EXHIBIT 10.1(b)
FORM 10-Q
QUARTER ENDED MARCH 31, 1999
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of
September 30, 1998, amends and supplements the Credit Agreement dated as of
September 24, 1997, as amended (as so amended, the "Credit Agreement") among
BUCYRUS INTERNATIONAL, INC., a Delaware corporation (the "Company"), the
financial institutions party thereto (the "Banks"), THE BANK OF NOVA SCOTIA,
as documentation agent, and BANK ONE, WISCONSIN, as agent for the Banks and as
letter of credit issuing bank.
RECITAL
The Company, the Banks, the Documentation Agent and the Agent
desire to amend the Credit Agreement as set forth below.
AGREEMENTS
In consideration of the promises and agreements set forth in the
Credit Agreement, as amended hereby, the parties agree as follows:
1. Definitions and References. Capitalized terms not defined
herein have the meanings ascribed to them in the Credit Agreement. Upon the
execution and delivery of this Second Amendment to Credit Agreement by the
Company, the Agent and the Majority Banks, all references to the Credit
Agreement set forth in the Loan Documents shall mean the Credit Agreement as
amended by this Second Amendment to Credit Agreement.
2. Amendments to Credit Agreement.
(a) The defined term "ABL Trigger Event" in Section 1.01
of the Credit Agreement is deleted.
(b) Paragraph (b) of the defined term "Borrowing Base
Amount" in Section 1.01 of the Credit Agreement is amended by deleting the
second proviso (set forth in lines 26 through 32 on page 6 of the Credit
Agreement) thereto.
(c) Clause (5) of the second paragraph of the defined term
"Net Proceeds" in Section 1.01 of the Credit Agreement is amended to read as
follows:
(5) the issuance or sale by the Company of capital stock,
(d) The phrase ", after the occurrence and during the
continuance of any ABL Trigger Event," is deleted from clause (e) of the
defined term "Qualified Domestic Finished Goods and Raw Materials Inventory,"
from clause (g) of the defined term "Qualified Domestic Work in Process
Inventory," and in clauses (k) and (l) of the defined term "Qualified North
American Accounts Receivable" in Section 1.01 of the Credit Agreement.
(e) The following defined term is inserted, in appropriate
alphabetical order, into Section 1.01 of the Credit Agreement.
"Lease/Sublease Transaction" means the series of related
transactions pursuant to which (a) the Company or a Subsidiary sells a
product manufactured by the Company or a Subsidiary to a Person (other
than an Affiliate), (b) the Company or a Subsidiary leases that product
from such Person and (c) the Company subleases that product to another
Person (other than an Affiliate) or enters into an agreement under which
the Company or a Subsidiary will operate the product for the benefit of
such other Person.
(f) Section 1.03(c) of the Credit Agreement is created to
read as follows:
(c) Any gain or loss realized by the Company and its
Subsidiaries under GAAP as a result of the repayment in cash by a
Subsidiary of Indebtedness owed to the Company incurred in connection
with the Xxxxxx Acquisition shall be disregarded for purposes of
determining compliance by the Company with the financial covenants set
forth in Section 8.16 of the Credit Agreement and for purposes of
computing the Applicable Margin.
(g) Subsection 2.03(d) and 2.04(f) of the Credit Agreement
one each amended by deleting the word "four" and replacing it with "ten".
(h) Section 2.16 of the Credit Agreement is deleted.
(i) Section 8.01 of the Credit Agreement is amended by
deleting the word "and" at the end of subsection 8.01(o) and inserting the
following at the end of subsection 8.01(p):
; and
(q) Liens in the sublease, the subleased equipment and the
sublease receivables arising pursuant to a Lease/Sublease Transaction
permitted under subsection 8.10(d);
(j) Subsection 8.02(a) of the Credit Agreement is amended
to read as follows:
(a) dispositions of inventory in the ordinary course of business
or pursuant to a Lease/Sublease Transaction permitted under subsection
8.10(d)
(k) Section 8.05 of the Credit Agreement is amended by
deleting the word "and" at the end of subsection 8.05(h) and by inserting the
following at the end of subsection 8.05(i):
; and
(j) Indebtedness incurred in connection with Lease/Sublease
Transactions permitted under subsection 8.10(d)
(l) Subsection 8.10(b) of the Credit Agreement is amended
to read as follows:
(b) operating leases (other than Lease/Sublease Transactions)
entered into by the Company or any Subsidiary after the Closing Date in
the ordinary course of business; provided that the aggregate annual
rental payments by the Company and its Subsidiaries pursuant to
operating leases (including operating leases permitted under clause (a)
but excluding Lease/Sublease Transactions) shall not exceed $8,000,000
during any fiscal year;
(m) Section 8.10 of the Credit Agreement is amended by
inserting the following at the end of subsection 8.10(c):
; and
(d) obligations arising in connection with Lease/Sublease
Transactions, provided that (i) the aggregate amount of scheduled rental
payments required to be made by the Company or a Subsidiary as lessee
under Lease/Sublease Transactions shall not exceed $30,000,000 at any
time and (ii) the amount by which [a] the aggregate amount of scheduled
rental payments required to by made by the Company or a Subsidiary as
lessee under Lease/Sublease Transactions exceeds [b] the aggregate
amount of rental or other payments scheduled to be received by the
Company or a Subsidiary under "Qualified Subleases", shall not exceed
$10,000,000 at any time. For purposes of this subsection 8.10(d), a
"Qualified Sublease" is a sublease to a Person (other than an
Affiliate), or an agreement with a Person (other than Affiliate) under
which the product will be operated by the Company or a Subsidiary for
the benefit of such Person, which (1) has a term not exceeding 10 years
and (2) for purposes of establishing the minimum rental or other payment
due, has an assumed residual value (expressed as a percentage of the
product cost) not greater than 40% at any time during the first five
years, 35% at any time during the sixth year, 30% at any time during the
seventh year, 25% at any time during the eighth year, 20% at any time
during the ninth year and 15% at any time during the tenth year.
(n) Subsection 8.15(a) of the Credit Agreement is amended
by deleting the phrase "no ABL Trigger Event has occurred and is continuing
and".
(o) Subsections 8.16(a), (b) and (c) of the Credit
Agreement are amended to read as follows:
(a) Adjusted Funded Debt to EBITDA Ratio. The Company shall not
permit the Adjusted Funded Debt to EBITDA Ratio, as of the end of any
fiscal quarter, to exceed the applicable ratio set forth in the
following table:
Fiscal Quarters
Ending During Ratio
1998 6.3:1.0
1999 6.0:1.0
2000 and thereafter 5.7:1.0
(b) Fixed Charge Coverage Ratio. The Company shall not permit
the Fixed Charge Coverage Ratio, as of the end of any fiscal quarter, to
be less than the applicable ratio set forth in the following table:
Fiscal Quarters
Ending During Ratio
1998 1.4:1.0
1999 1.5:1.0
2000 and thereafter 1.6:1.0
(c) Interest Coverage Ratio. The Company shall not permit the
Interest Coverage Ratio, as of the end of any fiscal quarter, to be less
than the applicable ratio set forth in the following table:
Fiscal Quarters
Ending During Ratio
1998 1.6:1.0
1999 1.7:1.0
2000 and thereafter 1.8:1.0
3. Representations and Warranties. The Company represents and
warrants to the Agent and each Bank that:
(a) The representations and warranties set forth in
Sections 6.02, 6.03 and 6.04 of the Credit Agreement are true and correct in
all material respects after giving effect to this Second Amendment to Credit
Agreement; and
(b) No Default or Event of Default exists as of the date
of this Second Amendment to Credit Agreement.
4. Cost and Expenses. The Company agrees to pay all costs and
expenses (including reasonable attorneys' fees) paid or incurred by the Agent
in connection with this Second Amendment to Credit Agreement.
5. Full Force and Effect. The Credit Agreement, as amended
hereby, remains in full force and effect.
BUCYRUS INTERNATIONAL, INC.
By /s/ Xxxx X. Xxxxxxx
Title: Treasurer
BANK ONE, WISCONSIN, as Agent, Issuing
Bank and a Bank
By /s/ Xxxx Xxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA, as
Documentation Agent and a Bank
By /s/ F.C.H. Xxxxx
Title: Senior Manager Loan Operations
FIRSTAR BANK MILWAUKEE, N.A.
By /s/ Xxxx Xxxxx
Title: Assistant Vice President
FLEET CAPITAL CORPORATION
By /s/ Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
LASALLE NATIONAL BANK
By /s/ Xxxxx X. Xxxxx
Title: First Vice President
BANK OF SCOTLAND
By /s/ Xxxxx Xxxx Xxx
Title: Senior Vice President