1
EXHIBIT 10.20
FIRST AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT AND TERM LOAN
AGREEMENT (this "Amendment") is made and entered into this 5th day of
January, 1996, by and between FALCONITE, INC., an Illinois corporation
("Borrower"), and CITIZENS BANK & TRUST COMPANY OF PADUCAH ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have heretofore entered into that
certain Revolving Credit and Term Loan Agreement dated October 5, 1995 (the
"Loan Agreement"; all capitalized terms used and not otherwise defined in this
Amendment shall have the respective meanings ascribed to them in the Loan
Agreement as amended by this Amendment); and
WHEREAS, Borrower desires to borrow an additional sum of Two
Million Dollars ($2,000,000.00) from Lender; and
WHEREAS, Borrower and Lender desire to amend the Loan
Agreement in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Lender hereby agree as follows:
1. The definition of "Continuing Guaranty" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Continuing Guaranty" shall mean that certain
Continuing Guaranty dated October 5, 1995, and executed by the
Guarantors in favor of Lender (an unexecuted copy of which is
attached hereto as Exhibit F), as amended by that certain
First Amendment to Continuing Guaranty dated January 5,
1996 (an unexecuted copy of which is attached hereto as
Exhibit F-1), and as the same may from time to time be further
amended, modified, extended or renewed."
2. The definition of "Eligible Accounts" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Eligible Accounts" shall mean, at the time of any
determination thereof, each Account as to which the following
requirements have been fulfilled to the reasonable
satisfaction of Lender:
(i) Borrower has lawful and absolute title to such
Account;
2
(ii) such Account arose from a transaction in the
ordinary course of business of Borrower;
(iii) such Account is a valid, legally enforceable
obligation of the Account Debtor for goods or services
previously sold, leased, rented or rendered to such Account
Debtor;
(iv) such Account is evidenced by an invoice rendered
to the Account Debtor and such Account is not evidenced by any
chattel paper, promissory note or other instrument;
(v) such Account does not represent a progress
billing. For the purposes of this definition, "progress
billing" shall mean any invoice for goods or services sold or
services rendered under contract or agreement pursuant to
which the Account Debtor's obligation to pay such invoice is
conditioned upon Borrower's completion of any further
performance under the contract or agreement;
(vi) such Account is not conditional such as those
accounts commonly known as "▇▇▇▇ and hold accounts" or
accounts of a similar or like arrangement;
(vii) such Account did not arise from a transaction
whereby it is subject to a "consignment sale", a "sale on
approval" or a "sale or return" arrangement;
(viii) such Account does not remain unpaid for more
than, and is not due and payable more than, (A) ninety (90)
days from the invoice date for all Accounts other than
Accounts owed by The Carbide/Graphite Group, Inc. or the
Tennessee Valley Authority, (B) one hundred twenty (120) days
from the invoice date for all Accounts owed by The
Carbide/Graphite Group, Inc. or (C) one hundred fifty (150)
days from the invoice date for all Accounts owed by the
Tennessee Valley Authority;
(ix) no Account Debtor in respect to such Account, if
it is owing to Borrower on any Accounts that have remain
unpaid for more than (A) ninety (90) days from the invoice
date for all Account Debtors other than The Carbide/Graphite
Group, Inc. or the Tennessee Valley Authority, (B) one hundred
twenty (120) days from the invoice date for The
Carbide/Graphite Group, Inc. or (C) one hundred fifty (150)
days from the invoice date for the Tennessee Valley Authority,
has more than Twenty Percent (20%) of the aggregate dollar
value of Accounts owed by such Account Debtor remaining unpaid
for more than (A) ninety (90) days from the invoice date for
all Account Debtors other than The Carbide/Graphite Group,
Inc. or the Tennessee Valley Authority, (B) one hundred twenty
(120) days from the invoice date for The
- 2 -
3
Carbide/Graphite Group, Inc. or (C) one hundred fifty (150)
days from the invoice date for the Tennessee Valley Authority;
(x) such Account is not subject to any dispute,
offset, counterclaim, discount (except for prompt payment
discounts that do not exceed Two Percent (2%) of the invoice
amount) or other claim or defense on the part of the Account
Debtor or to any claim on the part of the Account Debtor
denying liability under such Account;
(xi) Borrower has not extended the time for payment
of such Account;
(xii) in respect to an Account owing by an Account
Debtor located in New Jersey, Minnesota or West Virginia,
Borrower has filed all legally required Notice of Business
Activities Reports with the New Jersey Division of Taxation,
the Minnesota Department of Revenue or the West Virginia Tax
Commissioner, as the case may be, or Borrower is otherwise
exempt from such reporting requirements under the laws of such
State(s);
(xiii) no Account Debtor in respect of such Account
is (A) conducting business in any jurisdiction located outside
the United States of America, (B) an Affiliate of Borrower,
(C) any Governmental Authority, domestic or foreign (other
than the Tennessee Valley Authority) or (D) the subject of a
proceeding under any Debtor Laws;
(xiv) Borrower has the full and unqualified right to
assign and grant a security interest in such Account to Lender
as security for the Obligations;
(xv) such Account is subject to a fully perfected
first priority security interest in favor of Lender pursuant
to the Security Agreement, prior to the rights of, and
enforceable as such against, any other Person;
(xvi) such Account is not subject to any Lien in
favor of any Person other than the Lien of Lender pursuant to
the Security Agreement; and
(xvii) Lender has not otherwise advised Borrower that
such Account (or Account Debtor) is, in its sole discretion,
ineligible."
3. The definition of "Life Insurance Assignment" set forth
in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Life Insurance Assignment" shall mean (i) that
certain Assignment of Life Insurance Policy as Collateral
dated October 5, 1995, and executed by ▇▇▇▇▇▇▇ ▇.
- 3 -
4
Falconite in favor of Lender (an unexecuted copy of which is
attached hereto as Exhibit G), as the same may from time to
time be amended, modified, extended or renewed and/or (ii)
that certain Assignment of Life Insurance Policy as Collateral
dated January 5, 1996, and executed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in
favor of Lender (an unexecuted copy of which is attached
hereto as Exhibit G-1), as the same may from time to time be
amended, modified, extended or renewed."
4. The definition of "Term Loan Commitment" set forth
in Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
""Term Loan Commitment" shall mean the sum of Nine
Million Dollars ($9,000,000.00)."
5. Sections 3.01 and 3.02 of the Loan Agreement are
hereby deleted in their entirety and the following substituted in lieu thereof:
"Section 3.01. Term Loan Commitment. Lender made
Borrower a term loan in the amount of Seven Million Dollars
($7,000,000.00) on October 13, 1995, and, subject to the terms
and conditions of this Agreement and so long as no Default or
Event of Default under this Agreement has occurred, Lender
agrees to loan Borrower an additional sum of Two Million
Dollars ($2,000,000.00) on or about January 8, 1996, and
thereby increase the amount of said term loan from Seven
Million Dollars ($7,000,000.00) to Nine Million Dollars
($9,000,000.00) (said term loan as so increased is hereinafter
referred to as the "Term Loan").
Section 3.02. Term Note. The Term Loan made under
Section 3.01 hereof by Lender shall be evidenced by a Term
Loan Promissory Note of Borrower dated October 5, 1995, and
payable to the order of Lender in the original principal
amount of Seven Million Dollars ($7,000,000.00) in the form
attached hereto as Exhibit B and incorporated herein by
reference, as amended by a First Amendment to Term Loan
Promissory Note dated January 5, 1996, in the form attached
hereto as Exhibit B-1 and incorporated herein by reference (as
so amended and as the same may from time to time be further
amended, modified, extended or renewed, the "Term Note")."
6. Section 3.04 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 3.04. Principal Payments. Principal on the
Term Note shall be due and payable in nine (9) consecutive
monthly installments as follows: three (3) equal consecutive
monthly installments in the amount of
- 4 -
5
One Hundred Sixteen Thousand Six Hundred Sixty-Six and 67/100
Dollars ($116,666.67) each, due and payable on the last day of
each calendar month commencing October 31, 1995; five (5)
equal consecutive monthly installments in the amount of One
Hundred Fifty Thousand Dollars ($150,000.00) each, due and
payable on the last day of each calendar month commencing
January 31, 1996; with the ninth (9th) and final installment
in the amount of the then outstanding and unpaid principal
balance of the Term Note due and payable on the Maturity Date.
In addition to the scheduled monthly principal payments set
forth above, if at any time the Borrowing Base as shown on the
most recent Borrowing Base Certificate submitted to Lender
pursuant to Section 8.01(c) should be less than Zero Dollars
($0.00), Borrower shall be automatically required (without
demand or notice of any kind by Lender, all of which are
hereby expressly waived by Borrower) to immediately either (i)
make a permanent prepayment on the Term Note in an amount
sufficient to increase the amount of the Borrowing Base to at
least Zero Dollars ($0.00) or (ii) pledge cash or cash
equivalents with Lender as additional collateral for the Term
Loan in an amount at least equal to the difference between the
amount of the Borrowing Base and Zero Dollars ($0.00)."
7. Exhibits B-1, F-1 and G-1 attached to this Amendment
are hereby added as Exhibits B-1, F-1 and G-1 to the Loan Agreement.
8. Exhibit I attached to the Loan Agreement is hereby
deleted in its entirety and the Exhibit I attached to this Amendment is
substituted in lieu thereof.
9. Lender hereby acknowledges that the accounting firm
of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ is satisfactory to Lender for purposes of the
Loan Agreement.
10. Pursuant to Section 9.03 of the Loan Agreement,
Lender hereby consents to Borrower's acquisition of all or substantially all of
the assets of the Large Area Rentals division of ▇▇▇▇▇ and Sons Construction,
Inc.
11. Borrower hereby agrees to reimburse Lender upon
demand for all out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by Lender in the preparation,
negotiation and execution of this Amendment and all other agreements, documents
and instruments relating to the amendment of Borrower's existing credit
facilities with Lender (collectively, the "Amendment Documents"). Borrower
further agrees to pay or reimburse Lender for (a) any stamp or other taxes
(excluding income or gross receipts taxes) which may be payable with respect to
the execution, delivery or recording of the Loan Documents and (b) the cost of
any filings and searches, including, without limitation, Uniform Commercial
Code filings and
- 5 -
6
searches. All of the obligations of Borrower under this Paragraph 11 shall
survive the payment of the Borrower's Obligations and the termination of the
Loan Agreement.
12. All references in the Loan Agreement to "this
Agreement" and any other references of similar import shall henceforth mean the
Loan Agreement as amended by this Amendment.
13. Except to the extent specifically amended by this
Amendment, all of the terms, provisions, conditions, covenants, representations
and warranties contained in the Loan Agreement shall be and remain in full
force and effect and the same are hereby ratified and confirmed.
14. This Amendment shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns,
except that Borrower may not assign, transfer or delegate any of its rights or
obligations hereunder.
15. Borrower hereby represents and warrants to Lender
that:
(a) the execution, delivery and performance by
Borrower of this 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 or any other third party;
(b) the execution, delivery and performance by
Borrower of this 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, the terms of the Articles of Incorporation or By-Laws of
Borrower, any applicable law, rule, regulation, order, writ, judgment or decree
of any court or governmental or regulatory agency or instrumentality or any
agreement, document or instrument to which Borrower is a party or by which it
is bound or to which it is subject;
(c) this Amendment has been duly executed and
delivered by Borrower and constitutes the legal, valid and binding obligation
of Borrower enforceable against Borrower in accordance with its terms; and
(d) as of the date hereof, all of the
representations, warranties and covenants of Borrower set forth in the Loan
Agreement are true and correct and no Default or Event of Default under or
within the meaning of the Loan Agreement has occurred and is continuing.
16. In the event of any inconsistency or conflict between
this Amendment and the Loan Agreement, the terms, provisions and conditions
contained in this Amendment shall govern and control.
- 6 -
7
17. This Amendment shall be governed by and construed in
accordance with the substantive laws of the Commonwealth of Kentucky (without
reference to conflict of law principles).
IN WITNESS WHEREOF, Borrower and Lender have executed this
First Amendment to Revolving Credit and Term Loan Agreement this 5th day of
January, 1996.
FALCONITE, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Title: President
----------------------------------------
CITIZENS BANK & TRUST COMPANY OF PADUCAH
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
- 7 -
