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XXXXXXXX INDUSTRIES, INC. AND SUBSIDIARIES
EXHIBIT 10.31
AMENDMENT # 7 DATED APRIL 1, 1999 TO BANK CREDIT AGREEMENT
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AMENDMENT NO. 7
TO
CREDIT AGREEMENT
AMENDMENT NO. 7, dated as of April 1, 1999, among Xxxxxxxx
Industries, Inc., a Delaware corporation ("Xxxxxxxx"), Xxxxxxxx Industries
Alabama, Inc., an Alabama corporation formerly known as Opp and Xxxxxxx Xxxxx,
Inc. ("Xxxxxxxx Alabama"), J.I. Georgia, Inc., a Georgia corporation formerly
known as X.X. Xxxxx Company ("JIG"), and Xxxxxxxx Industries Composite
Reinforcements, Inc., an Alabama corporation ("JICR", and collectively with
Xxxxxxxx, Xxxxxxxx Alabama and JIG, the "Borrowers" and each individually, a
"Borrower"), NationsBank, N.A., as Syndication Agent, The Chase Manhattan Bank,
the successor by merger to The Chase Manhattan Bank, N.A., as Agent for the
lenders party hereto ("Lenders") and as Collateral Monitoring Agent ("Agent"),
and the Lenders, to the Credit Agreement, dated as of March 28, 1996, among
Xxxxxxxx, Wellington Sears Company, Southern Phenix Textiles, Inc., Opp and
Xxxxxxx Xxxxx, Inc., X.X. Xxxxx Company and JICR, the banks named therein, The
Chase Manhattan Bank, N.A., as Administrative Agent, Chase Securities, Inc., as
Arranger, and NationsBank, N.A., as Syndication Agent, as amended by Amendment
No. 1 dated as of June 28, 1996, Amendment No. 2 dated as of February 28, 1997,
Amendment No. 3 dated as of December 18, 1997, Amendment No. 4 dated as of March
30, 1998, Amendment No. 5 dated as of July 10, 1998, and Amendment No. 6 dated
as of December 22, 1998 (collectively, the "Credit Agreement"). All capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, a credit facility
is available to the Borrowers on the terms and conditions set forth therein; and
WHEREAS, the Borrowers have requested, and the Lenders have
agreed, subject to the terms and conditions hereinafter set forth, to (i) amend
certain provisions of the Credit Agreement and (ii) modify certain of the
Borrowers' covenants set forth in the Credit Agreement, and the Borrowers
further wish to confirm and reaffirm their joint and several obligations under
the Credit Agreement as amended hereby.
NOW, THEREFORE, each Lender, the Agent, the Syndication Agent
and each Borrower, on a joint and several basis, hereby agree as follows:
1. Amendment to Section 1.01 - Certain Defined Terms. Section 1.01 of
the Credit Agreement is amended hereby as follows:
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(a) The definition of "Applicable Margin" is hereby amended
(i) by deleting the table contained therein in its entirety and substituting the
following in lieu thereof:
Revolver Term Loan A
-------- -----------
Debt Ratio LIBOR Base Rate LIBOR Base Rate
---------- ----- --------- ----- ---------
Less than or equal to 2.00:1 200.00 bp 75.00 bp 250.00 bp 100.00 bp
Greater than 2.00:1 but 225.00 bp 75.00 bp 275.00 bp 100.00 bp
less than or equal to 2.75:1
Greater than 2.75:1 but 250.00 bp 100.00 bp 300.00 bp 125.00 bp
less than or equal to 3.50:1
Greater than 3.50:1 but 300.00 bp 150.00 bp 350.00 bp 175.00 bp
less than or equal to 4.25:1
Greater than 4.25:1 350.00 bp 200.00 bp 400.00 bp 225.00 bp
and (ii) by deleting clause [2] thereof in its entirety and substituting the
following in lieu thereof:
"[2] with respect to Term Loan B: (a) if such Loan is a Eurodollar
Loan, four hundred fifty (450) basis points (4.50%), and (b) if such
Loan is a Base Rate Loan, two hundred seventy-five (275) basis points
(2.75%)."
The Borrowers agree that the foregoing rate increases shall become
effective on April 4, 1999 and that all outstanding Debt of the Borrowers under
the Credit Agreement and the Notes shall be subject to the repricing set forth
herein on April 4, 1999, notwithstanding anything to the contrary contained in
the Credit Agreement.
(b) The definition of "Fixed Charge Coverage Ratio" is hereby
amended by adding "(which, for purposes hereof, shall include only expenditures
actually made)" immediately following "Consolidated Capital Expenditures" in
clause (a)(ii) thereof.
(c) The following defined terms are hereby added to Section
1.01 of the Credit Agreement:
"Xxxxxxxx Proceeds" shall mean all monies paid or payable to
any of the Borrowers resulting from or arising out of the action
originally brought by Xxxxxxxx and Xxxxxxxx Alabama against Xxxxxxxx &
Company, Inc., X.X. Xxxxxx & Associates, Inc., Global Intellectual
Network, Inc., Xxxxxx X. Xxxxxxx, JDW Consulting and Xxxxxx X. Xxxxxx,
et al., in the Circuit Court for Xxxxxxx County, Alabama, whether
obtained by enforcement of a judgment or paid in settlement thereof or
otherwise, net of legal fees and expenses and after taking into account
all incremental taxes payable by or assessed against any of the
Borrowers in connection with any such judgment or settlement."
"Term Loan A Commitment Percentage" has the meaning assigned
to that term in SECTION 2.06(a)."
"Term Loan B Commitment Percentage" has the meaning assigned
to that term in SECTION 2.06(a)."
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2. Amendment to Section 2.06 - Prepayments. Section 2.06(a) of the
Credit Agreement is hereby amended by deleting the last sentence thereof and
substituting the following in lieu thereof:
"Each application of such prepayment to the principal
installments of the Term Loans shall be made to Term Loans A
and to Term Loans B on a pro rata basis in accordance with the
Term Loan A Commitment Percentage and the Term Loan B
Commitment Percentage and, once so applied, shall be applied
pro rata to the principal installments of Term Loans A and
Term Loans B in inverse order of their maturities, and in
accordance with the Banks' respective Term Loan A Commitment
or Term Loan B Commitment, as the case may be. For purposes
hereof, "Term Loan A Commitment Percentage" and "Term Loan B
Commitment Percentage" shall mean a percentage, the numerator
of which is an amount equal to the aggregate of all Term Loan
A Commitments or Term Loan B Commitments, as the case may be,
and the denominator of which is an amount equal to the
aggregate amount of all Term Loan A Commitments and Term Loan
B Commitments."
3. Amendment to Section 2.07 - Mandatory Prepayment. Section 2.07 of
the Credit Agreement is hereby amended by (i) inserting a new paragraph (d) as
follows:
"(d) Any Xxxxxxxx Proceeds received by the Borrowers shall be
applied to discharge the Loans as follows:
(1) First, to the principal installments of the
Term Loans in inverse order of maturities
until the Term Loans shall have been paid in
full; and
(2) Second, to the Revolving Credit Loans until
the Revolving Credit Loans have been paid in
full."
and (ii) by deleting the original paragraph (d) thereof in its entirety and
substituting the following in lieu thereof:
"(e) The Borrowers shall make all mandatory prepayments due
hereunder to the Agent, for the account of the Banks, in amount(s) due
within five (5) days after the occurrence of an event triggering the
mandatory prepayment hereunder. Each application of such mandatory
prepayment to the principal installments of the Term Loans as set forth
in clauses (a), (b) and (d) hereof shall be made to Term Loans A and to
Term Loans B on a pro rata basis in accordance with the Term Loan A
Commitment Percentage and the Term Loan B Commitment Percentage and,
once so applied, shall be applied pro rata to the principal
installments of Term Loans A and Term Loans B in inverse order of their
maturities, and in accordance with the Banks' respective Term Loan A
Commitment or Term Loan B Commitment, as the case may be."
4. Amendment to Section 7.03 - Financial Covenants. Section 7.03 of the
Credit Agreement is hereby amended by deleting the paragraphs referred to below
in their entirety and to substituting the following in lieu thereof:
"(b) Capital Expenditures. Permit Consolidated Capital
Expenditures to exceed (i) $18,600,000 for the fiscal year ending
January 1, 2000, provided that (A) Consolidated Capital Expenditures
consisting of direct cash purchases or related disbursements during
such fiscal year shall not exceed $11,500,000 in the aggregate, and (B)
the computation of Consolidated Capital Expenditures for and/or
incurred with respect to Operating Leases during such fiscal year shall
include the notional value of equipment leased pursuant to such
Operating Leases during such fiscal year; and (ii) $20,000,000 for the
fiscal year ending December 31, 2000, of which no more than $5,500,000
may be committed for expenditure but not expended during the period
from January 2, 2000 through April 1, 2000."
"(c) Consolidated Funded Debt. Incur or permit Consolidated
Funded Debt to exceed (i) $139,000,000 at any time through July 3,
1999, (ii) $137,000,000 at any time from July 4, 1999 through
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October 2, 1999, (iii) $133,000,000 at any time from October 3, 1999
through January 1, 2000 and (iv) $129,000,000 at any time from and
after January 2, 2000."
"(d) Consolidated Tangible Net Worth. Permit its Consolidated
Tangible Net Worth, at any time, to be less than the amount set forth
below:
Period: Amount:
------ ------
1/3/99 - 4/3/99 $34,900,000
4/4/99 - 7/3/99 $34,000,000
7/4/99 - 10/2/99 $33,400,000
10/3/99 - 1/1/00 $34,100,000
1/2/00 and at all times thereafter $70,000,000"
"(e) Leverage Ratio. Permit the Leverage Ratio, as determined
at the end of each fiscal quarter, to be greater than the ratio set
forth opposite the following periods:
Period: Ratio:
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1/3/99 - 4/3/99 3.95:1.00
4/4/99 - 7/3/99 3.96:1.00
7/4/99 - 10/2/99 3.85:1.00
10/3/99 - 1/1/00 3.65:1.00
1/2/00 and at all times thereafter 2.00:1.00"
"(g) Interest Coverage Ratio. Permit the Interest Coverage
Ratio, as determined at the end of each fiscal quarter, to be less than
the ratio set forth opposite the following periods:
Period: Ratio:
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1/3/99 - 4/3/99 0.70:1.00
4/4/99 - 7/3/99 0.65:1.00
7/4/99 - 10/2/99 0.63:1.00
10/3/99 - 1/1/00 0.58:1.00
1/2/00 and at all times thereafter 3.00:1.00"
"(h) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio, as determined at the end of each fiscal quarter, to be
less than the ratio set forth opposite the following periods:
Period: Ratio:
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1/3/99 - 4/3/99 1.42:1.00
4/4/99 - 7/3/99 1.20:1.00
7/4/99 - 10/2/99 0.90:1.00
10/3/99 - 1/1/00 0.75:1.00
1/2/00 and at all times thereafter 1.50:1.00"
"(i) Debt Ratio. Permit the Debt Ratio, as determined at the
end of each fiscal quarter, to be greater than the ratio set forth
opposite the following periods:
Period: Ratio:
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1/3/99 - 4/3/99 4.55:1.00
4/4/99 - 7/3/99 4.65:1.00
7/4/99 - 10/2/99 4.70:1.00
10/3/99 - 1/1/00 4.60:1.00
1/2/00 and at all times thereafter 3.00:1.00"
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2. Representations, Warranties and Covenants of the Borrowers. Each
Borrower hereby represents and warrants to each Lender that on and as of the
date hereof (i) the representations and warranties of the Borrowers contained in
the Credit Agreement and any other Loan Document delivered in connection
therewith to which it is a party are true and correct and apply to the Borrowers
hereto with the same force and effect as though made on and as of the date
hereof, (ii) the Borrowers are in compliance with all covenants contained in the
Credit Agreement (as amended hereby), and (iii) no Default or Event of Default
has occurred and is continuing under the Credit Agreement (as amended hereby) or
any other Loan Document delivered in connection therewith to which it is a
party, after giving effect to this Amendment. To the extent any claim or off-set
may exist as of the date hereof, each Borrower, on behalf of itself and its
successors and assigns, hereby forever and irrevocably (a) releases each Lender,
the Agent and the Syndication Agent and their respective officers,
representatives, agents, attorneys, employees, successors and assigns
(collectively, the "Released Parties"), from any and all claims, demands,
damages, suits, cross-complaints and causes of action of any kind and nature
whatsoever, whether known or unknown and wherever and howsoever arising, and (b)
waives any right of off-set such Borrower may have against any of the Released
Parties.
3. Amendment Fee. Borrowers agree to pay to the Agent, for the benefit
of each Lender that executes and delivers this Amendment, a fee equal to 1/4 of
1% of the Revolving Credit Commitment plus 1/4 of 1% of the Term Loan A
Commitment and the Term Loan B Commitment respectively outstanding as of the
date hereof ("Amendment Fee"), together with the costs and expenses (including,
without limitation, reasonable attorneys' fees) incurred by the Agent for the
preparation, negotiation and delivery of this Amendment, in consideration for
the Lenders' agreement to enter into this Amendment, which shall be due and
payable upon the execution of this Amendment, and which Amendment Fee shall be
deemed earned when paid.
4. Payment of Fees. The Amendment Fee shall be paid to the Agent, for
the account of each Lender that executes and delivers this Agreement pro rata in
accordance with its respective percentage share of the Commitment outstanding at
the time of payment.
5. Conditions Precedent to Amendment No. 7. The obligation of the
Lenders and the Agent to enter into this Amendment shall be subject to the Agent
having received from the Borrowers, prior to or simultaneously with the
execution and delivery of this Amendment, the following:
(a) Amendment No. 2 to the Amended and Restated Security
Agreement executed by the Borrowers in the form of
Exhibit A hereto, providing for the inclusion of the
Xxxxxxxx Proceeds as Collateral.
(b) UCC-3 financing statements amending the UCC-1
financing statements filed in connection with the
Amended and Restated Security Agreement to reflect
the inclusion of the Xxxxxxxx Proceeds as Collateral.
6. Credit Agreement in Full Force and Effect. Except as expressly
modified hereby, the Credit Agreement shall remain unchanged and in full force
and effect as executed and each Borrower hereby confirms and reaffirms all of
the terms and conditions of the Credit Agreement.
7. Entire Understanding. The Credit Agreement and this Amendment
contain the entire understanding of and supersede all prior agreements, written
and verbal, among the Lenders, the Administrative Agent, the Syndication Agent
and the Borrowers with respect to the subject matter hereof and shall not be
modified except in writing executed by the parties hereto.
8. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to its
conflict of laws principles.
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9. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, and together which shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE BORROWERS:
XXXXXXXX INDUSTRIES, INC. XXXXXXXX INDUSTRIES
ALABAMA, INC.
By: By:
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Name: Name:
Title: Title:
J.I. GEORGIA, INC. XXXXXXXX INDUSTRIES COMPOSITE
REINFORCEMENTS, INC.
By: By:
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Name: Name:
Title: Title:
THE AGENT:
THE CHASE MANHATTAN BANK
By:
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Name:
Title:
THE SYNDICATION AGENT:
NATIONSBANK, N.A.
By:
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Name:
Title:
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THE LENDERS:
THE CHASE MANHATTAN BANK BANK OF AMERICA
(F/K/A NATIONSBANK, N.A.)
By: By:
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Name: Name:
Title: Title:
REGIONS BANK COMERICA BANK
By: By:
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Name: Name:
Title: Title:
XXX XXXXXX PRIME RATE THE SUMITOMO BANK, LIMITED
INCOME TRUST
By: By:
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Name: Name:
Title: Title:
By: By:
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Name: Name:
Title: Title:
XXXXXXX LYNCH, PEARCE, DK ACQUISITION PARTNERS,
XXXXXX & XXXXX INCORPORATED L.P.
By: By:
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Name: Name:
Title: Title:
FIRST UNION N.B.
(F/K/A CORESTATES BANK, N.A.)
By:
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Name:
Title:
