CELADON GROUP, INC. (NYSE:CGI) Files An 8-K Entry into a Material Definitive Agreement

On November 15, 2019, Celadon Group, Inc., a Delaware corporation (the “Company”), entered into a Third Amendment to Second Amended and Restated Credit Agreement (the “Term Loan Amendment”) among the Company, certain of its subsidiaries, Blue Torch Finance, LLC, as administrative agent (the “Term Loan Agent”), and BTC Holdings Fund I, LLC, BTC Holdings Fund I-B, LLC, BTC Holdings SC Fund LLC, and Luminus Energy Partners Master Fund, Ltd., each as lenders (the “Term Loan Lenders”), which amends that certain Second Amended and Restated Credit Agreement dated July 31, 2019 (as amended, the “Term Loan Agreement”), among the Company, certain of its subsidiaries, the Term Loan Agent, and the Term Loan Lenders. In addition, on November 15, 2019, the Company entered into a Waiver and Amendment No. 3 to Credit and Security Agreement (the “Revolving Loan Amendment” and, together with the Term Loan Amendment, the “Amendments”) among the Company, certain of its subsidiaries, MidCap Funding IV Trust, as agent (the “Revolving Agent”), and MidCap Financial Trust, as lender (the “Revolving Lender”), which amends that certain Credit and Security Agreement dated July 31, 2019 (as amended, the “Revolving Credit Agreement”), among the Company, certain of its subsidiaries, the Revolving Agent, and the Revolving Lender.

The Term Loan Amendment (i) increases the interest rate under the Term Loan Agreement by two percent per annum; (ii) eliminates the Lease Adjusted Leverage Ratio and the Fixed Charge Coverage Ratio financial covenants for all periods prior to February 29, 2020, at which point such financial covenants will be tested for the preceding five months; (iii) decreases the minimum liquidity requirement to $5 million for the period of November 15, 2019 through and including February 29, 2020 and provides that an amount of revolving loan availability, starting at $150,000 on January 1, 2020 and increasing by $150,000 a week to a maximum of $1,500,000, will be excluded from liquidity for purposes of the minimum liquidity covenant; (iv) permits a specified trailer sale and leaseback transaction and provides that proceeds of such transaction exceeding $10 million need not be used to repay indebtedness under the Term Loan Agreement; (v) waives defaults relating to the Company’s failure to comply with the Lease Adjusted Leverage Ratio required for the period ended September 30, 2019, the Company’s failure to timely deliver certain deposit account control agreements, and cross-defaults arising from defaults under the Revolving Credit Agreement; and (vi) requires the company to prepare and deliver certain budgets, projections, and cash flow reporting materials, including a plan to obtain additional capital prior to February 29, 2020.

The Revolving Loan Amendment (i) increases the interest rate under the Revolving Credit Agreement by two percent per annum; (ii) eliminates the Lease Adjusted Net Leverage Ratio and the Fixed Charge Coverage Ratio financial covenants for all periods prior to February 29, 2020, at which point such financial covenants will be tested for the preceding five months; (iii) decreases the minimum liquidity requirement to $5 million for the period of November 15, 2019 through and including February 29, 2020 and provides that an amount of revolving loan availability, starting at $150,000 on January 1, 2020 and increasing by $150,000 a week to a maximum of $1,500,000, will be excluded from liquidity for purposes of the minimum liquidity covenant; (iv) waives defaults relating to the Company’s failure to comply with the Lease Adjusted Net Leverage Ratio required for the period ended September 30, 2019, the Company’s failure to timely deliver financial statements and related items, and cross-defaults arising from defaults under the Term Loan Agreement; and (v) requires the company to prepare and deliver certain budgets, projections, and cash flow reporting materials, including a plan to obtain additional capital prior to February 29, 2020.

The description of the Amendments set forth above does not purport to be complete and is qualified in its entirety by the full text of the Term Loan Amendment and the Revolving Loan Amendment, which are filed herewith as Exhibits 10.1 and 10.2, respectively.

Item 9.01 Financial Statements and Exhibits.

CELADON GROUP INC Exhibit
EX-10.1 2 exhibit101.htm EXHIBIT 10.1 (THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED NOVEMBER 15,…
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About CELADON GROUP, INC. (NYSE:CGI)

Celadon Group, Inc. (Celadon) is a truckload freight transportation provider. The Company’s segments are asset-based, asset-light, and equipment leasing and services. Its services involve point-to-point shipping for its customers within the United States, between the United States and Mexico, and between the United States and Canada. The Company’s primary asset-based services include the United States domestic dry van, refrigerated and flatbed service; cross-border service between the United States and each of Mexico and Canada; intra-Mexico and intra-Canada service; contract service; regional and specialized short haul service, and rail intermodal service. The Company’s primary asset-light services include freight brokerage, warehousing, less-than truckload consolidation and supply chain logistics services. Celadon’s equipment leasing and services segment consists primarily of leasing activities with independent contractors and other trucking fleets.