Exhibit 3
THIRD AMENDMENT AND CONSENT
THIRD AMENDMENT AND CONSENT (this "Amendment"), dated as of January 30,
1998, among REFRACO INC., a Delaware corporation (the "Borrower"), the
lenders party to the Term Loan Agreement referred to below (the "Banks") and
BANKERS TRUST COMPANY, as Administrative Agent (in such capacity, the
"Administrative Agent"). Unless otherwise defined herein, all capitalized
terms used herein shall have the respective meanings provided such terms in
the Term Loan Agreement.
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks and the Administrative Agent are
parties to a Term Loan Agreement, dated as of April 15, 1997 (as amended,
modified or supplemented to but not including the date hereof, the "Term Loan
Agreement");
WHEREAS, the Borrower wishes to consummate a transaction (such
transaction, as described in that certain Confidential Information
Memorandum, dated January 1998 and previously distributed to the Banks, and
consummated as described below, the "Acquisition") whereby it will (i)
acquire all of the issued and outstanding capital stock of American Premier
Holdings, Inc. ("APHI") by way of the merger of APHI with and into the
Borrower, with the Borrower being the surviving entity of such merger,
pursuant to, and in accordance with, that certain Agreement and Plan of
Merger, dated as of January 13, 1998, among Alpine, the Borrower, APHI,
Minerals Trading, Inc., Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxx and
Xxxxxxx Xxxxx and (ii) concurrently with the consummation of the Acquisition,
American Premier Inc., a Delaware corporation and a Wholly-Owned Subsidiary
of APHI, will merge with and into Adience; and
WHEREAS, in connection with the Acquisition, (i) the Borrower has
requested the Banks to grant, and the Banks have agreed (subject to the terms
and conditions hereof) to grant, the consent provided herein and (ii) the
parties hereto wish to further amend the Term Loan Agreement as provided
herein;
NOW, THEREFORE, it is agreed:
1. Notwithstanding anything to the contrary contained in the Term Loan
Agreement, including, without limitation, Sections 7.03 and 7.10(iv) of the
Term Loan Agreement, the undersigned Banks hereby consent to the consummation
of the Acquisition by the Borrower.
2. Section 7.08 of the Term Loan Agreement is hereby deleted in its
entirety and the following new Section 7.08 is inserted in lieu thereof:
"7.08 Maximum Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time during a period set forth below to be greater than the
ratio set forth opposite such period below:
Period Ratio
--------- --------
Beginning February 1, 1998
and ending January 31, 1999 6.25:1
Beginning February 1, 1999
and ending April 30, 1999 6.00:1
Beginning May 1, 1999
and ending July 31, 1999 5.75:1
Beginning August 1, 1999
and ending October 31, 1999 5.65:1
Beginning November 1, 1999
and ending January 31, 2000 5.50:1
Beginning February 1, 2000
and ending October 31, 2000 5.25:1
Beginning November 1, 2000
and ending January 31, 2001 5.15:1
Thereafter 5.00:1
3. The definition of "Adience Credit Agreement" appearing in Section 9
of the Term Loan Agreement is hereby amended by deleting the reference to the
date "April 14, 1997" appearing therein and inserting the date "April 15,
1997" in lieu thereof.
4. The definition of Consolidated EBITDA appearing in Section 9 of the
Term Loan Agreement is hereby amended by inserting the following sentence at
the end thereof:
"In addition and without limitation to the foregoing, for the
purposes of compliance with Sections 7.03 and 7.08, Consolidated
EBITDA for the fiscal quarter of the Borrower ending April, 1997 shall
be increased by $4,250,000."
5. The definition of "Consolidated Fixed Charge Coverage Ratio"
appearing in Section 9 of the Term Loan Agreement is hereby amended by inserting
the following two sentences at the end thereof:
"In addition and without limitation to the foregoing, for the
purposes of compliance with Section 7.03, Consolidated EBITDA for each
fiscal quarter of the Borrower ending on or prior to October, 2000
shall be increased by the amount set forth
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on Schedule I attached hereto opposite such quarter. Notwithstanding
anything to the contrary contained elsewhere in this Agreement, to the
extent Consolidated Interest Expense is being determined for any Test
Period which begins prior to the Third Amendment Effective Date, then
Consolidated Interest Expense (x) for the fiscal quarter of the
Borrower ended in July, 1997 shall be deemed to be $6,960,500, (y) for
the fiscal quarter of the Borrower ended in October, 1997, shall be
deemed to be $6,960,500 and (z) for the fiscal quarter of the Borrower
ended January, 1998, shall be deemed to be $6,960,500.
6. The definition of "Leverage Ratio" appearing in Section 9 of the
Term Loan Agreement is hereby amended by deleting said definition in its
entirety and inserting the following new definition of "Leverage Ratio" in
lieu thereof:
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the then most recently
ended Test Period; provided that in calculating the Leverage Ratio (x) to the
extent any Asset Acquisition or Asset Sale has occurred during the relevant
Test Period or thereafter but on or prior to the date of the respective
determination of the Leverage Ratio, Consolidated EBITDA shall be determined
for the respective Test Period on a pro forma basis (as provided in the
definition of Consolidated Fixed Charge Coverage Ratio in calculating the
denominator thereof) to give effect to all such Asset Acquisitions and/or
Asset Sales occurring after the first day of the respective Test Period and
(y) for the purposes of compliance with Section 7.08, Consolidated EBITDA
for each fiscal quarter of Holdings ending on or prior to October 31, 2000
shall be increased by the amount set forth on Schedule I attached hereto
opposite such fiscal quarter.
7. Clause (ii) of the definition of "Permitted Indebtedness" appearing
in Section 9 of the Term Loan Agreement is hereby amended by deleting the
reference to the amount "$80,000,000" appearing therein and inserting the
amount "$210,000,000" in lieu thereof.
8. The definition of "Permitted Indebtedness" appearing in Section 9 of
the Term Loan Agreement is hereby further amended by (i) deleting the word
"and" appearing at the end of clause (xv) thereof, (ii) deleting the period
appearing at the end of clause (xvi) thereof and inserting the text "; " in
lieu thereof and (iii) inserting the following new clauses (xvii) through
(xix) immediately following existing clause (xvi):
"(xvii) Indebtedness of Canadian Subsidiaries of Adience the
proceeds of which Indebtedness are to be used for such Canadian
Subsidiaries' working capital purposes, provided that the aggregate
principal amount of all such Indebtedness outstanding at any time
shall not exceed $6,000,000 (the "Canadian Subsidiary Working Capital
Indebtedness"), and provided further, that all terms and conditions of
such Indebtedness shall be reasonably satisfactory to the
Administrative Agent and the Required Banks;
(xviii) Indebtedness incurred pursuant to the $2.8M Deferred
Interest Bond; and
(xix) Indebtedness incurred pursuant to the AMI Promissory Notes."
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9. The definition of "Permitted Liens" appearing in Section 9 of the
Term Loan Agreement is hereby amended by (i) deleting the word "and"
appearing at the end of clause (xix) thereof, (ii) deleting the period
appearing at the end of clause (xx) thereof and inserting the text "; and" in
lieu thereof and (iii) inserting the following new clause (xxi) immediately
following existing clause (xx):
"(xxi) Liens placed upon any of the assets of a Canadian Subsidiary
of Adience to secure any Canadian Subsidiary Working Capital
Indebtedness permitted to be incurred by such Canadian Subsidiary
under clause (xvii) of the definition of Permitted Indebtedness."
10. Section 9 of the Term Loan Agreement is hereby amended by inserting
the following definitions in the appropriate alphabetical order:
"AMI Promissory Notes" shall mean (i) the $190,000 Promissory Note
Due 1995, dated December 11, 1991, made by American Premier, Inc. in
favor of Ferro Standard Corporation and (ii) the $1,000,000 Promissory
Note Due 1995, dated December 11, 1991, made by American Premier, Inc.
in favor of Ferro Metal and Chemical, Inc.
"Canadian Subsidiary Working Capital Indebtedness" shall have the
meaning provided in clause (xvii) of the definition of Permitted
Indebtedness.
"$2.8M Deferred Interest Bond" shall mean the $2,470,000 Deferred
Interest Bond Due 2003, dated May 31, 1996, made by American Premier
Holdings, Inc. to Xxxxx X. Xxxxxxxxx.
11. In order to induce the Banks to enter into this Amendment, the
Borrower hereby represents and warrants that (x) no Default or Event of
Default exists on the Third Amendment Effective Date (as defined below), both
before and after giving effect to this Amendment and (y) all of the
representations and warranties contained in the Term Loan Agreement and the
other Credit Documents shall be true and correct in all material respects as
of the Third Amendment Effective Date, both before and after giving effect to
this Amendment, with the same effect as though such representations and
warranties had been made on and as of the Third Amendment Effective Date (it
being understood that any representation or warranty made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date).
12. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Term Loan
Agreement or any other Credit Document.
13. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrower and the Administrative
Agent.
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14. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
15. This Amendment shall become effective on the date (the "Third
Amendment Effective Date") when the Borrower, the Administrative Agent and
the Required Banks shall have signed a counterpart hereof (whether the same
or different counterparts) and shall have delivered (including by way of
facsimile transmission) the same to the Administrative Agent at the Notice
Office; provided, however, that if for any reason after the Third Amendment
Effective Date the Acquisition is not consummated, this Amendment shall
retroactively cease to have any force or effect.
16. From and after the Third Amendment Effective Date, all references
in the Term Loan Agreement and each of the other Credit Documents to the Term
Loan Agreement shall be deemed to be references to the Term Loan Agreement as
amended hereby.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date
first above written.
REFRACO INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Title: Vice President, General Counsel
and Secretary
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ Xxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Life Insurance Company
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Title: Vice President
DEBT STRATEGIES, FUND., INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Title: Authorized Signatory
EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By
------------------------------
Title:
EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By
-------------------------------
Title:
KZH-ING-1 CORPORATION
By /s/ Xxxxxxxx Xxxxxx
--------------------------------
Title: Authorized Agent
XXXXXXX XXXXX DEBT
STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By /s/Xxxxxxx X. Xxxxxxxx
---------------------------------
Title: Authorized Signatory
ML CBO IV (CAYMAN) LTD.
By: Protective Asset Management Company,
as Collateral Manager
By /s/ Xxxxx Xxxxxxx
------------------------------
Title: President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO [A UNIT OF THE CHASE
MANHATTAN BANK]
By
--------------------------------
Title:
PRIME INCOME TRUST
By /s/ Xxxxxx Xxxxxxx
-------------------------------
Title: SVP Portfolio Manager
SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Title: Authorized Signatory
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By: ING CAPITAL ADVISORS, INC.,
as Investment Advisor
By /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President and Portfolio Manager
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its Investment Advisor
By /s/ Xxxxxxx Xxxxxxx
--------------------------------
Title: Vice President
ACKNOWLEDGEMENT AND AGREEMENT
Alpine hereby acknowledges and agrees to the provisions of the Term Loan
Agreement, after giving effect to this Amendment, and hereby agrees for the
benefit of the Banks that all extensions of credit pursuant thereto shall be
fully entitled to the benefits of (and shall be fully guaranteed and secured
pursuant to the provisions of) the Alpine Guaranty and the Alpine Pledge
Agreement.
THE ALPINE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------
Title: Senior Vice President,
General Counsel and Secretary
SCHEDULE I
Holdings' Fiscal Quarter
Ending Closest to the Last
Day In Amount
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April, 1998 $4,750,000
July, 1998 $4,250,000
October, 1998 $3,500,000
January, 1999 $3,000,000
April, 1999 $3,750,000
July, 1999 $2,750,000
October, 1999 $1,750,000
January, 2000 $1,000,000
April, 2000 $ 500,000
October, 2000 $ 250,000
