EXHIBIT 10.16(b)
FORM 10-K
YEAR ENDED DECEMBER 31, 2002
AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment") is entered into as of January 9,
2003, by and among BUCYRUS INTERNATIONAL, INC., a corporation organized under
the laws of the State of Delaware ("Bucyrus"), MINSERCO, INC., a corporation
organized under the laws of the State of Delaware ("Minserco") and BOONVILLE
MINING SERVICES, INC., a corporation organized under the laws of the State of
Delaware ("Boonville"), (Bucyrus, Minserco and Boonville, each a "Borrower"
and collectively, the "Borrowers"), BUCYRUS CANADA LIMITED, a corporation
organized under the laws of the Province of Ontario ("Bucyrus Canada"),
BUCYRUS HOLDINGS, LLC, a limited liability company organized under the laws of
the State of Delaware ("Holdings"), (Holdings and, Bucyrus Canada, each a
"Guarantor" and collectively, the "Guarantors"), the financial institutions
which are now or which hereafter become a party hereto (each a "Lender" and
collectively, the "Lenders"), GMAC BUSINESS CREDIT, LLC, a limited liability
company organized under the laws of the State of Delaware ("GMACBC"), as agent
for Lenders (GMACBC, in such capacity, the "Agent") and BANK ONE, WISCONSIN
("BOW"), as syndication agent for Lenders (BOW, in such capacity, the
"Syndication Agent").
BACKGROUND
Borrowers, Guarantors, Agent, Syndication Agent and Lenders are parties
to a Loan and Security Agreement dated as of March 7, 2002 (as amended by
Amendment No. 1 to Loan and Security Agreement dated as of December 31, 2002
and as hereafter amended, restated, supplemented or otherwise modified from
time to time, the "Loan Agreement") pursuant to which Agent and Lenders
provide Borrowers with certain financial accommodations.
Borrowers have requested Agent and Lenders (a) to extend the Original
Term of the Loan Agreement from February 4, 2003 to January 8, 2005, and (b)
restate the financial covenants, and Agent and Lenders are willing to do so on
the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers by
Agent and Lenders, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is
amended as follows:
(a) Section 1.2 of the Loan Agreement is amended by inserting
the following defined terms in their appropriate alphabetical order:
"Amendment 2" shall mean Amendment No. 2 to this Agreement
dated as of January 9, 2003.
"Amendment 2 Closing Date" shall mean the date upon which
all of the conditions precedent to the effectiveness to
Amendment 2 have been satisfied.
"Excess Cash Flow" of Loan Parties on a Consolidated Basis
for any fiscal period shall mean (a) EBITDA for such period
minus (b) the sum of (i) reductions to the Supplemental
Amount (other than the reductions pursuant to Section
2.13(b)), (ii) Senior Debt Payments, (iii) federal, state,
provincial and local taxes paid in cash, (iv) principal
payments made by Foreign Subsidiaries to third parties which
are not Affiliates or Subsidiaries of any Loan Party with
respect to Indebtedness for Money Borrowed and (v) non-
financed Capital Expenditures (which shall include any
Capital Expenditures to the extent financed by utilization
of Advances).
(b) The following defined terms in Section 1.2 are amended in
their entirety to provide as follows:
"Fee Letter" shall mean, severally and collectively, (a) the
fee letter dated the Closing Date between Loan Parties and
GMACBC in connection with this Agreement, as amended and
restated on the Amendment 2 Closing Date, and (b) each fee
letter dated the Amendment 2 Closing Date between Loan
Parties and each of the other Lenders then party to this
Agreement.
"Maximum Revolving Advance Amount" shall mean the greater of
(a) $76,000,000 (inclusive of outstanding Swingline Loans),
minus a sum equal to (i) all scheduled reductions in the
Supplemental Amount after September 30, 2003, plus (ii) all
reductions in the Supplemental Amount pursuant to
Section 2.13 hereof, and (b) $65,000,000.
"Senior Debt Payments" shall mean and include all cash
actually expended by Loan Parties on a Consolidated Basis to
make (a) interest payments on any Advances hereunder, plus,
(b) the payments for all fees, commissions and charges set
forth herein and with respect to any Advances to the extent
not otherwise deducted in the calculation of net income (or
loss), plus (c) Capital Lease payments, plus (d) payments
with respect to any other Indebtedness for Money Borrowed,
including, without limitation (x) the Senior Unsecured Debt
and (y) interest and accrued fees on Indebtedness of Bucyrus
Canada and Foreign Subsidiaries.
"Supplemental Amount" shall mean, as of the Amendment 2
Closing Date, $15,500,000; provided, however, that the
Supplemental Amount shall be permanently reduced (but to an
amount not less than $0) (a) by $1,500,000 on the last day
of each calendar quarter commencing March 31, 2003 and (b)
as required pursuant to Section 2.13 hereof."
(c) The last sentence of Section 2.1(a) of the Loan Agreement is
amended and restated as follows:
"The Revolving Advances shall be evidenced by one or more
secured promissory notes (as amended, modified, or amended
and restated from time to time, individually and
collectively, the "Revolving Credit Note") initially,
substantially in the form attached hereto as Exhibit 2.1(a),
as of the Amendment 2 Closing Date, substantially in the
form attached to Amendment 2 as Exhibit 2.1(a) thereto, and
thereafter as amended, modified or amended and restated from
time to time."
(d) Section 2.13 of the Loan Agreement is amended by adding a
subsection designation "(a)" immediately after the section numeric designation
"2.13" and by adding the following subsection "(b)" at the end thereof:
"(b) Borrowers shall reduce the Supplemental
Amount in an amount equal to 50% of Excess Cash Flow for
each fiscal year commencing on or after January 1, 2003, in
each case payable upon delivery of the financial statements
to Agent referred to in and required by Section 9.7 for the
fiscal year then ended but in any event not later than the
date upon which such financial statements are required to be
delivered pursuant to Section 9.7, which amount shall be
applied to permanently reduce the Supplemental Amount (in
addition to the scheduled quarterly reductions of the
Supplemental Amount). In the event that the financial
statements are not so delivered, then a calculation based
upon estimated amounts shall be made by Agent upon which
calculation the reduction required by this Section 2.13(b)
shall occur, subject to adjustment when the financial
statements are delivered to Agent as required hereby. The
calculation made by Agent shall not be deemed a waiver of
any rights Agent or Lenders may have as a result of the
failure by Loan Parties to deliver such financial
statements."
(e) Section 3.4 of the Loan Agreement is hereby amended and
restated in its entirety as follows:
"3.4. Fees. Borrowers shall pay to Agent and each of the
Lenders, for their own respective accounts, all fees and
other amounts set forth in each Fee Letter, when and as due
in accordance with the terms thereof, respectively."
(f) Section 5.8(d) of the Loan Agreement is hereby amended by
deleting the reference to "Schedule 5.8(d)" in the second sentence of such
Section 5.8(d) and by substituting therefor a reference to "Schedule
5.8(d)-1".
(g) Section 6.8 of the Loan Agreement is hereby amended and
restated in its entirety as follows:
(a) EBITDA. Maintain EBITDA for the Loan
Parties on a Consolidated Basis as of the end of each fiscal
quarter set forth below for the respective fiscal periods
set forth below ending on the last day of such fiscal
quarter in an amount not less than the amount set forth
below:
Four Fiscal Quarters Ending
With Fiscal Quarter Ending Minimum EBITDA
December 31, 2002 $24,000,000
March 31, 2003 $24,000,000
June 30, 2003 $24,000,000
September 30, 2003 $24,000,000
December 31, 2003 $25,000,000
March 31, 2004 $25,000,000
June 30, 2004 $26,000,000
September 30, 2004 $26,500,000
December 31, 2004 $26,500,000
(b) Leverage Ratio. Maintain a Leverage Ratio
for the Loan Parties on a Consolidated Basis as of the end
of each fiscal quarter set forth below for the respective
periods set forth below of not greater than the ratios set
forth below:
Four Fiscal Quarters Ending
with Fiscal Quarter Ending Leverage Ratio
December 31, 2002 5.75:1.0
March 31, 2003 5.75:1.0
June 30, 2003 5.75:1.0
September 30, 2003 5.50:1.0
December 31, 2003 5.25:1.0
March 31, 2004 5.00:1.0
June 30, 2004 5.00:1.0
September 30, 2004 4.75:1.0
December 31, 2004 4.75:1.0
(c) Fixed Charge Coverage Ratio. Maintain a
Fixed Charge Coverage Ratio for the Loan Parties on a
Consolidated Basis as of the end of each fiscal quarter set
forth below for the respective periods set forth below of
not less than the ratios set forth below:
Four Fiscal Quarters Ending
with Fiscal Quarter Ending Fixed Charge Coverage Ratio
December 31, 2002 1.05:1.0
March 31, 2003 1.05:1.0
June 30, 2003 1.05:1.0
September 30, 2003 1.05:1.0
December 31, 2003 1.05:1.0
March 31, 2004 1.05:1.0
June 30, 2004 1.05:1.0
September 30, 2004 1.10:1.0
December 31, 2004 1.10:1.0
(h) Section 7.6 of the Loan Agreement is amended and restated in
its entirety as follows:
7.6 Capital Expenditures. Contract for, purchase or make
any Capital Expenditures as of the end of each fiscal
quarter set forth below for the respective fiscal periods
set forth below ending on the last day of such fiscal
quarter in an aggregate amount in excess of the amounts set
forth below:
Four Fiscal Quarters Ending
With Fiscal Quarter Ending Capital Expenditure
December 31, 2002 $4,800,000
December 31, 2003 $4,800,000
December 31, 2004 $4,800,000
(i) Section 13.1 of the Loan Agreement is amended by deleting
"February 4, 2003" and inserting "January 8, 2005" in its place and stead.
(j) Schedule 5.8(d)-1 to this Amendment is hereby added as
Schedule 5.8(d)-1 to the Loan Agreement.
3. Conditions of Effectiveness. This Amendment shall become
effective upon satisfaction of the following conditions precedent, each of
which shall be in form and substance reasonably satisfactory to Agent and its
counsel:
(a) Agent shall have received six (6) copies of this Amendment
duly executed by Borrowers, Guarantors and Lenders;
(b) Agent and each Lender shall have received its respective Fee
Letter, duly executed by Borrowers and Guarantors, and all payments thereunder
due on the Amendment 2 Closing Date shall have been made;
(c) Borrowers shall have executed and delivered to Agent for the
benefit of each of the Lenders an Amended and Restated Revolving Credit Note
in the form annexed hereto as Exhibit 2.1(a), each properly completed with
respect to the applicable amount and payee of each Lender;
(d) Borrowers and Guarantors shall have executed and delivered
to Agent a letter containing, inter alia, Borrowers' and Guarantors' agreement
to hereafter effectuate pricing or structural changes to the Agreement if
Agent determines that such changes are reasonably required in order to ensure
the successful further syndication of the credit facility established under
the Agreement on terms that are acceptable to Agent; and
(e) Agent shall have received such other certificates,
instruments, documents, agreements and opinions of counsel as may be required
by Agent or its counsel relating to the transactions contemplated in this
Amendment.
4. Representations and Warranties. Each Borrower hereby represents
and warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of each Borrower and are
enforceable against each Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each Borrower
hereby reaffirms all covenants, representations and warranties made in the
Loan Agreement to the extent the same are not amended hereby, and agrees that
all such covenants, representations and warranties shall be deemed to have
been remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment.
(d) No Borrower has any defense, counterclaim or offset with
respect to the Loan Agreement.
5. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered
in connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of Agent or
Lenders, nor constitute a waiver of any provision of the Loan Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.
6. Governing Law. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the
State of New York.
7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
8. Counterparts; Facsimile. This Amendment may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the
same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be an original signature hereto.
9. Repayment of Certain Lenders. Upon the effectiveness of this
Amendment, (a) the Lenders shall have the Commitment Percentages set forth on
the signature pages hereto which reflect the repayment of all Obligations
under the Loan Agreement owing to The Bank of Nova Scotia, Fleet Capital
Corporation and Bank of Scotland (collectively, the "Repaid Lenders") and (b)
the Repaid Lenders shall no longer be Lenders under the Loan Agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
BUCYRUS INTERNATIONAL, INC.
By: /s/X. X. Xxxxxx
Name: X. X. Xxxxxx
Title: Vice President-Finance and Secretary
MINSERCO, INC.
By: /s/X. X. Xxxxxx
Name: X. X. Xxxxxx
Title: Vice President-Finance, Secretary
and Assistant Treasurer
BOONVILLE MINING SERVICES, INC.
By: /s/X. X. Xxxxxx
Name: X. X. Xxxxxx
Title: Vice President-Finance, Treasurer
and Secretary
BUCYRUS CANADA LIMITED
(as Guarantor)
By: /s/X. X. Xxxxxx
Name: X. X. Xxxxxx
Title: Vice President and Treasurer
BUCYRUS HOLDINGS, LLC
(as Guarantor)
By: /s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title:
GMAC BUSINESS CREDIT, LLC, as a Lender
and as Agent
By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Director
Commitment: $35,000,000
Commitment Percentage: 46.0527%
BANK ONE, WISCONSIN
By: /s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: 1st Vice President
Commitment: $20,000,000
Commitment Percentage: 26.3158%
MARINE BANK
By: /s/Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President
Commitment: $6,000,000
Commitment Percentage: 7.8947%
LASALLE BANK NATIONAL ASSOCIATION
By: /s/X. Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Assistant Vice President
Commitment: $15,000,000
Commitment Percentage: 19.7368%
Schedule 5.8(d)-1 to Amendment No. 2
SCHEDULE 5.8(d)-1
Certain Plan Information
See NOTE I - PENSION AND RETIREMENT PLANS to the consolidated financial
statements of Bucyrus International, Inc. included in Bucyrus International,
Inc.'s Annual Report on Form 10-K with respect to the fiscal year ended
December 31, 2001.
