AMENDMENT NO. 2 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AMENDMENT ("Amendment"), dated January __, 1997, by and among CORESTATES
BANK, N.A., a national banking association ("CoreStates"), CONGRESS FINANCIAL
CORPORATION (CENTRAL), an Illinois corporation ("Congress", and together with
CoreStates, each individually, a "Lender", and collectively, "Lenders"),
CONGRESS FINANCIAL CORPORATION (CENTRAL), an Illinois corporation, in its
capacity as agent for Lenders (in such capacity, "Agent") and XXXXXX
INTERNATIONAL, INC., a Delaware corporation ("Borrower").
W I T N E S S E T H :
WHEREAS, Borrower has entered into financing arrangements with Agent and
Lenders pursuant to which Agent may make secured revolving loans and advances
and provide other financial accom modations to Borrower on behalf of Lenders
as set forth in the Amended and Restated Loan and Security Agreement, dated as
of August 23, 1996, by and among Agent, Lenders and Borrower, as amended
pursuant to Amendment No. 1 to Amended and Restated Loan and Security
Agreement, dated September 23, 1996 (as amended and supplemented hereby and as
the same may hereafter be further amended, modified, supplemented, extended,
renewed, restated or replaced, the "Loan Agreement") and the other Financing
Agreements (as defined therein); and
WHEREAS, Borrower has requested that Agent and Lenders increase the
maximum amount of the financing arrangements, consent to the change of control
of Borrower arising pursuant to the issuance and sale by Xxxxxx Holdings, Inc.
of certain new shares of its common stock and the redemption of certain
existing shares of its common stock with the proceeds received by Xxxxxx
Holdings, Inc. from the issuance and sale of new shares and Borrower has
requested that Agent and Lenders agree to certain amendments to the Financing
Agreements in connection therewith; and
WHEREAS, by this Amendment, Agent, Lenders and Borrower desire and intend
to evidence such increase in the maximum amount and such change of control and
related amendments; and
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
and covenants contained herein, and other good and valuable consideration,
Agent, Lenders and Borrower agree as follows:
1. Definitions.
(a) Amendments to Definitions.
(i) All references to the term "Adjusted Net Worth" in the
Loan Agreement shall be deemed and each such reference is hereby amended by
adding the following clause at the end of Section 1.4 of the Loan Agreement:
"plus (c) the aggregate amount of all indebtedness and other liabilities of
Borrower consisting of the commissions, fees, costs, expenses or other charges
in connection with the issuance and sale by Parent of certain new shares of
Parent Common Stock and the redemption of certain existing shares of Parent
Common Stock pursuant to the Recapitalization Agreements as in effect on the
date of the execution thereof and the other transactions contemplated
thereby."
(ii) All references to the term "Consolidated Net Income" in
the Loan Agreement shall be deemed and each such reference is hereby amended
(A) by adding the following clause at the end of Section 1.24 of the Loan
Agreement: "and (k) the aggregate amount of all indebtedness and other
liabilities of Borrower consisting of the commissions, fees, costs, expenses
or other charges in connection with the issuance and sale by Parent of certain
new shares of Parent Common Stock and the redemption of certain existing
shares of Parent Common Stock pursuant to the Recapitalization Agreements as
in effect on the date of the execution thereof and the other transactions
contemplated thereby" and (B) by deleting the word "or" immediately before
clause (j) of Section 1.24 of the Loan Agreement.
(iii) All references to the term "Maximum Credit" in the Loan
Agreement shall be deemed and each such reference is hereby amended to mean
the amount of $60,000,000.
(iv) All references to the term "Permitted Holders" in the
Loan Agreement shall be deemed and each such reference is hereby amended to
include, in addition and not in limitation, the Blackstone Funds.
(b) Additional Definitions. As used herein, the following terms
shall have the respective meanings given to them below and the Loan Agreement
shall be deemed and is hereby amended to include, in addition and not in
limitation, each of the following definitions:
(i) "Blackstone Funds" shall mean, collectively, Blackstone
Capital Partners II Merchant Banking Fund L.P., Blackstone Offshore Capital
Partners II Merchant Banking Fund L.P. and Blackstone Family Investment
Partnership L.P. and their respective successors and assigns.
(ii) "Change of Control Offer" shall mean the offer by
Borrower to each holder of the Senior Notes to repurchase such Senior Notes in
cash in an amount equal to one hundred one (101%) percent of the principal
amount of the Senior Notes, plus accrued and unpaid interest as required as a
result of the Change of Control from the transactions described herein
pursuant to Section 10.13 of the Senior Note Indenture.
(iii) "Exercise and Repurchase Agreement" shall mean the
Exercise and Repurchase Agreement, dated of even date herewith, by and among
Parent, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, F. Xxxxx Xxxxx and Xxxxxxx X.
Xxxxxxxxx, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(iv) "Recapitalization Agreements" shall mean, collectively,
the following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (A) the Stock
Purchase Agreement, (B) the Redemption Agreement, (C) the Exercise and
Repurchase Agreement, and (D) all agreements, documents and instruments
executed and/or delivered in connection with any of the foregoing.
(v) "Redemption Agreement" shall mean the Stock Redemption
Agreement, dated of even date herewith, by and among MLGA Fund II, L.P., MLGAL
Partners, LP and Parent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(vi) "Replacement Indebtedness" shall mean, collectively, all
indebtedness issued or incurred by Borrower after the date hereof, the
proceeds of which are used exclusively to pay the purchase price for the
Senior Notes tendered to Borrower pursuant to the Change of Control Offer in
the aggregate principal amount not to exceed one hundred one (101%) percent of
the amount of the Senior Notes tendered to, and repurchased by, Borrower under
the Change of Control Offer, as the same may hereafter exist and thereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(vii) "Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated of even date herewith, by and among the Blackstone Funds,
Borrower and Parent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(c) Interpretation. For purposes of this Amendment, unless
otherwise defined herein, all terms used herein, including, but not limited
to, those terms used and/or defined in the recitals hereto, shall have the
respective meanings assigned thereto in the Loan Agreement.
(d) Consent and Waiver. Subject to the terms and
conditions contained herein, Agent and Lenders hereby acknowledge and confirm
that each of them consents to and waives any and all Events of Default caused
by the following transactions:
(i) the issuance and sale by Parent of 5,329,392 shares of
new Parent Common Stock to the Blackstone Funds as set forth in the Stock
Purchase Agreement (as in effect on the date hereof) and the payment by
Borrower of the fees and expenses provided for therein;
(ii) the use of the proceeds from such issuance and sale
to redeem and repurchase 5,329,392 shares of existing Parent Common Stock as
set forth in the Redemption Agreement and the Exercise and Repurchase
Agreement (each as in effect on the date hereof); and
(iii) the Change of Control resulting from such
transactions.
2. Unused Line Fee. Section 4.4 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"4.4 Unused Line Fee. Borrower shall pay to Agent, for the benefit
of Lenders, monthly an unused line fee at a rate equal to three-eighths of one
(3/8%) percent per annum calculated on the amount by which $48,000,000 exceeds
the average daily principal balance of the outstanding Loans and Letter of
Credit Accom modations during the immediately preceding month (or part
thereof), in each case while this Agreement is in effect and for so long
thereafter as any of the Obligations are outstanding, which fee shall be
payable on the first day of each month in arrears."
3. Encumbrances. Section 10.8(e) of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"(e) purchase money security interests in Equip ment (including
Capital Leases) and purchase money mortgages on real estate to secure
indebtedness permitted under Section 10.9(c) below, provided, that, such
security interests and mortgages do not apply to any property of Borrower
other than the Equipment or real estate so acquired, and the indebtedness
secured thereby does not exceed the cost of the Equipment or real estate so
acquired, as the case may be."
4. Indebtedness.
(a) Section 10.9(c) of the Loan Agreement is hereby deleted in
its entirety and the following substituted therefor:
"(c) purchase money indebtedness (including Capital Leases) in a
principal amount in the aggregate not to exceed $10,000,000 in any fiscal year
of Borrower to the extent such indebtedness is secured by purchase money
security interests in Equipment or purchase money mortgages on real estate
permitted under Section 10.8(c) above."
(b) Section 10.9 of the Loan Agreement is hereby amended by adding
a new Section 10.9(j) thereto as follows:
"(j) the Replacement Indebtedness; provided, that,
(i) the sum of the principal amount of the Replacement
Indebtedness plus the principal amount of the indebtedness evidenced by the
Senior Notes shall not exceed the amount equal to: (A) $140,000,000 plus (B)
one (1%) percent multiplied by the principal amount of the Senior Notes
repurchased by Borrower pursuant to the Change of Control Offer (less the
aggregate amount of all repayments or purchases of principal in respect
thereof), together with interest on the principal amount of the Replacement
Indebtedness and prepayment and redemption premiums with respect thereto,
(ii) the proceeds of the Replacement Indebt edness shall only
be used to pay the purchase price for the Senior Notes to the extent required
upon the proper tender of Senior Notes to Borrower in response to the Change
of Control Offer,
(iii) Lender shall have received true, correct and complete
copies of the agreements evidenc ing or governing the Replacement Indebtedness
and all related agreements, documents and instruments,
(iv) such indebtedness (A) shall be incurred by Borrower at
commercially reasonable rates and terms in a bona fide arm's length
transaction, (B) shall not include any terms or conditions which in any manner
(1) adversely affect Agent, Lenders or any rights of Agent or Lenders as
determined in good faith by Agent or (2) which taken as a whole are more
restrictive or burdensome than the terms and conditions of any other
indebtedness of Borrower as in effect on the date hereof, (C) shall be
unsecured and (D) shall not have any scheduled maturity or amortization prior
to September 1, 2004,
(v) Borrower shall only make regularly scheduled payments of
principal and interest, or to the extent permitted under Section 10.9(j)(vii)
below, other payments, in respect of such indebtedness,
(vi) Borrower shall not, directly or indirectly, amend,
modify, alter or change the terms of the Replacement Indebtedness or any
related agreements, documents or instruments, except that Borrower may, after
not less than ten (10) Business Days prior written notice to Agent, amend or
modify the terms thereof so long as: (A) either (1) such amendment or
modification does not in any manner adversely affect Agent, Lenders or any
rights of Agent or Lenders as determined in good faith by Agent and confirmed
by Agent to Borrower in writing or (2) Agent has consented in writing to such
amendment or modification, and (B) such amendment or modification does not
relate to the terms of payment of the indebtedness evidenced thereby, the
amount of such indebtedness, the interest rate or any fees or charges or any
collateral with respect thereto or make any terms thereof more restrictive or
burdensome than as in effect on the date of the incurrence of the Replacement
Indebtedness, as determined in good faith by Agent and confirmed by Agent to
Borrower in writing,
(vii) Borrower shall not, directly or indirectly, redeem,
retire, defease, purchase or otherwise acquire such indebtedness, or set aside
or otherwise deposit or invest any sums for such purpose, or make any other
payments in respect thereof, except:
(A) purchases or redemptions of Replacement Indebtedness
required to be made under the terms of the Replacement Indebtedness: (1) to
the extent of net cash proceeds received by Borrower from an Asset Sale and
including any Sale and Leaseback Transaction, provided, that, any such net
cash proceeds shall first be applied to the Obligations to the extent such
assets sold or otherwise disposed of pursuant to the Asset Sale constitute
Collateral and thereafter to the repayment of the Senior Notes as required
under the terms of the Senior Note Indenture, (2) as a result of a Change in
Control or (3) to the extent of net cash proceeds received by Borrower from a
Public Equity Offering up to the maximum of thirty-five (35%) percent of the
initial aggregate principal amount of the Replacement Indebtedness at a
redemption price not to exceed one hundred eleven and six hundred twenty-five
thousandths (111.625%) percent of the principal amount thereof plus accrued
and unpaid interest to the redemption date, provided, that, after giving
effect thereto, at least two-thirds (2/3rds) of the initial principal amount
of Replacement Indebtedness remains outstanding,
(B) purchases or redemptions of Replacement Indebtedness
at the option of Borrower in open market transactions, provided, that, each of
the following conditions is satisfied as determined by Agent as of the date of
each such purchase and after giving effect thereto: (1) no Event of Default,
or act, conditions or event which with notice or passage of time or both would
constitute an Event of Default, shall exist or have occurred, (2) either:
(aa) the amounts used to pay for the purchase of the Replacement Indebtedness
consist only of the net cash proceeds received by Borrower from a Public
Equity Offering or (bb) there are no Loans outstanding, (3) as of the date of
such purchase or redemption and after giving effect thereto, Excess
Availability shall be not less than $5,000,000 and (4) Agent shall have
received not less than two (2) Business Days prior written notice of the
intent of Borrower to make any such purchases or redemptions;
(viii) Borrower shall furnish to Agent all notices, demands or
other materials concerning such indebtedness either received by Borrower or on
its behalf, promptly after receipt thereof, or sent by Borrower or on its
behalf, concurrently with the sending thereof, as the case may be;"
(c) Section 10.9 of the Loan Agreement is hereby amended by
adding a new Section 10.9(k) as follows:
"(k) indebtedness of Borrower owing to any person in an arm's
length transaction (other than Replacement Indebtedness); provided, that, as
to each and all of such indebtedness: (i) Agent shall have received not less
than ten (10) Business Days prior written notice of the intention to incur
such indebt edness, which notice shall set forth in reasonable detail
satisfactory to Agent, the amount of such indebtedness, the person to whom
such indebtedness will be owed, the interest rate, the schedule of repayments
and maturity date with respect thereto and such other information with respect
thereto as Agent may request, (ii) Agent shall have received true, correct and
complete copies of all agreements, documents and instruments evidencing or
otherwise related to such indebtedness, as duly authorized, executed and
delivered by the parties thereto, (iii) such indebtedness shall be unsecured,
(iv) the aggregate amount of all such indebtedness shall not exceed
$10,000,000 at any time outstanding less the then outstanding amount of any
indebtedness of a subsidiary of Borrower described in the definition of
"Permitted Subsidiary Indebtedness" in the Senior Note Indenture as in effect
on the date hereof, (v) such indebtedness shall be incurred by Borrower at
commercially reasonable rates and terms in a bona fide arm's length
transaction, (vi) such indebtedness shall not at any time include terms and
conditions which in any manner adversely affect Agent, Lenders or any rights
of Agent or Lenders as determined in good faith by Agent and confirmed by
Agent to Borrower in writing or which taken as a whole are more restrictive or
burdensome than the terms or conditions of any other indebtedness of Borrower
as in effect on the date hereof, (vii) as of the date of incurring such
indebtedness and after giving effect thereto, no Event of Default or act,
condition or event which with notice or passage of time or both would
constitute an Event of Default shall exist or have occurred and be continuing,
and (viii) Borrower shall furnish to Agent all notices or demands in
connection with such indebtedness either received by Borrower or on its behalf
promptly after the receipt thereof, or sent by Borrower, or on its behalf,
concurrently with the sending thereof, as the case may be;"
5. Line Increase Fee. Borrower shall pay to Agent, for the benefit
of Lenders, a line increase fee in the amount of $100,000, which amount shall
be payable simultaneously with the execution hereof and shall be deemed fully
earned as of the date hereof. Such fee, may, at Agent's option, be charged
directly to any account of Borrower maintained with Agent or Lenders.
6. Representations, Warranties and Covenants. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrower to Agent and Lenders pursuant to the other Financing
Agreements, Borrower hereby represents, warrants and covenants with and to
Agent and Lenders as follows (which representations, warranties and covenants
are continuing and shall survive the execution and delivery hereof and shall
be incorporated into and made a part of the Financing Agreements):
(a) After giving effect to this Amendment, no Event of Default
or act, condition or event which with notice or passage of time or both would
constitute an Event of Default exists or has occurred as of the date of this
Amendment.
(b) This Amendment has been duly executed and delivered by
Borrower and is in full force and effect as of the date hereof, and the
agreements and obligations of Borrower contained herein constitute legal,
valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms.
(c) The Recapitalization Agreements have been, and the agreements
evidencing the Replacement Indebtedness will be, duly authorized, executed and
delivered.
(d) All actions and proceedings required by the Recapitalization
Agreements and all applicable law or regulations in connection therewith have
been taken, and the transactions required thereunder have been duly and
validly taken and consummated.
(e) Neither the execution and delivery of any of the
Recapitalization Agreements or the agreements evidencing the Replacement
Indebtedness will be (or any related agreements, documents or instruments) nor
the consummation of the transactions therein contemplated, nor compliance with
the provisions thereof, has violated or shall violate any law or regulation or
any order or decree of any court or governmental instrumentality in any
substantial respect or does or shall conflict with or result in the breach of,
or constitute a default in any substantial respect under, any indenture,
mortgage, deed of trust, security agreement, agreement or instrument to which
Parent or Borrower is a party or may be bound, or violate any provision of the
Certificate of Incorporation or By-Laws of Parent or Borrower.
(f) Borrower has delivered to Lender, true, correct and complete
copies of the Recapitalization Agreements.
7. Conditions Precedent. The amendments herein shall be effective
upon the satisfaction of each of the following conditions precedent in a
manner satisfactory to Lenders:
(a) the receipt by Agent of an original of this Amendment, duly
authorized, executed and delivered by Borrower;
(b) Parent and Borrower have obtained all required consents and
approvals of all persons other than Agent and Lenders to the issuance and sale
of the shares of Parent Common Stock pursuant to the Stock Purchase Agreement
and the use of the proceeds to redeem the existing shares of Parent Common
Stock as provided for in the Redemption Agreement and the Exercise and
Repurchase Agreement;
(c) no Event of Default shall have occurred and be continuing
and no event shall have occurred or conditions be existing and continuing
which, with notice or passage or time or both, would constitute an Event of
Default.
8. Effect of this Amendment. Except as modified pursuant hereto, no
other changes or modifications to the Financing Agreements are intended or
implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment
shall control.
9. Further Assurances. Borrower shall execute and deliver, or shall
cause the execution and delivery of, such additional documents and take such
additional actions as may be requested by Agent or Lenders to effectuate the
provisions and purposes of this Amendment.
10. Governing Law. The validity, interpretation and enforcement of
this Amendment and any dispute arising out of the relationship between the
parties hereto, whether in contract, tort, equity or otherwise shall be
governed by the internal laws of the State of Illinois (without giving effect
to principles of conflicts of laws).
11. Binding Effect. This Amendment shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors
and assigns. The Loan Agreement and this Amendment shall be read and
construed as one agreement.
12. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one
and the same agreement. In making
proof of this Amendment, it shall not be necessary to produce or account for
more than one counterpart thereof signed by each of the parties thereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and
year first above written.
XXXXXX INTERNATIONAL, INC.
By: /s/ X X Xxxxxx
Title: VP Finance
CONGRESS FINANCIAL CORPORATION
(CENTRAL), in its individual
capacity and as agent
By: /s/ Xxxxxxx X. Xxxxx
Title: Senior Vice President
CORESTATES BANK, N.A.
By: /s/ Xxxxx Xxxxxx
Title: VP
