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Exhibit 4.1
AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (the "Amendment")
dated as of January 21, 1998 by and among Corrpro Companies, Inc., an Ohio
corporation (the "BORROWER"), PNC Bank, National Association, ("PNC"), Bank One,
NA ("BANKONE"), National City Bank ("NCB") and LaSalle National Bank ("LASALLE"
and together with PNC, Bank One and NCB, the "BANKS"), and PNC Bank, National
Association, in its capacity as agent for the Banks (the "AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent
are parties to that certain Credit Agreement dated as of July 16, 1997 (the
"CREDIT AGREEMENT"), as amended by Amendment No. 1 to Credit Agreement dated as
of September 18, 1997; and
WHEREAS, the parties hereto desire to amend the Credit
Agreement as hereinafter provided, among other things, to release the Guarantors
from the Guaranty Agreement, to add a net worth and a minimum debt service
covenant for the Borrower and to modify the covenant regarding loans and
investments and the annual reporting requirements.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
1. DEFINITIONS.
Defined terms used herein unless otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement as amended by this
Amendment.
2. AMENDMENTS OF CREDIT AGREEMENT.
A. Section 1.1 of the Credit Agreement is hereby amended by
inserting the following definitions in alphabetical order:
BORROWER ADJUSTED CONSOLIDATED CASH FLOW FROM OPERATIONS for
any period of determination shall mean the difference between (i)
Borrower Cash Flow From Operations and (ii) capital expenditures, in
each case of the Borrower for such period determined in accordance with
GAAP.
BORROWER BASE NET WORTH shall mean the sum of $29,000,OOO plus
(i) 50% of the net income of the Borrower for each fiscal quarter in
which net income was earned (as opposed to a net loss) during the
period from January 1, 1998 through the date of determination, and (ii)
an amount equal to the net proceeds received by the Borrower
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after the Closing Date resulting from the issuance of capital stock of
the Borrower which is treated as equity in accordance with GAAP (but
without, in any event, any adjustments for any losses).
BORROWER NET WORTH shall mean as of any date of determination
total stockholders' equity of the Borrower as of such date determined
in accordance with GAAP.
BORROWER CONSOLIDATED CASH FLOW FROM OPERATIONS for any period
of determination shall mean (i) the sum of net income from continuing
operations before extraordinary items and changes in accounting
principles, depreciation, amortization, other non-cash charges to net
income, interest expense and income tax expense minus (ii) non-cash
credits to net income, in each case of the Borrower for such period
determined in accordance with GAAP.
BORROWER DEBT SERVICE shall mean for any period of
determination, the sum of interest expense plus the regularly scheduled
payments of principal on Indebtedness, in each case of the Borrower
determined in accordance with GAAP.
B. Section 1.1 of the Credit Agreement is hereby amended by
deleting the definition of Loan Parties in its entirety and inserting in lieu
thereof the following:
LOAN PARTIES shall mean the Borrower and the Domestic
Subsidiaries (other than Commonwealth Pipeline Services (U.S.A.) Inc.
which is inactive, conducts no business, owns no assets and is being
dissolved).
C. Section 8.2.4 of the Credit Agreement is hereby amended by
deleting clause (iv) therefrom in its entirety and inserting in lieu thereof the
following:
(iv) Loans, advances and investments in effect as of the
Closing Date of a Loan Party in a Subsidiary and subsequent to the
Closing Date (a) of a Loan Party (other than the Borrower) or Foreign
Subsidiary in other Loan Parties, (b) of a Foreign Subsidiary in
another Foreign Subsidiary, (c) of a Loan Party in a Foreign
Subsidiary, PROVIDED such amount does not exceed $3,000,000 in the
aggregate at any one time, or (d) of the Borrower in another Loan
Party, PROVIDED such amount does not exceed $2,000,000 in the aggregate
at any one time; and
D. The Credit Agreement is hereby amended by inserting the
following two sections immediately following Section 8.2.18:
Section 8.2.19 BORROWER MINIMUM DEBT SERVICE COVERAGE RATIO.
The Borrower shall not permit the ratio of Borrower Adjusted
Consolidated Cash Flow From Operations to Borrower Debt Service,
calculated as of the end of each fiscal quarter for the period set
forth below, to be less than 2.0 to 1.O.
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Date of Calculation Applicable Period
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March 31, 1998 3 quarters ended 3/31/98
June 30, 1998 and the end of 4 quarters then ended
each fiscal quarter thereafter
Section 8.2.20 MINIMUM BORROWER NET WORTH.
The Borrower shall not at any time permit the Borrower Net
Worth to be less than Borrower Base Net Worth.
E. Section 8.2.9 of the Credit Agreement is hereby amended by
deleting the first sentence thereof in its entirety and inserting in lieu
thereof the following:
Each of the Loan Parties shall not, and shall not permit any
of the Subsidiaries to, own or create directly or indirectly any
Subsidiaries other than Foreign Subsidiaries other than (i) any
Subsidiary which has joined to this Agreement as a Loan Party on the
Closing Date; and (ii) any Subsidiary formed after Closing Date which
joins this Agreement and the Intercompany Subordination Agreement as a
Loan Party pursuant to a joinder in form and substance satisfactory to
the Agent and provides documents in the forms described in Section 7.1
[First Loans] modified as appropriate to relate to such Subsidiary.
F. Section 8.3.3 of the Credit Agreement is hereby amended
by deleting the first sentence thereof in its entirety and inserting in lieu
thereof the following:
As soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, financial statements of the
Borrower consisting of a consolidating balance sheet as of the end of
such fiscal year, and related consolidating statements of income,
stockholders' equity and cash flows for the fiscal year then ended,
all in reasonable detail and certified by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower as having been
prepared in accordance with GAAP, consistently applied, and setting
forth in comparative form the financial statements as of the end of and
for the preceding fiscal year. As soon as available and in any event
within 90 days after the end of each fiscal year of the Borrower,
financial statements of the Borrower consisting of a consolidated
balance sheet as of the end of such fiscal year, and related
consolidated statements of income, stockholders' equity and cash flows
for the fiscal year then ended, all in reasonable detail and setting
forth in comparative form the financial statements as of the end of and
for the preceding fiscal year, and certified by an accounting firm of
recognized national standing.
G. Section 11.18 of the Credit Agreement is hereby deleted in its
entirety and the following is inserted in lieu thereof:
Intentionally Omitted.
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H. SCHEDULE. Schedule 1.1(B)(1) to the Credit Agreement is hereby
amended and restated to read as set forth on the new schedule 1.1(B)(1) attached
hereto.
3. CONDITIONS OF EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of this Amendment No. 2 is expressly conditioned upon
satisfaction of each of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES, NO DEFAULTS. The representations and
warranties of the Loan Parties contained in Section 6 of the Credit Agreement
shall be true and accurate on the date hereof with the same effect as though
such representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein); the Loan Parties shall have
performed and complied with all covenants and conditions hereof; and no Event
of Default or Potential Default under the Credit Agreement shall have occurred
and be continuing or shall exist.
(b) NOTE PURCHASE AGREEMENT. The Agent, on behalf of the Banks, shall have
received a fully executed Note Purchase Agreement between the Borrower and the
Prudential Insurance Company of America with respect to the issuance of
$30,000,000 of 7.60% Senior Notes due January 15, 2008 (the "SENIOR NOTES"),
with warranties and covenants not less favorable to the Borrower and its
Subsidiaries than the warranties and covenants under the Credit Agreement as
determined by the Required Banks in their reasonable discretion.
(c) TERM LOANS. The Term Loans shall be paid in full from the proceeds of
the Senior Notes.
(d) OPINIONS OF COUNSEL. There shall be delivered to the Agent for the
benefit of each Bank a written opinion of Xxxxxxx Xxxxxxxxxxx Xxxxxx & Xxxxxxx
LLP, counsel for the Loan Parties, dated the date hereof in form and substance
reasonably satisfactory to the Agent.
(e) LEGAL DETAILS; COUNTERPARTS. All legal details and proceedings in
connection with the transactions contemplated by this Amendment shall be in form
and substance satisfactory to the Agent. The Agent shall have received
counterparts of this Amendment No. 2 duly executed by the Borrower and the
Banks, and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Agent. This
Amendment No. 2 may be executed by the parties hereto in any number of separate
counterparts, each of which when taken together and duly executed and delivered
shall together constitute one and the same instrument.
(e) BORROWER CERTIFICATE. The Agent shall have received a certificate
signed by the Secretary or Assistant Secretary of the Borrower certifying as to
all action taken by the Borrower to authorize the execution, delivery and
performance of this Amendment No. 2.
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4. FORCE AND EFFECT. No novation is intended by the Amendment No. 2 and
except as expressly modified by this Amendment, the Credit Agreement and the
other Loan Documents are hereby ratified and confirmed and shall remain in full
force and effect on and after the date hereof
5. GOVERNING LAW. This Amendment No. 2 shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.
6. EFFECTIVE DATE. This Amendment No. 2 shall be dated as of and shall be
effective as of the date and year first above written, which date shall be the
date of the satisfaction of all conditions precedent to effectiveness set forth
in this Amendment No. 2.
7. RELEASE OF GUARANTY. The Agent and the Banks hereby confirm that the
Guarantors are released from their obligations under the Guaranty Agreement and
that the Guaranty Agreement is hereby terminated and of no further force and
effect.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE 1 OF 1 TO AMENDMENT NO. 2 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Amendment as of the day and year first above
written.
CORRPRO COMPANIES, INC.
By:
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Title:
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PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By:
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Title:
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BANK ONE, NA, individually and as
Documentation Agent
By:
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Title:
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NATIONAL CITY BANK
By:
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Title:
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LASALLE NATIONAL BANK
By:
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Title:
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SCHEDULE 1.1(B)(1)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
PART 1 - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES TO BANKS
AMOUNT OF COMMITMENTS
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REVOLVING CREDIT LOANS RATABLE SHARE
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Bank
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PNC Bank, National Association
One Cleveland Ctr
0000 Xxxx 0xx Xx., Xxx. 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000 $ 18,333,333.33 45.8333%
Bank One, NA
000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000 $ 10,000,000.00 25.0000%
National City Bank
0000 Xxxx 0xx Xx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000 $ 6,666,666.67 16.6667%
LaSalle Banks
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Fax:0 00-000-0000
Attention: Xxxxx X. Xxxxxx or
Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 $ 5,000,000.00 12.5000%
Total $ 40,000,000.00 100.0000%
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SCHEDULE 1.1(B)(1)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 2 of 2
PART 2 - ADDRESSES FOR NOTICES TO BORROWER AND THE OTHER LOAN PARTIES:
BORROWER:
Name: Corrpro Companies, Inc.
Address: 0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000)000-0000
Telecopy: (000)000-0000
