EX-10 2 ex10-18.txt SEVENTH AMENDMENT TO CREDIT AGREEMENT SEVENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this "AMENDMENT"), dated as of June 25, 2001, is by and among COLUMBUS MCKINNON CORPORATION, a New York corporation (the "BORROWER"), the banks, financial institutions and other institutional lenders which are parties to the Credit Agreement (as such term is defined below) (the "LENDERS"), FLEET NATIONAL BANK, as Initial Issuing Bank (the "INITIAL ISSUING BANK"), FLEET NATIONAL BANK, as the Swing Line Bank (the "SWING LINE BANK"; each of the Lenders, the Initial Issuing Bank and the Swing Line Bank, individually, a "LENDER PARTY" and, collectively, the "LENDER PARTIES"), and FLEET NATIONAL BANK, as administrative agent (together with any successor appointed pursuant to Article VII of the Credit Agreement, the "ADMINISTRATIVE AGENT") for the Lender Parties. W I T N E S S E T H : ------------------- WHEREAS, the Borrower, Lenders, Initial Issuing Bank, Swing Line Bank and Administrative Agent are party to that certain Credit Agreement, dated as of March 31, 1998, as amended by that certain First Amendment to Credit Agreement, dated as of September 23, 1998, that certain Second Amendment to Credit Agreement and Consent, dated as of February 12, 1999, that certain Third Amendment to Credit Agreement and Consent, dated as of November 16, 1999, that certain Fourth Amendment to Credit Agreement and Waiver, dated as of February 15, 2000, that certain Fifth Amendment to Credit Agreement, dated as of September 28, 2000, and that certain Sixth Amendment to Credit Agreement and Consent, dated as of February 5, 2001 (as so amended and as it may hereafter be further amended, supplemented, restated, extended or otherwise modified from time to time, the "CREDIT AGREEMENT"); WHEREAS, Events of Default exist under (i) Section 5.04(a) (Funded Debt to EBITDA Ratio) of the Credit Agreement for the period of four fiscal quarters ended March 31, 2001 based on an actual Funded Debt to EBITDA Ratio of 4.04 to 1.0 versus a required Funded Debt to EBITDA Ratio of 4.00 to 1.0 and (ii) Section 5.04(d) (Minimum New Worth) as of March 31, 2001 based on an actual net worth of $207,864,000 versus a required net worth of $209,045,000 (the Events of Default described in clauses (i) and (ii), the "EXISTING EVENTS OF DEFAULT"); WHEREAS, the Borrower has requested that the Administrative Agent and Lender Parties waive the Existing Event of Default; WHEREAS, the Borrower has also requested that the Administrative Agent and Lender Parties amend the Credit Agreement as and to the extent set forth in this Amendment; and WHEREAS, the Administrative Agent and Lender Parties are agreeable to the foregoing, in each instance as and to the extent set forth in this Amendment and subject to each of the terms and conditions stated herein. NOW THEREFORE, in consideration of the premises and the mutual covenants set forth herein and of the loans or other extensions of credit heretofore, now or hereafter made to, or for the benefit of, the Borrower and its Subsidiaries by the Lender Parties, the parties hereto hereby agree as follows: 1. DEFINITIONS. Except to the extent otherwise specified herein, capitalized terms used in this Amendment shall have the same meanings ascribed to them in the Credit Agreement. 2. WAIVER. The Administrative Agent and Lender Parties hereby waive the Existing Events of Default under Sections 5.04(a) and 5.04(d) of the Credit Agreement solely for the period of four fiscal quarters ended March 31, 2001 and as of March 31, 2001, respectively. The foregoing waiver is only applicable and shall only be effective in the specific instance and for the specific purpose for which made. Such waiver is expressly limited to the facts and circumstances referred to herein and shall not operate (a) as a waiver of or consent to non-compliance with any other Section or provision of the Credit Agreement or any other Loan Document, (b) as a waiver of any other right, power or remedy of the Administrative Agent or any Lender Party under the Credit Agreement or any other Loan Document or (c) as a waiver of or consent to any Default or Event of Default under the Credit Agreement or any other Loan Document, other than as expressly provided in this Section 2. 3. AMENDMENTS. 3.1. Section 1.01 of the Credit Agreement is amended by deleting from the definition of "APPLICABLE MARGIN" the entire pricing chart contained therein and replacing it with the following chart:
APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN RATIO OF FUNDED DEBT TO FOR PRIME RATE FOR EURODOLLAR FOR COMMITMENT EBITDA ADVANCES RATE ADVANCES FEE ----------------------------- ----------------- ----------------- ----------------- Equal to or greater than 4.00 0.875% 2.500% 0.375% Equal to or greater than 3.50 less than 4.00 0.625% 2.250% 0.350% Equal to or greater than 3.00 less than 3.50 0.375% 2.000% 0.300% Equal to or greater than 2.50 less than 3.00 0.125% 1.750% 0.200% Less than 2.50 0.125% 1.375% 0.150%
3.2. Section 1.01 of the Credit Agreement is amended by inserting the following definition in the proper alphabetical order: "SEVENTH AMENDMENT" means that certain Seventh Amendment to Credit Agreement, dated as of June 25, 2001, by and among the Borrower, the Administrative Agent and the Lenders and other Lender Parties. 3.3. Section 1.03 of the Credit Agreement is amended by inserting the following sentence at the end thereof: "Notwithstanding the foregoing, solely for purposes of determining compliance with the financial covenants set forth in Section 5.04 of - 2 - this Agreement, the Borrower may add back to the calculations of Consolidated EBITDA the amount of non-recurring "restructuring charges" (as defined by and determined in accordance with GAAP) that was deducted from such calculations, but in no event shall the amount added back exceed $12,000,000 for the fiscal year ending March 31, 2002 or $8,000,000 for the fiscal year ending March 31, 2003." 3.4. Section 2.05 (b)(i) of the Credit Agreement is amended by inserting the following sentence at the end thereof: "The Revolving Credit Facility shall be automatically and permanently reduced on the closing date of the Seventh Amendment by $25,000,000, such reduction to be made ratably among the Revolving Credit Lenders in accordance with their Revolving Credit Commitments." 3.5. Section 2.06 (b)(i) of the Credit Agreement is amended by inserting the following sentence at the end thereof: "On the closing date of the Seventh Amendment, the Borrower shall prepay the amount, if any, equal to the excess of (A) the aggregate principal amount of the Revolving Credit Advances plus the aggregate Dollar Equivalent of Alternative Currency Revolving Credit Advances plus the aggregate principal amount of Swing Line Advances plus the aggregate principal amount of Letter of Credit Advances plus the aggregate principal amount of Alternative Currency Letter of Credit Advances plus the aggregate Available Amount of all Letters of Credit, including, without limitation, all Existing Letters of Credit, plus the aggregate Available Amount of all Alternative Currency Letters of Credit, in each instance, as then outstanding, after giving effect to any Advances or renewals on such date, over (B) the Revolving Credit Facility after giving effect to the permanent reduction thereof on such date in accordance with Section 2.05(b)(i)." 3.6. Section 5.04(a) of the Credit Agreement is amended by deleting from the chart contained therein the dates from and including June 30, 2001 and the corresponding ratios for such dates and replacing them with the following: FOUR FISCAL QUARTERS ENDING ON: RATIO ------------------------------ ----- June 30, 2001 4.40 to 1.0 September 30, 2001 4.35 to 1.0 December 31, 2001 4.10 to 1.0 March 31, 2002 4.00 to 1.0 June 30, 2002 3.75 to 1.0 September 30, 2002 and each fiscal quarter end thereafter 3.50 to 1.0. 3.7. Section 5.04(b) of the Credit Agreement is amended by deleting from the chart contained therein the dates from and including June 30, 2001 and the corresponding ratios for such dates and replacing them with the following: - 3 - FOUR FISCAL QUARTERS ENDING ON: RATIO ------------------------------ ----- June 30, 2001 2.25 to 1.0 September 30, 2001 2.25 to 1.0 December 31, 2001 2.35 to 1.0 March 31, 2002 2.50 to 1.0 June 30, 2002 2.75 to 1.0 September 30, 2002 and each fiscal quarter end thereafter 3.00 to 1.0. 3.8. Section 5.04(d) of the Credit Agreement is amended be deleting such Section in its entirety and replacing it with the following: "(d) MINIMUM NET WORTH. Maintain, as of the last day of each fiscal quarter, an excess of Consolidated total assets over Consolidated total liabilities of the Borrower and its Subsidiaries of not less than (i) $200,000,000, plus (ii) 75% of Consolidated positive net income (and excluding 100% of Consolidated net losses) of the Borrower and its Subsidiaries since March 31, 2001 to and including each date of determination computed on a cumulative basis for said entire period." 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower hereby represents and warrants as follows: 4.1. Each of the representations and warranties set forth in the Credit Agreement, including, without limitation, in Article IV of the Credit Agreement, and in each other Loan Document, is true, correct and complete on and as of the date hereof as though made on the date hereof. In addition, the Borrower hereby represents, warrants and affirms that the Credit Agreement and each of the other Loan Documents remains in full force and effect. 4.2. As of the date hereof after giving effect to this Amendment, there exists no Default or Event of Default under the Credit Agreement or any other Loan Document, and no event which, with the giving of notice or lapse of time, or both, would constitute a Default or Event of Default. 4.3. The execution, delivery and performance by each applicable Loan Party of this Amendment and/or the reaffirmations and confirmations attached hereto and each other Loan Document and the consummation of each of the transactions consented to in Sections 3.1 and 3.2 of this Amendment by each applicable Loan Party are within such Loan Party's corporate powers, have been duly authorized by all necessary corporate action, and do not, and will not, (i) contravene such Loan Party's charter or bylaws, (ii) violate any law (including, without limitation, the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended), rule, regulation (including, without limitation, any Regulation of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default under, any material contract, loan agreement, indenture (including, without limitation, the Senior Subordinated Note Indenture), mortgage, deed of trust, lease or other - 4 - material instrument or agreement binding on or affecting any Loan Party, any of its Subsidiaries or any of their respective properties or (iv) except for the Liens created under the Collateral Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries. Neither any Loan Party nor any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture (including, without limitation, the Senior Subordinated Note Indenture), mortgage, deed of trust, lease or other instrument or agreement, the violation or breach of which could reasonably be expected to have a Material Adverse Effect. 4.4. Each of this Amendment and each other Loan Document has been duly executed and delivered by each Loan Party party hereto and thereto. Each of this Amendment and each other Loan Document is the legal, valid and binding obligation of each Loan Party party hereto and thereto, enforceable against such Loan Party in accordance with its terms. 4.5. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of this Amendment, any other Loan Document or any other agreement or document related hereto or thereto or contemplated hereby or thereby to which it is or is to be a party or otherwise bound, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created by the Collateral Documents (including the first priority nature thereof) or (iv) the exercise by the Administrative Agent or any Lender Party of its rights under the Loan Documents or remedies in respect of the Collateral pursuant to the Collateral Documents. 5. CONDITIONS PRECEDENT TO THIS AMENDMENT. The effectiveness of this Amendment is subject to the satisfaction, in form and substance satisfactory to the Administrative Agent, of each of the following conditions precedent: 5.1. The Borrower and Required Lenders shall have duly executed and delivered this Amendment and each other Loan Party shall have duly executed the Acknowledgment and Ratification in connection with this Amendment 5.2. After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing. 5.3. The representations and warranties contained in Section 4 of this Amendment, the Credit Agreement and each other Loan Document shall be true, correct and complete on and as of the closing date of this Amendment as though made on such date. 5.4. The Borrower shall have paid an amendment fee to the Administrative Agent, for the account of each Lender which has approved this Amendment, as evidenced by such Lender's timely execution and delivery of a counterpart signature page to this Amendment (each such Lender being an "APPROVING LENDER"), in an amount equal to 0.20% (i.e. 20 basis points) of such Approving Lender's Revolving Credit Commitment (after giving effect to the $25,000,000 aggregate reduction in Revolving Credit Commitments pursuant to this Amendment). - 5 - 5.5. The Borrower and its Subsidiaries shall have delivered such other documents and taken such other actions as the Administrative Agent may reasonably request. 6. REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS. 6.1. Except as specifically amended in Section 3 above, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect and each is hereby ratified and confirmed. 6.2. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or any other word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any other Loan Document to the Credit Agreement or any word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby. 7. COUNTERPARTS. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument. Delivery of an executed counterpart to this Amendment by telecopier shall be as effective as delivery of a manually executed counterpart of this Amendment. 8. COSTS AND EXPENSES. The Borrower shall pay on demand all reasonable fees, costs and expenses incurred by Administrative Agent (including, without limitation, all reasonable attorneys' fees) in connection with the preparation, execution and delivery of this Amendment and the taking of any actions by any Person in connection herewith. 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK. 10. HEADINGS. Article headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. [Signature Pages Follow] - 6 - IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized on the date first above written. COLUMBUS MCKINNON CORPORATION By: /S/ ROBERT L. MONTGOMERY ---------------------------- Robert L. Montgomery Title: Executive Vice President ACKNOWLEDGMENT AND RATIFICATION The undersigned hereby acknowledge and agree to this Amendment, and agree that the Guaranty, the Security Agreement, and the Intellectual Property Security Agreement, and each other Loan Document executed by the undersigned shall remain in full force and effect and each is hereby ratified and confirmed by and on behalf of the undersigned, this 25th day of June 2001. AUTOMATIC SYSTEMS, INC. By: /S/ ROBERT L. MONTGOMERY ---------------------------- Robert L. Montgomery Title: Treasurer LICO STEEL, INC. By: /S/ ROBERT L. MONTGOMERY ---------------------------- Robert L. Montgomery Title: Treasurer GAFFEY, INC. By: /S/ ROBERT L. MONTGOMERY ---------------------------- Robert L. Montgomery Title: Treasurer HANDLING SYSTEMS AND CONVEYORS, INC. By: /S/ ROBERT L. MONTGOMERY ---------------------------- Robert L. Montgomery Title: Treasurer YALE INDUSTRIAL PRODUCTS, INC. By: /S/ ROBERT L. MONTGOMERY ---------------------------- Robert L. Montgomery Title: Treasurer LENDERS FLEET NATIONAL BANK, as Administrative Agent, Initial Issuing Bank, Swing Line Bank and Lender By: /S/ JOHN C. WRIGHT ---------------------------- Name: JOHN C. WRIGHT -------------------------- Title: VICE PRESIDENT ------------------------- LENDERS ABN-AMRO BANK N.V., as a Co-Agent and Lender By: /S/ JULIETTE MOUND --------------------------- Name: JULIETTE MOUND ------------------------- Title: VICE PRESIDENT ------------------------ By: /S/ NANCY W. LANZONI --------------------------- Name: NANCY LANZONI ------------------------- Title: GROUP VICE PRESIDENT ------------------------ LENDERS THE BANK OF NOVA SCOTIA, as a Co-Agent and Lender By: /S/ PHILIP N. ADSETTS --------------------------- Name: PHILIP N. ADSETTS ------------------------- Title: DIRECTOR ------------------------ LENDERS MANUFACTURERS AND TRADERS TRUST COMPANY, as a Co-Agent and Lender By: /S/ JEFFREY P. KENEFICK --------------------------- Name: JEFFREY P. KENEFICK ------------------------- Title: ASSISTANT VICE PRESIDENT ------------------------ LENDERS HSBC BANK USA (formerly known as Marine Midland Bank), as a Co-Agent and Lender By: /S/ TED OEXLE --------------------------- Name: TED OEXLE ------------------------- Title: VICE PRESIDENT ------------------------ LENDERS COMERICA BANK By: /S/ JOEL S. GORDON --------------------------- Name: JOEL S. GORDON ------------------------- Title: ACCOUNT OFFICER ------------------------ LENDERS FIRST UNION NATIONAL BANK By: /S/ JORGE A. GONZALEZ --------------------------- Name: JORGE A. GONZALEZ ------------------------- Title: SENIOR VICE PRESIDENT ------------------------ LENDERS KEYBANK NATIONAL ASSOCIATION By: /S/ MARY K. YOUNG --------------------------- Name: MARY K. YOUNG ------------------------- Title: VICE PRESIDENT ------------------------ LENDERS MELLON BANK, N.A. By: /S/ EDWARD J. KLOECKER --------------------------- Name: EDWARD J. KLOECKER ------------------------- Title: VICE PRESIDENT ------------------------ LENDERS BANKERS TRUST COMPANY By: /S/ SUSAN L. LE FEVRE --------------------------- Name: SUSAN L. LE FEVRE ------------------------- Title: DIRECTOR ------------------------ LENDERS THE BANK OF NEW YORK By: /S/ CHRISTINE T. RIO --------------------------- Name: CHRISTINE T. RIO ------------------------- Title: VICE PRESIDENT ------------------------ LENDERS NATIONAL BANK OF CANADA By: /S/ TIM LOHN --------------------------- Name: TIM LOHN ------------------------- Title: VICE PRESIDENT ------------------------ By: /S/ MARK DZIMIAN --------------------------- Name: MARK DZIMIAN ------------------------- Title: ASSISTANT VICE PRESIDENT ------------------------ LENDERS NATIONAL CITY BANK OF PENNSYLVANIA By: /S/ WILLIAM A. FELDMAN --------------------------- Name: WILLIAM A. FELDMAN ------------------------- Title: VICE PRESIDENT ------------------------