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EXHIBIT 10.10
AMENDMENT NO. 1 AND CONSENT AND WAIVER
This Amendment No. 1 dated as of February 12, 1999 ("Amendment") amends
the Credit Agreement dated as of June 12, 1998 (the "Credit Agreement") among
Arkansas Best Corporation, a Delaware corporation (the "Borrower"), the Banks
party thereto, Societe Generale, Southwest Agency, as Administrative Agent (the
"Agent"), and Bank of America National Trust and Savings Association and Xxxxx
Fargo Bank (Texas), N.A., as Co-Documentation Agents. Capitalized terms defined
in the Credit Agreement and not otherwise defined or redefined herein are used
herein with the meanings so defined.
WHEREAS the Borrower has requested that the Credit Agreement be amended
to permit the Borrower to make an intercompany loan to Treadco so that Treadco
may purchase all of its issued and outstanding capital stock not owned by the
Borrower and to modify certain covenants of the Borrower set forth in the Credit
Agreement; and
WHEREAS the Banks have agreed to so amend the Credit Agreement on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendment of Credit Agreement. The Credit Agreement is
hereby amended as follows:
(a) Section 1.1. Section 1.1 is amended as follows:
(i) The following definition is modified to read as follows:
"Borrowing Base" means an amount equal to the sum of (a) 80% of
the Net Depreciated Value of Eligible Revenue Equipment, plus (b)
85% of the aggregate outstanding amount of Eligible Receivables,
plus (c) 50% of the Net Depreciated Value of Eligible Other
Equipment, plus (d) 70% of the Real Estate Value of Eligible Real
Property.
(ii) The following new definitions are added in alphabetical order:
"TAC" means Treadco Acquisition Corp., a Delaware corporation
and wholly-owned Subsidiary of the Borrower.
"Treadco Merger" means the merger of TAC with and into Treadco
with Treadco being the surviving corporation.
"Treadco Credit Agreement" means the Amended and Restated
Credit Agreement dated as of September 30, 1997 between Treadco and
Societe Generale, Southwest Agency, as such agreement may be
amended, modified or restated from time-to-time.
(b) Section 6.1. Section 6.1 is amended by deleting the "and" at the
end of clause (l),
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deleting the period at the end of clause (m), and adding the following new
clauses (n) and (o):
(n) securing the Treadco Credit Agreement; provided, however that upon
the consummation of the Treadco Merger, a perfected second Lien shall
exist on all accounts receivable and inventory of Treadco in favor of
the Agent for the benefit of the Banks to secure the Obligations in
accordance with the terms of the Security Agreement executed by
Treadco; and
(o) not otherwise permitted herein but permitted under the Treadco
Credit Agreement.
(c) Section 6.3. Section 6.3 is modified in its entirety as follows:
Section 6.3. Agreements Restricting Distributions From
Subsidiaries. The Borrower will not, nor will it permit any of its
Subsidiaries to, enter into any agreement (other than a Credit Document
or the Treadco Credit Agreement as in effect on the Effective Date)
which limits distributions to or any advance by any of the Borrower's
Subsidiaries to the Borrower.
(d) Section 6.6(d)(iii). Section 6.6(d)(iii) is amended in its entirety
as follows:
(iii) the aggregate consideration paid (other than in the form
of common stock of the Borrower) during any fiscal year for such
contributions or investments shall not exceed $40,000,000; and
(e) Section 6.6(f). Section 6.6 is amended by deleting the "and" at the
end of clause (d), substituting "; and" for the period at the end of clause (e),
and by adding the following new clause (f):
(f) loans or advances to Treadco in an aggregate amount not to
exceed $12,000,000 which loans or advances shall be (i) evidenced by a
promissory note in form and substance satisfactory to the Agent (the
"Treadco Note"), (ii) subordinated to Treadco's obligations under the
Credit Documents, (iii) on terms and conditions satisfactory to the
Agent and (iv) used by Treadco to purchase all or a portion of its
issued and outstanding shares of its capital stock not owned by the
Borrower.
(f) Section 6.9. The introduction exception of Section 6.9 is modified
to read as follows:
Except as set forth in the Treadco Credit Agreement or any other
agreements and documentation governing Indebtedness of the Borrower or
any of its Subsidiaries existing on the Effective Date,
(g) The first sentence of Section 6.14 of the Credit Agreement is
amended in its entirety as follows:
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The Borrower may make or permit any of its Subsidiaries to make or
commit to make any Capital Expenditure; provided, however, that (a)
Capital Expenditures of the Borrower and its Subsidiaries (other than
Treadco) may not exceed $85,000,000 in an aggregate amount per fiscal
year so long as the Borrower's Senior Debt is not rated either BBB- or
higher by S&P or Baa3 or greater by Xxxxx'x and (b) Capital
Expenditures of Treadco are otherwise permitted under the Treadco
Credit Agreement.
(h) Section 6.15. Section 6.15 is amended by deleting the "and" at the
end of clause (e), adding the following new clauses (f) and (g) and modifying
the existing clause (f) to read as follows:
(f) the Treadco Credit Agreement;
(g) indebtedness of Treadco not otherwise permitted hereunder
but permitted under the Treadco Credit Agreement; and
(h) extensions, renewals and refinancing of any of the
Indebtedness specified in paragraphs (a) - (c), (f) and (g) above so
long as the principal amount of such Indebtedness is not thereby
increased.
Section 2. Treadco Note. The proceeds of the Treadco Note will be
deemed to be Acquisition Expenditures for the purposes of determining compliance
with Section 6.16 during fiscal year 1999.
Section 3. Consent and Waiver. (a) Section 6.6(d)(i) of the Credit
Agreement requires that if the aggregate amount of contributions to, or capital
investments by the Borrower or any of its Subsidiaries in any Person which,
prior to such contribution or investment, is not a Subsidiary but which becomes
a Subsidiary as a result of such contribution or investment, exceeds $5,000,000,
then the Borrower shall cause such Person to have executed and delivered to the
Agent an Accession Agreement, related financing statements and a certificate
covering the same matters described in Section 3.1(a)(iii) of the Credit
Agreement with respect to such Person and the Borrower's counsel shall deliver
an opinion with respect thereto covering the matters previously opined on with
regard to each Guarantor.
(b) Each of the Agent and the Banks hereby waive the requirements of
Section 6.6(d)(i); provided that upon the consummation of the Treadco Merger, in
lieu of Treadco executing and delivering to the Agent an Accession Agreement,
Treadco shall execute and deliver to the Agent (1) a limited guaranty
substantially similar in form and substance to the Guaranty, (2) a security
agreement substantially similar in form and substance to the Guarantor Security
Agreement except that such security agreement shall grant a second priority
security interest to the Agent for its benefit and the benefit of the Banks in
Treadco's accounts receivable and inventory, (3) a certificate covering the same
matters described in
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Section 3.1(a)(iii) of the Credit Agreement with respect to such Person and (4)
the Borrower's counsel shall deliver an opinion with respect thereto covering
the matters previously opined on with regard to each Guarantor. This waiver is
limited to the extent described herein and shall not be construed to be a
consent to or a waiver of any other actions prohibited by the Credit Agreement.
Further, if any such transaction is not completed as described above, all
consents granted hereunder shall be void.
Section 4. Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Banks that, after giving effect
hereto:
(a) the representations and warranties of the Borrower set forth in the
Credit Agreement and in the other Credit Documents are true and correct in all
material respects as of the date of this Amendment, except those that by their
terms relate only to a specific date;
(b) (i) the execution, delivery, and performance of this Amendment are
within the corporate power and authority of the Borrower and have been duly
authorized by appropriate proceedings, and (ii) this Amendment constitutes a
legal, valid, and binding obligation of the Borrower enforceable in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the rights of creditors
generally and general principles of equity; and
(c) as of the effectiveness of this Amendment, no Default or Event of
Default has occurred and is continuing.
Section 5. Effectiveness of Amendment. This Amendment shall become
effective on the date the Agent has received the following:
(a) counterparts of this Amendment executed by the Borrower and the
Majority Banks,
(b) a completed Federal Reserve From U-1 executed by the Borrower;
(c) a pledge agreement in form and substance satisfactory to the Agent
executed by the Borrower pledging the Treadco Note to the Agent for the benefit
of the Banks;
(d) the Treadco Note endorsed to the Agent for the benefit of the
Banks; and
(e) an amendment fee payable to each of the Banks approving this
amendment on or before the date hereof in an amount equal to 0.05% of such
Bank's Revolving Commitment.
Section 6. Effect on Loan Documents.
(a) Except as amended herein, the Credit Agreement and the Credit
Documents remain in full force and effect as originally executed. Nothing herein
shall act as a waiver
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of any of the Agent's or any of the Bank's rights under the Credit Documents, as
amended, including the waiver of any Default or Event of Default, however
denominated.
(b) This Amendment is a Credit Document for the purposes of the
provisions of the other Credit Documents. Without limiting the foregoing, any
breach of representations, warranties, and covenants under this Amendment may be
a Default or Event of Default under other Credit Documents.
Section 7. Fees and Expenses. The Borrower shall reimburse the Agent
for all expenses of the Agent, including charges and disbursements of legal
counsel for the Agent, in connection with the creation, amendment, modification,
waiver, or interpretation of this Amendment, and the preservation or enforcement
of any rights of the Agent or any of the Banks under this Amendment.
Section 8. Counterparts. This Amendment may be executed in any number
of counterparts which together shall constitute an instrument.
Section 9. Governing Law. This Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas.
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, A
CREDIT AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE CREDIT AGREEMENT EXCEEDS
$50,000 IN VALUE IS NOT ENFORCEABLE UNLESS THE CREDIT AGREEMENT IS IN WRITING
AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S AUTHORIZED REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO
THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN CREDIT
AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO THE CREDIT AGREEMENT. THIS WRITTEN AMENDMENT AND THE LOAN
DOCUMENTS, AS DEFINED IN THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT AMONG 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.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers duly authorized as of the date first
written above.
BORROWER:
ARKANSAS BEST CORPORATION
By:
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Xxxxx X. Xxxxxxxx
Vice President - Chief Financial Officer
BANK:
SOCIETE GENERALE,
SOUTHWEST AGENCY
By:
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Xxxxxxxxxxx Xxxxxx
Director, Head of SG - Dallas
By:
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Xxxxx X. Xxxxxx
Associate
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CO-DOCUMENTATION AGENTS:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
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By:
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Title:
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XXXXX FARGO BANK (TEXAS), N.A.
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By:
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Title:
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BANKS:
SOCIETE GENERALE,
SOUTHWEST AGENCY
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Xxxxxxxxxxx X. Xxxxxx
Director - Head of SG-Dallas
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Xxxxx X. Xxxxxx
Associate
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
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By:
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Title:
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XXXXX FARGO BANK (TEXAS), N.A.
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By:
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Title:
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ABN AMRO BANK N.V.
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By:
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Title:
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By:
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Title:
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CREDIT LYONNAIS NEW YORK BRANCH
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By:
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Title:
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DEPOSIT GUARANTY NATIONAL BANK
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By:
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Title:
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THE FIRST NATIONAL BANK OF CHICAGO
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By:
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Title:
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NATEXIS BANQUE BFCE
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By:
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Title:
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By:
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Title:
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