EXHIBIT 10.7
FIFTH AMENDMENT
TO
CREDIT AGREEMENT
By and Among
RAILTEX, INC.,
THE SEVERAL FINANCIAL INSTITUTIONS
PARTY TO THIS AGREEMENT,
and
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION,
As Agent
Dated as of November 14, 1997
TABLE OF CONTENTS
Page
Section 1. Certain Defined Terms.......................................... 1
Section 2. Recitals....................................................... 1
Section 3. Amendments..................................................... 1
Section 4. Conditions Precedent........................................... 3
Section 5. Consent........................................................ 3
Section 6. Ratification of Continued Force and Effect..................... 3
Section 7. Applicable Law................................................. 4
Section 8. Successors and Assigns......................................... 4
Section 9. Counterparts................................................... 4
Section 10. Effect of Waiver............................................... 4
Section 11. Headings....................................................... 4
Section 12. Non-Application of Chapter 15 of Texas Finance Code............ 4
Section 13. ENTIRE AGREEMENT............................................... 4
i
FIFTH AMENDMENT TO CREDIT AGREEMENT
This is the Fifth Amendment (the "Amendment") dated as of November 14,
1997 to a Credit Agreement, dated as of May 17, 1996, among Xxxxx Fargo Bank
(Texas), National Association (formerly known as First Interstate Bank of Texas,
N.A.), individually and as Agent, National Bank of Canada, New York Branch, ABN
Amro Bank, N.V. - Houston Agency, National City Bank, Kentucky and RailTex, Inc.
and previously amended by amendments dated as of June 1, 1996, July 22, 1996,
August 13, 1996 and December 3, 1996 (as amended, the "Agreement").
In consideration of the following Recitals, for $10 in hand paid and for
other good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows, intending to be legally
bound:
Section 1. CERTAIN DEFINED TERMS. Capitalized terms used but not defined
herein have the meanings ascribed to them in the Agreement.
Section 2. RECITALS. The Borrower, the Agent and the Lenders previously
executed and delivered a Consent and Waiver (the "Consent") permitting the
Borrower to (i) issue $50,000,000 of 7.44% Senior Notes due July 22, 2012
pursuant to the Note Agreement dated July 22, 1997, and (ii) use approximately
$9,000,000 of proceeds of the Acquisition Loan Commitments for capital
expenditures to upgrade the Detroit, Toledo and Ironton Railroad purchased by
the Borrower and waiving certain Defaults and Events of Default that would have
resulted therefrom in the absence of such Consent. In part, this Amendment
formalizes the Consent as part of the Agreement. The Borrower has requested that
the Agent and the Lenders (i) change the Eurodollar Rate Margin and the Prime
Rate Margin definitions found in Section 1.1 of the Agreement and (ii) delete
the Loan Formula and related reporting covenants. Subject to the terms and
conditions herein contained, the Agent and the Lenders are willing to amend the
Agreement as set forth below in this amendment.
Section 3. AMENDMENTS. The Agreement is amended as follows:
(A) The definitions of "AVAILABLE CREDIT," "ELIGIBLE ACCOUNTS" and "LOAN
FORMULA" and "MANDATORY PREPAYMENT" are deleted from Section 1.1.
(B) The following definitions are added to Section 1.1 in appropriate
alphabetical order:
"1997 SENIOR NOTES" means $50,000,000 of 7.44% Senior notes due July
22, 2012 pursuant to the Note Agreement dated July 22, 1997, a copy of the
Draft of 7/8/97 having been distributed to the Agent and the Lenders.
"DTIR CAP EX" means approximately $9,000,000 capital expenditures to
upgrade the Detroit, Toledo and Ironton Railroad.
(C) The definition of "APPLICABLE PERCENTAGE" found in Section 1.1 is
amended (i) by deleting the reference to "1.25" and inserting in lieu thereof a
reference to "1.125," (ii) by
deleting the words "Closing Date until June 30, 1997" and inserting in lieu
thereof the words "November 14, 1997 through December 31, 1997" and (iii) by
adding the following at the end of the existing text:
"Notwithstanding the foregoing, for all periods until October 15,
1997 and for the period from October 15, 1997 to November 14, 1997, the
Applicable Percentage shall be as provided in the Agreement prior to the
fifth amendment thereof."
(D) The definition of "COMPLIANCE CERTIFICATE" found in Section 1.1 is
amended (i) by deleting the text thereof found after the comma in line two and
(ii) by changing the comma to a period.
(E) The definitions found in Section 1.1 of "Eurodollar Rate Margin" and
"Prime Rate Margin" are amended in their entirety to read as follows:
"EURODOLLAR RATE MARGIN" means, with respect to Eurodollar Rate
Loans, the specified percentage set forth below based on the ratio of
Funded Debt to EBITDA as measured at the end of each calendar quarter
throughout the term hereof as specified in the definition of Applicable
Percentage:
RATIO OF
FUNDED DEBT TO EBITDA LIBOR MARGIN
------------------------------------- ------------
(less than) 2.00 to 1.0 .75%
2.00 to 1.0 through 2.49 to 1.0 .875%
2.50 to 1.0 through 2.99 to 1.0 1.00%
3.00 to 1.0 through 3.49 to 1.0 1.125%
3.50 to 1.0 through 3.99 to 1.0 1.25%
(greater than or equal to) 4.00 to 1.0 1.50%
"PRIME RATE MARGIN" means, with respect to Prime Rate Loans, zero
throughout the term hereof.
(F) Section 2.6 is amended by adding the following sentence thereto:
"Proceeds of Acquisition Loan Commitments may also be used for DTIR
Cap Ex."
(G) The first sentence of Section 3.1(a) is amended in its entirety to
read as follows:
"Subject to, and upon the terms, conditions, covenants and
agreements contained herein, each Lender severally agrees to make
Revolving Loans to the Borrower, at any time and from time to time,
prior to the Revolving Termination Date, equal to its Commitment
Percentage of such amounts
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as the Borrower may request, up to but not exceeding an aggregate
principal sum at any time outstanding equal to Lender's Revolving
Commitment."
(H) Section 3.2(a) is amended by changing existing clause (ii) of the
first sentence thereof to clause (iii) and by inserting a new clause (ii)
reading as follows:
", (ii) the DTIR Cap Ex."
(I) Section 3.5(b) is deleted in its entirety and the following
substituted therefor:
"[omitted intentionally]."
(J) Section 4.3 is amended by adding the following thereto:
"Notwithstanding anything in this Section 4.3 to the contrary,
proceeds of Acquisition Loans may be used for DTIR Cap Ex."
(K) Section 6.1(ix) is amended in its entirety to read as follows:
"(ix) the Senior Notes and the 1997 Senior Notes".
(L) Section 6.13(i) is amended by adding the following parenthetical at
the end thereof: "(including the DTIR Cap Ex)".
Section 4. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the following conditions precedent:
(A) Receipt by the Agent of fully signed counterparts of this Amendment;
(B) Delivery of such other documents from the Borrower as Agent shall
reasonably request.
Section 5. CONSENT. The Agent and the Lenders waive the requirement found
in Section 3.5 of the Agreement to apply approximately $900,000 of net proceeds
received from the grant of an easement to the Acquisition Loans and consent to
the application thereof to the Revolving Credit Loans.
Section 6. RATIFICATION OF CONTINUED FORCE AND EFFECT. Except as
specifically amended herein, all of the terms and conditions of the Agreement
and all of the Loan Documents executed in connection therewith or contemplated
thereby are and remain in full force and effect in accordance with their
respective terms. All of the terms used herein have the same meanings as set out
in the Agreement, unless amended hereby or unless the context clearly required
otherwise. References in the Agreement to the "Agreement," and the "Credit
Agreement," "hereof," "herein"
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and the words of similar import shall be deemed to be references to the
Agreement as amended through the Effective Date. Any reference in any Note or
any other Loan Documents to the "Credit Agreement" shall be deemed to be
references to the Agreement as amended through the Effective Date.
Section 7. APPLICABLE LAW. This Amendment and all other Loan Documents
executed pursuant hereto shall be deemed to have been made and to be performable
in Houston, Xxxxxx County, Texas and shall be governed by and construed in
accordance with the laws of the State of Texas.
Section 8. SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of the Lenders, the Agent and the Borrower and their
respective successors and assigns, except the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Lenders and the Agent.
Section 9. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 10. EFFECT OF WAIVER. No consent or waiver, express or implied, by
any Lender or the Agent to or for any breach of or deviation from any covenant,
condition or duty by the Borrower shall be deemed a consent or waiver to or of
any other breach of the same or any other covenant, condition or duty.
Section 11. HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 12. NON-APPLICATION OF CHAPTER 15 OF TEXAS FINANCE CODE. The
provisions of Chapter 15 of the Texas Finance Code are specifically declared by
the parties not to be applicable to this Amendment or any of the Loan Documents
or the transactions contemplated hereby.
Section 13. ENTIRE AGREEMENT. THIS AMENDMENT, THE AGREEMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES HERETO.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered effective as of the date first written above.
BORROWER:
RAILTEX, INC. Address: 0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Vice President and
By: /s/ XXXXX X. XXXXXX Chief Financial Officer
Xxxxx X. Xxxxxx Telephone No. (000) 000-0000
Vice President and Telecopy No. (000) 000-0000
Chief Financial Officer
AGENT:
XXXXX FARGO BANK (TEXAS), Domestic Lending Office and
NATIONAL ASSOCIATION Eurodollar Lending Office
Address: 0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
By: /s/ XXXXXXX X. XXXXXXX Attn: Bennett D. Xxxxxxx
Xxxxxxx X. Xxxxxxx Vice President
Vice President Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
LENDERS:
XXXXX FARGO BANK (TEXAS), Domestic Lending Office and
NATIONAL ASSOCIATION Eurodollar Lending Office
Address: 0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
By: /s/ XXXXXXX X. XXXXXXX Attn: Bennett D. Xxxxxxx
Xxxxxxx X. Xxxxxxx Vice President
Vice President Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
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NATIONAL BANK OF CANADA, Domestic Lending Office and
NEW YORK BRANCH Eurodollar Lending Office
Address: National Bank of Canada,
New York Branch
By: /s/ XXXXX X. XXXXX 000 X. 00xx Xxxxxx
Xxxxx X. Xxxxx Xxx Xxxx, Xxx Xxxx 00000
Group Vice President Attn: Xxxx Xxxx
Telephone No. (000) 000-0000
and Telecopy No. (000) 000-0000
With a copy to:
By: /s/ XXXXXXX XXXXX
Xxxxxxx Xxxxx National Bank of Canada
Vice President 0000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Mr. Xxxxxxx Xxxxx
Vice President
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
ABN AMRO BANK, N.V. - Domestic Lending Office and
HOUSTON AGENCY Eurodollar Lending Office
By: ABN AMRO NORTH AMERICA,
INC., as Agent Address: 0 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxx
Telephone No. (000) 000-0000
By: /s/ XXXXXX X. XXXX Telecopy No. (000) 000-0000
Name:Xxxxxx X. Xxxx
Title: Group Vice President
and
By: /s/ DIEGO PUIGGARI
Name:Diego Puiggari
Title: Vice President
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NATIONAL CITY BANK, KENTUCKY Domestic Lending Office and
Eurodollar Lending Office
Address: 000 Xxxxx Xxxxx Xxxxxx
By: /s/ XXXXXX X. XXXXXX Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxx Attn:Xxxxxx X. Xxxxxx, Xx.
Vice President Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
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