ITEM 14
EXHIBIT 10.7
EXECUTION COPY
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
TO
CREDIT AGREEMENT
THIS FIRST AMENDMENT AND CONSENT TO CREDIT AGREEMENT dated as of
August 23, 1996 (this "First Amendment") is entered into among Xxxxxxxxxx
Holding Corporation, a Delaware corporation ("Holdings"), X. Xxxxxxxxxx & Co.,
Inc., a New York corporation (the "Company"), Pegasus Polymers International
Inc., a Connecticut corporation ("Pegasus"), Xxxxxxxxxx International, Ltd., a
New York corporation ("Xxxxxxxxxx International"), X. Xxxxxxxxxx & Co. (Canada)
Limited, an Ontario corporation (the "Canadian Borrower"; and together with the
Company, Pegasus and Xxxxxxxxxx International, the "Borrowers"), the financial
institutions listed on the signature pages hereof (collectively referred to
herein, together with their respective successors and assigns, as the "Lenders"
and individually as a "Lender"), Citicorp USA, Inc., a Delaware corporation
("Citicorp"), in its capacity as agent for the Lenders and the "Issuing Banks"
(as defined in the Credit Agreement referred to below) (with its successors in
such capacity, the "Agent"), and Citibank Canada, a Canadian chartered bank
("Citibank Canada"), in its capacity as agent for the "Canadian Lenders" and the
"Canadian Issuing Banks" (in each case as defined in the Credit Agreement
referred to below) (with its successors in such capacity, the "Canadian Agent")
and relates to that certain Credit Agreement dated as of February 9, 1996 (as
supplemented or otherwise modified from time to time prior to the "First
Amendment Effective Date" (as defined in Section 2.1(i) below), the "Credit
Agreement"), among Holdings, the Borrowers, the Lenders, the Issuing Banks, the
Agent and the Canadian Agent.
W I T N E S S E T H:
WHEREAS, the Company plans to form a two new Wholly Owned
Subsidiaries, Xxxxxxxxxx Financial Corporation, a Delaware corporation
("Finsub"), and Polymers International Financial Corporation, a Delaware
corporation ("Finsub2");
WHEREAS, the Company, Xxxxxxxxxx International, Finsub and Finsub2
plan to enter into the Permitted Receivables Transaction Documents (as defined
in Section 2.1(v) below);
WHEREAS, proceeds of the sale of Receivables by the Company and
Xxxxxxxxxx International under the Permitted Receivables Transaction Documents
(i) if such proceeds are in the form of cash, shall constitute Net Cash Proceeds
and shall be
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applied as a mandatory prepayment to the outstanding Revolving Loans (without a
corresponding reduction of the Revolving Credit Commitments other than the
reduction in Revolving Credit Commitments effected by this First Amendment) or
(ii) if such proceeds are in the form of promissory notes, shall be pledged to
the Agent, for the benefit of the "Secured Parties" under (and as defined in)
the respective Borrower Pledge Agreements to which the Company and Xxxxxxxxxx
International are a party;
WHEREAS, Pegasus and Finsub2 plan to enter into the Multicurrency
Loan Documents (as defined in Section 2.1(o) below);
WHEREAS, during the period that the Multicurrency Loan Documents are
in effect, the loan facility evidenced by the Multicurrency Loan Documents shall
replace the Multicurrency Facility under the Credit Agreement;
WHEREAS, the Borrowers have requested that (i) the Lenders approve
the Permitted Receivables Financing Program and the execution by the Company,
Xxxxxxxxxx International, Finsub and Finsub2 of the Permitted Receivables
Transaction Documents, (ii) the Agent release its Liens on the Receivables sold
from time to time pursuant to the Permitted Receivables Transaction Documents,
(iii) the Agent and the Canadian Agent enter into the Permitted Receivables
Intercreditor Agreement (as defined in Section 2.1(t) below), (iv) the Lenders
approve the execution by Pegasus and Finsub2 of the Multicurrency Loan Documents
and (v) the Agent enter into the Multicurrency Intercreditor Agreement (as
defined in Section 2.1(n) below;
WHEREAS, the Company and the other Borrowers have requested the
Lenders to amend the Credit Agreement (i) to decrease the Multicurrency
Commitment from $35,000,000 to zero, (ii) to decrease the aggregate Revolving
Credit Commitments from $125,000,000 to $45,000,000 , (iii) to decrease the
aggregate US Commitment from $80,000,000 to $35,000,000 and (iv) to effect other
amendments, all as more fully described herein;
NOW, THEREFORE, in consideration of the above premises, Holdings,
the Borrowers, the Lenders, the Agent and the Canadian Agent agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein have the meanings assigned to them in the Credit Agreement.
2. Amendments to the Credit Agreement. Upon the "First Amendment
Effective Date" (as defined in Section 2.1(i) below), the Credit Agreement is
hereby amended as follows:
2.1 Section 1.01. Section 1.01 of the Credit Agreement is
amended as follows:
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(a) The following definition of "Average Liquidity" is added
in proper alphabetical order:
"Average Liquidity" means, for any period, the sum of
(i) average aggregate Revolving Credit Availability under all Credit
Facilities for such period, plus (ii) the excess, if any, of (A) the
average Net Receivables Balance for such period over (B) the
Required Net Receivables Balance for such period, plus (iii) the
average Revolving Credit Availability for such period under the
Credit Agreement referred to in clause (i) of the definition of
"Multicurrency Loan Documents".
(b) The definition of "Borrower Pledge Agreements" is deleted
in its entirety and the following definition is substituted in lieu
thereof:
"Borrower Pledge Agreements" means (i) the Pledge
Agreement dated as of the Closing Date by and between the Company
and the Agent, (ii) the Pledge Agreement dated as of the Closing
Date by and between Xxxxxxxxxx International and the Agent, (iii)
the Pledge Agreement dated as of the First Amendment Effective Date
by and between Pegasus and the Agent, in each case in substantially
the form of Exhibit C, and (iv) all other pledge agreements executed
by any Borrower in favor of the Agent in connection with the
transactions contemplated hereby, as each of the same may be
amended, supplemented or otherwise modified from time to time.
(c) The definition of "Collateral" is amended to delete the
words "the initial sale" therein and to substitute in lieu thereof the
words "all sales";
(d) The following definition of "Early Amortization Event" is
added in proper alphabetical order:
"Early Amortization Event" is defined on Schedule
1.01.7.
(e) The definition of "Eligible Inventory" is amended to add
the following phrase at the end of the parenthetical phrase before clause
(i) therein: "or which constitutes Returned Goods during any period prior
to which a Trust Early Amortization Event under Section 9.01(e) of the
Permitted Receivables Pooling and Servicing Agreement, or an Early
Amortization Event under the Series 1996-1 Supplement, shall have occurred
and be continuing".
(f) The definition of "Finsub" is deleted in its
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entirety and the following definition is substituted in lieu
thereof:
"Finsub" means Xxxxxxxxxx Financial Corporation, a
Delaware corporation and a Wholly Owned Subsidiary of the Company.
(g) The following definition of "Finsub2" is added in proper
alphabetical order:
"Finsub2" means Polymers International Financial
Corporation, a Delaware corporation and Wholly Owned Subsidiary of
Pegasus.
(h) The following definition of "First Amendment" is added in
proper alphabetical order:
"First Amendment" means the First Amendment, Consent and
Limited Waiver to Credit Agreement dated as of August 23, 1996,
among Holdings, the Borrowers, the Lenders, the Agent and the
Canadian Agent.
(i) The following definition of "First Amendment Effective
Date" is added in proper alphabetical order:
"First Amendment Effective Date" has the meaning set
forth in the First Amendment.
(j) The definition of "Intercreditor Agreement" is deleted in
its entirety and the following definition of "Intercreditor Agreements" is
substituted in lieu thereof:
"Intercreditor Agreements" means the Multicurrency
Intercreditor Agreement, the Permitted Receivables Intercreditor
Agreement and the Term Loan Intercreditor Agreement, and
"Intercreditor Agreement" means any of them.
(k) The following definition of "Liquidity Event" is added in
proper alphabetical order:
"Liquidity Event" means any time after which the Average
Liquidity becomes less than $5,000,000 for a period of any five (5)
consecutive Business Days or less than $1,500,000 for a period of
any two (2) consecutive Business Days. Solely for purposes of this
definition, (i) Revolving Credit Availability for the U.S. Facility
shall be calculated without giving effect to the limitation imposed
by clause (i)(A)(1) of the definition of Maximum Revolving Credit
Amount and (ii) Revolving Credit Availability for the Canadian
Facility shall be calculated without giving effect to the limitation
imposed by clause (iii)(A)(1) of the
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definition of Maximum Revolving Credit Amount.
(l) The definition of "Loan Documents" is amended (i) to
delete in its entirety the reference therein to "Intercreditor Agreement"
and substitute in lieu thereof "Intercreditor Agreements" and (ii) to add
the following phrase before the period at the end of the last sentence
thereof: "or the Multicurrency Loan Documents".
(m) The definition of "Multicurrency Commitment" is amended to
add the following proviso before the period at the end of such definition:
"provided, further, however, on and after the First Amendment Effective
Date, the Multicurrency Commitment shall be zero.
(n) The definition of "Multicurrency Facility" is amended to
add the phrase "from the Closing Date to the First Amendment Effective
Date" immediately following the reference therein to "Multicurrency
Borrower".
(o) The following definition of "Multicurrency Intercreditor
Agreement" is added in proper alphabetical order:
"Multicurrency Intercreditor Agreement" means the Letter
Agreement dated as of the First Amendment Effective Date from the
Agent and the Canadian Agent to the Multicurrency Lender, as the
same may be amended, supplemented or otherwise modified from time to
time.
(p) The following definition of "Multicurrency Lender" is
added in proper alphabetical order:
"Multicurrency Lender" means Citibank, N.A., in its
capacity as the lender under the Multicurrency Loan Documents, and
its successors in such capacity.
(q) The following definition of "Multicurrency Loan Documents"
is added in proper alphabetical order:
"Multicurrency Loan Documents" means (i) the Credit
Agreement dated as of the First Amendment Effective Date between
Pegasus and the Multicurrency Lender, (ii) the Guaranty dated as of
the First Amendment Effective Date executed by Finsub2 in favor of
the Multicurrency Lender, (iii) the Pledge Agreement dated as of the
First Amendment Effective Date executed by Finsub2 in favor of the
Multicurrency Lender and (iv) all other instruments, agreements and
written Contractual Obligations entered into in connection with any
of the foregoing, in each case as the same may be amended,
supplemented or otherwise modified from time to time.
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(r) The definition of "Net Cash Proceeds" is amended to add
the parenthetical phrase "(but including proceeds of all sales under the
Permitted Receivables Financing Program)" immediately following the phrase
"other than sales, assignments and other dispositions of Property between
the Company and Wholly Owned Subsidiaries of the Company to the extent
permitted hereunder".
(s) The following definition of "Net Receivables Balance" is
added in proper alphabetical order:
"Net Receivables Balance" is defined on Schedule 1.01.7.
(t) The definition of "Permitted Receivables Financing
Program" is deleted in its entirety and the following definition is
substituted in lieu thereof:
"Permitted Receivables Financing Program" means the
receivables financing program evidenced by the Permitted Receivables
Transaction Documents.
(u) The definition of "Permitted Receivables Financing Program
Trustee" is added in proper alphabetical order:
"Permitted Receivables Financing Program Trustee" means
Bankers Trust Company, not in its individual capacity but solely as
trustee of the Xxxxxxxxxx Trade Receivables Master Trust, together
with its successors and assigns in such capacity.
(v) The following definition of "Permitted Receivables
Intercreditor Agreement" is added in proper alphabetical order:
"Permitted Receivables Intercreditor Agreement" means
the Intercreditor Agreement dated as of the First Amendment
Effective Date among Citicorp North America, Inc., as Program Agent,
Finsub, the Company, Bankers Trust Company, as Trustee, the Agent,
the Canadian Agent, Finova and Ambac Indemnity Corporation, as the
same may be amended, supplemented or otherwise modified from time to
time.
(w) The following definition of "Permitted Receivables Pooling
and Servicing Agreement" is added in proper alphabetical order:
"Permitted Receivables Pooling and Servicing Agreement"
means the Pooling and Serving Agreement dated as of the First
Amendment Effective Date among
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Finsub, the Company and Bankers Trust Company, as trustee, as the
same may be amended, supplemented or otherwise modified from time to
time.
(x) The definition of "Permitted Receivables Transaction
Documents" is deleted in its entirety and the following definition is
substituted in lieu thereof:
"Permitted Receivables Transaction Documents" means the
Permitted Receivables Pooling and Servicing Agreement and the other
agreements, documents and instruments set forth on Schedule 1.01.7
and all other instruments, agreements and written Contractual
Obligations entered into in connection with any of the foregoing, in
each case as the same may be amended, supplemented or otherwise
modified from time to time.
(y) The following definition of "Required Net Receivables
Balance" is added in proper alphabetical order:
"Required Net Receivables Balance" is defined on
Schedule 1.01.7.
(z) The following definition of "Returned Goods" is added in
proper alphabetical order:
"Returned Goods" means all right, title and interest of
the Company, Xxxxxxxxxx International or Finsub, as applicable, in
and to returned, repossessed or foreclosed goods and/or merchandise.
(aa) The definition of "Revolving Credit Commitment" is
amended to delete the Dollar amount "$125,000,000" and to substitute in
lieu thereof the Dollar amount "$45,000,000".
(bb) The following definition of "Series 1996-1 Supplement" is
added in proper alphabetical order:
"Series 1996-1 Supplement" means the Series 1996-1
Supplement to the Permitted Receivables Pooling and Servicing Agreement,
as such supplement may be amended, supplemented or otherwise modified from
time to
time.
(cc) The following definition of "Series 1996-2 Certificate"
is added in proper alphabetical order:
"Series 1996-2 Certificate" means the Series 1996-2
Certificate issued pursuant to the Series 1996-2 Supplement to the
Permitted Receivables Pooling and Servicing Agreement.
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(dd) The following definition of "Term Loan Intercreditor
Agreement" is added in proper alphabetical order:
"Term Loan Intercreditor Agreement" means the
Intercreditor Agreement dated as of the Closing Date between Finova
and the Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
(ee) The definition of "Transaction Documents" is amended to
add the phrase ", the Permitted Receivables Transaction Documents, the
Multicurrency Loan Documents," immediately following the reference therein
to "the Finova Documents".
(ff) The following definition of "Trust Early Amortization
Event" is added in proper alphabetical order:
"Trust Early Amortization Event" is defined on Schedule
1.01.7.
(gg) The definition of "U.S. Commitment" is amended to delete
the Dollar amount "$125,000,000" and to substitute in lieu thereof the
Dollar amount "$45,000,000".
2.2 Section 2.01(a)(ii). Section 2.01(a)(ii) of the Credit
Agreement is hereby amended to delete the reference therein to "Revolving Credit
Termination Date" and to substitute in lieu thereof "First Amendment Effective
Date".
2.3 Section 2.01(b). Section 2.01(b) of the Credit Agreement
is hereby amended to add the following parenthetical phrase immediately
following the reference to "Revolving Credit Termination Date" in the first
sentence thereof: "(the First Amendment Effective Date, in the case of the
Multicurrency Facility)".
2.4 Section 2.01(g). Section 2.01(g) of the Credit Agreement
is hereby amended to delete the second sentence thereof in its entirety and to
substitute in lieu thereof the following:
"Proceeds of U.S. Loans and of Swing Loans under the U.S. Facility
shall be used to provide for ongoing working capital needs in the
ordinary course of the business of the Company and its Subsidiaries
and for other lawful general corporate purposes not prohibited
hereunder, including, without limitation, (x) capital contributions
from the Company and Xxxxxxxxxx International to Finsub permitted by
Section 9.07(b), and (y) capital contributions from Pegasus to
Finsub2 permitted by Section 9.07(b)."
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2.5 Section 3.01(b). Section 3.01(b) of the Credit Agreement
is hereby amended as follows:
(a) Clause (iii) thereof is amended to delete the
second sentence therein in its entirety.
(b) Clause (iv) thereof is amended to delete the first
sentence therein in its entirety and to substitute in lieu thereof the
following:
"The Revolving Credit Commitments shall be permanently
reduced to $45,000,000 as of the First Amendment
Effective Date."
2.6 Section 3.05(c)(iii). Section 3.05(c)(ii) of the Credit
Agreement is hereby amended to delete the portion of the second sentence thereof
beginning with clause (C) and to substitute in lieu thereof the following:
"(C) the Agent shall honor any request made by the Multicurrency
Borrower and the Canadian Agent shall honor any request made by the
Canadian Borrower, as applicable, and received by the Agent or the
Canadian Agent, as applicable, no later than 12:00 noon (London or
Toronto time, as applicable), at least two (2) Business Days prior
to the date of such transfer (in the case of the Multicurrency
Borrower), to transfer funds from any such Cash Collateral Account
(whether or not any Multicurrency Loan or Canadian Loan, as the case
may be, is outstanding) to (x) a Disbursement Account of such
Borrower, and such funds shall be transferred to such Disbursement
Account of the Canadian Borrower on the same Business Day or of the
Multicurrency Borrower on the following Business Day, or (y) in the
case of any Cash Collateral Account into which proceeds of
Receivables of the Multicurrency Borrower have been deposited, the
Multicurrency Lender and its successors, for application to amounts
owing under the Multicurrency Loan Documents, and such funds shall
be so transferred on the following Business Day, provided that such
request shall in the case of clause (x) or (y) be made pursuant to a
signed Notice of Withdrawal and the conditions set forth therein
shall have been met as of the date of such request and that the
intended use of such funds shall be consistent with Section 2.01(g)
(assuming for such purpose that such funds are proceeds of Revolving
Loans), and provided, further, that after giving effect to any such
withdrawal by the Canadian Borrower, the Revolving Credit
Availability under the Canadian Facility is greater than zero, and
provided, further, that the Agent shall not be required to honor any
such request
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made by the Multicurrency Borrower at any time after a Liquidity
Event has occurred.
2.7 Section 4.03(b). Section 4.03(b) of the Credit Agreement
is hereby amended to insert the following proviso immediately before the period
at the end of the first sentence of such subsection:
", provided that, if the earnings results of Holdings and its
Subsidiaries for Fiscal Year 1996, as reflected in the audited
financial statements delivered by Holdings to the Agent and the
Lenders pursuant to Section 7.01(b) with respect such Fiscal Year,
exceed in all respects the applicable forecasts for Fiscal Year set
forth in the Initial Projections, then, from and after the first day
of the calendar month immediately succeeding the calendar month in
which such financial statements shall have been so delivered, the
Unused Commitment Fee shall accrue at a rate of three-eighths of one
percent (0.375%) per annum"
2.8 Section 6.01(c). Section 6.01(c) of the Credit Agreement
is hereby amended to delete each reference to the phrase "as of the Closing
Date" therein and to substitute in lieu thereof the phrase "as of the First
Amendment Effective Date".
2.9 Section 6.01(aa). Section 6.01(aa) of the Credit Agreement
is hereby amended to delete the phrase "as of the Closing Date" therein and to
substitute in lieu thereof the phrase "as of the First Amendment Effective
Date".
2.10 Section 8.11(b)(ii)(y). Section 8.11(b)(ii)(y) of the
Credit Agreement is hereby amended to delete the reference therein to
"Intercreditor Agreement" and to substitute in lieu thereof "Term Loan
Intercreditor Agreement".
2.11 Section 9.01. Section 9.01 of the Credit Agreement is
hereby amended as follows:
(a) Clause (viii) thereof is amended to add the phrase "and
pursuant to the Multicurrency Loan Documents" immediately following the
reference to "Permitted Receivables Transaction Documents" therein;
(b) Clause (x) thereof is amended to delete in their entirety
subclauses (D) and (E) thereof and substitute in lieu thereof the
following:
"(D) from any Borrower to any Subsidiary of the Company (other than
Borrowers) in a principal amount, together with any Investments made
(1) after the First Amendment Effective Date in Finsub and Finsub2
and (2) after the
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Closing Date in any such Subsidiaries of the Company (other than
Finsub and Finsub2) permitted to be created or capitalized after the
Closing Date under Section 9.07(b), in any Fiscal Year not to exceed
the Subsidiary Investment Basket for such Fiscal Year, (E) in
addition to any loans made to such Person under clause (D) above,
from Pegasus to Pegasus Asia in an amount at any time outstanding
not to exceed the sum of (1) $2,000,000, plus (2) the amount of
dividends received by Pegasus from Pegasus Asia after the Closing
Date and (F) in addition to any loans made to such Person under
clauses (D) and (E) above, unless the Agent has delivered the notice
described in Section 9.02(ii), from the Company or Xxxxxxxxxx
International to Finsub in respect of subordinated loans advanced as
part of the purchase price for Receivables sold to Finsub under the
Permitted Receivables Transaction Documents; provided, that no loans
permitted by clauses (D) or (E) shall be made if an Event of Default
or Default has occurred and is continuing;"
2.12 Section 9.02(ii). Section 9.02(ii) of the Credit
Agreement is hereby amended to add the following proviso before the semi-colon
at the end thereof:
"; provided, however, that, if a Liquidity Event shall occur at any
time when (x) an Event of Default has occurred and is continuing or
(y) the Company and its Subsidiaries are not in compliance with any
covenant contained in Article X (without giving effect to any
amendment, modification or waiver of any such covenant since the
date hereof), the Agent may, upon one (1) Business Day's prior
written notice thereof to the Company and the Permitted Receivables
Financing Program Trustee, terminate the right of the Company,
Xxxxxxxxxx International and any of their Affiliates to continue to
sell or otherwise transfer Receivables pursuant to the Permitted
Receivables Financing Documents; and provided, further, that if (a)
any event shall have occurred and be continuing which constitutes a
Trust Early Amortization Event or (b) purchases of Receivables under
the Permitted Receivables Financing Program shall have been
discontinued for a period of at least five (5) consecutive Business
Days, the right of the Company, Xxxxxxxxxx International and any of
their Affiliates to continue to sell or otherwise transfer
Receivables pursuant to the Permitted Receivables Financing
Documents shall be automatically terminated."
2.13 Section 9.03. Section 9.03 of the Credit Agreement is
hereby amended as follows:
(a) Clause (vii) thereof is amended to delete the
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word "and" at the end thereof;
(b) Clause (viii) thereof is amended to delete the period at
the end thereof and to substitute in lieu thereof "; and"; and
(c) The following clause (ix) is added thereto:
"(ix) Liens on the Series 1996-2 Certificate held by Finsub2
and pledged to secure the obligations of Finsub2 under the
Multicurrency Loan Documents."
2.14 Section 9.04. Section 9.04 of the Credit Agreement is
hereby amended as follows:
(a) Clause (iv) thereof is amended to delete the phrase "such
Subsidiaries and Finsub" therein and to substitute in lieu thereof the
phrase "such Subsidiaries, Finsub and Finsub2";
(b) The "and" at the end of clause (v) thereof is deleted;
(c) The period at the end of clause (vi) thereof is replaced
with a semi-colon; and
(d) The following clause (vii) is added thereto:
"(vii) Investments by Finsub2 in the Series 1996-2 Certificate
as contemplated by the Permitted Receivables Transaction Documents."
2.15 Section 9.05(v). Section 9.05(v) of the Credit Agreement
is hereby amended to delete the provisions thereof in their entirety and to
substitute in lieu thereof the following:
"(v) Accommodation Obligations incurred pursuant to the
Permitted Receivables Transaction Documents and pursuant to the
Multicurrency Loan Documents; and"
2.16 Section 9.06. Section 9.06 of the Credit Agreement is
hereby amended to delete the second proviso thereto and to substitute in lieu
thereof "and provided, further, that cash redemptions permitted under clause
(vii) above shall be limited to the excess, if any, of the Average Liquidity
during the thirty days immediately preceding the date set for such payment over
$15,000,000".
2.17 Section 9.07(a). Section 9.07(a) of the Credit Agreement
is hereby amended to insert the following two sentences at the end of such
subsection:
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"Finsub shall not engage in any business other than as contemplated
by the Permitted Receivables Transaction Documents. Finsub2 shall
not engage in any business other than as contemplated by the
Multicurrency Loan Documents."
2.18 Section 9.07(b). Section 9.07(b) of the Credit Agreement
is hereby amended to delete the phrase "Sections 9.01(x)(D) and 9.01(x)(E) for
such Fiscal Year" therein and to substitute in lieu thereof the following:
"Sections 9.01(x)(D), 9.01(x)(E) and 9.01(x)(F) for such Fiscal
Year; provided, further, however, in addition to such amounts,
unless the Agent has delivered the notice described in Section
9.02(ii), the Company and Xxxxxxxxxx International may make capital
contributions to Finsub to the extent required to be made under the
Permitted Receivables Transaction Documents (i) as part of the
purchase price for Receivables sold to Finsub thereunder and (ii) to
cause the Net Receivables Balance to equal the Required Net
Receivables Balance; and provided, further, however, that Pegasus
may capitalize Finsub2 by making a capital contribution to Finsub2
on the First Amendment Effective Date in an aggregate amount equal
to 102% of the principal amount of the Series 1996-2 Certificate
purchased by Finsub2 under the Permitted Receivables Transaction
Documents (it being understood and agreed that such principal amount
shall in no event exceed $25,000,000)"
2.19 Section 9.16. Section 9.16 of the Credit Agreement is
hereby amended as follows:
(a) Clause (ii) thereof is amended to delete the phrase
"average aggregate Revolving Credit Availability under all Credit
Facilities (plus the average liquidity available to the Borrowers under
the Permitted Receivables Financing Program)" therein and to substitute in
lieu thereof "Average Liquidity"; and
(b) Clause (iii)(B) thereof is deleted in its entirety and the
following is substituted in lieu thereof:
(B) the Finova Documents, the Common Equity Notes, the Permitted
Receivables Transaction Documents, the Multicurrency Loan Documents
or any documents evidencing the Permitted Subordinated Indebtedness
in any respect that is adverse to the Lenders, provided, that no
Persons other than the Company and Xxxxxxxxxx International may be
added as sellers of Receivables to Finsub under the Permitted
Receivables Transaction Documents.
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2.20 Section 9.20. Section 9.20 of the Credit Agreement is
hereby amended to add the phrase ", the Multicurrency Loan Documents"
immediately following the reference to "Loan Documents" therein.
2.21 Section 11.01. Section 11.01 of the Credit Agreement is
hereby amended as follows:
(a) Section 11.01(e) is amended to delete the phrase "'Event
of Termination' under and as defined in the Permitted Receivables
Transaction Documents, or which could otherwise cause the early
termination of the Permitted Receivables Financing Program" and to
substitute in lieu thereof "Trust Early Amortization Event; or purchases
of Receivables under the Permitted Receivables Financing Program shall
have been discontinued for a period of at least five (5) consecutive
Business Days".
(b) Section 11.01(n) of the Credit Agreement is amended to
delete the provisions thereof in their entirety and to substitute in lieu
thereof the following:
"(n) Intercreditor Agreements. Any party to any
Intercreditor Agreements (other than the Agent and the Lenders)
shall fail to perform any material covenant or material obligation
binding on such party thereunder or any Intercreditor Agreement
shall cease to be in full force and effect."
2.22 Section 13.15. Section 13.15 of the Credit Agreement is
hereby amended to delete each reference therein (including the Section heading
thereof) to "Intercreditor Agreement" and to substitute in lieu thereof
"Intercreditor Agreements".
3. Amendments to Schedules and Exhibits to Credit Agreement.
Upon the First Amendment Effective Date, the Schedules and Exhibits to the
Credit Agreement are hereby amended as follows:
3.1 Schedule 1.01.1. Schedule 1.01.1 to the Credit Agreement
is deleted in its entirety and Annex A attached hereto and made a part
hereof shall be substituted therefor.
3.2 Schedule 1.01.2. Schedule 1.01.2 to the Credit Agreement
is deleted in its entirety and Annex B attached hereto and made a part
hereof shall be substituted therefor.
3.3 Schedule 1.01.7. New Schedule 1.01.7 to the Credit
Agreement, entitled "Permitted Receivables
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Transaction Documents and Definitions," is added in the form of Annex C
attached hereto and made a part hereof.
3.4 Schedule 6.01-C. Schedule 6.01-C to the Credit Agreement
is deleted in its entirety and Annex D attached hereto and made a part
hereof shall be substituted therefor.
3.5 Schedule 6.01-AA. Schedule 6.01-AA to the Credit Agreement
is deleted in its entirety and Annex E attached hereto and made a part
hereof shall be substituted therefor.
3.6 Exhibit O-1. Exhibit O-1 to the Credit Agreement is
deleted in its entirety and Annex F attached hereto and made a part hereof
shall be substituted therefor.
4. Lender Consents.
4.1 As of the First Amendment Effective Date, the Lenders
hereby approve (i) the Permitted Receivables Financing Program and the
execution, delivery and performance by the Company, Xxxxxxxxxx
International, Finsub and Finsub2 of the Permitted Receivables Transaction
Documents, provided that, concurrently therewith, the Company and
Xxxxxxxxxx International shall have made a mandatory prepayment to the
Agent, for the benefit of the U.S. Lenders, of the Net Cash Proceeds
arising from the initial sale of Receivables pursuant to the Permitted
Receivables Transaction Documents in an amount not less than $50,000,000,
(ii) the transactions evidenced by the Multicurrency Loan Documents and
the execution, delivery and performance by Pegasus and Finsub2 thereof,
provided that, prior to or concurrently therewith, the Multicurrency
Borrower shall have paid to the Agent, for the benefit of the
Multicurrency Lenders, the outstanding principal amount of all
Multicurrency Loans, together with all other Obligations arising in
connection with the Multicurrency Facility (whereupon each Multicurrency
Lender will return to Pegasus its Multicurrency Loan Note marked
"cancelled"), and (iii) a Borrowing on the First Amendment Effective Date,
the proceeds of which shall be used by Pegasus to make a capital
contribution to Finsub2 so that Finsub2 may pay for the Series 1996-2
Certificate (it being understood and agreed that if such Borrowing is
repaid by 5:00 p.m. (New York time) on the First Amendment Effective Date,
then no interest shall be payable with respect thereto).
4.2 The Lenders hereby instruct and direct the Agent, upon the
occurrence of the First Amendment Effective Date, (i) to release its Liens
on the Receivables sold from time to time pursuant to the Permitted
Receivables Transaction Documents (including, without limitation, all
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Liens on Dollar denominated Receivables of the Company and Xxxxxxxxxx
International which are so sold from time to time), (ii) to enter into the
Permitted Receivables Intercreditor Agreement and to take all actions
required to be taken by the Agent thereby (including, without limitation,
the transfer of certain Collection Accounts of the Company and the
Borrower to the Permitted Receivables Financing Program Trustee) and (iii)
to enter into the Multicurrency Intercreditor Agreement and to take all
actions required to be taken by the Agent thereunder.
4.3 The Canadian Lender hereby instructs and directs the
Canadian Agent, upon the occurrence of the First Amendment Effective Date,
to enter into the Permitted Receivables Intercreditor Agreement and to
take all actions required to be taken by the Canadian Agent thereunder.
5. Limited Waiver. As of the First Amendment Effective Date, the
Lenders hereby (a) waive the provisions of Section 8.11(a) of the Credit
Agreement in respect of (and solely in respect of) the Obligations of Holdings
and the Borrowers to deliver within ninety (90) days after the Closing Date all
"Foreign Personal Property Security Documents" identified on the Closing List as
pertaining to Spain and France and (b) extend the time period for the delivery
of such Loan Documents to September 30, 1996 (or such later date as may be
agreed to by the Agent). If such Loan Documents are not delivered on or before
such date, the limited waiver under this Section 5 shall expire.
6. Representations and Warranties. Each of the Borrowers hereby
represents and warrants to each Lender, the Issuing Bank and the Agent that, as
of the First Amendment Effective Date and after giving effect to this First
Amendment, the Permitted Receivables Financing Program and the effectiveness of
the Multicurrency Loan Documents:
(a) Each of the representations and warranties contained in this
Amendment, the Credit Agreement as amended hereby and the other Loan
Documents are true and correct in all material respects on and as of the
First Amendment Effective Date, as if then made, other than
representations and warranties which expressly speak as of a different
date;
(b) No Default or Event of Default has occurred or is continuing;
and
(c) No change (other than as contemplated by the Registration
Statement) in the condition (financial or otherwise), business,
performance, assets, operations or prospects of the Domestic Borrowers,
taken as a whole, or the Canadian Borrower, individually, has occurred
since December 31, 1994, which change has had or is reasonably likely to
have a Material Adverse Effect.
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7. First Amendment Effective Date. This First Amendment shall become
effective as of the date, on or before September 30, 1996 (the "First Amendment
Effective Date") when each of the following conditions shall have been
satisfied:
(a) the Agent shall have received each of the following documents,
in each case in form and substance satisfactory to the Agent:
(i) counterparts hereof executed by each Borrower, Holdings,
the Agent, the Canadian Agent and each Lender;
(ii) an amendatory agreement in substantially the form of
Annex G attached hereto and made a part hereof;
(iii) UCC amendment statements with respect to each UCC-1
financing statement filed against the Company or Xxxxxxxxxx
International, giving effect to the amendments, pursuant to the
amendatory agreement referred to in the immediately preceding clause
(ii), to the Borrower Security Agreements executed by the Company
and Xxxxxxxxxx International;
(iv) (A) stock certificate(s) representing 100% of the Capital
Stock of Finsub, together with stock powers (executed in blank)
therefor, (B) all subordinated promissory notes issued to the
Company and Xxxxxxxxxx International pursuant to the Permitted
Receivables Transaction Documents, endorsed in blank, (C)
replacements for the applicable exhibits to the Borrower Pledge
Agreements executed by the Company and Xxxxxxxxxx International
reflecting the pledge of the property described in subclauses (A)
and (B) above, and (D) an acknowledgement of pledge executed by
Finsub;
(v) (A) a Pledge Agreement executed by Pegasus, in
substantially the form of Exhibit C to the Credit Agreement, (B)
stock certificate(s) representing 100% of the Capital Stock of
Finsub2, together with stock powers (executed in blank) therefor,
and (C) an acknowledgement of pledge executed by Finsub2;
(vi) fully executed copies of the Permitted Receivables
Intercreditor Agreement and the Multicurrency Intercreditor
Agreement;
(vii) a copy of each of the Permitted Receivables Transaction
Documents, certified as of the First Amendment Effective Date by the
Secretary or an Assistant Secretary of the Company (A) to be a true,
correct and complete copy of each such document and
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(B) not to have been amended or rescinded;
(viii) a copy of each of the Multicurrency Loan Documents,
certified as of the First Amendment Effective Date by the Secretary
or an Assistant Secretary of Pegasus (A) to be a true, correct and
complete copy of each such document and (B) not to have been amended
or rescinded;
(ix) a certificate of the chief executive officer, chief
financial officer or treasurer of the Company executed and delivered
on behalf of the Borrowers certifying that all conditions precedent
required to be satisfied by Holdings, the Company, the other
Borrowers or any Subsidiary Guarantor for the effectiveness of this
First Amendment have been satisfied;
(x) a certificate of the Secretary or Assistant Secretary of
Holdings, each Borrower, Finsub and Finsub2 dated the First
Amendment Effective Date certifying (A) the names and true
signatures of the incumbent officers of such Persons authorized to
sign this Amendment and the other Transaction Documents executed in
connection with this Amendment to which it is a party, (B) the
By-laws of such Person as in effect on the date of such
certification, (C) the resolutions of such Person's Board of
Directors approving and authorizing the execution, delivery and
performance of this Amendment and the other Transaction Documents
executed in connection with this Amendment to which it is a party
and (D) the Articles or Certificate of Incorporation, certified by
the applicable Government Authority, if not previously delivered to
the Agent, or that there have been no changes in the Certificate or
Articles of Incorporation of such Person since the date of the most
recent certification thereof by the Secretary of State of the
applicable State delivered to the Agent;
(xi) Good Standing Certificates relating to the Borrowers, the
Subsidiary Guarantors, Finsub and Finsub2 in the jurisdictions set
forth on Annex H attached hereto and made a part hereof; and
(xii) A favorable opinion of XxXxxxxxx, Will & Xxxxx, counsel
to the Borrowers, Subsidiary Guarantors, Finsub and Finsub2, in form
and substance satisfactory to the Requisite Lenders, and a letter
entitling the Agent, the Canadian Agent, the Issuing Banks and the
Lenders to rely on any opinion or opinions delivered by XxXxxxxxx,
Will & Xxxxx in connection with the Permitted Receivables
Transaction Documents and the
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Multicurrency Loan Documents; and
(xiii) such additional documentation as the Agent may
reasonably request.
(b) The Borrowers shall have paid to the Agent, together with any
payments required under Section 4 above, an amount sufficient to reduce
the Revolving Credit Obligations for each Credit Facility to an amount
which is less than or equal to the Maximum Revolving Credit Amount for
such Credit Facility.
(c) The Agent and the Requisite Lenders shall be satisfied that: (i)
the Permitted Receivables Transaction Documents and the Multicurrency Loan
Documents shall have been duly approved and executed and delivered by the
parties thereto in form and substance satisfactory to the Agent and the
Requisite Lenders, and (ii) all conditions precedent to closing under the
Permitted Receivables Transaction Documents and the Multicurrency
Documents have been satisfied (and no modification or waiver of any such
condition shall have been made without the consent of the Agent) and such
documents are, or simultaneously with the execution hereof, will be in
full force and effect.
(d) No law, regulation, order, judgment or decree of any
Governmental Authority shall, and the Agent shall not have received any
notice that litigation is pending or threatened which is likely to,
enjoin, prohibit or restrain the consummation of the transactions
contemplated by this First Amendment, except for such laws, regulations,
orders or decrees, or pending or threatened litigation that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect.
(e) Each of the representations and warranties contained in this
Amendment, the Credit Agreement as amended hereby and the other Loan
Documents shall be true and correct in all material respects on and as of
the First Amendment Effective Date, as if then made, other than
representations and warranties which expressly speak as of a different
date;
(f) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Amendment shall be satisfactory in all respects in
form and substance to the Agent and the Requisite Lenders.
(g) No Event of Default or Default shall have occurred and be
continuing on the First Amendment Effective Date.
8. Reference to and Effect on the Loan Documents.
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(a) Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in the Credit Agreement as amended hereby to "this
Agreement", "hereunder", "hereof" or words of like import, and each reference in
the other Loan Documents to the Credit Agreement, shall mean and be a reference
to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, all of the terms of the
Credit Agreement and all other Loan Documents shall remain unchanged and in full
force and effect.
(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 Senior Lender, the Agent or the Collateral Agent
under the Credit Agreement or any of the Loan Documents, nor constitute a waiver
of any provision of the Credit Agreement or any of the Loan Documents.
9. Costs and Expenses. The Borrowers (other than the Canadian
Borrower) jointly and severally agree to pay upon demand in accordance with the
terms of Section 13.02 of the Credit Agreement all reasonable costs and expenses
of the Agent in connection with the preparation, reproduction, negotiation,
execution and delivery of this Amendment and all other Loan Documents entered
into in connection herewith, including, without limitation, the reasonable fees,
expenses and disbursements of Sidley & Austin, counsel for the Agent with
respect to any of the foregoing.
10. Miscellaneous. This First Amendment is a Loan Document. The
headings herein are for convenience of reference only and shall not alter or
otherwise affect the meaning hereof.
11. Counterparts. This First Amendment may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
12. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO AND TO THE CREDIT AGREEMENT AS
AMENDED HEREBY DETERMINED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Agent, the Canadian Agent, the Lenders, the
Borrowers and Holdings have caused this First Amendment to be executed by their
respective officers thereunto duly authorized as of the date first above
written.
X. XXXXXXXXXX & CO., INC.
By:_______________________________________________
Name:
Title:
PEGASUS POLYMERS INTERNATIONAL INC.
By:_______________________________________________
Name:
Title:
XXXXXXXXXX INTERNATIONAL, LTD.
By:_______________________________________________
Name:
Title:
X. XXXXXXXXXX & CO. (CANADA) LIMITED
By:_______________________________________________
Name:
Title:
XXXXXXXXXX HOLDING CORPORATION
By:_______________________________________________
Name:
Title:
CITICORP USA, INC., as Agent and U.S.
Lender
By:_______________________________________________
Name:
Title:
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CITIBANK, N.A., as Multicurrency Lender
By:_______________________________________________
Name:
Title:
CITIBANK CANADA, as Canadian Agent and
Canadian Lender
By:_______________________________________________
Name:
Title:
NATIONSBANK, N.A., as U.S. Lender and
Multicurrency Lender
By:_______________________________________________
Name:
Title:
XXXXXX FINANCIAL, INC., as U.S. Lender
By:_______________________________________________
Name:
Title:
-23-
ANNEX A
TO
FIRST AMENDMENT, CONSENT AND WAIVER
New Schedule 1.01.1 to Credit Agreement
[To be attached]
ANNEX B
TO
FIRST AMENDMENT, CONSENT AND WAIVER
New Schedule 1.01.2 to Credit Agreement
[To be attached]
ANNEX C
TO
FIRST AMENDMENT, CONSENT AND WAIVER
New Schedule 1.01.7 to Credit Agreement
Permitted Receivables Transaction Documents
[To be inserted]
Applicable Definitions
"Early Amortization Event" means [to be inserted from the final
Series 1996-1 Supplement].
"Net Receivables Balance" means [to be inserted from final Pooling
and Servicing Agreement].
"Required Net Receivables Balance" means [to be inserted from final
Pooling and Servicing Agreement].
"Trust Early Amortization Event" means [to be inserted from final
Pooling and Servicing Agreement].
[Other definitions used in the above definitions to be inserted from final
Permitted Receivables Transaction Documents]
ANNEX D
TO
FIRST AMENDMENT, CONSENT AND WAIVER
New Schedule 6.01-C to Credit Agreement
[To be attached]
ANNEX E
TO
FIRST AMENDMENT, CONSENT AND WAIVER
New Schedule 6.01-AA to Credit Agreement
[To be attached]
ANNEX F
TO
FIRST AMENDMENT, CONSENT AND WAIVER
New Exhibit O-1 to Credit Agreement
[To be attached]
ANNEX G
TO
FIRST AMENDMENT, CONSENT AND WAIVER
Form of Amendatory Agreement
[To be attached]
ANNEX H
TO
FIRST AMENDMENT, CONSENT AND WAIVER
Good Standing Jurisdictions
[To be attached]
