EXHIBIT 10.14
FORM 10-Q
QUARTER ENDED JUNE 30, 1997
THIRTEENTH AMENDMENT TO
CREDIT AGREEMENT
THIS THIRTEENTH AMENDMENT TO CREDIT AGREEMENT, dated as of
June 26, 1997, amends and supplements the Credit Agreement dated as of
December 14, 1994, as amended (the "Credit Agreement"), between BUCYRUS
INTERNATIONAL, INC. (the "Company") and BANK ONE, WISCONSIN (the "Bank").
RECITAL
The Company and the Bank desire to amend and supplement the Credit
Agreement as provided below.
AGREEMENTS
In consideration of the promises and agreements set forth in the
Credit Agreement, as amended hereby, the Company and the Bank agree as
follows:
1. Definition and References. Capitalized terms not defined
herein have the meanings assigned in the Credit Agreement. Upon the
fulfillment of the conditions set forth in section 3 below, all references to
the Credit Agreement contained in the Loan Documents shall mean the Credit
Agreement as amended by this Thirteenth Amendment to Credit Agreement.
2. Amendment. Subsections 2.16(b)(ix) and (x) of the Credit
Agreement are created to read as follows:
(ix) Project Financing Loan No. 9. The Bank agrees
to make advances, (in a minimum amount of $250,000 and in a
multiple of $50,000 above such minimum), subject to the terms and
conditions set forth in this Agreement, to finance the
construction of a 495-BI shovel, a 395-BIII shovel and related
equipment and accessories ("Project No. 9") to be sold by the
Company to Mexicana de Cananea, S.A. de C.V. and Mexicana de
Cobre, S.A. de C.V., respectively, pursuant to Purchase Order Nos.
84-14-24-1654-7 and 84-14-24-1653-7 dated March 4, 1997 (the
"Grupo Mexico Contract"), as follows:
(a) Maximum Loan Amount: $7,500,000 until the
495-BI shovel is shipped and paid for (less any retainage);
thereafter, $5,000,000.
(b) Limitation on Advances: The unpaid
principal balance of Project Financing Note No. 9 shall not at any
time prior to the shipment of the 495-BI shovel exceed the lesser
of (i) the Maximum Loan Amount or (ii) an amount equal to 100% of
the cost (determined in accordance with GAAP in a manner
consistent with the Company's historical accounting practices) of
the work-in-process inventory comprising Project No. 9 and (iii)
100% of the remaining payments (i.e., the contract purchase price
less payments already received) under the Grupo Mexico Contract.
After shipment of the 495-BI shovel, the unpaid
principal balance of Project Financing Note No. 9 shall not exceed
the lesser of (x) the Maximum Loan Amount, (y) the sum of 100% of
the cost (determined in accordance with GAAP in a manner
consistent with the Company's historical accounting practices) of
the remaining work-in-process inventory comprising Project No. 9
plus 100% of the amounts invoiced under the Grupo Mexico Contract
and (z) 100% of the remaining payments (i.e., the contract
purchase price less payments already received) under the Grupo
Mexico Contract
(c) Maturity Date: The aggregate principal
amount of Project Financing Note No. 9 and all accrued interest
shall be due upon the first to occur of (i) the receipt by the
Company of the final payment under the Grupo Mexico Contract or
(ii) December 31, 1997.
(d) Interest Rate: Reference Rate or the
Adjusted Libor Rate with the Applicable Libor Margin being 2.75%;
each Libor Rate Loan must be in a minimum amount of $250,000 and
have an Interest Period of one month.
(e) Interest Payment Dates: The last Business
Day of each month and on the Maturity Date.
(f) Facility Fee: (i) If the Credit Agreement
is not refinanced by August 15, 1997 (or such later date specified
by the Bank in writing), the Company agrees to pay $2,500 to the
Bank on such date; (ii) if the Project Financing Reserve is
reduced by the mutual agreement of the Company and the Bank, the
Company agrees to pay to the Bank on the date of such reduction a
fee equal to the greater of [1] 1/2 of 1% of the reduction in the
Project Financing Reserve or [2] $10,000; and (iii) if the Credit
Agreement is refinanced with another financial institution prior
to the Maturity Date, the Company agrees to pay to the Bank on the
date of such refinancing a fee of $25,000.
(g) Commitment Fee: As consideration for the
commitment of the Bank to provide the Project Financing to the
Company, the Company agrees to pay to the Bank on the last
Business Day of each month, commencing August 29, 1997, and on the
Maturity Date, a commitment fee equal to 1/4 of 1% per year on the
difference between the Maximum Loan Amount and the daily average
outstanding principal balance of Project Financing Note No. 9
during the preceding month or other applicable period. The
commitment fee shall begin to accrue on August 15, 1997 and no
commitment fee shall be payable for the period prior to that date.
(h) Prepayment of Project Financing Note No.
9: The Company may prepay Project Note No. 9 in whole or in part
at any time upon two Business Days prior notice to the Bank. The
Company shall prepay Project Financing Note No. 9 immediately upon
receipt (i) from the Bank of a notice (containing calculations in
reasonable detail) to the effect that the outstanding principal
balance of Project Financing Note No. 9 exceeds the limits set
forth in subsection (b) above in an amount equal to such excess
and (ii) of a payment on the Grupo Mexico Contract in an amount
equal to such payment. Any principal prepayment shall first be
applied to the amount, if any, of Project Financing Note No. 9
consisting of Reference Rate Loans and the balance to Libor Rate
Loans. Upon any principal prepayment of a Libor Rate Loan, the
Company shall also pay accrued interest thereon and any amount due
under section 2.14(c).
(i) Project Financing Reserve: 100%.
(i) Use of Proceeds: The Company shall use
the proceeds of Project Loan No. 9 solely to pay costs associated
with Project No. 9.
(x) Project Financing Loan No. 10. The Bank agrees
to make advances, (in a minimum amount of $250,000 and in a
multiple of $50,000 above such minimum), subject to the terms and
conditions set forth in this Agreement, to finance the
construction of a Model 495-B shovel and related equipment and
accessories ("Project No. 10") to be sold by the Company to Phelps
Dodge ("Phelps Dodge") pursuant to a Purchase Order No. 51400 (the
"Phelps Dodge Contract"), as follows:
(a) Maximum Loan Amount: $5,000,000.
(b) Limitation on Advances: Prior to shipment
of the shovel, the unpaid principal balance of Project Financing
Note No. 10 shall not at any time exceed the lesser of (i) the
Maximum Loan Amount or (ii) an amount equal to 100% of the cost
(determined in accordance with GAAP in a manner consistent with
the Company's historical accounting practices) of the work-in-
process inventory comprising Project No. 10 and (iii) 100% of the
remaining payments (i.e., the contract purchase price less
payments already received) under the Phelps Dodge Contract.
After shipment of the shovel, the unpaid principal
balance of Project Financing Note No. 10 shall not at any time
exceed the lesser of (i) the Maximum Loan Amount or (b) 100% of
the outstanding amount invoiced by the Company under the Phelps
Dodge Contract and (iii) 100% of the remaining payments (i.e., the
contract purchase price less payments already received) under the
Phelps Dodge Contract
(c) Maturity Date: The aggregate principal
amount of Project Financing Note No. 10 and all accrued interest
shall be due upon the first to occur of (i) the receipt by the
Company of the final payment under the Phelps Dodge Contract or
(ii)August 31, 1997.
(d) Interest Rate: Reference Rate or the
Adjusted Libor Rate with the Applicable Libor Margin being 2.75%;
each Libor Rate Loan must be in a minimum amount of $250,000 and
have an Interest Period of one month.
(e) Interest Payment Dates: The last Business
Day of each month and on the Maturity Date.
(f) Facility Fee: (i) If the Credit Agreement
is not refinanced by August 15, 1997 (or such later date specified
by the Bank in writing), the Company agrees to pay $2,500 to the
Bank on such date, (ii) if the Project Financing Reserve is
reduced by the mutual agreement of the Company and the Bank, the
Company agrees to pay to the Bank on the date of such reduction a
fee equal to the greater of [1] 1/2 of 1% of the reduction in the
Project Financing Reserve or [2] $10,000 and (iii) if the Credit
Agreement is refinanced with another financial institution prior
to the Maturity Date, the Company agrees to pay to the Bank on the
date of such refinancing a fee of $25,000. There fees are in
addition to any fees payable under section 2.16(b)(ix)(f).
(g) Commitment Fee: As consideration for the
commitment of the Bank to provide the Project Financing to the
Company, the Company agrees to pay to the Bank on the Maturity
Date, a commitment fee equal to 1/4 of 1% per year on the
difference between the Maximum Loan Amount and the daily average
outstanding principal balance of Project Financing Note No. 10
during the period from August 15, 1997 to the Maturity Date. The
commitment fee shall begin to accrue on August 15, 1997 and no
commitment fee shall be payable for the period prior to that date.
(h) Prepayment of Project Financing Note No.
10: The Company may prepay Project Note No. 10 in whole or in
part at any time upon two Business Days prior notice to the Bank.
The Company shall prepay Project Financing Note No. 10 immediately
upon receipt (i) from the Bank of a notice (containing
calculations in reasonable detail) to the effect that the
outstanding principal balance of Project Financing Note No. 10
exceeds the limits set forth in subsection (b) above in an amount
equal to such excess and (ii) of a payment on the Phelps Dodge
Contract in an amount equal to such payment. Any principal
prepayment shall first be applied to the amount, if any, of
Project Financing Note No. 10 consisting of Reference Rate Loans
and the balance to Libor Rate Loans. Upon any principal
prepayment of a Libor Rate Loan, the Company shall also pay
accrued interest thereon and any amount due under section 2.14(c).
(h) Project Financing Reserve: 100%.
(i) Use of Proceeds: The Company shall use
the proceeds of Project Loan No. 10 solely to pay costs associated
with Project No. 10.
(j) Delivery of Phelp Dodge Contract: The Company
will deliver a copy of the executed purchase order for Project No. 10 to the
Bank before requesting an advance under Project Loan No. 10.
3. Closing Conditions. This Thirteenth Amendment to Credit
Agreement shall be effective upon its execution and delivery by the Company
and the Bank and the receipt by the Bank of:
(a) Project Financing Note Nos. 9 and 10, duly executed by
the Company;
(b) An opinion of counsel to the Company satisfactory to
the Bank; and
(c) Such other documents as the Bank may reasonably
request relating to this Thirteenth Amendment.
4. Representations and Warranties. The Company represents and
warrants to the Bank that:
(a) The execution and delivery of this Thirteenth
Amendment and Project Financing Note Nos. 9 and 10 are within the Company's
corporate power and corporate authority, have been duly authorized by all
necessary corporate action on the part of the Company, are not in violation of
any existing law, rule or regulation of any governmental agency or authority,
any order or decision of any court, the certification of incorporation or by-
laws of the Company or the terms of any agreement, restriction or undertaking
to which the Company is a party or by which it is bound, do not require the
approval or consent of the shareholders of the Company, any governmental body,
agency or authority or any other person or entity.
(b) The representations and warranties set forth in
section 3 of the Credit Agreement are true and correct in all material
respects as of the date of this Thirteenth Amendment to Credit Agreement and
no Default or Event of Default has occurred and is continuing.
5. Cash Interest Payment. The Bank consents to the Company
making a cash interest payment on June 30, 1997 of the interest accrued on the
Secured Notes during the period from January 1, 1997 through June 30, 1997.
6. Costs and Expenses. The Company agrees to pay all costs and
expenses (including reasonable attorneys' fees) paid or incurred by the Bank
in connection with the execution and delivery of this Thirteenth Amendment and
the consummation of the transactions contemplated hereby.
7. Full Force and Effect. The Company and the Bank confirm
that the Credit Agreement, as amended hereby, remains in full force and
effect.
BANK ONE, WISCONSIN
BY /s/William E. Shaw, VP
William E. Shaw, Vice President
BUCYRUS INTERNATIONAL, INC.
BY /s/John F. Bosbous
Its Assistant Treasurer
PROJECT FINANCING NOTE NO. 9
$7,500,000 Milwaukee, Wisconsin
June 26, 1997
FOR VALUE RECEIVED, on or before the Maturity Date set forth in
section 2.16(b)(ix) of the Credit Agreement referred to below, the
undersigned, BUCYRUS INTERNATIONAL, INC., a Delaware corporation, promises to
pay to the order of BANK ONE, WISCONSIN (the "Bank") the principal sum of
Seven Million Five Hundred Thousand Dollars, or such lesser amount as is shown
to be outstanding according to the records of the Bank, together with interest
on the principal balance outstanding from time to time at such rates and
payable at such times as set forth in the Credit Agreement.
Payments of both principal and interest are to be made in
immediately available funds in lawful currency of the United States of America
at the office of the Bank, 111 East Wisconsin Avenue, Milwaukee, Wisconsin, or
such other place as the holder hereof shall designate to the undersigned in
writing.
This Note is Project Financing Note No. 9 issued pursuant to the
Credit Agreement dated as of December 14, 1994, as amended, between the
undersigned and the Bank, to which Agreement reference is made for rights and
obligations as to prepayment and acceleration of maturity.
The undersigned agrees to pay all costs of collection, including
reasonable attorneys' fees.
BUCYRUS INTERNATIONAL, INC.
BY /s/John F. Bosbous
Its Assistant Treasurer
PROJECT FINANCING NOTE NO. 10
$5,000,000 Milwaukee, Wisconsin
June 26, 1997
FOR VALUE RECEIVED, on or before the Maturity Date set forth in
section 2.16(b)(x) of the Credit Agreement referred to below, the undersigned,
BUCYRUS INTERNATIONAL, INC., a Delaware corporation, promises to pay to the
order of BANK ONE, WISCONSIN (the "Bank") the principal sum of Five Million
Dollars, or such lesser amount as is shown to be outstanding according to the
records of the Bank, together with interest on the principal balance
outstanding from time to time at such rates and payable at such times as set
forth in the Credit Agreement.
Payments of both principal and interest are to be made in
immediately available funds in lawful currency of the United States of America
at the office of the Bank, 111 East Wisconsin Avenue, Milwaukee, Wisconsin, or
such other place as the holder hereof shall designate to the undersigned in
writing.
This Note is Project Financing Note No. 10 issued pursuant to the
Credit Agreement dated as of December 14, 1994, as amended, between the
undersigned and the Bank, to which Agreement reference is made for rights and
obligations as to prepayment and acceleration of maturity.
The undersigned agrees to pay all costs of collection, including
reasonable attorneys' fees.
BUCYRUS INTERNATIONAL, INC.
BY /s/John F. Bosbous
Its Assistant Treasurer