EXHIBIT 10.1
 

 
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
 
THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this “Amendment”) is
dated as of May 17, 2010, (the “Effective Date”) by and among COLE TAYLOR BANK
(the “Lender”) and CLARK HOLDINGS INC., THE CLARK GROUP, INC., CLARK
DISTRIBUTION SYSTEMS, INC., HIGHWAY DISTRIBUTIONS SYSTEMS, INC., CLARK WORLDWIDE
TRANSPORTATION, INC., and EVERGREEN EXPRESS LINES, INC. (collectively, the
“Borrowers”).
 
WITNESSETH:
 
WHEREAS, the Borrowers and the Lender entered into that certain Credit and
Security Agreement dated as of March 5, 2010, by and among Borrowers and Lender
(as amended from time to time, the “Credit Agreement”); and

WHEREAS, the Borrowers have requested that the Lender agree to amend the Credit
Agreement, and the Lender has agreed to amend the Credit Agreement on the terms
and conditions set forth below.

NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

1. All capitalized terms used herein and not otherwise expressly defined herein
shall have the respective meanings given to such terms in the Credit Agreement.
 
2. The Borrowers acknowledge and agree that effectiveness of this Amendment is
conditioned on:  (a) the payment of the amendment fee of Twenty-Five Thousand
and No/100 Dollars ($25,000.00); (b) the delivery of a fully-executed original
of this Amendment; and, (c) the delivery of such other documents or instruments
as the Lender and its counsel may reasonably request, each in form and substance
satisfactory to the Lender and its counsel.
 
3. The Credit Agreement is amended by deleting the definition of “Borrowing
Base” from Section 1.01, and substituting the following in lieu thereof:
 
“‘Borrowing Base’ means at any time, the lesser of:
 
(a) The Maximum Revolving Loan Limit; or
 
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(b) Subject to change from time to time in the Lender’s sole discretion
consistently applied, the sum of:
 
(i) Eighty-Five percent (85%) of the Borrowers’ Eligible Accounts provided if
Dilution exceeds five percent (5%), such advance rate shall be reduced by one
(1) percentage point for each whole or partial percentage point by which
Dilution exceeds five percent (5%); plus
 
(ii) seventy percent (70%) of the Borrowers’ Eligible Unbilled Accounts, not to
exceed One Million and No/100 Dollars ($1,000,000.00) in the aggregate; less
 
(iii) the Hedging Obligation Reserve; less
 
(iv) the Availability Reserve; less
 
(v) the Carrier Reserve; less
 
(vi) a reserve in the amount of Fifty Thousand and No/100 Dollars ($50,000.00)
until a release of lien is received by the Lender from the Internal Revenue
Service relating to the federal tax lien set forth on Schedule 1.01-C; less
 
(vii) a reserve in the amount of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) to be released provided: (A) no Event of Default Exists at the
time of the release; (B) compliance with a Fixed Charge Coverage of not less
than 1.05 to 1.00 for two consecutive quarters; and (C) Excess Availability is
greater than Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00) for
the preceding thirty (30) day period.”
 
4. The Credit and Security Agreement is amended by deleting Section 12.02
entitled “Fixed Charge Coverage” and substituting the following in lieu thereof:
 
“12.02                      Fixed Charge Coverage.
 
Borrowers shall not permit Fixed Charge Coverage as of each date set forth below
to be less than the corresponding ratio for such date set forth below:
 
Date
Ratio
       
for the fifty-two (52) week period ending
January 1, 2011 and each thirteen (13) week quarter
end thereafter on a rolling twelve (12) month basis.
1.05 to 1.0
 
 
 
”

5. The Credit and Security Agreement is amended by deleting Section 12.03
entitled “Intentionally Omitted” and substituting the following in lieu thereof:
 
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“12.03                      EBITDA.

Borrowers shall not permit EBITDA to be less than the amount set forth below for
the corresponding period set forth below:

Time Period
Minimum Cumulative EBITDA
 
eighteen (18) week period  ending May 8, 2010
$<1,958,000.00>
 
twenty-two (22) week period ending June 5, 2010
$<1,967,000.00>
 
twenty-six (26) week period ending July 3, 2010
$<1,961,000.00>
 
thirty-one (31) week period ending August 7, 2010
$<1,587,000.00>
 
thirty-five (35) week period  ending September 4, 2010
$<1,118,000.00>
 
thirty-nine (39) week period ending October 2, 2010
$   <704,000.00>
 
forty-four (44) week period ending November 6, 2010
$       82,000.00  
 
forty-eight (48) week period ending December 4, 2010
$     562,000.00  
 
”

6. The Credit Security Agreement is amended by deleting EXHIBIT B entitled “FORM
OF COMPLIANCE CERTIFICATE” and substituting the attached EXHIBIT B in lieu
thereof.
 
7. The Borrowers hereby acknowledge that prior to giving effect to this
Amendment, the Borrowers are in default under Sections 12.02 and 13.01(b) of the
Credit Agreement.  The Lender hereby waives the Event of Default under Sections
12.02 and 13.01(b) through and including the Effective Date, but the Lender
expressly reserves its rights and remedies with respect to any other default or
Event of Default, including, without limitation, any default or Event of Default
with respect to Section 12.02 of the Credit Agreement arising after the
Effective Date.  The Borrowers hereby acknowledge and agree that the execution
and delivery of this Amendment has not established any course of dealing between
the Borrowers and the Lender or any obligation of the Lender with respect to any
future restructuring or modification of the Credit Agreement or the exercise of
the Lender’s rights and remedies thereunder.
 
8. Each of the Borrowers hereby restates, ratifies, and reaffirms each and every
term, condition, representation and warranty heretofore made by it under or in
connection with the execution and delivery of the Credit Agreement as amended
hereby and the other Loan Documents (which shall include all documents executed
in connection with this Amendment) as fully as though such representations and
warranties had been made on the date hereof and with specific reference to this
Amendment and the Loan Documents.
 
9. As amended hereby, the Credit Agreement shall be and remain in full force and
effect, and shall constitute the legal, valid, binding and enforceable
obligations of the Borrowers to the Lender.
 
10. The Borrowers agree to pay on demand all costs and expenses of the Lender in
connection with the preparation, execution, delivery and enforcement of this
Amendment and all other Loan Documents and any other transactions contemplated
hereby, including, without limitation, the reasonable fees and out-of-pocket
expenses of legal counsel to the Lender.
 
11. The Borrowers agree to take such further action as the Lender shall
reasonably request in connection herewith to evidence the amendments herein
contained to the Credit Agreement.
 
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12. This 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
counterparts, taken together, shall constitute but one and the same instrument.
 
13. This Amendment shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto.
 
14. This Amendment shall be governed by, and construed in accordance with,
Section 15.03 of the Credit Agreement.
 
IN WITNESS WHEREOF, the Borrowers and the Lender have caused this Amendment to
be duly executed as of the date first above written.
 
 

BORROWERS:  
 
     
CLARK HOLDINGS INC.,
a Delaware Corporation
            By:
 
 
 
Name: /s/ Stephen Spritzer     Title: Vice President and Treasurer      
 
 
 
       
THE CLARK GROUP, INC.,
a Delaware Corporation
     
 
 
 
By:       Name: /s/ Stephen Spritzer     Title: Vice President and Treasurer    
       

 
CLARK DISTRIBUTION SYSTEMS, INC.,
a Delaware Corporation
            By:
 
 
 
Name: /s/ Stephen Spritzer     Title: Vice President and Treasurer      
 
 
 
       
HIGHWAY DISTRIBUTION SYSTEMS, INC.,
a Delaware Corporation
     
 
 
 
By:       Name: /s/ Stephen Spritzer     Title: Vice President and Treasurer    
       

 
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CLARK WORLDWIDE TRANSPORTATION, INC.,
a Pennsylvania Corporation
            By:
 
 
 
Name: /s/ Stephen Spritzer     Title: Vice President and Treasurer      
 
 
 
       
EVERGREEN EXPRESS LINES, INC.,
a Pennsylvania Corporation
     
 
 
 
By:       Name: /s/ Stephen Spritzer     Title: Vice President and Treasurer    
       

 
 

LENDER:          
COLE TAYLOR BANK,
an Illinois banking corporation
            By:
 
 
 
Name: /s/ Donald A. Tomlinson     Title: Senior Vice President      
 
 
 
       

 
 
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EXHIBIT B
 
FORM OF COMPLIANCE CERTIFICATE
 
Compliance Certificate
 
To:
Cole Taylor Bank
Date:
_____________________, 20___
Subject:
[Borrower]
   

Financial Statements
 
In accordance with our Credit and Security Agreement dated as of ________,
20____, as amended, modified, extended, renewed, supplemented or restated (the
“Credit Agreement”), attached are the financial statements of _____________
(“Borrower[s]”) of and for the [month] [fiscal quarter] ended _______________
____, 20____ (the “Reporting Date”) and the year-to-date period then ended (the
“Current Financials”) required to be delivered pursuant to Section 7.03 of the
Credit Agreement.  All terms used in this certificate have the meanings given in
the Credit Agreement.
 
The Borrower[s] certifies that the Current Financials have been prepared in
accordance with GAAP and fairly present in all material respects the
consolidated financial condition of the Borrower as of the date thereof and in a
manner consistent with prior periods.
 
Defaults. (Check one):
 
The Borrower[s] further certifies that:
 
 
o
Except as previously reported in writing to the Lender, there exists no event or
circumstance which is or which with the passage of time, the giving of notice,
or both would constitute an Event of Default, as that term is defined in the
Agreement, or, if such an event of circumstance exists, a writing attached
hereto specifies the nature thereof, the period of existence thereof and the
action that Borrower[s] has taken or proposes to take with respect thereto.

 
 
o
There exists no event or circumstance which is or which with the passage of
time, the giving of notice, or both would constitute an Event of Default, as
that term is defined in the Agreement, or, if such an event of circumstance
exists, a writing attached hereto specifies the nature thereof, the period of
existence thereof and the action that Borrower[s] has taken or proposes to take
with respect thereto.

 
Representations and Warranties:
 
The Borrower[s] further certifies that each of the representations and
warranties made by the Borrower[s], any Subsidiary and/or any Owner of the
Borrower[s] in the Credit Agreement and/or in any other Loan Document are true
and correct in all material respects on and as of the date of this Compliance
Certificate as if made on and as of the date of this Compliance Certificate (and
for purposes of this Compliance Certificate, the representations and warranties
made by the Borrower[s] in Section 9.01 of the Credit Agreement shall be deemed
to refer to the financial statements of the Borrower[s] delivered to the Lender
with this Compliance Certificate).
 

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Financial Covenants. The Borrower further certifies as follows:
 
1. Minimum Fixed Charge Coverage. Pursuant to Section 12.02 of the Credit
Agreement, as of the Reporting Date, the Borrowers’ Fixed Charge Coverage was
_____ to 1.00 which o satisfies o does not satisfy the requirement that such
ratio be no less than [____ to 1.00 on the Reporting Date.] The applicable ratio
set forth in the table below on the Reporting Date:
 
Period
Minimum Fixed Charge Coverage Ratio
Through
_____ to 1.00
Through
_____ to 1.00
Through
_____ to 1.00
Through
_____ to 1.00
   

 
2.           Minimum EBITDA.  Pursuant to Section 12.03 of the Credit Agreement,
as of the Reporting Date, the Borrowers’ EBITDA for the month ending as of
____________________, was $____________________ which o satisfies o does not
satisfy the requirement that such amount be not less than [$__________ on the
Reporting Date.]  The amount set forth in the table below (numbers appearing
between “< >” are negative) on the Reporting Date:
 
Period
Minimum EBITDA
Through
$             
Through
$             
Through
$             
Through
$             
   

 
Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP, subject to normal year-end adjustments and
absence of footnotes.
 

 
,
   
 a
         
 
By:
      Name        Title             

 
 ,                                                         

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