AMENDMENT NUMBER FOUR
TO
CREDIT AGREEMENT
THIS AMENDMENT NUMBER FOUR TO CREDIT AGREEMENT (this "Amendment") is
made as of April 28, 2000, by and among BANK OF AMERICA, N.A., formerly known as
Bank of America National Trust and Savings Association, a national banking
association, and U.S. BANK NATIONAL ASSOCIATION, a national banking association
(each a "Lender"), BANK OF AMERICA, N.A., as agent for the Lenders (the
"Agent"), and FLOW INTERNATIONAL CORPORATION, a Washington corporation
("Borrower").
RECITALS
A. Lenders, Agent and Borrower are parties to that certain Credit
Agreement dated as of August 31, 1998, as amended by that certain Amendment
Number One to Credit Agreement dated as of March 26, 1999, by that certain
Amendment Number Two to Credit Agreement dated as of June 21, 1999, and that
certain Amendment Number Three to Credit Agreement dated as of September 2, 1999
(the "Credit Agreement").
B. Borrower has requested, and Lenders and Agent have agreed, to
amend the Credit Agreement upon certain terms and conditions contained in this
Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS. Capitalized terms not otherwise defined in this
Amendment shall have the meaning set forth in the Credit Agreement.
2. AMENDMENTS TO DEFINITION OF "APPLICABLE MARGIN". In Section
1.1, the definition of "Applicable Margin" is hereby amended to read as follows:
"APPLICABLE MARGIN" means on any date, with respect to any
LIBOR Loans or Multi-Currency Loans, the rate per annum that is
determined by reference to the following matrix or subclauses (ii)
below:
Senior Funded Debt Ratio as of Applicable
the end of the previous fiscal quarter: Margin
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Less than 2.00:1 1.00%
Equal to or greater than 2.00:1 and
less than 2.50:1 1.25%
Equal to or greater than 2.50:1 and
less than 3.00:1 1.50%
Equal to or greater than 3.00:1 2.50%
(i) Subject to the limitations and exceptions set forth below,
the Applicable Margin shall be adjusted forty-five (45) days after the
end of each of the first three fiscal quarters in each of Borrower's
fiscal years and ninety (90) days after the end of each fiscal year of
Borrower.
In the event that any of the financial statements or quarterly
compliance certificates required to be delivered pursuant to Section
6.9 are not delivered when due, then (aa) if such financial statements
and certificates are delivered after the date such financial statements
and certificates were required to be delivered (without giving effect
to any applicable cure period) and the Applicable Margin increases from
that previously in effect as a result of the delivery of such financial
statements, then the Applicable Margin during the period from the date
upon which such financial statements were required to be delivered
(without giving effect to any applicable cure period) until the date
upon which they actually are delivered shall, except as otherwise
provided in clause (cc) below, be the Applicable Margin as so
increased; (bb) if such financial statements and certificates are
delivered after the date such financial statements and certificates are
required to be delivered (without giving effect to any applicable cure
period) and the Applicable Margin decreases from that previously in
effect as a result of the delivery of such financial statements, then
such decrease in the Applicable Margin shall not become effective until
the date upon which the financial statements and certificates actually
were delivered; and (cc) if such financial statements and certificates
are not delivered prior to the expiration of the applicable cure
period, then, effective upon such expiration, for the period from the
date upon which such financial statements and certificates were
required to be delivered (after the expiration of the applicable cure
period) until two (2) Business Days following the date upon which they
actually are delivered, the Applicable Margin shall be 2.50% (250 basis
points).
(ii) Notwithstanding the foregoing to the contrary and without
limiting any other rights which the Agent or Lenders may have under any
Loan Document or applicable law in respect thereof, at any time that
Borrower is in default of its obligations under either Section 6.13 or
6.17 of this Agreement, the Applicable Margin will be 5.00%.
3. AMENDMENT TO DEFINITION OF "FUNDED DEBT". In Section 1.1, the
definition of "Funded Debt" is hereby amended to read as follows:
"FUNDED DEBT" shall mean all interest bearing liabilities of
Borrower, including capitalized lease obligations.
4. AMENDMENT TO DEFINITION OF "SENIOR FUNDED DEBT". In Section
1.1, the definition of "Senior Funded Debt" is hereby amended to read as
follows:
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"SENIOR FUNDED DEBT" means, as of the end of any fiscal
quarter, the sum of Funded Debt less Senior Unsecured Debt and less
Subordinated Debt, each as of the end of such fiscal quarter.
5. AMENDMENT TO DEBT TO TANGIBLE NET WORTH RATIO. Section 6.15 of
the Credit Agreement is amended and restated as follows:
SECTION 6.15 DEBT TO TANGIBLE NET WORTH RATIO. Borrower shall
maintain, on a consolidated basis, a ratio of Debt to Tangible Net
Worth of not more than (a) 4.00 to 1 as at the fiscal quarters ending
April 30, 2000, July 31, 2000, October 31, 2000 and January 31, 2001;
(b) 3.25 to 1 as at the fiscal quarters ending April 30, 2001, July 31,
2001, October 31, 2001 and January 31, 2002; and (c) 2.75 to 1 as at
the fiscal quarters ending April 30, 2002 and thereafter. As used
herein, "Debt" shall mean, on a consolidated basis, all liabilities of
Borrower as determined and computed in accordance with GAAP other than
Senior Unsecured Debt, Subordinated Debt, and for clarification
purposes only, minority interests.
6. AMENDMENT TO SENIOR FUNDED DEBT RATIO. Section 6.17 of the
Credit Agreement is amended and restated as follows:
SECTION 6.17 SENIOR FUNDED DEBT RATIO. Borrower shall
maintain, on a consolidated basis, a Senior Funded Debt Ratio of not
more than (a) 4.00 to 1 as at the fiscal quarters ending April 30, 2000
and July 31, 2000; (b) 3.75 to 1 as at the fiscal quarters ending
October 31, 2000; (c) 3.50 to 1 as at the fiscal quarters ending
January 31, 2001; (d) 3.25 to 1 as at the fiscal quarters ending April
30, 2001 and July 31, 2001; and (e) 3.00 to 1 as at the fiscal quarters
ending October 31, 2001 and thereafter. As used herein, "Senior Funded
Debt Ratio" shall mean, as of the end of any fiscal quarter, the
quotient obtained by dividing (A) Senior Funded Debt as of the end of
such fiscal quarter by (B) the EBITDA for such quarter and the three
immediately preceding fiscal quarters, PLUS, in the event that Borrower
has acquired any Subsidiaries during such fiscal quarter or during the
immediately preceding three fiscal quarters, the EBITDA of such
Subsidiaries from the first day of the immediately preceding three
fiscal quarters through the date of acquisition of each Subsidiary.
"EBITDA" shall mean pre-tax net income (or pre-tax net loss), PLUS, the
sum of (i) interest expense, (ii) depreciation expense, (iii) depletion
expense, and (iv) amortization expense.
7. ADDITION OF AFFIRMATIVC COVENANT. A new Section 6.18 is hereby
added to the Credit Agreement:
SECTION 6.18 SENIOR FUNDED DEBT. As at the end of each fiscal
quarter, Borrower shall cause, on a consolidated basis, Senior Funded
Debt to be less than or equal to the sum of (i) 75% of Borrower's
consolidated accounts receivable, plus (ii) 40% of Borrower's
consolidated inventory (valued as the lesser of cost or fair market
value), plus (iii) 100% of the net book value of Borrower's
consolidated equipment (excluding Fresher Under Pressure equipment).
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8. AMENDMENT FEE. On the date of this Amendment, Borrower shall
pay to Agent, for the account of Lenders in accordance with their Pro Rata
Shares, an amendment fee equal to 0.25% of the sum of the Total Revolving
Commitment (the "Fourth Amendment Fee"). Such fee shall be fully earned upon the
execution of this Amendment and irrevocable and non-refundable upon payment.
9. CONDITIONS TO EFFECTIVENESS. Notwithstanding anything
contained herein to the contrary, this Amendment shall not become effective
until each of the following conditions fully and simultaneously satisfied:
a. DELIVERY OF AMENDMENT. Borrower, Agent and each
Lender shall have executed and delivered counterparts of this Amendment to
Agent.
b. PAYMENT OF FOURTH AMENDMENT FEE. Borrower shall have
paid the Fourth Amendment Fee to Agent.
10. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Lenders and Agent that each of the representations and
warranties set forth in Article 5 of the Credit Agreement is true and correct in
each case as if made on and as of the date of this Amendment and Borrower
expressly agrees that it shall be an additional Event of Default under the
Credit Agreement if any representation or warranty made hereunder shall prove to
have been incorrect in any material respect when made.
11. NO FURTHER AMENDMENT. Except as expressly modified by the
terms of this Amendment, all of the terms and conditions of the Credit Agreement
and the other Loan Documents shall remain in full force and effect and the
parties hereto expressly reaffirm and ratify their respective obligations
thereunder.
12. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Washington.
13. 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 one and the same agreement.
14. ORAL AGREEMENTS NOT ENFORCEABLE.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Number Four to Credit Agreement as of the date first above written.
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BORROWER: FLOW INTERNATIONAL CORPORATION
By:
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Its:
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LENDERS: BANK OF AMERICA, N.A.
By:
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Its:
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U.S. BANK NATIONAL ASSOCIATION
By:
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Its:
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AGENT: BANK OF AMERICA, N.A.
By:
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Its:
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