EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
To Each of the Banks Signatory Hereto
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
October 8, 1996 (the "CREDIT AGREEMENT"), between the undersigned, Xxxxxxxx
Xxxxxxx Corporation, a Delaware corporation (the "COMPANY"), Bank of Montreal,
as agent for the Banks (the "AGENT"), and you (the "BANKS"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.
In connection with one or more proposed assignments pursuant to Section
11.12 of the Credit Agreement, the Company and the Banks have agreed to amend
the covenants set forth in Section 8 of the Credit Agreement on the terms and
conditions set forth in this First Amendment.
1. AMENDMENTS.
Upon your acceptance hereof in the space provided for that purpose below,
the Credit Agreement shall be and hereby is amended as follows:
(a) Section 1.1 of the Credit Agreement shall be amended to include
two new definitions which shall read as follows:
" "FIXED CHARGES" means, with reference to any period, the sum of
(i) all payments of principal due within 12 calendar months on and
after the last day of such period with respect to the current portion
of long-term funded debt of the Company and its Subsidiaries (as
determined in accordance with GAAP), PLUS (ii) Interest Expense for
the period then ended, PLUS (iii) Capital Expenditures of the Company
and its Subsidiaries for the period then ended.
"CAPITAL EXPENDITURES" means, with respect to any Person for any
period, the aggregate amount of all expenditures (whether paid in cash
or accrued as a liability) by such Person during that
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period which, in accordance with GAAP, are or should be included
as "additions to property, plant or equipment" or similar items
reflected on the statement of cash flows of such Person."
(b) The definition of "REQUIRED BANKS" appearing in Section 1.1 of
the Credit Agreement shall be amended and restated to read as follows:
" "REQUIRED BANKS" shall mean Banks holding 66.7% or more of the
outstanding principal amount of the Loans and the credit risks to the
Letters of Credit, or, if no Loans or Letters of Credit are
outstanding, Banks granting 66.7% or more of the Commitments."
(c) Section 5.1 of the Credit Agreement shall be amended by deleting
the amount "$5,000,000" appearing in clause (vii) therein and inserting the
amount "$9,000,000" in lieu thereof.
(d) Section 8.11 of the Credit Agreement shall be amended by deleting
the phrase "Letters of Credit" appearing therein and inserting the phrase
"financial letters of credit" in lieu thereof.
(e) Section 8.16 of the Credit Agreement shall be amended and
restated to read as follows:
"SECTION 8.16. SALE OF ASSETS. The Company will not, nor
will it permit any Restricted Subsidiary to, sell, lease or otherwise
dispose of all or any substantial part of its property or assets
(including any disposition of property as part of a sale and leaseback
transaction, but excluding the leasing of property by WCG Leasing,
Inc., a Montana corporation, made in the ordinary course of its
business) or in any event sell or discount (whether through factoring,
securitization or otherwise), with or without recourse, any of its
notes or accounts receivable; PROVIDED, that nothing contained therein
shall prohibit (i) sales of inventory in the ordinary course of
business; (ii) sales or dispositions of obsolete or worn out tangible
property disposed of in the ordinary course of business; (iii) sales
of individual items of Collateral or other assets
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(other than notes or accounts receivable) with a book value of less
than (x) $10,000,000 in the aggregate during the fiscal year ending on
or about November 30, 1997, and (y) $15,000,000 in the aggregate
during any other fiscal year; and (iv) the sale of delinquent notes or
accounts receivable in the ordinary course of business for purposes of
collection only. In the event the Company sells CF Systems
Corporation during the fiscal year ending on or about November 30,
1997, such sale shall not count against the $10,000,000 permitted
amount provided for in clause (iii)(x) above for purposes of this
Section 8.16 or Section 8.19 below. At the request of the Company, so
long as no Default or Event of Default then exists or would arise as a
result of such disposition, the Agent is hereby authorized and
directed to release its lien on any property sold pursuant to the
forgoing provisions."
(f) Section 8 of the Credit Agreement shall be amended by inserting
two new Sections at the end thereof which shall read as follows:
"SECTION 8.25. MINIMUM EBITDA. As of the last day of each
fiscal quarter of the Company, Earnings Before Interest, Taxes,
Depreciation and Amortization shall not be less than (a) $10,000,000
as of February 28, 1997, for the fiscal quarter then ended, (b)
$15,000,000 as of May 31, 1997, for the fiscal quarter then ended, (c)
$15,000,000 as of August 31, 1997, for the fiscal quarter then ended,
(d) $15,000,000 as of November 30, 1997, for the fiscal quarter then
ended, (e) notwithstanding the quarterly tests set forth in clauses
(a)-(d) above, $60,000,000 as of November 30, 1997, for the four
fiscal quarters then ended and (f) $65,000,000 as of the last day of
each fiscal quarter ending after November 30, 1997, for the four
fiscal quarters then ended.
SECTION 8.26. FIXED CHARGE COVERAGE RATIO. As of the last day
of each fiscal quarter of the Company ending during the periods
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specified below, the Company shall maintain a ratio of (a) Earnings
Before Interest, Taxes, Depreciation and Amortization for the four
fiscal quarters of the Company then ended to (b) Fixed Charges for the
same four fiscal quarters then ended (the "FIXED CHARGE COVERAGE
RATIO") of not less than:
FIXED CHARGE COVERAGE
FROM AND TO AND RATIO SHALL
INCLUDING INCLUDING NOT BE LESS THAN
12/01/96 11/30/97 1.50 to 1.0
12/01/97 11/30/98 1.75 to 1.0
12/01/98 and at all times 2.00 to 1.0
thereafter
; PROVIDED that (i) such ratio shall be computed on February 28, 1997,
for the quarter then ended, with Earnings Before Interest, Taxes,
Depreciation and Amortization, Interest Expense, and Capital
Expenditures each computed by multiplying the actual amount thereof
during such period by a fraction, the numerator of which is 365 and
the denominator of which is the number of days elapsed since November
30, 1996; on May 31, 1997, for the two quarters then ended, with
Earnings Before Interest, Taxes, Depreciation and Amortization,
Interest Expense, and Capital Expenditures each computed by
multiplying the actual amount thereof during such period by a
fraction, the numerator of which is 365 and the denominator of which
is the number of days elapsed since November 30, 1996; and on August
31, 1997, for the three
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quarters then ended, with Earnings Before Interest, Taxes,
Depreciation and Amortization, Interest Expense, and Capital
Expenditures each computed by multiplying the actual amount thereof
during such period by a fraction, the numerator of which is 365 and
the denominator of which is the number of days elapsed since November
30, 1996. Notwithstanding anything to the contrary set forth above,
if as of the last day of any fiscal quarter of the Company, the
Company has a Xxxxx'x Rating of at least Baa3 or a S & P Rating of at
least BBB-, then the Company shall maintain a Fixed Charge Coverage
Ratio for the four fiscal quarters of the Company then ended of not
less than 1.75 to 1.0."
(g) Section 11.12 of the Credit Agreement shall be amended by
deleting the amount "$2,000" appearing in clause (iii) therein (Assignment
Agreement recording and processing fee) and inserting the amount "$3,500"
in lieu thereof.
(h) Section 11.13 of the Credit Agreement shall be amended and
restated to read as follows:
"SECTION 11.13. WAIVERS, MODIFICATIONS AND AMENDMENTS. Any
provision hereof or of any of the other Loan Documents may be amended,
modified, waived or released and any Default or Event of Default and its
consequences may be rescinded and annulled upon the written consent of the
Required Banks; PROVIDED, HOWEVER, that without the consent of all Banks no
such amendment, modification or waiver shall (i) increase the amount or
extend the terms of any Bank's Commitment, (ii) reduce the interest rate
applicable to or extend the maturity of any Loan, fee or other obligation
owed to it or reduce the amount of the fees to which it is entitled
hereunder, (iii) release any Material Subsidiary from its obligations under
the Guaranty (except for releases expressly contemplated by this
Agreement), (iv) release any substantial (in value) part of the collateral
security afforded by the Collateral
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Documents (except in connection with a sale or other disposition required
to be effected by the provisions hereof or of the Collateral Documents and
except for releases of the Agent's lien thereon expressly contemplated by
this Agreement) or permit the sale or discount of notes or accounts
receivable except as permitted by Section 8.16(iv) hereof, (v) change this
Section 11.13, or (vi) change the definition of "REQUIRED BANKS" or change
the number of Banks required to take any action hereunder or under any of
the other Loan Documents; it being understood (x) that waivers or
modifications of covenants, Defaults or Events of Default (other than those
set forth in Section 9.1(j) and (k) hereof) or of a mandatory reduction in
the Commitments or of a mandatory prepayment may be made at the discretion
of the Required Banks and shall not constitute an increase of the
Commitment of any Bank, and that any resulting increase in the available
portion of any Commitment of any Bank shall not constitute an increase in
the Commitment of such Bank, and (y) any waiver of applicability of any
post-default increase in interest rates may be made at the discretion of
the Required Banks. No amendment, modification or waiver of the Agent's or
an Issuing Bank's protective provisions shall be effective without the
prior written consent of the Agent or the relevant Issuing Bank."
2. CONDITIONS PRECEDENT.
The effectiveness of this First Amendment is subject to the satisfaction of
all of the following conditions precedent:
(a) The Company, the Agent and the Banks shall have executed and
delivered this First Amendment.
(b) Legal matters incident to the execution and delivery of this
First Amendment shall be satisfactory to the Banks and their counsel.
(c) Each Material Subsidiary shall have executed and delivered to the
Banks its
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consent to this First Amendment in the form set forth below.
3. REPRESENTATIONS.
In order to induce the Banks to execute and deliver this First Amendment,
the Company hereby represents to the Banks that as of the date hereof, and after
giving effect to this First Amendment, the representations and warranties set
forth in Section 6 of the Credit Agreement are and shall be and remain true and
correct (except that the representations contained in Section 6.4 shall be
deemed to refer to the most recent financial statements of the Company delivered
to the Banks) and the Company is in full compliance with all of the terms and
conditions of the Credit Agreement and no Default or Event of Default has
occurred and is continuing under the Credit Agreement or shall result after
giving effect to this First Amendment.
4. MISCELLANEOUS.
(a) Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific First Amendment need not be made in the Credit
Agreement, the Notes, or any other instrument or document executed in connection
therewith, or in any certificate, letter or communication issued or made
pursuant to or with respect to the Credit Agreement, any reference in any of
such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.
(b) The Company agrees to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation, execution
and delivery of this First Amendment, including the fees and expenses of counsel
for the Agent.
(c) This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
Dated as of January 31, 1997.
XXXXXXXX XXXXXXX CORPORATION
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By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Its Vice President and Treasurer
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Accepted and agreed to as of the date and year last above written.
BANK OF MONTREAL, individually and as
Agent
By /s/ X. X. Xxxxxx
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X. X. Xxxxxx
Its Director
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GUARANTORS' CONSENT
The undersigned, Xxxxxxxx Xxxxxxx Corporation, an Ohio corporation, Atascosa
Mining Co., Centennial Engineering, Inc., CF Systems Corporation, XX-Xxxxxxxx of
Oak Ridge Company, WCG Holdings, Inc., Xxxxxx Corporation, Pomeroy Corporation,
Washington Contractors Group, Inc., Xxxxx Mining, Inc., Washington Construction
Co., Pro Builders, Corp., and WCG Leasing, Inc., heretofore executed and
delivered to the Agent and the Banks an Amended and Restated Guaranty Agreement
dated as of October 8, 1996, and certain other Loan Documents in connection
therewith, and hereby consent to the First Amendment to the Credit Agreement as
set forth above and confirm that the Guaranty Agreement, and all other Loan
Documents executed by the undersigned, or any one or more of them, and all of
the obligations of the undersigned thereunder, remain in full force and effect.
XXXXXXXX XXXXXXX CORPORATION,
an Ohio corporation
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
ATASCOSA MINING CO.
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
CENTENNIAL ENGINEERING, INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
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CF ENVIRONMENTAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
XX-XXXXXXXX OF OAK RIDGE COMPANY
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President and Treasurer
WCG HOLDINGS, INC.
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
XXXXXX CORPORATION
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
XXXXXXX CORPORATION
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
WASHINGTON CONTRACTORS GROUP, INC.
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
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XXXXX MINING, INC.
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
WASHINGTON CONSTRUCTION CO.
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
PRO BUILDERS CORP.
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
WCG LEASING, INC.
By /s/ Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Assistant Secretary
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