SECOND AMENDMENT TO CREDIT AGREEMENT
------------------------------------
SECOND AMENDMENT (this "Second Amendment"), dated as of
September 15, 1999, among SCOTSMAN HOLDINGS, INC., a Delaware corporation
("Holdings"), XXXXXXXX SCOTSMAN, INC., a Maryland corporation (the "Borrower"),
the Lenders from time to time party to the Credit Agreement referred to below,
BANKERS TRUST COMPANY, as Issuing Bank, BT COMMERCIAL CORPORATION, acting as
Administrative Agent and Co-Syndication Agent, NATIONSBANK, N.A., acting as
Co-Syndication Agent, and XXXXXXX SACHS CREDIT PARTNERS L.P., acting as
Documentation Agent. All capitalized terms used herein and not otherwise defined
shall have the respective meanings provided such terms in the Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Holdings, the Borrower, the Lenders, the Issuing
Bank, the Administrative Agent, the Co-Syndication Agents and the Documentation
Agent are parties to a Credit Agreement, dated as of May 22, 1997 and amended
and restated as of September 1, 1998, (as in effect on the date hereof, the
"Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit
Agreement as herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments to Credit Agreement.
-------------------------------
1. Section 1.1 of the Credit Agreement is hereby amended by
inserting the following new definition in the appropriate alphabetical order:
"'Dedicated Basket Amount' shall mean $50,000,000; provided
that, at the option of the Borrower, at any time after the Restatement
Effective Date such amount may be (x) decreased to an amount not less
than $0 so long as the Borrower delivers to the Administrative Agent an
officer's certificate (1) setting forth such new Dedicated Basket
Amount and (2) certifying that, after giving effect to such decrease to
the Dedicated Basket Amount, the sum of (I) the aggregate principal
amount of then outstanding Revolving Loans and (II) the Letter of
Credit Obligations at such time, will not exceed the Senior Unsecured
Notes Borrowing Base as same will be in effect after giving effect to
the reduction to the Dedicated Basket Amount, or (y) thereafter
increased to an amount not greater than $50,000,000 so long as the
Borrower delivers to the Administrative Agent an officer's certificate
(1) setting forth such new Dedicated Basket Amount, (2) certifying that
Indebtedness is not then outstanding pursuant to Section 4.09(b)(14) of
the Senior Unsecured Notes Indenture (excluding Indebtedness
representing extensions of credit pursuant to the Revolving Credit
Commitments) in an amount in excess of
$50,000,000 less the new Dedicated Basket Amount and (3) confirming the
Borrower's obligation to comply with Section 8.20."
2. Section 2.2(a)(iii) of the Credit Agreement is hereby
amended by deleting said Section in its entirety and inserting in lieu thereof
the following new Section 2.2(a)(iii):
"(iii) the amount then equal to:
(A) (i) 75% of the net book value of Eligible Rental Equipment
of the Borrower and its Restricted Subsidiaries (as defined in the
Senior Unsecured Notes Indenture) and (ii) 85% of the book value of the
Eligible Accounts Receivable of the Borrower and its Restricted
Subsidiaries (as defined in the Senior Unsecured Notes Indenture) less
(x) the amount of net proceeds which have been received in connection
with a Permitted Units Financing (as defined in the Senior Unsecured
Notes Indenture) permitted under clause (b)(13)(i) of Section 4.09 of
the Senior Unsecured Notes Indenture (provided that such reduction
shall apply only to the extent of any outstanding balance on such
financing and for so long as such Permitted Units Financing is in
effect) and (y) the amount of any outstanding Attributable Debt (as
defined in the Senior Unsecured Notes Indenture) incurred under clause
(b)(12) of Section 4.09 of the Senior Unsecured Notes Indenture (with
all determinations of the amount specified above in this clause (A) to
be made in accordance with the requirements of the Senior Unsecured
Notes Indenture), plus
----
(B) the Dedicated Basket Amount then in effect, minus
-----
(C) the aggregate principal amount of Term Loans then outstanding."
3. Article 8 of the Credit Agreement is hereby amended by inserting, at
the end thereof, the following new Section 8.20:
"8.20 Allocation of Senior Unsecured Notes Indenture Basket Amount.
-------------------------------------------------------------
Notwithstanding anything to the contrary set forth herein (including, without
limitation, Section 8.3 hereof), except for extensions of credit from time to
time made pursuant to the Revolving Credit Commitments, no Indebtedness may at
any time be outstanding pursuant to Section 4.09(b)(14) of the Senior Unsecured
Notes Indenture, except that at any time when the Dedicated Basket Amount has
been reduced to an amount which is less than $50,000,000, Indebtedness (other
than Indebtedness as a result of extensions of credit from time to time pursuant
to the Revolving Credit Commitments) may be incurred pursuant to Section
4.09(b)(14) of the Senior Unsecured Notes Indenture (so long as such
Indebtedness is also permitted to be incurred and remain outstanding pursuant to
Section 8.3 hereof) in an aggregate amount not to exceed at any time an amount
equal to $50,000,000 less the Dedicated Basket Amount as then in effect."
4. The Credit Agreement is hereby amended by deleting Exhibit R thereto
in its entirety and by inserting in lieu thereof new Exhibit R attached hereto.
-2-
II. Miscellaneous.
--------------
1. In order to induce the Lenders to enter into this Second
Amendment, Holdings and the Borrower hereby represent and warrant that (i) the
representations, warranties and agreements contained in Article 6 of the Credit
Agreement are true and correct in all material respects on and as of the Second
Amendment Effective Date (as defined below) (unless such representations and
warranties relate to a specific earlier date, in which case such representations
and warranties shall be true and correct as of such earlier date) and (ii) there
exists no Default or Event of Default on the Second Amendment Effective Date, in
each case both before and after giving effect to this Second Amendment.
2. This Second Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
3. This Second Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW
OF THE STATE OF NEW YORK.
5. This Second Amendment shall become effective on the date
(the "Second Amendment Effective Date") when Holdings, the Borrower, each
Subsidiary Guarantor and the Required Lenders shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered
(including, without limitation, by usage of facsimile transmission) the same to
the Administrative Agent at its Notice Office. This Second Amendment and the
agreements contained herein shall be binding on the successors and assigns of
the parties hereto.
6. From and after the Second Amendment Effective Date, all
references in the Credit Agreement and each of the Credit Documents to the
Credit Agreement shall be deemed to be references to the Credit Agreement as
amended hereby.
* * *
-3-
IN WITNESS WHEREOF, the parties hereto have caused a
counterpart of this Second Amendment to be duly executed and delivered as of the
date first above written.
SCOTSMAN HOLDINGS, INC.
By___________________________________________
Name:
Title:
XXXXXXXX SCOTSMAN, INC.
By___________________________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Issuing Bank
By___________________________________________
Name:
Title:
BT COMMERCIAL CORPORATION,
Individually and as Administrative Agent and
Co-Syndication Agent
By___________________________________________
Name:
Title:
NATIONSBANK, N.A.,
Individually and as Co-Syndication Agent
By___________________________________________
Name:
Title:
XXXXXXX SACHS CREDIT PARTNERS L.P.,
Individually and as Documentation Agent
By___________________________________________
Name:
Title:
BANKBOSTON, N.A
By___________________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By___________________________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By___________________________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
By___________________________________________
Name:
Title:
CONGRESS FINANCIAL CORPORATION
By___________________________________________
Name:
Title:
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company,
its Investment Manager
By___________________________________________
Name:
Title:
DEBT STATEGIES FUND III, INC.
By___________________________________________
Name:
Title:
DIME COMMERCIAL CORP.
By___________________________________________
Name:
Title:
FLEET BANK, N.A.
By___________________________________________
Name:
Title:
FLEET CAPITAL CORPORATION
By___________________________________________
Name:
Title:
FREMONT FINANCIAL CORPORATION
By___________________________________________
Name:
Title:
THE FUJI BANK, LIMITED
By___________________________________________
Name:
Title:
GREEN TREE FINANCIAL SERVICING
CORPORATION
By___________________________________________
Name:
Title:
XXXXXX FINANCIAL, INC.
By___________________________________________
Name:
Title:
IBJ XXXXXXXX BUSINESS CREDIT
CORPORATION
By___________________________________________
Name:
Title:
LASALLE NATIONAL BANK
By___________________________________________
Name:
Title:
MERCANTILE SAFE DEPOSIT AND TRUST
COMPANY
By___________________________________________
Name:
Title:
NATIONAL BANK OF CANADA, A
CANADIAN CHARTERED BANK
By___________________________________________
Name:
Title:
By___________________________________________
Name:
Title:
NATIONAL CITY COMMERICAL FINANCE, INC.
By___________________________________________
Name:
Title:
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P. its General
Partner
By: Oak Hill Securities MGP, Inc., its General Partner
By___________________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By___________________________________________
Name:
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
By___________________________________________
Name:
Title:
SOCIETE GENERALE
By___________________________________________
Name:
Title:
SUMMIT COMMERCIAL/GIBRALTAR CORP.
By___________________________________________
Name:
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By___________________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
formerly known as First Bank National
Association
By___________________________________________
Name:
Title:
XXXXX FARGO BANK, N.A.
By___________________________________________
Name:
Title:
Acknowledged and Agreed:
WILLSCOT EQUIPMENT, LLC
By: Xxxxxxxx Scotsman, Inc., as a Member
SPACE MASTER INTERNATIONAL, INC.
EVERGREEN MOBILE COMPANY
By__________________________
Name:
Title:
On behalf of each of the above
Subsidiary Guarantors
Exhibit R
---------
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
OFFICER'S CERTIFICATE
This Certificate is being delivered pursuant to the Credit
Agreement, dated as of May 22, 1997 and amended and restated as of September 1,
1998, among Scotsman Holdings, Inc., Xxxxxxxx Scotsman, Inc., a Maryland
corporation (the "Borrower"), the financial institutions from time to time party
thereto, Bankers Trust Company, as Issuing Bank, BT Commercial Corporation, as
Administrative Agent and Co-Syndication Agent, NationsBank, N.A., as
Co-Syndication Agent, and Xxxxxxx Sachs Credit Partners L.P., as Documentation
Agent (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"). Unless otherwise defined herein, all terms used herein
shall have the meanings ascribed to them in the Credit Agreement.
The undersigned represents and warrants that the information
set forth on the attached Borrowing Base Certificate is, to the best of my
knowledge, true, correct and complete in all material respects (subject to
year-end audit adjustments [and adjustments, if any, reflected in the corrected
Borrowing Base Certificate to be delivered post-closing pursuant to Section 5.1
of the Credit Agreement]1) calculated in accordance with the Credit Agreement
and sets forth [my best good-faith estimate (to the extent relevant information
is not available) of]1 the Eligible Accounts Receivable and Eligible Rental
Equipment as of the close of business on __________ ____, ____.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of this ___ day of ________ _____.
XXXXXXXX SCOTSMAN, INC.
By:__________________________________
Name:
Title:
------------------------
(1) Include bracketed language only in the Officer's Certificate delivered on
the Restatement Effective Date.
Exhibit R
Page 2
BORROWING BASE CERTIFICATE FOR THE MONTH ENDING [DATE]
ISSUED BY XXXXXXXX SCOTSMAN, INC.
---------------------------------
PART A - BORROWING BASE:
------------------------
1) Eligible Accounts Receivable
(a) Gross Accounts Receivable:
(i) Total per Accounts
Receivable Aging Report
Less: (ii) Unearned Income
-----
Total Gross Accounts Receivable
(Item 1(a)(i) less Item 1(a)(ii))
(b) Less: Ineligible Accounts
Receivable (Schedule A)
(c) Total Eligible Accounts
Receivable (Item 1(a) minus Item 1(b))
(d) Advance Rate
(e) Accounts Receivable Availability
(Item 1(c) multiplied by Item 1(d))
Plus:
-----
2) Eligible Rental Equipment
(a) Net book value of Rental Equipment per financial statements:
(i) Xxxxxxxx Scotsman, Inc.
(ii) Willscot Equipment, LLC
(iii) Space Master International, Inc.
Total Net Book Value of Rental Equipment per financial
statements (sum of Item 2(a)(i), Item 2(a)(ii) and Item
2(a)(iii))
(b) Less: Ineligible Rental
Equipment (Schedule B)
(c) Total Eligible Rental Equipment
(Item 2(a) minus Item 2(b))
(d) Advance Rate
(e) Rental Equipment Availability (Item 2(c) multiplied by Item
2(d))
Exhibit R
Page 3
3) Total Borrowing Base before deductions (sum of Item
1(e) and Item 2(e))
Less:
-----
4) Excess Other Liability Amount
5) Exposure under Interest Rate Agreements
6) Equity Blocked Commitments as defined in the Credit
Agreement
7) Total Borrowing Base $_______
Less: (i) Letter of Credit Obligations: $_____
----- (ii) Revolving Loans Outstanding: $_______
8) Excess Borrowing Base Availability (Deficiency) (Items 3 minus Item
4, Item 5, Item 6 and Item 7)
Exhibit R
Page 4
PART B - SENIOR UNSECURED NOTES BORROWING BASE:
-----------------------------------------------
1) Rental Equipment Availability (Item 1(a) multiplied by
Item 1(b))
(a) Total net book value of Eligible Rental
Equipment
(b) Advance Rate (75%)
Plus:
-----
2) Accounts Receivable Availability (Item 2(a) multiplied
by Item 2(b))
(a) Total book value of Eligible Accounts
Receivable
Plus: (b) Advance Rate (85%)
-----
3) Dedicated Basket Amount
Minus:
------
4) Net Proceeds from Permitted Units Financing (as defined
in Senior Unsecured Notes Indenture)
5) Outstanding Attributable Debt (as defined in Senior
Unsecured Notes Indenture)
6) Term Loans Outstanding
7) Senior Unsecured Notes Borrowing Base (Item 1 plus Item
Minus: 2 and Item 3 minus Item 4, Item 5 and Item 6)
------
8) Letter of Credit Obligations
9) Revolving Loans Outstanding
10) Excess Senior Unsecured Notes Borrowing Base
Availability (Deficiency) (Item 7 minus Item 8 and Item 9)
Schedule A
----------
ACCOUNTS RECEIVABLE INELIGIBILITY
---------------------------------
1) Accounts arising out of sales or Leases
for which no invoice has been provided
to the account debtor
2) Accounts arising out of sales or Leases
made to Affiliates
3) Accounts unpaid on the date which is 90
days after the date on which the
original invoice provides that such
payment is due
4) Accounts (other than Accounts listed on
Part A of Schedule II to the Credit
Agreement that are not 30 days past due)
providing for payment more than 91 days
after the date of the original invoice
5) Accounts which do not meet the
Cross-Aging test (50%)
6) Accounts of account debtors (other than
Accounts supported or secured by
insurance acceptable to the
Administrative Agent or by a duly
pledged irrevocable letter of credit in
form and substance satisfactory to the
Administrative Agent and issued by a
financial institution satisfactory to
the Administrative Agent), when
aggregated with all other Accounts of
such account debtors, exceed 15% in face
value of all Accounts of the Borrower
and its Subsidiaries whose Accounts are
included in the Borrowing Base, to the
extent of such excess
7) Accounts of creditors of the Borrower
(other than Accounts with respect to
which a no-offset letter in form and
substance satisfactory to the
Administrative Agent has been delivered
to the Administrative Agent)
8) Accounts with respect to which account
debtors dispute liability on, or have made
any claim with respect to, such Accounts
or any other Account due from such
account debtors to the Borrower
9) Accounts which are, or may be, subject
to any right of set-off by the account
debtor
Schedule A
Page 2
10) Accounts of bankrupt account debtors
11) Accounts (other than Accounts supported
or secured by insurance acceptable to
the Administrative Agent or by a duly
pledged irrevocable letter of credit in
form and substance satisfactory to the
Administrative Agent and issued by a
financial institution satisfactory to
the Administrative Agent) arising out of
sales or Leases to account debtors
located outside the United States or
Canada (except for receivables of
account debtors located in Canada not in
excess of 20% of Accounts and Accounts
listed on Part B of Schedule II to the
Credit Agreement)
12) Accounts arising from sales made on a
xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval,
consignment basis or otherwise providing
for repurchase or return (other than
pursuant to ordinary course of business
warranties)
13) Accounts which the Administrative Agent
has determined, in its Permitted
Discretion, may not be paid by reason of
the account debtor's financial inability to
pay
14) Accounts with respect to which the
account debtor is the United States or
any department, agency or
instrumentality thereof, unless the
Borrower duly assigns its rights to
payment of such Account to the
Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as
amended
15) Accounts with respect to which the act
of Rental Equipment being leased and put
into service giving rise to such
Accounts has not occurred or the
services giving rise to such Accounts
have not been performed by the Borrower
and accepted by the account debtor
16) Accounts not representing a final sale
17) Accounts which do not comply in all
material respects with all applicable
legal requirements
Schedule A
Page 3
18) Accounts with respect to which the
Collateral Agent does not have a valid
and perfected first priority security
interest in or Lien on such Accounts
(except for Permitted Liens, provided
that the value of any such Account shall
be reduced by the amount of the
obligations secured by such Permitted
Liens)
19) Accounts not conforming to the
representations and warranties contained
in the Credit Agreement or other Credit
Documents
20) Other ineligible Accounts pursuant to
the terms of the Credit Agreement
(including without limitation Accounts
of the Canadian Subsidiary, unless and
until the Canadian Subsidiary becomes a
Subsidiary Guarantor and a party to the
Security Agreement, and takes all other
actions as may be requested by the
Collateral Agent to ensure that the
Collateral Agent has a valid and
perfected first priority security
interest in or Lien on the Accounts of
the Canadian Subsidiary)
TOTAL INELIGIBLE ACCOUNTS
RECEIVABLE
Schedule B
----------
RENTAL EQUIPMENT INELIGIBILITY
------------------------------
1) Rental Equipment not owned solely by the
Borrower or a Wholly-Owned Subsidiary
of the Borrower and with respect to which
the Borrower or a Wholly-Owned
Subsidiary of the Borrower does not have
good, valid and marketable title
2) Rental Equipment held by a third party for
sale on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval or
consignment basis
3) Rental Equipment (other than Rental
Equipment being leased or returned by a
customer) not stored on property owned or
leased by (i) the Borrower, (ii) a
Wholly-Owned Subsidiary of the Borrower or
(iii) a warehouseman under contract with
the Borrower or a Wholly-Owned Subsidiary
of the Borrower to store Rental Equipment
4) Rental Equipment (other than Rental
Equipment being leased or returned by a
customer) stored on property leased by the
Borrower or a Wholly-Owned Subsidiary of
the Borrower, but with respect to which
the Borrower has not delivered to the
Collateral Agent a Collateral Access
Agreement executed by the lessor of such
property [applicable only in the case of
calculations of Eligible Rental Equipment
made after the 90th day following the
Restatement Effective Date]
5) Rental Equipment (other than Rental
Equipment being leased or returned by a
customer) stored on property leased or
owned by a warehouseman under contract
with the Borrower or a Wholly-Owned
Subsidiary of the Borrower to store Rental
Equipment, but with respect to which the
Borrower has not delivered to the
Collateral Agent a Collateral Access
Agreement executed by such warehouseman
and, in the case of leased property, the
lessor of such property [applicable only
in the case of calculations of Eligible
Rental Equipment made after the 90th day
following the Restatement Effective Date]
6) Rental Equipment not subject to a
Schedule B
Page 2
perfected first priority Lien in favor of
the Collateral Agent except: (i) with
respect to Rental Equipment of SMI
constituting Qualified Certificated Units
[applicable only in the case of
calculations of Eligible Rental Equipment
made within the 60 days following the
Restatement Effective Date], (ii) with
respect to Rental Equipment constituting
Non-Qualified Units, such Non-Qualified
Units with respect to which all applicable
UCC filings have been made as required by
the Credit Documents, (iii) Liens for
normal and customary warehouseman charges
in the case of Rental Equipment stored on
property owned or leased by a warehouseman
and (iv) Permitted Liens (provided that
the value of such Rental Equipment is
reduced by the amount of the obligations
secured by such Permitted Liens)
7) Rental Equipment not located in the United
States or Canada and with respect to which
arrangements for the granting and
perfection of a security interest in such
Rental Equipment have not been made in a
manner acceptable to the Administrative
Agent in its discretion
8) Rental Equipment not conforming in all
material respects to the representations
and warranties contained in the Credit
Agreement or the other Credit Documents
9) Rental Equipment not segregated or
otherwise separately identifiable from
goods of others stored on the same premises
10) Rental Equipment owned by the Borrower or
any of its Wholly-Owned Subsidiaries
(other than the Unit Subsidiary) not
constituting (A) (x) Certificated Units
with respect to Rental Equipment of SMI
and its Subsidiaries prior to the 90th day
following the Restatement Effective Date
or (y) Qualified Certificated Units with
respect to which all actions required to
be taken pursuant to Section 7.18 of the
Credit Agreement have been taken or (B)
Non-Certificated Units of SMI prior to the
60th day following the Restatement
Effective Date
11) Rental Equipment subject to Sales-Type
Schedule B
Page 3
Leases
12) Rental Equipment leased by the Borrower as
lessor pursuant to Leases containing a
bargain purchase option
13) Rental Equipment that has been or
reasonably should be classified by the
Borrower or its Subsidiaries as type "E" or
"F" consistent with the manner in which
the Borrower classifies Rental Equipment
on the Original Effective Date
14) Other ineligible Rental Equipment pursuant
to the terms of the Credit Agreement
(including without limitation Rental
Equipment of the Canadian Subsidiary,
unless and until the Canadian Subsidiary
becomes a Subsidiary Guarantor and a party
to the Security Agreement, and takes all
other actions as may be requested by the
Collateral Agent to ensure that the
Collateral Agent has a valid and perfected
first priority security interest in or
Lien on the Rental Equipment of the
Canadian Subsidiary)
TOTAL INELIGIBLE RENTAL EQUIPMENT
