UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2018 (August 3, 2018)
ARCBEST CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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0-19969 |
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71-0673405 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
8401 McClure Drive
Fort Smith, Arkansas 72916
(479) 785-6000
( Address, including zip code, and telephone number, including area code, of
the registrant’s principal executive offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ( §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 1.01 Entry into a Material Definitive Agreement.
The information required by Item 1.01 is included in Item 2.03 and is incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
On August 3, 2018, ArcBest Corporation (the “Company”) and its wholly-owned subsidiary ArcBest Funding LLC (the “Borrower”), amended the Borrower’s existing revolving accounts receivable securitization facility with PNC Bank, National Association (“PNC”) and Regions Bank (“Regions”) governed by the Second Amended and Restated Receivables Loan Agreement, dated as of March 20, 2017 (the “Receivables Loan Agreement”), by and among the Company, as servicer, the Borrower, as borrower, and Regions Bank and PNC, as lenders (the “Lenders”), and PNC, as letter of credit issuer (“LC Issuer”), and agent and administrator for the Lenders and their assigns and the LC Issuer and its assigns (“Agent”).
The Receivables Loan Agreement has been amended to, among other things (i) extend the facility termination date from April 1, 2020, to October 1, 2021, and (ii) ease certain performance triggers. Borrowings under the facility are secured primarily by a lien on and security interest in the Borrower’s related accounts receivable. Borrowing advances have no scheduled maturity date, and are payable upon termination of the Receivables Loan Agreement. Advances bear interest based upon LIBOR, plus a margin.
The Receivables Loan Agreement contains representations and warranties, affirmative and negative covenants and events of default that are customary for financings of this type. As of the date hereof, the Borrower has approximately $45.0 million of outstanding loans under the Receivables Loan Agreement.
The Receivables Loan Agreement includes a provision under which the Borrower may request, and the LC Issuer may issue, standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which certain subsidiaries of the Company are self-insured. Outstanding standby letters of credit reduce the availability of borrowings under the facility. As of the date hereof, approximately $17.7 million of standby letters of credit have been issued under the facility which, together with the outstanding loans under the Receivables Loan Agreement, have reduced the available borrowing capacity to approximately $62.3 million.
Affiliates of PNC and Regions Bank have provided from time to time, and may provide in the future, investment and commercial banking and financial advisory services to the Company and its affiliates in the ordinary course of business, for which they have received, and may continue to receive, customary fees and commissions.
The foregoing description of the transactions contemplated by the amendment to the Receivables Loan Agreement is qualified in its entirety by reference to such amendment, a copy of which is filed as Exhibit 10.1 to this current report on Form 8-K (the “Current Report”) and is incorporated by reference herein.
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED RECEIVABLES LOAN AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED RECEIVABLES LOAN AGREEMENT, dated as of August 3, 2018 (the “Amendment” ) is by and among ARCBEST FUNDING LLC f/k/a ABF Freight Funding LLC, a Delaware limited liability company, as Borrower (the “Borrower” ), ARCBEST CORPORATION, F/K/A ARKANSAS BEST CORPORATION, a Delaware corporation, as Servicer (the “Servicer” ), REGIONS BANK, as a lender, PNC BANK, NATIONAL ASSOCIATION, as a lender, letter of credit issuer (in such capacity, the “LC Issuer” ) and as agent and administrator for the lenders and their assigns and the LC Issuer and its assigns under the Loan Agreement (in such capacity, the “Agent” ).
W I T N E S S E T H :
WHEREAS, the Borrower, the Servicer, the Lenders, the LC Issuer and the Agent are parties to that certain Second Amended and Restated Receivables Loan Agreement dated as of March 20, 2017 (as amended and supplemented through the date hereof, the “Loan Agreement” )
WHEREAS, the Borrower, the Servicer, the LC Issuer, the Lenders and the Agent agree to amend the Loan Agreement pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
Section 1. Defined Terms. Unless otherwise amended by the terms of this Amendment, terms used in this Amendment shall have the meanings assigned in the Loan Agreement.
Section 2. Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 5 below, the Loan Agreement shall be and hereby is amended as follows:
2.1. The reference to “1.75%” in Section 9.1(h)(ii) of the Loan Agreement is hereby deleted and replaced with “2.50%” .
2.2. The reference to “10.00” in Section 9.1(h)(iv) of the Loan Agreement is hereby deleted and replaced with “8.00” .
2.3. Section 9.1(i) of the Loan Agreement is hereby amended and restated in its entirety and as so amended and restated shall read as follows:
(i) As at the end of any Special Calculation Period:
(i) the three-month rolling average Delinquency Ratio shall be greater than or equal to 4.25%,
(ii) the three-month rolling average Default Ratio shall be greater than or equal to 2.75%,
(iii) the three-month rolling average Dilution Ratio shall be greater than or equal to 4.25%, or
(iv) the Accounts Receivable Turnover Ratio shall be less than 6.50.
2.4. Clause (g) of the defined term “Concentration Limit” appearing in Exhibit I to the Loan Agreement is hereby amended and restated in its entirety and as so amended and restated shall read as follows:
(g) For any Unbilled Receivables in the aggregate, 9.0% of the aggregate Outstanding Balance of all Eligible Receivables; provided however, that during a Special Calculation Period, the Concentration Limit for any Unbilled Receivables in the aggregate shall be 11.0% of the aggregate Outstanding Balance of all Eligible Receivables.
2.5. The defined terms “Facility Termination Date” and “Special Calculation Period” appearing in Exhibit I to the Loan Agreement are hereby amended and restated in their entirety and as so amended and restated shall read as follows:
“Facility Termination Date” The earliest to occur of (i) the Amortization Date, and (ii) October 1, 2021.
“Special Calculation Period” Any Calculation Period elected by the Borrower so long as (i) at least five (5) days prior written notice has been given to the Agent and each Lender before the next Settlement Date and (ii) not more than nine (9) Special Calculation Periods have been selected from the Second Amendment Closing Date through the Facility Termination Date.
2.6. The defined term “Settlement Date” appearing in Exhibit I to the Loan Agreement is hereby amended and restated in its entirety and as so amended and restated shall read as follows:
“ Settlement Date ” the 17 th day of each month or, if such day is not a Business Day, the Business Day immediately thereafter.
2.7. The defined term “Surplus Event” appearing in Exhibit I to the Loan Agreement is hereby deleted in its entirety.
2.8. Exhibit I to the Loan Agreement is hereby amended by adding the defined term “Second Amendment Closing Date” in alphabetical sequence to read as follows:
“Second Amendment Closing Date” shall mean August 3, 2018.
Section 3. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:
3.1. The parties hereto shall have executed and delivered this Amendment.
3.2. The Agent shall have received an executed Fourth Amended and Restated Fee Letter.
3.3. Each representation and warranty of the Borrower and the Servicer contained herein (after giving effect to this Amendment) shall be true and correct.
3.4. No (i) Servicer Termination Event, (ii) Unmatured Servicer Termination Event, (ii) Amortization Event, or (iv) Unmatured Amortization Event, shall have occurred and be continuing.
3.5. The Agent shall have received such other agreements, instruments, documents, certificates, and opinions as the Agent may reasonably request.
Section 4. Representations of the Borrower and the Servicer. Each of the Borrower and the Servicer hereby represent and warrant to the parties hereto that as of the date hereof each of the representations and warranties contained in the Loan Agreement and any other Transaction Document to which such Person is a party is true and correct as of the date hereof and after giving effect to this Amendment (except to the extent that such representations and warranties expressly refer to an earlier date, in which case they are true and correct as of such earlier date).
Section 5. Reaffirmation and Ratification of the Performance Guaranty . The agreements and obligations of ArcBest Corporation (the “Guarantor” ) under the Performance Guaranty are hereby reaffirmed, ratified, brought forward, renewed and extended. The Guarantor hereby ratifies, affirms, reaffirms, acknowledges, and agrees that the Performance Guaranty represents the valid, binding and enforceable obligation of the Guarantor. The Guarantor hereby agrees that the Performance Guaranty is and shall remain in full force and effect in favor of the Agent for the benefit of the Secured Parties under the Performance Guaranty, until all obligations owing to the Secured Parties thereunder shall have been satisfied in accordance with its terms.
Section 6. Agreement in Full Force and Effect. Except as expressly set forth herein, all terms and conditions of the Agreement, as amended, shall remain in full force and effect.
Section 7. Execution in Counterparts, Effectiveness. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be executed by the parties hereto and be deemed an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of this Amendment.
Section 8. Governing Law. This Amendment shall be construed in accordance with the laws of the State of New York, without reference to conflict of law principles other than Section 5-1401 of the General Obligations Law, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Second Amended and Restated Receivables Loan Agreement to be executed and delivered by their duly authorized officers as of the date hereof.
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ARCBEST FUNDING LLC, as Borrower |
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By: ArcBest Corporation, its sole member |
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By: |
/s/Donald W. Pearson |
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Name: Donald W. Pearson |
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Title: Treasurer |
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ARCBEST CORPORATION, as Servicer |
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By: |
/s/Donald W. Pearson |
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Name: Donald W. Pearson |
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Title: Treasurer |
Signature Page to Second Amendment to
Second Amended and Restated Receivables Loan Agreement
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PNC BANK, NATIONAL ASSOCIATION, as a Lender, the LC Issuer, and as the Agent |
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By: |
/s/ Michael Brown |
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Name: Michael Brown |
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Title: Senior Vice President |
Signature Page to Second Amendment to
Second Amended and Restated Receivables Loan Agreement
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REGIONS BANK, as a Lender |
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By: |
/s/ Cecil Noble |
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Name: Cecil Noble |
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Title: Managing Director |
Signature Page to Second Amendment to
Second Amended and Restated Receivables Loan Agreement
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Solely for the purpose of Section 5: |
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ARCBEST CORPORATION, f/k/a ARKANSAS BEST CORPORATION, as Guarantor |
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By: |
/s/ Donald W. Pearson |
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Name: Donald W. Pearson |
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Title: Vice President - Treasurer |
Signature Page to Second Amendment to
Second Amended and Restated Receivables Loan Agreement