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EXHIBIT 10.1
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Fifth Amendment"),
dated as of June 30, 2000 (but effective as provided herein), is entered into
among XXXXXXXX MANUFACTURING COMPANY, a Texas corporation (the "Borrower"), the
lenders listed on the signature pages hereof (collectively, the "Lenders"), and
BANK OF AMERICA, N.A. (formerly known as Bank of America National Trust and
Savings Association, successor by merger to Bank of America, N.A., formerly
known as NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.),
as the Administrative Agent (in said capacity, the "Administrative Agent").
The Borrower, the Lenders and the Administrative Agent are parties to
that certain Credit Agreement, dated as of September 19, 1997, as amended by
that certain First Amendment to Credit Agreement, dated as of February 10, 1999,
that certain Second Amendment to Credit Agreement, dated as of May 14, 1999, and
that certain Third Amendment to Credit Agreement, dated as of August 12, 1999,
and that certain Fourth Amendment to Credit Agreement, dated as of October 12,
1999 (the "Credit Agreement"; the terms defined in the Credit Agreement and not
otherwise defined herein shall be used herein as defined in the Credit
Agreement).
The Borrower, the Lenders and the Administrative Agent desire to amend
the Credit Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower, the
Lenders and the Administrative Agent covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(1) The definition of "Applicable Base Rate Margin" set forth in
Section 1.1 of the Credit Agreement is hereby amended to read as follows:
"Applicable Base Rate Margin" means the following per annum
percentages, applicable in the following situations:
Facility A Term Facility B
Loan Advances and Term Loan
Applicability Revolving Advances Advances
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(a) The Leverage Ratio is greater than or 2.000% 2.500%
equal to 4.50 to 1
(b) The Leverage Ratio is less than 4.50 to 1 1.500% 2.500%
but greater than or equal to 3.50
to 1
(c) The Leverage Ratio is less than 3.50 to 1 0.750% 2.500%
2
The Applicable Base Rate Margin payable by the Borrower on the Base
Rate Advances outstanding hereunder shall be subject to reduction or
increase, as applicable and as set forth in the table above, on a
quarterly basis according to the performance of the Borrower as tested
by using the Leverage Ratio calculated as of the end of each fiscal
quarter; provided, that each adjustment in the Base Rate Basis as a
result of a change in the Applicable Base Rate Margin shall be
effective with respect to Base Rate Advances (i) made following receipt
by the Administrative Agent of the financial statements required to be
delivered pursuant to Section 6.2 or 6.3 hereof, as applicable, for
each such fiscal quarter, and the corresponding Compliance Certificate
required pursuant to Section 6.4 hereof, on the date of making such
Base Rate Advance and (ii) outstanding on the date of receipt of such
financial statements and Compliance Certificate referred to in clause
(i) immediately preceding, on the date which is two Business Days
following the date of receipt of such financial statements and
Compliance Certificate. If such financial statements and Compliance
Certificate are not received by the Administrative Agent by the date
required, the Applicable Base Rate Margin shall be determined as if the
Leverage Ratio is greater than 4.50 to 1 until such time as such
financial statements and Compliance Certificate are received. For the
period from and including January 1, 2000 to but not including the date
in which the Applicable Base Rate Margin would be adjusted as provided
above, the Applicable Base Rate Margin shall be determined as if the
Leverage Ratio is greater than 4.50 to 1.
(2) The definition of "Applicable LIBOR Rate Margin" set forth in
Section 1.1 of the Credit Agreement is hereby amended to read as follows:
"Applicable LIBOR Rate Margin"means the following per annum
percentages, applicable in the following situations:
Facility A Term Facility B
Loan Advances and Term Loan
Applicability Revolving Advances Advances
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(a) The Leverage Ratio is greater than or 3.500% 4.000%
equal to 4.50 to 1
(b) The Leverage Ratio is less than 4.50 3.000% 4.000%
to 1 but greater than or equal to
3.50 to 1
(c) The Leverage Ratio is less than 3.50 2.250% 4.000%
to 1
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The Applicable LIBOR Rate Margin payable by the Borrower on the LIBOR
Advances outstanding hereunder shall be subject to reduction or
increase, as applicable and as set forth in the table above, on a
quarterly basis according to the performance of the Borrower as tested
by using the Leverage Ratio calculated as of the end of each fiscal
quarter; provided, that each adjustment in the LIBOR Basis as a result
of a change in the Applicable LIBOR Rate Margin shall be effective with
respect to LIBOR Advances (i) made following receipt by the
Administrative Agent of the financial statements required to be
delivered pursuant to Section 6.2 or 6.3 hereof, as applicable, for
each such fiscal quarter, and the corresponding Compliance Certificate
required pursuant to Section 6.4 hereof, on the date of making such
LIBOR Advance and (ii) outstanding on the date of receipt of such
financial statements and Compliance Certificate referred to in clause
(i) immediately preceding, on the date which is two Business Days
following the date of receipt of such financial statements and
Compliance Certificate. If such financial statements and Compliance
Certificate are not received by the Administrative Agent by the date
required, the Applicable LIBOR Rate Margin shall be determined as if
the Leverage Ratio is greater than 4.50 to 1 until such time as such
financial statements and Compliance Certificate are received. For the
period from and including January 1, 2000 to but not including the date
in which the Applicable LIBOR Rate Margin would be adjusted as provided
above, the Applicable LIBOR Rate Margin shall be determined as if the
Leverage Ratio is greater than 4.50 to 1.
(3) The definition of "Borrowing Base" set forth in Section 1.1 of the
Credit Agreement is hereby amended to read as follows:
"Borrowing Base" means (a) during the period from and
including May 31, 2000 through and including September 30, 2000, an
amount equal to the sum of (i)(A) 100% of Insured Eligible Accounts
(less coinsurance and deductible amounts with respect to such Insured
Eligible Accounts), plus (B) 80% of Uninsured Eligible Accounts plus
(ii)(A) 100% of Spectrum Resin Eligible Inventory, plus (B) 100% of
Borrower Resin and Colorant Eligible Inventory, plus (C) 50% of Other
Eligible Inventory and (b) during any period other than the period from
and including May 31, 2000 through and including September 30, 2000, an
amount equal to the sum of (i) 80% of Eligible Accounts plus (ii) 50%
of Eligible Inventory.
(4) The definition of "EBITDA" set forth in Section 1.1 of the Credit
Agreement is hereby amended to read as follows:
"EBITDA" means, for any period, determined in accordance with
GAAP on a consolidated basis for the Borrower and its Subsidiaries, the
sum of (a) EBIT plus (b) depreciation, amortization and other non-cash
charges (to the extent included in determining EBIT), plus (c)
management fees in favor of Westar Capital L.L.C. and
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bonuses accrued but not paid during such period, minus (d) management
fees in favor of Westar Capital L.L.C. and bonuses paid but not accrued
during such period. Notwithstanding anything in this definition to the
contrary, for purposes of any calculations made pursuant to Article 7
hereof, EBITDA shall also include capital contributions made during the
applicable period by the Specified Investors or other shareholders of
the Borrower.
(5) The definition of "Fixed Charges" set forth in Section 1.1 of the
Credit Agreement is hereby amended to read as follows:
"Fixed Charges" means, for any date of calculation, calculated
for the Borrower and its Subsidiaries on a consolidated basis, the sum
of, without duplication, (a) scheduled principal payments in respect of
Indebtedness (after giving effect to the reduction of scheduled
principal payments as a result of the prepayments of Loans pursuant to
Section 3(e) of the Fourth Amendment or Section 8.3 hereof), plus (b)
cash interest expense paid by the Borrower or its Subsidiaries
(including interest expense pursuant to Capitalized Lease Obligations),
but not including any amortized closing fees or closing costs.
(6) The definition of "Fixed Charge Coverage Ratio" set forth in
Section 1.1 of the Credit Agreement is hereby amended to read as follows:
"Fixed Charge Coverage Ratio" means the ratio of (a) EBITDA
minus Maintenance Capital Expenditures to (b) Fixed Charges, calculated
for (i) June 30, 2000, from and including October 1, 1999 to and
including June 30, 2000, and (ii) each fiscal quarter thereafter, for
the four consecutive fiscal quarters immediately preceding the date of
such calculation.
(7) Section 1.1 of the Credit Agreement is hereby amended by adding the
following defined terms thereto in proper alphabetical order:
"Borrower Resin and Colorant Eligible Inventory" means all
Eligible Inventory of the Borrower and its Subsidiaries which consists
solely of resin Eligible Inventory (excluding any Spectrum Resin
Eligible Inventory) and colorant Eligible Inventory.
"Insured Eligible Accounts" means all Accounts of the Borrower
and its Subsidiaries (a) which have satisfied all of the requirements
set forth in clauses (a) through (j) of the definition of Eligible
Accounts but not necessarily the requirements set forth in clause (g)
thereof and (ii) the payment of which are insured in full pursuant to
terms and by insurers acceptable to the Administrative Agent.
"Inventory" has the meaning assigned to such term in the UCC.
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"Other Eligible Inventory" means all Eligible Inventory of the
Borrower and its Subsidiaries other than Spectrum Resin Eligible
Inventory and Borrower Resin and Colorant Eligible Inventory.
"Maintenance Capital Expenditures" means all Capital
Expenditures identified by the Borrower to be for purposes of
maintenance on facilities and equipment.
"Spectrum Resin Eligible Inventory" means all Eligible
Inventory which consists wholly of resin inventory of the Spectrum
division of the Borrower.
"Support Agreement" means that certain agreement, executed by
Westar Capital II LLC and Westar Capital, L.P., in the form of Exhibit
M hereto.
"Uninsured Eligible Accounts" means all Eligible Accounts of
the Borrower and its Subsidiaries which are not Insured Eligible
Accounts.
(8) Section 7.12 of the Credit Agreement is hereby amended in its
entirety to read as follows:
Section 7.12 Minimum Fixed Charge Coverage Ratio. The Borrower
shall not permit the Fixed Charge Coverage Ratio to be less than (a)
1.0 to 1 for any fiscal quarter ending during the period from the
Agreement Date through and including June 30, 2001 and (b) 1.25 to 1
for any fiscal quarter thereafter.
(9) Section 7.19 of the Credit Agreement is hereby amended in its
entirety to read as follows:
Section 7.19 Minimum EBITDA. The Borrower shall not permit
EBITDA to be less than $22,754,000 for the three consecutive fiscal
quarters ending June 30, 2000.
(10) Section 8.1(m) of the Credit Agreement is hereby amended by
deleting the word "or" at the end of said section.
(11) Section 8.1(n) of the Credit Agreement is hereby amended by
deleting the period at the end of said section and inserting "; or" in lieu
thereof.
(12) Section 8.1 of the Credit Agreement is hereby amended by adding a
new Section 8.1(o) at the end of said section to read as follows:
(o) The Specified Investors shall fail to make payments to the
Borrower in the manner and on the dates specified in the Support
Agreement.
(13) Section 8.3 of the Credit Agreement is hereby amended to read as
follows:
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Section 8.3 Cure. Upon the earlier of (a) the receipt of
knowledge by any Responsible Officer of the Borrower of a default by
the Borrower or any Subsidiary of any covenant contained in Section
7.11, 7.12, 7.13 or 7.21 hereof, or (b) 45 days after the end of any
fiscal quarter other than the last fiscal quarter of any fiscal year
(or 90 days after the end of the last fiscal quarter of any fiscal
year) following any such default, the Borrower shall give notice to the
Specified Investors of the occurrence of such default, and within two
Business Days of receiving notice of such default, one or more of the
Specified Investors may give the Administrative Agent irrevocable
written notice of their intent to cure such default by the investment
of additional capital in the Borrower (whether through the contribution
of cash, the purchase of equity or otherwise) in an amount not less
than the amount set forth in such notice. If one or more of the
Specified Investors send such notice to the Administrative Agent, the
Specified Investors shall have fifteen days from the receipt by the
Administrative Agent to provide the Borrower with the amount of capital
set forth in such notice, it being understood that such capital
investment shall be deemed to increase the (and shall be considered as)
(without duplication) EBIT, Pretax Net Income, EBITDA and EBITDAR of
the Borrower as of the last day of the previous fiscal quarter by the
amount thereof for all purposes of this Agreement and to the extent any
such proceeds are applied to repay any Advances, such proceeds shall be
deemed for all purposes to have reduced the Total Debt and the Senior
Debt, as applicable, or other Indebtedness that constitutes Total Debt
or Senior Debt, as the case may be, of the Borrower as of the last day
of the previous fiscal quarter; provided, however, in no event shall
the grace period provided by this Section 8.3 extend more than 45 days
beyond the date of any fiscal quarter (or 90 days in the case of the
last fiscal quarter of any fiscal year) in which compliance with any
such covenant was not satisfied. All payments received by Borrower
pursuant to the Support Agreement shall be deemed to be payments made
pursuant to this Section 8.3.
(14) Exhibit F to the Credit Agreement is hereby amended to be in the
form of Exhibit F to this Fifth Amendment.
(15) Exhibit M is hereby added to the Credit Agreement and is in the
form of Exhibit M to this Fifth Amendment.
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Borrower represents and warrants that, as of
the date hereof and after giving effect to the amendments contemplated by the
foregoing Section 1:
(1) the representations and warranties contained in the Credit
Agreement are true and correct on and as of the date hereof as if made on and as
of such date; except as otherwise expressly provided in Section 4.2 of the
Credit Agreement;
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(2) no event has occurred and is continuing which constitutes a Default
or an Event of Default;
(3) the Borrower has full power and authority to execute and deliver
this Fifth Amendment, and this Fifth Amendment and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms, except as enforceability may be limited by applicable debtor relief laws
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and except as rights to indemnity may be
limited by federal or state securities laws; and
(4) no authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person (including the Board
of Directors of the Borrower), is required that has not been obtained for the
execution, delivery or performance by the Borrower of this Fifth Amendment.
3. CONDITIONS OF EFFECTIVENESS. This Fifth Amendment shall be effective
as of June 30, 2000 (provided, however, the changes in the definition of (i) the
Applicable Base Rate Margin and the Applicable LIBOR Rate Margin shall be
effective as of June 1, 2000 and (ii) the Borrowing Base shall be effective as
of May 31, 2000), subject to the following:
(1) the Administrative Agent shall have received a counterpart of this
Fifth Amendment executed by Lenders comprising the Determining Lenders;
(2) the Administrative Agent shall have received counterparts of this
Fifth Amendment executed by the Borrower;
(3) the representations and warranties set forth in Section 5 of this
Fifth Amendment shall be true and correct, except as otherwise expressly
provided in Section 4.2 of the Credit Agreement;
(4) the Administrative Agent shall have received a Support Agreement,
executed by the Specified Investors, the Borrower, and the Lenders comprising
the Determining Lenders; and
(5) the Administrative Agent and the Determining Lenders shall have
received in form and substance satisfactory to the Administrative Agent and the
Determining Lenders, such other documents and certificates as the Administrative
Agent shall require.
4. REFERENCE TO THE CREDIT AGREEMENT.
(1) Upon the effectiveness of this Fifth Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as affected and amended
by this Fifth Amendment.
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(2) The Credit Agreement, as amended by this Fifth Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Administrative Agent in connection with the
preparation, reproduction, execution and delivery of this Fifth Amendment, and
the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent with respect thereto and with respect to advising the Administrative Agent
as to its rights and responsibilities under the Credit Agreement, as amended by
this Fifth Amendment).
6. EXECUTION IN COUNTERPARTS. This Fifth Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which when taken together shall constitute but one and
the same instrument.
7. GOVERNING LAW; BINDING EFFECT. This Fifth Amendment shall be
governed by and construed in accordance with the laws of the State of Texas and
shall be binding upon the Borrower and each Lender and their respective
successors and assigns.
8. HEADINGS. Section headings in this Fifth Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Fifth Amendment for any other purpose.
9. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIFTH
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Fifth
Amendment as of the date first above written.
BORROWER: XXXXXXXX MANUFACTURING COMPANY
By:
------------------------------------
Name:
-------------------------------
Title:
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ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A. as the
Administrative Agent
By:
------------------------------------
Name:
-------------------------------
Title:
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LENDERS: BANK OF AMERICA, N.A., as a Lender,
Swing Line Bank and Issuing Bank
By:
------------------------------------
Name:
-------------------------------
Title:
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ARCHIMEDES FUNDING, LLC
By: ING Capital Advisors, LLC
As Collateral Manager
By:
------------------------------------
Name:
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Title:
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COMERICA BANK-TEXAS
By:
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Name:
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Title:
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HSBC BANK USA
(formerly known as Marine Midland Bank)
By:
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Name:
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Title:
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IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By:
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Name:
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Title:
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BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By:
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Name:
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Title:
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By:
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Name:
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Title:
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FLEET CAPITAL CORPORATION
By:
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Name:
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Title:
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XXXXXX XXXXXXX XXXX XXXXXX PRIME
INCOME TRUST
By:
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Name:
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Title:
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KZH SOLEIL LLC
By:
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Name:
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Title:
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ML CLO XII PILGRIM AMERICA (CAYMAN) LTD.
By: Pilgrim Investments, Inc., as its
Investment Manager
By:
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Name:
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Title:
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TRI-LINKS INVESTMENT TRUST
By: Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee
By:
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Name:
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Title:
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