Exhibit 10.5
SECOND AMENDMENT TO AMENDED AND RESTATED
CREDIT FACILITY AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT FACILITY AND
SECURITY AGREEMENT (the "Amendment") is made effective as of August 12th, 2003
by and among BANK ONE, NA (with its main office located in Chicago, Illinois,
and hereinafter referred to as "Bank"), with a place of business located at 000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, CONTINENTAL CONVEYOR & EQUIPMENT
COMPANY, a Delaware corporation ("Continental"), with its principal place of
business and executive offices located at 000 Xxxx 0xx Xxxxxx, Xxxxx, P. O. Xxx
000, Xxxxxxxx, Xxxxxxx 00000, and XXXXXXX CONVEYOR COMPANY, a Delaware
corporation ("Xxxxxxx"), with its principal place of business and executive
offices located at U.S. Route 178 South, P. X. Xxx 000, Xxxxxx, Xxxxx Xxxxxxxx
00000 (each of "Continental" and "Xxxxxxx" being sometimes referred to herein
individually as a "Borrower" and collectively as the "Borrower").
RECITALS
A. Pursuant to the terms of that certain Assumption and
Modification Agreement by and between Borrower and Bank
dated as of March 7, 1997 ("Assumption"), the Borrowers
assumed all of the Obligations of CONTINENTAL CONVEYOR &
EQUIPMENT CO. L.P., formerly a limited partnership organized
and existing under the laws of the State of Delaware, and
XXXXXXX CONVEYOR CO. L.P., formerly a limited partnership
organized and existing under the laws of the State of
Delaware (collectively, the "Original Borrowers") under that
certain Credit Facility and Security Agreement by and among
the Original Borrowers and Bank (and/or its predecessor Bank
One Cleveland, N.A.) dated as of September 14, 1992; as
amended by a certain First Amendment to Credit Facility and
Security Agreement by and among the Original Borrowers and
Bank executed on August 27, 1993; as further amended by a
certain Second Amendatory Agreement by and among the Original
Borrowers and Bank dated as of October 5, 1994; as further
amended by a certain Consolidated Amendment No. 1 to Credit
Facility and Security Agreement by and among the Original
Borrowers and Bank dated as of July 28, 1995; as further
amended by a certain Consolidated Amendment No. 2 to Credit
Facility and Security Agreement by and among the Original
Borrowers and Bank dated as of December 13, 1996; as further
amended by a certain Third Amendatory Agreement to Credit
Facility and Security Agreement by and among the Borrower and
Bank dated as of March 28, 1997; as further amended by a
certain Fourth Amendatory Agreement by and among the Borrower
and Bank dated as of December, 1998; as further amended by a
certain Fifth Amendatory Agreement by and among the Borrower
and Bank dated as of April 29, 1999; as further amended by a
certain Sixth Amendatory Agreement by and among the Borrower
and Bank dated as of March 28, 2000, as modified by a letter
amendment dated as of March 25, 2002 (collectively, the
"Original Loan Agreement"); and as further amended by a
certain Amended and Restated Credit Facility and Security
Agreement by and among the Borrower and Bank dated as of
July 25, 2002 (the "Restated Credit Agreement"), and by the
First Amendment to Amended and Restated Credit Facility and
Security Agreement dated as of June 30, 2003 (which, together
with the Original Loan Agreement and the Restated Credit
Agreement are sometimes collectively referred to herein as
the "Credit Agreement").
B. The Borrower has requested certain amendments to the Credit
Agreement as set forth hereinbelow, and Borrower is willing to
execute and deliver to Bank the Third Amended and Restated
Replacement Promissory Note (Revolving Loan) (the "Restated
Revolving Note") of even date herewith, substantially in the
form attached hereto as Exhibit "A".
C. Bank is willing to make the loan herein described, upon the
terms, covenants and conditions herein set forth, and in
reliance upon the representations and warranties of Borrower
herein contained.
NOW, THEREFORE, in consideration of the foregoing Recitals (which are
incorporated herein by reference), the terms, covenants and conditions
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Amendments. The following amendments are hereby made:
1.1 Section 1.1 of the Restated Credit Agreement is hereby
amended by adding the following definition in alphabetical
order:
"Applicable Rate" - the fluctuating rate per annum set forth below
opposite the applicable Level then in effect:
------------ --------------------------- ---------------------------
Level Debt Coverage Ratio Applicable Rate
------------ --------------------------- ---------------------------
I > 1.2:1.0 Base Rate - 0.25%
------------ --------------------------- ---------------------------
II < 1.2:1.0 Base Rate + 0%
------------ --------------------------- ---------------------------
The Applicable Rate shall, in each case, be determined and adjusted
annually (based upon on a four quarter measurement) on the date five
(5) Business Days after the date on which the Lender has received from
the Borrower the financial information and certifications required to
be delivered to the Lender in accordance with the provisions of
Sections 8.1(I)(i) and (iii) (each an "Interest Determination Date").
The term "Debt Coverage" shall have the same meaning as set forth in
Section 8.1(Q) of the Restated Credit Agreement, as amended. Such
Applicable Rate shall be effective from such Interest Determination
Date until the next such Interest Determination Date. The initial
Applicable Rate shall be based on Level II as of August 31, 2003, until
the first Interest Determination Date occurring after the delivery of
the officer's compliance certificate pursuant to Sections 8.1(I)(i) and
(iii) for the year ended December 31, 2003. After August 31, 2003, if
the Borrower shall fail to provide the financial information and
certifications in accordance with the provisions of Sections 8.1(I)(i)
and (iii), the Applicable Rate from such Interest Determination Date
shall, on the date five (5) Business Days after the date by which the
Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on
Level II until such time as such information and certifications are
provided, whereupon the Level shall be determined by the then current
Debt Coverage Ratio.
1.2 Sections 2.4(A) and (C) of the Restated Credit Agreement are hereby
amended by deleting the reference to "August 31, 2003" and replacing it with a
reference to "July 31, 2004".
1.3 Section 2.4(E) of the Restated Credit Agreement is hereby amended
by deleting the reference to "Base Rate" and replacing it with a reference to
"Applicable Rate".
1.4 Section 2.5(D) of the Restated Credit Agreement is hereby amended
by deleting the first sentence thereof in its entirety, and substituting
therefor the following sentence:
Except in Lender's discretion, the amount of all of Borrowers'
outstanding Letter of Credit Accommodations and all other commitments
and obligations made or incurred by Lender in connection therewith
shall not at any time exceed Four Million Five Hundred Thousand Dollars
($4,500,000); provided, however, that at no time shall the aggregate
outstanding Letter of Credit Accommodations for the account of
Continental exceed Four Million Dollars ($4,000,000), and at no time
shall the aggregate outstanding Letter of Credit Accommodations for the
account of Xxxxxxx exceed Five Hundred Thousand Dollars ($500,000).
1.5 Section 8.1 of the Restated Credit Agreement is hereby amended by
deleting subsection (O) in its entirety, and substituting therefor the
following:
(O) Maintain a consolidated Tangible Net Worth equal to or greater than
fifteen Million Dollars ($15,000,000) beginning as of September 30,
2003, and each calendar quarter thereafter, in each case calculated
based upon Borrower's fiscal quarter end combined consolidated
financial statement prepared in accordance with GAAP.
1.6 Section 8.1 of the Restated Credit Agreement is hereby amended by
deleting subsection (Q) in its entirety, and substituting therefor the
following:
(Q) Maintain Debt Coverage (as defined herein) of not less than 1.00 to
1.00 calculated beginning as of September 30, 2003, and as of the end
of each calendar quarter thereafter. "Debt Coverage" as used in this
Section 8.1(Q) means, on a combined consolidated basis, the ratio of:
(1) Borrowers' operating income, plus depreciation and amortization,
less Distributions; to (2) the amount of all principal and interest
paid or payable by the Borrowers to Lender plus all Capital
Expenditures not funded on a term basis at the date of calculation
thereof. Debt Coverage shall be calculated quarterly, commencing
September 30, 2003, based on each Borrower's fiscal quarter and direct
financial statements for the four preceding fiscal quarters prepared in
accordance with GAAP but exclusive of the results of any foreign
subsidiary of Continental.
1.7 Section 8.1 of the Restated Credit Agreement is hereby
amended by deleting subsections (T) and (U) in their entirety.
1.8 Section 8.2 of the Restated Credit Agreement is hereby amended by
deleting subsection (U) in its entirety, and substituting therefor the
following:
(U) Make any advances or loans to any Subsidiary, including any
foreign-based Subsidiaries of either of the Borrowers; provided,
however, that the Borrowers, or either of them, may make loans and
advances to any one or more foreign-based Subsidiaries of Continental
in an aggregate amount at any time outstanding not to exceed $8,500,000
during the period beginning September 30, 2003 or at any time
thereafter, tested quarterly. All such loans or advance shall be
evidenced by promissory notes which shall be deemed to be and hereby
are assigned to Lender and shall be included as Collateral. Borrowers
shall apply against the outstanding balances thereof all payments
designated by the foreign-based Subsidiary as an advance or loan
payment, and Borrower may, in its discretion, apply against such
outstanding balances such other cash amounts received by Borrower from
the foreign-based Subsidiary in the form of advisory fees, management
fees or otherwise to the extent (1) such application is lawful, and (2)
Borrower expressly itemizes such payments and application as a part of
regular financial reporting to Bank pursuant to this Agreement.
1.9 Borrower shall execute and deliver to the Bank the Restated
Revolving Note simultaneously with the execution and delivery of this Amendment.
2. Borrower's Representations, Warranties and Events of Default.
2.1 Affirmation of Credit Agreement. Except as amended hereby, the
terms, provisions, conditions and agreements of the Credit Agreement are hereby
ratified and confirmed and shall remain in full force and effect. Borrower
expressly acknowledges that this Amendment shall neither extinguish or satisfy,
nor constitute a novation or a waiver of, the Borrower's existing indebtedness
or obligations to Bank. Each and every representation and warranty of the
Borrower set forth in the Credit Agreement is hereby confirmed and ratified in
all material respects and such representations and warranties shall be deemed to
have been made and undertaken as of the date of this Amendment as well as at the
time they were made and undertaken.
2.2 Other Representations. The Borrower further represents and
warrants that:
2.2.1 No Event of Default will exist immediately following the
execution hereof or after giving effect to the transactions contemplated hereby.
2.2.2 All necessary corporate actions have been taken by
Borrower to authorize the execution, delivery and performance of this Amendment,
and the Restated Revolving Note, and all other documents or instruments required
pursuant hereto or thereto; this Amendment, and the Restated Revolving Note, and
each such other document or instrument have been duly and validly executed and
delivered, and are valid and legally binding upon the parties thereto and
enforceable in accordance with their respective terms, except to the extent that
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws or by general equitable principals.
2.2.3 No consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority or any other
person or entity is required to be obtained by the Borrower in connection with
the execution, delivery or performance of this Amendment, and the Restated
Revolving Note, or any document or instrument required in connection herewith or
therewith which has not already been obtained or completed.
3. Consent; Continuing Security Interest. This Amendment is executed by the
Borrower to acknowledge, agree and consent to the amendments made pursuant
hereto, and to acknowledge that the security interests and liens granted by the
Borrower to Bank pursuant to the Credit Agreement shall continue to secure all
Obligations. Borrower hereby acknowledges that all liens and security interests
securing the Obligations are valid and subsisting.
4. Covenant Waiver. Borrowers and Guarantor have informed Lender that one or
more Events of Default has occurred under the Credit Agreement, as amended, due
to the Borrower's breach as of June 30, 2003 of the following provisions of the
Restated Credit Agreement: i) Section 8.1(O) (Minimum Tangible Net Worth); ii)
Section 8.1(T) (Operating Income); and, iii) Section 8.2(U) (Maximum Advances to
Other Related Entities). The Borrower and Guarantor have requested that Lender
waive such Events of Default. Pursuant to such request, Lender hereby waives the
Borrower's breach of said Minimum Tangible Net Worth, Operating Income, and
Maximum Advances to Other Related Entities covenants as of June 30, 2003. The
foregoing waiver is limited to its express terms and shall not be deemed to be a
waiver of any other Event of Default or Default which may have existed on or
prior to the date hereof or any Event of Default or Default which may hereafter
arise under the foregoing covenants or under any other provision of the Credit
Agreement or any of the other documents or instruments delivered with respect
thereto. Further, the granting of this waiver shall not be construed as an
agreement or understanding by the Lender to grant any other waiver or other
accommodation in the future with respect to the foregoing covenants or any other
provision of the Credit Agreement or any of the other documents or instruments
delivered with respect thereto.
5. Waivers; Releases. BORROWER, FOR ITSELF AND ITS AFFILIATES, SUCCESSORS,
ASSIGNS, MEMBERS, SHAREHOLDERS, OFFICERS, DIRECTORS AND MANAGERS, HEREBY FOREVER
WAIVES, RELINQUISHES, DISCHARGES AND RELEASES ALL DEFENSES AND CLAIMS OF EVERY
KIND OR NATURE, WHETHER EXISTING BY VIRTUE OF STATE, FEDERAL, OR LOCAL LAW, BY
AGREEMENT OR OTHERWISE, AGAINST LENDER, ITS SUCCESSORS, ASSIGNS, DIRECTORS,
OFFICERS, SHAREHOLDERS, AGENTS, EMPLOYEES AND ATTORNEYS, WHETHER PREVIOUSLY OR
NOW EXISTING OR ARISING OUT OF OR RELATED TO ANY TRANSACTION OR DEALINGS AMONG
THE PARTIES, WHICH ANY BORROWER MAY HAVE OR MAY HAVE MADE AT ANY TIME UP THROUGH
AND INCLUDING THE DATE OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY
AFFIRMATIVE DEFENSES, CLAIMS, COUNTERCLAIMS, SETOFFS, DEDUCTIONS OR RECOUPMENTS.
NOTHING CONTAINED IN THIS AGREEMENT PREVENTS ENFORCEMENT OF THIS RELEASE.
6. Fees and Expenses. As required under the Credit Agreement, the Borrower shall
reimburse the Bank upon demand for all out-of-pocket costs, charges and expenses
of the Bank (including reasonable fees and disbursements of legal counsel to
Bank) in connection with the preparation, negotiation, execution and delivery of
this Amendment and the other agreements or documents relating hereto or required
hereby.
7. Reference to Credit Agreement. On and after the date of this Amendment, each
reference in the Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference to the Credit Agreement in
any Promissory Note or other Credit Document, or other agreement, document or
instrument executed and delivered pursuant to the Credit Agreement, shall be
deemed a reference to the Credit Agreement as amended hereby. All terms not
otherwise defined in this First Amendment shall have the meanings ascribed
thereto in the Credit Agreement.
8. Counterparts. This Amendment may be executed in as many counterparts as may
be convenient, each of which when so executed shall be deemed to be an original
for all purposes, and all of which shall be deemed on and the same instrument.
9. Further Acts. The parties agree to perform any further acts and to execute
and deliver any additional documents which may be reasonably necessary to carry
out the intent and provisions of this Amendment.
10. Binding Effect. This Amendment shall be binding upon and shall inure to the
benefit of the Borrower, Lender, and their respective heirs, personal
representatives, successors and assigns; provided, that Borrower shall not be
permitted to assign any of their rights, duties, obligations or liabilities
hereunder or pursuant to the Credit Agreement without first obtaining the
Lender's prior written consent (which consent may be withheld in the Lender's
sole discretion).
11. WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR LENDER
TO ENTER INTO THIS AGREEMENT, LENDER AND BORROWER AGREE THAT NOTWITHSTANDING ANY
CONSTITUTIONAL RIGHT, EACH PARTY HEREBY WAIVES SUCH RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF
THIS AGREEMENT OR THE CONDUCT OF THE RELATIONSHIP BETWEEN LENDER AND BORROWER
(REGARDLESS OF WHETHER THE CLAIMS MAY ARISE UNDER CONTRACT, TORT OR OTHERWISE).
IN WITNESS WHEREOF, the parties have signed this Amendment to Credit
Agreement, intending to be legally bound thereby as of the Effective Date.
WITNESS BORROWER
CONTINENTAL CONVEYOR & EQUIPMENT COMPANY
__________________________ By: _____________________________
__________________________ Its: _____________________________
WITNESS BORROWER
XXXXXXX CONVEYOR COMPANY
__________________________ By: _____________________________
__________________________ Its: _____________________________
WITNESS BANK
BANK ONE, NA
__________________________ By: _____________________________
__________________________ Its: _____________________________
CONSENT AND REAFFIRMATION OF GUARANTOR
The undersigned is the Guarantor of the Credit Agreement. The
undersigned does hereby consent to the terms of this Amendment executed and
delivered by Borrower on even date herewith, and does hereby ratify and confirm
the Guaranty dated July 25, 2002 to which the undersigned is a party in all
respects. The undersigned further specifically consents to and joins in the
representations, warranties, agreements and the waiver and release set forth in
Sections 2, 5 and 11 of this Amendment. Guarantor acknowledges that it has
consulted with counsel in connection with the negotiation, execution and
delivery of this Consent And Reaffirmation of Guarantor.
WARNING. BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT
YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY
OTHER CAUSE.
WITNESS: GUARANTOR
CONTINENTAL GLOBAL GROUP, INC.
__________________________________ By: _____________________________
__________________________________ Its: ____________________________
