1
EXHIBIT 10.3
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment") is made
as of the 1st day of February, 1999, by and between THE XXXX GROUP INC., a
Louisiana corporation ("Borrower"), MERCANTILE BUSINESS CREDIT INC., a Missouri
corporation, BANK ONE LOUISIANA, N. A., a national banking association
(successor to First National Bank of Commerce, assignee of City National Bank of
Baton Rouge), UNION PLANTERS BANK N.A., a national banking association, and
HIBERNIA NATIONAL BANK, a national bank (collectively, the "Banks"), and
MERCANTILE BUSINESS CREDIT INC., a Missouri corporation, as agent for Banks (in
such capacity, the "Agent").
WITNESSETH:
WHEREAS, Borrower, Agent and Banks have heretofore entered into that
certain Credit Agreement dated as of May 15, 1998, as previously amended by that
certain Amendment to Credit Agreement dated as of August 31, 1998 made by and
among Borrower, Agent and Banks (as amended, the "Agreement"); and
WHEREAS, Borrower desires to further amend the Agreement in the manner
hereinafter set forth, to which amendments Agent and Banks are willing to agree.
NOW, THEREFORE, in consideration of the above premises and for other
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Notwithstanding the limitations set forth in Section 7.2(a) of
the Agreement, the Borrower has requested that it be permitted to guarantee
indebtedness of its Bahrain joint venture, Xxxx Nass Middle East, W.L.L.
("Xxxx-Xxxx"), to the Bank of Bahrain and Kuwait for fifty percent (50%) of: (i)
Xxxx-Xxxx' 1,500,000 Bahraini Dinar (approximately $4,000,000.00 U. S. Dollars
at current exchange rates) general capital line of credit, (ii) a 2,000,000
Bahraini Dinar (approximately $5,300,000.00 U. S. Dollars) credit facility to
fund short term capital requirements of Xxxx-Xxxx in connection with the Gazalan
II power plant project recently awarded to Xxxx-Xxxx, and (iii) a loan in the
total approximate amount of 900,000 Bahraini Dinar (approximately $2,500,000.00
U. S. Dollars) which, if used, is one option of Xxxx-Xxxx for financing the
purchase and installation of a new Cojafex PB16 Induction Bending Machine. The
Agent and the Banks hereby consent to Borrower's guarantee to Bank of Bahrain
and Kuwait of the above referenced credit facilities of Xxxx-Xxxx with the Bank
of Bahrain and Kuwait provided such facilities shall not exceed the maximum
amounts described above with out the further consent and approval of the Agent
and the Required Banks, and Schedule 6.10 to the Agreement shall be amended and
restated in the form of Schedule 6.10 attached to this Second Amendment.
2. Section 7.1(i)(i) of the Agreement is hereby deleted in its
entirety, and in its place shall be substituted the following:
2
(i) Debt Service Coverage Ratio. Maintain on a consolidated
basis as of each fiscal quarter-end during the Term hereof a ratio of
Consolidated EBITDA to Consolidated Debt Service, each determined for
the 12-month period ending as of each such fiscal quarter-end, of not
less than 1.75 to 1.0 for each fiscal quarter ending during the Term
hereof;
3. Section 7.2(k) of the Agreement is hereby deleted in its
entirety, and in its place shall be substituted the following to permit a new
loan made to Xxxxxxx Xxxx, a Senior Vice President of Borrower:
(k) Loans and Investments. Neither Borrower nor any
Subsidiary of the Borrower will make any loans or advances or extensions of
credit to purchase any stocks, bonds, notes, debentures or other securities
of, make any expenditures on behalf of, or in any manner assume liability
(direct, contingent or otherwise) for the Indebtedness of any Person,
except for (i) advances for relocation, travel or other expenses to the
Borrower's or any Guarantor's employees in the ordinary course of business
and other loans to employees in principal amounts of less than $500,000.00,
(ii) a loan in the amount of $3,850,000.00 from X. X. Xxxx, Inc. to Word
Industries Fabricators, Inc. evidenced by a promissory note of Word
Industries Fabricators, Inc. retained in Borrower's offices for Agent's
inspection, endorsed over to the Agent for the benefit of Banks, and which
Borrower shall cause X. X. Xxxx, Inc. to deliver to Agent at any time upon
demand therefor, (iii) other loans among the Subsidiaries evidenced by
promissory notes retained in Borrower's offices for Agent's inspection,
endorsed over to the Agent for the benefit of Banks and which Borrower
agrees to cause such Subsidiaries to deliver to Agent at any time upon
demand therefor, (iv) loans to joint venture Related Parties evidenced by
promissory notes retained in Borrower's offices for Agent's inspection, (v)
a loan from the Borrower to Merit Industrial Constructors, Inc. in the
principal amount of $475,000.00 evidenced by a promissory note made by
Merit Industrial Constructors, Inc. which is retained in Borrower's offices
for Agent's inspection, endorsed over to the Agent for the benefit of Banks
and which the Borrower agrees to deliver to Agent at any time upon demand
therefor, and (vi) a loan from the Borrower to Xxxxxxx Xxxx, Senior Vice
President of Borrower, in the principal amount of $837,500.00 secured by a
pledge by Xxxxxxx Xxxx of 62,500 shares of Borrower's common stock, which
loan is evidenced by a promissory note made by Xxxxxxx Xxxx which is
retained in Borrower's offices along with the pledged shares for Agent's
inspection, which note has been endorsed over to the Agent for the benefit
of Banks and which the Borrower agrees to deliver to Agent at any time upon
demand therefor (which loans under (iii), (iv), (v) and (vi) of this
subsection 7.2(k) shall not exceed $8,000,000.00 in the aggregate or
$3,000,000.00 for any one loan or to any one such Subsidiary or joint
venture Related Party) (vii) the Loans and Guaranties described on Schedule
6.10 attached to the Second Amendment to Credit Agreement between Borrower,
Agent and the Banks dated as of February 1, 1999 and incorporated herein by
this reference, and (viii) Permitted Investments. For purposes of this
Section 7.2(k), any Person which becomes a Subsidiary of the Borrower after
the date hereof
-2-
3
shall be deemed to have made, at the time it becomes a Subsidiary, all
Investments of such Person existing immediately after it became a
Subsidiary.
4. Schedule 7.2(a) to the Credit Agreement is hereby deleted in its
entirety, and in its place shall be substituted Schedule 7.2(a) hereto.
5. Exhibit D to the Credit Agreement is hereby deleted in its entirety,
and in its place shall be substituted Exhibit D hereto.
6. Borrower hereby agrees to reimburse Agent and Banks upon demand for
all out-of-pocket costs and expenses (including reasonable attorneys' fees and
expenses) incurred by Agent and Banks in the preparation, negotiation and
execution of this Second Amendment and all other documents, instruments and
agreements relating to this amendment of Borrower's existing credit facilities
with Bank. All of the obligations of Borrower under this Paragraph 6 shall
survive termination of the Agreement.
7. Borrower hereby represents and warrants to Agent and Banks that:
(a) The execution, delivery and performance by Borrower of this
Second Amendment are within the corporate powers of Borrower, have been duly
authorized by all necessary corporate action and require no action by or in
respect of, or filing with, any governmental or regulatory body, agency or
official. The execution, delivery and performance by Borrower of this Second
Amendment do not conflict with, or result in a breach of the terms, conditions
or provisions of, or constitute a default under or result in any violation of,
and the Borrower is not now in default under or in violation of, the terms of
its Articles of Incorporation or Bylaws, any applicable law, any rule,
regulation, order, writ, judgment or decree of any court or governmental or
regulatory agency or instrumentality, or any agreement or instrument to which
Borrower is a party or by which Borrower is bound or to which Borrower is
subject;
(b) This Second Amendment has been duly executed and delivered and
constitutes the legal, valid and binding obligation of Borrower enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights in
general; and
(c) As of the date hereof, all of the covenants, representations and
warranties of Borrower set forth in the Agreement are true and correct and no
"Event of Default" (as defined therein) under or within the meaning of the
Agreement has occurred and is continuing.
8. Borrower hereby releases Agent and Banks and their successors,
assigns, directors, officers, agents, employees, representatives and attorneys
from any and all claims, demands, causes of action, liabilities or damages,
whether now existing or hereafter arising or contingent or noncontingent, or
actions in law or equity of any type or matter, relating to or in connection
with any statements, agreements, action or inaction on the part of Agent or
Banks at any time prior to the execution of this Second Amendment, with respect
to Borrower or the Agreement, provided that such release shall not apply to any
such claim, demand, cause of action, liability or damage of which Borrower is
not deemed to have actual or constructive knowledge as of the execution of this
Second Amendment.
-3-
4
9. The Agreement, as hereby amended, and any other agreements executed in
connection therewith, are and shall remain the binding obligations of Borrower,
and all of the provisions, terms, stipulations, conditions, covenants and powers
contained therein shall stand and remain in full force and effect, except only
as the same are herein and hereby specifically varied or amended, and the same
are hereby ratified and confirmed.
10. All references in the Agreement to "this Agreement" and any other
references of similar import shall henceforth mean the Agreement as amended by
this Second Amendment. All capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to them in the
Agreement, as amended by this Second Amendment.
11. This Second Amendment shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except that
Borrower may not assign, transfer or delegate any of its rights or obligations
hereunder.
12. This Second Amendment shall be governed by and construed in accordance
with the internal laws of the State of Missouri.
13. In the event of any inconsistency or conflict between this Second
Amendment and the Agreement, the terms, provisions and conditions of this Second
Amendment shall govern and control.
14. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO EXTEND OR
RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER, AGENT AND BANKS FROM
ANY MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER,
AGENT AND BANKS COVERING SUCH MATTERS ARE CONTAINED IN THE AGREEMENT, AS HEREBY
AMENDED, WHICH CONSTITUTES A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS
BETWEEN BORROWER, AGENT AND BANKS EXCEPT AS BORROWER, AGENT AND BANKS MAY LATER
AGREE IN WRITING TO MODIFY. THE AGREEMENT, AS HEREBY AMENDED, EMBODIES THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL OR WRITTEN) RELATING TO THE SUBJECT
MATTER HEREOF.
15. This Second Amendment is made solely for the benefit of Borrower,
Agent and Banks as set forth herein, and is not intended to be relied upon or
enforced by any other person or entity.
16. This Second Amendment may be executed in one or more counterparts by
the parties hereto, and shall constitute one agreement.
-4-
5
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the day and year first written above on this _____ day of April, 1999.
Borrower:
THE XXXX GROUP INC.
By:
-----------------------------------
Title:
---------------------------------
Agent:
MERCANTILE BUSINESS CREDIT INC.
By:
------------------------------------
Title:
---------------------------------
Banks:
Revolving Credit Commitment: MERCANTILE BUSINESS CREDIT INC.
$31,250,000.00
By:
------------------------------------
Title:
---------------------------------
Revolving Credit Commitment: BANK ONE LOUISIANA, N. A.
$25,000,000.00
By:
------------------------------------
Title:
---------------------------------
Revolving Credit Commitment: UNION PLANTERS BANK N. A.
$18,750,000.00
By:
------------------------------------
Title:
---------------------------------
Revolving Credit Commitment: HIBERNIA NATIONAL BANK
$25,000,000.00
By:
------------------------------------
Title:
---------------------------------
-5-
6
SCHEDULE 6.10
Other Loans and Guaranties
1. Secured loan (Jetstar plane) by Metlife Capital Financial Corporation to
the Borrower, with a March 31, 1998 balance of approximately $1,690,641.32.
2. Secured loan (equipment) by Metlife Capital Financial Corporation to The
Xxxx Group Inc. for Sunland Fabricators, Inc. equipment, with a March 31,
1998 balance of approximately $1,911,610.34.
3. Secured loan (equipment) by Metlife Capital Financial Corporation to The
Xxxx Group Inc. for Sunland Fabricators, Inc. equipment, with a March 31,
1998 balance of approximately $462,192.08.
4. Secured loan (real estate/fixtures) by Metlife Capital Financial
Corporation to Sunland Fabricators, Inc., with a March 31, 1998 balance of
approximately $2,251,071.31. Guaranteed by the Borrower, X. X. Xxxx, Inc.,
FVF Incorporated and National Fabricators, Inc.
5. Secured loan (equipment) by Metlife Capital Financial Corporation to The
Xxxx Group Inc. for Sunland Fabricators, Inc. equipment, with a March 31,
1998 balance of approximately $3,345,607.04.
6. Secured loan (real estate) by Metlife Capital Financial Corporation to
Sunland Fabricators, Inc. with a March 31, 1998 balance of approximately
$1,688,434.78. Guaranteed by the Borrower, X. X. Xxxx, Inc., FVF
Incorporated and National Fabricators, Inc.
7. Secured loan (real estate) by Metlife Capital Financial Corporation to Word
Industries Fabricators, Inc., with a March 31, 1998 balance of
approximately $1,777,363.66. Guaranteed by the Borrower.
8. Secured loan (equipment) by Metlife Capital Financial Corporation to Word
Industries Fabricators, Inc., with a March 31, 1998 balance of
approximately $1,560,443.00. The Borrower is a co-maker of such loan.
9. Secured loan (equipment) by MetLife Capital Financial Corporation to Word
Industries Fabricators, Inc., with a March 31, 1998 balance of
approximately $1,786,357.42. Guaranteed by the Borrower.
10. Secured loan (real estate) by Metlife Capital Financial Corporation to SAON
Properties, Inc., with a March 31, 1998 balance of approximately
$3,133,409.00. Guaranteed by the Borrower, Alloy Piping Products, Inc.,
Sunland Fabricators, Inc., National Fabricators, Inc., X. X. Xxxx, Inc.,
FVF Incorporated, NAPTech, Inc. and Word Industries Fabricators, Inc.
11. Secured loan (equipment) by First Bank of Boston to Alloy Piping Products,
Inc., with a March 31, 1998 balance of approximately $5,549,999.83.
Guaranteed by the Borrower.
12. Secured loan (equipment) by BancBoston Leasing to NAPTech, Inc., with a
March 31, 1998 balance of approximately $3,428,571.00. Guaranteed by the
Borrower.
-6-
7
13. Secured loan (equipment) by BancBoston Leasing, Inc. to Xxxx Constructors,
Inc., with a March 31, 1998 balance of approximately $1,131,938.57.
Guaranteed by the Borrower.
14. Secured loan (equipment) by Mercantile Business Credit Inc. to X. X. Xxxx,
Inc., with a March 31, 1998 balance of approximately $1,350,000.00.
Guaranteed by the Borrower. [TO BE PAID AT CLOSING].
15. Secured loan by Mercantile Business Credit Inc. to the Borrower, with a
March 31, 1998 balance of approximately -0-.
16. $13,000,000.00 unsecured revolving credit facility extended to the Borrower
by Mercantile Business Credit Inc., which has a March 31, 1998 principal
balance of $2,115,800.00. [TO BE PAID AT CLOSING.]
17. Secured loans, letters of credit and guarantees under the Second Amended
Loan and Security Agreement dated March 29, 1996 among Borrower, the
Subsidiaries of Borrower parties thereto and Mercantile Business Credit
Inc., et al., and all amendments thereto. [TO BE PAID AT CLOSING.]
18. South Carolina bonds in favor of X. X. Xxxx, Inc., unsecured, with a March
31, 1998 balance of $4,000,000.00.
19. Secured loan (real estate) by Pioneer/Hibernia Bank to Alloy Piping
Products, Inc., with a March 31, 1998 balance of approximately
$3,178,492.86.
20. Secured loan (real estate) by Union Planters Bank to United Crafts, Inc.,
with a March 31, 1998 balance of approximately $545,875.87.
21. Fifteen secured loans by Union Planters Bank to United Crafts, Inc., with a
March 31, 1998 balance of approximately $106,878.12.
22. Secured loan (real estate) by ARKLA to Alloy Piping Products, Inc., with a
March 31, 1998 balance of approximately $19,220.71.
23. Secured loan (real estate) by XxXxxxxx Corporation to Alloy Piping
Products, Inc., with a March 31, 1998 balance of approximately $140,065.03.
Guaranteed by the Borrower.
24. Unsecured loan by Alkota Cleaning Systems to United Crafts, Inc.,
unsecured, with a March 31, 1998 balance of approximately $2,235.69.
25. Unsecured loan by Associated Leasing to FVF, Incorporated, with a March 31,
1998 balance of approximately $15,899.50.
26. Unsecured loan by Xxxx Xxxxxxxxxxxxx Equipment to Xxxx Industrial Supply
Company, Inc., with a March 31, 1998 balance of approximately -0-.
27. Unsecured loan by First Premium to the Borrower, with a March 31, 1998
balance of approximately -0-.
-7-
8
28. Secured loan (equipment) by Contractors Finance Co. of Louisiana to Xxxx
Constructors, Inc. (UCI), with a March 31, 1998 balance of approximately
$78,894.41.
29. Secured loan (assets) by NatWest Bank facility to Xxxx Xxxxx, Ltd. in the
amount of approximately (pound)3,000,000.00, which has a March 31, 1998
balance of approximately (pound)1,367,000.00. Parent company guarantee of
the Borrower and Xxxx Group U.K. Holdings, Ltd. and a mortgage on the
assets of Xxxx Group U.K. Holdings, Ltd., Xxxx U.K., Ltd., Xxxx Xxxxx,
Ltd., Xxxx Xxxx, Ltd. and Pipework Engineering and Development, Ltd.
30. Bank guarantees by Westpac Banking Corp. in favor of Xxxxx Australia Pty.
Ltd. ("Xxxxx") in the amount of Aus. $2,696,848.00.
31. Aus. $1,500,000.00 facility by Westpac Banking Corp. in favor of Xxxxx,
which has a March 31, 1998 balance of Aus. $198,393.00 guaranteed by the
Borrower.
32. Secured loan (assets) by Barclays Bank to Pipework Engineering and
Developments, Ltd., which has a March 31, 1998 principal balance of
(pound)182,637.00.
33. 6.44% Series A Senior Secured Notes due 2005 and 6.93% Series B Senior
Secured Notes due 2008 and Subsidiary Guarantees thereof.
34. Loan in the amount of $3,850,000.00 from X. X. Xxxx, Inc. to Word
Industries Fabricators, Inc.
35. Loan by the Borrower to Merit Industrial Constructors, Inc. pursuant to a
Loan Agreement dated July 2, 1997, which has a March 31, 1998 balance of
$475,000.00.
36. Various loans by the Borrower and/or its Subsidiaries to the employees of
the Borrower and its Subsidiaries.
37. Loans to joint venture Related Parties.
38. Various loans among the Borrower and/or its Subsidiaries.
39. Guarantee by the Borrower of the obligations of Word Industries
Fabricators, Inc. under the Asset Purchase Agreement executed in connection
with the prior acquisition of assets for Word Industries Pipe Fabricating,
Inc. and affiliates.
40. Existing guarantees by the Borrower or any Subsidiary made in the ordinary
course of business of any payment to a vendor of goods or services to the
Borrower/Subsidiaries or guarantees by the Borrower or any Subsidiary made
with respect to the performance by the Borrower/Subsidiary of a contract
for the sale of goods or the delivery of services.
41. Endorsements of negotiable instruments for collection in the ordinary
course of business.
42. The Borrower and/or one of its Subsidiaries is indebted in the approximate
amount of $3,623,760.00 as of March 31, 1998, to Vekamaf Holding B.V.,
incurred in connection with the acquisition of Cojafex, B.V. ("Cojafex"),
which amount is secured by the pledge of the capital stock in Cojafex.
-8-
9
43. The Borrower and/or one of its Subsidiaries is indebted to the former
stockholders of Pipework Engineering and Developments, Ltd. ("PED") in the
amount of approximately $1,078,440.00 as of March 31, 1998, such
indebtedness resulting from the deferred portion of the purchase price for
the capital stock in PED, which is secured by a letter of credit.
44. Deed dated November 14, 1997 to which the Borrower is a party relating to
preferential creditors of Prospect Industries, plc ("Prospect") and
Prospect Engineering Limited ("PEL").
45. Deed of Indemnity dated November 14, 1997 by the Borrower in favor of
Midland Bank, plc ("Midland") relating to claims of the preferential
creditors of Prospect and PEL.
46. Deed of Indemnity dated November 14, 1997 by the Borrower in favor of
Midland with respect to demands or claims on certain letters of credit,
bonds or guarantees.
47. Each of the Letters of Credit set forth on Schedule 3.3(a) to this
Agreement.
48. Customary indemnification obligations undertaken by the Borrower and/or its
Subsidiaries in connection with acquisitions prior to the date of the
Agreement.
49. 1,500,000 Bahraini Dinar (approximately $4,000,000.00 U. S. Dollars at
current exchange rates) general working capital line of credit from the
Bank of Bahrain and Kuwait to Borrower's Bahrain joint venture, Xxxx Nass
Middle East, W.L.L. ("Xxxx-Xxxx") of which fifty percent of the obligations
of Xxxx-Xxxx are guaranteed by Borrower.
50. 2,000,000 Bahraini Dinar (approximately $5,300,000.00 U. S. Dollars at
current exchange rates) loan from the Bank of Bahrain and Kuwait to
Xxxx-Xxxx of which fifty percent of the obligations of Xxxx-Xxxx are
guaranteed by Borrower.
51. Possible 900,000 Bahraini Dinar (approximately $2,500,000.00 U. S. Dollars
at current exchange rates) financing of a new Cojafex PB16 Induction
Bending Machine from the Bank of Bahrain and Kuwait to Xxxx-Xxxx of which,
if used, fifty percent of the obligations of Xxxx-Xxxx are to be guaranteed
by Borrower.
-9-
10
SCHEDULE 7.2(a)
Permitted Indebtedness
The items set forth on Schedule 6.10 - Other Loans and Guarantees to this
Agreement, are incorporated by reference herein.
-10-
11
EXHIBIT D
COMPLIANCE CERTIFICATE
_________________, 19___
Mercantile Business Credit Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Credit Officer
Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of May
15, 1998, by and between you, as agent for the Banks named therein, and the
undersigned (as from time to time amended, the "Agreement"). All capitalized
terms used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Agreement.
The undersigned hereby certifies to you that as of the date hereof:
(a) All of the representations and warranties set forth in Section 6 of
the Agreement are true and correct as if made on the date hereof;
(b) No violation or breach of any of the affirmative covenants set forth
in Section 7.1 of the Agreement has occurred and is continuing;
(c) No violation or breach of any of the negative covenants set forth in
Section 7.2 of the Agreement has occurred and is continuing;
(d) No Default or Event of Default under or within the meaning of the
Agreement has occurred and is continuing;
(e) The financial statements of Borrower and its Consolidated Subsidiaries
delivered to you with this letter are true, correct and complete in all material
respects and have been prepared in accordance with generally accepted accounting
principles consistently applied; and
(f) The financial covenant information set forth in Schedule 1 to this
letter is true and correct.
Very truly yours,
THE XXXX GROUP INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
-11-
12
Schedule 1
To Compliance Certificate
(The Certificate attached hereto is as of ________________)
Capitalized terms used herein shall have the meanings set forth in the
Credit Agreement dated as of May 15, 1998 among The Xxxx Group Inc., Mercantile
Business Credit Inc., as agent, and the lenders named therein (as amended,
restated, supplemented or otherwise modified from time to time, the
"Agreement"). Subsection references herein relate to the subsections of the
Agreement.
A. MAXIMUM CAPITAL EXPENDITURES
1. Actual Capital Expenditures for current Fiscal Year-To-Date $
2. Maximum Permitted (Section 7.2(i)) $
B. CONSOLIDATED EBITDA
For the 12 months ended _____________:
1. Net Income (excluding extraordinary items) $
2. Income Tax Expense $
3. Interest Expense $
4. Amortization and Depreciation Expenses $
5. Consolidated EBITDA (sum of Lines B1 through B4) $
C. DEBT SERVICE COVERAGE RATIO
1. Consolidated EBITDA (from B5 above) $
2. Interest Expense (from Line B3 above) $
3. Scheduled payments of principal on Indebtedness (for the 12 months
ending ______________) $
6. Consolidated Debt Service (Sum of D2 and D3) $
7. Debt Service Coverage (D1 divided by D4) _____ to 1.0
8. Minimum Required (Section 7.1(i)(i)) 1.75 to 1.0
D. MAXIMUM LEVERAGE RATIO
1. Average Revolving Credit Loans outstanding $
2. Face amount of Letters of Credit outstanding $
3. Other Borrowed Money Indebtedness outstanding $
4. Consolidated Total Funded Debt outstanding as of _____________
(Sum of E1 through E3) $
5. Consolidated EBITDA (from B5 above) $
6. Leverage Ratio (E4 divided by E5) _____ to 1.0
7. Maximum Permitted (Section 7.1(i)(ii)) 4.00 to 1.0
-12-
13
E. SHAREHOLDERS' EQUITY
1. Shareholders' Equity as of ______________ $
--------------
2. Beginning Required Shareholders' Equity $135,000,000.00
3. Cumulative Quarterly Net Income (excluding any Quarterly Net
Losses) for Quarters ending November 30, 1997 and thereafter $
--------------
4. Net Proceeds of Capital Stock issued subsequent to August 31, 1997
$
--------------
5. Total Required Shareholders' Equity (Sum of F2 through F4) $
--------------
F. TOTAL FUNDED DEBT TO TOTAL CAPITALIZATION
1. Consolidated Total Funded Debt (Line E4 above) $
--------------
2. Shareholders' Equity (Line F1 above) $
--------------
3. Total Capitalization (Sum of G1 plus G2) $
--------------
4. Ratio of G1 divided by G3) _____ to 1.0
5. Maximum Permitted Ratio (Section 7.1(i)(iv)) 0.60 to 1.0
G. OTHER INDEBTEDNESS
1. Purchase money debt as of _________________ $
--------------
2. Maximum permitted (Section 7.2(a)(iv)) $
--------------
3. Subordinated Debt as of _______________ $
--------------
4. Maximum permitted (Section 7.2(a)(v)) $
--------------
5. Other Indebtedness $
--------------
6. Maximum permitted (Section 7.2(a)(vi)) $
--------------
H. RESTRICTION ON LEASES
1. Direct and indirect obligations with respect to leases $
--------------
2. Maximum permitted (Section 7.2(m)) $
--------------
-13-
14
DOCUMENT NAME: Second Amendment to Credit Agreement
AUTHOR/OWNER: MKaltenrieder
CLIENT NUMBER: 299 CLIENT NAME: MBSL Non Retainer
MATTER NUMBER: 19112 MATTER NAME: The Xxxx Group Inc.
PC DOCS #: 1134614 VERSION: 1
TYPIST/USER'S NAME: ZTaylor APPLICATION: MS Word
TODAY'S DATE: November 1, 1999/2:07 PM
DOCUMENT HISTORY:
COMMENTS: Amends 891409 and 1056510 (First Amendment)
DO NOT DISCARD THIS PAGE
-14-