EXHIBIT 4
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SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
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This Second Amendment to Revolving Credit Agreement (this "Amendment") is
entered into at Columbus, Ohio, by and between The Huntington National Bank, as
lender (the "Bank"), and X.X. Xxxxx Corporation, as borrower (the "Borrower"),
as of the 1st day of September, 2003, in order to amend the Revolving Credit
Agreement entered into by and among the Bank and the Borrower as of the 27th day
of December, 2002 (the "Credit Agreement").
Whereas, the parties to this Amendment desire to amend certain of the
provisions of the Credit Agreement, the Credit Agreement is hereby amended as
follows:
1. Section 1 of the Credit Agreement is hereby amended to recite in its
entirety as follows:
SECTION 1. COMMITMENT.
1.1. Basic Commitment Terms. The Borrower has applied to the Bank
for revolving credit loans up to an aggregate principal amount of
$32,000,000, the proceeds of which are to be used by the Borrower for
general corporate purposes, including, without limitation, seasonal
financing of inventory and accounts receivable. The Borrower has also
applied to the Bank for a loan in the principal amount of $4,000,000,
the proceeds of which are to be used by the Borrower for general
corporate purposes and which loan is to mature and the related
commitment to lend is to expire on November 1, 2003. The Bank is
willing to make such loans to the Borrower upon the terms and subject
to the conditions hereinafter set forth up to a maximum aggregate
principal amount not in excess of $36,000,000 (said amount being
hereinafter called the "Commitment" of the Bank). Notwithstanding
anything to the contrary contained in any Note evidencing the Loan,
the principal amount advanced by the Bank pursuant to the Notes held
by the Bank shall not exceed the amount of the Bank's Commitment.
1.2. Commitment Limitations. Notwithstanding the foregoing,
during the following periods in each year occurring during the term of
this Agreement, the aggregate Commitment of the Bank shall be in an
amount equal to the lesser of the following amounts or the amount to
which the Commitment has been reduced pursuant to Section 4.6 hereof:
Period Commitment
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From 1/1 through 1/31 $3,000,000
From 2/1 through 4/30 $12,000,000
From 5/1 through 10/31 $32,000,000
From 11/1 through 12/31 $27,000,000
provided, that during the period from September 1, 2003, to November
1, 2003, and only during such period, the aggregate Commitment of the
Bank shall be in an amount equal to the lesser of $36,000,000 or the
amount to which the Commitment has been reduced pursuant to Section
4.6 hereof.
1.3 BORROWING BASE. Notwithstanding the foregoing provisions of
Sections 1.1 and 1.2, the aggregate principal balance of the Loans at
any time outstanding shall not exceed the lesser of (a) the Commitment
of the Bank, reduced as provided in Section 1.2 and (b) the Borrowing
Base (as hereinafter defined). As used herein, "Borrowing Base" shall
mean the sum of (i) 80% of the Company's Eligible Accounts plus (ii)
40% of the Company's Eligible Inventory.
2. Section 3.36 of the Credit Agreement is hereby amended to recite in its
entirety as follows:
3.36 "Note" or "Notes" means the Revolving Credit Note or
Revolving Credit Notes as defined in Section 4.2.
3. Section 4.2 of the Credit Agreement is hereby amended to recite in its
entirety as follows:
4.2 EVIDENCE OF LOANS MADE UNDER REVOLVING CREDIT. All Loans made
by the Bank pursuant to the Bank's Commitment shall be evidenced by
one or more promissory notes substantially in the form attached hereto
as EXHIBIT A (hereinafter called the "Revolving Credit Note" or
"Revolving Credit Notes"), payable to the order of the Bank, duly
executed on behalf of the Borrower. The Bank is hereby authorized by
the Borrower to note on the schedule attached to each Revolving Credit
Note the date, amount and type of each Loan made to the Borrower, the
duration of the related Interest Period if applicable, the amount of
each payment or prepayment of principal thereon, and the other
information provided for on such schedule, which schedule shall
constitute PRIMA FACIE evidence of the information so noted; provided,
that failure of the Bank to make any such notation shall not relieve
the Borrower of its obligation to repay the outstanding principal
amount of any Loan or Loans made to it, all accrued interest thereon
and all other amounts payable in accordance with the terms of the
Revolving Credit Notes or this Agreement. Interest on the Loans
evidenced by the Revolving Credit Notes shall be payable at the rates
specified in Sections 3.2 and 3.20 hereof and on each Interest Payment
Date, as hereinafter defined. The terms and conditions of this
Agreement are incorporated in the Revolving Credit Notes by reference
as though the same were written therein.
4. Section 9.15 of the Credit Agreement is hereby amended to recite in its
entirety as follows:
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9.15 CASH FLOW LEVERAGE. Effective beginning on January 3, 2004,
permit the ratio of average Funded Debt for the previous four quarters
to EBITDA for the same period to be more than the following at the end
of any fiscal quarter:
Periods Ratio
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As of January 3, 2004, for the four quarters then
ending, and as of the end of each of the following
two quarters, for the four quarters then ending 3.0 to 1.0
As of October 2, 2004, for the four quarters then
ending, and as of the end of each of the following
three quarters, for the four quarters then ending 2.75 to 1.0
As of October 1, 2005, for the four quarters then
ending, and as of the end of each of the quarters
thereafter, for the four quarters then ending 2.5 to 1.0
For the purpose of the calculations required by this Section
9.15, "EBITDA" shall not include the loss incurred by the
Borrower in connection with the sale of certain of the
assets of its subsidiary, Vesture Corporation, nor any of
the operating losses of Vesture Corporation prior to such
sale.
5. The Borrower represents and warrants that no Event of Default has
occurred and is continuing, nor will any occur immediately after the execution
and delivery of this Amendment by the performance or observance of any provision
hereof.
6. Each reference to the Credit Agreement, whether by use of the phrase
"Credit Agreement," "Agreement," the prefix "herein" or any other term, and
whether contained in the Credit Agreement itself, in this Amendment, in any
document executed concurrently herewith or in any loan documents executed
hereafter, shall be construed as a reference to the Credit Agreement as amended
by this Amendment.
7. Except as previously amended and as modified herein, the Credit
Agreement and the Loan Documents shall remain as written originally and in full
force and effect in all respects, and nothing herein shall affect, modify, limit
or impair any of the rights and powers which the Banks may have thereunder.
8. The Borrower agrees to perform and observe all the covenants,
agreements, stipulations and conditions to be performed on its part under the
Credit Agreement, the promissory note executed and delivered in connection
herewith, the Loan Documents, and all other related agreements, as amended by
this Amendment.
9. The Borrower hereby represents and warrants to the Bank that (a) the
Borrower has legal power and authority to execute and deliver the within
Amendment; (b) the respective officer executing the within Amendment on behalf
of the Borrower has been duly authorized to
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execute and deliver the same and bind the Borrower with respect to the
provisions provided for herein; (c) the execution by the Borrower and the
performance and observance by the Borrower of the provisions hereof do not
violate or conflict with the articles of incorporation, regulations or by-laws
of the Borrower or any law applicable to the Borrower or result in the breach of
any provision of or constitute a default under any agreement, instrument or
document binding upon or enforceable against the Borrower; and (d) this
Amendment and the promissory notes executed and delivered in connection herewith
constitute valid and legally binding obligations upon the Borrower, subject to
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally, to general equitable principles and to
applicable doctrines of commercial reasonableness.
10. This Amendment shall become effective only upon the occurrence of all
the following: (a) the execution by the Borrower and the Bank of this Amendment;
(b) the execution by the Borrower and delivery to the Bank of a Revolving
Promissory Note in the amount of $4,000,000 as described in this Amendment; (c)
delivery by the Borrower to the Bank of a certified resolution of the Board of
Directors authorizing the execution and performance of this Amendment and the
additional borrowing provided for herein; and (d) Metropolitan Life Insurance
Company having entered into an amendment to the Intercreditor Agreement by and
between Metropolitan Life Insurance Company and the Bank dated as of December
27, 2002, providing for the pro rata sharing of collateral by those two lenders
to be calculated upon the basis of $36,000,000 of debt owed to the Bank by the
Borrower, and otherwise in form and substance satisfactory to the Bank and its
counsel. Execution of this Amendment by the parties hereto may be in any number
of counterparts, but all of such counterparts when taken together shall
constitute one and the same document.
12. Except as otherwise specifically provided herein, the capitalized terms
used herein shall have the same meanings as the capitalized terms used in the
Credit Agreement.
IN WITNESS WHEREOF, the Borrower and the Bank have hereunto set their hands
as of the 1st day of September, 2003.
X. X. XXXXX CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxx Xxxx
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Xxx Xxxx, Senior Vice President
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