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EXHIBIT 10(b)
SECOND AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Second Amendment to Amended and Restated Loan and Security
Agreement (this "Second Amendment") dated as of April 22, 1999 by and among
United States Lime & Minerals, Inc., a Texas corporation ("U.S. Lime"), Texas
Lime Company, a Texas corporation ("TLC"), and Arkansas Lime Company, an
Arkansas corporation ("ALC," and together with U.S. Lime and TLC, collectively
referred to as the "Borrowers" and individually as a "Borrower"), and First
Union National Bank, a national banking association, as successor to CoreStates
Bank, N.A. ("Bank").
BACKGROUND
A. Borrowers and Bank are parties to an Amended and Restated Loan and
Security Agreement dated December 30, 1997, as amended by the First Amendment
to Amended and Restated Loan and Security Agreement (collectively, the "Loan
Agreement"), pursuant to which Bank continued and restated certain credit
facilities for the benefit of Borrowers under the terms and conditions set
forth therein. All initially capitalized terms used in this Second Amendment,
unless otherwise specifically defined herein, shall have the meanings ascribed
to them in the Loan Agreement.
B. Borrowers, Bank, as Administrative Agent ("Administrative Agent")
for itself and the other Lenders from time to time party to the Credit
Agreement referenced below (the "Lenders"), and the other Lenders are parties
to the Credit Agreement dated as of April 22, 1999 (as the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "Credit Agreement"). Lenders have agreed, subject to the terms and
conditions of the Credit Agreement, to lend to Borrowers the sum of $50,000,000
on a term loan basis secured by substantially all of the respective Borrowers'
personal property other than Accounts, Inventory, and related personal
property, and by mortgages or deeds of trust on certain real property owned by
ALC and TLC.
C. The Credit Agreement contemplates that Borrowers may maintain a
committed working capital facility not to exceed $4,000,000 in the maximum
principal amount outstanding at any one time, which facility may be secured by
all of the Borrowers' respective Accounts, Inventory, and related personal
property. Bank and Borrowers desire to further amend the Loan Agreement to
maintain the Revolving Credit as Borrowers' working capital facility, according
to the terms hereof, and to terminate the Term Loan, Line of Credit and the
Second Revolving Credit under the Loan Agreement. Bank and Borrowers have
agreed to such modifications subject to the terms and conditions hereof with
the intention that the Revolving Credit contemplated by the Loan Agreement as
hereby amended shall constitute the Working Capital Facility for purposes of
the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set
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forth herein, the parties hereto, intending to be legally bound hereby, agree
as follows:
1. Ratification. This Second Amendment is a modification of the Loan
Agreement pursuant to Section 9.2 thereof. Except as expressly set forth
herein, or in any amendment to any of the documents referred to herein,
Borrowers and Bank acknowledge and agree that each and every term, condition
and provision of the Loan Agreement is hereby ratified and confirmed in full.
2. Term Loan Repaid in Full. Bank acknowledges repayment in full of
the entire principal balance and all accrued and unpaid interest on the Term
Loan on the date hereof. All references to any Fixed Rate Loan, the Term Loan,
the Term Loan Indebtedness, the Term Loan Amortization Date, the Term Loan
Termination Date, and the Term Note in the Loan Agreement shall have no force
or effect after the date hereof.
3. Line of Credit and Second Revolving Credit Terminated. The Line of
Credit and the Second Revolving Credit are hereby terminated as of the date
hereof, and Borrowers acknowledge that no further credit availability exists
thereunder. There is no principal balance outstanding or any accrued and unpaid
interest outstanding under the Line of Credit or the Second Revolving Credit on
the date hereof. All references to the Line of Credit, the Line of Credit
Loans, the Line of Credit Note, the Line of Credit Termination Date, the Second
Revolving Credit, the Second Revolving Credit Note, and the Second Revolving
Credit Termination Date in the Loan Agreement shall have no force or effect
after the date hereof.
4. Outstanding Indebtedness. Borrowers hereby unconditionally
acknowledge that, as of the date hereof, there is no outstanding principal
balance under the Revolving Credit and the aggregate face amount of outstanding
undrawn Letters of Credit is $504,802. Borrowers acknowledge and agree that the
foregoing balance of the Revolving Credit (including the amount of all draws
under outstanding Letters of Credit), together with interest which shall accrue
from the date hereof at the rates set forth herein, is owing to Bank without
claim, counterclaim, recoupment, defense or setoff of any kind.
5. Certain Collateral Released. In connection with Borrowers' grant of
security interests in substantially all of Borrowers' personal property and
mortgages and deeds of trust on substantially all of Borrowers' real estate
contemplated by the Credit Agreement, Bank has released the Mortgages, the
Mortgage Confirmations and the Second Mortgages, as well as the security
interests granted by Borrowers in substantially all of each Borrower's personal
property other than Accounts, Inventory and related personal property as
granted by Section 3.1.1 of the Loan Agreement. All references to the
Mortgages, the Mortgage Confirmations and the Second Mortgages in the Loan
Agreement shall have no force or effect after the date hereof.
6. Confirmation and Re-grant of Security Interest in Accounts and
Inventory. Borrowers hereby ratify and confirm the grant of security interest
in and to all of each Borrower's Accounts, Inventory, books and records in
connection therewith, and all proceeds thereof as collateral security
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for Borrowers' joint and several liability for the Indebtedness, and in
consideration of the extension of the Revolving Credit and the release of
certain Collateral, Borrowers hereby re-grant, re-assign and deliver to Bank a
continuing first priority security interest in and lien on all of each
Borrower's right, title and interest in and to the Collateral (as defined in
the Loan Agreement as amended hereby).
7. Added, Amended, and Amended and Restated Definitions. Each of the
following definitions in Section 1.1 of the Loan Agreement is hereby added, or
if the term is already defined in Section 1.1 of the Loan Agreement, the
definition is hereby amended and restated in its entirety as follows:
"Accounts" means all "accounts" (as defined in the UCC) now
owned or hereafter created or acquired by any Borrower including, without
limitation, all of the following now owned or hereafter created or acquired by
any Borrower: (a) accounts receivable, contract rights, book debts, notes,
drafts and other obligations or indebtedness owing to any Borrower that
evidence or arise from the sale, lease or exchange of goods or other property
and/or the performance of services; (b) each Borrower's rights in, to and under
all purchase orders for goods, services or other property sold or to be sold by
such Borrower; (c) each Borrower's rights to any goods, services or other
property represented by any of the foregoing (including returned or repossessed
goods and unpaid sellers' rights of rescission, replevin, reclamation and
rights to stoppage in transit); (d) moneys due to or to become due to any
Borrower under all contracts for the sale, lease or exchange of goods or other
property and/or the performance of services (whether or not yet earned by
performance on the part of such Borrower); and (e) Proceeds of any of the
foregoing and all collateral security and guaranties of any kind given by any
Person with respect to any of the foregoing.
"Adjusted LIBOR" means and refers to the LIBOR.
"Adjusted LIBOR Loans" means Cash Advances under the
Revolving Credit bearing interest at a rate determined with reference to the
Adjusted LIBOR.
"Base Rate Loans" mean applicable portions of the Revolving
Credit bearing interest at a rate determined with reference to the Base Rate.
"Borrowing Base" means the sum of (i) 90% of Borrowers'
Eligible Accounts; plus (ii) the lesser of $1,000,000 and 50% of Eligible
Inventory; less (a) the aggregate amount of all outstanding Cash Advances, and
(b) the face amount of all issued and outstanding Letters of Credit.
"Borrowing Base Certificate" means the certificate in the
form attached hereto as Exhibit A to be delivered by Borrower in accordance
with Section 6.1.1 hereof to assist Bank in the determination of the amount
which may be borrowed under the Revolving Credit.
"Cash Advance" means any advance of cash to any Borrower
under the Revolving
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Credit subject to and in accordance with the provisions of Article 2 hereof.
"Collateral" means all of each Borrower's right, title and
interest in and to the following property, whether now owned or hereafter
acquired, arising, created or reacquired and regardless where located: (i) all
Accounts; (ii) all Inventory; (iii) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data and data
processing software that at any time evidence or contain information relating
to any of the property described in subparts (i) and (ii) above or are
otherwise necessary or helpful in the collection thereof or realization
thereon; (iv) Proceeds of all or any of the property described in subparts (i)
- (iii) above; and (v) any other property of any kind which such Borrower may
hereafter at any time deliver to Bank to secure the obligations of such
Borrower owed to Bank.
"Debt Service" means the sum of (a) for a period of four
consecutive quarters, Interest Expense in respect of such period, plus (b) (i)
for the period commencing April 22, 1999 through June 30, 2000, an amount equal
to one fifteenth (0.0667) of all outstanding funded Debt (excluding
Indebtedness under the Revolving Credit), and (ii) for all times after June 30,
2000, an amount equal to the principal payments on all Debt due and payable
during the next succeeding four quarters (except for any period which includes
the Termination Date under the Credit Agreement, the Obligations (as defined in
the Credit Agreement) due on the Termination Date).
"Debt Service Coverage Ratio" as of last day of any fiscal
quarter means the ratio of Borrowers' EBITDA to Debt Service, both calculated
for the period of four consecutive calendar quarters most recently ended as of
such day.
"EBITDA" means Borrowers' consolidated Net Income for a
period, plus the sum of the following for such period (without duplication and
only to the extent each is deducted from Borrowers' revenues to determine Net
Income): (i) Interest Expense, (ii) taxes, (iii) depreciation, (iv)
amortization, and (v) depletion for such period.
"Eligible Account" means an Account of a Borrower which meets
the following requirements:
(i) The Account arose in the ordinary course of
the business of a Borrower from a bona fide absolute sale of
Goods by such Borrower (and not on consignment, approval or
sale-or-return basis or subject to any other repurchase or
return agreement), or for services performed by such
Borrower, and such Goods have been shipped to the appropriate
account debtor or the account debtor has agreed to accept
invoicing of product while delaying actual shipment, or the
services have actually been performed for the appropriate
account debtor;
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(ii) The Account is based upon an enforceable order
or contract, written or oral, for Goods shipped or services
performed, and the same were shipped or actually performed in
accordance with the order or contract;
(iii) The title of such Borrower to the Account and,
except as to the account debtor, to any Goods is absolute and
is lawfully in such Borrower and subject to no other
assignment, claim, lien or security interest except that of
Bank, and such Borrower has the right of assignment thereof
and the power to grant to Bank a security interest therein;
(iv) The amount shown on the books or records of
such Borrower and on any invoice or statement delivered to
Bank in respect of the Account is owing to such Borrower, and
no partial payment has been made thereon except as shown on
such books and records and disclosed to Lender;
(v) The Account is a valid and enforceable
Account, representing an undisputed indebtedness of an
account debtor to Borrower, is not subject to any claim or
reduction, counterclaim, set-off, recoupment, or any claim
for credits, allowances or adjustments by the account debtor
because of returned, inferior or damaged Goods or
unsatisfactory services, or for any other reason, except for
discounts customarily allowed by such Borrower in the
ordinary course of its business for prompt payment;
(vi) The account debtor has not returned or refused
to retain any of the Goods, the sale of which gave rise to
the Account, or the Account Debtor has not, upon partial
payment of amounts owing to such Borrower, reserved the right
to return any of the Goods, the sale of which gave rise to
the Account;
(vii) The Account has been outstanding not more than
60 days from the invoice date;
(viii) The Account did not arise out of a contract
with, or order from, an Account Debtor that, by its terms,
forbids or makes void or enforceable the assignment by such
Borrower to Bank of the Account arising with respect thereto;
(ix) Such Borrower has received no Instrument (as
defined in the UCC) in payment of the Account, nor any
Chattel Paper with respect to the Goods, the sale of which
gave rise to the Account, and, if any Instrument or Chattel
Paper is at any time received, Borrower will immediately
notify Bank and, at the latter's request, endorse and/or
assign and deliver the same to Bank;
(x) Such Borrower has not received notice of the
death of the account debtor, if a natural person, or a
general partner thereof if such death causes
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dissolution of the account debtor; nor of the dissolution,
termination of existence, insolvency, business failure or
cessation, appointment of a receiver for all or any part of
the property of, assignment for the benefit of creditors by,
or the filing of a petition in bankruptcy or insolvency laws,
now or hereafter enacted, by or against the Account Debtor.
Upon the receipt by such Borrower of any such notice, it will
immediately notify Bank thereof;
(xi) The Account Debtor is not an Affiliate of
Borrower;
(xii) The Account is owing from an Account Debtor
whose principal place of business and office from which its
order was placed is within the United States;
(xiii) The Account is not an account owing from an
Account Debtor which is a government (federal, state or
local) or an agency or instrumentality of a government, or if
the Account is an account owing from an Account Debtor which
is a government (federal, state or local) or an agency or
instrumentality of a government, all requirements necessary
to fully assign all rights with respect to such Account to
Bank have been met or complied with, including the
requirements of the Federal Assignment of Claims Act, if
applicable, and such Account Debtor shall have given all such
consents, permissions or agreements as are necessary to fully
assign, and make payments on, such Account to Lender.
An Account which is at any time an Eligible Account,
but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible
Account.
"Eligible Inventory" shall mean Borrowers' finished inventory
of fully-processed quicklime, hydrated lime, sand, agricultural lime, ag-lime,
aggregate, and pulverized limestone held for sale and other similar products
held for sale, in each case whether held in bulk, bagged or otherwise, but not
including any raw materials or work in process of each Borrower, and not
including any sale subject to sale-or-return, consignment or on approval or
subject to any repurchase or return agreement. Inventory which is at any time
Eligible Inventory, but which subsequently fails to meet any of the foregoing
requirements shall forthwith cease to be Eligible Inventory.
"Interest Rate Option" means the Base Rate or the Adjusted
LIBOR selected by Borrowers as permitted by this Agreement.
"Inventory" means all "inventory" (as defined in the UCC),
now owned or hereafter acquired by any Borrower, wherever located including,
without limitation, finished goods, raw materials, work in process, spare parts
and other materials and supplies (including packaging and shipping materials)
used or consumed in the manufacture or production thereof and goods which are
returned to or repossessed by any Borrower.
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"LIBOR" means the rate per annum for U.S. Dollar deposits for
an Interest Period as reported on Telerate page 3750 as of 11:00 am, London
time, on the second London Business Day before the relevant Interest Period
begins (or if not so reported, then as determined by the Bank from another
recognized source or interbank quotation. LIBOR shall be rounded to the next
highest 1/100th of 1%, or if Borrowers shall have entered into any interest
rate hedging agreement with Bank, LIBOR shall be rounded five decimal places as
set forth in the 1991 ISDA Definitions published by the International Swaps and
Derivatives Association, Inc.
"Loans" mean collectively all Cash Advances under the
Revolving Credit, and a "Loan" means any Cash Advance under the Revolving
Credit.
"Loan Documents" mean this Agreement, as amended and as may
be hereafter amended, the Revolving Credit Note, as amended, restated,
supplemented or otherwise modified, and as hereafter may be amended, restated,
supplemented or otherwise modified, all financing statements filed or in
connection with this Agreement relating to the Collateral, and all certificates
of Borrowers, or any Borrower, delivered pursuant to this Agreement.
"Permitted Liens" means (i) liens for taxes, assessments or
governmental charges or claims which are not overdue or which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, if a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor; (ii) statutory liens
of landlords and liens of carriers, warehousemen, materialmen, repairmen,
suppliers and other like liens incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, if a reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor; (iii) liens (other than any lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with workers'
compensation or unemployment insurance and other types of social security; (iv)
liens incurred or deposits made to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) any judgment lien; provided that, within 45 days after the
entry of the judgment secured thereby, such judgment shall be discharged or
execution thereof shall be stayed pending appeal; and further provided that
such judgment shall be discharged within 60 days after the expiration of any
such stay; (vi) other liens and encumbrances permitted by Section 9.3 of the
Credit Agreement; (vii) liens, security interests and other encumbrances in
favor of Administrative Agent under the Credit Agreement for the benefit of the
Lenders thereunder; and (viii) liens set forth on Schedule 5.1.3 hereto.
"Proceeds" means all "proceeds" (as defined in the UCC) of,
and all other profits, rentals or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or realization upon, any Collateral, including, without limitation, all
claims of any Borrower against third parties for loss of, damage to or
destruction of, or for proceeds
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payable under, or unearned premiums with respect to, policies of insurance with
respect to any Collateral, and any condemnation or requisition payments with
respect to any Collateral, in each case whether now existing or hereafter
arising.
"Revolving Credit Termination Date" means April 21, 2000, or
such later date as may be agreed to in writing by Bank.
"Tangible Net Worth" means the sum of each Borrower's (i)
capital stock, (ii) cumulative retained earnings, (iii) additions to capital,
(iv) capital in excess of par or stated value, and (v) any other account which,
in accordance with GAAP constitutes shareholders equity, less the sum of each
Borrower's (a) treasury stock, and (b) intangible assets carried on the books
of Borrowers.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the Commonwealth of Pennsylvania; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests in any Collateral or the availability
of any remedy hereunder is governed by the Uniform Commercial Code as in effect
on or after the date hereof in any other jurisdiction, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection or availability of such remedy.
8. Revolving Credit Subject to Borrowing Base. Section 2.2.1 of
the Loan Agreement is hereby amended and restated in its entirety as follows:
2.2.1 Revolving Credit. Provided that no Event of Default or
Unmatured Event of Default has occurred and is continuing and subject
to the terms and conditions set forth herein, commencing on the
Closing Date and expiring on the Revolving Credit Termination Date,
Bank shall extend to Borrowers the Revolving Credit, pursuant to which
Bank: (i) shall extend Cash Advances to Borrowers, in amounts not to
exceed $4,000,000 outstanding at any one time, and which, if not
exhausting the unadvanced portion of the Revolving Credit or the
Borrowing Base, shall be at least $50,000 or integral multiples
thereof requested by the Borrowers (within the limits of the Revolving
Credit and the Borrowing Base), which the Borrowers may, from time to
time, repay, and, subject to the terms hereof, reborrow; and (ii)
shall, within the limits of the Revolving Credit, issue Letters of
Credit in the aggregate face amount issued at any one time not to
exceed the sum of $750,000. Borrowers may not reborrow under the
Revolving Credit after the Revolving Credit Termination Date.
9. Revolving Credit Interest Rate. Section 2.2.2 of the Loan
Agreement is hereby amended and restated in its entirety as follows:
2.2.2 Revolving Credit Interest Rate. Cash Advances under the
Revolving Credit
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shall bear interest on the unpaid principal balance thereof from the
Funding Date until paid in full (whether by acceleration or otherwise)
at the sum of (i) the Base Rate or the Adjusted LIBOR on the relevant
Interest Rate Determination Date as selected by Borrowers at the time a
Notice of Borrowing or Notice of Rate Election is given pursuant to
Sections 2.4.1 and 2.4.2 hereof, plus (ii) an additional percentage per
annum determined in reference to Borrowers' Cash Flow Ratio set forth
in the table below:
Revolving Credit Interest Rate
Cash Flow Ratio LIBOR plus Base Rate
Greater than or equal to: But less than: -------------- ----------------
6.0:1 ----- 3.55% plus 1.25%
5.5:1 6.0:1 3.30% plus 1.00%
5.0:1 5.5:1 3.05% plus 0.75%
4.5:1 5.0:1 2.80% plus 0.50%
4.0:1 4.5:1 2.55% plus 0.25%
3.5:1 4.0:1 2.30% plus 0
3.0:1 3.5:1 2.10% plus 0
2.5:1 3.0:1 1.65% plus 0
------- 2.5:1 1.40% minus 0.25%
The Cash Flow Ratio shall be tested quarterly, as of the last
day of each Calendar Quarter, by Borrowers' delivery to Bank
within 30 days after each Calendar Quarter of a completed and
executed Ratio Certificate as of the last day of such
Calendar Quarter on a rolling four Calendar Quarter
historical basis, commencing with the Calendar Quarter ending
June 30, 1999. The applicable interest rate for Cash Advances
under the Revolving Credit shall change with any change in
the Cash Flow Ratio as reported to Bank on a properly
completed and executed Ratio Certificate within 30 days after
the expiration of each Calendar Quarter. Any change in the
Cash Flow Ratio shall change the interest rate applicable to
all outstanding Cash Advances under the Revolving Credit and
shall become effective five business days after Bank's timely
receipt of a properly completed and executed Ratio
Certificate without retroactive effect.
10. Renewal of Revolving Credit. Section 2.2.5 of the Loan
Agreement is hereby amended and restated in its entirety as follows:
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2.2.5 Renewal. Upon being so requested by Borrowers in
writing at least 90 days prior to the Revolving Credit Termination
Date, Bank may, but shall not be obligated to, renew the Revolving
Credit for an additional 364-day period by giving written notice to
Borrowers in the manner set forth in Section 9.3 hereof on or before
60 days prior to the Revolving Credit Termination Date. In the event
Bank fails to provide any notice to Borrowers regarding renewal of the
Revolving Credit, the Revolving Credit Termination Date shall not be
extended and all outstanding Cash Advances under the Revolving Credit
and all interest and Bank's Costs pertaining thereto shall become due
and payable as provided in Section 2.2.3 hereof. In the event that any
Letter of Credit is outstanding on the Revolving Credit Termination
Date which Bank has elected not to renew, Borrowers shall post cash
collateral with Bank in an amount equal to the lesser of (i) the face
amount, or (ii) the aggregate undrawn amount, of all outstanding
Letters of Credit on the Revolving Credit Termination Date.
11. Unused Fee. Section 2.2.8 of the Loan Agreement is hereby
amended and restated in its entirety as follows:
2.2.8 Unused Fee. Borrowers agree to pay to Bank a fee at an
annual rate of one fourth of one percent (.25%) per annum of the
aggregate daily average unused portion of the Revolving Credit from
the Closing Date to the Revolving Credit Termination Date, payable in
arrears on the last day of each Calendar Quarter and on the Revolving
Credit Termination Date.
12. Notice of Borrowing and Notice of Rate Election Replaced.
After the date hereof, Notices of Borrowing and Notices of Rate Election shall
only pertain to Cash Advances under the Revolving Credit. Schedule 2.4.1, the
form of Notice of Borrowing, and Schedule 2.4.2, the form of Notice of Rate
Election, are each hereby amended and restated in the forms attached to this
Second Amendment as Schedule 2.4.1 and Schedule 2.4.2, respectively. The
interest rates applicable to Interest Rate Options selected by Borrowers in a
Notice of Borrowing or Notice of Rate Election shall be determined with
reference to the most recent Ratio Certificate prepared by Borrowers for the
preceding Calendar Quarter.
13. Maximum Available Credit. Section 2.4.13 of the Loan Agreement is
hereby amended and restated in its entirety as follows:
2.4.13 Maximum Available Credit for All Loans.
Notwithstanding anything herein to the contrary, the outstanding
principal balance of all Cash Advances under the Revolving Credit,
including the aggregate face amount of all issued Letters of Credit,
shall not exceed the lesser of (i) $4,000,000, or (ii) the Borrowing
Base then in effect. The maximum available credit under this Agreement
shall not exceed the sum of (a) $4,000,000, plus (b) all interest,
Bank's Costs and any other amount due from Borrowers to Bank hereunder
or pursuant to any other Loan Document.
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14. Mandatory Payments. Section 2.4.14 of the Loan Agreement is
hereby amended and restated in its entirety as follows:
2.4.14 Mandatory Payments. In the event that the principal
amount outstanding under the Revolving Credit shall at any time exceed
$4,000,000, then Borrowers shall immediately repay such excess to
Bank.
15. Monthly Borrowing Base Certificate. The following sentence is
hereby added at the end of Section 6.1.1 of the Loan Agreement:
"Borrowers shall furnish to Bank monthly, within 10 Business
Days after the end of each calendar month, a Borrowing Base
Certificate duly completed and executed by Borrowers'
principal financial and accounting officer, together with an
aging of each Borrower's Accounts and a report of each
Borrower's Inventory amounts;"
16. Financial Covenants.
16.1 After the date hereof, Sections 6.1.13.1 (minimum net
worth), 6.1.13.2 (testing Borrowers' ratio of Total Liabilities to Net Worth),
6.1.13. 3 (testing Borrowers' ratio of Cash Flow to Fixed Obligations),
6.1.13.4 (testing Borrowers' Interest Coverage Ratio) shall have no force or
effect after the date hereof.
16.2 The following sections are hereby added to the Loan
Agreement as Sections 16.1.13.5 and 00.0.00.0:
16.1.13.5 Debt Service Coverage Ratio. As of any fiscal
quarter end, Borrowers shall not permit the Debt Service
Coverage Ratio on such date for the period of four (4)
consecutive fiscal quarters ending on or immediately
prior to such date to be less than 1.10 to 1.0 for all
such four-quarter periods ending on and before December
31, 2001, and 1.20 to 1.0 for all such four-quarter
periods ending on and after March 31, 2002.
16.1.13.6 Tangible Net Worth. Borrowers shall not permit
Tangible Net Worth as of the last day of any fiscal
quarter to be less than the sum of $25,000,000 plus 50%
of Borrowers' cumulative Net Income from January 1, 1999
calculated for each succeeding fiscal quarter through
the last day of such fiscal quarter.
17. Negative Covenants.
17.1 New subparagraph (vii) is hereby added to Section 7.1.1
of the Loan Agreement as follows: "(vii) indebtedness to the Lenders under the
Credit Agreement."
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17.2 New subparagraph (v) is hereby added to Section 7.1.2 of
the Loan Agreement as follows: "(v) liens granted to Administrative Agent for
the benefit of the Lenders under, and liens otherwise permitted by, the Credit
Agreement."
17.3 Section 7.1.4 of the Loan Agreement is hereby amended
and restated in its entirety as follows:
7.1.4 Except (i) as permitted by the Credit Agreement,
(ii) as set forth on Schedule 5.1.15 attached hereto,
and (iii) for miscellaneous employee travel and other
advances and guarantees not to exceed $20,000 in each
case and $100,000 in the aggregate, and as otherwise
permitted under Section 7.1.10, make loans to, invest in
the securities of, or endorse, guaranty, or otherwise
become a surety except in the ordinary course of
business for the payment or performance of any liability
or obligation of, any individual, firm or corporation
other than a Borrower or a subsidiary thereof, except
that Borrowers may invest in Cash Equivalents;
17.4 Section 7.1.5 of the Loan Agreement is hereby amended
and restated in its entirety as follows:
7.1.5 Change the general character of any Borrower's
business from that in which it is currently engaged or
proposes to be engaged; except as permitted by the
Credit Agreement, remove any of such Borrower's tangible
assets with a book value of more than $500,000 that are
now located on such Borrower's Real Estate to a location
other than another parcel of such Borrower's or another
Borrower's Real Estate and any Borrower may, in the
ordinary course of business, cause or permit the removal
of moveable equipment, or equipment in repair or the
like off-premises or otherwise in transit and may have
inventory or equipment in transit or in warehouses;
enter into proceedings in total or partial dissolution;
except as permitted by the Credit Agreement, merge or
consolidate with or into any other corporation, or
permit another corporation to merge into it, or acquire
all or substantially all of the assets or securities of
any other Person; except as permitted by the Credit
Agreement, pay or declare any dividends or distribution
on any of such Borrower's capital stock; except (i) as
permitted by the Credit Agreement, (ii) for dividends
and other distributions payable in stock, and (iii) for
dissolution into, mergers and consolidations with,
acquisitions of assets or securities of, and dividends
and other distributions to, another Borrower or a
subsidiary thereof and except that the Bank will not
unreasonably withhold its consent to any proposed
acquisition in which the consideration and liabilities
assumed does not exceed $250,000;
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17.5 Section 7.1.9 of the Loan Agreement is hereby amended
and restated in its entirety as follows:
7.1.9 Except (i) as permitted by the Credit Agreement,
and (ii) as part of a reasonable overall compensation
structure, enter into any transaction with any officer,
director or shareholder (other than another Borrower) of
any entity comprising a Borrower, or any Affiliate
(other than another Borrower) of any of them, for less
than full value or on terms or conditions not consistent
with transactions in similar circumstances with other
Persons;
17.6 Section 7.1.12 of the Loan Agreement is hereby amended
and restated in its entirety as follows:
7.1.12 Except as permitted by the Credit Agreement,
incur any Operating Lease Expense in excess of $500,000
in any Fiscal Year, unless otherwise consented to in
writing by Bank, which consent shall not be unreasonably
withheld.
18. Representations and Warranties. To induce Bank to enter into
this Second Amendment, Borrowers jointly and severally represent and warrant to
Bank as follows:
18.1 After giving effect to the modifications contained
herein, all representations, warranties and covenants made by Borrowers to Bank
in the Loan Agreement (except those relating to a specific date) are true and
correct in all material respects as of the date hereof, with the same force and
effect as though made as of the date hereof;
18.2 No Event of Default or Unmatured Event of Default has
occurred and is continuing under the Loan Agreement as of the date hereof;
18.3 Each Borrower is a corporation validly subsisting under
the laws of the state of its incorporation; the execution, delivery and
performance of this Second Amendment and any other documents and instruments
executed and delivered to Bank in connection herewith (i) are within each
Borrower's corporate powers, (ii) have been duly authorized by each Borrower's
Board of Directors, (iii) do not contravene any provision of law or any
indenture, agreement or undertaking to which any Borrower is a party or is
otherwise bound, any Borrower's Certificate of Incorporation, bylaws, or any
resolution of the Board of Directors of any Borrower, and (iv) require no
consent or approval of any governmental authority or any third party; and
18.4 This Second Amendment and any other documents and
instruments executed and delivered to Bank in connection herewith have been
validly executed and are enforceable against the Borrower or Borrowers party
thereto in accordance with their respective terms.
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Any failure of any of the representations and warranties made by Borrowers in
this Second Amendment to be true and correct in all material respects when made
shall constitute an Event of Default under the Loan Agreement.
19. Conditions Precedent. The effectiveness of this Second
Amendment, and the performance by Bank of its obligations described herein, are
subject to the conditions precedent that Bank shall have received, in form and
substance satisfactory to Bank:
19.1 a completed and executed Ratio Certificate for the
Calendar Quarter ended March 31, 1999;
19.2 resolutions of the Boards of Directors of each Borrower
authorizing the execution, delivery and performance of this Second Amendment,
and the other documents and instruments executed and delivered to Bank in
connection herewith, certified by such Borrower's Secretary that the same are
true and complete copies of the originals thereof and remain in full force and
effect, not having been modified or rescinded;
19.3 UCC-3 Amendment Statements listing each Borrower as
debtor and Bank as secured party to amend the description of the Collateral;
and.
19.4 a completed and executed Borrowing Base Certificate for
the month ended April 30, 1999.
20. Miscellaneous.
20.1 Entire Agreement. The Loan Agreement, as amended by this
Second Amendment, and the other Loan Documents, embody the entire agreement and
understanding between Bank and Borrowers. The Loan Agreement, together with
this Second Amendment, and all documents executed and delivered herewith,
supersede all prior agreements and understandings relating to subject matter
hereof. This Second Amendment together with the Loan Agreement, and the
documents executed and delivered in connection herewith and therewith shall be
construed as one agreement, and in the event of any inconsistency, the
provisions of any promissory note evidencing a portion of the Indebtedness
shall control over the provisions of this Second Amendment.
20.2 Working Capital Facility. The parties mutually
acknowledge that the Loan Agreement as amended by this Second Amendment
constitutes the "Working Capital Facility" for purposes of the Credit
Agreement.
20.3 Counterparts. This Second Amendment may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken
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together, shall constitute but one and the same agreement. This Second
Amendment shall be effective upon the execution and delivery of a counterpart
hereof by each of the parties hereto.
20.4 Captions. The captions or headings in this Second
Amendment are for convenience of reference only and in no way define, limit, or
describe the scope or intent of any provision of this Second Amendment.
20.5 Successors and Assigns; Governing Law. This Second
Amendment shall be binding upon and inure to the benefit of the respective
parties hereto and their successors and assigns and shall be governed by, and
construed and enforced in accordance with, the internal laws of the
Commonwealth of Pennsylvania without regard to its principles of conflicts of
laws.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have executed this Second
Amendment as of the day and year first written above.
BANK:
FIRST UNION NATIONAL BANK
(successor to CoreStates Bank, N.A.)
By:
-------------------------------
XXXXXXXX X. XXXXXX,
Vice President
BORROWERS:
UNITED STATES LIME & MINERALS,
INC.
Attest:
By: By:
------------------------------- -------------------------------
Xxxxx X. Ohms, Controller, Xxxxxxx G. A. Xxxxxx, President and
Secretary, and Treasurer Chief Executive Officer
TEXAS LIME COMPANY
By: By:
------------------------------- -------------------------------
Xxxxx X. Ohms, Controller, Xxxxxxx G. A. Xxxxxx, President
Secretary and Treasurer
ARKANSAS LIME COMPANY
By: By:
------------------------------- -------------------------------
Xxxxx X. Ohms, Controller, Xxxxxxx G. A. Xxxxxx, President
Secretary and Treasurer
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