EXHIBIT 10.23
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of
September 2, 1997 (this "Supplemental Indenture"), between
ENVIRODYNE INDUSTRIES, INC., a Delaware corporation (the
"Company"), and FLEET NATIONAL BANK (formerly Shawmut Bank of
Connecticut, National Association), as trustee (the "Trustee"),
under the Indenture dated as of June 20, 1995 and amended by the
First Supplemental Indenture, dated as of October, 13, 1995, both
between the Company and the Trustee (the "Indenture").
WHEREAS, the Company has issued, the Trustee has
authenticated and there have been delivered pursuant to the
Indenture $160,000,000 aggregate principal amount of the
Company's First Priority Senior Secured Notes due 2000, all of
which are currently outstanding;
WHEREAS, the Company desires, by this Supplemental
Indenture, to amend the negative covenants contained in Sections
4.01(a)(iii),(iv) and (v), Section 4.01(b) and Section 4.03(a) of
the Indenture (collectively, the "Amendment").
WHEREAS, Section 8.02 of the Indenture provides that
the Company and the Trustee may enter into a supplemental
indenture, with the consent of the holders of not less than a
majority in aggregate principal amount of the then outstanding
Securities (as defined therein), for the purpose of changing any
provisions of the Indenture except as otherwise set forth
therein;
WHEREAS, pursuant to Section 5.05 of the Indenture, the
holders of not less than a majority in aggregate principal of the
then outstanding Securities, as of 5:00 p.m., New York time, on
July 21, 1997, the record date for such purposes, have waived any
prior default by the Company of Sections 4.01(a), 4.01(b) or
4.03(a) of the Indenture, if any.
WHEREAS, the holders of not less than a majority in
principal amount of the Securities outstanding, as of 5:00 p.m,
New York City time, on July 21, 1997, the record date for such
purpose, have consented to the Amendment; and
WHEREAS, the Company is legally empowered and has been
duly authorized by the necessary corporate action to make,
execute and deliver this Supplemental Indenture, and all acts and
things whatsoever necessary to make this Supplemental Indenture,
when executed and delivered by the Company and the Trustee, a
valid, binding and legal instrument have been taken;
NOW, THEREFORE, each party agrees as follows for the
benefit of the other party and for the equal and ratable benefit
of the holders of the Securities:
ARTICLE 1
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DEFINITIONS
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All terms used in this Supplemental Indenture which are defined
in the Indenture shall have the meanings assigned to them in the
Indenture.
ARTICLE 2
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AMENDMENT OF INDENTURE
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2.1 Sections 4.01(a)(iii),(iv) and (v) of the Indenture are
hereby amended by deleting such sections in their entirety and
substituting in lieu thereof the following:
(iii) During each "Clause (iii) Test Period" (as
defined below) occurring during the period commencing on
December 27, 1996 and ending on December 25, 1997, to be
less than an amount (the "Clause (iii) Amount") equal to
(1) the greater of (X) the Clause (ii) Amount at December
26, 1996, and (Y) negative $47,000,000, plus (2) 50% of
----
Consolidated Net Income for such Clause (iii) Test Period
(or zero in the case of a deficit), plus (3) the amount
----
of any net gain realized by the Company or any of its
Subsidiaries on the exchange, redemption, purchase or other
acquisition of any of its debt securities (including,
without limitation, the 10.25% Notes) during such Clause
(iii) Test Period; where "Clause (iii) Test Period" means,
at any time, the period (taken as a one accounting period)
commencing on December 27, 1996 and ending on the then most
recently ended fiscal quarter of the Company;
(iv) During each "Clause (iv) Test Period" (as defined
below) occurring during the period commencing on December
26, 1997 and ending on December 31, 1998, to be less than
an amount (the "Clause (iv) Amount") equal to (1) the
greater of (X) the Clause (iii) Amount at December 25,
1997, and (Y) negative $47,000,000, plus (2) 50% of
----
Consolidated Net Income for such Clause (iv) Test Period
(or zero in the case of a deficit), plus (3) the amount of
----
any net gain realized by the Company or any of its
Subsidiaries on the exchange, redemption, purchase or other
acquisition of any of its debt securities (including,
without limitation, the 10.25% Notes) during such Clause
(iv) Test Period; where "Clause (iv) Test Period" means,
at any time, the period (taken as one accounting period)
commencing on December 26, 1997 and ending on the then most
recently ended fiscal quarter of the Company; and
(v) During each "Clause (v) Test Period" (as defined
below) occurring after January 1, 1999 and thereafter, to
be less than an amount equal to (1) the greater of (X) the
Clause (iv) Amount at December 31, 1998, and (Y) negative
$47,000,000, plus (2) the greater of (X) 50% of
----
Consolidated Net Income for such Clause (v) Test Period (or
zero in the case of a deficit), and (Y) $1,250,000
multiplied by the number of the Company's fiscal quarters
that have ended during such Clause (v) Test Period, plus
----
(3) the amount of any net gain realized by the Company or
any of its Subsidiaries on the exchange, redemption,
purchase or other acquisition of any of its debt securities
(including, without limitation, the 10.25% Notes) during
such Clause (v) Test Period; where "Clause (v) Test Period"
commencing on January 1, 1999 and ending on the then most
recently ended fiscal quarter of the Company.
2.2 Section 4.01(b) of the Indenture is amended by deleting
such section in its entirety and substituting in lieu thereof the
following:
(b) Fixed Charge Coverage Ratio. The Company
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covenants that it will not cause or permit the ratio of (i)
Consolidated Cash Flow for the twelve month period ending
at the end of any fiscal quarter of the Company to (ii)
Consolidated Fixed Charges for each such twelve month
period to be less than the ratio set forth below for the
period set forth below in which such fiscal quarter ends:
Ratio Period
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1.45:1 Effective Date through
December 28, 1995
1.50:1 December 29, 1995 through
December 31, 1998
1.55:1 January 1, 1999 and thereafter
provided, however, for purposes of determining Consolidated
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Cash Flow for the calculation of the Fixed Charge Coverage
Ratio only and notwithstanding any tax effect of such
restructuring charges, restructuring charges in amounts not
to exceed $3,500,000 and $1,500,000 shall be added back,
each on a one-time basis, prior to December 25, 1997 and
June 25, 1998, respectively, to the calculation of the
Consolidated Net Income to the extent deducted therefrom.
2.3 Section 4.03(a) of the Indenture is hereby amended by
deleting the last clause of such section beginning with "provided,
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however" and substituting in lieu thereof the following:
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provided, however, that at no time shall (1) Consolidated
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Senior Debt be more than 52.5% of Consolidated Total
Capitalization, or (2) Consolidated Debt be more than 88%
of Consolidated Total Capitalization.
ARTICLE 3
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MISCELLANEOUS
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3.1 This Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed shall be
deemed to be an original, and all of such counterparts shall together
constitute one and the same instrument.
3.2 The internal laws of the State of New York shall govern
this Supplemental Indenture without regard to principles of conflicts
of law.
3.3 All provisions of this Supplemental Indenture shall be
deemed to be incorporated in, and made a part of, the Indenture; and
the Indenture, as amended and supplemented by this Supplemental
Indenture, shall be read, taken and construed as one and the same
instrument.
3.4 The provisions of Sections 4.01(a)(iii),(iv) and (v),
Section 4.01(b) and Section 4.03(a), as amended by Article 2 of this
Supplemental Indenture, shall be deemed effective for all purposes as
of December 27, 1996; provided, however, that this Supplemental
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Indenture shall not become effective as of such date until the
Company has entered into amendments that are substantially identical
to the Amendment contained herein with respect to (i) the Revolving
Credit Agreement, dated as of June 20, 1995 and amended as of October
13, 1995, between the Company and The Prudential Insurance Company of
America and (ii) the Credit Agreement, dated as of June 20, 1995 and
amended as of October 13, 1995, among the Company, the lenders
identified therein and BT Commercial Corporation, as Agent. The
Company shall provide to the Trustee written notice that it has
entered into such amendments and that this Supplemental Indenture has
become effective.
3.5 The recitals to this Supplemental Indenture shall not be
construed as representations of the Trustee and the Trustee makes no
representation as to the accuracy of such recitals.
3.6 The Trustee enters into this Supplemental Indenture in
its capacity as Trustee under the Indenture and in reliance on an
Opinion of Counsel and Officers' Certificate.
IN WITNESS WHEREOF, the parties have caused this Second
Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as of the
day and year first above written.
ENVIRODYNE INDUSTRIES, INC.
By:_________________________________
Xxxxxx X. Xxxxxxx
Vice President, Chief Financial
Officer and Treasurer
Attest:
______________________
Xxxxxxx X. Xxxxxxxx
Vice President and
Secretary
FLEET NATIONAL BANK
By:_________________________________
Title:______________________________
Attest:
By:_________________________________
Title:_____________________________
