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Exhibit 10.8(b)
AMENDMENT NUMBER 2 TO THE
CREDIT AGREEMENT
Dated as of November 9, 1995
AMENDMENT NUMBER 2 TO THE CREDIT AGREEMENT among The Geon
Company, a Delaware corporation (the "BORROWER"), the banks, financial
institutions and other institutional lenders parties to the Credit Agreement
referred to below (collectively, the "Lenders"), Citibank, N.A. ("Citibank") as
administrative agent (the "ADMINISTRATIVE AGENT") for the Lenders, and
NationsBank of North Carolina, N.A. as co-agent (the "CO-AGENT") thereunder.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders, the Administrative Agent and
the Co-Agent have entered into a Credit Agreement dated as of August 16, 1994
and the amendment thereto dated as of December 8, 1994 (such Credit Agreement,
as so amended and as otherwise supplemented or modified through the date
hereof, the "CREDIT AGREEMENT"). Capitalized terms not otherwise defined in
this Amendment have the same meanings as specified in the Credit Agreement.
(2) The Borrower and the Lenders have agreed to further
amend the Credit Agreement as hereinafter set forth.
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit
Agreement is, effective as of the date hereof, hereby amended as follows:
(a) The definition of "APPLICABLE MARGIN" in Section 1.01
is amended by deleting the table in clause (ii) thereof and
substituting therefor the following:
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Public Debt Rating Usage Applicable Margin
S&P/Xxxxx'x/ for
Duff & Xxxxxx Eurodollar Rate
Advances
==============================================================================================
Level 1 < 50% 0.150%
A-/A3/A- or above -
----------------------------------------------------------------
> 50% 0.250%
----------------------------------------------------------------------------------------------
Xxxxx 0 < 50% 0.1875%
BBB+/Baa1/BBB+ -
----------------------------------------------------------------
> 50% 0.2625%
----------------------------------------------------------------------------------------------
Xxxxx 0 < 50% 0.270%
BBB/Baa2/BBB -
----------------------------------------------------------------
> 50% 0.350%
----------------------------------------------------------------------------------------------
Xxxxx 0 < 50% 0.2625%
BBB-/Baa3/BBB- -
----------------------------------------------------------------
> 50% 0.3375%
----------------------------------------------------------------------------------------------
Xxxxx 0 < 50% 0.500%
BB+/Ba1/BB+ -
----------------------------------------------------------------
> 50% 0.625%
----------------------------------------------------------------------------------------------
Xxxxx 0 < 50% 0.750%
BB/Ba2/BB -
----------------------------------------------------------------
> 50% 0.875%
==============================================================================================
(b) The definition of "APPLICABLE PERCENTAGE" in Section 1.01 is
amended by deleting the table in clause (ii) thereof and substituting therefor
the following:
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Public Debt Rating Applicable
S&P/Xxxxx'x/Duff & Percentage
Xxxxxx
=====================================================
Level 1 0.100%
A-/A3/A- or above
-----------------------------------------------------
Xxxxx 0 0.125%
BBB+/Baa1/BBB+
-----------------------------------------------------
Xxxxx 0 0.150%
BBB/Baa2/BBB
-----------------------------------------------------
Xxxxx 0 0.225%
BBB-/Baa3/BBB-
-----------------------------------------------------
Xxxxx 0 0.375%
BB+/Ba1/BB+
-----------------------------------------------------
Xxxxx 0 0.375%
BB/Ba2/BB
=====================================================
(c) Section 1.01 is amended by adding the following new definitions
in appropriate alphabetical order:
"'BORROWED DEBT/EBITDAR RATIO' means, as of any date, the ratio
computed by dividing (a) Borrowed Debt of the Borrower and its
subsidiaries on a Consolidated basis as of such date by (b) EBITDAR of
the Borrower and its subsidiaries on a Consolidated basis for the four
consecutive fiscal quarters of the Borrower most recently ended as of
such date."
"'EBITDAR' means, for any period, net income (or net loss) PLUS
the sum of (a) interest expense, (b) income tax expense, (c)
depreciation expense, (d) amortization expense and (e) rental expense
incurred in connection with the XxXxxxx Financing, in each case
determined in accordance with GAAP for such period."
(d) The definition of "INTEREST COVERAGE RATIO" in Section 1.01 is
amended in full to read as follows:
"'INTEREST COVERAGE RATIO' means, with respect to any fiscal
quarter, the ratio of FBITDA of the Borrower and its subsidiaries on a
Consolidated basis to Cash Interest Expense, in each case in the
aggregate for the period of four consecutive fiscal quarters ended at
the end of such fiscal quarter. "
(e) The definition of "XXXXXXX FINANCING" in Section 1.01 is amended
in full to read as follows:
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"'XXXXXXX FINANCING' means, collectively, the transactions
contemplated by (i) the Amended and Restated Participation Agreement
dated as of November 9, 1995 (the "PARTICIPATION AGREEMENT") among the
Borrower, 0000 XXX Xxx., Xxxxx Xxxxxx Bank and Trust Company of
Connecticut, National Association, as trustee, the financial
institutions parties thereto and Citibank, N.A., as agent, and (ii) the
other Operative Documents (as defined in the Participation Agreement)."
(f) The definition of "TERMINATION DATE" in Section 1.01 is amended
by deleting "August 16,1999" therein and substituting therefor "November 9,
2000".
(g) Section 2.05(b) is amended in full to read as follows:
"(b) MANDATORY. The Commitments shall be permanently reduced
ratably in an aggregate amount of $80,000,000 on the following dates in
the aggregate amounts indicated:
Date Amount
---- ------
December 31,1997 $25,000,000
December 31,1998 $55,000,000
PROVIDED that if the Borrower or any of its Subsidiaries consummates an
issuance of public debt in an aggregate principal amount equal to or
greater than $100,000,000 (the "TRIGGER EVENT"), then (1) if the Trigger
Event occurs before December 31, 1998, the Commitments of the Lenders
shall be reduced ratably (A) if the Trigger Event occurs before December
31, 1997, by $30,000,0000 or (B) if the Trigger Event occurs on or after
December 31, 1997 and before December 31, 1998, by $5,000,000 (after
giving effect to the reduction described above of $25,000,000 on
December 31, 1997) and, in the case of a reduction under clause (A) or
(B), no reduction of the Commitments under this Section 2.05(b) shall be
required thereafter or (2) if the Trigger Event occurs on or after
December 31, 1998, the Commitments of the Lenders (after giving effect
to the reductions described above of $25,000,000 on December 31, 1997
and $55,000,000 on December 31, 1998) shall be increased ratably so that
the aggregate amount of the Commitments shall be $100,000,000
immediately after such increase."
(h) Section 5.03 is amended in full to read as follows:
"SECTION 5.03. FINANCIAL COVENANTS. So long as
any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower will:
(a) INTEREST COVERAGE RATIO. Maintain an
Interest Coverage Ratio of at least 6:1.
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(b) BORROWED DEBT/EBITDAR RATIO. Maintain a
Borrowed Debt/EBITDAR Ratio of not more than 3.5:1.
(c) MINIMUM RETAINED EARNINGS. Either (i) for
each fiscal quarter, maintain retained earnings equal to
or exceeding $150,000,000 or (ii) for any period of four
consecutive fiscal quarters, not incur net losses in
excess of $50,000,000."
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of the date first above written when, and only when, on or before
November 9, 1995 the Administrative Agent shall have received counterparts of
this Amendment executed by the Borrower and all of the Lenders or, as to any of
the Lenders, advice satisfactory to the Administrative Agent that such Lender
has executed this Amendment. This Amendment is subject to the provisions of
Section 8.01 of the Credit Agreement.
SECTION 3. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
NOTES. (a) On and after the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in the Notes
to "the Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement, as amended by this Amendment.
(b) The Credit Agreement and the Notes, as specifically amended by
this Amendment, are and shall continue to be in full force and effect and are
hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or the Administrative Agent under the
Credit Agreement, nor constitute a waiver of any provision of the Credit
Agreement.
SECTION 4. COSTS, EXPENSES. The Borrower agrees to pay on demand all
costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent) in accordance with the terms of Section
8.04 of the Credit Agreement.
SECTION 5. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one
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and the same agreement. Delivery of an executed counterpart of a signature page
to this Amendment by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION 6. GOVERNING LAW . This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
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 GEON COMPANY
By
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Title: Assistant Treasurer
CITIBANK, N.A.,
as Administrative Agent and as Lender
By
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Title: Vice President
NATIONSBANK OF NORTH
CAROLINA, N.A., as Co-Agent
and as Lender
By
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Title: Senior Vice President
BANK OF MONTREAL
By
-----------------------------------
Title: Director
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THE BANK OF NEW YORK
By
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Title: Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE
By
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Title: Assistant Vice President
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By
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Title: Vice President
NBD BANK, N.A.
By
-----------------------------------
Title: Vice President
NATIONAL CITY BANK
By
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Title: Sr. Vice President
