EXHIBIT 10.4
FIRST AMENDMENT
TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
First Amendment dated as of July 3, 1998 (the "Amendment") to Revolving
Credit and Term Loan Agreement (the "Amendment"), by and among CRC-XXXXX
PIPELINE INTERNATIONAL, INC. (formerly known as CEPI Holdings, Inc.), a Delaware
Corporation (the "Borrower"), (b) CRC HOLDINGS CORP., a Delaware Corporation and
the owner of 100% equity of the Borrower (the "Holding Company") (c) the
financial institutions listed on SCHEDULE 1 to the Credit Agreement (as
hereinafter defined) (the "Lenders"), (d) BANKBOSTON, N.A. (formerly known as
The First National Bank of Boston) as agent for itself and the other Lenders
(the "Agent") and (e) BANKERS TRUST COMPANY, as documentation agent for itself
and the other Lenders (the "Documentation Agent"), amending certain provisions
of the Revolving Credit and Term Loan Agreement date([ as of June 12, 1997 (as
amended and in effect from time to time, the "Credit Agreement") by and among
the Borrower, the Holding Company, the Lenders, the Agent and the Documentation
Agent. Terms not otherwise defined herein which are defined in the Credit
Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and he Lenders have agreed to modify certain terms
and conditions of the Credit Agreement s specifically set forth in this
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT. SECTION 1.1. of
the Credit Agreement is hereby amended as follows:
(a) The definition of "Aggregate Facilities Commitment" is hereby
amended in its entirety to read as follows:
"AGGREGATE FACILITIES COMMITMENT. With respect to each Lender, the
amount equal to the sum of (a) such Lender's Commitments hereunder
and, with respect to FNBB, the UK Commitment, plus (b) such Lender's
Commitment Percentage of the Term Loan hereunder, PLUS (c) such
Lender's Acquisition Commitment Percentage of the Acquisition Loan
outstanding."
(b) The definition of "Borrowing Base" is hereby amended by
replacing the reference to the dollar amount "$1.000,000" appearing in part
(c)(i) and (ii) with a reference the dollar amount "$2,000,000" and by replacing
the reference to the dollar amount "2,000,000" appearing in part (c)(ii) with a
reference to the dollar amount "$3,000,000".
(c) The definition of "B, se Rate Loans" is hereby amended in its
entirety to read as follows:
BASE RATE LOANS. The Revolving Credit Loans and all or any
portion of the Term Loan or Acquisition Loan bearing interest
calculated by reference to the Base Rate."
(d) The definition of " Capital Expenditures" is hereby amended by
inserting at the end thereof the following new sentence:
"Notwithstanding the foregoing, "Capital Expenditures" shall
not include (a) the acquisition of assets in connection with a
Permitted Acquisition and (b) up to $750,000 per annum of the cost
of producing rental equipment necessary to replace rental equipment
sold in the ordinary course of the Borrower's business."
(e) The definition of "Commitment Fee" is hereby amended in its
entirety to read as follows:
"COMMITMENT FEE. The commitment fees due pursuant to
Sections 2-2 and 4A. 13."
(f) The definition of "Commitment Percentage" is hereby amended in
its entirety to read as follows:
"COMMITMENT PERCENTAGE. With respect to each Lender, the
percentage set forth on SCHEDULE 1 hereto under the heading
Revolving Credit Facility."
(g) The definition of "Drawdown Date" is hereby amended in its
entirety to read as follows:
"DRAWDOWN DATE. The date on which any Revolving Credit Loan,
Acquisition Loan or the Term Loan is made or is to be made, and the
date on which any Revolving Credit Loan is converted or continued in
accordance with SECTION 2.7 hereof, all or any portion of the
Acquisition Loan is converted or continued in accordance with
SECTION 4.A.6 hereof or all or any portion of the Term Loan is
converted or continued in accordance with SECTION 4.5 hereof."
(h) The definition of "Eurodollar Rate Loans" is hereby amended in
its entirety to read as follows:
"EURODOLLAR RATE LOANS. Revolving Credit Loans and all or
any portion of the Term Loan or Acquisition Loans bearing
interest calculated by reference :o the Eurodollar Rate."
(i) The definition of Guaranties" is hereby amended by inserting
immediately after the words "Closing Date" contained in the second line thereof
the phrase "(or in the case of Persons who become Subsidiaries after the Closing
Date, at such time as such Person becomes i Subsidiary of the Holding Company or
the Borrower)".
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(j) The definition of "Interest Period" is hereby amended by
inserting immediately after the words "relevant portion of the Term Loan"
contained in the second line thereof the phrase "or Acquisition Loans".
(k) The definition of "Loans" is hereby amended in its entirety to
read as follows:
"LOANS. The Revolving Credit Loans, the Acquisition Loans
and the Term Loan."
(1) The definition of Mortgaged Properties" is hereby amended in its
entirety to read as follows:
"MORTGAGED PROPERTIES. The Real Estate located in Tulsa,
Oklahoma and Edmonton, Alberta, Canada, any Real Estate which the
Borrower or any North American Subsidiary is required to grant to
the Agent a Mortgage pursuant to SECTION 9.13, and any Real Estate
acquired in connection with a Permitted Acquisition as to which the
Agent requests that the Borrower or the North American Subsidiaries
grant to the Agent a Mortgage.
(m) The definition of 'Mortgages" is hereby amended by inserting
immediately after the words "Closing Date" contained in the second line thereof
the phrase "(or in the case of Real Estate acquired after the Closing Date,
prior to the acquisition of such Real Estate)".
(n) The definition of "Notes" is hereby amended in its entirety to
read as follows:
"NOTES. The Term Notes, the Acquisition Notes and the
Revolving Credit Notes."
(o) The definition of "Security Agreements" is hereby amended in its
entirety to read as follows:
"SECURITY AGREEMENTS. The several Security Agreements, each
executed and delivered pursuant to the Credit Agreement, between the
Agent and each of the Borrower, the North American Subsidiaries and
the Holding Company, each in form and substance satisfactory to the
Lenders and the Agent.'
(p) The definition of "UK Commitment" is hereby amended in its
entirety to read as follows:
"UK COMMITMENT. The "Maximum Commitment Amount" under the
UK Facility, not to exceed (pound)4,500,000."
(q) SECTION 1.1 of the C it Agreement is further amended by
inserting the following definitions in the appropriate alphabetical order:
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ACQUISITION COMMITMENT. With respect to each Lender, the
amount set forth on Schedule 1 hereto as the amount of such Lender's
commitment to make Acquisition Loans to the Borrower during the
Disbursement Period, as the same may be reduced from time to time;
or, after the Disbursement Period or if such commitment is
terminated pursuant to the provision hereof, zero.
ACQUISITION COMMITMENT PERCENTAGE. With respect to each
Lender, the percentage,. set forth on Schedule .1 hereto under
the heading Acquisition Loan."
ACQUISITION FACILITY CLOSING DATE. The date of the First
Amendment to the Credit Agreement.
ACQUISITION LOANS. Loans made or to be made by the Lenders
to the Borrower pursuant to the acquisition facility described in
SECTION 4A.
ACQUISITION NOTES. See Section 4A.3.
ACQUISITION LOAN REQUEST. See Section 4A.1.2.
ACQUISITION TARGET. A Person or business, the business
operations of which are substantially concentrated in the same or
similar lines of business as that of the Borrower or any Subsidiary
of the Borrower or of the Holding Company.
CRC KEY, INC. CRC-Key, Inc., an Oklahoma corporation and
wholly owned subsidiary of the Holding Company.
DISBURSEMENT PERIOD. The period from the Acquisition Facility
Closing Date through and including the Final Acquisition Drawdown
Date or such earlier date on which the Acquisition Commitment shall
have been terminated pursuant hereto.
FINAL ACQUISITION DRAWDOWN DATE. December 31, 1999.
PERMITTED ACQUISITION (a) An acquisition by the Borrower or,
in the case of an Acquisition Target organized outside of the United
States, a Subsidiary of the Borrower (i) of Capital Assets or (ii)
of the shares, or assets of any Acquisition Target, PROVIDED that in
each case each of the following conditions are met:
(A) if such Permitted Acquisition is structured as a
stock acquisition, the Acquisition Target will be immediately
merged with and into the Borrower; and
(B) upon completion of the Permitted Acquisition, unless
waived by the Agent, the Borrower shall have provided the
Agent with all
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such additional security Documents, pledge agreements or other
documents or instruments (where appropriate, in substantially
the form previously delivered to the Agent) necessary or
appropriate to grant to the Agent, for the benefit of the
Lenders, a perfected first priority pledge and security
interest in substantially all of the acquired assets located
in the United States, Canada or England; and
(C) Not, withstanding anything contained in (A) or (B)
above, the Borrower may make share or asset acquisitions
having an aggregate cash purchase price not exceeding
$5,000,000 (and make investments in Subsidiaries of such
amounts) for Permitted Acquisitions of Acquisition Targets
organized outside of the United States or the Dominion of
Canada to which the Agent is not granted a perfected first
priority pledge and security interest in substantially all of
the acquired assets and the Acquisition Target is not merged
with and into the Borrower; PROVIDED, HOWEVER, the Agent is
granted, for the benefit of the Lenders, a lien on and pledge
of all of the shares of capital stock of the acquired company;
and
(D) the Agent and the Lenders shall have received at
least ten (10) Business Days' prior to the Permitted
Acquisition Closing Date (i) written notice of the proposed
acquisition describing the relevant Permitted Acquisition to
be consummated, including but not limited to the anticipated
date of the closing of such acquisition and the expected
amount of Acquisition Loans to be borrowed in connection with
such Permitted Acquisition, (ii) copies c f all documents,
agreements and instruments to be entered into by the Borrower
in connection with such Permitted Acquisition and evidence, of
compliance with all requirements of the Loan Documents and
(iii) PRO FORMA financial statements and calculations, in form
and substance satisfactory to the Agent, evidencing that
immediately prior to and following such acquisition the
Borrower will be in compliance on a Pro forma Basis with the
financial covenants set forth in SECTION 1.1 for the period of
twelve (12) months following the Permitted Acquisition Closing
Date; and
(E) no Default or Event of Default shall have occurred
and be continuing at the time a of completion of the proposed
acquisition, and no Default or Event of Default would result
therefrom; and
(F) any Indebtedness assumed or incurred in connection
with such Permitted acquisition must be on terms and
conditions acceptable to the Agent; and
(G) Purchase rice for each Permitted Acquisition shall
not exceed $5,000,000; PROVIDED, HOWEVER, the Borrower may
make one (1) Permitted Acquisition with a Purchase Price in
excess of $5,000,000 but not exceeding $10,000,000; and
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(H) the Borrower shall have delivered to the Agent and
the Lenders a copy of all financial statements received from
the Acquisition Target for the periods prior to the Permitted
Acquisition Closing Date,
(b) Up to $61;00,000 in the aggregate of amounts paid or
Indebtedness incurred b) the Borrowers in connection with the
purchase or construction of Capital Assets.
PERMITTED ACQUISITION CLOSING DATE. The closing date of
any acquisition by the Borrower which is a Permitted Acquisition.
PRO FORMA BASIS. Following a Permitted Acquisition, the
Consolidated Funded Debt (or, in the case of Consolidated Total
Interest Expense, all Indebtedness) and EBITDA for the fiscal
quarter in which such Permitted Acquisition occurred and each of the
three fiscal quarters immediately following such Permitted
Acquisition being calculated with reference to the audited
historical financial results of the business or portion thereof so
acquired (to the extent available) and the Borrower for the
applicable Test Period after giving effect on a PRO FORMA basis to
such Permitted Acquisition and assuming that such Permitted
Acquisition had been consummated at the beginning of such Test
Period in the manner described in (a), (b) and (c) below:
(a) all Indebtedness (whether under this Credit
Agreement or otherwise) and any other balance sheet
adjustments incurred or made in connection with the Permitted
Acquisition shall be deemed to have been incurred or made on
the first day of the Test Period, and all Indebtedness of the
Person acquired )r to be acquired in such Permitted
Acquisition which was or will have been repaid in connection
with the consummation of the Permitted Acquisition shall be
deemed to have been repaid concurrently with the incurrence of
the Indebtedness incurred in connection with the Permitted
Acquisition;
(b) all Indebtedness assumed to have been incurred
pursuant to the preceding clause (a) shall be deemed to have
borne interest at the sum of (i) the Eurodollar Rate for
Eurodollar Rate Loan having an Interest Period of one m:)nth
in effect on the first day of the Test Period PLUS (ii) the
Applicable Margin for Revolving Credit Loans then in effect
(after giving effect to the Permitted Acquisition on a PRO
FORMA Basis); and
(c) other reasonable cost savings, expenses and other
income statement or operating statement adjustments which are
attributable to the change in ownership and/or management
resulting from such Permitted Acquisition as may be approved
by the Agent in writing (which approval shall not be
unreasonably withheld) shall be deemed to have been realized
on the first day of the Test Period.
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PURCHASE PRICE. The sum of (a) cash paid, (b) Indebtedness
assumed or incurred (other than Indebtedness under the Credit
Agreement) and (c) the started issue price of any securities or the
principal amount of any notes issued by the Borrower or the
Guarantors in connection with any Permitted Acquisition.
RESTRICTED CAPITAL EXPENDITURE. Amounts paid or indebtedness
incurred by the Borrower or any of its Subsidiaries in connection
with the purchase or lease I y the Borrower or any of its
Subsidiaries of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in
accordance with Generally Accepted Accounting Principles.
TEST PERIOD. The period of all fiscal quarters (and any
portion of a fiscal quarter) being tested in any covenant
calculation period prior to the date of such Permitted, Acquisition
as set forth in the definition of Pro forma Basis.
TOTAL ACQUISITION COMMITMENT. The sum of the Acquisition
Commitments of the Lenders, as in effect from time to time (at no
time to exceed $17,500,000.
UK PERMITTED ACQUISITION. As defined in the UK Facility.
SECTION 2. AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT.
Section 2.1 is hereby amended by inserting the following phrase at
the end of the first sentence "plus, the amount borrowed under the UK Facility
to fund any Permitted Acquisition."
SECTION 3. AMENDMENT TO SECTIONS 4.3.2., 4.3.3., 4.3.4 AND 4.3.5. OF THE
CREDIT AGREEMENT. SECTIONS 4.3.2, 4.3.3, 4.3.4 and 4.3.5 of the Credit Agreement
are hereby amended in their entirety to read as follows:
"4.3.2 PAYMENTS FROM EXCESS CASH FLOW. Commencing on June 30, 1999
and thereafter, within thirty (30) days after the Agent's receipt of the
audited financial statements delivered pursuant to SECTION 9.4(a) hereof,
the Borrower shall prepay the Term Loan and Acquisition Loan in an
aggregate principal amount equal to (a) if the Funded Debt Ration as at
the last day of the most recently ended fiscal year is less than
2.50:1.00, twenty five percent (25%) of Consolidated Excess Cash Flow for
such fiscal year; (b) if the Funded Debt Ratio as at the la! t day of the
most recently ended fiscal year is greater than or equal to 2.5:1:00 but
less than 3.00:1.00, fifty percent (50%) of Consolidated Excess Cash Flow
for such fiscal year; and (c) if the Funded Debt Ratio equals or exceeds
3.00:1.00, seventy-five percent (75%) of Consolidated Excess Cash Flow for
such fiscal year, less, in each case, the amount of any prepayments of he
Term Loan made during such fiscal year by the Borrower pursuant to SECTION
4.4 below."
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"4.3.3 PAYMENTS FROM NET PROCEEDS. The Borrower shall prepay the
Term Loan and the Acquisition Loans as follows:
(a) no later than five (5) days following the issuance of
equity securities or debt by the Borrower or any of the North
American Subsidiaries (to the extent permitted by this Credit
Agreement), other than sales of equity securities to directors,
officers or employees of the Borrower or any of its North American
Subsidiaries t ) the extent the aggregate proceeds thereof in any
fiscal year do not exceed $200,000, the Borrower shall prepay the
Term Loan and the Acquisition Loans by an amount equal to 100% of
the cash proceeds received by the Borrower from the issuance of such
equity securities or debt; and
(b) no later than five (5) days after any sale or other
disposition of all or any material assets of the Borrower or of any
of the North American Subsidiaries (to the extent permitted by
SECTION 10.5.2 hereof), other than (i) sales in the ordinary course
of business and consistent with the -past practices of the Holding
Company and it; Subsidiaries, of (A) inventory and (B) Rental
Equipment and/or Rental Inventory and (ii) sales or dispositions of
other assets which do not exceed $200,000 in any fiscal year of the
Borrower, the Borrower shall prepay the Term Loan and the
Acquisition Loans by an amount equal to 100% of the cash proceeds
from such sale or disposition.
4.3.4 UK FACILITY. The Borrower shall prepay the Term Loan and
Acquisition Loans in full, and the Acquisition Commitments shall terminate
if at any time the aggregate principal amount outstanding under the UK
Facility (including the maximum amount available to be drawn under letters
of credit and other collateral instruments issued under such facility) is
less than (pound)2,000,000 PLUS fifty percent (50%) of the amount borrowed
under the UK Facility to fund any UK Permitted Acquisition.
4.3.5 ALLOCATION OF MANDATORY PREPAYMENTS. Each mandatory prepayment
required under this SECTION 4.3 shall be (i) FIRST, applied to reduce the
principal amounts of the Term Loan outstanding on the date of such
prepayment and SECOND, after payment in full of the Term Loan to reduce
the principal amounts of the Acquisition Loans, and (ii) allocated among
the Lenders in proportion, as nearly as practicable, to the respective
aggregate outstanding amounts of each Lender's Term Note or, as
applicable, Acquisition Note, with adjustments to the extent practicable
to equalize any prior prepayments not exactly in proportion. Any
prepayment of principal of the Term Loan or, as applicable, Acquisition
Loan, shall include all interest accrued to the date of such prepayment
and all principal amounts prepaid shall be applied against the scheduled
installments of principal due on the Term Loan or, as applicable,
Acquisition Loan, in the inverse order of maturity.
SECTION 4. ADDITION OF SECTION 4A. The following Section 4A is hereby
addeD to the Credit Agreement:
4A THE ACQUISITION LOAN
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4A.1 COMMITMENT TO LEND.
4A.1.1 COMMITMENT. Subject to the terms and conditions set forth in
this Credit Agreement (including, but not limited to those requirements
set forth in SECTION 4A.1.2) during the Disbursement Period each of the
Lenders severally agrees to lend to the Borrower and the Borrower may
borrow from time to time, upon notice by the Borrower to the Agent given
in accordance with SECTION 4A.1.2 hereof, such sums as are requested by
the Borrower up to a maximum aggregate amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Lender's
Acquisition Commitment; PROVIDED that the sum of the outstanding amount of
the Acquisition Loans (after giving effect to all amounts requested) shall
not at any time exceed the Total Acquisition Commitment. The Acquisition
Loans shall be made PRO RATA in accordance with each -ender's Acquisition
Commitment Percentage. Each request for a Acquisition Loan hereunder shall
constitute a representation and warranty by the Borrower that the
Acquisition Loans are used solely to purchase assets which constitute a
Permitted Acquisition at the conditions set forth in SECTIONS 1.3 hereof,
have been satisfied on the date of such request The commitments of the
Lenders to make any Acquisition Loans shall terminate on the Final
Acquisition Drawdown Date.
4A.1.2 CONDITIONS TO ACQUISITION LOANS. Advances of principal of the
Acquisition Loans may be requested by the Borrower during the Disbursement
Period on the following terms and conditions. The Borrower shall provide
the Agent with evidence, in form and substance satisfactory to the Agent,
that the proceeds from such Acquisition Loan will be used only in
connection with a Permitted Acquisition or the refinancing of Revolving
Credit Loans or other Indebtedness (including the Seller Note) used to
make a Permitted Acquisition. The Borrower shall give to the Agent written
notice in the form of EXHIBIT I hereto of each Acquisition Loan requested
hereunder (an "Acquisition Loan Request") no later than 2:00 p.m. (Boston
time) (a) one (1) Business Day prior to the proposed Drawdown Date of any
Acquisition Loan which is a Base Rate Loan and (b) three (3) Eurodollar
Business Days prior to the proposed Drawdown Date of any Acquisition Loan
which is a Eurodollar Rate Loan. Each such notice shall specify (i) the
principal amount of the Acquisition Loan requested, (ii) the proposed
Drawdown Date of such Acquisition Loan; (iii) the Interest Period of such
Acquisition Loan, and (iv) the Type of such Acquisition L:)an. Promptly
upon receipt of any such notice, the Agent shall notify each of the
Lenders thereof. Each Acquisition Loan Request shall be irrevocable aid
binding on the Borrower and shall obligate the Borrower to accept the
Acquisition Loan requested from the Lenders on the proposed Drawdown Date.
Each Acquisition Loan Request shall be in a minimum amount of $500,000 )r
a whole multiple $100,000 in excess thereof The Purchase Price for such
Permitted Acquisition plus all transaction costs related thereto shall not
be less than the amount of the Acquisition Loan so requested. Subject to
the foregoing, and subject to satisfaction of the conditions set forth in
SECTION 13, so long as no Default or Event of Default shall have occurred
and is continuing, and all of the applicable conditions set forth in this
Credit Agreement, have been met, each Lender shall lend to the Borrower
such Lender's Acquisition Loan
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Commitment Percentage of the Acquisition Loan so requested in immediately
available funds not later than the close of business on such Drawdown
Date.
4A.1.3 COMMITMENT FEE. The Borrower agrees to pay to the Agent for
the accounts of the Lenders PRO RATA in accordance with each Lender's
share of the aggregate amount of Acquisition Loans outstanding, a
commitment fee calculated at the rate determined pursuant to SECTION 6.11
hereof for the Commitment Fee, on the average daily amount, during each
calendar quarter or portion thereof during the Disbursement Period, by
which the Total Acquisition Commitment, exceeds the outstanding amount of
Acquisition Loans during such calendar quarter. The commitment fee for the
unborrowed portion of the Acquisition Commitments shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Final Acquisition
Drawdown Date or any earlier date on which the Acquisition Commitments
shall terminate.
4A.2 REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right at
any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $500,000 or a whole multiple $100,000 in
excess thereof the unborrowed portion of the Total Acquisition Commitment
or terminate entirely the Total Acquisition Commitment, whereupon the
Acquisition Commitments of the Lenders shall be reduced PRO RATA in
accordance with their respective Acquisition Commitment Percentages of the
amount specified in such notice or, as the case may be, terminated.
Promptly after receiving any notice of the Borrower delivered pursuant to
this SECTION 4A.2, the Agent will notify the Lenders of the substance
thereof. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Lenders
the full amount of any commitment fee then accrued on the amount of the
reduction. No reduction or termination of the Acquisition Commitments may
be reinstated. In addition, on he Final Acquisition Drawdown Date, the
Acquisition Commitments shall permanently be reduced to zero.
4A.3 THE ACQUISITION NOTES. The Acquisition Loan shall be evidenced by
separate promissory notes of the Borrower in substantially the form of
EXHIBIT J hereto (each an "Acquisition Note"), dated the Acquisition
Facility Closing Date and completed with appropriate insertions. One
Acquisition Note shall be payable to the order of each Lender in a
principal amount equal to such Lender's Acquisition Commitment of the
Acquisition Loan and representing the obligation of the Borrower to pay to
such Lender such principal amount or, if less, the outstanding amount of
such Lender's Acquisition Commitment Percentage of the Acquisition Loan,
plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Lender to make or cause to be made a notation
on such Lender's Acquisition Note Record reflecting the original principal
amount o ' such Lender's Acquisition Commitment Percentage of the
Acquisition Loan and, at or about the time of such Lender's receipt of any
principal payment on such Lender's Acquisition Note, an appropriate
notation on such Lender's Acquisition Note Record reflecting such payment.
The aggregate unpaid amount set forth on such Lender's Acquisition Note
Record shall be PRIMA FACIE evidence of the principal amount thereof owing
and unpaid to such Lender, but the failure to record, or any error in so
recording, any such amount on such Lender's Acquisition Note Record shall
not affect the obligations of the Borrower hereunder or under any
Acquisition Note to make payments of principal of and interest on any
Acquisition Note when due.
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4A.4 OPTIONAL PREPAYMENT OF ACQUISITION LOAN. The Borrower shall have the
right at any time after the Disbursement Period to prepay the Acquisition
Note on or before the Maturity Date, as a whole, or in part, upon not less
than three (3) Business Days prior written notice to the Agent, without
premium or penalty, PROVIDED that (a) each partial prepayment shall be in
the principal amount of $500,000 or a whole multiple $100,000 in excess
thereof, (b) no portion of the Acquisition Loan bearing interest at the
Eurodollar Rate may be prepaid pursuant to this SECTION 4.A4 except on the
last day of the Interest Period relating thereto, and (c) each partial
prepayment shall be allocated among the Lenders, in proportion, as nearly
as practicable, to the respective outstanding amount of each Lender's
Acquisition Note, with adjustments to the extent practicable to equalize
any prior prepayments not exactly in proportion. Any prepayment of
principal of the Acquisition Loan shall include all interest accrued to
the date of prepayment and shall be applied against the scheduled
installments of principal due on such Acquisition Loan on a PRO RATA rate
basis. No amount repaid with respect to the Acquisition Loan may be
reborrowed.
4.A.5 SCHEDULE OF INSTALLMENT PAYMENTS OF PRINCIPAL OF ACQUISITION LOAN.
The Borrower promise; to pay to the Agent for the account of the Lenders
the principal amount of the Acquisition Loan in sixteen (16) consecutive
installments, due and payable in arrears on the last day of each calendar
quarter of each calendar year as set forth in the table below, commencing
on the Final Acquisition Drawdown Date, with a final payment on the
Maturity Date in an amount equal to the unpaid balance of the Acquisition
Loan.
------------------------ --------------------------------------------------- -------------------------------------------------------
PAYMENTS QUARTERLY AMOUNT ANNUAL AMOUNT
------------------------ --------------------------------------------------- -------------------------------------------------------
1 through 2 5% of the principal amount of the Acquisition 10% of the principal amount of the Acquisition Loan
Loan outstanding on the Final Acquisition outstanding on the Final Acquisition Drawdown Date
Drawdown Date
------------------------ --------------------------------------------------- -------------------------------------------------------
3 through 6 5% of the principal amount of the Acquisition 20% of the principal amount of the Acquisition Loan
Loan outstanding on the Final Acquisition outstanding on the Final Acquisition Drawdown Date
Drawdown Date
------------------------ --------------------------------------------------- -------------------------------------------------------
7 through 10 7.5% of the principal amount of the Acquisition 30% of the principal amount of the Acquisition Loan
Loan outstanding on the Final Acquisition outstanding on the Final Acquisition Drawdown Date
Drawdown Date
------------------------ --------------------------------------------------- -------------------------------------------------------
11 through 14 10% of the principal amount Acquisition Loan 40% of the principal amount of the Acquisition Loan
outstanding on the Final Acquisition Drawdown Date outstanding on the Final Acquisition Drawdown Date
------------------------ --------------------------------------------------- -------------------------------------------------------
The principal amount of the Acquisition Loan
TOTAL outstanding on the Final Acquisition Drawdown Date
------------------------ --------------------------------------------------- -------------------------------------------------------
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4A.6 INTEREST ON ACQUISITION LOAN.
4A6.1 INTEREST RATES. Except as otherwise provided in SECTION 6.12, the
Acquisition Loan shall bear interest during each Interest Period relating to all
or any portion of the Acquisition Loan at the following rates:
(a) to the, extent that all or any portion of the Acquisition Loan
bears interest during such Interest Period at the Base Rate, the
Acquisition L)an or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Base Rate PLUS the Applicable
Margin.
(b) To the extent that all or any portion of the Acquisition Loan
bears interest during such Interest Period at the Eurodollar Rate, the
Acquisition Loan or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Eurodollar Rate PLUS the
Eurodollar Applicable Margin.
The Borrower promises to pay interest on the Acquisition Loan or any
portion thereof outstanding during each Interest Period in arrears on each
Interest Payment Date applicable to such Interest Period.
4A.6.2 NOTIFICATION BY BORROWER. After any Acquisition Loan has been made,
the provisions of SECTION 2.7 shall apply MUTATIS MUTANDIS with respect to all
or any portion of the Acquisition Loan so that the Borrower may have the same
interest rate options with respect to all or any portion of the Acquisition Loan
as it would be entitled to with respect to the Revolving Credit Loans, subject
to the same limitations as applied to Revolving Credit Loans.
4A.6.3. AMOUNTS, ETC. Any portion of the Acquisition Loan bearing interest
at the Eurodollar Rate relating to any Interest Period shall be in the amount of
$500,000 or a while multiple $100,000 in excess thereof. No Interest Period
relating to the i Acquisition Loan or any portion thereof bearing interest at
the Eurodollar Rate shall extend beyond the date on which a regularly scheduled
installment payment of the principal of the Acquisition Loan is to be made
unless a portion of the Acquisition Loan at least equal to such installment
payment has , In Interest Period ending on such date or is then bearing interest
at the Base Rate.
4A.7 FUNDS FOR ACQUISITION LOANS.
4A7.1. FUNDING PROCEDURES. Not later than 2:00 p.m. (Boston time) on the
proposed Drawdown Date of any Acquisition Loan, each of the Lenders will make
available to the Agent, at the Agent's Head Office, in immediately available
funds, such Lender'; Acquisition Commitment Percentage of the amount of the
requested Acquisition Loan. Upon receipt from each Lender of such amount, and
upon receipt of the documents required by SECTIONS 4A.1.2 and 13 and the
satisfaction 0: the other conditions set forth therein, to the extent
applicable, the Agent
12
will make available to the Borrower the aggregate amount of such Acquisition
Loans made available to the Agent by the Lenders. The failure or refusal of any
Lender to make available to the Agent at the aforesaid time and price on any
Drawdown Date its Acquisition Commitment Percentage of the requested Acquisition
Loan shall not relieve any other Lender from its several obligation hereunder to
make available to the Agent such other Lender's Acquisition Commitment
Percentage of any requested Acquisition Loan.
4A.8 ACQUISITION LOANS BY AGENT
The Agent may, unless notified to the contrary by any Lender prior to a Drawdown
Date, assume that such Lender has made available to the Agent on such Drawdown
Date such Lender's Acquisition Commitment Percentage of the Acquisition Loan to
be made on such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Lender makes available to the Agent such amount on
a date after such Drawdown Date, such Lender shall pay to the Agent on demand an
amount equal to the product of (a) the average computed for the period referred
to in clause (c) below, of the weighted average interest rate paid by the Agent
for federal funds acquired by the Agent during each day included in such period,
TIMES (b) the amount of such Lender's Acquisition Commitment Percentage of such
Acquisition Loan, TIMES (c) a fraction, the numerator of which is the number of
days that elapse from and including such Drawdown Date (or, if the Drawdown Date
occurs prior to twenty-four hours after such Lender has received notice a loan
request, twenty-four hours after receipt of such notice of a loan request) to
the date on which the amount of such Lender's Acquisition Commitment Percentage
of such Acquisition Loan shall become immediately available to the Agent, and
the denominator of which is 360. A statement of the Agent submitted to such
Lender with respect to any amounts owing under this paragraph shall be PRIMA
FACIE evidence of the amount due and owing to the Agent by such Lender. If the
amount of such Lender's Acquisition Commitment Percentage of such Acquisition
Loan is not made available to the Agent by such Lender within three (3) Business
Days following such Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the rate per annum
applicable to the Acquisition Loan made on such Drawdown Date. In no event shall
the Borrower be responsible for payments of any amounts, costs, or other
expenses under SECTION 6.10 hereof incurred by or allocable to the Lender who
failed to make available to the Agent any amounts required under this SECTION
4.A8.
SECTION 5. AMENDMENT TO SECTION 7 OF THE AGREEMENT.
SECTION 7.2 is hereby amended by inserting the following sentence
immediately prior to the last sentence "the obligations of CRC-Key, Inc.
under the Guaranty to which it is a party shall be in turn secured at all
times by a perfected first priority security interest in substantially all
of the assets of CRC-Key, Inc., whether now owned or hereafter acquired,
pursuant to the terms of the Security Agreement to which it is a party to,
and the Pledge Agreement to which the Holding Company is a party."
SECTION 6. AMENDMENT TO SECTION 8 OF THE CREDIT AGREEMENT.
13
SECTION 8.19 is hereby amended by inserting after the phrase "The
Canadian Subsidiary, the Holland Subsidiary" in the first line thereof the
following new words," CRC-Key, Inc."
SECTION 7. AMENDMENT TO SECTION 9 OF THE CREDIT AGREEMENT.
SECTION 9.12 is hereby amended by inserting immediately after the
word "Acquisition" in the second line thereof I words "and Permitted
Acquisitions."
SECTION 8. AMENDMENT TO SECTION 10 OF THE CREDIT AGREEMENT.
(a) SECTION 10.1 is here y amended by adding thereto subparagraph
(p) as follows:
"(p) Indebtedness assumed or incurred in connection with a
Permitted Acquisition."
(b) SECTION 10.5.1 is hereby amended by adding the following (iii)
prior to the end thereof:
"(iii) prior to the Final Acquisition Drawdown Date, any
Permitted Acquisition or UK Permitted Acquisition."
SECTION 9. AMENDMENT TO SECTION 11 OF THE CREDIT AGREEMENT.
(a) SECTION 11.1 is hereby amended by replacing the table appearing
therein with the following table:
FISCAL QUARTER
ENDING DATE RATIO
------------------------------------------------
3/31/98 3.50:1
------------------------------------------------
6/30/98 3.75:1
------------------------------------------------
9/30/98 3.75:1
------------------------------------------------
12/31/98 3.00:1
------------------------------------------------
3/31/99 3.00:1
------------------------------------------------
6/30/99 3.00:1
------------------------------------------------
9/30/99 2.75:1
------------------------------------------------
12/31/99 2.50:1
------------------------------------------------
3/31/00 2.50:1
------------------------------------------------
6/30/00 2.50:1
------------------------------------------------
9/30/00 2.50:1
------------------------------------------------
12/31/00 and thereafter 2.00:1
------------------------------------------------
(b) SECTION 11.2 is here y amended in its entirety to read as follows:
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"11.2 RESTRICTED CAPITAL EXPENDITURES. The Borrower and the Holding
Company will not make, or permit any of their Subsidiaries to make, Restricted
Capital Expenditures OTHER THAN: (a) Restricted Capital Expenditures that do not
exceed in aggregate $6,800,000, for all such Persons collectively, for fiscal
year 1999 and do not exceed $3,000,000 thereafter, PROVIDED that, if during any
such fiscal year, the amount of Restricted Capital Expenditures permitted for
that fiscal year is not so utilized, a portion of such unutilized amount not to
exceed $500,000 may be utilized in the immediately succeeding fiscal year, but
not in any subsequent fiscal year, (b) in fiscal, year 1999, Restricted Capital
Expenditures in an amount not to exceed in aggregate $1,000,000 to (i) acquire
property in the metropolitan Houston, Texas area, (ii) construct an office
building on such property, and (iii) expand the Borrower's existing facility in
Tulsa, Oklahoma, (c) in fiscal year 2000, Restrictive Capital Expenditures in an
amount not to exceed in aggregate $1,500,000 in connection with the relocation
of the existing Houston, Texas facility to another facility in the same
geographic area and the development of such other facility, (d) Permitted
Acquisitions and (e) UK Permitted Acquisitions."
(c) SECTION 11.3 is hereby amended by amended in its entirety to
read as follows:
"11.3 CONSOLIDATED TANGIBLE NET WORTH. The Borrower and the Holding
Company will not permit Consolidated Tangible Net Worth at any time to be
less than the sum of (a) $7,257,000, plus (b) on a cumulative basis, 75%
of positive Consolidated Net Income for each fiscal year beginning with
the fiscal year ended March 31, 1999, plus (c) 100% of the proceeds of any
sale by any of the Holding Company or any of its Subsidiaries after the
Closing Date of (i) equity securities issued by such Person, or (ii)
warrants or subscription rights for equity securities issued by such
Person.
(d) SECTION 11.4 is hereby amended by replacing the table appearing
therein with the following table:
-------------------------------------------------
Date Ratio
-------------------------------------------------
3/31/98 2.75:1
-------------------------------------------------
6/30/98 2.50:1
-------------------------------------------------
9/30/98 3.00:1
-------------------------------------------------
12/31/98 3.75:1
-------------------------------------------------
3/31/99 3.75:1
-------------------------------------------------
6/30/99 4.00:1
-------------------------------------------------
9/30/99 4.00:1
-------------------------------------------------
12/31/99 and thereafter 4.50:1
-------------------------------------------------
(e) SECTION 11.5 is hereby amended by replacing the table appearing
therein with the following table:
15
-------------------------------------------------
Date Ratio
-------------------------------------------------
3/3 1/98 1.05:1
-------------------------------------------------
6/30/98 1.00:1
-------------------------------------------------
9/30/98 1.20:1
-------------------------------------------------
12/31/98 1.40:1
-------------------------------------------------
3/31/99 1.40:1
-------------------------------------------------
6/30/99 1.40:1
-------------------------------------------------
9/30/99 1.40:1
-------------------------------------------------
12/31/99 1.50:1
-------------------------------------------------
3/3 1 /00 and thereafter 1.50:1
-------------------------------------------------
SECTION 10. AMENDMENT TO THE CREDIT AGREEMENT. The Credit Agreement is
hereby amended by adding EXHIBITS I and J hereto as EXHIBITS I and J thereto.
SCHEDULE 1 of the Credit Agreement is hereby amended in its entirety and
replaced with SCHEDULE 1 hereto.
SECTION 11. CONDITIONS TO EFFECTIVENESS. This Amendment shall not become
effective until the Agent receives the following:
(a) a counterpart of this Amendment, executed by the Borrower,
the Guarantors and each of the Lenders; and
(b) an amendment fee of $56,250 paid by the Borrower for the PRO
RATA account of each Lender based on such Lender's percentage of the Total
Acquisition Commitment and the increase of such Lender's Total Commitment as
effected by this Amendment; and
(c) an arrangement fee for the account of BancBoston Securities Inc.
in the amount set forth in the term sheet relating to this Amendment; and
(d) Acquisition Notes, duly executed and delivered by the Borrower
for each Lender; and
(e) the first amendment to the UK Facility, executed by the parties
to the UK Facility; and
(f) Amended and Restated Revolving Credit Notes, duly executed and
delivered by the Borrower for each Lender; and
(g) a copy, certified by a duly authorized officer of the Borrower
and the Holding Company to be true and complete on the date hereof, of each of
(i) such Person's charter or other incorporation documents as in effect on such
date of certification, (ii) such Person's by-laws as in effect on such date and
(iii) proof of at corporate action necessary for the valid execution, delivery
and performance by the Holding Company and each of its Subsidiaries of this
Amendment, the Acquisition Notes and the other documents entered into in
connection herewith to which such Person is or is to become a party; and
16
(h) an opinion of counsel for the Borrower and the Guarantors in
form and substance satisfactory to the Agent.
SECTION 12. DELIVERY OF ANNUAL FINANCIAL STATEMENTS. Notwithstanding the
provisions of ss.9.4(a) and (d), the Agent and the Lenders hereby agree that so
long as the Borrower delivers the financial statement its and compliance
certificate required thereby for the Borrower's 1997 fiscal year to the Agent
and the Lenders within 10 days of the effective date of this Amendment, no
D,,-fault or Event of Default will occur as a result of the Borrower's failure
to deliver the 199 7 annual statements and compliance certificate by the date
originally required by such ss.9.4 (a) and (d).
SECTION 13. REPRESENTATIONS AND WARRANTIES. The Borrower and the
Guarantors hereby repeat, on and as of the date hereof, each of the
representations and warranties made by it in SECTION 8 of the Credit Agreement,
and such representations and warranties remain true as of the date hereof
(except to the extent of changes resulting from transactions contemplated or
permitted by the Credit Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and to the extent that such representations and
warranties relate expressly to an earlier date), PROVIDED, that all references
therein to the Credit Agreement shall refer to such Credit Agreement as amended
hereby. In addition, the Borrower and the Guarantors hereby represent an d
warrant that (a) the execution and delivery by the Borrower and the Guarantors
of this Amendment and the performance by the Borrower and the Guarantors of a of
their agreements and obligations under the Credit Agreement as amended hereby
are within the corporate authority of each the Borrower and the Guarantors and
have been duly authorized by all necessary corporate action on the part of the
Borrower an I the Guarantors and (b) on May 20, 1998 the Holding Company
received additional cash equity contributions of $5,087,598.
SECTION 14. RATIFICATION, ETC. as expressly amended hereby, the Credit
Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the Security Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this Amendment shall be read and construed as a single
agreement. All references in the Credit Agreement or any related agreement or
instrument t the Credit Agreement shall hereafter refer to the Credit Agreement
as amended hereby.
SECTION 15. WAIVER. Nothing contained herein shall constitute a waiver of,
impair or otherwise affect any Obligations, any other obligation of the Borrower
or any rights of the Agent or the Lenders consequent thereon.
SECTION 16. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
SECTION 17. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
17
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as a
document under seal as of the date first above written.
CRC-XXXXX PIPELINE
INTERNATIONAL, INC.
By: ___________________________
Title:__________________________
CRC HOLDINGS CORP.
By: ___________________________
Title:__________________________
BANKBOSTON, N.A., as Agent
By: ___________________________
Title:__________________________
BANKERS TRUST COMPANY, as
Documentation Agent
By: ___________________________
Title:__________________________
NATIONSBANK OF TEXAS, N.A.
By: ___________________________
Title:__________________________
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By: ___________________________
Title:__________________________
19
RATIFICATION OF GUARANTY
Each of the undersigned Guarantors hereby acknowledges and consents to the
foregoing Amendment as of July 3, 1998, and agrees that each of the Guarantees
from each of the undersigned Guarantors remain in full force and effect, and
each of the Guarantors confirms and ratifies all of it legations thereunder.
CRC-KEY, INC.
By:____________________________
Title:___________________________
CRC-XXXXX CANADA, LTD.
By:____________________________
Title:___________________________
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