Exhibit 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED LOAN
AGREEMENT ("Second Amendment") is entered into as of
October 25, 1996, between X.X. XXXXXXX COMPANY, an Oklahoma
corporation ("Borrower"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a corporation organized under the banking laws of
the State of New York ("Lender"), with reference to the following
facts:
RECITALS
A. Borrower and Lender have entered into the Amended and
Restated Loan Agreement dated as of July 27, 1995, as amended by
the First Amendment to Amended and Restated Loan Agreement dated
as of February 2, 1996 (collectively, the "Loan Agreement"),
pursuant to which Lender agreed to extend certain financial
accommodations to or for the benefit of Borrower upon the terms
and conditions contained therein. Unless otherwise defined in
this Second Amendment, (i) capitalized terms shall have the
meanings attributed to them in the Loan Agreement, and
(ii) references to sections and subsections shall refer to
sections or subsections of the Loan Agreement.
B. Borrower has requested that Lender modify and amend
certain of the financial covenants set forth in Schedule 6.3 to
the Loan Agreement, and Lender is willing to do so subject to the
terms and conditions set forth in this Second Amendment.
NOW, THEREFORE, in consideration of the continued
performance by Borrower of its promises and obligations under the
Loan Agreement and the other Loan Documents, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Borrower and Lender hereby agree as
follows:
AGREEMENT
1. Incorporation of Loan Agreement and Other Loan
Documents. Except as expressly modified under this Second
Amendment, all of the terms and conditions set forth in the Loan
Agreement and the other Loan Documents are incorporated herein by
this reference, and the obligations of Borrower under the Loan
Agreement and the other Loan Documents are hereby acknowledged,
confirmed and ratified by Borrower.
2. Amendments to Loan Agreement.
2.1 The definition of Capital Expenditure Carryforward
Amount contained in Section 1.1 is deleted in its entirety and
the following is substituted therefor:
"Capital Expenditure Carryforward Amount" shall
mean, with respect to any Fiscal Year, the positive amount, if
any, equal to the difference obtained by subtracting (i) the
actual amount of Capital Expenditures made during such Fiscal
Year from (ii) the maximum amount of permitted Capital
Expenditures for such Fiscal Year (after taking into account any
increase thereof pursuant to the proviso to paragraph (a) of
Schedule 6.3).
2.2 The definition of Capital Expenditures contained
in Section 1.1 is deleted in its entirety and the following is
substituted therefor:
"Capital Expenditures" shall mean all payments for
any fixed assets or improvements or for replacements,
substitutions or additions thereto, and which are required to be
capitalized under GAAP. "Capital Expenditures" shall not include
Capital Lease Obligations or expenditures that are financed by
financing arrangements other than those provided under this
Agreement.
2.3 The definition of Fixed Charge Coverage Ratio
contained in Section 1.1 is deleted in its entirety and the
following is substituted therefor:
"Fixed Charge Coverage Ratio" shall mean, as of
the end of each Fiscal Quarter, a ratio of (i) (A) EBITDA minus
(B) the actual amount of non-financed Capital Expenditures, to
(ii) Fixed Charges, in each case for the then ending rolling
period of 12 Fiscal Periods; provided, that in no event may the
aggregate amount so deducted on account of non-financed Capital
Expenditures made during any Fiscal Year exceed the amount
specified in the table in paragraph (a) of Schedule 6.3 for such
Fiscal Year (without taking into account any increase thereof
pursuant to the proviso to such paragraph). For the purposes of
calculating Fixed Charge Coverage Ratio, Capital Expenditures
shall not include (x) any Capital Expenditure Carryforward Amount
or Capital Expenditure Carryover Amount from the prior Fiscal
Year if the net amount of such numbers is a positive number or
(y) Capital Expenditures of up to $2,500,000 related to
Borrower's distribution center located at 0000 Xxxx Xxxx,
Xxxxxxxx Xxxx, Xxxxxxxx 00000 and referred to in Borrower's five
year financial projections dated May 30, 1996.
2.4 Schedule 6.3 to the Loan Agreement is deleted in
its entirety and replaced with Schedule 6.3 attached hereto.
3. Conditions of Effectiveness. This Second Amendment
shall become effective as of October 25, 1996, but only upon the
receipt by Lender of (a) this Second Amendment executed by
Borrower and Lender, and (b) a Guarantor Consent substantially in
the form attached hereto executed by Anco Transportation Service,
Inc., an Oklahoma corporation.
4. Entire Agreement. This Second Amendment, together with
the Loan Agreement and the other Loan Documents, is the entire
agreement between the parties hereto with respect to the subject
matter hereof. This Second Amendment supersedes all prior and
contemporaneous oral and written agreements and discussions with
respect to the subject matter hereof. Except as otherwise
expressly modified herein, the Loan Documents shall remain in
full force and effect.
5. Representations and Warranties. Borrower hereby
represents and warrants that the representations and warranties
contained in the Loan Agreement were true and correct in all
material respects when made and, except to the extent that (a) a
particular representation or warranty by its terms expressly
applies only to an earlier date, or (b) Borrower has previously
advised Lender in writing as contemplated under the Loan
Agreement, are true and correct in all material respects as of
the date hereof after giving effect to this Second Amendment.
The Loan Agreement shall continue in full force and effect in
accordance with the provisions thereof on the date hereof.
6. Miscellaneous.
6.1 Counterparts. This Second Amendment may be
executed in identical counterpart copies, each of which shall be
an original, but all of which shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature
page to this Second Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this
Second Amendment.
6.2 Headings. Section headings used herein are for
convenience of reference only, are not part of this Second
Amendment, and are not to be taken into consideration in
interpreting this Second Amendment.
6.3 Interpretation. No provision of this Second
Amendment shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party's
having or being deemed to have structured, drafted or dictated
such provision.
6.4 Recitals. The recitals set forth at the beginning
of this Second Amendment are true and correct, and such recitals
are incorporated into and are a part of this Second Amendment.
6.5 Governing Law. This Second Amendment shall be
governed by, and construed and enforced in accordance with, the
laws of the State of New York applicable to contracts made and
performed in such state, without regard to the principles thereof
regarding conflict of laws.
6.6 No Novation. The execution, delivery and
effectiveness of this Second Amendment shall not (a) waive any
breaches or defaults under the Loan Agreement or the other Loan
Documents, whether known or unknown, (b) limit, impair,
constitute a waiver of or otherwise affect any right, power or
remedy by Lender under the Loan Agreement or any other Loan
Document, (c) constitute a waiver of any provision in the Loan
Agreement or in any of the other Loan Documents, or under
applicable law, or (d) except as specifically set forth in
section 2 of this Second Amendment, alter, modify, amend or in
any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Loan Agreement, all of
which are ratified and affirmed in all respects and shall
continue in full force and effect.
6.7 Conflict of Terms. In the event of any
inconsistency between the provisions of this Second Amendment and
any provision of the Loan Agreement, the terms and provisions of
this Second Amendment shall govern and control.
IN WITNESS WHEREOF, this Second Amendment has been duly
executed as of the date first written above.
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION
By:/s/ C. A. Xxxxxxxxxx
Xxxxxxxx X. Xxxxxxxxxx
Duly Authorized Signatory
BORROWER:
X.X. XXXXXXX COMPANY
By:/s/ Xxxxxxx X. XxXxxxxx
Name: Xxxxxxx X. XxXxxxxx
Title: Vice Chairman & CAO
GUARANTOR CONSENT
The undersigned hereby (i) ratifies and reaffirms, as of
the date hereof, all of the provisions of the Continuing Guaranty
dated as of August 3, 1992, made by the undersigned in favor of
General Electric Capital Corporation, as amended by the
Reaffirmation and Consent Regarding Guaranty dated July 27, 1995,
and as thereafter ratified and reaffirmed by the Guarantor
Consent dated November 2, 1996, (ii) acknowledges receipt of a
copy of the Second Amendment to Amended and Restated Loan
Agreement dated as of October 25, 1996 (the "Second Amendment")
between General Electric Capital Corporation and X.X. Xxxxxxx
Company, and (iii) consents to all of the provisions of the
Second Amendment.
Dated as of October 25, 1996 ANCO TRANSPORTATION SERVICE, INC.,
an Oklahoma corporation
By:/s/ Xxxxxxx X. XxXxxxxx
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
ACKNOWLEDGMENT OF INSTRUMENTS
STATE OF Oklahoma )
) SS.
COUNTY OF Oklahoma )
On October 28, 1996 before me, the undersigned notary public
in and for said state, personally appeared Xxxxxxx X. XxXxxxxx
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by
his/her signature on the instrument, the person, or the entity
upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ Xxxxxxx X. Xxxxxxxx (Seal)
SCHEDULE 6.3
FINANCIAL COVENANTS
Borrower shall not breach any of the following
financial covenants, each of which shall be calculated as of the
end of each Fiscal Quarter (except as otherwise provided herein)
in accordance with GAAP, consistently applied:
(a) Capital Expenditures. Borrower shall not make
aggregate Capital Expenditures in excess of the amounts shown
below for the Fiscal Years set forth below:
Fiscal Year Amount
1996 $ 7,800,000
1997 $ 11,100,000
1998 $ 11,200,000
1999 $ 12,100,000
2000 $ 10,100,000
2001 $ 12,760,000
provided, that, for each Fiscal Year subsequent to Fiscal Year
1996, the amount of such permitted Capital Expenditures
referenced above will be increased (and shall never be decreased)
by the amount, if any, equal to the sum of (i) the Capital
Expenditure Carryforward Amount and (ii) the Capital Expenditure
Carryover Amount, in each case for the immediately preceding
Fiscal Year (it being understood and agreed by the parties that
the effect of this provision shall be to calculate such amounts
on a cumulative basis).
(b) Net Worth. Borrower shall maintain Net Worth of
not less than $62,000,000 at all times; provided, that, at all
times after the completion of the proposed repurchases under the
Stock Repurchase Program, Borrower shall maintain Net Worth of
not less than $50,000,000.
(c) Fixed Charge Coverage Ratio. Borrower shall
maintain a Fixed Charge Coverage Ratio, measured at the end of
each Fiscal Quarter on a 12 Fiscal Period rolling basis, of not
less than the amounts shown below for such period:
Fiscal Quarters Ratio
3rd Fiscal Quarter of 1996 0.95 to 1.00
4th Fiscal Quarter of 1996- 1.00 to 1.00
3rd Fiscal Quarter of 1997
4th Fiscal Quarter of 1997- 1.10 to 1.00
3rd Fiscal Quarter of 1998
4th Fiscal Quarter of 1998 1.20 to 1.00
and at all times thereafter
(d) Inventory Turnover Ratio. Borrower shall maintain
an Inventory Turnover Ratio, measured at the end of each Fiscal
Quarter on a 12 Fiscal Period rolling basis, of not less than
2.20 to 1.00.
