EXHIBIT 4.8
SEVENTH AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This SEVENTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(this "AMENDMENT") dated as of June 24, 1999 and effective as of May 31, 1999
(the "EFFECTIVE DATE") is made among WEIDER NUTRITION INTERNATIONAL, INC., a
Delaware corporation ("HOLDINGS"), WEIDER NUTRITION GROUP, INC., a Utah
corporation ("NUTRITION"), WNG HOLDINGS (INTERNATIONAL) LTD., a Nevada
corporation ("INTERNATIONAL"; Holdings, Nutrition and International,
individually, each an "OBLIGOR" and, collectively, "OBLIGORS"), GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, for itself, as Lender, and as Agent
for Lenders (in such capacity, "AGENT"), and the other Lenders signatory to the
hereinafter defined Credit Agreement.
RECITALS
A. Agent, Lenders and Obligors are party to that certain Third Amended and
Restated Credit Agreement dated as of May 6, 1997 (as previously amended,
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT").
B. On and subject to the terms and conditions hereof, Obligors have
requested, and Agent and Lenders are willing to grant, certain amendments and
waivers under the Credit Agreement.
C. This Amendment shall constitute a Loan Document and these Recitals
shall be construed as part of this Amendment; capitalized terms used herein
without definition are so used as defined in Annex A to the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
1. WAIVER. Subject to the conditions precedent set forth in Section 4
hereof, Agent and Lenders hereby waive the Event of Default arising under
Section 8.1(c) of the Credit Agreement solely resulting from Holdings' failure
to comply with paragraph (c) of Annex G of the Credit Agreement at the end of
the Fiscal Quarter ending May 31, 1999.
2. AMENDMENT. Subject to the conditions precedent set forth in Section 4
hereof, the Credit Agreement is hereby amended as follows:
(a) The text of Section 1.5(a) of the Credit Agreement is replaced
with the following text:
"(a) Borrowers shall pay interest to Agent, for the ratable benefit
of Lenders, in arrears on (i) the first day of each month with
respect to Index Rate Loans and (ii) on the last day of each
applicable LIBOR Period with respect to LIBOR Loans, at a per annum
rate equal to (A) with respect to Index Rate Loans, the Index Rate
plus a margin of (1) 1.75%, from June
24, 1999 through September 23, 1999, (2) 2.25%, from September
24, 1999 through November 23, 1999, (3) 3.25%, from November 24,
1999 through December 23, 1999 and (4) for each period of thirty
consecutive days thereafter, the margin in effect immediately prior
to such period PLUS an additional .25% (such that, for example, the
margin determined pursuant to this clause (4) will be 3.50% as of
December 24, 1999 and 3.75% as of January 24, 2000) and (B) with
respect to LIBOR Loans, the LIBOR Rate plus a margin of (1) 3.25%,
from June 24, 1999 through September 23, 1999, (2) 3.75%, from
September 24, 1999 through November 23, 1999, (3) 4.75%, from
November 24, 1999 through December 23, 1999 and (4) for each period
of thirty consecutive days thereafter, the margin in effect
immediately prior to such period PLUS an additional .25% (such that,
for example, the margin determined pursuant to this clause (4) will
be 5.00% as of December 24, 1999 and 5.25% as of January 24, 2000)."
(b) The text of Section 1.6 of the Credit Agreement is replaced with
the following text:
"Section 1.6 FEES. As additional compensation for Lenders'
costs and risks in making the Revolving Credit Loan available to
Borrowers, Borrowers agree to pay to Agent, for the ratable benefit
of Lenders, in arrears, on the first Business Day of each month
prior to the Revolving Commitment Termination Date or such earlier
date as the Lenders' obligations to make Revolving Credit Advances
terminate or the Revolving Credit Loan becomes due and payable, and
on the Revolving Commitment Termination Date or such earlier date as
the Lenders' obligations to make Revolving Credit Advances terminate
or the Revolving Credit Loan becomes due and payable, a fee for
Borrowers' non-use of available funds (the "NON-USE FEE") in an
amount equal to (i) a rate of .50% per annum (calculated on the
basis of a 360 day year and actual days elapsed) (the "NON-USE FEE
MARGIN") multiplied by (ii) the difference between the respective
daily averages of (A) the Maximum Revolving Credit Loan (as it may
be adjusted from time to time hereunder) and (B) the amount of the
Revolving Credit Loan outstanding during the period for which the
Non-Use Fee is due."
(c) The text of Article 6 of the Credit Agreement is replaced with
the following text:
"6. NEGATIVE COVENANTS
Obligors, jointly and severally, covenant and agree that,
without the prior written consent of Agent and the Requisite Lenders
from and after the Closing Date until the Termination Date:
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6.1 MERGERS, SUBSIDIARIES, ETC. No Obligor shall, or
shall cause or permit any Subsidiary thereof to, directly or
indirectly, by operation of law or otherwise, merge with,
consolidate with, acquire all or any substantial part of the assets
or capital stock of, or otherwise combine with, any Person or form
any Subsidiary; PROVIDED that (1) in a series of related
transactions consummated substantially concurrently (i) Haleko may
acquire all of the Stock of Sy-Fra not owned by Haleko immediately
prior to such acquisition, (ii) Sy-Fra may acquire all of the Stock
of Haleko Italia s.r.l., (iii) Haleko Italia s.r.l. may be merged
with and into Sy-Fra and (iv) Sy-Fra may change its name to Haleko
Italia s.r.l. (the transactions described in this clause (1),
collectively, the "HALEKO ACQUISITION") and (2) Weider Nutrition
Group (Canada) Ltd. may acquire all of the Stock of Custom
Nutritional Inc. ("CNI") (the transaction described in this clause
(2), the "CNI ACQUISITION;" the Haleko Acquisition and the CNI
Acquisition, each, a "PERMITTED Acquisition"), subject to the
following conditions precedent:
(a) Agent shall receive at least twenty (20) Business Days'
prior written notice of such Permitted Acquisition, which notice
shall include a reasonably detailed description of such Permitted
Acquisition;
(b) such Permitted Acquisition shall only be of a Person
engaged in, or involve assets dedicated to, the same or a
substantially similar business to the businesses engaged in by one
or more of Borrowers as of the Closing Date;
(c) such Permitted Acquisition shall not be with respect to
Persons or assets located in jurisdictions against which the United
States has imposed economic sanctions;
(d) such Permitted Acquisition will not subject Agent or any
Lender to regulatory or third party approvals in connection with the
exercise of its rights and remedies under this Agreement or any
other Loan Documents other than approvals applicable to the exercise
of such rights and remedies with respect to Obligors prior to such
Permitted Acquisition;
(e) each such Permitted Acquisition of a Person shall be
consensual and shall have been approved by such Person's board of
directors and, as applicable, shareholders;
(f) no additional Indebtedness, contingent obligations or
other liabilities shall be incurred, assumed or otherwise be
reflected on a consolidated balance sheet of Holdings and its
Subsidiaries after giving effect to such Permitted Acquisition,
except (i) obligations to trade creditors incurred in the ordinary
course of business, (ii) existing Indebtedness of the Persons
acquired pursuant to the Haleko Acquisition not exceeding $850,000
in the aggregate and (iii) existing Indebtedness of
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CNI not exceeding $150,000 in the aggregate; PROVIDED that neither
Holdings, International nor any Wholly-Owned Domestic Obligor shall
at any time be directly or indirectly liable for or otherwise
obligated with respect to any such Indebtedness;
(g) at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default shall have occurred
and be continuing;
(h) Concurrently with delivery of the notice referred to in
CLAUSE (A) above, Holdings shall have delivered to Agent, in form
and substance satisfactory to Agent a pro forma consolidated balance
sheet of Holdings and its Subsidiaries, based on recent financial
data, which shall be complete and shall accurately and fairly
represent the assets, liabilities, financial position and results of
operations of Holdings and its Subsidiaries in accordance with GAAP
consistently applied, but taking into account such Permitted
Acquisition, together with a certificate of Holdings' Chief
Financial Officer stating that, based on such pro forma balance
sheet, Borrowing Availability shall be at least $15,000,000 (on a
pro forma basis after giving effect to such Permitted Acquisition,
with trade payables being paid currently and expenses and
liabilities being paid in the ordinary course of business, and
without acceleration of sales) after giving effect to such Permitted
Acquisition;
(i) the Haleko Acquisition shall be funded solely with
proceeds of contributions by Obligors to the capital of Haleko
permitted by clause (d) of SECTION 6.2 and proceeds of Indebtedness
of Haleko permitted by clause (vii) of SECTION 6.3; and the CNI
Acquisition shall be funded solely with proceeds of Indebtedness of
Weider Nutrition Group (Canada) Ltd. permitted by clause (viii) of
SECTION 6.3;
(j) reasonably prior to the date of such Permitted
Acquisition, Agent shall have received, in form and substance
satisfactory to Agent, all opinions, certificates, lien search
results and other documents, including acquisition agreements,
reasonably requested by Agent, including proof of regulatory
compliance.
6.2 INVESTMENTS; LOANS AND ADVANCES. Except (I) as
otherwise permitted by SECTION 6.1, 6.3, or 6.4, and (II) for
advances to suppliers on an arm's length basis in connection with
purchases in the ordinary course of business, no Obligor shall, or
shall cause or permit any Subsidiary thereof to, make any investment
in, or make or accrue loans or advances of money to any Person,
through the direct or indirect lending of money (including, without
limitation, the guarantee of any letters of credit issued for the
benefit of such Person), holding of securities or otherwise, other
than (a) Accounts, (b) investments in Domestic Wholly-Owned
Obligors, (c) investments by Nutrition in (i) marketable direct
obligations
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issued or unconditionally guaranteed by the United States of America
or any agency thereof maturing within one year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one
year from the date of creation thereof and currently having the
highest rating obtainable from either Standard & Poor's Corporation
or Xxxxx'x Investors Service, Inc., (iii) certificates of deposit,
maturing no more than one year from the date of creation thereof,
issued by commercial banks incorporated under the laws of the United
States of America, each having combined capital, surplus and
undivided profits of not less than $300,000,000 and having a senior
secured rating of "A" or better by a nationally recognized rating
agency, provided that the aggregate amount invested in such
certificates of deposit shall not at any time exceed $100,000 for
any one such certificate of deposit and $200,000 for any one such
bank, (iv) time deposits, maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or
savings and loan associations each having membership either in the
Federal Deposit Insurance Corporation or in the Federal Savings and
Loan Insurance Corporation and in amounts not exceeding the maximum
amounts of insurance thereunder, (v) money market funds and (vi) in
accordance with paragraph (d) of ANNEX C, (d) contributions by
Obligors to the capital of Haleko that shall not at any time exceed
$3,000,000 in aggregate at any time outstanding, (e) Specified
Margin Shares acquired by Holdings during the period from June 26,
1998 to October 1, 1998 and (f) capital contributions to Domestic
Wholly-Owned Obligors, to the extent deemed necessary and
appropriate by Holdings in its reasonable discretion. Nothing herein
shall be deemed to permit the disposition of any Stock constituting
Collateral except in accordance with the express terms of this
Agreement and the other Loan Documents.
6.3 INDEBTEDNESS. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, create, incur, assume or permit to
exist any Indebtedness, except (i) obligations of Borrowers in
connection with Letter of Credit Obligations, (ii) the Revolving
Credit Loan and the other Obligations, (iii) deferred taxes, (iv)
unfunded pension fund and other employee benefit plan obligations
and liabilities to the extent they are permitted to remain unfunded
under applicable law, (v) Indebtedness (including intercompany loans
and obligations under Capital Leases) existing and set forth on
SCHEDULE 6.3 as of June 24, 1999 (all of which shall have been
incurred in accordance with the terms of this Agreement as in effect
as of the date of such incurrence, and none of which shall be
amended, refinanced, replaced, restated, supplemented or otherwise
modified), (vi) lease payment obligations under existing leases
permitted under SECTION 6.14, (vii) Indebtedness of Haleko which
shall not exceed the amount of the Indebtedness of Haleko
outstanding on November 30, 1998 (as indicated on the most recent
balance sheet delivered pursuant to Annex G which includes such
date) by DM20,000,000 in the aggregate from time to time outstanding
(inclusive of the Indebtedness of Haleko
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permitted in accordance with clause (x) below), (viii) Indebtedness
of Weider Nutrition Group (Canada) Ltd. incurred in connection with
the CNI Acquisition which shall not exceed the $114,000 in the
aggregate from time to time outstanding, (ix) Indebtedness of CNI
which shall not exceed $250,000 in the aggregate from time to time
outstanding (inclusive of the Indebtedness of CNI permitted in
accordance with clause (x) below) and (x) Indebtedness permitted in
accordance with clause (f) of SECTION 6.1.
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS. (a) No
Obligor shall, or shall cause or permit any Subsidiary thereof to,
enter into or be a party to any transaction with any Affiliate of
any such Person, other than (i) as permitted by SECTIONS 6.2,
6.4(B), or 6.13, (ii) in the ordinary course of and pursuant to the
reasonable requirements of such Person's business and upon fair and
reasonable terms that are fully disclosed to Agent in advance and
are no less favorable to such Person than would be obtained in a
comparable arm's length transaction with a third party not an
Affiliate of such Person, (iii) loans to employees or other
transactions between or among Obligors providing goods and services
described on SCHEDULE 6.4 as of the Closing Date in the ordinary
course of business consistent with past practices, (iv) payments
made pursuant to the tax sharing agreement described on SCHEDULE
3.13 as of the Closing Date, to the extent permitted by, and made in
accordance with, clause (i) of SECTION 6.13, and (v) cash payments
to Holdings to enable Holdings (contemporaneously with, and in the
same amount of, such payments) to (1) fund its obligations under
"Executive Retirement Plans" described on SCHEDULE 6.4 as of the
Closing Date in an aggregate amount not to exceed $300,000 in any
Fiscal Year (except, $1,100,000 in Fiscal Year 2000, $845,000 of
which shall be paid by Parent to Holdings' former chief executive
officer pursuant to Holding's existing severance arrangements with
such Person) and (2) pay the general corporate, operating and
administrative expenses of Holdings allocated to such Obligor or
Subsidiary PROVIDED THAT payments made pursuant to this subclause
(2) to Holdings by any Obligor or Subsidiary thereof shall not
exceed such Obligor's or Subsidiary's fair allocable share of the
expenses incurred by Holdings for the benefit of Obligors and their
Subsidiaries. Payments made in accordance with clauses (iv) and (v)
above may be accounted for by the applicable Obligor or Subsidiary
as a cash dividend to Holdings or as an expense for the
reimbursement of Holdings' expenses in the income statement of such
Obligor or Subsidiary.
(b) No Obligor shall, or shall cause or permit any Subsidiary
thereof to, enter into any lending, borrowing or other commercial
transaction with any of its employees, directors, Subsidiaries,
Affiliates, any other Obligor or related parties without the prior
written consent of Agent, including, without limitation, payment of
any management consulting, advisory or similar fee based on or
related to any such
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Person's operating performance or income or any percentage thereof,
other than (i) as permitted by SECTIONS 6.2, 6.4(A), or 6.13, (ii)
employment agreements and incentive compensation programs with
full-time employees on commercially reasonable terms substantially
similar to the agreements in effect on the Closing Date and
described on SCHEDULE 6.4 as of the Closing Date, (iii) loans to
their respective employees consisting of travel advances in the
ordinary course of business consistent with past practice up to a
maximum of $150,000 in the aggregate at any one time outstanding,
(v) loans of up to $500,000 during each Fiscal Year to their
respective employees for the payment of taxes incurred in connection
with the conversion after the Closing Date of "Phantom Stock" of
Nutrition issued prior to the Closing Date into Stock of Holdings,
and (vi) outstanding intercompany loans among the Obligors as set
forth on SCHEDULE 6.3 in accordance with SECTION 6.3.
6.5 CAPITAL STRUCTURE AND BUSINESS. No Obligor shall, or
shall cause or permit any Subsidiary thereof to (i) make any changes
in any of its business objectives, purposes or operations in each
case which is reasonably likely to adversely affect the repayment of
the Revolving Credit Loan or any of the other Obligations or could
have or result in a Material Adverse Effect, (ii) except as
described on SCHEDULE 3.10 as of the Closing Date, issue any shares
of Stock, warrants or other securities convertible into Stock or
revise the terms of its outstanding Stock, or (iii) amend its
certificate or articles of incorporation or bylaws in a manner which
is reasonably likely to have a Material Adverse Effect. No Obligor
shall, or shall cause or permit any Subsidiary thereof to, engage in
any business substantially different than the lines of businesses
currently engaged in by such Person or any lines of business
reasonably related thereto. Notwithstanding any other provision of
this Agreement or any other Loan Document, Holdings shall not incur
any Indebtedness or engage in any business activities other than (a)
the performance of its obligations under the Loan Documents to which
it is a party and (b) those activities incidental to (i) its
ownership of the capital stock of the other Obligors, (ii) the
Restricted Payments permitted to be made by it in accordance with
SECTION 6.13 and (iii) the maintenance of its corporate existence in
compliance with applicable law and this Agreement.
6.6 GUARANTEED INDEBTEDNESS. No Obligor shall, or shall
cause or permit any Subsidiary thereof to, incur any Guaranteed
Indebtedness except (i) by endorsement of instruments or items of
payment for deposit to the general account of any Domestic
Wholly-Owned Obligor (to the extent the transaction to which the
foregoing relates is otherwise permitted by this Agreement), (ii)
for Guaranteed Indebtedness incurred for the benefit of any Domestic
Wholly-Owned Obligor if the primary obligation is permitted by this
Agreement and (iii) Guaranteed Indebtedness existing and described
on SCHEDULE 6.3 as of June 24,1999 (all of which shall have been
incurred in accordance with the
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terms of this Agreement as in effect as of the date of such
incurrence, and none of which shall be amended, refinanced,
replaced, restated, supplemented or otherwise modified).
6.7 LIENS. No Obligor shall, or shall cause or permit
any Subsidiary thereof to, create, incur, assume or permit to exist
any Lien on or with respect to any properties or assets (including
any document or instrument with respect to Inventory or Accounts) of
any such Person, whether now owned or hereafter acquired, or any
income or profits therefrom, except (i) Liens existing and set forth
on SCHEDULE 6.7 as of June 24, 1999 (all of which shall have been
incurred in accordance with the terms of this Agreement as in effect
as of the date of such incurrence, and none of which shall be
amended, replaced, restated, supplemented or otherwise modified),
(ii) Permitted Encumbrances and Liens on property or assets of
Haleko securing Indebtedness of Haleko permitted under clause (vii)
of SECTION 6.3, and (iii) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders.
6.8 SALE OF ASSETS. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, sell, transfer, convey, assign or
otherwise dispose of any of its properties or other assets,
including the capital stock of any such Person or any of their
Accounts, other than Excluded Asset Sales.
6.9 ERISA. No Obligor shall, or shall cause or permit
any Subsidiary or ERISA Affiliate thereof (without Agent's prior
written consent) to (i) acquire any new ERISA Affiliate that
maintains or has an obligation to contribute to a Pension Plan that
has either an "accumulated funding deficiency", as defined in
Section 302 of ERISA, or any "unfunded vested benefits", as defined
in Section 4006(a)(3)(e)(iii) of ERISA, in the case of any plan
other than a Multiemployer Plan, and in Section 4211 of ERISA in the
case of a Multiemployer Plan, (ii) permit or suffer any condition
set forth on SCHEDULE 3.14 as of the Closing Date to cease to be met
and satisfied at any time, (iii) terminate any Pension Plan that is
subject to Title IV of ERISA where such termination could reasonably
be anticipated to result in a material liability to such Person,
(iv) permit any accumulated funding deficiency, as defined in
Section 302(a)(2) of ERISA, to be incurred with respect to any
Pension Plan, (v) fail to make any contributions or fail to pay any
amounts due and owing as required by the terms of any Plan before
such contributions or amounts become delinquent, (vi) make a
complete or partial withdrawal (within the meaning of Section 4201
of ERISA) from any Multiemployer Plan, or (vii) fail to promptly
provide Agent with copies of any Plan documents or governmental
reports or filings requested by Agent.
6.10 HAZARDOUS MATERIALS. Except as set forth on
SCHEDULE 3.20 as of the Closing Date, no Obligor shall, or shall
cause or
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permit any Subsidiary thereof or any other Person within its
control, to cause or permit a Release or the presence, use,
generation, manufacture, installation, Release, discharge, storage
or disposal of any Hazardous Materials on, under, in, above or about
any of its real estate or the transportation of any Hazardous
Materials to or from any real estate where such Release or such
presence, use, generation, manufacture, installation, Release,
discharge, storage or disposal would violate or form the basis for
liability under any Environmental Laws.
6.11 SALE-LEASEBACKS. No Obligor shall cause or permit
any Subsidiary thereof to, engage in any sale-leaseback or similar
transaction involving its assets, including the resale of assets in
any transaction or series of related transactions pursuant to which
the subject assets are sold or transferred in connection with the
leasing or the resale against installment payments, or as part of an
arrangement involving the leasing or the resale against installment
payments, of such assets to the seller or transferor thereof, other
than such transactions which are existing and described on SCHEDULE
6.11 as of June 24, 1999 (all of which shall have been consummated
in accordance with the terms of this Agreement as in effect as of
the date of such consummation, and none of which shall be amended,
refinanced, replaced, restated, supplemented or otherwise modified).
6.12 CANCELLATION OF INDEBTEDNESS. No Obligor shall, or
shall cause or permit any Subsidiary thereof to, cancel any claim or
debt owing to it, except on an arm's-length basis and in the
ordinary course of its business consistent with past practices.
6.13 RESTRICTED PAYMENTS. No Obligor shall, or shall
cause or permit any Subsidiary thereof to, make or pay any
Restricted Payment, other than (i) Restricted Payments to Holdings
to permit Holdings (contemporaneously with, and in the same amount
of, such payments) to (A) make Restricted Payments to Parent
pursuant to, and not in excess of the amounts required under, the
tax sharing agreements described on SCHEDULE 3.13 as of the Closing
Date in respect of taxes payable for periods (or portions thereof)
ending on or prior to the closing on the Closing Date and (B) pay
Federal, state and local income tax obligations actually due and
payable in cash by Holdings for periods (or portions thereof)
commencing after the closing on the Closing Date, to the extent such
obligations are the result of the net income or loss of Obligors and
their Subsidiaries being attributed to Holdings for tax purposes,
(ii) Restricted Payments to Holdings to permit Holdings
(contemporaneously with, and in the same amount of, such payments)
to pay fees and expenses necessary to maintain Holdings' corporate
existence and good standing, (iii) Restricted Payments to Holdings
to permit Holdings (contemporaneously with, and in the same amount
of, such payments) to pay quarterly cash dividends in respect of its
common stock, PROVIDED that
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(A) only one such set of Restricted Payments may be made during any
Fiscal Quarter, (B) all such Restricted Payments made during any
Fiscal Quarter shall be made during the fifteenth (15th) through the
twentieth (20th) (except, the thirty- fifth (35th) day, in the case
of such a Restricted Payment to be made during the first Fiscal
Quarter of Fiscal Year 2000) consecutive day immediately following
the end of the immediately preceding Fiscal Quarter, (C) at least
five (5) days prior to such Restricted Payment (except, one (1) day,
in the case of such a Restricted Payment made during the third
Fiscal Quarter of Fiscal Year 1999), Agent shall have received
preliminary versions of the Financial Statements to be delivered to
Agent pursuant to ANNEX E for the immediately preceding Fiscal
Quarter, together with an attached certificate of the Chief
Financial Officer of Holdings (on behalf of itself and each
Borrower) to the effect that (1) the final Financial Statements to
be delivered to Agent for such immediately preceding Fiscal Quarter
will not differ in any material respect from such preliminary
Financial Statements and (2) no Default or Event of Default had
occurred or been continuing as of the end of the period covered by
such Financial Statements (other than as of the end of the second
Fiscal Quarter of Fiscal Year 1999), has occurred or is continuing
as of the date of such certificate or would result from the making
of such Restricted Payment, (D) the aggregate amount of all such
Restricted Payments made during any Fiscal Quarter shall not exceed
$0.0375 per each share of Holdings' common stock and (E)
concurrently with each delivery of the Financial Statements
described in clause (C) above, Holdings shall have delivered to
Agent, in form and substance satisfactory to Agent and based on
recent financial data, a pro forma consolidated balance sheet of
Holdings and its Subsidiaries indicating that Borrowing Availability
shall be at least $5,500,000 (after giving effect to such Restricted
Payment and all Revolving Credit Advances to be made in connection
therewith, and with trade payables being paid currently, expenses
and liabilities being paid in the ordinary course of business and
without acceleration of sales); (iv) Restricted Payments not in
excess of $700,000 in the aggregate used to fund the purchase by
Nutrition of its Stock pursuant to any "Phantom Stock" agreement
separately identified in SCHEDULE 3.10 as of the Closing Date from
the other agreements described therein; (v) transactions permitted
under SECTION 6.4 and (vi) Restricted Payments to one or more
Borrowers; PROVIDED THAT, in the case of Restricted Payments
described in the foregoing clauses (iii) through (vi), no Default or
Event of Default shall have occurred and be continuing or would
result after giving effect to such Restricted Payment.
6.14 LEASES. No Obligor shall, or shall cause or permit
any Subsidiary thereof to, enter into any operating lease or similar
agreement or arrangement with respect to real property or Equipment,
other than such leases, agreements or arrangements which are
existing and described on SCHEDULE 6.14 as of June 24, 1999 (all of
which shall have been consummated in accordance with the terms of
this Agreement as in
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effect as of the date of such consummation); PROVIDED that Obligors
may enter into, or cause or permit any Subsidiary thereof to enter
into, extensions or renewals of such leases and new leases so long
as aggregate annual lease payment obligations under all leases shall
at no time exceed by more than $300,000 aggregate annual lease
payment obligations for all leases initially described on SCHEDULE
6.14).
6.15 FISCAL YEAR. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, change its Fiscal Year.
6.16 CHANGE OF CORPORATE NAME. No Obligor shall, or
shall cause or permit any Subsidiary thereof to, change its
corporate name except upon sixty (60) days advance written notice to
Agent and after taking any reasonable action requested by Agent in
connection therewith, including, without limitation, to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral.
6.17 SALE OF STOCK. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, issue or sell (whether in a public
or private offering or otherwise) any of its Stock except pursuant
to agreements or arrangements existing as of the Closing Date and
described on SCHEDULE 3.10 as of the Closing Date.
6.18 CASH MANAGEMENT. No Obligor shall, or shall cause
or permit any Subsidiary thereof to, accumulate or maintain cash in
accounts (other than the Disbursement Account) as of any date of
determination more than $200,000 in the aggregate in excess of
checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements.
6.19 NO IMPAIRMENT OF CROSS-STREAMING, UPSTREAMING,
DOWNSTREAMING OR LIENS. No Obligor shall, or shall cause or permit
any Subsidiary thereof to, directly or indirectly, enter into or
become bound by any agreement, instrument, indenture or other
obligation (other than this Agreement) which could directly or
indirectly restrict, prohibit or require the consent of any Person
with respect to (a) the payment of dividends or distributions or the
making of intercompany loans or investments by, between or among any
of such Persons or (b) the creation of a Lien in favor of Agent, on
behalf of itself and Lenders, as additional collateral for the
Obligations, on the properties or other assets of such Obligor or
Subsidiary.
6.20 FINANCIAL COVENANTS. Obligors shall not breach or
fail to comply with any of the Financial Covenants set forth on
XXXXX X.
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0.00 XXX XXXX XXXXX XXXXXXXX LISTING. Holdings shall not
at any time fail to be, or fail to be qualified to be, listed on the
New York Stock Exchange.
6.22 SPECIFIED MARGIN SHARES. Notwithstanding anything to the
contrary, no Obligor (other than Holdings) or any Subsidiary thereof
may own, legally or beneficially, any Specified Margin Shares and,
upon the sale or other disposition of any Specified Margin Shares by
Holdings, no Obligor (including Holdings) or any Subsidiary thereof
may at any time thereafter own, legally or beneficially, any of
those Specified Margin Shares which have been so sold or
transferred. Nothing contained herein shall be deemed to permit the
acquisition or disposition of any Stock."
(d) The proviso contained in clause (c) of Section 8.1 of the Credit
Agreement is deleted.
(e) Each reference to "$1,000,000" contained in clause (f) of
Section 8.1 of the Credit Agreement is replaced with a reference to
"$250,000".
(f) Each reference to "$500,000" contained in clause (i) of Section
8.1 of the Credit Agreement is replaced with a reference to "$250,000".
(g) Each reference to "forty-five (45)" contained in clause (i) of
Section 8.1 of the Credit Agreement is replaced with a reference to
"thirty (30)".
(h) Each reference to "forty-five (45)" contained in clause (j) of
Section 8.1 of the Credit Agreement is replaced with a reference to
"thirty (30)".
(i) Each reference to "$500,000" contained in clause (l) of Section
8.1 of the Credit Agreement is replaced with a reference to "$250,000".
(j) The reference to "60" contained in clause (m) of Section 8.1 of
the Credit Agreement is replaced with a reference to "30".
(k) The defined terms "Acceptable Haleko Credit Funding", "Funded
Debt", "Index Margin", "L/C Margin", "LIBOR Margin" and "Margin" are
deleted from Annex A of the Credit Agreement.
(l) The following defined term is inserted into Annex A of the
Credit Agreement in alphabetical order among the defined terms contained
therein:
""DOMESTIC WHOLLY-OWNED OBLIGOR" shall mean any Obligor (other
than International) formed under the laws of a jurisdiction located
within the continental United States, all of the outstanding Stock
of which is owned and controlled directly or indirectly by Holdings,
beneficially and as of record, with full voting and dispositive
power, and none of the outstanding Stock of which is owned or
controlled directly or indirectly by
-12-
a Person formed under the laws of a jurisdiction located outside of
the continental United States."
(m) The defined term "Excluded Asset Sales" contained in Annex A of
the Credit Agreement is replaced with the following text:
""EXCLUDED ASSET SALES" shall mean the sale, transfer,
conveyance or other disposition of any assets or properties (i) to
any Domestic Wholly-Owned Obligor other than Holdings, (ii)
consisting of sales of Inventory in the ordinary course of business,
(iii) consisting of licensing of items of intellectual property in
the ordinary course of business, (iv) consisting of the sale and
leaseback of assets or properties, if permitted by the terms of the
Agreement, (v) consisting of sales of obsolete or redundant
Equipment or Fixtures not to exceed $500,000 in the aggregate in any
Fiscal Year, and (vi) consisting of the assignment for collection of
up to $250,000 of uncollectible Accounts each Fiscal Year."
(n) The last sentence of paragraph (a) of Annex B of the Credit
Agreement is replaced with the following sentence:
"It is further understood that Letter of Credit Obligations may be
incurred only by a Borrower on its own behalf and that all Letter of
Credit Obligations shall be guaranteed by Holdings pursuant to the
Guaranty."
(o) The text of subparagraph (d)(1) of Annex B of the Credit
Agreement is replaced with the following text:
"(1) Agent for the benefit of the Lenders, as compensation to the
Lenders for such Letter of Credit Obligation, (i) all costs and
expenses incurred by Agent or any Lender on account of such Letter
of Credit Obligation, (ii) commencing with the month in which such
Letter of Credit Obligation is incurred by the Lenders and monthly
thereafter for each month during which such Letter of Credit
Obligation shall remain outstanding, a fee in an amount equal to (A)
the maximum amount available from time to time to be drawn under the
applicable Letter of Credit multiplied by (B) a per annum rate of
(1) 3.50%, from June 24, 1999 through September 23, 1999, (2) 4.00%,
from September 24, 1999 through November 23, 1999, (3) 5.00%, from
November 24, 1999 through December 23, 1999 and (4) for each period
of thirty consecutive days thereafter, the margin in effect
immediately prior to such period PLUS an additional .25% (such that,
for example, the margin determined pursuant to this clause (4) will
be 5.25% as of December 24, 1999 and 5.50% as of January 24, 2000)."
(p) The text of paragraph (d) of Annex C of the Credit Agreement is
replaced with the following text:
"(d) So long as no Event of Default has occurred and is continuing
(i) Holdings may amend SCHEDULE 1.7 to add or replace a Lock Box or
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Obligor Account or replace the Concentration Account; PROVIDED,
HOWEVER, THAT (A) Agent shall have consented in writing to the
opening of such account with the relevant bank and (B) prior to the
time of the opening of such account or Lock Box, such bank and the
applicable Obligor and/or Subsidiary thereof shall have executed and
delivered to Agent a triparty blocked account agreement, in form and
substance satisfactory to Agent and (ii) Nutrition may invest
amounts maintained overnight in the Disbursement Account in
accordance with this Agreement in overnight deposits offered by the
financial institution at which the Disbursement Account is
maintained."
(q) The following text is inserted into paragraph (c) of Annex E of
the Credit Agreement immediately after the reference to "Fiscal Year"
contained therein:
"(except, ninety (90) days after the end of Fiscal Year 1999)"
(R) Annexes G and J to the Credit Agreement are respectively
replaced with Annexes G and J respectively attached as ANNEXES A and B
hereto.
(s) Schedules 3.10, 6.3 and 6.7 to the Credit Agreement are
respectively replaced with Schedules 3.10, 6.3 and 6.7 attached to ANNEX C
hereto.
(t) Schedules 6.11 and 6.14 attached to ANNEX C hereto are inserted
into the Credit Agreement in appropriate order among the Schedules
thereto.
3. REPRESENTATIONS AND WARRANTIES. As of the date hereof, Obligors hereby
jointly and severally represent and warrant to Agent and Lenders as follows:
(a) After giving effect to this Amendment and the transactions
contemplated hereby (i) no Default or Event of Default shall have occurred
or be continuing and (ii) the representations and warranties of Obligors
contained in the Loan Documents shall be true, accurate and complete in
all respects on and as of the date hereof to the same extent as though
made on and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date.
(b) The execution, delivery and performance, as the case may be, by
each Obligor of this Amendment and the other documents and transactions
contemplated hereby are within each Obligor's corporate powers, have been
duly authorized by all necessary corporate action (including, without
limitation, all necessary shareholder approval) of each Obligor, have
received all necessary governmental approvals, and do not and will not
contravene or conflict with any provision of law applicable to any
Obligor, the certificate or articles of incorporation or bylaws of any
Obligor, or any order, judgment or decree of any court or other agency of
government or any contractual obligation binding upon any Obligor.
(c) This Amendment, the Credit Agreement and each other Loan
Document is the legal, valid and binding obligation of each Obligor
enforceable against each Obligor in accordance with its respective terms,
except to the extent enforceability is limited by
-14-
bankruptcy, insolvency or similar laws affecting the rights of creditors
generally or by application of general principles of equity.
4. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
Effective Date, PROVIDED that as of the Effective Date each of the following
items shall have been received by Agent or satisfied, as the case may be, all in
form and substance satisfactory to Agent:
(a) AMENDMENT. This Amendment, duly executed by each Obligor, Agent
and Requisite Lenders.
(b) REVOLVING CREDIT NOTES. Revolving Credit Notes reflecting each
Revolving Credit Loan Commitment set forth on ANNEX A attached hereto,
duly executed by each Borrower.
(c) SCHEDULES. Schedules 3.10 (after giving effect to the
Restructuring), 6.3, 6.7, 6.11 and 6.14 to the Credit Agreement attached
to ANNEX C hereto.
(d) NO DEFAULT. After giving effect to this Amendment and the
transactions contemplated hereby, no Default or Event of Default shall
have occurred and be continuing.
(e) WARRANTIES AND REPRESENTATIONS. After giving effect to this
Amendment and the transactions contemplated hereby, the warranties and
representations of each Obligor contained in this Amendment shall be true
and correct in all respects.
(f) FEES, COSTS AND EXPENSES. Agent shall have received (at Agent's
option, by payment or as a charge against the Revolving Loan) (i) for the
ratable benefit of each Lender signatory to this Amendment, an amendment
fee of $287,500, which fee shall be fully earned as of the date hereof and
shall be non-refundable when paid, and (ii) all other fees, costs and
expenses, including reasonable attorneys' fees, due pursuant to the Loan
Documents, including as incurred by Agent in connection herewith.
5. EFFECT ON LOAN DOCUMENTS. This Amendment is limited to the specific
purpose for which it is granted and, except as specifically set forth above (a)
shall not be construed as a consent, waiver, amendment or other modification
with respect to any term, condition or other provision of any Loan Document and
(b) each of the Loan Documents shall remain in full force and effect and are
each hereby ratified and confirmed.
6. SUCCESSORS AND ASSIGNS. This Amendment shall be binding on and shall
inure to the benefit of Obligors, Agent, Lenders and their respective successors
and assigns; PROVIDED that no Obligor may assign its rights, obligations, duties
or other interests hereunder without the prior written consent of Agent and
Lenders. The terms and provisions of this Amendment are for the purpose of
defining the relative rights and obligations of Obligors, Agent and Lenders with
respect to the transactions contemplated hereby and there shall be no third
party beneficiaries of any of the terms and provisions of this Amendment.
-15-
7. ENTIRE AGREEMENT. This Amendment, including all documents attached
hereto, incorporated by reference herein or delivered in connection herewith,
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all other understandings, oral or written, with
respect to the subject matter hereof.
8. FEES AND EXPENSES. Obligors shall pay to Agent on demand all fees,
costs and expenses owing by Obligors pursuant to Section 11.3 of the Credit
Agreement, including those incurred by Agent or otherwise payable in connection
with the preparation, execution and delivery of this Amendment.
9. INCORPORATION OF CREDIT AGREEMENT. The provisions contained in Sections
11.9 and 11.14 of the Credit Agreement are incorporated herein by reference to
the same extent as if reproduced herein in their entirety with respect to this
Amendment.
10. ACKNOWLEDGMENT. Each Obligor hereby represents and warrants that there
are no liabilities, claims, suits, debts, liens, losses, causes of action,
demands, rights, damages or costs, or expenses of any kind, character or nature
whatsoever, known or unknown, fixed or contingent (collectively, the "CLAIMS"),
which any Obligor may have or claim to have against Agent or any Lender, or any
of their respective affiliates, agents, employees, officers, directors,
representatives, attorneys, successors and assigns (collectively, the "LENDER
RELEASED PARTIES"), which might arise out of or be connected with any act of
commission or omission of the Lender Released Parties existing or occurring on
or prior to the date of this Amendment, including, without limitation, any
Claims arising with respect to the Obligations or any Loan Documents. In
furtherance of the foregoing, each Obligor hereby releases, acquits and forever
discharges the Lender Released Parties from any and all Claims that any Obligor
may have or claim to have, relating to or arising out of or in connection with
the Obligations or any Loan Documents or any other agreement or transaction
contemplated thereby or any action taken in connection therewith from the
beginning of time up to and including the date of the execution and delivery of
this Amendment. Each Obligor further agrees forever to refrain from commencing,
instituting or prosecuting any lawsuit, action or other proceeding against any
Lender Released Parties with respect to any and all Claims which might arise out
of or be connected with any act of commission or omission of the Lender Released
Parties existing or occurring on or prior to the date of this Amendment,
including, without limitation, any Claims arising with respect to the
Obligations or any Loan Documents.
11. CAPTIONS. Section captions used in this Amendment are for convenience
only, and shall not affect the construction of this Amendment.
12. SEVERABILITY. Whenever possible each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Amendment shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment.
13. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same
-16
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment.
[signature pages follow]
-17-
IN WITNESS WHEREOF, this Seventh Amendment to Third Amended and Restated
Credit Agreement has been duly executed and delivered as of the day and year
first above written.
WEIDER NUTRITION INTERNATIONAL, INC.
WEIDER NUTRITION GROUP, INC.
WNG HOLDINGS (INTERNATIONAL) LTD.
For each of the foregoing:
By: ______________________________
Title: ______________________________
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GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By: ______________________________
Title: Duly Authorized Signatory
-19-
FIRST UNION NATIONAL BANK, successor by
merger to Corestates Bank, N.A.
By: ______________________________
Title: ______________________________
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XXXXXXX XXXX, NATIONAL ASSOCIATION,
successor to LaSalle National Bank
By: ______________________________
Title: ______________________________
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XXX XXXX XX XXXX XXXXXX
By: ______________________________
Title: ______________________________
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XXXX XXXXXXX CREDITANSTALT CORPORATE FINANCE, INC.
By: ______________________________
Title: ______________________________
By: ______________________________
Title: ______________________________
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XXXXXXXX XXXX XX, XXX XXXX AND
GRAND CAYMAN BRANCHES
By: ______________________________
Title: ______________________________
By: ______________________________
Title: ______________________________
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ZIONS FIRST NATIONAL BANK
By: ______________________________
Title: ______________________________
-25-
Annex A
ANNEX G (SECTION 6.20)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FINANCIAL COVENANTS
Holdings shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP, consistently applied:
(a) MAXIMUM CAPITAL EXPENDITURES. Holdings, on a consolidated basis,
shall not make Capital Expenditures during any fiscal period described
below that exceed the amount set forth opposite such fiscal period:
FISCAL PERIOD AMOUNT
------------- ------
Fiscal Year 1999 $ 11,900,000
Three month period ended August 31, 1999 $ 2,000,000
Six month period ended November 30, 1999 $ 4,000,000
Nine month period ended February 29, 2000 $ 5,500,000
(b) MINIMUM NET WORTH. Holdings, on a consolidated basis, shall
maintain at all times Net Worth equal to or greater than $90,000,000.
(c) MINIMUM INTEREST COVERAGE RATIO. Holdings, on a consolidated
basis, shall have at the end of each Fiscal Quarter described below a
ratio of (i) the sum of (A) EBITDA LESS (B) Capital Expenditures LESS (C)
taxes paid in cash to (ii) Gross Interest Charges, in the case of (i) the
Fiscal Quarter ending August 31, 1999, for the three month period then
ended, (ii) the Fiscal Quarter ending November 30, 1999, for the six month
period then ended and (iii) the Fiscal Quarter ending February 29, 2000,
for the nine month period then ended, equal to or greater than the ratio
set forth opposite such Fiscal Quarter:
FISCAL QUARTER RATIO
-------------- -----
Fiscal Quarter ending August 31, 1999 1.15 to 1.00
Fiscal Quarter ending November 30, 1999 1.45 to 1.00
Fiscal Quarter ending February 29, 2000 1.70 to 1.00
(d) MINIMUM EBITDA. Holdings, on a consolidated basis, shall have at
the end of each Fiscal Quarter described below EBITDA, in the case of (i)
the Fiscal Quarter ending May 31, 1999, for the 12 month period then
ended, (ii) the Fiscal Quarter ending August 31, 1999, for the three month
period then ended, (iii) the Fiscal Quarter ending November 30, 1999, for
the six month period then ended and (iv) the Fiscal Quarter
-26-
ending February 29, 2000, for the nine month period then ended, equal to
or greater than the amount set forth opposite such Fiscal Quarter:
FISCAL QUARTER AMOUNT
Fiscal Quarter ending May 31, 1999 $12,400,000
Fiscal Quarter ending August 31, 1999 $ 5,600,000
Fiscal Quarter ending November 30, 1999 $12,900,000
Fiscal Quarter ending February 29, 2000 $22,000,000
Solely for purposes of determining compliance with this Annex G, EBITDA as
of (A) the Fiscal Quarter ending May 31, 1999 shall be increased by an
amount equal to the amount of actual write-offs taken by Holdings as a
result of what is commonly referred to by Holdings as its "SKU reduction
program" (the "Program") during the 12 month period then ended in excess
of the amount of projected write-offs to be taken by Holdings as a result
of the Program reflected in the most recent Projections received by Agent
for such period, which excess amount is identified in a writing acceptable
and delivered to Agent along with the Financial Statements for such Fiscal
Quarter, (B) the Fiscal Quarter ending August 31, 1999 shall be increased
by an amount equal to the lesser of $700,000 and the amount of actual
write-offs taken by Holdings as a result of the Program during the three
month period then ended in excess of the amount of projected write-offs to
be taken by Holdings as a result of the Program reflected in the most
recent Projections received by Agent for such period, which excess amount
is identified in a writing acceptable and delivered to Agent along with
the Financial Statements for such Fiscal Quarter, (C) the period of two
consecutive Fiscal Quarters ending November 30, 1999 shall be increased by
an amount equal to the lesser of $1,400,000 and the amount of actual
write-offs taken by Holdings as a result of the Program during the six
month period then ended in excess of the amount of projected write-offs to
be taken by Holdings as a result of the Program reflected in the most
recent Projections received by Agent for such period, which excess amount
is identified in a writing acceptable and delivered to Agent along with
the Financial Statements for such Fiscal Quarter and (D) the period of
three consecutive Fiscal Quarters ending February 29, 2000 shall be
increased by an amount equal to the lesser of $2,100,000 and the amount of
actual write-offs taken by Holdings as a result of the Program during the
nine month period then ended in excess of the amount of projected
write-offs to be taken by Holdings as a result of the Program reflected in
the most recent Projections received by Agent for such period, which
excess amount is identified in a writing acceptable and delivered to Agent
along with the Financial Statements for such Fiscal Quarter; PROVIDED
that, in any event, (a) all write-offs projected to be taken by Holdings
as a result of the Program shall be reflected separately from all other
losses and write-offs in all Projections, Financial Statements and other
relevant information delivered to Agent and/or Lenders and (b) EBITDA
shall not be increased pursuant to this paragraph by more than $2,500,000
in the aggregate. In addition to the foregoing and as an additional
covenant of this Annex G, the amount of actual write-offs taken by
Holdings as a result of the Program during Fiscal Year 1999 and the first
three Fiscal Quarters of Fiscal Year 2000 shall not exceed $5,500,000 in
the aggregate.
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Annex B
ANNEX J
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
COMMITMENTS
Revolving Credit
LENDER LOAN COMMITMENT PERCENTAGE
------ --------------- -----------
General Electric Capital Corporation ......... $ 38,525,000.00 33.50%
First Union National Bank .................... $ 19,837,500.00 17.25%
LaSalle Bank, N.A ............................ $ 19,837,500.00 17.25%
The Bank of Nova Scotia ...................... $ 9,200,000.00 8.00%
Bank Austria Creditanstalt ................... $ 9,200,000.00 8.00%
Corporate Finance, Inc.
Dresdner Bank AG, New York and ............... $ 9,200,000.00 8.00%
Grand Cayman Branches
Zions First National Bank .................... $ 9,200,000.00 8.00%
--------------- -----------
Total: ....................................... $115,000,000.00 100.00%
=============== ===========
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Annex C
Schedules 3.10, 6.3, 6.7, 6.11 and 6.14
to the Third Amended and Restated Credit Agreement
[to be attached by Obligors]
-29-
