EXHIBIT 10.6
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Second Amendment") is
entered into as of the 18 day of July 1997, by and between LaSalle National
Bank, a national banking association ("LaSalle"), Xxxxxx Trust and Savings Bank,
an Illinois banking corporation ("Xxxxxx") (LaSalle and Xxxxxx are referred to
herein collectively as the "Banks"), and Stimsonite Corporation, a Delaware
corporation ("Borrower"). LaSalle National Bank, a national banking association,
as agent for the Banks for certain limited purposes ("Agent"), shall also be
deemed a party hereto for the purpose of acting as agent.
W I T N E S S E T H:
WHEREAS, Banks, Agent and Borrower entered into a Loan Agreement dated
as of July 23, 1996 as amended by the Amendment to Loan Agreement dated as of
March 24, 1997 (the "Agreement"), and now desire to further amend such
Agreement.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements herein contained and for the purposes of setting forth the terms and
conditions of this Second Amendment, the parties, intending to be bound, hereby
agree as follows:
1. Incorporation of the Agreement. All capitalized terms which are not
defined hereunder shall have the same meanings as set forth in the
Agreement, and the Agreement, to the extent not inconsistent with this
Second Amendment, is incorporated herein by this reference as though
the same was set forth in its entirety. To the extent any terms and
provisions of the Agreement are inconsistent with the amendments set
forth in paragraph 2 below, such terms and provisions shall be deemed
superseded hereby. Except as specifically set forth herein, the
Agreement shall remain in full force and effect and its provisions
shall be binding on the parties hereto.
2. Amendment of the Agreement. The Agreement is hereby amended as follows:
a. Paragraph 9.2(g) of the Agreement is hereby amended and
restated in its entirety as follows:
(g) Financial Covenants (each of which in clauses (i), (ii)
and (iii) below shall be measured each quarter on a rolling four (4)
quarter basis taking into account the immediately preceding four fiscal
quarters of Borrower).
(i) Not permit the ratio of Funded Debt to EBITDA
minus Capital Expenditures to exceed (A) 4.50:1 as of the end
of each fiscal quarter through September 30, 1997 and (B)
3.75:1 for the fiscal quarter ending December 31, 1997.
Notwithstanding the foregoing, such ratio shall be immediately
reduced to 3.75:1 if Borrower sells the Waukegan Facility
prior to December 31, 1997.
(ii) Not permit the Cash Flow Coverage Ratio to
be less than 1.3:1.
(iii) Not permit the Leverage Ratio to exceed (A) for
the fiscal quarters ending June 30, 1996 to September 30,
1997, .60:1; (B) for the fiscal quarters ending December 31,
1997 to September 30, 1998, .55:1; and (C) for the fiscal
quarters ending December 31, 1998 and each quarter thereafter,
.40:1.
b. The final sentence of Paragraph 9.3(b) is hereby amended
and restated in its entirety as follows:
Notwithstanding the foregoing, Borrower may sell or otherwise
dispose of the Waukegan Facility if, and only if, the net proceeds of
such sale are $5,700,000 or greater and Borrower complies in full with
the provisions of Paragraph 5.18.
3. Closing Documents. The following documents and other items shall be
delivered concurrently with this Second Amendment:
a. Four executed copies of this Second Amendment.
4. Representations and Warranties; No Event of Default. The
representations and warranties set forth in Paragraph 9 are deemed
remade as of the date hereof and, upon full execution of this Second
Amendment in accordance with Section 5 below, Borrower represents that
such representations and warranties are true and correct as of the date
hereof (other than representations and warranties made as of a specific
date). Upon full execution of this Second Amendment in accordance with
Section 5 below, no Event of Default exists nor does there exist any
event or condition which with notice, lapse of time and/or the
consummation of the transactions contemplated hereby would constitute
an Event of Default.
5. Effectuation. The amendments to the Agreement contemplated by this
Second Amendment shall be deemed effective as of the date first written
above upon the full execution of this Second Amendment and without any
further action required by the parties hereto. There are no conditions
precedent or subsequent to the effectiveness of this Second Amendment
except as set forth in Section 3 above.
6. Counterparts. This Second Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Second
Amendment as of the date first above written.
LASALLE NATIONAL BANK STIMSONITE CORPORATION
By: By:
Its Vice President Its President
XXXXXX TRUST AND SAVINGS BANK
By:
Its Vice President
