SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Second Amendment"), dated as of March 26, 1996, is entered
into among AMERICAN FREIGHTWAYS CORPORATION, an Arkansas
corporation ("AFC"), AMERICAN FREIGHTWAYS, INC., an Arkansas
corporation ("AFI"; AFC and AFI are referred to collectively as the
"Companies" and individually as a "Company"), the banks listed on
the signature pages hereof (the "Lenders"), NATIONSBANK OF TEXAS,
N.A., in its capacity as agent (in said capacity, the "Agent").
BACKGROUND
A. Companies, Lenders and Agent heretofore entered into that
certain Amended and Restated Credit Agreement, dated as of
October 20, 1994, as amended by that certain First Amendment to
Amended and Restated Credit Agreement, dated as of May 31, 1995
(said Credit Agreement, as amended, the "Credit Agreement"; the
terms defined in the Credit Agreement and not otherwise defined
herein shall be used herein as defined in the Credit Agreement).
B. Companies, Lenders and Agent desire to make certain
amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions
and agreements hereafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are all hereby
acknowledged, Companies, Lenders and Agent covenant and agree as
follows:
1. AMENDMENTS.
(a) The defined term "Applicable LIBOR Margin" is hereby
added to Section 1.01 of the Credit Agreement in proper
alphabetical order to read as follows:
"'Applicable LIBOR Margin' means, for any particular
date for any LIBOR Advance outstanding during the
(a) Initial Pricing Period, a rate of interest per annum
equal to 0.625% and (b) the Final Pricing Period, that
rate of interest per annum equal to the rate set forth
below opposite the Leverage Ratio which is in effect for
such particular date. During the Final Pricing Period,
such rate of interest applicable to any particular date
will be determined quarterly by the Agent upon receipt of
an Officer's Certificate of the Companies setting forth
the Leverage Ratio (and its computation) as of the last
day of the most recent fiscal quarter then ended pursuant
to Section 5.13. If the Agent shall not have received
such Officer's Certificate pursuant to Section 5.13 with
respect to the last day of the most recent fiscal quarter
then ended, such rate of interest shall be equal to
1.000% until such time as such Officer's Certificate is
received. All such
determinations shall be effective on the fifth Business Day
following receipt of such Officer's Certificate of the
Companies.
Leverage Ratio Applicable LIBOR Margin
Greater than or equal to 3.90 1.000%
to 1.0
Greater than or equal to 3.50 0.875%
to 1.0 but less than 3.90 to
1.0
Greater than or equal to 3.00 0.750%
to 1.0 but less than 3.50 to
1.0
Greater than or equal to 2.25 0.625%
to 1.0 but less than 3.00 to
1.0
Less than 2.25 to 1.0 0.500%"
(b) The defined term "Initial Pricing Period" is hereby added
to Section 1.01 of the Credit Agreement in proper alphabetical
order to read as follows:
"'Initial Pricing Period' means that period from the
date of this Agreement to and including the Rate
Adjustment Date."
(c) The defined term "Leverage Ratio" is hereby added to
Section 1.01 of the Credit Agreement in proper alphabetical order
to read as follows:
"'Leverage Ratio' means, with respect to Companies
and their Subsidiaries on a consolidated basis, the ratio
of (a) the sum of Current Debt and Funded Debt as of the
date of determination to (b) EBITDA for the four fiscal
quarters ending on the date of determination."
(d) The definition of "LIBOR Rate" set forth in Section 1.01
of the Credit Agreement is hereby amended by deleting "0.625%" in
the first sentence thereof and inserting "the Applicable LIBOR
Margin" in lieu thereof.
(e) The defined term "Rate Adjustment Date" is hereby added
to Section 1.01 of the Credit Agreement in the proper alphabetical
order to read as follows:
"'Rate Adjustment Date' means the date five Business
Days after the date that the Lenders receive the
financial statements for the quarterly period ending
March 31, 1996 and Officer's Certificate, as required
pursuant to Section 5.13."
(f) The defined term "Final Pricing Period" is hereby
added to Section 1.01 of the Credit Agreement in proper
alphabetical order to read as follows:
"'Final Pricing Period' means the period from the
date which is the first day following the end of the
Initial Pricing Period to the Maturity Date."
(g) Section 2.03 of the Credit Agreement is hereby deleted in
its entirety and the following is substituted in lieu thereof:
"2.03 Fees. (a) Subject to Section 8.09
hereof, the Companies, jointly and severally, agree to
pay to the Agent, for the Ratable account of the Lenders,
a commitment fee payable on the average daily amount of
the Unused Commitment, from the date hereof through the
Maturity Date (i) during the Initial Pricing Period, at a
per annum percentage of 0.2000% and (ii) during the Final
Pricing Period, at the per annum percentages based on the
following schedule:
Leverage Ratio Percentage
Greater than or equal to 3.90 to 1.0 0.3000%
Greater than or equal to 3.50 to 1.0 but less than 0.2750%
3.90 to 1.0
Greater than or equal to 3.00 to 1.0 but less than 0.2500%
3.50 to 1.0
Greater than or equal to 2.25 to 1.0 but less than 0.2000%
3.00 to 1.0
Less than 2.25 to 1.0 0.1875%
During the Final Pricing Period, such per annum
percentage will be determined quarterly by the Agent upon
receipt of an Officer's Certificate of the Companies
setting forth the Leverage Ratio (and its computation) as
of the last day of the most recent fiscal quarter then
ended pursuant to Section 5.13. If the Agent shall not
have received such Officer's Certificate pursuant to
Section 5.13 with respect to the last day of the most
recent fiscal quarter then ended, such per annum
percentage shall be equal to 0.3000% until such time as
such Officer's Certificate is received. All such
determinations shall be effective on the fifth Business
Day following receipt of such Officer's Certificate of
the Companies. Such commitment fee shall be payable in
arrears on each Quarterly Date and on the Maturity Date."
(h) Section 5.03 of the Credit Agreement is hereby deleted in
its entirety and the following is inserted in lieu thereof:
"At the end of each fiscal quarter indicated below,
the Companies will not permit the ratio of Income
Available for Fixed Charges (based on the four fiscal
quarters immediately prior to the date of determination)
to Fixed Charges (based on the four fiscal quarters
immediately prior to the date of determination) to be
less than the ratio set forth below opposite each such
fiscal quarter:
Fiscal Quarter Ratio
First fiscal quarter of fiscal year 1996 1.80 to 1
Second and third fiscal quarters of fiscal year 1.65 to 1
1996
Fourth fiscal quarter of fiscal year 1996 1.80 to 1
Each fiscal quarter thereafter 2.00 to 1"
(i) The first sentence of Section 5.17 of the Credit
Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
"The Companies will and will cause each Subsidiary,
at all times, to maintain insurance of such types and in
such amounts as is consistent with prudent practices and
standards for companies of the same size as and engaged
in businesses similar to that of the Companies."
(j) Exhibit C to the Credit Agreement is hereby amended to be
in the form of Exhibit C attached to this Second Amendment.
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT.
By its execution and delivery hereof, each Company represents and
warrants that, as of the date hereof and after giving effect to the
amendments contemplated by the foregoing Section 1:
(a) the representations and warranties contained in the
Credit Agreement are true and correct on and as of the date hereof
as made on and as of such date;
(b) no event has occurred and is continuing which constitutes
a Default or an Event of Default;
(c) each Company has full power and authority to execute and
deliver this Second Amendment, and this Second Amendment and the
Credit Agreement, as amended hereby, constitute the legal, valid
and binding obligations of such Company, enforceable in accordance
with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding
in equity or at law) and except as rights to indemnity may be
limited by federal or state securities laws; and
(d) no authorization, approval, consent, or other action by,
notice to, or filing with, any governmental authority or other
Person (including, but not limited to, with respect to the
Prudential Debt), is required for the execution, delivery or
performance by each Company of this Second Amendment.
3. CONDITIONS OF EFFECTIVENESS. This Second Amendment shall
be effective as of March 26, 1996, subject to the following:
(i) Agent shall have received counterparts of this
Second Amendment executed by the Majority Lenders;
(ii) Agent shall have received counterparts of this
Second Amendment executed by each Company;
(iii) Agent shall have received evidence satisfactory
to it that Section 6A(3) of Prudential Debt shall have been
amended in a form similar to the amendment provided for in
Section 1(h) of this Second Amendment;
(iv) Agent shall have received certified copies of
resolutions of each Company authorizing execution, delivery
and performance of this Second Amendment; and
(v) Agent shall have received, in form and substance
satisfactory to Agent and its counsel, such other documents,
certificates and instruments as Agent shall require.
4. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder",
or words of like import shall mean and be a reference to the Credit
Agreement, as affected and amended hereby.
(b) The Credit Agreement, as amended by the amendments
referred to above, shall remain in full force and effect and is
hereby ratified and confirmed.
5. COSTS, EXPENSES AND TAXES. The Companies, jointly and
severally, agree to pay on demand all costs and expenses of Agent
in connection with the preparation, reproduction, execution and
delivery of this Second Amendment and the other instruments and
documents to be delivered hereunder (including the reasonable fees
and out-of-pocket expenses of counsel for Agent with respect
thereto and with respect to advising Agent as to its rights and
responsibilities under the Credit Agreement, as hereby amended).
6. EXECUTION IN COUNTERPARTS. This Second Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which when
taken together shall constitute but one and the same instrument.
7. GOVERNING LAW: BINDING EFFECT. This Second Amendment
shall be governed by and construed in accordance with the laws of
the State of Texas and shall be binding upon each Company and each
Lender and their respective successors and assigns.
8. HEADINGS. Section headings in this Second Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Second Amendment for any other purpose.
9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY
THIS SECOND AMENDMENT, AND THE OTHER LOAN PAPERS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
IN WITNESS WHEREOF, the parties hereto have executed this
Second Amendment as the date first above written.
AMERICAN FREIGHTWAYS CORPORATION
By: /s/Frank Conner
Title: EVP - Accounting &
Finance
AMERICAN FREIGHTWAYS, INC.
By: /s/Frank Conner
Title: EVP - Accounting &
Finance
NATIONSBANK OF TEXAS, N.A.
as Agent and as a Lender
By: /s/Steven A. Deily
Title: Senior Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/Michael Lister
Title: VP
WACHOVIA BANK OF GEORGIA, N.A.
By: John R. Tibe
Title: Cororate Banking Officer