EXHIBIT 10.4
SECOND AMENDMENT
THIS SECOND AMENDMENT (this "Amendment") dated as of November 12, 1999
is among UNITED ROAD SERVICES, INC. (the "Company"), various financial
institutions and BANK OF AMERICA, N.A. (f/k/a Bank of America National Trust and
Savings Association), as agent (in such capacity, the "Agent").
W I T N E S E T H:
WHEREAS, the Company, various financial institutions and the Agent are
parties to an Amended and Restated Credit Agreement dated as of November 2, 1998
(the "Credit Agreement" and, as amended and modified by this Amendment, the
"Amended Credit Agreement");
WHEREAS, the parties hereto desire to amend the Credit Agreement as
hereinafter provided; and
WHEREAS, the Company desires to reduce the Commitment Amount under and
as defined in the Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1 Defined Terms. Terms used in this Amendment which are defined in the
Credit Agreement shall have the respective meanings assigned to such terms in
the Credit Agreement unless otherwise defined herein.
SECTION 2 Amendments to Credit Agreement. The Credit Agreement is amended as set
forth below in this Section 2
2.1 Amendment to Definition of Base Rate Margin. The definition of Base
Rate Margin is amended in its entirety to read as follows:
"Base Rate Margin means a rate per annum determined
in accordance with Schedule 1.1A, provided that, upon the
request of the Required Banks, the Base Rate Margin shall be
equal to 1% beginning on the date of effectiveness of the
Second Amendment to this Agreement and continuing through
February 29, 2000 (or such earlier date as the Required Banks
may agree)."
2.2 Addition of Reporting Requirement. Section 10 shall be amended by
adding the following subsection 10.1.12 and renumbering the existing subsection
10.1.12 as 10.1.13:
"10.1.12 Monthly EBITDA Report. The Company shall
furnish to the Agent promptly when available and in any event
within 30 days after the end of each month a calculation in
reasonable detail of EBITDA for such month."
2.3 Addition of Financial Covenant. Subsection 10.6 is amended by
inserting the following subsection 10.6.7 at the end thereof:
"10.6.7 Minimum EBITDA. Not permit EBITDA for any
period set forth below plus (i) bonuses paid to Xxxxxx X.
Xxxxxxx in an aggregate amount not exceeding $100,000, (ii)
the charge-off of certain deferred financing costs in an
aggregate amount not exceeding $320,000 and (iii) payments to
Kibel Green for consulting services, not exceeding $200,000
per month, in each case to the extent deducted in determining
EBITDA for such period, to be less than the applicable amount
set forth below for such period:
Period Minimum EBITDA
------ --------------
10/1/99 - 10/31/99 $1,700,000
10/1/99 - 11/30/99 3,400,000
10/1/99 - 12/31/99 5,100,000
10/1/99 - 1/31/00 7,000,000."
2.4 Amendment of Mergers, Consolidations, Sales Covenant. Clause
(c)(3)(i)(y) of subsection 10.10 is amended in its entirety to read as follows:
"(y) no cash consideration is to be paid by the
Company and its Subsidiaries in connection therewith"
2.5 Amendment to Advances and Other Investments Covenant. Clause (i) of
subsection 10.20 is amended by deleting the amount $2,500,000 therein and
replacing $1,500,000 therefor.
2.6 Addition of Covenant. Section 10 is amended by inserting the
following subsection 10.25 at the end thereof:
"10.25 Operating Leases. Not and not permit any
Subsidiary to, incur or assume any liability for rental
payments under any lease (including any lease resulting from a
sale and leaseback transaction, but excluding any Capital
Lease) if, after giving effect thereto, the aggregate amount
of all payments under such leases in Fiscal Year 1999 would
exceed $8,600,000."
2.7 Amendment to Change in Control. Clause (d) of subsection 12.1.11 is
amended by deleting the word "all" and replacing it with "any two".
2.8 Amendment to Schedule of Key Executive Officers. Schedule 12.1.11A
to the Credit Agreement is amended to read in its entirety as set forth in
Schedule 12.1.11A to this Agreement.
2.9 Amendment to Schedule of Key Directors. Schedule 12.1.11B to the
Credit Agreement is amended to read in its entirety as set forth in Schedule
12.1.11B to this Agreement.
SECTION 3. Waiver; Limitation on Outstandings. Effective as of
September 30, 1999 (but subject to the occurrence of the Amendment Effective
Date), the Required Banks hereby waive through February 29, 2000 the Company's
non-compliance with Sections 10.6.1 and 10.6.5 of the Credit Agreement so long
as the Consolidated Net Income for the Fiscal Quarter ending September 30, 1999
is not less than ($3,687,000). In consideration of such waiver, the Company (a)
acknowledges that upon the expiration of such waiver (unless a new waiver or an
amendment has been agreed to by the Required Banks) an immediate Event of
Default shall exist under the Credit Agreement; and (b) agrees that, unless the
Required Banks otherwise consent the aggregate outstanding principal amount of
all Loans plus the Stated Amount of all Letters of Credit shall not at any time
exceed from the date hereof through December 31, 1999 $58,000,000 and
$55,000,000 after January 1, 2000.
SECTION 4. Conditions Precedent. This Amendment shall become effective
as of the date hereof on the date (the "Amendment Effective Date") on which all
of the following conditions shall have been satisfied:
4.1 Receipt of Documents. The Agent shall have received all of the
following, each duly executed and dated a date acceptable to, and otherwise in
form and substance satisfactory to, the Agent, and in sufficient number of
signed counterparts to provide one for each Bank:
(a) Amendment. Counterpart originals of this Amendment
executed by the Company, the Required Banks and the Agent. For purposes
of this clause (a), a facsimile executed copy shall be treated as an
original.
(b) Certificates A certificate of the secretary or an
assistant secretary of the Company, substantially in the form of
Exhibit A to this Amendment, and a certificate of the President, the
Chief Financial Officer or the Vice President, Finance of the Company,
substantially in the form of Exhibit B to this Amendment.
(c) Opinion. An opinion of counsel to the Company in form and
substance satisfactory to the Agent.
(d) Confirmation. A Confirmation substantially in the form of
Exhibit C to this Amendment.
(e) Other. Such other documents as the Agent or any Bank may
reasonably request.
4.2 No Default. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing (other than any such event which is waived
hereby).
4.3 Amendment Fee. For the account of each Bank which has executed and
delivered a counterpart hereof to the Agent by noon (Chicago time) on November
15, 1999, an amendment fee equal to 0.10% of the Commitment of such Bank after
giving effect to the reduction of the Commitment Amount set forth in Section
5.10 (it being understood that the Agent shall distribute such fee to each Bank
promptly upon receipt thereof).
SECTION 5 Miscellaneous.
5.1 Pricing. The Required Banks request that the Base Rate Margin be 1%
as of the Amendment Effective Date through February 29, 2000.
5.2 Warranties. In order to induce the Banks to enter into this
Amendment, the Company hereby warrants to the Agent and each Bank that, as of
the date of the execution of this Amendment by the Company, the warranties of
the Company contained in the Credit Agreement are true and correct as if made on
such date.
5.3 Appointment of Key Director and Key Executive. The Required Banks
hereby acknowledge and, for purposes of Section 12.1.11 of the Credit Agreement,
approve the appointment of Xxxxxx X. Xxxxxxx to the Board of Directors of the
Company and as Chief Executive Officer to the Company.
5.4 Expenses. The Company agrees to pay on demand all costs and
expenses of the Agent (including fees, charges and expenses of counsel for the
Agent) in connection with the preparation, negotiation, execution, delivery and
administration of this Amendment and all other instruments or documents provided
for herein or delivered or to be delivered hereunder or in connection herewith.
5.5 Captions. Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.
5.6 Governing Law. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
5.7 Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Amendment.
5.8 Continuing Effectiveness. Except as herein amended, the Credit
Agreement shall remain in full force and effect and is hereby ratified in all
respects.
5.9 Successors and Assigns. This Amendment shall be binding upon the
parties hereto and their respective successors and assigns, and shall inure to
the sole benefit of the parties hereto and the successors and assigns of the
Agent and the Banks.
5.10 Waiver of Notice of Commitment Reduction. The Company has
requested a permanent reduction in the Commitment Amount to $65,000,000 pursuant
to Section 6.1.1 of the Credit Agreement. The Required Banks hereby waive the
five day notice requirement set forth in such Section 6.1.1, and the Company and
the Required Banks agree that such reduction shall become effective immediately
upon the effectiveness of this Amendment.
Delivered at Chicago, Illinois, as of the day and year first above
written.
UNITED ROAD SERVICES, INC.
By:
Its:
BANK OF AMERICA, N.A., as Agent
By:
Its:
BANK OF AMERICA, N.A., as Issuing
Bank, Swing Line Bank and as a
Bank
By:
Its:
BANKBOSTON, N.A.
By:
Its:
COMERICA BANK
By:
Its:
FLEET NATIONAL BANK
By:
Its:
THE CHASE MANHATTAN BANK
By:
Its:
SCHEDULE 12.1.11A
KEY EXECUTIVES
Name Current Office(s)
---- -----------------
Xxxxxxx X. Xxxxxxxx Chairman of the Board
Xxxxxx X. Xxxxxxx Chief Executive Officer
SCHEDULE 12.1.11B
KEY DIRECTORS
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxxx
Xxxx X. Smart
EXHIBIT A
---------
United Road Services, Inc.
[Assistant] Secretary's Certificate
-----------------------------------
To: The Banks and the Agent
parties to the Amendment
referenced below
This Certificate is being furnished pursuant to Section 3.1 of the
First Amendment (the "Amendment") dated as of November __, 1999 among United
Road Services, Inc. (the "Company"), various financial institutions and Bank of
America National Trust and Savings Association, as agent (in such capacity, the
"Agent"), which amends the Amended and Restated Credit Agreement dated as of
November 2, 1998 among the Company, various financial institutions and the
Agent. Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Amendment.
The undersigned, ____________________, [Assistant] Secretary of the
Company, hereby certifies on behalf of the Company that attached hereto as
Attachment 1 are true and correct copies of certain resolutions which were duly
adopted by the Board of Directors of the Company as of __________, 1999; such
resolutions have not been rescinded or amended and are in full force and effect
on and as of the date hereof and, except for such resolutions, there is no other
corporate action, consent or governmental or regulatory approval required for
the execution and delivery of the Amendment.
IN WITNESS WHEREOF, I have executed this Certificate on this ____ day
of November, 1999.
UNITED ROAD SERVICES, INC.
By:
Name:
Title: [Assistant] Secretary
ATTACHMENT 1
RESOLUTIONS OF THE BOARD OF DIRECTORS
OF UNITED ROAD SERVICES, INC.
WHEREAS, there has been presented to this Board of Directors a form of
First Amendment (the "Amendment") among UNITED ROAD SERVICES, INC. (this
"Corporation"), various financial institutions and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as agent (in such capacity, the "Agent"),
providing for the amendment of the Amended and Restated Credit Agreement dated
as of November 2, 1998 among the Corporation, various financial institutions and
the Agent (the "Credit Agreement"); capitalized terms used but not defined
herein shall have the respective meanings assigned thereto in the Amendment;
WHEREAS, it is contemplated that certain officers of this Corporation
shall be required to execute the Amendment and various other agreements,
instruments or documents contemplated by the Amendment or requested by the Agent
or any Bank;
NOW, THEREFORE, BE IT RESOLVED, that the Chairman of the Board, the
President, the Chief Financial Officer and any Vice President of this
Corporation be, and each of them acting alone is, hereby authorized to execute
and deliver, in the name and on behalf of this Corporation, (i) the Amendment,
substantially in the form presented to this Board of Directors, and (ii) any and
all other agreements, instruments or documents contemplated by the Amendment or
requested by the Agent or any Bank; this authorization to execute and deliver
the foregoing encompasses the authorization to make such changes, additions and
deletions as to any or all of the terms and provisions of any or all of the
foregoing agreements, instruments and documents as the officer executing the
same shall approve (hereinafter, as so executed and delivered and as any or all
of the foregoing agreements, instruments and documents may at any time be
amended or otherwise modified, sometimes called the "Agreements"); and the
execution and delivery of each of the Agreements by such officer shall be
conclusive evidence of the approval thereof on behalf of this Corporation by
such officer and by this Board of Directors;
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Chief Financial Officer and any Vice President of this Corporation be, and each
of them acting alone is, hereby authorized to cause this Corporation to borrow
funds under the Credit Agreement as amended by the Amendment;
FURTHER RESOLVED, that each and every officer of this Corporation be,
and each of them acting alone is, hereby authorized, from time to time, in the
name and on behalf of this Corporation, to take such actions and to execute and
deliver such certificates, instruments, notices and documents as may be required
or as such officer may deem necessary, advisable or proper in order to carry out
and perform the obligations of this Corporation under the Credit Agreement, as
amended by the Amendment, or any other instrument, document or agreement
executed pursuant to any of the foregoing; all such certificates, instruments,
notices, documents and agreements to be executed and delivered in such form as
the officer performing or executing the same may approve, and the performance or
execution thereof by such officer shall be conclusive evidence of the approval
thereof by such officer and by this Board of Directors;
FURTHER RESOLVED, that the Secretary and/or Assistant Secretary of this
Corporation is hereby directed to file the drafts of each of the Agreements
which have been presented to the members of the Board of Directors with the
official records of this Corporation; and
FURTHER RESOLVED, that the Chairman of the Board, the President, the
Chief Financial Officer, any Vice President, the Secretary or any Assistant
Secretary of this Corporation be, and each of them acting alone is, hereby
authorized to certify and deliver to the Agent or other persons a true copy of
the foregoing resolutions.
EXHIBIT B
---------
UNITED ROAD SERVICES, INC.
Officer's Certificate
---------------------
To: The Banks and the Agent
parties to the Amendment
referenced below
This Certificate is being furnished pursuant to Section 3.1 of the
Second Amendment (the "Amendment") dated as of November __, 1999 among United
Road Services, Inc. (the "Company"), various financial institutions and Bank of
America National Trust and Savings Association, as agent (in such capacity, the
"Agent"), which amends the Amended and Restated Credit Agreement dated as of
November 2, 1998 among the Company, various financial institutions and the
Agent. Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Credit Agreement as amended by the Amendment.
The undersigned, _______________, _________________ of the Company,
hereby certifies on behalf of the Company that:
1. The representations and warranties on the part of the Company
contained in the Credit Agreement as amended by the Amendment are true and
correct at and as of the date hereof as though made on and as of the date
hereof.
2. As of the date hereof, no Event of Default or Unmatured Event of
Default exists.
IN WITNESS WHEREOF, I have executed this Certificate on this ____ day
of November, 1999.
UNITED ROAD SERVICES, INC.
By: _________________________________
Name:
Title:
EXHIBIT C
CONFIRMATION
Dated as of November 12, 1999
To: Bank of America National Trust
and Savings Association, as
Agent, and the Banks which are
parties to the Amended and Restated
Credit Agreement referred to below
Please refer to (a) the Amended and Restated Credit Agreement dated as
of November 2, 1998 (the "Credit Agreement") among United Road Services, Inc.
(the "Company"), various financial institutions (the "Banks") and Bank of
America National Trust and Savings Association, as Agent; (b) the Second
Amendment dated as of November 12, 1999 (the "Second Amendment") to the Credit
Agreement; (c) the Security Agreement dated as of June 16, 1998 (the "Security
Agreement") among the Company, various Subsidiaries of the Company and the
Agent; (d) the Guaranty dated as of June 16, 1998 (the "Guaranty") executed by
various Subsidiaries of the Company in favor of the Banks and the Agent; and (e)
the Company Pledge Agreement dated as of June 16, 1998 (the "Company Pledge
Agreement") between the Company and the Agent. Each document referred to in
items (c) through (e) above, as amended hereby, is called a "Credit Document".
Capitalized terms used but not defined herein shall have the meanings set forth
in the Amended and Restated Credit Agreement.
Each of the undersigned (i) confirms to the Banks and the Agent that
(a) each Credit Document to which such undersigned is a party continues in full
force and effect on and after the date hereof, as amended hereby, and is the
legal, valid and binding obligation of such undersigned, enforceable against
such undersigned in accordance with its terms, and (b) the obligations and
liabilities guaranteed or secured (as applicable) under each Credit Document
include, without limitation, the obligations and liabilities of the Company
under the Credit Agreement as amended by the First Amendment; and (ii) agrees
that each reference in each Credit Document to the "Credit Agreement" or any
similar term shall, after the date hereof, be deemed to be a reference to the
Credit Agreement as amended by the Second Amendment.
IN WITNESS WHEREOF, this Confirmation has been duly executed as of the
day and year first above written.
UNITED ROAD SERVICES, INC.
By:
Title:
CITY TOWING, INC. d/b/a QUALITY TOWING
By:
Title:
AUTO SERVICE CENTER
By:
Title:
URS WEST, INC.
By:
Title:
URS SOUTHWEST, INC.
By:
Title:
URS MIDWEST, INC.
By:
Title:
URS SOUTHEAST, INC.
By:
Title:
URS NORTHEAST, INC.
By:
Title:
URS TRANSPORT, INC.
By:
Title:
URS OF TENNESSEE, INC.
By:
Title:
XXXX AND WAGS, INC.
By:
Title:
E & R TOWING & GARAGE, INC.
By:
Title:
EL PASO TOWING, INC.
By:
Title:
ENVIRONMENTAL AUTO REMOVAL, INC.
By:
Title:
EVANSTON RELIABLE MAINTENANCE, INC.
By:
Title:
FAST TOWING, INC.
By:
Title:
GARRY'S WRECKER SERVICE, INC.
By:
Title:
NORTH SHORE RECYCLING, INC.
By:
Title:
NORTH SHORE TOWING, INC.
By:
Title:
XXXXX'X BODY SHOP, INC. d/b/a
XXXXX'X TOWING AND HAULING
By:
Title:
ARRI BROTHERS, INC. d/b/a
A & A TOWING SERVICE
By:
Title:
XXX XXXXXX ENTERPRISES, INC. d/b/a
SOUTHSTRIP TOWING
By:
Title:
Accepted and Agreed to
this ________ day of
November, 1999.
BANK OF AMERICA, N.A.,
as Agent
By:
Title:
