EXHIBIT 10.13
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
TWELFTH AMENDMENT TO
CREDIT AGREEMENT
THIS TWELFTH AMENDMENT TO CREDIT AGREEMENT, dated as of March 14,
1997, amends and supplements the Credit Agreement dated as of December 14,
1994, as amended (the "Credit Agreement"), between BUCYRUS INTERNATIONAL, INC.
(the "Company") and BANK ONE, WISCONSIN (formerly known as Bank One,
Milwaukee, National Association (the "Bank").
RECITAL
The Company and the Bank desire to amend and supplement the Credit
Agreement as provided below.
AGREEMENTS
In consideration of the promises and agreements set forth in the
Credit Agreement, as amended hereby, the Company and the Bank agree as
follows:
1. Definition and References. Capitalized terms not defined
herein have the meanings assigned in the Credit Agreement. Upon the
fulfillment of the conditions set forth in section 3 below, all references to
the Credit Agreement contained in the Loan Documents shall mean the Credit
Agreement as amended by this Twelfth Amendment to Credit Agreement.
2. Amendments.
(a) Section 2.16(b)(iv)(a) of the Credit Agreement is
amended by adding the following sentences at the end of that subsection:
Notwithstanding the foregoing, the Maximum Loan Amount shall be
reduced to $4,000,000 on February 1, 1997; provided, however, that
upon a Change in Control the Bank may, in its discretion, reduce
the aggregate Maximum Loan Amounts for Project Financing Loans
Nos. 4, 6, 7 and 8 to $7,000,000 with the Bank allocating any such
reduction in the aggregate Maximum Loan Amount to the individual
Project Financing Loans in its reasonable discretion.
(b) Section 2.16(b)(iv)(d) is amended by deleting the date
"July 31, 1997" and substituting the date "June 30, 1997" in its place.
(c) Section 2.16(b)(iv)(f) is amended by adding the
following sentence to the end of such subsection:
In lieu of the foregoing, the Company agrees to pay to the Bank
commitment fees of $1,000 on the last Business Day of February,
March, April, May and June, 1997.
(d) Subsections 2.16(b)(vi), 2.16(b)(vii) and
2.16(b)(viii) of the Credit Agreement are created to read as follows:
(vi) Project Financing Loan No. 6. The Bank agrees to make
advances, (in a minimum amount of $250,000 and in a multiple of $50,000
above such minimum), subject to the terms and conditions set forth in
this Agreement, to finance the construction of two Model 495-B1 Rope
Shovels and related equipment and accessories ("Project No. 6") to be
sold by the Company to Minera Alumbrera Limited ("Alumbrera") pursuant
to Purchase Order No. 00216200-9008-1 dated December 6, 1995, as amended
(the "Alumbrera Contract"), as follows:
(a) Maximum Loan Amount: $3,250,000.
(b) Limitation on Advances: The unpaid principal
balance of Project Financing Note No. 6 shall not at any time prior to
the delivery of the first shovel under the Alumbrera Contract exceed the
lesser of (i) the Maximum Loan Amount or (ii) an amount equal to 60% of
the cost (determined in accordance with GAAP in a manner consistent with
the Company's historical accounting practices) of the work-in-process
inventory comprising Project No. 6 minus 100% of the advance payments
received from Alumbrera plus 100% of the Project Financing Reserve
established from time to time pursuant to subsection (h) below.
The unpaid principal balance of Project Financing Note No. 6
shall not at any time after delivery of the first shovel under the
Alumbrera Contract exceed the lesser of (x) the remaining amount to be
paid under the Alumbrera Contract, (y) the Maximum Loan Amount or (z) an
amount equal to 90% of "Qualified Alumbrera Receivables" plus 100% of
the Project Financing Reserve plus 60% of the cost (determined in
accordance with GAAP in a manner consistent with the Company's
historical accounting practices) of the work-in-process inventory
comprising Project No. 6 minus 100% of the advance payments received
from Alumbrera.
In addition to the limits in the two preceding paragraphs,
the unpaid principal balance of Project Financing Note No. 6 shall not
at any time exceed (1) prior to receipt by the Company of the $1,412,000
advance payment scheduled to be paid in August 1997, an amount equal to
the sum of 100% of Qualified Alumbrera Receivables plus 60% of the cost
(determined in accordance with GAAP in a manner consistent with the
Company's historical accounting practices) of the work-in-process
inventory comprising of Project No. 6 and (2) thereafter, the amount
remaining to be paid to the Company under the Alumbrera Contract.
"Qualified Alumbrera Receivables" means the aggregate amount
(after deducting all downpayments, advance payments and retainage
amounts owed by Minera Alumbrera Limited to the Company) which arose out
of the sale of goods comprising Project No. 6 and which have been
shipped by the Company in accordance with the applicable provisions of
the Alumbrera Contract; provided, however, that if any amount owed by
Alumbrera to the Company under the Alumbrera Contract is outstanding
more than 30 days after the due date, then Qualified Alumbrera
Receivables shall be $0.
(c) Maturity Date: The aggregate principal amount
of Project Financing Note No. 6 and all accrued interest shall be due
upon the first to occur of (i) the receipt by the Company of the final
payment under the Alumbrera Contract or (ii) November 30, 1997.
(d) Interest Rate: Reference Rate or the Adjusted
Libor Rate with the Applicable Libor Margin being 2.75%; each Libor Rate
Loan must be in a minimum amount of $250,000 and have an Interest Period
of one month.
(e) Interest Payment Dates: The last Business Day
of each month and on the Maturity Date.
(f) Commitment Fee: As consideration for the
commitment of the Bank to provide the Project Financing to the Company,
the Company agrees to pay to the Bank on the last Business Day of each
month, commencing March 31, 1997, and on the Maturity Date, a commitment
fee equal to 1/4 of 1% per year on the difference between the Maximum
Loan Amount and the daily average outstanding principal balance of
Project Financing Note No. 6 during the preceding month or other
applicable period.
(g) Prepayment of Project Financing Note No. 6: The
Company may prepay Project Note No. 6 in whole or in part at any time
upon two Business Days prior notice to the Bank. The Company shall
prepay Project Financing Note No. 6 immediately upon receipt (i) from
the Bank of a notice (containing calculations in reasonable detail) to
the effect that the outstanding principal balance of Project Financing
Note No. 6 exceeds the limits set forth in subsection (b) above in an
amount equal to such excess and (ii) of a payment by Alumbrera on the
Alumbrera Contract in an amount equal to such payment. Any principal
prepayment shall first be applied to the amount, if any, of Project
Financing Note No. 6 consisting of Reference Rate Loans and the balance
to Libor Rate Loans. Upon any principal prepayment of a Libor Rate
Loan, the Company shall also pay accrued interest thereon and any amount
due under section 2.14(c).
(h) Project Financing Reserve: For purposes of
determining availability under subsection (b) above, the Project
Financing Reserve shall equal the lesser of (i) the Maximum Loan Amount
or (ii) the amount remaining to be paid to the Company under the
Alumbrera Contract, minus the greater of (x) the amount available under
subsection (b) above or (y) $0. The Project Financing Reserve will be
adjusted on each day on which the Company obtains an advance under, or
makes a principal payment on, Project Financing Note No. 6 and upon
receipt by the Bank of the financial information provided under section
5.4(d).
For purposes of calculating the Project Financing
Reserve under section 2.8 of the Credit Agreement, the aggregate Project
Financing Reserve for Project Financing Loan Nos. 6, 7 and 8 shall equal
the difference between (1) the aggregate availability for Project
Financing Loan Nos. 6, 7 and 8 under sections 2.16(b)(vi)(b),
2.16(b)(vii)(b) and 2.16(b)(viii)(b) and (2) the aggregate outstanding
principal balances of Project Financing Note Nos. 6, 7 and 8, rounded up
to the next highest $50,000 with a minimum aggregate Project Financing
Reserve of $250,000.
(i) Use of Proceeds: The Company shall use the
proceeds of Project Loan No. 6 solely to pay costs associated with
Project No. 6.
(vii) Project Financing Loan No. 7. The Bank agrees to make
advances, (in a minimum amount of $250,000 and in a multiple of $50,000
above such minimum) subject to the terms and conditions set forth in
this Agreement, to finance the construction of one Model 59-R blast hole
drill and related equipment and accessories ("Project No. 7") to be sold
by the Company to Road Machinery & Supplies Co. pursuant to Purchase
Order No. 25466 dated May 23, 1996, as amended (the "USX Contract"), as
follows:
(a) Maximum Loan Amount: $2,250,000.
(b) Limitation on Advances: The unpaid principal
balance of Project Financing Note No. 7 shall not at any time prior to
the delivery of the drill under the USX Contract exceed the lesser of
(i) the Maximum Loan Amount or (ii) an amount equal to 60% of the cost
(determined in accordance with GAAP in a manner consistent with the
Company's historical accounting practices) of the work-in-process
inventory comprising Project No. 7 minus 100% of the advance payments
received from USX plus 100% of the Project Financing Reserve established
from time to time pursuant to subsection (h) below.
The unpaid principal balance of Project Financing Note
No. 7 shall not at any time after delivery of the drill under the USX
Contract exceed the lesser of (x) the remaining amount to be paid under
the USX Contract, (y) the maximum Loan Amount or (z) an amount equal to
90% of "Qualified USX Receivables" plus 100% of the Project Financing
Reserve plus 60% of the cost (determined in accordance with GAAP in a
manner consistent with the Company's historical accounting practices) of
the work-in-process inventory comprising Project No. 7 minus 100% of the
advance payments received from USX.
"Qualified USX Receivables" means the aggregate amount
(after deducting all downpayments, advance payments and retainage
amounts owed by USX to the Company) which arose out of the sale of goods
comprising Project No. 7 and which have been shipped by the Company in
accordance with the applicable provisions of the USX Contract; provided,
however, that if any amount owed by USX to the Company under the USX
Contract is outstanding more than 30 days after the due date, then
Qualified USX Receivables shall be $0.
(c) Maturity Date: The aggregate principal amount
of Project Loan No. 7 and all accrued interest shall be due upon the
first to occur of (i) the receipt by the Company of the final payment
under the USX Contract or (ii) November 30, 1997.
(d) Interest Rate: Reference Rate or the Adjusted
Libor Rate with the Applicable Libor Margin being 2.75%; each Libor Rate
Loan must be in a minimum amount of $250,000 and have an Interest Period
of one month.
(e) Interest Payment Dates: The last Business Day
of each month and on the Maturity Date.
(f) Commitment Fee: As consideration for the
commitment of the Bank to provide the Project Financing to the Company,
the Company agrees to pay to the Bank on the last Business Day of each
month, commencing March 31, 1997, and on the Maturity Date, a commitment
fee equal to 1/4 of 1% per year on the difference between the Maximum
Loan Amount and the daily average outstanding principal balance of
Project Financing Note No. 7 during the preceding month or other
applicable period.
(g) Prepayment of Project Financing Note No. 7: The
Company may prepay Project Financing Note No. 7 in whole or in part at
any time upon two Business Days prior notice to the Bank. The Company
shall prepay Project Financing Note No. 7 immediately upon receipt (i)
from the Bank of a notice (containing calculations in reasonable detail)
to the effect that the outstanding principal balance of Project
Financing Note No. 7 exceeds the limits set forth in subsection (b)
above in an amount equal to such excess and (ii) of a payment by USX on
the USX Contract in an amount equal to such payment. Any principal
prepayment shall first be applied to the amount, if any, of Project
Financing Note No. 7 consisting of Reference Rate Loans and the balance
to Libor Rate Loans. Upon any principal prepayment of a Libor Rate
Loan, the Company shall also pay accrued interest thereon and any amount
due under section 2.14(c).
(h) Project Financing Reserve: For purposes of
determining availability under subsection (b) above, the Project
Financing Reserve shall equal (i) an amount equal to the sum of 100% of
the amount owed by USX to the Company relating to the Project No. 7 plus
100% of the cost (determined in accordance with GAAP in a manner
consistent with the Company's historical accounting practices) of the
work-in-process inventory comprising Project No. 7 minus (ii) an amount
equal to the sum of 90% of the Qualified USX Receivables plus 60% of the
cost of the work-in-process inventory comprising Project No. 7. The
Project Financing Reserve will be adjusted on each day on which the
Company obtains an advance under, or make a principal payment on,
Project Financing Note No. 7.
For purposes of calculating the Project Financing
Reserve under section 2.8 of the Credit Agreement, the aggregate Project
Financing Reserve for Project Financing Loan Nos. 6, 7 and 8 shall equal
the difference between (1) the aggregate availability for Project
Financing Loan Nos. 6, 7 and 8 under sections 2.16(b)(vi)(b),
2.16(b)(vii)(b) and 2.16(b)(viii)(b) and (2) the aggregate outstanding
principal balances of Project Financing Note Nos. 6, 7 and 8, rounded up
to the next highest $50,000 with a minimum aggregate Project Financing
Reserve of $250,000.
(i) Use of Proceeds: The Company shall use the
proceeds of Project Loan No. 7 solely to pay costs associated with
Project No. 7.
(viii) Project Financing Loan No. 8. The Bank agrees to
make advances, (in a minimum amount of $250,000 and in a multiple of
$50,000 above such minimum) subject to the terms and conditions set
forth in this Agreement, to finance the construction of two Model 49-R
blast hole drills and related equipment and accessories ("Project No.
8") to be sold by the Company to Iscor Limited ("Iscor") pursuant to
Contract No. 3219/71 dated March 6, 1996, as amended (the "Iscor
Contract"), as follows:
(a) Maximum Loan Amount: $3,500,000.
(b) Limitation on Advances: The unpaid principal
balance of Project Financing Note No. 8 shall not at any time prior to
the delivery of the first drill under the Iscor Contract exceed the
lesser of (i) the Maximum Loan Amount or (ii) an amount equal to 60% of
the cost (determined in accordance with GAAP in a manner consistent with
the Company's historical accounting practices) of the work-in-process
inventory comprising Project No. 8 minus 100% of the advance payments
received from Iscor plus 100% of the Project Financing Reserve
established from time to time pursuant to subsection (h) below.
The unpaid principal balance of Project Financing Note
No. 8 shall not at any time after delivery of the first drill under the
Iscor Contract exceed the lesser of (x) the remaining amount to be paid
under the Iscor Contract, (y) the maximum Loan Amount or (z) an amount
equal to 90% of "Qualified Iscor Receivables" plus 100% of the Project
Financing Reserve plus 60% of the cost (determined in accordance with
GAAP in a manner consistent with the Company's historical accounting
practices) of the work-in-process inventory comprising Project No. 8
minus 100% of the advance payments received from Iscor.
"Qualified Iscor Receivables" means the aggregate
amount (after deducting all downpayments, advance payments and retainage
amounts owed by Iscor to the Company) which arose out of the sale of
goods comprising Project No. 8 and which have been shipped by the
Company in accordance with the applicable provisions of the Iscor
Contract; provided, however, that if any amount owed by Iscor to the
Company under the Iscor Contract is outstanding more than 30 days after
the due date, then Qualified Iscor Receivables shall be $0.
(c) Maturity Date: The aggregate principal amount
of Project Loan No. 8 and all accrued interest shall be due upon the
first to occur of (i) the receipt by the Company of the final payment
under the Iscor Contract or (ii) August 31, 1997.
(d) Interest Rate: Reference Rate or the Adjusted
Libor Rate with the Applicable Libor Margin being 2.75%; each Libor Rate
Loan must be in a minimum amount of $250,000 and have an Interest Period
of one month.
(e) Interest Payment Dates: The last Business Day
of each month and on the Maturity Date.
(f) Commitment Fee: As consideration for the
commitment of the Bank to provide the Project Financing to the Company,
the Company agrees to pay to the Bank on the last Business Day of each
month, commencing March 31, 1997, and on the Maturity Date, a commitment
fee equal to 1/4 of 1% per year on the difference between the Maximum
Loan Amount and the daily average outstanding principal balance of
Project Financing Note No. 8 during the preceding month or other
applicable period.
(g) Prepayment of Project Financing Note No. 8: The
Company may prepay Project Financing Note No. 8 in whole or in part at
any time upon two Business Days prior notice to the Bank. The Company
shall prepay Project Financing Note No. 8 immediately upon receipt (i)
from the Bank of a notice (containing calculations in reasonable detail)
to the effect that the outstanding principal balance of Project
Financing Note No. 8 exceeds the limits set forth in subsection (b)
above in an amount equal to such excess and (ii) of a payment by Iscor
on the Iscor Contract in an amount equal to such payment. Any principal
prepayment shall first be applied to the amount, if any, of Project
Financing Note No. 8 consisting of Reference Rate Loans and the balance
to Libor Rate Loans. Upon any principal prepayment of a Libor Rate
Loan, the Company shall also pay accrued interest thereon and any amount
due under section 2.14(c).
(h) Project Financing Reserve: For purposes of
determining availability under subsection (b) above, the Project
Financing Reserve shall equal (i) an amount equal to the sum of 100% of
the amount owed by Iscor to the Company relating to the Project No. 8
plus 100% of the cost (determined in accordance with GAAP in a manner
consistent with the Company's historical accounting practices) of the
work-in-process inventory comprising Project No. 8 minus (ii) an amount
equal to the sum of 90% of the Qualified Iscor Receivables plus 60% of
the cost of the work-in-process inventory comprising Project No. 8. The
Project Financing Reserve will be adjusted on each day on which the
Company obtains an advance under, or make a principal payment on,
Project Financing Note No. 8.
For purposes of calculating the Project Financing
Reserve under section 2.8 of the Credit Agreement, the aggregate Project
Financing Reserve for Project Financing Loan Nos. 6, 7 and 8 shall equal
the difference between (1) the aggregate availability for Project
Financing Loan Nos. 6, 7 and 8 under sections 2.16(b)(vi)(b),
2.16(b)(vii)(b) and 2.16(b)(viii)(b) and (2) the aggregate outstanding
principal balances of Project Financing Note Nos. 6, 7 and 8, rounded up
to the next highest $50,000 with a minimum aggregate Project Financing
Reserve of $250,000.
(i) Use of Proceeds: The Company shall use the
proceeds of Project Loan No. 8 solely to pay costs associated with
Project No. 8.
(e) Section 5.4(d) of the Credit Agreement is amended to
read as follows:
(d) within 15 days after the end of each month during the period
ending November 30, 1997, a statement summarizing the work-in-
process inventory for Projects Nos. 4, 6, 7 and 8 and the
Qualified Collahuasi Accounts, the Qualified Alumbrera
Receivables, the Qualified USX Receivables and the Qualified Iscor
Receivables,
(f) The final sentence of section 5.12 of the Credit
Agreement is amended by deleting the phrase "the Maturity Date of Project
Financing Note No. 4" and substituting the date "November 30, 1997" in its
place.
(g) Section 5.13(f) of the Credit Agreement is amended by
inserting the phrase ", Alumbrera Contract, USX Contract or Iscor Contract"
after the words "Collahuasi Contract" in each place such words appear in
section 5.13(f).
(h) The last two lines in the table in section 6.13 of the
Credit Agreement are deleted and replaced with the following:
December 31, 1996 29,500,000
March 31, 1997 29,500,000
June 30, 1997 31,000,000
September 30, 1997 32,500,000
(i) Section 6.14 of the Credit Agreement is amended by
deleting the date "July 31, 1997" and substituting the phrase "June 30, 1997
or to be less than 1.50:1 as of the last day of any subsequent fiscal quarter"
in its place.
3. Closing Conditions. This Twelfth Amendment to Credit
Agreement shall be effective upon its execution and delivery by the Company
and the Bank and the receipt by the Bank of:
(a) Project Financing Note Nos. 6, 7 and 8, duly executed
by the Company;
(b) An Amendment to the Participation Agreement between
the Bank and The Bank of Nova Scotia, in form and content satisfactory to the
Bank, pursuant to which participating interests in Project Note Nos. 6, 7
and 8 are sold by the Bank to The Bank of Nova Scotia, duly executed by The
Bank of Nova Scotia;
(c) An opinion of counsel to the Company satisfactory to
the Bank; and
(f) Such other documents as the Bank or the Bank of Nova
Scotia may reasonably request relating to this Twelfth Amendment.
4. Representations and Warranties. The Company represents and
warrants to the Bank that:
(a) The execution and delivery of this Twelfth Amendment
and Project Financing Note Nos. 6, 7 and 8 are within the Company's corporate
power and corporate authority, have been duly authorized by all necessary
corporate action on the part of the Company, are not in violation of any
existing law, rule or regulation of any governmental agency or authority, any
order or decision of any court, the certification of incorporation or by-laws
of the Company or the terms of any agreement, restriction or undertaking to
which the Company is a party or by which it is bound, do not require the
approval or consent of the shareholders of the Company, any governmental body,
agency or authority or any other person or entity.
(b) The representations and warranties set forth in
section 3 of the Credit Agreement are true and correct in all material
respects as of the date of this Twelfth Amendment to Credit Agreement and no
Default or Event of Default has occurred and is continuing.
5. Costs and Expenses. The Company agrees to pay all costs and
expenses (including reasonable attorneys' fees) paid or incurred by the Bank
in connection with the execution and delivery of this Twelfth Amendment and
the consummation of the transactions contemplated hereby.
6. Full Force and Effect. The Company and the Bank confirm
that the Credit Agreement, as amended hereby, remains in full force and
effect.
BANK ONE, WISCONSIN
BY /s/Xxxxxxx X. Xxxx, VP
Xxxxxxx X. Xxxx, Vice President
BUCYRUS INTERNATIONAL, INC.
BY /s/Xxxx X. Xxxxxxx
Its Assistant Treasurer
