Exhibit 10.03
NINTH AMENDMENT TO LETTER OF CREDIT AGREEMENTS
THIS NINTH AMENDMENT TO LETTER OF CREDIT AGREEMENTS
(this "Amendment"), is made and entered into as of April 5, 2002
(the "Effective Date"), by and among CONSOLIDATED FREIGHTWAYS
CORPORATION, a Delaware corporation ("Debtor"), the other Credit
Parties signatory to the Letter of Credit Agreement described
below (collectively, together with the Debtor, the "Credit
Parties") and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation ("GE Capital").
W I T N E S S E T H:
WHEREAS, Debtor and GE Capital are parties to that
certain Letter of Credit Agreement, dated as of April 27, 2001
(as amended to the date hereof, the "Letter of Credit Agreement";
capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Letter of Credit
Agreement), pursuant to which GE Capital has committed to make
certain letters of credit available to Debtor; and
WHEREAS, Debtor, the other Credit Parties and GE
Capital desire to modify the Letter of Credit Agreement in
certain respects, all in accordance with and subject to the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Debtor, the other Credit Parties and GE
Capital do hereby agree 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, GE
Capital hereby waives (i) any Default or Event of Default
resulting from any failure of Debtor to meet the Minimum EBITDA
financial covenant in clause (c) of Annex C 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
Eighth Amendment Effective Date; provided, however that any such
Default or Event of Default shall automatically be restored if
Debtor shall fail or have failed to satisfy the financial
covenant as amended hereby, and (ii) any Default or Event of
Default resulting from any failure of Debtor to meet the Minimum
Fixed Charge Coverage Ratio financial covenant in clause (a) of
Annex C 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 Default
or Event of Default shall automatically be restored if Debtor
shall fail or have failed to satisfy the financial covenant as
amended hereby.
2. Amendment of the Letter of Credit Agreements. Subject to
the terms and conditions of this Amendment, including without
limitation the fulfillment of the conditions precedent specified
in Section 7 below, the Letter of Credit Agreement is hereby
amended as follows:
A. Section 1.10 of the Letter of Credit Agreement is
hereby deleted and a new Section 1.10 is substituted in lieu
thereof to read in its entirety as follows:
1.10 Access. Debtor shall, during normal
business hours, subject to Debtor's reasonable and
customary safety, security and confidentiality
policies and regulations, from time to time upon
one (1) Business Day's prior notice: (a) provide
Creditor and any of its officers, employees and
agents access to the properties, facilities,
advisors and employees (including officers) of
each Credit Party and to the Collateral, (b)
permit Creditor, and any of its officers,
employees and agents, to inspect, audit and make
extracts from any Credit Party's books and
records, and (c) permit Creditor, and its
officers, employees and agents, to inspect,
review, evaluate and make test verifications and
counts of the Accounts, Inventory and other
Collateral of any Credit Party and to perform
collateral appraisals and environmental reviews at
Creditor's discretion. Debtor and the Credit
Parties shall be liable for all costs and expenses
relating to any and all of the foregoing
inspections, appraisals, evaluations or reviews
conducted by Creditor or any of its officers,
employees and agents irrespective of whether or
not any Default or Event of Default exists at the
time of any such inspection, appraisal, evaluation
or review. If a Default or Event of Default shall
have occurred and be continuing or if access is
necessary to preserve or protect the Collateral as
determined by Creditor, Debtor shall cause each
such Credit Party to provide such access at all
times and without advance notice. Furthermore, so
long as any Event of Default shall have occurred
and be continuing, Debtor shall provide Creditor
with access to the suppliers and customers of each
Credit Party. Debtor shall cause each Credit
Party to make available to Creditor and its
counsel, as quickly as is possible under the
circumstances, originals or copies of all books
and records which Creditor may request. Debtor
shall cause each Credit Party to deliver any
document or instrument necessary for Creditor, as
it may from time to time request, to obtain
records from any service bureau or other Person
which maintains records for such Credit Party, and
shall maintain duplicate records or supporting
documentation on media, including computer tapes
and discs owned by such Credit Party.
B. Clause (a) of Annex C is deleted in its entirety
and replaced with a new clause (a) as set forth below:
(a) Minimum Fixed Charge Coverage Ratio. The
Debtor 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 1.00
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
C. Clause (c) of Annex C is deleted in its entirety
and replaced with a new clause (c) set forth below:
(c) Minimum EBITDA. Debtor 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
D. Annex E is amended by adding a new clause (m) to
the end thereof to read in its entirety as follows:
(m) Weekly Cash Flow Forecast. No less
frequently than the last Business Day of each
calendar week, a twelve-week cash flow forecast
for the Debtor and its Subsidiaries for the next
succeeding period of twelve consecutive calendar
weeks, in such form and with such detail as is
satisfactory to Creditor, accompanied by such
supporting detail and documentation as shall be
requested by Creditor in its reasonable
discretion.
E. Section 6.3(o) of the Letter of Credit Agreement
is amended by deleting clause (i) thereof in its entirety and
replacing it with a new clause (i) to read as follows:
(i) the aggregate outstanding principal amount of
all Bayview Indebtedness shall not exceed
$48,000,000 plus any capitalized fees at any one
time,
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 Letter of Credit
Agreement shall remain unchanged and in full force and effect.
Nothing in this Amendment is intended or shall be construed to be
a novation of any of the Letter of Credit Agreement or to affect,
modify or impair the continuity or perfection of GE Capital's
Liens under the Collateral Documents.
4. Representations and Warranties. To induce GE Capital to
enter into this Amendment, Debtor and each of the other Credit
Parties hereby warrant, represent and covenant to GE Capital
that: (a) this Amendment has been duly authorized, executed and
delivered by Debtor and each Credit Party signatory thereto, (b)
after giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing as of this date, and (c)
after giving effect to this Amendment, all of the representations
and warranties made by Debtor and each Credit Party in the Letter
of Credit Agreement are true and correct in all material respects
on and as of the date of this Amendment (except to the extent
that any such representations or warranties expressly referred to
a specific prior date). Any breach in any material respect by
Debtor or any Credit Party of any of its representations and
warranties contained in this Section 4 shall be an Event of
Default under the Letter of Credit Agreement.
5. Ratification and Acknowledgment. Debtor and each of the
other Credit Parties hereby ratify and reaffirm each and every
term, covenant and condition set forth in the Letter of Credit
Agreement and all other documents delivered by such company in
connection therewith (including without limitation the other
Letter of Credit Documents to which Debtor or any Credit Party is
a party), effective as of the date hereof.
6. Estoppel. To induce GE Capital to enter into this
Amendment, Debtor and each of the other Credit Parties hereby
acknowledge and agree that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of Debtor or
any Credit Party as against GE Capital with respect to the
obligations of Debtor or any Credit Party to GE Capital under the
Letter of Credit Agreement or the other Letter of Credit
Agreement Documents, either with or without giving effect to this
Amendment.
7. Conditions to Effectiveness. This Amendment shall become
effective, as of the Effective Date, (a) upon receipt by GE
Capital of this Amendment, duly executed, completed and delivered
by Debtor and each other Credit Party, together with the related
fee letter, duly executed by Debtor, in each case, in form and
substance satisfactory to GE Capital and (b) the Eighth Amendment
to Securitization Agreements, dated as of the date hereof, among
Consolidated Freightways Funding LLC, Consolidated Freightways
Corporation of Delaware and GE Capital shall have been executed
and delivered to GE Capital and be in full force and effect.
Upon the effective date of this Amendment, the waivers set forth
in Section 1 and the amendments set forth in Section 2 of this
Amendment shall become effective as of the effective date of this
Amendment.
8. Reimbursement of Expenses. Debtor and each of the other
Credit Parties hereby agree that Debtor and each of the other
Credit Parties shall reimburse GE Capital on demand for all costs
and expenses (including without limitation reasonable attorney's
fees) incurred by GE Capital in connection with the negotiation,
documentation and consummation of this Amendment and the other
documents executed in connection herewith and therewith and the
transactions contemplated hereby and thereby.
9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SAID STATE.
10. Severability of Provisions. Any provision of this Amendment
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. To
the extent permitted by applicable law, Debtor and each of the
other Credit Parties hereby waive any provision of law that
renders any provision hereof prohibited or unenforceable in any
respect.
11. Counterparts. This Amendment may be executed in any number
of several counterparts, all of which shall be deemed to
constitute but one original and shall be binding upon all
parties, their successors and permitted assigns.
12. Entire Agreement. The Letter of Credit Agreement as amended
by this Amendment embodies the entire agreement between the
parties hereto relating to the subject matter hereof and
supersedes all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
[Remainder of page intentionally blank; next page is
signature page]
IN WITNESS WHEREOF, the parties have caused
this Ninth Amendment to Letter of Credit Agreements to be duly
executed by their respective officers thereunto duly authorized,
as of the date first above written.
DEBTOR:
CONSOLIDATED FREIGHTWAYS CORPORATION
By Xxxxxx X. Xxxxxxxxx
Name:/s/Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
GENERAL ELECTRIC CAPITAL CORPORATION
By/s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Its Duly Authorized Signatory
SUBSIDIARY GUARANTORS:
CONSOLIDATED FREIGHTWAYS CORPORATION OF
DELAWARE
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
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
CF XXXXXX.XXX INCORPORATED
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Treasurer
