XXXXXX INDUSTRIAL GROUP, INC.
FIRST AMENDMENT TO CREDIT AGREEMENT
Xxxxxx Trust and Savings Bank LaSalle National Bank
Chicago, Illinois Chicago, Illinois
Branch Banking & Trust Co. National City Bank
Raleigh, North Carolina Cleveland, Ohio
Firstar Bank Milwaukee, N.A.
Milwaukee, Wisconsin
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
May 29, 1998 (the "CREDIT AGREEMENT"), as amended and currently in effect by
and among, Xxxxxx Industrial Group, Inc., a Georgia corporation (the
"BORROWER"), and you (the "LENDERS"). All capitalized terms used herein
without definition shall have the same meanings herein as such terms have in
the Credit Agreement.
The Borrower hereby applies to the Lenders to decrease the amount of the
Revolving Credit Commitments, to amend certain of the financial covenants
contained therein, and to make certain other amendments to the Credit
Agreement, and the Lenders are willing to do so under the terms and
conditions set forth in this Amendment.
1. DECREASE OF REVOLVING CREDIT COMMITMENT AMOUNTS.
Upon the effective date of this Amendment, the amount of each Lender's
Revolving Credit Commitment set forth opposite its name on its signature page
to the Credit Agreement shall be amended and as so amended shall be restated
as follows:
AMOUNT OF REVOLVING
LENDER CREDIT COMMITMENT
Xxxxxx Trust and Savings Bank $8,750,000
(41.666666%)
Firstar Bank Milwaukee, N.A. $2,916,666.69
(13.888889%)
National City Bank $2,333,333.31
(11.111111%)
Branch Banking & Trust $3,500,000
(16.666667%)
LaSalle National Bank $3,500,000
(16.666667%)
2. AMENDMENTS.
Upon the effective date of this Amendment, the Credit Agreement shall be and
hereby is amended as follows:
2.01. Section 8.6 of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:
SECTION 8.6. INTEREST COVERAGE RATIO. The Borrower will, as of
the last day of each fiscal quarter of the Borrower ending during any of the
periods specified below, maintain an Interest Coverage Ratio of not less
than:
INTEREST COVERAGE RATIO
FROM AND INCLUDING TO AND INCLUDING SHALL NOT BE LESS THAN
January 1, 1999 March 31, 1999 1.05 to 1.0
April 1, 1999 June 30, 1999 1.00 to 1.0
July 1, 1999 September 30, 1999 1.05 to 1.0
October 1, 1999 December 31, 1999 1.55 to 1.0
January 1, 2000 at all times thereafter 2.00 to 1.0
2.02. Section 8.7 of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:
SECTION 8.7. CASH FLOW LEVERAGE RATIO. The Borrower shall not, at
any time during each of the periods specified below, permit the Cash Flow
Leverage Ratio to be greater than:
CASH FLOW LEVERAGE RATIO
FROM AND INCLUDING TO AND INCLUDING SHALL NOT BE GREATER THAN
January 1, 1999 March 31, 1999 5.25 to 1.0
April 1, 1999 June 30, 1999 5.50 to 1.0
July 1, 1999 September 30, 1999 5.00 to 1.0
October 1, 1999 December 31,1999 4.25 to 1.0
January 1, 2000 at all times thereafter 3.50 to 1.0
2.03. Section 8.9 of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:
SECTION 8.9. FIXED CHARGE COVERAGE RATIO. The Borrower will
not, as the last day of each fiscal quarter of the Borrower ending during any
of the periods specified below (commencing with the fiscal quarter of the
Borrower ending on or
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about June 30, 1999), permit the Fixed Charge Coverage Ratio to be less than:
FROM AND INCLUDING TO AND INCLUDING FIXED CHARGE COVERAGE
RATIO SHALL NOT BE LESS
THAN:
April 1, 1999 June 30, 1999 1.15 to 1.0
July 1, 1999 September 30, 1999 1.20 to 1.0
October 1, 1999 at all times thereafter 1.40 to 1.0
2.04. Section 8.10 of the Credit Agreement shall be amended by
striking the amount "$12,000,000" appearing in the fourth line thereof and
substituting therefor the amount "$7,000,000".
2.05. The definition of "Applicable Margin" appearing in Section 5.1
of the Credit Agreement is hereby amended in its entirety and as so amended
shall be restated to read as follows:
"Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees payable under Section 2.1 hereof, from
and including January 1, 1999 through the first Pricing Date the rate per
annum specified below:
Applicable Margin for Domestic Rate Loans under
the Revolving Credit and Swing Line Commitment
and Term A Loan and Reimbursement Obligations: 1.00%
Applicable Margin for LIBOR Loans under the
Revolving Credit and Term A Loan and letter
of credit fee: 3.25%
Applicable Margin for commitment fee: 0.50%
Applicable Margin for Domestic Rate Loans
under Term B Loan: 1.50%
Applicable Margin for LIBOR Loans under
Term B Loan: 3.75%
; PROVIDED, HOWEVER, that (i) the Applicable Margin for Domestic Rate Loans
and LIBOR Loans in each case under the Term B Loan shall in both cases
increase by 0.75%, respectively, on each of June 30, 1999, September 30, 1999
and December 31, 1999 and (ii) the Applicable Margin for Revolving Credit
Loans, Swingline Loans, the Term A Loan, Reimbursement Obligations and the
commitment fee shall be subject to further quarterly adjustments on the first
Pricing Date and each Pricing Date thereafter and shall mean from and
including each such Pricing Date to the next Pricing Date, a rate per annum
determined in accordance with the following schedule:
Cash Flow Leverage Applicable Margin for Applicable Margin for Applicable Margin for
Ratio for Such Pricing Base Rate Loans shall LIBOR Loans Shall Be: Commitment Fee Shall
Date be: Be:
Less than 2.00 to 1.0 0% 2.25% 0.25%
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Greater than or equal to 0.25% 2.50% 0.375%
2.00 to 1.0, but less than
2.50 to 1.00.
Greater than or equal to 0.50% 2.75% 0.375%
2.50 to 1.0, but less than
3.0 to 1.0
Greater than or equal to 0.75% 3.00% 0.50%
3.0 to 1.0, but less than
3.5 to 1.0
Greater than or equal to 1.00% 3.25% 0.50%
3.5 to 1.0
For purposes hereof, the term "PRICING DATE" means, for any fiscal quarter of
the Borrower ending on or after December 31, 1999, the first date on which
the Agent is in receipt of the Borrower's most recent financial statements
(meaning, in the case of any fiscal quarter coinciding with the Borrower's
fiscal yearend, the related, audit report) for the fiscal quarter then ended,
pursuant to Section 8.5 hereof. The Applicable Margin on each Pricing Date
shall be established based on the Cash Flow Leverage Ratio as of the close of
the then most recently completed fiscal quarter of the Borrower and the
Applicable Margin established on a Pricing Date shall remain in effect until
the next Pricing Date. If the Borrower has not delivered its financial
statements by the date such financial statements (and, in the case of the
year-end financial statements, audit report) are required to be delivered
under Section 8.5 hereof, until such financial statements are delivered, the
Applicable Margin shall be the highest Applicable Margin (I.E., the Cash Flow
Leverage Ratio shall be deemed to be greater than 3.5 to 1.0). If the
Borrower subsequently delivers such financial statements before the next
Pricing Date, the Applicable Margin established by such late delivered
financial statements shall take effect from the date of delivery until such
next Pricing Date. In all other circumstances, the Applicable Margin
established by such financial statements shall be in effect from the Pricing
Date that occurs immediately after the end of the fiscal quarter covered by
such financial statements until the next Pricing Date. Each determination of
the Applicable Margin made by the Agent in accordance with the foregoing
shall be conclusive and binding on the Borrower and the Lenders if reasonably
determined.
2.06. The definition of "FIXED CHARGE COVERAGE RATIO" appearing in
Section 5.1 of the Credit Agreement is hereby amended in its entirety and as
so amended shall be restated to read as follows:
"FIXED CHARGE COVERAGE RATIO" means, as of any date the same is to be
determined, the ratio of (i) EBITDA for the four (4) consecutive fiscal
quarters of the Borrower ending on, or (if none so and) most recently
completed prior to such date to (ii) the sum (during the same four (4) fiscal
quarters) of (a) Interest Expense and (b) Cash Maturities.
2.07. Section 8.5(a) of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:
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(a) (i) as soon as available, and in any event within 45 days
after the close of each monthly fiscal period of the Borrower which is
also the end of a fiscal quarter of the Borrower and within 30 days
after the close of each other monthly fiscal period of the Borrower, a
copy of the balance sheet and statements of income of the Borrower and
its Subsidiaries for such period, and (ii) as soon as available, and
in any event within 45 days after the close of each monthly fiscal
period of the Borrower which is also the end of a fiscal quarter of the
Borrower, a copy of the statements of retained earnings and cash flows
of the Borrower and its Subsidiaries for such period, all prepared on a
consolidated basis and in reasonable detail showing in comparative form
the figures for the corresponding date and period in the previous fiscal
year, prepared by the Borrower in accordance with GAAP (subject to normal
year-end audit adjustments and the absence of notes) and certified to by
the chief financial officer of the Borrower;
2.08. Section 8.5 of the Credit Agreement shall be amended by striking
the second to last paragraph thereof and substituting therefor the following:
Each of the financial statements furnished to the Lenders pursuant
to clauses (a) and (b) of this Section corresponding to the end of a
fiscal quarter or fiscal year of the Borrower shall be accompanied by a
written certificate in the form attached hereto as Exhibit E signed by
the chief financial officer of the Borrower to the effect that to the
best of the chief financial officer's knowledge and belief no Default
or Event of Default is continuing as of the close of the period covered
by such statements or, if any such Default or Event of Default is
continuing as of the close of such period, setting forth a description
of such Default or Event of Default and specifying the action,
if any, taken by the Borrower to remedy the same. Such certificate shall
also set forth the calculations supporting such statements in respect of
Sections 8.6, 8.7, 8.8, 8.9 and 8.10 of this Agreement.
3. WAIVERS.
The Borrower has informed the Lenders that it is not in compliance with
Section 8.6 and Section 8.7 of the Credit Agreement for the Borrower's fiscal
quarter ended December 31, 1998. The Borrower has also informed the Lenders
that it is not in compliance with Section 8.8 of the Credit Agreement for the
Borrower's fiscal quarters ended December 31, 1998 and March 31, 1999. In
accordance with the request of the Borrowers, the Lenders hereby waive
compliance with such Sections 8.6, 8.7 and 8.8 at all times during the fiscal
quarter of the Borrower ended December 31, 1998 and also waive compliance
with such Section 8.8 at all times during the fiscal quarter of the Borrower
ended March 31, 1999. The Borrower hereby acknowledges and agrees that
non-compliance after such periods constitutes an Event of Default under the
Credit Agreement. Accordingly, at all times after December 31, 1998 with
respect to Sections 8.6 and 8.7 and March 31, 1999 with respect to
Section 8.8, the Borrower shall be in full compliance with such Sections and
all other terms, conditions and provisions of the
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Credit Agreement and the Loan Documents.
4. AMENDMENT FEE.
In order to induce the Lenders to execute this Amendment, the Borrower
has agreed to pay an amendment fee to each Lender which executes this
Amendment. Such fee to be payable (i) to each of Xxxxxx Trust and Savings
Bank, Firstar Bank Milwaukee, N.A., Branch Banking & Trust Co. and LaSalle
National Bank in the amount equal to 0.25% of the aggregate amount of such
Lender's Commitments (as amended hereby) if such Lender executes and delivers
this Amendment and (ii) to National City Bank in the amount equal to 0.125%
of the aggregate amount of such Lender's Commitments (as amended hereby) if
such Lender so executes and delivers this Amendment. The amendment fee
payable to each Lender specified herein shall be deemed fully earned and
non-refundable upon such Lender's execution of this Amendment and shall be
due and payable immediately upon with such Lender's execution of this
Amendment, whether or not this Amendment takes effect.
5. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all of
the following conditions precedent:
5.01. The Borrower, each of the Guarantors, the Agent and the Required
Lenders shall have executed and delivered this Amendment.
5.02. The Borrower shall have made such prepayments on the Revolving
Credit Loans so as to assure the aggregate unpaid principal balance of
Revolving Credit Loans does not exceed the Revolving Credit Commitments after
giving effect to this Amendment.
5.03. After giving effect to this Amendment, no Default or Event of
Default shall have occurred and be continuing as of the date this Amendment
would otherwise take effect.
5.04. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Lenders and their counsel.
5.05 The Agent shall have received for the account of the Lenders the
amendment fee required to be paid by the Borrower under Section 4 of this
Amendment.
Upon satisfaction of such conditions precedent, this Amendment shall be and
become effective, and its "effective date" shall be March 26, 1999.
6. REPRESENTATIONS.
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In order to induce the Lenders to execute and deliver this Amendment, the
Borrower hereby represents to the Lenders that as of the date hereof, the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except that for purposes of
this paragraph the representations contained in Section 6.4 shall be deemed
to refer to the most recent financial statements of the Borrower delivered to
the Lenders) and the Borrower is in full compliance with all of the terms and
conditions of the Credit Agreement after giving effect to this Amendment and
no Default or Event of Default has occurred and is continuing under the
Credit Agreement or shall result after giving effect to this Amendment.
7. MISCELLANEOUS.
7.01. The Borrower and each Guarantor acknowledges and agrees that all
of the Loan Documents to which it is a party remain in full force and effect
for the benefit and security of, among other things, the Obligations as
modified hereby. The Borrower and each Guarantor further acknowledges and
agrees that all references in such Loan Documents to the Obligations shall be
deemed a reference to the Obligations as so modified. The Borrower and each
Guarantor further agrees to execute and deliver any and all instruments or
documents as may be required by the Agent or Required Lenders to confirm any
of the foregoing.
7.02. Except as specifically amended herein or waived hereby, the
Credit Agreement shall continue in full force and effect in accordance with
its original terms. Reference to this specific Amendment need not be made in
the Credit Agreement, the Notes, or any other instrument or document executed
in connection therewith, or in any certificate, letter or communication
issued or made pursuant to or with respect to the Credit Agreement, any
reference in any of such items to the Credit Agreement being sufficient to
refer to the Credit Agreement as amended hereby.
7.03. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of
which taken together shall constitute one and the same agreement. Any of the
parties hereto may execute this Amendment by signing any such counterpart and
each of such counterparts shall for all purposes be deemed to be an original.
This Amendment shall be governed by the internal laws of the State of
Illinois.
7.04. The Borrower agrees to pay all reasonable out-of-pocket costs and
expenses incurred by the Agent in connection with the preparation, execution
and delivery of this Amendment and the documents and transactions
contemplated hereby, including the reasonable fees and expenses of counsel
for the Agent with respect to the foregoing.
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Dated as of ______________, 1999.
Xxxxxx Industrial Group, Inc.
By
---------------------------------
Name:
Title:
Xxxxxx Metalcraft Co.
By
---------------------------------
Name:
Title:
Xxxxxx Metalcraft Co. of North Carolina
By
---------------------------------
Name:
Title:
Xxxxxx Metalcraft Co. of South Carolina
By
---------------------------------
Name:
Title:
Xxxxxxx Xxxxxx, Inc.
By
---------------------------------
Name:
Title:
B&W Metal Fabricators, Inc.
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By
---------------------------------
Name:
Title:
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Accepted and agreed to in Chicago, Illinois as of the date and year last
above written.
Xxxxxx Trust And Savings Bank
By
---------------------------------
Name:
Title:
Branch Banking & Trust Co.
By
---------------------------------
Name:
Title:
Firstar Bank Milwaukee, N.A.
By
---------------------------------
Name:
Title:
LaSalle National Bank
By
---------------------------------
Name:
Title:
National City Bank
By
---------------------------------
Name:
Title:
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