AMENDMENT NO, 3 TO CREDIT AGREEMENT
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THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT (this "Amendment Agreement")
is made and entered into effective as of the day of July, 1999, by and among
XXXXXX INDUSTRIES, INC., a Tennessee corporation ("Xxxxxx"), and XXXXXX
INDUSTRIES TOWING EQUIPMENT INC., a Delaware corporation and wholly owned
subsidiary of Xxxxxx ("Xxxxxx Towing") (Xxxxxx and Xxxxxx Towing may be referred
to herein individually as a "Borrower" and together as the "Borrowers"), EACH OF
THE GUARANTORS SIGNATORY HERETO (the "Guarantors"), BANK OF AMERICA, N.A. D/B/A
NATIONSBANK, N.A. SUCCESSOR TO NATIONSBANK, N.A., a national banking association
organized and existing under the laws of the United States, as agent ("Agent")
for the Lenders under the Credit Agreement (as defined below), and the Lenders
signatory hereto. Unless the context otherwise requires, all terms used herein
without definition shall have the definitions provided therefor in the Credit
Agreement.
W I T N E S S E T H:
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WHEREAS, the Agent, the Lenders and the Borrowers have entered into
that certain Credit Agreement dated as of January 30, 1998, as amended by
Amendment No. 1 to Credit Agreement dated as of January 31, 1998 and by
Amendment No. 2 to Credit Agreement dated as of October 30, 1998 (as hereby and
from time to time amended, supplemented or replaced, the "Credit Agreement"),
pursuant to which the Lenders have agreed to make and have made available to the
Borrowers a revolving credit facility with a letter of credit sublimit and a
swing line sublimit; and
WHEREAS, the Borrowers have requested that the Agent and the Lenders
make certain modifications to the Credit Agreement;
WHEREAS, the Agent and the Lenders have agreed to such modifications
pursuant to the terms and conditions set forth herein;
WHEREAS, the parties hereto desire to amend the Credit Agreement in the
manner herein set forth effective as of the date hereof;
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. The term "Credit Agreement" or "Agreement" (as the case
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may be) as used herein and in the Loan Documents shall mean the Credit Agreement
as hereby amended and modified, and as further amended, modified or supplemented
from time to time as permitted thereby. The term "Lender" as used herein and in
the Loan Documents shall include each of the financial institutions signatory
hereto as a Lender. The term "BAS" as used herein shall mean Banc of America
Securities, LLC, successor to NationsBanc Xxxxxxxxxx Securities, LLC.
2. Amendments. Subject to the conditions hereof, the Credit Agreement
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is hereby amended, effective as of the date hereof, as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by amending
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and restating the following definitions as follows:
"'Consolidated Fixed Charge Ratio' means, with respect to
Xxxxxx and its Subsidiaries for any Four-Quarter Period ending on the
date of computation thereof, the ratio of (i) Consolidated EBITDA plus,
(W) to the extent deducted in arriving at Consolidated EBITDA, lease,
rental and all other payments made in respect of or in connection with
operating leases, plus (X) for the fiscal quarter of Xxxxxx ending July
31, 1999, the lesser of (i) the amount of the income tax refund due
Xxxxxx for its fiscal year ending April 30, 1999 to be requested in its
filing with the Internal Revenue Service for the year ended April 30,
1999 (but not to exceed $7,000,000) or (ii) the actual amount of such
refund received, (provided, however, that to avoid duplication of such
sum, it shall not otherwise be included in the calculation of the
Consolidated Fixed Charge Ratio upon actual payment of such refund,) I=
(Y) (without duplication) Capital Expenditures for such period, 1= (Z)
(without duplication) income taxes paid in cash during such period, to
(ii) Consolidated Fixed Charges, in each case during such Four-Quarter
Period."
"'Consolidated EBITDA' means, with respect to Xxxxxx and its
Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, (A) the gum of, without duplication, (i)
---
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
taxes on income, (iv) amortization, (v) depreciation and (vi)
nonrecurring noncash restructuring charges of not in excess of
$10,000,000, minus (B) the sum of, without duplication, (a) net gains
----- ---
on the sale, conversion or other disposition of capital assets (other
than net gains on the sale, conversion or other disposition of used
trucks in the towing services division in the ordinary course of
business consistent with past practice), (b) net gains on the
acquisition, retirement, sale or other disposition of capital stock and
other securities of Xxxxxx or its Subsidiaries, (c) net gains on the
collection of proceeds of life insurance policies, (d) any write-up of
any asset other than as permitted in accordance with Statement No. 16
of the Financial Accounting Standards Board, and (e) any other net gain
or credit of an extraordinary nature as determined in accordance with
GAAP applied on a Consistent Basis; provided, however, that for each of
the first four fiscal quarters following any Acquisition, the
calculation of Consolidated EBITDA for each Four-Quarter Period ending
on the last day of each such fiscal quarter shall include the
historical financial performance of the acquired business for that
portion of such Four-Quarter Period occurring prior to such
Acquisition, to the extent that such Acquisition has not otherwise been
reflected in Xxxxxx'x consolidated financial statements."
"'Consolidated Shareholders' Equity' means, as of any date on
which the amount thereof is to be determined, the sum of the following
in respect of Xxxxxx and its Subsidiaries (determined on a
consolidated basis): (i) the amount of issued and outstanding share
capital, plus (ii) the amount of additional paid-in capital and
retained earnings (or, in the case of a deficit, minus the amount of
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such deficit), plus
----
(iii) the amount of any foreign currency translation adjustment (if
positive, or, if negative, minus the amount of such translation
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adjustment), plus (iv) the amount of actual non-recurring noncash
----
restructuring charges incurred since October 31, 1997, in an aggregate
amount not to exceed $10,000,000, minus (v) the amount of any treasury
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stock, all as determined in accordance with GAAP applied on a
Consistent Basis."
"'Security Instruments' means the Pledge Agreement, the
Collateral Assignment of Partnership Interests, the Negative Pledge
Agreement, the LC Account Agreement, the Security Agreement, the
Intellectual Property Security Agreement, the Mortgages, the Assignment
of Leases and all other documents and agreements executed and delivered
in connection herewith granting to the Lenders Liens on any assets of
the Borrowers, any Guarantor, or any other Person collaterally to
secure payment and performance of the Obligations and the Guarantors'
Obligations under the Guaranty."
(b) Section 1.1 of the Credit Agreement is hereby amended by adding
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the following definitions to appear in their appropriate order:
"'Assignment of Leases' means the Assignment of Lessee's
Interest in Leases by the Borrowers and the Guarantors to the Agent
delivered pursuant to the terms hereof, including Sections 8.19 or 8.24
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hereof, as hereinafter modified, amended or supplemented from time to
time."
"'BAS' means Banc of America Securities, LLC, successor to
NationsBanc Xxxxxxxxxx Securities, LLC."
"'Intellectual Property Security Agreement' means the
Intellectual Property Security Agreement dated as of July _, 1999 by
the Borrowers and the Guarantors to the Agent, and any additional
Intellectual Property Security Agreements by the Borrowers and the
Guarantors to the Agent delivered pursuant to Section 8.19 hereof, as
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hereafter modified, amended or supplemented from time to time."
"'Mortgages' means, collectively, all Mortgages, Deeds of
Trust and Deeds to Secure Debt or other comparable instrument granting
a Lien to the Agent (or a trustee for the benefit of the Agent) for the
benefit of the Lenders in Collateral constituting real property and
fixtures, as such documents may be amended, modified or supplemented
from time to time."
"'Security Agreement' means, collectively (or individually as
the context may indicate), (i) the Security Agreement dated as of July
__, 1999 by the Borrowers and Guarantors to the Agent, and (ii) any
additional Security Agreement delivered to the Agent pursuant to the
terms hereof, including Section 8.19, as hereafter modified, amended or
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supplemented from time to time."
(c) Section 8.19 of the Credit Agreement is hereby amended by deleting such
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section in its entirety and inserting in lieu thereof the following:
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"Additional Support Documents"
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(a) Within fifteen (15) days after the end of each fiscal quarter, with
respect to each Domestic Subsidiary acquired or created during such fiscal
quarter cause to be delivered to the Agent for the benefit of the Lenders each
of the following:
(i) a Guaranty executed by each such Domestic Subsidiary substantially
in the form of Exhibit F hereto;
(ii) a Security Agreement of such Domestic Subsidiary substantially
similar to the Security Agreement delivered by the existing Domestic
Subsidiaries, together with such Uniform Commercial Code financing
statements on Form UCC-1 or otherwise duly executed by such Domestic
Subsidiary as "Debtor" and naming the Agent for the benefit of the Agent
and the Lenders as "Secured Party," in form, substance and number
sufficient in the reasonable opinion of the Agent and its special counsel
to be filed in all Uniform Commercial Code filing offices in all
jurisdictions in which filing is necessary or advisable to perfect in favor
of the Agent for the benefit of the Agent and the Lenders the Lien on
Collateral conferred under such Security Instrument to the extent such Lien
may be perfected by Uniform Commercial Code filing;
(iii) a Negative Pledge Agreement executed by each such Domestic
Subsidiary substantially in the form of Exhibit I hereto;
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(iv) a Pledge Agreement executed by each such Domestic Subsidiary's
stockholders substantially in the form of Exhibit K-1 or K-2 hereto, as
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applicable, pledging 100% (or such lesser percentage as such Person shall
own of any Partially-Owned Subsidiary) of the capital stock and related
interests and rights of such Domestic Subsidiary, or other comparable
instrument pledging or assigning to the Agent for the benefit of the
Lenders all of the equity, membership or partnership interest of such
Domestic Subsidiary;
(v) stock certificates representing 100% of the capital stock and
related interests and rights of each such Domestic Subsidiary, or other
appropriate evidence of ownership of 100% of the equity, membership or
partnership interest of each such Domestic Subsidiary, in each case
together with duly executed stock powers or powers of assignment in blank
affixed thereto, or in the case that any such Domestic Subsidiary is a
partnership or other entity that has not issued certificates evidencing
ownership of such partnership or other entity, the Collateral Assignment of
Interests and Certificate and Receipt of Registrar of such entity with
respect to the registration of the Lien on Assigned Interests so long as
such assignment is not prohibited by the Governing Documents of such
entity;
(vi) an opinion of counsel to each such Domestic Subsidiary dated as
of the date of delivery of the Guaranty, Security Agreement and other Loan
Documents provided for in this Section 8.19(a) and addressed to the Agent
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and the Lenders, in form and substance substantially identical to the
opinion of counsel delivered pursuant to Section 6.1 (a)(ii) on the Closing
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Date (including opinions covering the Security Agreement and the validity
and perfection of the liens created thereunder), with respect to each Loan
Party which is party to any Loan Document which such newly acquired or
created Subsidiary is required to deliver or cause to be delivered pursuant
to this Section 8,19(a);
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(vii) current copies of the Organizational Documents and Operating
Documents of each such Domestic Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if required by
such Organizational Documents or Operating Documents, of the shareholders)
of such Domestic Subsidiary authorizing the actions and the execution and
delivery of documents described in this Section 8.19(a); and
(viii) such other documents and agreements as may be reasonably
requested by the Agent.
(b) Within forty-five (45) days after the acquisition or creation of any
Direct Foreign Subsidiary, cause to be delivered to the Agent for the benefit of
the Lenders each of the following:
(i) a Pledge Agreement executed by such Direct Foreign Subsidiary's
stockholders in such form reasonably acceptable to the Agent, pledging 65%
(or such lesser percentage as such Person shall own) of the Voting Stock of
such Direct Foreign Subsidiary, or other comparable instrument pledging or
assigning to the Agent for the benefit of the Lenders comparable
percentages of the voting and non-voting stock of such Direct Foreign
Subsidiary;
(ii) to the extent that such Direct Foreign Subsidiary constitutes a
Material Foreign Subsidiary, an opinion of foreign counsel to such Domestic
Subsidiary dated as of the date of delivery of the Pledge Agreement or
other comparable instrument provided for in this Section 8.19(b) and
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addressed to the Agent and the Lenders, in form and substance acceptable to
the Agent, with respect to each Loan Party which is party to any Loan
Document which such newly acquired or created Direct Foreign Subsidiary is
required to deliver or cause to be delivered pursuant to this Section
8.19(b); and
----
(iii) such other documents and agreements as may be reasonably
requested by the Agent."
(d) A new Section 8.24 of the Credit Agreement is hereby added as follows:
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"8.24 Certificate of Title Property and Other Collateral. (a)
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With respect to all property owned by a Borrower or Subsidiary which is
a motor vehicle or other good which is (i) covered by a certificate of
title issued under a statute of a state under the law of which
indication of a security interest on the certificate is required as a
condition of perfection and (ii) not subject to a purchase money Lien
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in favor of another creditor which is permitted by Section 9.3 hereof
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(collectively, "Certificate of Title Property"), within thirty (30)
days following a request by the Agent following (i) the occurrence of a
Default or (ii) a determination by the Agent after completion of the
field audit described in Section 8.25 or after any fiscal quarter end
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that the liquidation value of Collateral (applying loan value margins
specified on Schedule 8-24) consisting of accounts receivable,
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inventory and property, plant and equipment located in the United
States and which is covered by a security interest or lien in favor of
the Agent for the benefit of the Lenders results in a loan to value
ratio (based on the percentage which the principal balance of
outstanding at the date of calculation bears to the aggregate
liquidation value of all such Collateral at such time as determined by
Agent) in excess of 95% (any event described in (i) or (ii) herein
called an "Additional Collateral Event"), the Borrowers will execute
and deliver, and will cause each Subsidiary which is a party to a
Security Agreement to execute and deliver, to the Agent the original
certificates of title or other comparable instrument for such property,
together with a fully executed application for notation of a security
interest or other comparable form and such other certificates,
agreements, notices or other items as the Agent may deem necessary to
perfect liens on such property. The Borrowers will pay all filing fees,
taxes and other amounts which are payable to perfect the liens on such
property. The Borrowers agree that upon the occurrence of an Additional
Collateral Event, the Agent shall be entitled to have an agent or
trustee administer and manage the certificates of title or other
comparable documents on behalf of the Agent and that all fees and
expenses in connection therewith shall be paid by the Borrowers.
(b) Additionally, within thirty (30) days following request by
the Agent after the occurrence of an Additional Collateral Event, the
Borrowers will execute and deliver, and will cause each applicable
Subsidiary to execute and deliver (i) a Mortgage on all real property
and fixtures owned by such entities not already covered by a Mortgage,
along with title insurance policies, surveys, environmental reports and
legal opinions meeting the requirements set forth in Section 8.25, (ii)
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a Collateral Assignment of Leases with respect to all real property
owned by a Borrower or Guarantor and leased to others and all real
property not owned by a Borrower or Guarantor and leased to a Borrower
or Guarantor together with, on a best efforts basis by Borrowers and
Guarantors, a Landlord Consent, Waiver and Estoppel Certificate
executed by each landlord or tenant as applicable and (iii) local
counsel opinions covering perfection of liens in jurisdictions in which
the Agent deems necessary."
(e) Section 8.25 of the Credit Agreement is hereby added as follows:
"Additional Collateral Documents; Audit. (a) The Borrowers agree that
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by August 27, 1999, each will deliver, and will cause each Guarantor to
deliver, the following:
(i) Mortgages, Deeds of Trust or other similar
documentation necessary to grant to the Agent for the
benefit of the Agent and the Lenders a lien on the
real property owned by each Borrower and each
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Guarantor (collectively, the "Mortgages") described
below (subject only to existing liens approved by the
Agent):
(A) Ooltewah, Tennessee real property owned by
__________
(B) Greeneville, Tennessee real property owned by
________
(C) Hermitage, Pennsylvania real property owned by
_______
(D) Xxxxxx, Pennsylvania real property owned by
__________
(ii) Mortgagee title insurance policies from a title
insurance company satisfactory to the Agent covering
the Mortgages, in each case indicating the liens of
the Mortgages are a first lien priority (subject only
to existing liens approved by the Agent), containing
no exceptions to coverage not acceptable to the Agent
and providing a revolving credit endorsement and
other endorsements required by Agent for such policy;
(iii) Surveys for each of the properties covered by the
Mortgages in form and substance satisfactory to the
Agent as well as a certification as to whether the
location of each property is within any "special
flood hazard" area within the meaning of the Federal
Flood Disaster Protection Act of 1973.
(iv) Collateral Assignment of Lease covering the Road One
Headquarters located at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxx covered by the Lease Agreement
dated August 6, 1997 between Xxxxxxx Limited
Partnership, as landlord, and Road One, Inc., as
lessee, together with, on a best efforts basis, a
Landlord Consent, Waiver and Estoppel Certificate
executed by the landlord satisfactory to Agent.
(v) With respect to each leased location on which an
amount of inventory (other than motor vehicles) and
equipment (other than motor vehicles) in an amount
deemed material by the Agent is located, deliver, on
a best efforts basis, a Landlord Consent, Waiver and
Estoppel Certificates regarding each such location.
(vi) Environmental Reports on all real property covered by
a Mortgage from an environmental firm satisfactory to
Agent showing no environmental hazards with respect
to such real property.
(vii) Legal opinions from Georgia, Pennsylvania and
Tennessee counsel for the Borrowers with respect to
the documents executed and delivered under this
Section 8.25 and the perfection of the liens created
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thereby in form and substance satisfactory to the
Agent.
(viii) Insurance policies and Certificates of Insurance
evidencing compliance by the Borrowers with the
insurance requirements of this Agreement and the
Security Instruments.
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(ix) UCC-11 search reports no older than thirty (30) days
from the appropriate UCC filing office in the states
where the Borrowers and Guarantors are doing business
showing no liens or security interests on any assets
of the Borrowers or Guarantors other than Permitted
Liens.
(b) The Borrowers agree that the Agent and its representatives
may undertake a field audit on the inventory and accounts receivable
of the Borrowers and the Guarantors and that the costs and expenses of
this audit shall be paid by the Borrowers. The Borrowers agree to
cooperate with the Agent and its representatives to facilitate
completion of the audit by August 31, 1999."
(f) Section 9.1 of the Credit Agreement is hereby amended by deleting
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existing clauses (b), (c) and (d) appearing therein and inserting in lieu
thereof the following clauses (b), (c) and (d) which shall read in their
entirety as follows:
"9.1 Financial Covenants.
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(b) Consolidated Funded Senior Indebtedness to Consolidated
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EBITDA. Permit at any time during the respective periods set forth
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below the ratio of Consolidated Funded Senior Indebtedness to
Consolidated EBITDA for the FourQuarter Period most recently ended to
be greater than that set forth opposite each such period:
Consolidated Funded Senior
Indebtedness To Consolidated
Four Quarter Periods Ending EBITDA Must Not Be Greater Than:
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Prior to and including 1/31/2000 4.25 to 1.00
During period 2/1/2000 and 3.00 to 1.00
thereafter
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(c) Consolidated Funded Total Indebtedness to Consolidated
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EBITDA. Permit at any time during the respective periods set forth
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below the ratio of Consolidated Funded Total Indebtedness to
Consolidated EBITDA for the Four-Quarter Period most recently ended to
be greater than that set forth opposite each such period:
Consolidated Funded Senior
Four Quarter Indebtedness To Consolidated
Periods Ending EBITDA Must Not Be Greater Than:
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Prior to and including 1/31/2000 4.25 to 1.00
During period 2/1/2000 and 3.00 to 1.00
thereafter
* provided that, in the event the ratio of Consolidated Funded Total
Indebtedness to Consolidated EBITDA is less than 3.5 to 1.0 for two consecutive
fiscal quarters following the fiscal quarter ended April 30, 1999, then the
stated ratio of 4.25 to 1.00 shall be automatically reduced to 3.5 to 1.0 if
requested by Borrowers by written notice to the Agent.
(d) Consolidated Fixed Charge Ratio. Permit at any time during
the respective periods set forth below the Consolidated Fixed Charge
Ratio to be less than that set forth opposite each such period:
Consolidated Funded Senior
Indebtedness To Consolidated
Four Quarter Periods Ending EBITDA Must Not Be Greater Than:
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Prior to and including 1/31/2000 4.25 to 1.00
During period 2/1/2000 and thereafter 3.00 to 1.00
(g) Section 9.2 of the Credit Agreement is hereby amended by deleting
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such section in its entirety and inserting in lieu thereof the following:
"Acquisitions. Enter into any agreement, contract, binding
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commitment or other arrangement providing for, or otherwise effect,
any Acquisition, or take any action to solicit the tender of
securities or proxies in respect thereof in order to effect any
Acquisition unless approved in writing by the Required Lenders;
provided, however , that the prior written consent of the Required
Lender shall not be required and Xxxxxx or any Subsidiary may enter
into any such agreement for, and effect, one or more Permitted
Acquisitions if (x) the Cost of Acquisition for such Permitted
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Acquisitions, in the aggregate, does not exceed $50,000,000 in any
Fiscal Year and (y) (i) the ratio of Consolidated Funded Total
Indebtedness to Consolidated EBITDA is less than 3.50 to 1.00 for two
consecutive fiscal quarters of Xxxxxx and its Subsidiaries occurring
after the fiscal quarter ended April 30, 1999, (ii) the required ratio
of Consolidated Funded Total Indebtedness to Consolidated EBITDA has
been reduced pursuant to Section 9.1(c) to 3.50 to 1.00 and (iii) the
Borrowers have provided to the Agent projections reasonably
satisfactory to the Agent indicating that the provisions of Section 9.
1 (c) will not be violated on an going forward basis through the
Stated Termination Date."
(h) Exhibit M to the Credit Agreement is hereby amended and
restated in its entirety as set forth on Annex I attached hereto and
incorporated herein by reference.
(i) Schedule 8.24, in the form of Schedule 8.24 attached hereto,
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is made a part of the Credit Agreement.
3. Applicable Margin; Commitment Fee Rate. The Applicable Margin for
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Eurodollar Rate Loans and Base Rate Loans to be in effect as of July 27, 1999
through the Compliance Date which includes the January 31, 2000 reporting period
(the "January 31, 2000 Compliance Date") shall be 2.50% and 1.25%, respectively.
The current Commitment Fee Rate to be in effect as of July 27,1999 through the
January 31, 2000 Compliance Date shall be 0.50%. After the January 31,2000
Compliance Date, the Applicable Margin and Commitment Fee Rate shall return to
determination pursuant to the existing definitions in the Credit Agreement.
4. Guarantors. Each Guarantor hereby (i) consents and agrees to the
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amendments to the Credit Agreement set forth herein and (ii) confirms its joint
and several guarantee of payment of all the Guarantors' Obligations pursuant to
the Guaranty.
5. Representations and Warranties. Each of the Borrowers hereby certifies
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that:
(a) The representations and warranties made by the Borrowers in
Article VII of the Credit Agreement are true and correct in all material
respects on and as of the date hereof, with the same effect as though such
representations and warranties were made on the date hereof, except that
the financial statements referred to in Section 7.6(a) shall be those most
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recently furnished to each Lender pursuant to Sections 8.1 (a) and (b) of
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the Credit Agreement.
(b) The Borrowers and each Subsidiary have the power and authority to
execute and perform this Amendment Agreement and have taken all action
required for the lawful execution, delivery and performance thereof.
(c) There has been no material adverse change in the business,
properties, prospects, operations or condition, financial or otherwise, of
Xxxxxx and its Subsidiaries since the date of the most recent financial
reports of Xxxxxx received by each Lender under Section 8.1 of the
Agreement; and
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(d) No event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, will constitute a
Default or an Event of Default on the part of the Borrowers under the
Credit Agreement or any other Loan Document either immediately or with the
lapse of time or the giving of notice, or both.
6. Conditions to Effectiveness. This Amendment shall not be effective until
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the Agent has received to its satisfaction each of the following:
(a) ten (10) counterparts of this Amendment Agreement executed by the
Borrower, the Guarantors, the Agent and the Lenders;
(b) ten (10) counterparts of the Security Agreement by and among the
Borrowers, the Guarantors and the Agent;
(c) UCC-1 financing statements executed by each Borrower and each
Guarantor in form and number to perfect the security interests in the
Collateral granted pursuant to the Security Instruments;
(d) ten (10) counterparts of the Intellectual Property Security
Agreement by the Borrowers and the Guarantors to the Agent;
(e) legal opinion of counsel to the Borrowers and Guarantors in form
and content satisfactory to the Agent;
(f) corporate resolutions of the Borrowers and Guarantors with respect
to the transactions contemplated hereby;
(g) with respect to each "new" Guarantor, fully executed copies of the
following:
(i) Guaranty Agreement
(ii) Security Agreement
(iii) Negative Pledge Agreement
(iv) Stock Pledge Agreement
(v) Stock Certificate
(vi) Stock Power
(vii) Secretary's Certificate
(viii) Intellectual Property Security Agreement
(h) evidence satisfactory to the Agent that all Subsidiaries of the
Borrowers have executed all documentation required pursuant to the terms of
the Credit Agreement and the other Loan Documents, including without
limitation such documents and instruments as may be required pursuant to
Section 8.19 of the Credit Agreement;
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(i) copies of all letters of intent for acquisitions executed by the
Borrowers or any Guarantor as to which the acquisitions contemplated
thereby have not occurred;
(j) evidence satisfactory to the Agent that all Persons party to the
Pledge Agreement have executed this Amendment Agreement;
(k) evidence of payment by Borrowers of all fees owing to Agent and
BAS (including reasonable fees and expenses of their counsel, recording
fees, and fees resulting from the fee letter), and payment by Borrowers to
any consenting Lender of an amendment fee of fifteen (15) basis points on
the Total Revolving Credit Commitment allocable to such Lender.
(1) such other documents, instruments and certificates as reasonably
requested by the Agent.
7. Default Waiver. The Agent and the Lenders hereby waive any Default or
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Event of Default resulting from any violation by the Borrowers of Sections 9.1
(b), (c) and (d) of the Credit Agreement for the reporting period of the
Borrowers ended April 30, 1999. This waiver shall be a one-time waiver covering
the period ended April 30, 1999 and shall in no way serve to waive any
obligations of the Borrowers other than as expressly set forth above.
8. Entire Agreement. This Amendment Agreement sets forth the entire
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understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, condition, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and not one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that, except
as otherwise expressly stated herein, no representations, warranties or
commitments, express or implied, have been made by any party to the other. None
of the terms or conditions of this Amendment Agreement may be changed, modified,
waived or canceled orally or otherwise, except by writing, signed by all the
parties hereto, specifying such change, modification, waiver or cancellation of
such terms or conditions, or of any preceding or succeeding breach thereof.
9. Full Force and Effect of Agreement. Except as hereby specifically
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amended, modified or supplemented, the Credit Agreement and all of the other
Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms. Without
limiting the foregoing all Security Instruments shall continue to secure all
Obligations, as increased hereby, including without limitation the $175,000,000
of principal evidenced by the promissory notes in such aggregate amount
delivered by the Borrowers in favor of the Lenders (including without limitation
the promissory notes delivered in connection with the Assignment), which notes
shall constitute "Notes" for all purposes under the Credit Agreement and the
other Loan Documents.
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10. Counterparts. This Amendment Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
11. Governing Law. This Agreement shall in all respects be governed by, and
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construed in accordance with, the laws of the State of Georgia.
12. Enforceability. Should any one or more of the provisions of this
--------------
Amendment Agreement be determined to be illegal or unenforceable as to one or
more of the parties hereto, all other provisions nevertheless shall remain
effective and binding on the parties hereto.
13. Credit Agreement. All references in any of the Loan Documents to the
----------------
"Credit Agreement" shall mean the Credit Agreement as amended hereby.
14. Successors and Assigns. This Amendment Agreement shall be binding upon
----------------------
and inure to the benefit of each of the Borrowers, the Lenders and the Agent and
their respective successors, assigns and legal representatives; provided,
however, that the Borrowers, without the prior consent of the Agent, may not
assign any rights, powers, duties or obligations hereunder.
15. Expenses. The Borrowers agree to pay to the Agent all reasonable costs
--------
and expenses (including without limitation legal fees and expenses) incurred or
arising in connection with the negotiation and preparation of this Amendment
Agreement.
16. Lenders. Each of the financial institutions signatory hereto as a
-------
Lender (and each other financial institution which may hereafter execute and
deliver an instrument of assignment pursuant to Section 12. 1 of the Credit
Agreement ) shall be deemed a "Lender" and party to the Credit Agreement and
other Loan Documents and shall be entitled to all rights and benefits described
therein, be bound by the provisions thereof and perform all obligations as a
Lender thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
Credit Agreement to be duly executed by their duly authorized officers, all as
of the day and year first above written.
[SIGNATURE PAGES FOLLOW]
13
BORROWERS:
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
XXXXXX INDUSTRIES TOWING EQUIPMENT INC.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Vice President
AMENDMENT NO. 3 TO CREDIT AGREEMENT
SIGNATURE PAGE 1 OF 6
GUARANTORS:
----------
XXXXXXXX WRECKER SERVICE, INC.
A-EXCELLENCE TOWING CO.
ALL AMERICAN TOWING SERVICES, INC.
ALLIED GARDENS TOWING, INC.
ALLIED TOWING AND RECOVERY, INC.
ALTAMONTE TOWING, INC.
XXXXXXXX TOWING SERVICE, INC.
APACO, INC.
APPLE TOWING CO., INC.
ARROW WRECKER SERVICE, INC.
A TO Z ENTERPRISES, INC.
B&B ASSOCIATED INDUSTRIES, INC.
B-G TOWING, INC.
BEAR TRANSPORTATION, INC.
XXXXX TOWING & RECOVERY, INC.
BERT'S TOWING RECOVERY CORPORATION
XXXX XXXXXXX TOWING CO.
XXX XXXXX SERVICES, INC.
BOB'S AUTO SERVICE, INC.
XXX XXXXXXX AND SONS WRECKER SERVICE, INC.
BOULEVARD & TRUMBULL TOWING, INC.
XXXXXX'X, INC.
BRYRICH CORPORATION
C&L TOWING SERVICES, INC.
CAL WEST TOWING, INC.
CEDAR BLUFF 24 HOUR TOWING, INC.
CENTURY HOLDINGS, INC.
CHAD'S, INC.
CHAMPION CARRIER CORPORATION CHEVRON, INC.
CHICAGO METRO SERVICES, INC.
XXXXXXXX XXXXXXX AUTOMOTIVE SERVICE, INC.
CLEVELAND VEHICLE DETENTION CENTER, INC.
XXXXXXX'X TOWING & RECOVERY, INC.
DALLAS VEHICLE RECOVERY, INC.
DICK'S TOWING & ROAD SERVICE, INC.
DOLLAR ENTERPRISES, INC.
DON'S TOWING, INC.
DUN-RITE TOWING, INC.
AMENDMENT NO. 3 TO CREDIT AGREEMENT
SIGNATURE PAGE 2 OF 6
DURU, INC.
E.B.T., INC.
EXPORT ENTERPRISES, INC.
GARY'S TOWING & SALVAGE POOL, INC
GOLDEN WEST TOWING EQUIPMENT, INC. GOOD
MECHANIC AUTO CO. OF RICHFIELD, INC.
GREAT AMERICA TOWING, INC.
GREG'S TOWING, INC.
H&H TOWING ENTERPRISES, INC.
HALL'S TOWING SERVICE, INC.
XXXXXXXXXXX TOWING, INC.
H.M.R. ENTERPRISES, INC.
INTERSTATE TOWING & RECOVERY, INC.
XXXXXXX WRECKER SERVICE, INC. XXXXXXXX
ENTERPRISES, INC.
XXXXX'X, INC.
XXXXX'X OF FT. XXXXXX, INC.
XXXXX'X OF MIAMI, INC.
KAUFFS OF PALM BEACH, INC.
KEN'S TOWING, INC.
KING AUTOMOTIVE & INDUSTRIAL EQUIPMENT, INC.
XXXXX WRECKER SERVICE, INC.
LAZER TOW SERVICES, INC.
XXXXX WRECKER SERVICE, INC.
XXXXXXXX'X AUTO SERVICE, INC.
LINCOLN TOWING ENTERPRISES, INC.
M&M TOWING AND RECOVERY, INC.
MAEJO, INC.
MEL'S ACQUISITION CORP.
MERL'S TOWING SERVICE, INC.
MID AMERICA WRECKER & EQUIPMENT SALES, INC.
OF COLORADO
MIKE'S WRECKER SERVICE, INC.
XXXXXX FINANCIAL SERVICES GROUP, INC.
XXXXXX/GREENEVILLE, INC.
XXXXXX INDUSTRIES DISTRIBUTING, INC.
XXXXXX INDUSTRIES INTERNATIONAL, INC.
XXXXX'X SERVICE & TOWING, INC.
XXXXX'X TOWING SERVICE, INC.
XXXXXXXXX'X GARAGE, INC.
XXXXXX'X TOWING, INC.
OFFICIAL TOWING, INC.
X'XXXX TRUCK SERVICE, INC.
PETE'S A TOWING, INC.
PIPES ENTERPRISES, INC.
AMENDMENT NO. 3 TO CREDIT AGREEMENT
SIGNATURE PAGE 3 OF 6
PRO-TOW, INC.
XXXXXX'X TRUCK CENTER, INC.
PURPOSE, INC. RAR ENTERPRISES, INC.
RANDY'S HIGH COUNTRY TOWING, INC. XXX
XXXXXX, INC.
RMA ACQUISITION CORP.
RRIC ACQUISITION CORP.
RAY'S TOWING, INC.
RETRIEVER TOWING, INC.
ROAD XXXXXX; INC.
ROAD ONE, INC.
ROADONE EMPLOYEE SERVICES, INC.
ROAD ONE INSURANCE SERVICES, INC.
ROAD ONE SERVICE, INC.
XXXXX XXXXXX WRECKER SERVICE INC.
SANDY'S AUTO & TRUCK SERVICE, INC.
SAKSTRUP TOWING, INC.
SONOMA CIRCUITS, INC.
SOUTHERN WRECKER CENTER, INC.
SOUTHERN WRECKER SALES, INC.
SOUTHWEST TRANSPORT, INC.
SPEED'S AUTOMOTIVE, INC.
SPEED'S RENTALS, INC.
XXXXX'X AUTOMOTIVE SERVICES, INC.
SUBURBAN WRECKER SERVICE, INC.
TEAM TOWING AND RECOVERY, INC.
TED'S OF FAYVILLE, INC.
TEXAS TOWING CORPORATION
XXXXXXXX'X WRECKER SERVICE, INC.
TOW PRO CUSTOM TOWING & HAULING, INC.
TREASURE COAST TOWING, INC.
TRUCK SALES & SALVAGE CO., INC.
XXXXXXX CORPORATION
VULCAN EQUIPMENT COMPANY, INC. XXXXXX TOWING, INC.
WES'S SERVICE INCORPORATED
WESTERN TOWING; XXXXXXX/XXXXXX ENTERPRISES, INC.
WHITEY'S TOWING, INC.
AMENDMENT NO. 3 TO CREDIT AGREEMENT
SIGNATURE PAGE 5 OF 6
XXXXXX TOWING, INC.
ZEBRA TOWING, INC.
XXXXXX TOWING & RECOVERY, INC.
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: Attorney-in-Fact
AMENDMENT NO. 3 TO CREDIT AGREEMENT
SIGNATURE PAGE 5 OF 6
AGENT AND LENDERS:
BANK OF AMERICA, N.A.
D/B/A NATIONSBANK, N.A.
SUCCESSOR TO NATIONSBANK, N.A.,
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
WACHOVIA BANK, N.A.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SUNTRUST BANK, CHATTANOOGA, N.A.
By: /s/ Xxx X. Xxxx
Name: Xxx X. Xxxx
Title: Vice President
AMENDMENT NO. 3 TO CREDIT AGREEMENT
SIGNATURE PAGE 6 OF 6
ANNEX I
NEW EXHIBIT M
-------------
Compliance Certificate
Bank of America, N.A.,
d/b/a NationsBank, N.A., successor
to NationsBank, N.A.
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Telefacsimile: (000) 000-0000
Reference is hereby made to the Credit Agreement dated as of January
30, 1998, as amended pursuant to Amendment No. 1 to Credit Agreement dated as of
January 31, 1998 and Amendment No. 2 to Credit Agreement dated as of October 30,
1998 and Amendment No. 3 to Credit Agreement dated as of July 27, 1999 (as may
be further amended, modified or supplemented from time to time, the "Agreement")
among XXXXXX INDUSTRIES, INC., a Tennessee corporation ("Xxxxxx"), XXXXXX
INDUSTRIES TOWING EQUIPMENT INC., a Delaware corporation ("Xxxxxx Towing," and
together with Xxxxxx, the "Borrowers"), the Lenders (as defined in the
Agreement) and Bank of America, N.A., d/b/a NationsBank, N.A., successor to
NationsBank, N.A., as Agent for the Lenders ("Agent"). Capitalized terms used
but not otherwise defined herein shall have the respective meanings therefor set
forth in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of _____________, 19___ (the
"Determination Date") as follows:
1. Calculations
A. Compliance with Section 9.1(a): Consolidated
Shareholders' Equity
1. Issued and outstanding share capital $__________
2. Additional paid-in capital plus retained
income (retained deficit to be
expressed as a negative) $__________
3. Foreign currency translation (to be
expressed as a negative, if applicable) $__________
4. Non-recurring noncash restructuring
charges [not to exceed $10,000,000]
since October 31, 1997 $__________
5. Treasury stock $__________
6. Consolidated Shareholders' Equity
(A.1 + A.2 + A.3 + A.4 - A.5) $__________
REQUIRED:
--------
(I) REQUIREMENT FOR PRIOR FISCAL QUARTER;
PLUS $___________
(II) 50% OF CONSOLIDATED NET INCOME
SINCE FIRST DAY OF CURRENT QUARTER; PLUS $___________
(III) 100% OF THE NET PROCEEDS OF ANY EQUITY
OFFERING; MINUS $___________
(IV) NET REPURCHASED SHARES
(NOT TO EXCEED $10,000,000) $___________
TOTAL: $___________
B. Compliance with Section 9.1(b): Consolidated Funded Senior
Indebtedness to Consolidated EBITDA
1. 1. Consolidated Funded Senior Indebtedness
a. Consolidated Total Funded
Indebtedness $__________
b. Aggregate principal amount of all
Subordinated Debt $__________
TOTAL (a-b) $__________
2. Consolidated EBITDA for such period
a. Consolidated Net Income $__________
b. Consolidated Interest Expense $__________
c. Taxes on income $__________
d. Amortization $__________
e. Depreciation $__________
f. Non-recurring noncash
restructuring charges
(not to exceed $10,000,000) $__________
g. Net gains on the sale, conversion
or other disposition of capital
assets $__________
h. Net gains on the acquisition,
retirement, sale or other
Annex I - 9
disposition of capital stock and
other securities $__________
i. Net gains on the collection of
proceeds of life insurance
policies $__________
j. Write-ups of any assets other than
permitted by FAS 16 $__________
k. Other extraordinary net gains
or credits $__________
TOTAL ([a + b +c + d + e + f] -
[g + h + i + j + k]) $__________
3. Ratio of B.2 to B.1 ____ to ____
REQUIRED: LINE 3 MUST NOT BE MORE THAN THE FOLLOWING AT THE
FOLLOWING TIMES:
THROUGH 1/31/00 4.25 TO 1.00
2/1/00 AND THEREAFTER 3.00 TO 1.00
C. Compliance with Section 9.1(c): Consolidated Funded
Total Indebtedness to Consolidated EBITDA
1. Consolidated Funded Total Indebtedness $__________
2. Consolidated EBITDA for such period (see B.2) $__________
3. Ratio of C.2 to C.1 ____ to ____
REQUIRED: LINE 3 MUST NOT BE MORE THAN THE FOLLOWING AT THE
FOLLOWING TIMES:
THROUGH 1/31/00 4.25 TO 1.00*
2/1/00 AND THEREAFTER 3.50 TO 1.00
*provided that, in the event the ratio of Consolidated Funded Total
Indebtedness to Consolidated EBITDA is less than 3.5 to 1.0 for two
consecutive fiscal quarters following the fiscal quarter ended April
30, 1999, then required ratio of 4.25 to 1.00 shall be automatically
reduced to 3.5 to 1.0 if requested by Borrower.
D. Compliance with Section 9.1(d): Consolidated Fixed Charge Ratio
1. Consolidated EBITDA for such period (see B.2) $___________
2. Lease, rental and other expenses in connection
with operating leases for such period (to the extent
deducted in arriving at Consolidated EBITDA) $___________
2a. For the fiscal quarter ending July 31, 1999
the amount representing income tax refund
but not to exceed $7,000,000 $___________
Annex I - 10
3. Capital Expenditures for such period $___________
4. Taxes paid or accrued on income for such period $___________
5. Consolidated Fixed Charges for such period:
(i) Consolidated Interest
Expense, plus $___________
----
(ii) Lease, rental and other expenses
in connection with operating
leases (to the extent deducted in
arriving at Consolidated EBITDA),
plus $___________
(iii) Current maturities of Consolidated
Funded Total Indebtedness, plus $___________
(iv) Current maturities of Capital
Leases, plus $___________
(v) Payments (contingent, deferred or
otherwise) in respect of Acquisitions
representing any deferred portion
of consideration, plus $___________
(vi) Payments in respect of Off Balance
Sheet Liabilities $___________
TOTAL (i + ii + iii + iv + v + vi) $___________
6. D.1 + D.2 + D.2a $___________
7. D.3 + D.4 $___________
8. D.6 - D.7 $___________
9. Ratio of D.8 to D.5 ___ to ___
REQUIRED: LINE 9 MUST NOT BE LESS THAN THE FOLLOWING AT THE FOLLOWING
TIMES:
THROUGH 1/31/00 1.00 TO 1.00
2/1/00 AND THEREAFTER 1.25 TO 1.00
E. Compliance with Section 9.2: Acquisitions
1. Acquisitions during fiscal quarter, including Cost of Acquisition
a. Name of Subsidiary: ______________ $__________
b. Name of Subsidiary: ______________ $__________
c. Name of Subsidiary: ______________ $__________
d. Name of Subsidiary: ______________ $__________
e. Name of Subsidiary: ______________ $__________
f. Name of Subsidiary: ______________ $__________
g. Name of Subsidiary: ______________ $__________
h. Name of Subsidiary: ______________ $__________
Annex I - 11
2. Total Cost of Acquisition during fiscal quarter $__________
3. Total Cost of Acquisition during prior fiscal
quarters during such Fiscal year $__________
4. Total Cost of Acquisition during Fiscal Year to date $__________
REQUIRED: COST OF ACQUISITION NOT GREATER THAN
$10,000,000 PER ACQUISITION OR
$50,000,000 IN ANY FISCAL YEAR
F. Compliance with Section 9.4(d): Purchase Money Indebtedness and Capital
Lease Obligations
1. Purchase money and Capital Lease obligations $__________
REQUIRED: NOT MORE THAN $5,000,000 OUTSTANDING AT ANY TIME
G. Compliance with Section 9.4(e): Guarantees of Trade Account
Indebtedness
1. Guarantees of trade account indebtedness $__________
REQUIRED: NOT MORE THAN $2,000,000 OUTSTANDING AT ANY TIME
H. Compliance with Section 9.4(h): Additional Indebtedness
1. Total additional Indebtedness $__________
REQUIRED: NOT MORE THAN $5,000,000 OUTSTANDING AT ANY TIME
I. Compliance with Section 9.8: Restricted Payments
1. Repurchases of Common Stock
a. Aggregate cost of Net Repurchased
Shares at end of prior quarter $_________
b. Aggregate cost of shares repurchased
during quarter $__________
c. Aggregate cost of shares reissued
in connection with Permitted
Acquisitions during quarter $__________
Annex I - 12
d. Aggregate cost of Net Repurchased
Shares at end of current quarter
(a + b - c) $__________
REQUIRED: NOT MORE THAN $10,000,000 IN AGGREGATE
COST OF NET REPURCHASED SHARES AT
ANY TIME
2. Additional Restricted Payments
a. Restricted Payments during fiscal
quarter $__________
b. Restricted Payments during prior
fiscal quarters during such Fiscal
Year $__________
c. Restricted Payments during
Fiscal Year to date $__________
REQUIRED: RESTRICTED PAYMENTS NOT GREATER THAN
$3,000,000 DURING ANY FISCAL YEAR
2. No Default
A. Since __________ (the date of the last similar
certification), (a) the Borrowers have not defaulted in the keeping,
observance, performance or fulfillment of its obligations pursuant to
any of the Loan Documents; and (b) no Default or Event of Default
specified in Article X of the Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred since
__________ (the date of the last similar certification), the Borrowers
propose to take the following action with respect to such Default or
Event of Default:
(Note, if no Default or Event of Default has occurred, insert "Not
----
Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 8.1 of the
------------
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:____________________________
Authorized Representative
Name:__________________________
Title:_________________________
Annex I - 13
SCHEDULE 8.24
Loan Value Margins
-----------------
Type of Property Loan Value Margin
---------------- -----------------
Accounts Receivable 50%
Inventory (Distribution) 50%
Inventory (Manufacturing) 50%
Property, Plant and Equipment (Manufacturing)
(Non-Road One) 50%
Property, Plant and Equipment - Trucks 75%
(Road One)
Property, Plant and Equipment - Other 50%
(Road One)
S-1
