EXHIBIT 10.31
SECOND AMENDMENT TO CREDIT AGREEMENT
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This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made as
of the 19th day of November, 2000, by and among CECO GROUP, INC., CECO FILTERS,
INC., AIR PURATOR CORPORATION, NEW XXXXX CO., INC., THE XXXX & XXXX
MANUFACTURING COMPANY and KBD/TECHNIC, INC. (the "Borrowers"), and PNC BANK,
NATIONAL ASSOCIATION ("PNC"), individually and as agent for itself and the other
banks (collectively, the "Banks") which from time to time are parties to the
hereinafter defined Credit Agreement (in such capacity, the "Agent").
BACKGROUND
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A. The Agent, the Banks and the Borrowers are parties to a Credit
Agreement dated as of December 7, 1999 as amended by Amendment to Credit
Agreement, date as of March 28, 2000 (as amended, the "Credit Agreement").
B. The Borrowers have requested and the Agent and the Banks have agreed
to amend the Credit Agreement on the terms and conditions set forth herein.
Now, Therefore, in consideration of the foregoing and for good and
valuable consideration, the legality and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement.
2. Amendments to Credit Agreement. The Credit Agreement is hereby
amended as follows:
(a) Section 5.2 of the Credit Agreement is hereby amended by inserting
the following new subsection (f):
"(f) (i) internally prepared consolidated financial projections for
CECO for the quarter ending December 31, 2000 on or before December 15,
2000; (ii) internally prepared preliminary consolidated financial
projections for CECO for the fiscal year ending December 31, 2001 on or
before December 15, 2000; (iii) internally prepared final consolidated
financial projections for CECO for the fiscal year ending December 31,
2001 on or before January 31, 2001, together with a written explanation
of any changes to the preliminary projections for such period; (iv)
internally prepared financial statements of CECO for the quarter and
fiscal year ending December 31, 2000, and covenant compliance
calculations for such periods, on or before February 15, 2001.
Notwithstanding any provision to the contrary contained in this
Agreement, the Borrowers' failure to deliver any of the items required
by this subsection (f) shall constitute and immediate Event of Default
without any required notice or cure period."
(b) Section 6.1(c) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"Interest Coverage Ratio. Permit the Interest Coverage Ratio for the period (i)
beginning January 1, 2000 and ending June 30, 2000 to be less than 1.50 to 1, or
(ii) beginning January 1, 2000 and ending September 30, 2000 to be less than
1.50 to 1, or permit the Interest Coverage Ratio, as of the end of any fiscal
quarter ending during the periods specified below, for the prior four
consecutive fiscal quarters, to be less than the ratio set forth opposite such
period:
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Last Day of Fiscal Quarter During Period Interest Coverage Ratio Not
To Be Less Than
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December 31, 2000 through December 30, 2001 2.50 to 1
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December 31, 2001 through December 30, 2002 3.25 to 1
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December 31, 2002 through December 30, 2003 3.75 to 1
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December 31, 2003 through Termination Date 4.00 to 1
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(c) Section 6.1(e) of the Credit Agreement is hereby amended by
deleting the "$5,100,000" amount in the third row of the table with respect to
the period from January 1, 2000 through September 30, 2000, and inserting
"$3,900,000" in its place.
(d) Section 6.8 of the Credit Agreement is hereby amended by inserting
the following sentence at the end of such Section:
"Notwithstanding anything herein to the contrary, the Borrowers shall
not pay management fees to CECO in excess of $40,000 for each of the
months of October, November and December, 2000."
3. Additional Covenant. The Borrowers and Green Diamond Oil Corp.
("Green Diamond") agree that the scheduled payment to Green Diamond on the
Subordinated Debt (as defined in the Subordination Agreement) due on or about
September 30, 2000 shall be deferred until December 31, 2000, and no payment of
principal or interest on the Subordinated Debt may be made to or received by
Green Diamond before December 31, 2000. Notwithstanding any provision to the
contrary contained in the Credit Agreement, the Borrowers' failure to comply
with this Section 3 shall constitute an immediate Event of Default without any
required notice or cure period.
4. Amendment to the Loan Documents. All references to the Credit
Agreement in the Loan Documents and in any documents executed in connection
therewith shall be deemed to refer to the Credit Agreement as amended by this
Amendment.
5. Ratification of the Loan Documents.Notwithstanding anything to the
contrary herein contained or any claims of the parties to the contrary, the
Agent, the Banks and the Borrowers agree that the Loan Documents and each of the
documents executed in connection therewith are in full force and effect and each
such document shall remain in full force and effect, as further amended by this
Amendment, and each of the Borrowers hereby ratifies and confirms its
obligations thereunder.
6. Representations and Warranties.
(a) Each Borrower hereby certifies that (i) the representations and
warranties of such Borrower in the Credit Agreement are true and correct in all
material respects as of the date hereof, as if made on the date hereof and (ii)
no Event of Default and no event which could become an Event of Default with the
passage of time or the giving of notice, or both, under the Credit Agreement or
the other Loan Documents exists on the date hereof.
(b) Each Borrower further represents that it has all the requisite
power and authority to enter into and to perform its obligations under this
Amendment, and that the execution, delivery and performance of this Amendment
have been duly authorized by all requisite action and will not violate or
constitute a default under any provision of any applicable law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect or of the Articles of Incorporation or by-laws of such
Borrower, or of any indenture, note, loan or credit agreement, license or any
other agreement, lease or instrument to which such Borrower is a party or by
which such Borrower or any of its properties are bound.
(c) Each Borrower also further represents that its obligation to repay
the Loans, together with all interest accrued thereon, is absolute and
unconditional, and there exists no right of set off or recoupment, counterclaim
or defense of any nature whatsoever to payment of the Loans.
(d) Each Borrower also further represents that there have been no
changes to the Articles of Incorporation, by-laws or other organizational
documents of each such Borrower since the most recent date true and correct
copies thereof were delivered to the Agent.
7. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of the Agent and its
counsel, of the following conditions precedent:
(a) The Borrowers shall have delivered to the Agent the following, all
of which shall be in form and substance satisfactory to the Agent and shall be
duly completed and executed:
(i) This Amendment and the consent of the Guarantor and the
Subordinated Creditor listed on the consents attached hereto; and
(ii) Such additional documents, certificates and information as the
Agent may require pursuant to the terms hereof or otherwise reasonably
request. (b) The Borrowers shall have received not less than $120,000
in cash from Green Diamond as a repayment of interest previously paid
to Green Diamond by the Borrowers.
(c) After giving effect to the amendments contained herein, the
representations and warranties set forth in the Credit Agreement shall be true
and correct on and as of the date hereof.
(d) After giving effect to the amendments contained herein, no Event of
Default hereunder, and no event which, with the passage of time or the giving of
notice, or both, would become such an Event of Default shall have occurred and
be continuing as of the date hereof.
(e) The Borrowers shall have paid the reasonable fees and disbursements
of the Agent's counsel incurred in connection with this Amendment.
6. No Waiver. Except as expressly provided herein, this Amendment does
not and shall not be deemed to constitute a waiver by the Agent or the Banks of
any Event of Default, or of any event which with the passage of time or the
giving of notice or both would constitute an Event of Default, nor does it
obligate the Agent or the Banks to agree to any further modifications to the
Credit Agreement or any other Loan Document or constitute a waiver of any of the
Agent's or the Banks' other rights or remedies.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
CECO GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
Name: /s/ Xxxxxxxx X. Xxxxxx
Title: /s/ CFO
CECO FILTERS, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
Name: /s/ Xxxxxxxx X. Xxxxxx
Title: /s/ Secretary
AIR PURATOR CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
Name: /s/ Xxxxxxxx X. Xxxxxx
Title: /s/ Secretary
NEW XXXXX CO., INC.
By: /s/ Xxxxxxxx X. Xxxxxx
Name: /s/ Xxxxxxxx X. Xxxxxx
Title: /s/ Secretary
THE XXXX & XXXX MANUFACTURING COMPANY
By: /s/ Xxxxx X. Xxxx
Name: /s/ Xxxxx X. Xxxx
Title: /s/ VP
KBD/TECHNIC, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
Name: /s/ Xxxxxxxx X. Xxxxxx
Title: /s/ Assist. Secretary
PNC BANK, NATIONAL ASSOCIATION,
as Agent and as a Bank
By: /s/ Xxxx X. Xxxxxxxx
Title: /s/ Vice President
FIFTH THIRD BANK, as a Bank
By: /s/ Xxxxx Xxxxxxxxx
Title: /s/ Fifth Third Bank - Assistant Vice President
BANK ONE, N.A., as a Bank
By: /s/ Xxxx Xxxxxxx
Title: /s/ 1st Vice President
GUARANTOR'S CONSENT
By Corporate Guaranty, dated December 7, 2000 (the "Guaranty"), the
undersigned (the "Guarantor") guaranteed to the Agent and the Banks, subject to
the terms and conditions set forth therein, the prompt payment and performance
of all of the Obligations (as defined therein). The Guarantor consents to the
Borrowers' execution of the foregoing Second Amendment to Credit Agreement. The
Guarantor hereby acknowledges and agrees that the Guaranty remains unaltered and
in full force and effect and is hereby ratified and confirmed in all respects.
CECO ENVIRONMENTAL CORP.
By: /s/ Xxxxxxxx X. Xxxxxx
Title: /s/ CFO
SUBORDINATED CREDITOR'S CONSENT
The undersigned (the "Subordinated Creditor") is a party to the
Subordination Agreement with the Agent and the Banks and other subordinated
creditors, dated December 7, 2000 (the "Subordination Agreement"). The
Subordinated Creditor consents to the Borrowers' execution of the foregoing
Second Amendment to Credit Agreement. The Subordinated Creditor agrees that
Section 3 of the foregoing Second Amendment to Credit Agreement applies to it
and that such Subordinated Creditor is bound thereby. The Subordinated Creditor
hereby acknowledges and agrees that, except as provided in Section 3 of the
foregoing Second Amendment to Credit Agreement, the Subordination Agreement
remains unaltered and in full force and effect and is hereby ratified and
confirmed in all respects.
GREEN DIAMOND OIL CORP.
By: /s/ Xxxxxxx XxXxxxxx
Title: /s/ President
