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Exhibit 4(d)
ROYAL APPLIANCE MFG. CO.
AS THE BORROWER
AND
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS LENDERS
AND
NATIONAL CITY BANK
AS ADMINISTRATIVE AGENT
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AMENDMENT NO. 1
DATED AS OF
MAY 28, 1999
TO
CREDIT AGREEMENT
DATED AS OF
MAY 1, 1998
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AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of May 28, 1999
("THIS AMENDMENT"), among:
(i) ROYAL APPLIANCE MFG. CO., an Ohio corporation (herein,
together with its successors and assigns, the "BORROWER");
(ii) the financial institutions listed on the signature pages
hereof (the "LENDERS"); and
(iii) NATIONAL CITY BANK, a national banking association, as
Administrative Agent (the "ADMINISTRATIVE AGENT") for the Lenders under
the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, and the Administrative
Agent entered into the Credit Agreement, dated as of May 1, 1998 (herein
referred to as the "CREDIT AGREEMENT"; with the terms defined therein, or the
definitions of which are incorporated therein, being used herein as so defined).
(2) The parties hereto desire to amend certain of the provisions of the
Credit Agreement, all as more fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1. EXTENSION OF MATURITY DATE. Effective on the Effective Date
provided for in section 3 hereof, the definition of the term "Maturity Date"
contained in section 1.1 of the Credit Agreement is amended to read in its
entirety as follows:
"MATURITY DATE" shall mean April 1, 2002, unless earlier
terminated, or extended in accordance with section 4.4.
1.2. INDEBTEDNESS COVENANT. Effective on the Effective Date provided
for in section 3 hereof, section 9.4(b) of the Credit Agreement is amended by
changing the dollar amount specified therein from $12,000,000 to $15,000,000.
1.3. DIVIDENDS COVENANT. Effective on the Effective Date provided for
in section 3 hereof, section 9.6 of the Credit Agreement is amended by changing
the date which appears therein from December 31, 1997 to December 31, 1998, with
the result that, as so amended, section 9.6 of the Credit Agreement reads in its
entirety as follows:
9.6. DIVIDENDS, ETC. The Borrower will not (a) directly or
indirectly declare, order, pay or make any dividend (other than
dividends payable solely in capital stock of the Borrower) or other
distribution on or in respect of any capital stock of any class of the
Borrower, whether by reduction of capital or otherwise, or (b) directly
or indirectly make, or permit any of its Subsidiaries to directly or
indirectly make, any purchase, redemption, retirement or other
acquisition of any capital stock of any class of the Borrower (other
than for a consideration consisting solely of capital stock of the same
class of the Borrower) or of any warrants, rights or options to acquire
or any securities convertible into or exchangeable for any capital
stock of
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the Borrower, EXCEPT that if no Event of Default shall have occurred
and be continuing or would result therefrom, the Borrower shall be
permitted to repurchase shares of its capital stock in open market or
privately negotiated transactions if the aggregate amount expended for
such purposes after December 31, 1998 does not exceed $20,000,000.
1.4. MINIMUM CONSOLIDATED NET WORTH COVENANT. Effective on the
Effective Date provided for in section 3 hereof, section 9.10 of the Credit
Agreement is amended by changing the amount and the calendar dates which appear
therein and by adding a new clause (iv) at the end thereof, with the result that
section 9.10 of the Credit Agreement, as so amended, reads in its entirety as
follows:
9.10. MINIMUM CONSOLIDATED NET WORTH. The Borrower will not
permit its Consolidated Net Worth at any time to be less than
$46,723,000, EXCEPT that (i) effective as of the end of the Borrower's
fiscal year ended December 31, 1999, and as of the end of each fiscal
year thereafter, the foregoing amount (as it may from time to time be
increased as herein provided), shall be increased by 50% of the
consolidated net income of the Borrower and its Subsidiaries for the
fiscal year ended on such date, if any, as determined in conformity
with GAAP (there being no reduction in the case of any such
consolidated net income which reflects a deficit), (ii) the foregoing
amount (as it may from time to time be increased as herein provided),
shall be increased by an amount equal to 100% of the cash proceeds (net
of underwriting discounts and commissions and other customary fees and
costs associated therewith) from any sale or issuance of equity by the
Borrower after the Closing Date (other than any sale or issuance to
management or employees pursuant to employee benefit plans of general
application), (iii) the foregoing amount (as it may from time to time
be increased as herein provided), shall be increased by an amount equal
to 50% of the increase in Consolidated Net Worth attributable to the
issuance of common stock or other equity interests subsequent to
December 31, 1998 as consideration in any Acquisitions permitted under
section 9.2, and (iv) in determining compliance with the foregoing
covenant, the effect of stock repurchases made subsequent to December
31, 1998 pursuant to section 9.6 shall not be taken into account.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as follows:
2.1. AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has
been duly authorized by all necessary corporate action on the part of the
Borrower, has been duly executed and delivered by a duly authorized officer or
officers of the Borrower, and constitutes the valid and binding agreement of the
Borrower, enforceable against the Borrower in accordance with its terms.
2.2. REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The
representations and warranties of the Borrower contained in the Credit
Agreement, as amended hereby, are true and correct on and as of the date hereof
as though made on and as of the date hereof, except to the extent that such
representations and warranties expressly relate to a specified date, in which
case such representations and warranties are hereby reaffirmed as true and
correct when made.
2.3. NO EVENT OF DEFAULT, ETC. No condition or event has occurred or
exists which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
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2.4. COMPLIANCE. The Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby.
2.5. RECENT FINANCIAL STATEMENTS. The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of the audited
consolidated balance sheet of the Borrower and its consolidated subsidiaries as
of December 31, 1998, and the related audited consolidated statements of income,
changes in shareholders' equity, and cash flows for the fiscal year then ended,
accompanied by the unqualified report thereon of the Borrower's independent
accountants, as contained in the Report on Form 10-K filed by the Borrower with
the SEC for its fiscal year ended December 31, 1998. All such financial
statements have been prepared in accordance with GAAP, consistently applied
(except as stated therein), and fairly present the financial position of the
Borrower and its consolidated subsidiaries as of December 31, 1998 and the
consolidated results of their operations and cash flows for the fiscal year then
ended.
SECTION 3. EFFECTIVENESS.
This Amendment shall become effective on and as of the date (the
"EFFECTIVE DATE"), on or before July 31, 1999 if the following conditions are
satisfied:
(a) this Amendment shall have been executed by the Borrower
and the Administrative Agent, and counterparts hereof as so executed
shall have been delivered to the Administrative Agent;
(b) the Administrative Agent shall have been notified by all
of the Lenders that such Lenders have executed this Amendment (which
notification may be by facsimile or other written confirmation of such
execution); and
(c) the Borrower shall have paid to the Administrative Agent,
for the pro rata account of the Lenders, a nonrefundable amendment fee
in the amount previously agreed between the Borrower and the
Administrative Agent.
The Administrative Agent shall notify the Borrower and each Lender in writing of
the Effective Date of this Amendment.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. MISCELLANEOUS.
5.1. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Borrower, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
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5.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
5.3. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
5.4. EXPENSES. As provided in the Credit Agreement, but without
limiting any terms or provisions thereof, the Borrower agrees to pay on demand
all costs and expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether this Amendment becomes effective in accordance
with the terms hereof, and all costs and expenses incurred by the Administrative
Agent or any Lender in connection with the enforcement of the Credit Agreement,
as amended hereby.
5.5. SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
5.6. APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Ohio.
5.7. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
5.8. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
5.9. COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
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ROYAL APPLIANCE MFG CO. NATIONAL CITY BANK,
INDIVIDUALLY AS A LENDER,
THE LETTER OF CREDIT ISSUER
BY:_____________________________ AND AS ADMINISTRATIVE AGENT
TITLE:
BY:_____________________________
TITLE:
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COMERICA BANK NATIONAL BANK OF CANADA,
A CANADIAN CHARTERED BANK
CLEVELAND REPRESENTATIVE OFFICE
BY:_____________________________
TITLE:
BY:_____________________________
TITLE:
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