Exhibit 10.05
EIGHTH AMENDMENT TO SECURITIZATION AGREEMENTS
THIS EIGHTH AMENDMENT TO SECURITIZATION AGREEMENTS (this
"Amendment"), is made and entered into as of April 5, 2002 (the
"Effective Date"), by and among CONSOLIDATED FREIGHTWAYS FUNDING
LLC, a Delaware limited liability company (the "Borrower"),
CONSOLIDATED FREIGHTWAYS CORPORATION OF DELAWARE, a Delaware
corporation ("CFCD"; the Borrower and CFCD are referred to herein
individually as a "Company" and collectively as the "Companies"),
and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
("GE Capital"), in its capacities (i) as Conduit Lender (in such
capacity, the "Conduit Lender"), (ii) as Committed Lender (in
such capacity, the "Committed Lender"; in its dual capacities as
Conduit Lender and Committed Lender, GE Capital is herein
referred to as "Lender"), and (iii) as Administrative Agent for
the Lender (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, CFCD and the Borrower are parties to a certain
Receivables Sale and Contribution Agreement, dated as of April
27, 2001 (as amended to the date hereof, the "Sale Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in Annex X to the Sale
Agreement as amended by this Amendment), whereby CFCD has agreed
to sell, contribute or otherwise transfer to the Borrower, and
the Borrower has agreed to purchase or otherwise acquire from
CFCD, all of the right, title and interest of CFCD in the
Receivables; and
WHEREAS, CFCD, the Borrower, the Lender and the
Administrative Agent, are parties to a certain Servicing
Agreement, dated as of April 27, 2001 (as amended to the date
hereof, the "Servicing Agreement"), whereby the Borrower has
appointed CFCD to service, administer and collect the Transferred
Receivables pursuant to the Funding Agreement (defined below) on
the terms and conditions set forth therein; and
WHEREAS, the Parent, certain Subsidiaries of Parent
signatory thereto, the Borrower, the Lender, the Conduit Lender
and the Administrative Agent are parties to a certain Guaranty
Agreement, dated as of April 27, 2001 (as amended to the date
hereof, the "Guaranty Agreement"); and
WHEREAS, the Borrower, the Lender and the Administrative
Agent are parties to a certain Receivables Funding Agreement,
dated as of April 27, 2001 (as amended to the date hereof, the
"Funding Agreement") (the Sale Agreement, the Servicing
Agreement, the Guaranty Agreement and the Funding Agreement,
together with all exhibits and annexes thereto, are referred to
herein collectively as the "Securitization Agreements"), pursuant
to which, among other things, the Lender has agreed, subject to
certain terms and conditions, to make Advances to the Borrower to
fund its purchases of the Receivables; and
WHEREAS, the Companies have requested that the
Securitization Agreements be amended in certain respects, and GE
Capital (in its various capacities) is willing to agree to such
amendments subject to the terms and conditions of this Amendment.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Waiver. Subject to the terms and conditions of this
Amendment, including without limitation the fulfillment of the
conditions to effectiveness specified in Section 7 below, any
Incipient Termination Event or Termination Event resulting from
(i) any failure of the Parent to meet the Minimum EBITDA
financial covenant in clause (c) to Annex 4.02(p) to the Sale
Agreement solely for the Fiscal Quarters ending December 31, 2001
and March 31, 2002, as such financial covenant is in effect
immediately prior to the date of this Amendment or as it was in
effect immediately prior to the Seventh Amendment Effective Date;
provided, however that any such Incipient Termination Event or
Termination Event shall automatically be restored if the Parent
shall fail or have failed to satisfy the financial covenant as
amended hereby, and (ii) any failure of the Parent to meet the
Minimum Fixed Charge Coverage Ratio financial covenant in clause
(a) to Annex 4.02(p) to the Sale Agreement solely for the Fiscal
Quarter ending March 31, 2002, as such financial covenant is in
effect immediately prior to the date of this Amendment; provided,
however that any such Incipient Termination Event or Termination
Event shall automatically be restored if the Parent shall fail or
have failed to satisfy the financial covenant as amended hereby.
2. Amendments of Securitization Agreements. 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 parties signatory to each of
the Funding Agreement, the Sale Agreement and the Servicing
Agreement hereby agree to amend the Securitization Agreements as
follows:
(A) Amendments to Annex X.
(i) Annex X to the Funding Agreement, the Sale
Agreement and the Servicing Agreement is hereby amended by
adding a new defined term "Eighth Amendment Effective Date"
in alphabetical order to read in its entirety as follows:
"Eighth Amendment Effective Date" shall mean April
5, 2002.
(ii) The definition of the term "Payroll Reserve"
set forth in Annex X to the Funding Agreement, the Sale
Agreement and the Servicing Agreement is hereby deleted in
its entirety and the following definition of such term is
substituted in lieu thereof:
"Payroll Reserve" shall mean (a) at all times
during the period from the Third Amendment Effective
Date through November 1, 2001, an amount equal to
$5,000,000, (b) at all times on and after November 2,
2001 and prior to the Eighth Amendment Effective Date,
an amount equal to $15,000,000, (c) at all times on and
after the Eighth Amendment Effective Date and prior to
the Payroll Reserve Adjustment Date (defined below), an
amount equal to $20,000,000, and (d) at all times on
and after the Payroll Reserve Adjustment Date (defined
below), an amount equal to $15,000,000. The imposition
of the Payroll Reserve is not intended to modify or
impair the Administrative Agent's discretion to impose
additional reserves with respect to the unpaid employee
payroll of the Parent and its Subsidiaries under clause
(iv) of the definition of the term "Reserves" herein.
As used herein, the term "Payroll Reserve Adjustment
Date" shall mean the first date upon which each of the
following conditions shall be satisfied in full: (i)
the outstanding principal amount of the Revolving Loan
(as such term is defined in the Revolving Credit
Agreement) is permanently reduced to an amount equal to
or less than $25,000,000; (ii) Parent shall have
delivered to GE Capital a Borrowing Limit Reduction
Notice (as such term is defined in the Revolving Credit
Agreement), which shall have resulted in a permanent
reduction in the Borrowing Limit (as such term is
defined in the Revolving Credit Agreement) to an amount
equal to or less than $25,000,000 in accordance with
the terms of the Revolving Credit Agreement; and (iii)
Parent shall have delivered to GE Capital an Advance
Rate Reduction Notice (as such term is defined in the
Revolving Credit Agreement), which shall have resulted
in a permanent reduction in the Advance Rate (as such
term is defined in the Revolving Credit Agreement) to
no more than 23.8% in accordance with the terms of the
Revolving Credit Agreement.
(B) Amendments to Sale Agreement. Annex 4.02(p) to
the Sale Agreement is hereby amended as follows:
(i) Clause (a) is deleted in its entirety and replaced
with a new clause (a) as set forth below:
(a) Minimum Fixed Charge Coverage Ratio. The
Parent and its Subsidiaries shall have on a
consolidated basis, as of the end of each Fiscal
Quarter set forth below, a Fixed Charge Coverage Ratio
for the period set forth below of not less than the
following:
Fiscal Quarter Minimum Fixed
Charge
Coverage Ratio
for the Rolling Period 0.20 to 1.00
ending September 30,
2001
for the Rolling Period 0.01 to 1.00
ending December 31, 2001
for the three month -1.80 to 1.00
period ending March 31,
2002
for the six month period -1.20 to l.00
ending June 30, 2002
for the nine month -0.30 to 1.00
period ending September
30, 2002
for the Rolling Period 0.20 to 1.00
ending December 31, 2002
for the Rolling Period 1.70 to 1.00
ending on each Fiscal
Quarter thereafter
(ii) Clause (c) is deleted in its entirety and replaced
with a new clause (c) as set forth below:
(c) Minimum EBITDA. Parent and its Subsidiaries
shall have on a consolidated basis, for each period set
forth below, an EBITDA for such period of not less than
the following:
Fiscal Quarter Minimum EBITDA
for the Rolling Period $8,000,000
ending September 30,
2001
for the Rolling Period -$3,300,000
ending December 31, 2001
for the three month -$13,300,000
period ending March 31,
2002
for the six month period -$16,400,000
ending June 30, 2002
for the nine month $1,400,000
period ending September
30, 2002
for the Rolling Period $20,500,000
ending December 31, 2002
for the Rolling Period $80,000,000
ending on each Fiscal
Quarter thereafter
(C) Amendment to Funding Agreement. Section 8.06(b)
to the Funding Agreement is deleted in its entirety and replaced
with a new Section 8.06(b) as set forth below:
(b) Access. The Borrower shall, at its own
expense, during normal business hours, subject to
Borrower's reasonable and customary safety, security
and confidentiality policies and regulations, from time
to time upon one Business Day's prior notice: (i)
provide the Lenders, the Administrative Agent and any
of their respective officers, employees and agents
access to its properties (including properties utilized
in connection with the collection, processing or
servicing of the Transferred Receivables), facilities,
advisors and employees (including officers) and to the
Borrower Collateral; (ii) permit the Lenders, the
Administrative Agent and any of their respective
officers, employees and agents to inspect, audit and
make extracts from its books and records, including all
Records; (iii) permit the Lenders or the Administrative
Agent and their respective officers, employees and
agents to inspect, review and evaluate the Transferred
Receivables and the Borrower Collateral and (iv) permit
the Lenders or the Administrative Agent and their
respective officers, employees and agents to discuss
matters relating to the Transferred Receivables or its
performance under this Agreement or the other Related
Documents or its affairs, finances and accounts with
any of its officers, managers, employees,
representatives or agents (in each case, with those
persons having knowledge of such matters) and with its
independent certified public accountants. Borrower
shall be liable for all costs and expenses relating to
any and all of the foregoing inspections, appraisals,
evaluations or reviews conducted by the Administrative
Agent, any Lender or any of their respective officers,
employees and agents irrespective of whether or not any
Termination Event or Incipient Termination Event exists
at the time of any such inspection, appraisal,
evaluation or review. If (A) an Incipient Termination
Event or a Termination Event shall have occurred and be
continuing or (B) the Administrative Agent, in good
faith, believes that an Incipient Termination Event or
a Termination Event is imminent or deems any Lender's
rights or interests in the Transferred Receivables, the
Borrower Assigned Agreements or any other Borrower
Collateral insecure, then the Borrower shall, at its
own expense, provide such access at all times and
without advance notice and provide the Lenders or the
Administrative Agent with access to its suppliers and
customers. The Borrower shall make available to the
Administrative Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies
of all books and records, including Records, that the
Administrative Agent may request. The Borrower shall
deliver any document or instrument necessary for the
Administrative Agent, as the Administrative Agent may
from time to time request, to obtain records from any
service bureau or other Person that maintains records
for the Borrower or the Servicer, and shall maintain
duplicate records or supporting documentation on media,
including computer tapes and discs owned by the
Borrower or the Servicer.
3. No Other Amendments. Except for the waiver expressly set
forth and referred to in Section 1 and the amendments expressly
set forth and referred to in Section 2, the Securitization
Agreements shall remain unchanged and in full force and effect.
4. Representations and Warranties. Each Company hereby
represents and warrants to the Lender and the Administrative
Agent that (a) this Amendment has been duly authorized, executed
and delivered by such Company, (b) after giving effect to this
Amendment, no Termination Event, Incipient Termination Event,
Event of Servicer Termination or Incipient Servicer Termination
Event in respect of such Company 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 such Company in
the Securitization Agreements 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 any Company of any of its representations and
warranties contained in this Section 4 shall be a Termination
Event and an Event of Servicer Termination for all purposes of
the Securitization Agreements. Any Advances made on the Effective
Date shall be deemed to have been requested and funded after
giving effect to this Amendment.
5. Ratification. Each Company hereby ratifies and reaffirms
each and every term, covenant and condition set forth in the
Securitization Agreements and all other documents delivered by
such Company in connection therewith (including without
limitation the other Related Documents to which each Company is a
party), effective as of the date hereof.
6. Estoppel. To induce GE Capital (in its various capacities)
to enter into this Amendment, each Company hereby acknowledges
and agrees that, as of the date hereof, there exists no right of
offset, defense or counterclaim in favor of any Company as
against GE Capital (in its various capacities) with respect to
the obligations of any Company to GE Capital (in its various
capacities) under the Securitization Agreements or the other
Related Documents, either with or without giving effect to this
Amendment.
7. Conditions to Effectiveness. This Amendment shall become
effective, as of the Effective Date, upon receipt by the
Administrative Agent, in form and substance satisfactory to
Administrative Agent, of this Amendment, duly executed, completed
and delivered by each of the Companies and by GE Capital in its
various capacities.
8. Reimbursement of Expenses. Each Company hereby agrees that
it shall reimburse the Administrative Agent on demand for all
costs and expenses (including without limitation reasonable
attorney's fees) incurred by the Administrative Agent 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, each Company hereby
waives 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 Securitization Agreements as amended
by this Amendment embody 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.
13. Originators' and GE Capital's Capacities. CFCD is executing
and delivering this Amendment both in its capacity as an
Originator under the Sale Agreement and as a Servicer under the
Servicing Agreement, and all references herein to "CFCD" shall be
deemed to include CFCD in both such capacities unless otherwise
expressly indicated. GE Capital is executing and delivering this
Amendment in its various capacities as Lender and the
Administrative Agent, and all references herein to "GE Capital"
shall be deemed to include it in all such capacities unless
otherwise expressly indicated.
[Remainder of page intentionally blank; next page is signature page]
IN WITNESS WHEREOF, the parties have caused this Eighth
Amendment to Securitization Agreements be duly executed by their
respective officers thereunto duly authorized, as of the date
first above written.
CONSOLIDATED FREIGHTWAYS FUNDING LLC, as
Borrower
By Xxxxxx X. Xxxxxxxxx
Name:/s/Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE, as Originator and Servicer
By Xxxxxx X. Xxxxxxxxx
Name:/s/Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CONSOLIDATED FREIGHTWAYS CORPORATION
By Xxxxxx X. Xxxxxxxxx
Name:/s/Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CF AIRFREIGHT CORPORATION
By Xxxxxx X. Xxxxxxxxx
Name:/s/Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CF XXXXXX.XXX INCORPORATED
By Xxxxxx X. Xxxxxxxxx
Name:/s/Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
REDWOOD SYSTEMS, INC.
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXXX XXXXX XXXXXXX CORPORATION
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
GENERAL ELECTRIC CAPITAL CORPORATION,
as Conduit Lender, Committed Lender and
Administrative Agent
By /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Its Duly Authorized Signatory
