AMENDMENT NO. 1 TO MASTER CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO MASTER CREDIT AGREEMENT is made as of April 30,
1999, by and among CONSTRUCTION FORMS, INC., a Wisconsin corporation (the
"Company"), CF ULTRA TECH, INC., a Wisconsin corporation ("Ultra") and XX XXXXX,
Inc., a Wisconsin corporation ("Gilco") and LASALLE NATIONAL BANK, a national
banking association (the "Bank").
In consideration of the mutual covenants, conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used herein, the following terms shall have the following meanings
specified:
1.1 "Amendment" shall mean this Amendment No. 1 to Master Credit
Agreement
1.2 "Credit Agreement" shall mean the Master Credit Agreement dated as of
June 21, 1996 by and among the Company, Ultra, Gilco and the Bank as amended
pursuant to a waiver and amendment letter dated April 2, 1998 of Bank in favor
of the Company.
ARTICLE II
AMENDMENTS
The Credit Agreement is hereby amended as follows:
2.1 Amendments.
(a) Ultra and Gilco, which were merged into the Company effective as
of February 1, 1998, are hereby removed as parties to the Credit Agreement.
(b) Each reference to "Overadvance Term" contained in the Credit
Agreement and all Related Documents is amended in its entirety to read "Term."
(c) The following definitions contained in Section 1.1 of the Credit
Agreement are hereby amended in their entirety as follows:
"Borrowing Base" shall mean, as of any date, the sum of (a) 60% of
Qualified Accounts of CF Europe and CF Asia, each a division of the
Company, plus (b) 85% of all other Qualified Accounts, plus (c) 30% of
Qualified Inventory of CF Europe and CF Asia, plus (d) 50% of all other
Qualified Inventory.
"Borrowing Base Certificate" shall mean a schedule of the Bank's
collateral in the form of Exhibit A separately setting forth accounts
receivable, Qualified Accounts, inventory and Qualified Inventory.
"Excess Cash Flow Payment" shall mean an amount equal to 50% of Excess
Cash Flow for the relevant period of determination.
"LIBOR Spread" shall mean, subject to the final sentence of this
definition, for any period, the applicable of the following percentages
in effect with respect to such period based on the ratio of (a) Funded
Debt outstanding on the January 31 prior to the date of determination, to
(b) EBITDA computed as of the January 31 prior to the date of
determination as follows:
LIBOR LIBOR
Spread for Spread for
Funded Debt to EBITDA Revolving Loans Term Loan
--------------------- --------------- ---------
Equal to or
Greater than less than
------------ ----------
2.25 to 1.00 __________ 2.25% 2.50%
2.00 to 1.00 2.25 to 1.00 2.00% 2.25%
1.75 to 1.00 2.00 to 1.00 1.75% 2.00%
__________ 1.75 to 1.00 1.50% 1.75%
The LIBOR Spread shall be adjusted, if necessary, annually on
April 30 of each year; provided, however, that the LIBOR Spread may not
change during a Loan Period. Notwithstanding anything to the contrary
contained herein, until October 31, 1999, the LIBOR Spread shall be
calculated as if the ratio of Funded Debt to EBITDA was 2.01 to 1.00,
regardless of the actual ratio of Funded Debt to EBITDA.
"'Qualified Account' shall mean an account (as that term is defined in
the UCC and by GAAP) owing solely to the Company which is not subject to
any assignment, claim, lien, encumbrance or security interest whatsoever
other than those securing any of the Company's obligations to the Bank,
excluding any reserve for bad debts and uncollectible finance charges;
provided, however, that an account shall not be a Qualified Account if
the Company has any notice or knowledge of the bankruptcy, insolvency, or
similar proceeding of the account debtor thereunder, or of the inability
of the account debtor thereunder to pay its debts as they become due, or
of anything which might impair the credit standing of the account
debtor."
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"'Qualified Inventory' shall mean inventory (as that term is defined in
the UCC and by GAAP) solely owned by the Company which meets the
following requirements and continues to meet the same until sold or
otherwise disposed of as permitted by this Agreement: (a) it is not
subject to any assignment, claim, lien, or security interest whatsoever
other than those securing the Obligations; (b) it is not obsolete, is in
good condition and is either currently usable or saleable; (c) it is raw
materials or finished goods; and (d) it is valued at the lower of cost
(on a FIFO basis) or market value."
"Related Documents" shall mean the Master Revolving Credit Note, the
Master Term Note, the Security Agreements, the Guaranty, the Collateral
Assignments, the Mortgages, the Pledge Agreement, the Assignment, the IRB
Documentation, the Subordination Agreement dated as of April 30, 1999 of
the City of Port Washington, Wisconsin in favor of the Bank and all other
certificates, resolutions, or other documents required or contemplated
hereunder.
"Revolving Loan Commitment" shall mean an aggregate principal amount not
to exceed $6,000,000, or such lesser amount to which the Revolving Loan
Commitment is reduced under Section 2.1(e).
"Restricted Payments" shall mean (a) dividends or other distributions by
any Company based upon the stock of the Company (except dividends payable
solely in stock of the Company), (b) purchases, redemptions or other
acquisitions, direct or indirect, by the Company, of stock of the
Company, whether now or hereafter outstanding, (c) any other distribution
by the Company in respect of stock of the Company, whether now or
hereafter outstanding, either directly or indirectly, whether in cash or
property or otherwise, and (d) payment of management fees in an aggregate
amount which exceeds $300,000 annually by the Company to one or more
Affiliates, either directly or indirectly, whether in cash or property or
otherwise.
"Termination Date" shall mean, as to the Revolving Loans April 30, 2004,
and as to the Term Loan April 30, 2004, or such earlier date on which the
Obligations shall terminate as provided in Section 7.2.
(d) The following definitions shall be added to Section 1.1 of the Credit
Agreement and shall be placed in alphabetical order therein:
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"EBITDA" shall mean, with respect to the Company for any period, the net
income from the Company's operations before interest, taxes, depreciation
and amortization, determined in accordance with GAAP and applied in a
manner consistent with the financial statements for such period and prior
periods.
"Gilco" shall mean XX Xxxxx, Inc., a Wisconsin corporation which was
merged into the Company effective as of February 1, 1998.
"Ultra" shall mean CF Ultra Tech, Inc., a Wisconsin corporation which was
merged into the Company effective as of February 1, 1998.
(e) The definition of "Marketable Securities" contained in Section 1.1 of
the Credit Agreement is hereby deleted in its entirety.
(f) Section 2.1 of the Credit Agreement is hereby amended in its entirety
to read as follows:
" 2.1 Revolving Loans.
(a) Prior to the Termination Date and so long as no Default has
occurred and is continuing, the Bank agrees on the terms and conditions
set forth in this Agreement to extend to the Company Revolving Loans from
time to time in amounts not to exceed in the aggregate at any one time
outstanding the lesser of (i) the Revolving Loan Commitment, and (ii) the
Borrowing Base. Subject to the terms of this Agreement, the Company may
borrow, repay (in whole or in part) and reborrow the Revolving Loans
prior to the Termination Date for Revolving Loans. The Revolving Loans
made by the Bank to the Company shall be evidenced by the Master
Revolving Credit Note.
(b) From the date of the first Revolving Loan and until all
Revolving Loans are paid in full, the Company shall pay all accrued and
unpaid interest on (i) any portion of the Revolving Loans which are LIBOR
Rate Loans on the last day of the Loan Period, or (ii) any portion of the
Revolving Loans which are not LIBOR Rate Loans on the first day of each
month, commencing on the last day of May, 1999. Prior to an Event of
Default, interest shall accrue on the aggregate unpaid principal amount
from time to time outstanding under the Master Revolving Credit Note at a
rate per annum equal to (i) the applicable LIBOR Rate on each LIBOR Rate
Loan, and (ii) the Prime Rate on Revolving Loans which are not LIBOR Rate
Loans. Interest shall be computed and adjusted daily based on the actual
number of days elapsed in a year of 360 days. All outstanding unpaid
principal and accrued interest on the Revolving Loans shall be due and
payable on the Termination Date for the Revolving Loans.
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(c) The Company may obtain Revolving Loans by making a request
therefor to the Bank, orally or in writing. Such request shall specify a
Business Day prior to the Termination Date on which such Revolving Loans
are to be made (the "Borrowing Date"), shall be received by the Bank by
12:00 Noon (Milwaukee time) three Business Days before the Borrowing Date
in the case of LIBOR Rate Loans or otherwise by 12:00 Noon (Milwaukee
time) of the Borrowing Date, and shall specify the amount of the
Revolving Loans requested, whether the Revolving Loans are to be LIBOR
Rate Loans and, if so, the requested Loan Period; provided, however, that
within three days after any oral request for a Revolving Loan, the Bank
shall receive from the Company a written confirmation in form acceptable
to the Bank confirming the Company's Revolving Loan request, and the
Bank's obligation to make further Revolving Loans hereunder to the
Company shall be suspended until such confirmation has been received by
the Bank. In the event of any inconsistency between the telephonic notice
and the written confirmation thereof, the telephonic notice shall
control. The Company shall be obligated to repay all Revolving Loans
notwithstanding the failure of the Bank to receive written confirmation,
and notwithstanding the fact that the person requesting the Revolving
Loan was not in fact authorized to do so. No Revolving Loan request shall
be modified, altered or amended without the prior written consent of the
Bank. Each Revolving Loan shall be in the principal amount of the lesser
of (i) $25,000 or a multiple thereof, or (ii) the Maximum Available
Commitment; provided, however, that the Companies may not request LIBOR
Rate Loans in an amount less than $250,000 per request (and additional
increments of $100,000). Upon fulfillment of the conditions specified in
Section 4.2, the Bank shall promptly deposit the amount of such Revolving
Loan in the general deposit account of the Company maintained at the
Bank.
(d) Revolving Loans which are not LIBOR Rate Loans may be
converted (in increments of $250,000 (and additional increments of
$100,000)) into LIBOR Rate Loans by notice from the Company to the Bank
meeting the requirements of, Section 2.1(c). At the end of each
respective Loan Period, LIBOR Rate Loans shall become Revolving Loans
which are not LIBOR Rate Loans unless and until the Company converts such
Revolving Loans to LIBOR Rate Loans.
(e) On the final day of each fiscal quarter, the
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Company may, upon five Business Days' prior written notice to the Bank,
permanently reduce the aggregate amount of the Revolving Loan Commitment;
provided that no such reduction shall reduce the aggregate amount of the
Revolving Loan Commitment to an amount less than the aggregate unpaid
principal balance of the Master Revolving Credit Note on the effective
date of such reduction. Each reduction in the Revolving Loan Commitment
shall be in a minimum amount of $250,000 and in integral multiples of
$250,000 above such minimum."
(g) Section 2.2 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"2.2 Term Loan.
(a) On the date hereof, the Bank agrees to continue to extend to
the Company the Term Loan in an aggregate principal amount of $5,750,000
and such Term Loan shall be subject to all of the terms and conditions
set forth in this Agreement. The Term Loan made by the Bank to the
Company pursuant hereto shall be evidenced by the Master Term Note.
(b) The Company shall pay all accrued and unpaid interest on (i)
any portion of the Term Loan which is a LIBOR Rate Loan on the last day
of the Loan Period, or (ii) any portion of the Term Loan which is not a
LIBOR Rate Loan on the first day of each month, commencing on the last
day of May, 1999, and continuing until the Term Loan is paid in full.
Prior to an Event of Default, interest shall accrue on the aggregate
unpaid principal amount outstanding under the Term Note at a rate per
annum equal to (i) the applicable LIBOR Rate if the Term Loan is a LIBOR
Rate Loan, and (ii) the Prime Rate if the Term Loan is not a LIBOR Rate
Loan. Notwithstanding the foregoing, and so long as no Default has
occurred and is continuing, the Company may elect to fix the interest
rate on all, but not less than all, of the outstanding Term Loan
(provided that no such portion of the Term Loan at the time of such
conversion may be LIBOR Rate Loans) at the Fixed Term Rate by delivering
an irrevocable written notice to the Bank at least three Business Days
prior to the effective date of such election as specified therein (the
"Fixed Term Rate Borrowing Date"); and, thereafter, interest shall accrue
on the aggregate unpaid principal amount of the Term Loan at a rate per
annum equal to the Fixed Term Rate. Interest shall be computed and
adjusted daily based on the actual number of days elapsed in a year of
360 days. The Company shall pay principal outstanding under such Term
Note in twenty equal quarterly installments of
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principal of $200,000 each payable commencing on the last day of July,
1999 and on the last day of each July, October, January and April
thereafter, and a final payment of the balance of all unpaid principal
and accrued interest on the Termination Date for such Term Loan. Amounts
paid or prepaid on the Term Loan may not be reborrowed.
(c) So long as no Default has occurred and is continuing and
provided that the Company has not elected to convert the Term Loan to the
Fixed Term Rate pursuant to Section 2.2(b), the portion of the Term Loan
which is not a LIBOR Rate Loan may be converted into a LIBOR Rate Loan of
at least $250,000 (and additional increments of $100,000) by written
notice from the Company to the Bank and received by Bank by 12:00 p.m.
(Milwaukee time) three Business Days before the requested conversion date
(such date which shall be prior to the Termination Date for the Term
Loan); such notice which shall specify the amount of the Term Loan to be
converted and the requested Loan Period. No Term Loan conversion request
shall be modified, altered or amended without the prior written consent
of the Bank. At the end of each respective Loan Period, each LIBOR Rate
Loan shall become a Term Loan which is not a LIBOR Rate Loan unless and
until the Company converts such Term Loan to a LIBOR Rate Loan."
(h) Section 3.12 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 3.12 Places of Business. The principal place of business and the
chief executive office of the Company is located at the address specified
in Section 8.6, and the books and records of the Company and all records
of account are located and hereafter shall continue to be located at such
principal place of business and chief executive office."
(i) A new Section 3.20 is added to the Credit Agreement to read as
follows:
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" 3.20 Year 2000 Compliance. All material computer hardware,
software and databases used by the Company are Year 2000 Compliant and
the Company will not after the date hereof be materially and adversely
affected by, incur any material cost, material liability or material
expense which arises from the failure of the Company's hardware, software
and databases to be Year 2000 Compliant. For purposes of this Section,
"Year 2000 Compliant" shall mean, as to all computer hardware, software
and databases, that such hardware, software or database operates, and
will operate, accurately and without interruption, prior to and after
December 31, 1999, when referring to, or involving, any year or date in
the twentieth or twenty-first centuries."
(j) The reference to "50 days" contained in Section 5.3(a) of the Credit
Agreement is hereby amended in its entirety to read "60 days."
(k) Section 5.3(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
" (b) as soon as available, and in any event within 90 days after
the close of each fiscal year of Edison Control Corporation, copies of
(i) the detailed annual audit report for such year and accompanying
consolidated financial statements for Edison Control Corporation and its
Subsidiaries as of the end of such year (including consolidating
information for the Company), containing balance sheets and statements of
income, retained earnings and cash flows for such year and for the
previous fiscal year, as audited by independent certified public
accountants of recognized standing selected by Edison Control Corporation
and satisfactory to the Bank, which report shall be accompanied by (A)
the unqualified opinion of such accountants to the effect that the
statements present fairly, in all material respects, the financial
position of Edison Control Corporation and its Subsidiaries as of the end
of such year and the results of its operations and its cash flows for the
year then ended in conformity with GAAP; (B) a certificate of such
accountants showing their calculation of the financial covenants
contained herein and stating that their review disclosed no Default or
that their review disclosed a Default and specifying the same and the
action taken or proposed to be taken with respect thereto; and (C) any
supplementary comments and reports submitted by such accountants to
Edison Control Corporation including the management letter, if any; and
(ii) unaudited internally-prepared financial statements for CF and its
Subsidiaries as of the end of such year, containing balance sheets and
statements of income, retained earnings and cash flows for
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such year and for the previous fiscal year;"
(l) The reference to "15 days" contained in Section 5.3(d) of the Credit
Agreement is hereby amended in its entirety to read "30 days."
(m) Section 5.5 of the Credit Agreement is hereby amended in its entirety
to read as follows:
" 5.5 Use of Proceeds. Use the entire proceeds of the Obligations as
follows:
(a) the proceeds of the Revolving Loans shall be used for working
capital and general corporate purposes only; and
(b) the proceeds of the Term Loan shall be used to refinance (i)
all of the Company's existing term debt and a portion of the Company's
existing revolving debt to the Bank, and (ii) to refinance all
indebtedness related to the Subordinated Loan Transaction."
(n) Section 6.8 of the Credit Agreement is hereby amended in its entirety
to read as follows:
"6.8 Fixed Asset Expenditures. Purchase, become obligated for,
invest in, acquire or otherwise expend for the acquisition of real
estate, machinery, equipment or other fixed assets (including capitalized
lease obligations) during any fiscal year an amount exceeding
$1,000,000."
(o) Section 6.10 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 6.10 Tangible Net Worth. Permit Tangible Net Worth at the end of
any fiscal quarter of the Companies to be less than (a) $3,250,000, plus
(b) 75.0% of the Company's Net Income (but not Net Loss) for each fiscal
year of the Company ending on or after January 31, 2000."
(p) Section 6.11 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 6.11 Funded Debt to EBITDA. Permit the ratio of Funded Debt to
EBITDA to exceed (a) 2.50 to 1 at the end of any fiscal quarter of the
Companies from July 31, 1999 through January 31, 2000, (b) 2.25 to 1 at
the end of any fiscal quarter of the Companies from April 30, 2000
through January 31, 2001, and (c) 2.0 to 1 at the end of any fiscal
quarter thereafter."
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(q) Section 6.13 of the Credit Agreement is hereby amended in its
entirety to read as follows:
" 6.13 Debt Service Coverage Ratio. As of the end of any fiscal
quarter, permit the ratio of (a) EBITDA of the Companies for the most
recent four fiscal quarters, to (b) all scheduled principal payments and
interest expense paid or accrued by any Company during the most recent
four fiscal quarters, to be less than (i) 2.0 to 1 at the end of any
fiscal quarter of the Companies from July 31, 1999 through January 31,
2000, (ii) 2.25 to 1 at the end of any fiscal quarter of the Companies
from April 30, 2000 through January 31, 2001, and (iii) 2.5 to 1 at the
end of any fiscal quarter thereafter."
(r) Section 8.6 of the Credit Agreement is amended by deleting the
current notice information for the Companies and replacing it with the
following:
"if to the Companies: Construction Forms, Inc.
000 Xxxxxxxx Xxxxx
X.X. Xxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxx,
President
FAX: (000) 000-0000"
2.2 Miscellaneous Amendments. The Credit Agreement, the Related Documents
and all other agreements and instruments executed and delivered heretofore or
hereafter pursuant to the Credit Agreement are amended hereby so that any
reference therein to the Credit Agreement shall be deemed to be a reference to
such agreements and instruments as amended by or pursuant to this Amendment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Bank that:
3.1 Credit Agreement. All of the representations and warranties made by
the Company in the Credit Agreement are true and correct in all material
respects on the date of this Amendment. No Default or Event of Default under the
Credit Agreement has occurred and is continuing as of the date of this Amendment
(after giving effect to the limited waiver contained in Section 4.8 hereof).
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3.2 Authorization; Enforceability. The making, execution and delivery of
this Amendment and performance of and compliance with the terms of the Credit
Agreement has been duly authorized by all necessary corporate action by the
Company. This Amendment is the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
3.3 Absence of Conflicting Obligations. The making, execution and
delivery of this Amendment and performance of and compliance with the terms of
the Credit Agreement, as amended, do not violate any presently existing
provision of law or the articles or certificate of incorporation or bylaws of
the Company or any agreement to which the Company is a party or by which it or
any of its assets is bound.
ARTICLE IV
MISCELLANEOUS
4.1 Continuance of Credit Agreement. Except as specifically amended by
this Amendment, the Credit Agreement shall remain in full force and effect.
4.2 Survival. All agreements, representations and warranties made in this
Amendment or in any documents delivered pursuant to this Amendment shall survive
the execution of this Amendment and the delivery of any such document.
4.3 Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Wisconsin applicable to
agreements made and wholly performed within such state.
4.4 Counterparts; Headings. This Amendment may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement. Article and section
headings in this Amendment are inserted for convenience of reference only and
shall not constitute a part hereof.
4.5 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Amendment in such jurisdiction or affecting the
validity or enforceability of any provision in any other jurisdiction.
4.6 Conditions. The effectiveness of this Amendment is subject to the
Bank having received on or before the date hereof, each of the following, in
form and substance satisfactory to the Bank and its counsel:
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(i) a certificate of an officer of the Company and dated the date
hereof certifying: (A) the adoption and continuing effect of
resolutions of the Board of Directors of the Company authorizing
the execution and delivery of this Amendment and the documents to
be executed and delivered in connection with this Amendment; (B)
that its bylaws have not been amended since the date of the last
delivery of the bylaws to the Bank on June 21, 1996; and (C) that
an attached copy of its Articles of Incorporation, recently
certified by the Department of Financial Institutions of Wisconsin
are in full force and effect on the date hereof and have not be
amended since the date of certification by the Department of
Financial Institutions;
(ii) the Subordination Agreement attached hereto as Exhibit L of the
City of Port Washington, Wisconsin in favor of the Bank;
(iii) the Amended and Restated Master Revolving Note;
(iv) the Amended and Restated Master Term Note;
(v) an opinion of counsel to the Companies in form and substance
satisfactory to the Bank;
(vi) evidence satisfactory to the Bank in its sole discretion that all
of the conditions outlined in the letter of the Bank to the
Company, dated September 4, 1998, have occurred;
(vii) an amendment fee in the amount of $10,000; and
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(viii) such additional supporting documents and materials as the Bank may
reasonably request.
4.7 Other Capitalized Terms. All capitalized terms used in this Amendment
and not specifically defined herein shall have the definitions assigned to such
terms in the Credit Agreement.
4.8 Waiver. The Banks hereby waive compliance by the Company with
Sections 6.1(a) and (c) of the Credit Agreement (as in effect prior to giving
effect to this Amendment) as they apply to the sale of the portion of the City
of Port Washington property commonly known as "Outlot B" to the City of Port
Washington. This limited waiver shall be effective only for the specific
purposes set forth in this Section and shall not be deemed to be a further or
continuing waiver of any other Section of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to Credit Agreement as of the day and year first written above.
CONSTRUCTION FORMS, INC.
By:
-------------------------------
---------------, ------------
XX XXXXX, INC.
By: CONSTRUCTION FORMS, INC.
By:
-------------------------------
---------------, ------------
CF ULTRA TECH, INC.
By: CONSTRUCTION FORMS, INC.
By:
-------------------------------
---------------, ------------
LASALLE NATIONAL BANK
By:
-------------------------------
Xxxxx X. Xxxxx,
First Vice President
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