Exhibit 10.17
FIRST AMENDMENT TO LOAN AGREEMENT
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THIS FIRST AMENDMENT TO LOAN AGREEMENT, dated as of March 10, 1997 (the
"Amendment"), is entered into among AXIA INCORPORATED, a Delaware corporation
("AXIA"), and its direct subsidiaries, XXXX TAPING TOOL SYSTEMS, INC., a
Delaware corporation ("ATTS"), TAPETECH TOOL CO., INC., a Delaware corporation
("TapeTech") (AXIA, ATTS and TapeTech, individually, "Borrower" and
collectively, "Borrowers"), the lenders ("Lenders") named in the Loan Agreement
referred to below, and AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a
national banking association ("ANB"), as agent for Lenders under the Loan
Agreement (ANB, in such capacity, being "Agent").
R E C I T A L S:
- - - - - - - -
A. Borrowers, Lenders and Agent entered into that certain Loan Agreement,
dated as of June 27, 1996 (the "Loan Agreement").
B. Borrowers have requested that Agent and Lenders enter into this
Amendment in order to provide for an increase in the Revolving Credit Loan and
to amend certain other provisions of the Loan Agreement.
C. Capitalized terms used herein and not otherwise defined shall have the
meanings provided for in the Loan Agreement.
1. AMENDMENT
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1.1 The definition of Applicable Margin contained in Section 1 of the Loan
Agreement is hereby amended by deleting the text appearing after the table in
such definition and inserting the following in its stead:
"For purposes of the foregoing, the Applicable Margin shall be determined
by reference to the Actual Ratio as of the measurement date set forth above
and any change in the Applicable Margin shall become effective for all
purposes on and after the date of delivery to Agent of the certificate and
applicable financial statements required by Sections 5.1(c) and 5.1(d)
relating to the Fiscal Quarter or Fiscal Year ended as of the applicable
measurement date; provided, however, that until the first such certificate
and financial statements have been delivered to Agent, the Applicable
Margin shall be 1.75%, unless AXIA shall have delivered to Agent on the
initial Closing Date an officer's certificate certifying that the
Applicable Margin, determined by AXIA in accordance with the first part of
this sentence based upon its good faith estimates, should be 1.50% in which
case the
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Applicable Margin shall be set at 1.50% for all purposes hereunder until
delivery of the first certificate and financial statements pursuant to
Section 5.1(c) hereof and if, upon delivery of such first financial
statements and certificate pursuant to Section 5.1(c), the certificate
delivered on the initial Closing Date proves to have been inaccurate and
shall have resulted in an understatement of the Applicable Margin, then
such understatement shall be corrected retroactively to the Closing Date
and the Borrowers shall immediately pay to Agent the amount of the
shortfall. Notwithstanding the foregoing, at any time during which AXIA has
failed to deliver the certificate and applicable financial statements
described in Sections 5.1(c) and 5.1(d) with respect to the Fiscal Quarter
or Fiscal Year ending as of the applicable measurement date in accordance
with the provisions of such Sections, for more than five Business Days
after such certificate and applicable financial statements are due, the
Actual Ratio shall be deemed, solely for purposes of this definition, to
exceed the Required Ratio until such certificate and applicable financial
statements are delivered."
1.2 Section 2.1(a) of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
(a) The aggregate amount of the Revolving Credit Loan to be made by
each Lender (such Lender's "Revolving Credit Loan Commitment") shall be the
amount set below such Lender's name on the signature pages hereof. The aggregate
principal amount of the Revolving Credit Loan Commitments is $20,000,000. The
percentage equal to the quotient of (x) each Lender's Revolving Credit Loan
Commitment, divided by (y) the aggregate of all Revolving Credit Loan
Commitments, is that Lender's "Revolving Credit Percentage". Upon and subject to
the terms and conditions hereof, each Lender, severally and for itself alone,
agrees to make available, from time to time, on and after the initial Closing
Date and until the Commitment Termination Date, for Borrowers' use and upon the
request of AXIA on behalf of Borrowers therefor, advances (each, a "Revolving
Credit Advance") in an aggregate amount outstanding which, together with that
Lender's Revolving Credit Percentage of all outstanding Letter of Credit
Obligations, whether or not due and payable, shall not at any given time exceed
the product of (A) that Lender's Revolving Credit Percentage multiplied by (B)
the Maximum Revolving Credit Loan. Subject to the provisions of Section 2.4 and
Section 9.2 hereof and until all amounts outstanding in respect of the Revolving
Credit Loan shall become due and payable on the Commitment Termination Date,
AXIA on behalf of Borrowers may from time to time borrow, repay and reborrow
under this Section 2.1(a). Each Revolving Credit Advance shall be made on notice
(i) in the case of a Revolving Credit LIBOR Borrowing, given not later than
11:00 A.M. (Chicago time) three Business Days prior to the proposed Revolving
Credit Advance, and (ii) in the case of a Revolving Credit Alternate Base Rate
Borrowing, given not later than
11:00 A.M. (Chicago time) on the Business Day of the proposed Revolving Credit
Advance, by AXIA to Agent, which shall give to each Lender prompt written notice
thereof by telecopy, telex or cable. Each such notice (a "Notice of Revolving
Credit Advance") shall be in writing or by telephone to the Loan Administrator
of Agent at (000) 000-0000, confirmed immediately in writing, in substantially
the form of Exhibit B hereto, specifying therein (i) the requested date (which
shall be a Business Day) and amount of the Revolving Credit Advance, (ii)
whether the Revolving Credit Advance is to be an Alternate Base Rate Borrowing
or a LIBOR Rate Borrowing, and (iii) if such Revolving Credit Advance is to be a
LIBOR Rate Borrowing, the LIBOR Rate Interest Period with respect thereto. If no
election as to the Type of Revolving Credit Advance is specified in any such
notice, than the requested Revolving Credit Advance shall be an Alternate Base
Rate Borrowing. If no LIBOR Rate Interest Period with respect to any LIBOR Rate
Borrowing is specified in such notice, then AXIA shall be deemed to have
selected a LIBOR Rate Interest Period of one month's duration. Each Lender
shall, not later than 2:00 P.M. (Chicago time) on each requested date, wire to a
bank designated by Agent the amount of that Lender's Revolving Credit Percentage
of the requested Revolving Credit Advance. Agent shall, before 2:00 P.M.
(Chicago time) on the date of the proposed Revolving Credit Advance, upon
fulfillment of the applicable conditions set forth in Section 3 and to the
extent received from the Lenders, wire to a bank designated by AXIA and
reasonably acceptable to Agent, the amount of such Revolving Credit Advance. The
failure of any Lender to make the Revolving Credit Advance to be made by it
shall not relieve any other Lender of its obligation hereunder to make its
Revolving Credit Advance. No Lender shall be responsible for the failure of any
other Lender to make the Revolving Credit Advance to be made by such other
Lender. Unless Agent shall have received notice from a Lender prior to the date
of any Revolving Credit Advance that such Lender will not make available to
Agent an amount equal to such Lender's Revolving Credit Percentage of such
Revolving Credit Advance, Agent may assume that such Lender has made such amount
available to Agent on the date of such Revolving Credit Advance in accordance
with this Section 2.1 and Agent may, in reliance upon such assumption, make
available to Borrowers on such date a corresponding amount. If and to the extent
that such Lender shall not have made such portion available to Agent, such
Lender and Borrowers severally agree to repay to Agent forthwith on demand such
corresponding amount together with interest thereon, for each day, from the date
such amount is made available to Borrowers until the date such amount is repaid
to Agent at (i) in the case of Borrowers, the interest rate applicable at the
time to the Revolving Loan comprising such Revolving Credit Advance and (ii) in
the case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to Agent such corresponding amount, such amount shall constitute such
Lender's Revolving Credit Percentage of such Revolving Credit Advance for
purposes of this Agreement."
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1.3 Section 2.7(a) of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
(a) Borrowers shall apply the proceeds of the Term Loan to the
payment of their outstanding indebtedness and the proceeds of the
Revolving Credit Loan for working capital and general corporate
purposes and to the payment of outstanding indebtedness; provided,
however, that not more than $5,000,000 of the proceeds of the
Revolving Credit Loan may be utilized for the repayment of
indebtedness of AXIA under the Credit Agreement, dated as of March 15,
1994, among AXIA, Banque Indosuez, as agent, and the lenders named
therein. In addition to the foregoing, AXIA may apply proceeds of
Revolving Credit Advances to the payment of the purchase price of
Subordinated Notes or Subordinated Note Units; provided, however, that
the maximum amount of proceeds of Revolving Credit Advances which may
be utilized for such purpose shall not exceed in the aggregate at any
date of determination $10,000,000.
1.4 Section 5.1(a) of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
(a) Within 15 Business Days after the end of each Fiscal Quarter, a
Borrowing Base Certificate in the form attached hereto as Exhibit A
and with content satisfactory to Agent which provides the following
information: (1) total Accounts Receivable/Inventory and Eligible
Domestic Accounts Receivable/Eligible Foreign Accounts
Receivable/Eligible Inventory, and (2) the current loan balance.
1.5 Section 6.3(b) of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
(b) Consolidated Funded Debt to Consolidated EBITDA Ratio. As at the
end of each Fiscal Year listed below and as at the end of each of the
first three Fiscal Quarters of the immediately succeeding Fiscal Year,
a Consolidated Funded Debt to Consolidated EBITDA Ratio for the
immediately preceding four Fiscal Quarters not greater than the ratios
set forth opposite such Fiscal Year:
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Consolidated Funded
Debt to Consolidated
Fiscal Year EBITDA Ratio
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1995 3.00 to 1.0
1996 2.80 to 1.0
1997 2.65 to 1.0
1998 2.25 to 1.0
1999 1.90 to 1.0"
1.6 The Revolving Credit Loan Commitments of each Lender are amended to be
in the amounts set below each Lender's name on the signature pages to this
Amendment.
2. CONDITIONS PRECEDENT
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This Amendment shall be effective upon the receipt by Agent of each of the
following, each in form and substance satisfactory to Agent:
(a) Counterparts of this Amendment duly executed on behalf of each of
the Borrowers, Lenders and Agent;
(b) Resolutions of the Board of Directors of each Borrower
authorizing the execution and delivery of this Amendment and the
replacement Revolving Credit Notes certified by the Secretary or Assistant
Secretary of each Borrower;
(c) Replacement Revolving Credit Notes of Borrowers payable to
Lenders;
(d) Payment to Agent, for the ratable benefit of Lenders, of a
facility fee in the amount of $12,500.
3. MISCELLANEOUS
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3.1 Limited Nature of Amendments. The parties hereto acknowledge and agree
that the terms and provisions of this Amendment amend, add to and constitute a
part of the Loan Agreement. Except as expressly modified and amended by the
terms of this Amendment, all of the other terms and conditions of the Loan
Agreement and all documents executed in connection therewith or referred to or
incorporated therein remain in full force and effect and are hereby ratified,
reaffirmed, confirmed and approved.
3.2 Conflict. If there is an express conflict between the terms of this
Amendment and the terms of the Loan Agreement, or any of the other agreements or
documents executed in
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connection therewith or referred to or incorporated therein, the terms of this
Amendment shall govern and control.
3.3 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original.
3.4 Representations and Warranties. Each Borrower represents and warrants
to Agent and Lenders as follows: (A) such Borrower has all necessary power and
authority to execute and deliver this Amendment and perform its obligations
hereunder; (B) this Amendment and the Loan Agreement, as amended hereby,
constitute the legal, valid and binding obligations of such Borrower and are
enforceable against such Borrower in accordance with their terms; and (C) all
representations and warranties of such Borrower contained in the Loan Agreement
and all other agreements, instruments and other writings relating thereto are
true and complete as of the date hereof.
3.5 Governing Law. This Amendment shall be construed in accordance with
and governed by and the internal laws of the State of Illinois, without giving
effect to choice of law principles.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
AXIA INCORPORATED AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO, as
By: /s/ Xxxx X. Xxxx Agent and as Lender
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Name: Xxxx X. Xxxx
Title: Vice President
By:
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Name: Georgy Xxx Xxxxxxxxxxx
Title: Second Vice President
XXXX TAPING TOOL SYSTEMS, INC.
Revolving Credit Loan Commitment:
By: /s/ Xxxx X. Xxxx $8,000,000
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Name: Xxxx X. Xxxx
Title: Vice President
THE NORTHERN TRUST COMPANY, as
Lender
TAPETECH TOOL CO., INC.
By:
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By:/s/ Xxxx X. Xxxx Name:
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Name: Xxxx X. Xxxx Title:
Title: Vice President -----------------------
Address:
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Revolving Credit Loan Commitment:
$6,000,000
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