subordination agreement in form and substance satisfactory to the Agent
executed by the Purchaser, any guarantor of the obligations of the
Purchaser under the Asset Purchase Agreement, the "Sellers" (as such
term is defined in the Asset Purchase Agreement) and the Agent;
(iv) the obligation of the Purchaser to pay the Year 1 Earnout
and the Year 2 Earnout (each as defined in the Asset Purchase
Agreement) (the "Earnout Payment Obligation"), in accordance with
Section 2.4 of the Asset Purchase Agreement, not being secured by any
Lien and being subject to a subordination agreement in form and
substance satisfactory to the Agent executed by the Purchaser, any
guarantor of the obligations of the Purchaser under the Asset Purchase
Agreement, the "Sellers" (as such term is defined in the Asset Purchase
Agreement) and the Agent; and
(v) the Parent's execution and delivery to the Agent,
substantially concurrently with the consummation of the MIF
Acquisition, of a certification in form
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 2
and substance satisfactory to the Agent certifying that each of the
conditions referred to in clauses (i), (ii), (iii) and (iv) above has
been satisfied.
(b) In addition, and not withstanding anything to the contrary
contained in Section 7.10, 7.12 or 7.13 of the Credit Agreement, immediately
upon the effectiveness of the consent of the Majority Lenders to the
consummation of the MIF Acquisition as provided in clause (a) of this Section
2.1, the Majority Lenders hereby:
(i) consent to the incurrence of the Debt consisting of the
Purchaser's Deferred Payment Obligation and waive any Default or Event
of Default occurring under Section 7.13 of the Credit Agreement which
would, but for the consent contained herein, consist of the incurrence
of such Deferred Payment Obligation;
(ii) consent to the incurrence of the Debt consisting of the
Purchaser's Earnout Payment Obligation and waive any Default or Event
of Default occurring under Section 7.13 of the Credit Agreement which
would, but for the consent contained herein, consist of the incurrence
of such Earnout Payment Obligation;
(iii) consent to the Guaranty by EGL, Inc. of all the
Purchaser's obligations arising under the Asset Purchase Agreement,
including, without limitation, its Guaranty of the Deferred Payment
Obligation and the Earnout Payment Obligation, and waive any Default or
Event of Default occurring under Section 7.12 or Section 7.13 of the
Credit Agreement which would, but for the consent contained herein,
consist of the Guaranty of such obligations; and
(iv) consent to the obligation of the Purchaser to pay
interest under certain specified circumstances in accordance with
Section 9.13 of the Asset Purchase Agreement (the "Interest Payment
Obligation") and any incurrence of Debt consisting of such Interest
Payment Obligation, and waive any Default or Event of Default occurring
under Section 7.10 or 7.13 of the Credit Agreement which would, but for
the consent contained herein, consist of such Interest Payment
Obligation.
Section 2.2 Representations regarding the MIF Acquisition. Each of EGL,
Inc. and its Subsidiaries party hereto hereby represents and warrants or
covenants (as applicable) to or with the Agent and the Lenders that (a) the MIF
Acquisition is being, or will be, consummated in accordance with the Asset
Purchase Agreement and (b) each of the requirements set forth in clauses (a),
(e), (f), (g) and (h) of the definition of the term "Permitted Acquisition" is
being, or will be, satisfied in connection with the MIF Acquisition. Without
limiting the generality of the foregoing, the Purchaser hereby certifies to the
Agent and the Lenders that (i) after giving effect to the completion of the MIF
Acquisition, the Availability Without Regard to Line Constraint is not less than
$40,000,000 on a pro forma basis which includes all consideration given in
connection with the MIF Acquisition as having been paid in cash at the time of
making the MIF Acquisition and (ii) attached hereto as Third Amendment Schedule
1 is a pro forma calculation which evidences the veracity of the statement made
in the immediately preceding clause (i).
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 3
Section 2.3 Conditional Consent to the Guaranty of Debt of Ashton
Leasing. Subject to the succeeding proviso, and notwithstanding anything to the
contrary contained in Section 7.12 or Section 7.13 of the Credit Agreement, the
Majority Lenders hereby consent to the Guaranty by EGL, Inc. of the Ownership
Percentage (as hereinafter defined) of the indebtedness of Ashton Leasing, Ltd.
("Ashton") owed to Ford Motor Credit Company under that certain Master Lease and
Services Agreement (Net) dated as of August 30, 2001 between Ford Motor Credit
Company and Ashton and waive any Default or Event of Default occurring under
Section 7.12 or Section 7.13 of the Credit Agreement which would, but for the
consent contained herein, consist of such Guaranty by EGL, Inc.; provided,
however, that such consent is conditioned upon (a) the percentage of the total
amount of such indebtedness being guaranteed by EGL, Inc. not exceeding, at any
time, the percentage of the equity ownership of EGL Delaware Limited Liability
Company in Ashton (the "Ownership Percentage") at such time and (b) the
aggregate amount of such indebtedness of Ashton guaranteed by EGL, Inc. at any
time not exceeding $2,000,000 in aggregate amount. Each of EGL, Inc. and its
Subsidiaries party hereto hereby represents and warrants or covenants (as
applicable) to or with the Agent and the Lenders that each of the conditions set
forth in clauses (a) and (b) preceding is being satisfied as of the date of this
Agreement and will continue to be satisfied at all times hereafter.
ARTICLE 3
Amendments
Section 3.1 Amendment to Definition of the Term "Adjusted Tangible
Assets". Effective as of the Amendment Date, the definition of the term
"Adjusted Tangible Assets" is amended and restated to read in its entirety as
follows:
" 'Adjusted Tangible Assets' means, as applied to any Person,
all of such Person's assets except: (a) patents, copyrights,
trademarks, trade names, franchises, goodwill, and other similar
intangibles; (b) Restricted Investments; (c) unamortized debt discount
and expense; (d) assets constituting Intercompany Accounts; and (e)
fixed assets to the extent of any write-up in the book value thereof
resulting from a revaluation effective after the Closing Date;
provided, however, that, on and after the date of the consummation of
the MIF Acquisition, the amount of intangible assets of EGL Eagle
Global Logistics L.P. attributable to the assets acquired pursuant to
the MIF Acquisition for purposes of this definition shall be the
greater of (a) the remainder of (i) the actual amount of such
intangible assets recorded in accordance with GAAP as a result of the
MIF Acquisition minus (ii) $13,000,000 or (b) $10,000,000."
Section 3.2 Amendments to Annex A of the Credit Agreement. Effective as
of the Amendment Date, the following amendments are hereby made to Annex A of
the Credit Agreement:
(a) The term "MIF Acquisition" and the following definition
thereof are hereby added to Annex A of the Credit Agreement (which term
shall appear in alphabetical order in such Annex A) to read in their
entirety as follows:
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 4
" 'MIF Acquisition' means the acquisition by EGL
Eagle Global Logistics L.P. of substantially all of the
business operations and assets of Sig X. Xxxxxxxx, Inc.,
Chamsey Transfer, Inc. and Surf Carriers, Inc. as consented to
by the Majority Lenders."
(b) Clause (c) of the definition of the term "Permitted
Acquisition" is hereby amended and restated to read in its entirety as
follows:
"(b) subject to the succeeding proviso, the cash
purchase consideration paid in connection with such
acquisition does not exceed $10,000,000, and the cash purchase
consideration paid in connection with all acquisitions during
the term of this Agreement does not exceed $25,000,000;
provided, however, that the aggregate amount of cash purchase
consideration paid in connection with all acquisitions, other
than the MIF Acquisition, consummated on or after March 31,
2003 shall not exceed $5,000,000;".
ARTICLE 4
Conditions
Section 4.1 Conditions Precedent. The effectiveness of this Amendment
is subject to the satisfaction of each of the following conditions precedent:
(a) The Agent shall have received all of the following, each
dated the date of this Amendment (unless otherwise indicated), in form
and substance satisfactory to the Agent:
(i) Amendment Documents. This Amendment and any other
instrument, document, or certificate reasonably required by
the Agent to be executed or delivered by the Loan Parties in
connection with this Amendment, in each case duly executed
(the "Amendment Documents");
(ii) Additional Information. The Agent shall have
received such additional documents, instruments, and
information as the Agent may reasonably request to effect the
transactions contemplated hereby;
(iii) Amendment Fee. The Borrowers shall have paid to
the Agent, for the benefit of the Lenders executing and
delivering to the Agent a copy of this Amendment, a fee with
respect to the consents, waivers and amendments included
herein in the amount of $100,000; and
(iv) Expenses. The Borrowers shall have paid to the
Agent all fees, costs, and expenses owed to and/or incurred by
the Agent in connection with the Credit Agreement or this
Amendment.
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 5
(b) The representations and warranties contained herein, in
the Credit Agreement, and in all other Loan Documents, as amended
hereby, shall be true and correct in all material respects as of the
date hereof as if made on the date hereof except for such
representations and warranties limited by their terms to a specific
date.
(c) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all other agreements,
documents, and instruments executed and/or delivered pursuant hereto,
and all legal matters incident thereto, shall be satisfactory to the
Agent; and
(d) No Default or Event of Default shall be in existence after
giving effect to this Amendment.
ARTICLE 5
Miscellaneous
Section 5.1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and superseded
by this Amendment, the terms and provisions of the Credit Agreement and the
other Loan Documents are ratified and confirmed and shall continue in full force
and effect. Each of the Loan Parties, the Agent, and the Lenders agrees that the
Credit Agreement as amended hereby and the other Loan Documents shall continue
to be legal, valid, binding, and enforceable in accordance with their respective
terms.
Section 5.2 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agent and the Lenders that, as of the date of and
after giving effect to this Amendment, (a) the execution, delivery, and
performance of this Amendment and any and all other Amendment Documents executed
and/or delivered in connection herewith have been authorized by all requisite
action on the part of such Loan Party and will not violate such Loan Party's
organizational or governing document, (b) the representations and warranties
contained in the Credit Agreement and in the other Loan Documents are true and
correct on and as of the date hereof, in all material respects, as if made again
on and as of the date hereof except for such representations and warranties
limited by their terms to a specific date, and (c) after giving effect to this
Amendment, no Default or Event of Default exists.
Section 5.3 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan
Document, including any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Loan Documents, and no investigation by the Agent or any Lender, or any
closing, shall affect the representations and warranties or the right of the
Agent and the Lenders to rely upon them.
Section 5.4. Reference to Credit Agreement. Each of the Loan Documents,
including the Credit Agreement, the Amendment Documents, and any and all other
agreements,
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 6
documents, or instruments now or hereafter executed and delivered pursuant to
the terms hereof or pursuant to the terms of the Credit Agreement as amended
hereby, are hereby amended so that any reference in such Loan Documents to the
Credit Agreement, whether direct or indirect, shall mean a reference to the
Credit Agreement as amended hereby.
Section 5.5 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5.6 Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE
LAWS OF THE UNITED STATES.
Section 5.7 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Loan Parties, the Agent, and the Lenders and
their respective successors and assigns, except no Loan Party may assign or
transfer any of its respective rights or obligations hereunder without the prior
written consent of the Lenders.
Section 5.8 Counterparts. This Amendment may be executed in one or more
counterparts and on telecopy counterparts, each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 5.9 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 5.10 Entire Agreement. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND
SUPERSEDE ANY AND ALL OTHER PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
Section 5.11 Intangible Assets relating to the MIF Acquisition. The
Borrowers will, as soon as available and in any event on or before 60 days after
the consummation of the MIF Acquisition, deliver to the Agent a report, in
reasonable detail, which specifies and explains the amount of intangible assets
recorded on the balance sheets of EGL Eagle Global Logistics L.P. and the
Consolidated Members in connection with the MIF Acquisition.
[Remainder of page intentionally left blank.]
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers in several counterparts effective as
of the Amendment Date specified in the introductory paragraph hereof.
LOAN PARTIES:
-------------
EGL, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ XXXXX XXXXXXX
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
ALROD INTERNATIONAL, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CIRCLE AIRFREIGHT JAPAN, LTD.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CIRCLE OVERSEAS CORP.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CIRCLE INTERNATIONAL GROUP, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 8
CIRCLE INTERNATIONAL HOLDINGS,
INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CIRCLE INTERNATIONAL, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
XXXXXXX X. XXXXX & CO.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ XXXXX XXXXXXX
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
EAGLE MARITIME SERVICES, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/XXXXX XXXXXXX
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
EAGLE PARTNERS, L.P.
By: EUSA HOLDINGS, INC.,
its General Partner
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
EAGLE USA IMPORT BROKERS, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 9
EGL (CANADA) HOLDING COMPANY, INC.
By: /s/XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
EGL DELAWARE LIMITED LIABILITY
COMPANY
By: /s/XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ XXXXX XXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
EGL EAGLE GLOBAL LOGISTICS, LP
By: EGL MANAGEMENT, LLC,
its Sole General Partner
By: /s/XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ XXXXX XXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
EGL MANAGEMENT, LLC
By: /s/XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
By: /s/ XXXXX XXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 10
EUSA HOLDINGS, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
EUSA PARTNERS, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
XXXXXX XXXXXXXX & CO., INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
J. R. XXXXXXX, INCORPORATED
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
XXX XXXXXXXX INTERNATIONAL, INC.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
EGL EAGLE GLOBAL LOGISTICS
(CANADA) CORP.
By: /s/XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 11
AGENT:
-----
BANK OF AMERICA, NATIONAL
ASSOCIATION
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
LENDERS:
-------
BANK OF AMERICA, NATIONAL
ASSOCIATION
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ XXXXXXXX XXXXXXXXX
---------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT - Page 12
