EXHIBIT 10.60
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Second Amended and Restated Credit Agreement
(herein, the "Amendment") is made as of February 8, 2005, by and among Xxxxxx
Industrial Group, Inc., a Georgia corporation (the "Borrower"), the Lenders
party to the Credit Agreement hereinafter identified and defined, and Xxxxxx
Trust and Savings Bank, as Agent for the Lenders (in such capacity, the
"Agent").
RECITALS
A. The Lenders currently extend credit to the Borrower on the terms and
conditions set forth in that certain Second Amended and Restated Credit
Agreement dated as of March 26, 2004, as amended, by and among the Borrower, the
Guarantors, the Lenders and the Agent (the "Credit Agreement"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.
B. The Borrower has requested that the Lenders amend certain provisions
of the Borrowing Base and certain financial covenants set forth in the Credit
Agreement, and the Lenders are willing to do so on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in,
and effective from and after the date specifically set forth in, Section 2
below, the Credit Agreement shall be and hereby is amended as follows:
1.1. The definition of "Borrowing Base" set forth in Section 5.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"Borrowing Base" means, as of any time it is to be
determined, the sum of:
(a) 85% of the then net book value of Eligible Accounts
(computed using the method of receivables valuation applied by the
Borrower in accordance with GAAP which reflects such value as the
net book value of its receivables, except that net book value for
such purposes shall not reflect any reserve for accounts more than
ninety days past due that have already been excluded from gross
accounts in computing such Eligible Accounts) less such other
reserves for uncollectibility, location of account debtor, contras
and other matters as the Agent or Required Lenders in good
faith shall from time to time reasonably deem appropriate to
adjust such net book value; plus
(b) the lesser of (x) $13,000,000 and (y) 60% of the value
(computed at its cost using the method of inventory valuation
applied by the Borrower in accordance with GAAP which reflects
such cost on the Borrower's books as its net book value, but in
any event after reducing such value as so computed by the
aggregate amount of all reserves for obsolescence, slow-moving
items, shrinkage and all such other matters as the Agent or
Required Lenders in good faith shall from time to time reasonably
deem appropriate to adjust such net book value) of Eligible
Inventory, provided that, in no event shall the amount computed
pursuant to this clause (b) exceed 60% of the Borrowing Base;
minus
(c) a general reserve in the amount of $500,000;
provided that (A) the Borrowing Base shall be computed only as
against and on so much of the Collateral as is included on the
certificates to be furnished from time to time by the Borrower
pursuant to Section 8.5(f) hereof and, if required by the Agent
pursuant to any of the terms hereof or any Collateral Document, as
verified by such other evidence required to be furnished to the
Agent pursuant hereto or pursuant to any such Collateral Document,
and (B) the Agent shall have the right to adjust the advance rates
against Eligible Receivables and Eligible Inventory based solely
on the commercially reasonable exercise of its credit judgment
based on the results of any field audit of any Collateral which
reasonably supports any such adjustment and the Agent shall notify
the Borrower of any such adjustment to the advance rates promptly
following such adjustment.
Notwithstanding any other provision of this definition of
"Borrowing Base" to the contrary: (i) the amount of Eligible
Accounts otherwise included in the Borrowing Base shall be
reduced, dollar for dollar, by a reserve equal to the greater of
(a) the amount (if any) by which (x) the aggregate amount of
accounts payable owing by the Borrower and its Subsidiaries to
Deere and Caterpillar together and their respective Affiliates for
inventory and supplies purchased (the "Deere/Caterpillar
Payables") at any time exceeds (y) $8,000,000 or (b) the sum of
(A) the amount (if any) by which (x) the aggregate amount of
accounts payable owing by the Borrower and its Subsidiaries to
Deere and its Affiliates for inventory and supplies purchased (the
"Deere Payables") at any time exceeds (y) $5,000,000 and (B) the
amount (if any) by which (x) the aggregate amount of accounts
payable owing by the
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Borrower and its Subsidiaries to Caterpillar and its Affiliates
for inventory and supplies purchased (the "Caterpillar Payables")
at any time exceeds (y) $4,000,000; (ii) no reserve will be
imposed in computing the Borrowing Base as of any time solely in
respect of the Deere/Caterpillar Payables, Deere Payables or
Caterpillar Payables to the extent the same do not exceed such
respective limits; and (iii) the Agent and the Required Lenders
shall have the right to impose reserves for other matters arising
in connection with receivables owing by Deere and Caterpillar and
to otherwise impose reserves in accordance with the Credit
Agreement.
1.2. Section 8.10 of the Credit Agreement is hereby amended by (i)
deleting the amount "$4,800,000" for fiscal year 2004 and replacing it with the
amount "$5,400,000," and (ii) deleting the amount "$5,200,000" for fiscal year
2005 and replacing it with the amount "$5,500,000."
1.3. Section 8.14(b) of the Credit Agreement is hereby amended by
deleting the amount "$7,800,000" for the fiscal year 2005 and replacing it with
the amount "$8,000,000."
1.4. Exhibit H to the Credit Agreement is hereby amended and restated
to read in its entirety as set forth on the revised Exhibit H attached hereto.
SECTION 2. CONDITIONS PRECEDENT.
Upon the satisfaction of all the following conditions precedent, this
Amendment shall be, and is hereby agreed to by the parties hereto to be,
effective from and after December 31, 2004:
2.1. The Borrower, the Agent, the Lenders and the Guarantors shall have
executed and delivered this Amendment.
2.2. The Agent shall have received copies (executed or certified, as
may be appropriate) of all legal documents or proceedings taken in connection
with the execution and delivery of this Amendment to the extent the Agent or its
counsel may reasonably request.
2.3. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Agent and its counsel.
2.4. The Agent shall have received a certified copy of an amendment to
the Note Purchase Agreement increasing the capital expenditures limitation
covenant to an amount not less than $5,400,000 for fiscal year 2004 and which
shall be in form and substance acceptable to the Agent.
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SECTION 3. REPRESENTATIONS.
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, and
after giving effect to this Amendment, (a) the representations and warranties
set forth in Section 6 of the Credit Agreement are and shall be and remain true
and correct in all material respects (except that for purposes of this paragraph
the representations contained in Section 6.5 shall be deemed to refer to the
most recent financial statements of the Borrower delivered to the Lenders) and
(b) 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.
SECTION 4. MISCELLANEOUS.
4.1. The Borrower and certain of its Subsidiaries have heretofore
executed and delivered to the Agent and the Lenders certain of the Collateral
Documents. The Borrower hereby acknowledges and agrees that, notwithstanding the
execution and delivery of this Amendment, the Collateral Documents remain in
full force and effect and the rights and remedies of the Agent and the Lenders
thereunder, the obligations of the Borrower and its Subsidiaries thereunder, and
the liens and security interests created and provided for thereunder remain in
full force and effect and shall not be affected, impaired, or discharged hereby.
Nothing herein contained shall in any manner affect or impair the priority of
the liens and security interests created and provided for by the Collateral
Documents as to the indebtedness which would be secured thereby prior to giving
effect to this Amendment.
4.2. 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.
4.3. The Borrower agrees to pay all reasonable out-of-pocket costs and
expenses incurred by the Agent and the Lenders 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.
4.4. 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.
[SIGNATURE PAGES TO FOLLOW]
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This Second Amendment to Second Amended and Restated Credit Agreement
is entered into by the parties hereto as of the date and year first above
written.
XXXXXX INDUSTRIAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxxxxx
Name Xxxxxx X. Xxxxxxxx
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Title VP of Finance
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Accepted and agreed to:
XXXXXX TRUST AND SAVINGS BANK
By /s/ Xxx X. Xxxxxxxxxx
Name Xxx X. Xxxxxxxxxx
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Title Managing Director
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NATIONAL CITY BANK OF THE MIDWEST
By /s/ Xxxxxxx X. Xxxxxx
Name Xxxxxxx X. Xxxxxx
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Title Vice President
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JPMORGAN CHASE BANK, N.A. (formerly
known as Bank One, N.A.)
By /s/ Xxxxx X. Xxxxxxx
Name Xxxxx X. Xxxxxxx
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Title First VP
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GUARANTORS' ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned hereby acknowledges and agrees that it is a
Guarantor under the terms of Section 11 of the Credit Agreement and, as such,
has executed and delivered certain Collateral Documents pursuant to the Credit
Agreement. The undersigned hereby consent to the Second Amendment to Second
Amended and Restated Credit Agreement as set forth above and agree to the terms
thereof, and the undersigned hereby confirm that their guaranties and the
Collateral Documents executed by them, and all of the obligations of the
undersigned thereunder, remain in full force and effect. The undersigned further
agree that the consent of the undersigned to any further amendments to the
Credit Agreement shall not be required as a result of this consent having been
obtained. The undersigned acknowledge the Lenders are relying on this
acknowledgement and consent in entering into the Second Amendment to Second
Amended and Restated Credit Agreement with the Borrower.
XXXXXX METALCRAFT CO.
By /s/ Xxxxx X. Xxxxxxxxx
Name Xxxxx X. Xxxxxxxxx
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Title Vice President
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XXXXXX METALCRAFT CO. OF NORTH CAROLINA
By /s/ Xxxxx X. Xxxxxxxxx
Name Xxxxx X. Xxxxxxxxx
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Title Vice President
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XXXXXX METALCRAFT CO. OF SOUTH CAROLINA
By /s/ Xxxxx X. Xxxxxxxxx
Name Xxxxx X. Xxxxxxxxx
--------------------------------
Title Vice President
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MID CENTRAL PLASTICS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
Name Xxxxx X. Xxxxxxxxx
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Title Vice President
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B&W METAL FABRICATORS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
Name Xxxxx X. Xxxxxxxxx
--------------------------------
Title Vice President
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EXHIBIT H
XXXXXX INDUSTRIAL GROUP, INC.
BORROWING BASE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as
Agent under, and the Lenders party
to, the Credit Agreement described
below.
Pursuant to the terms of the Credit Agreement dated as of March 26, 2004,
among us (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), we submit this Borrowing Base Certificate to you and
certify that the information set forth below and on any attachments to this
Certificate is true, correct and complete as of the date of this Certificate.
A. ACCOUNTS RECEIVABLE IN BORROWING BASE
1. Gross accounts receivable ___________
Less
(a) Ineligible sales ___________
(b) Owed by an account debtor who is an ___________
Affiliate
(c) Owed by an account debtor who is in an ___________
insolvency or reorganization proceeding
(d) Credits/allowances ___________
(e) Unpaid more than 90 days from due date ___________
(f) Ineligible terms (e.g., due date more than ___________
60 days from invoice date)
(g) 25% taint factor ___________
(h) Otherwise ineligible ___________
2. Total Deductions (sum of lines A1a - A1h) ___________
3. Eligible accounts receivable (line A1 minus ___________
line A2)
4. Eligible accounts receivable in Borrowing ___________
Base (line A3 x .85)
5. Deere/Caterpillar Reserve Amount ___________
6. Net Borrowing Base value of accounts ___________
receivable (line A4 minus line A5)
B. INVENTORY IN BORROWING BASE
1. Gross inventory of Finished Goods and Raw ___________
Materials
2. Less
(a) Finished Goods and Raw Materials not ___________
located at approved locations
(b) Obsolete, slow moving, or not ___________
merchantable
(c) Otherwise ineligible ___________
2. Total Deductions (sum of lines B2a - B2c ___________
above)
3. Eligible Inventory (line B1 minus line B2) ___________
4. Eligible Inventory in Borrowing Base before ___________
cap (line B3 x .60)
5. Inventory cap ($13,000,000) ___________
6. Eligible Inventory in Borrowing Base (lesser ___________
of line B4 or line B5)
C. TOTAL BORROWING BASE
1. Line A6 ___________
2. Line B6(1) ___________
3. Sum of Lines C1 and C2 ___________
4. General reserve ___________
5. Line C3 minus Line C4 (Borrowing Base) ___________
D. REVOLVING CREDIT ADVANCES
1. Loans ___________
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(1) If Line B6 would otherwise exceed 60% of the total Borrowing Base, insert
the largest amount which would not exceed 60% of the total Borrowing
Base as shown on Line C5 (as recomputed including such smaller amount
on Line C2).
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2. Letters of Credit ___________
3. Total Outstandings (line D1 plus D2) ___________
E. AVAILABLE BORROWING BASE COLLATERAL
(line C5 minus line D3) ___________
Dated as of this ______ day of __________________.
XXXXXX INDUSTRIAL GROUP, INC.
By
Name
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Title
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