AMENDMENT NO. 1 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of December 24, 1997 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
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WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I to the Credit Agreement (Definitions).
(a) The following definitions contained in Article I of the Credit
Agreement are hereby amended and restated to read in their entirety as follows:
"New Investment" means (i) any Investment in UAG Stock or Foamex
Common Stock (other than pursuant to the Rallis Put) on or after the Closing
Date made with the proceeds of the Loans, pursuant to this Agreement and (ii)
any Investment made in CHF with the proceeds of the Term A Loan (as defined in
the Other Credit Agreement), pursuant to the Other Credit Agreement.
"Other Credit Agreement" means the Second Amended and Restated
Credit Agreement, dated as of December 24, 1997, between the Company and The
Bank of Nova Scotia, as lender, as amended, amended and restated, supplemented
or modified from time to time.
"Tranche A Commitment Amount" means $0.
"Tranche B Commitment Amount" means $0.
SECTION 2.2. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.1 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.1. Indebtedness. The Borrower shall not and shall not permit any
of its Subsidiaries (other than CHF Industries, Inc. and its operating
Subsidiaries and any Subsidiary which is not a Subsidiary of an Investment
Entity) directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Funded Indebtedness,
except:
(i) the Obligations;
(ii) the Obligations (as such term is defined in the Other Credit
Agreement);
(iii) in the case of Trace Foam Sub, the DLJ Facility;
(iv) other Funded Indebtedness of the Borrower and such Subsidiaries
outstanding on the Closing Date; and
(v) Indebtedness to the United Auto Group, Inc. in a maximum principal
amount not to exceed $5,000,000."
(b) Section 9.2 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.2. Investments. The Borrower shall not make any Investment in any
Investment Entity or any Subsidiary thereof other than (i) any Investment
existing on the Closing Date (as defined in the Other Credit Agreement), (ii)
110,000 shares of Foamex International, Inc. common stock described in the
proviso to the definition of "Restricted Management Payment", (iii) as required
by Section 4(c) of the TIHI CHF Guaranty and (iv) the New Investments. The
Borrower shall not and shall not permit any Subsidiary to sell, transfer or
otherwise dispose of (i) any Equity Interest in Trace Foam Sub or any of its
assets or (ii) any Subject Asset to another Subsidiary of the Borrower unless,
in the case of this clause (ii), (x) such transferee Subsidiary is a direct,
wholly-owned Subsidiary of the Borrower and (y) the Borrower shall have given
prior written notice of such transaction to the Lender."
(c) Section 9.4 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.4. Transactions with Shareholders and Affiliates. The Borrower
shall not and shall not permit any Investment Entity which is a Subsidiary or
Trace Foam Sub to directly or indirectly enter into any transaction (including,
without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service), with any Affiliate of the Borrower. Nothing contained
in this Section 9.4 shall prohibit (i) any transaction permitted by Section 9.3
or, subject to Section 9.3, compensation and benefits for officers and employees
of the Borrower or any of the Borrower's predecessors in interest or any of
their respective Subsidiaries which are customary in the industry or consistent
with the past business practice of the Borrower or such Subsidiary, provided
that no Event of Default or Potential Event of Default has occurred and is
continuing at the time of any increase therein; (ii) payment of customary
directors' fees and indemnities; (iii) performance of any obligations arising
under the Loan Documents; (iv) transactions listed on Schedule 6.1-Q, (v)
payment of
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dividends and distributions by Subsidiaries to the Borrower and (vi)
transactions between Trace Capital Partners LLC and Trace Capital Management LLC
on the one hand and Trace Global Opportunities Fund L.P. on the other hand,
other than any transaction which reduces the compensation or profits allocation
payable to Trace Capital Partners LLC or Trace Capital Management LLC."
(d) Section 9.5 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.5. Restriction on Fundamental Changes. The Borrower shall not,
and shall not permit Trace Foam Sub to, enter into any merger or consolidation,
or liquidate, windup or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or
series of transactions, all or substantially all of its business or property or
assets, whether now or hereafter acquired."
(e) Section 9.8 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.8. Environmental Matters. The Borrower shall not and shall not
permit Trace Foam Sub to:
(i) become subject to any Liabilities and Costs which would have a
Material Adverse Effect arising out of or related to (a) the Release or
threatened Release at any location of any Hazardous Material into the
environment, or any Remedial Action in response thereto, or (b) any violation of
any Environmental, Health or Safety Requirements of Law; or
(ii) either directly or indirectly, create, incur, assume or permit to
exist any Environmental Lien on or with respect to any of its Property."
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is
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hereby ratified, approved and confirmed in each and every respect. All
references to the Credit Agreement in any other document, instrument, agreement
or writing shall hereafter be deemed to refer to the Credit Agreement as amended
hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Xxxxxx X. Xxxxx, Xx.
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Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Senior Relationship Manager
