| | On September 4, 2009, Frozen Food Express Industries, Inc. (the “Company”) and its principal operating subsidiary, FFE Transportation Services, Inc. (the “Borrower”), closed on the Second Amended and Restated Credit Agreement (the “Agreement”), dated September 2, 2009, by and among the Borrower and certain of its affiliates, the Company, and Comerica Bank as Administrative Agent, Collateral Agent, and Issuing Bank. The Agreement extends the term of the Amended and Restated Credit Agreement dated as of October 12, 2006, as amended, together with the promissory notes made by the Borrower thereunder, for a period of two years and provides for a secured revolving credit facility of up to $35.0 million, subject to a borrowing base based on accounts receivable and the orderly liquidation value of vehicles. The credit facility will continue to be used by the Company, the Borrower and certain of its affiliates for working capital and general corporate purposes and to refinance existing indebtedness and to issue up to $10.0 million in letters of credit to support transactions entered into in the ordinary course of business. Borrowings made under the credit facility will be based on a base rate plus an applicable margin. The base rate will be a floating rate equal to the higher of the daily adjusting 30 day LIBOR rate or 2.00% per annum, plus the applicable margin which will be 1.875% per annum for outstanding balances of $10.0 million or less and 2.875% per annum for outstanding balances greater than $10.0 million. The Agreement terminates on September 2, 2011, or such earlier date upon which the obligation of the banks to make loans is terminated pursuant to the terms of the Agreement. The credit facility contains usual and customary covenants for transactions of this type, including covenants limiting dividends and repurchases of shares of common stock, liens, additional indebtedness and mergers. The Company will be required to maintain a fixed charge coverage ratio, as defined in the Agreement, equal to or greater than 1.25 to 1.00, and a leverage ratio, as defined in the Agreement, equal to or less than 2.50 to 1.00. In addition, as of the last day of any fiscal quarter, the Company is required to maintain a minimum consolidated tangible net worth, as defined in the Agreement, of at least $85.0 million. The credit facility is secured by substantially all of the assets of the Borrower and is guaranteed by the Company and its affiliates. In the event of a default by the Borrower under the credit facility, the Administrative Agent may, at its election, terminate the obligation to make loans under the credit facility, declare the entire unpaid balance of the obligations and all other indebtedness of any one or more of the Borrower or other companies to the bank and the agent immediately due and payable, and enforce any and all rights and interests created and existing under the Agreement, including, without limitation, all rights of set-off and all other rights available under the law. |
