Exhibit 10.27
10/25/95
FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THE FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Fourth Amendment") is
made as of the 30th day of October, 1995 by and among Xxxxxx Products Ltd., a
Delaware corporation having its chief executive office at 000 XxXxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000 ("Borrower"), the lenders who are or who may from
time to time become signatories hereto ("Lenders") and Shawmut Capital
Corporation, a Connecticut corporation having an office at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("SCC") which is the successor-in-interest to
Barclays Business Credit, Inc., as agent for the Lenders ("SCC," in such
capacity being "Agent").
WITNESSETH:
WHEREAS, SCC, as Agent and Lender, and Borrower entered into a certain Loan
and Security Agreement dated as of July 14, 1994 as amended by (i) a certain
First Amendment to Loan and Security Agreement ("First Amendment") dated as of
September 30, 1994 by and among Agent, Borrower and the lender signatories
thereto, (ii) a certain Second Amendment to Loan and Security Agreement ("Second
Amendment") dated as of October 20, 1994 by and among Agent, Borrower and the
lender signatories thereto, and (iii) a certain First (sic) Amendment to Loan
and Security Agreement dated as of March 29, 1995 by and among Agent, Borrower
and the lender signatories thereto. Said Loan and Security Agreement, as
amended from time to time, is hereinafter referred to as the "Loan Agreement";
and
WHEREAS, Borrower, Lenders and Agent desire to amend and modify certain
provisions of the Loan Agreement.
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Lenders and Agent to Borrower, the parties hereto hereby agree
as follows:
1. Definitions. Except as otherwise specifically provided for herein,
all capitalized terms used herein without definition shall have the meanings
given to them in the Loan Agreement.
2. Borrowing Base. The definitions of "Borrowing Base" and "Interest
Coverage Ratio" contained in Section 1. 1 of the Loan Agreement are hereby
deleted and the following are inserted in their stead:
"Borrowing Base - as at any date of determination thereof, an amount equal
to the lesser of:
(a) the Maximum Revolving Credit Loan; and
(b) an amount equal to:
(i) eighty-five percent (85%) or such lesser
percentage as Agent in its reasonable discretion deems appropriate, of
the net amount of Eligible Accounts outstanding at such date;
PLUS
(ii) the lesser of (A) Thirty-Five Million Dollars
($35,000,000) and (B) the Inventory Percentage of the value of
Eligible Inventory at such date consisting of raw materials and
finished goods, calculated on the basis of the lower of cost or
market, as determined by Agent, in its reasonable discretion, on a
first-in, first-out ("FIFO") basis;
MINUS (subtract from the lesser of clauses
(a) and (b) above)
(c) an amount equal to the sum of (A) the face amount
of all LC Guaranties and Letters of Credit issued by Agent or Bank and
outstanding at such date, plus (B) any amounts which Agent and/or Lenders
may then be obligated to pay for the account of Borrower under this
Agreement.
For purposes hereof, the net amount of Eligible Accounts at any time shall be
the face amount of such Eligible Accounts less any and all returns, rebates,
discounts (which, if granted outside the ordinary course of business as in
effect on the Closing Date, may, at Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time, all as determined by Agent in the reasonable
exercise of its discretion.
Interest Coverage Ratio - with respect to any fiscal
period, the ratio of Borrower's (a) net income before interest, income tax
expense, depreciation expense, amortization expense, any gain or loss (in
excess of $40,000 within the immediately previous twelve month period) from
the sale of assets outside the ordinary course of business and any charge or
expense to net income (in an amount not to exceed $13,000,000) in respect to
the restructuring of Xxxxxx Manufacturing for or taken within such period to
(b) Borrower's interest expense for such period."
3. Capital Expenditures. Section 9.2(L) of the Loan and Security
Agreement is hereby deleted and the following is inserted in its stead:
"9.2. Negative Covenants. During the term of this Agreement, and thereafter
for so long as there are any Obligations to Agent or any Lender, Borrower
covenants that, unless Required Lenders have first consented thereto in writing,
it will not:
* * *
(L) Capital Expenditures. Make Capital Expenditures which, in the
aggregate, as to Borrower and its Subsidiaries, exceed during any fiscal year of
Borrower within the Term hereof the amount set forth opposite such fiscal year
in the following schedule:
Fiscal Year Amount
1995 $8,500,000
1996 $7,300,000
1997 and each succeeding fiscal year $5,000,000"
* * *
4. Specific Financial Covenants. Section 9.3 of the Loan Agreement is
hereby deleted and the following is inserted in its stead:
"9.3. Specific Financial Covenants. During the Term of this Agreement, and
thereafter for so long as there are any Obligations to Agent or any Lender,
Borrower covenants that, unless otherwise consented to by Required Lenders in
writing, it shall:
(A) Minimum Net Worth. Maintain at the end of each fiscal quarter
within the term hereof a Tangible Net Worth of not less than the amount shown
below for the fiscal quarter corresponding thereto:
Fiscal Quarter Ending Amount
September 30, 1994 $46,500,000
December 31, 1994 $46,600,000
March 31, 1995 $46,200,000
June 30, 1995 $46,800,000
September 30, 1995 $46,500,000
December 31, 1995 $44,200,000
March 31, 1996 $42,200,000
June 30, 1996 $42,300,000
September 30, 1996 $44,600,000
December 31, 1996 $43,900,000
March 31, 1997 $43,500,000
June 30, 1997 and the last day
of each fiscal quarter thereafter $44,100,000
(B) Total Liabilities to Tangible Net Worth Ratio. Have at the end
of each month within the Term hereof, a ratio of Indebtedness (computed in
accordance with GAAP) to Tangible Net Worth equal to or less than the ratio set
forth opposite such month in the following schedule:
Month Ratio
Each Month within 1.85 to 1
Fiscal Year 1994
Each Month within 1.50 to 1
Fiscal Year 1995
January, February and 1.50 to 1
March, 1996
April, May, June, July 1.60 to 1
August, September, October
and November, 1996
December, 1996 and each 1.50 to 1
month thereafter
(C) Interest Coverage Ratio. Have at the end of each fiscal quarter
of Borrower within the Term hereof, commencing with the fiscal quarter ending
September 30, 1994, an Interest Coverage Ratio for the twelve consecutive months
then ended equal to or greater than the Interest Coverage Ratio set forth
opposite such fiscal quarter in the following schedule:
Fiscal Quarter Ending Interest Coverage
Ratio
Fiscal Quarters Ending on or Prior 1.30 to 1
to March 30, 1995
June 30, 1995 1.30 to 1
September 30, 1995 .90 to 1
December 31, 1995 1.00 to 1
March 31, 1996 .80 to 1
June 30, 1996 .95 to 1
September 30, 1996 1.60 to 1
December 31, 1996 2.20 to 1
March 31, 1997 2.50 to 1
June 30, 1997 and each 2.50 to 1
Fiscal Quarter thereafter
(D) Minimum Excess Revolving Credit Loan Available. Maintain as of
any date within the Term hereof, average Excess Revolving Credit Loan
Availability for the date of determination and the immediately previous
twenty-nine (29) days of Eight Million Dollars ($8,000,000) or more.
Agent and Lenders have agreed to waive compliance by Borrower with the
covenants contained in Sections 9.3(A) and 9.3(C) for the period ending June 30,
1995. Said waiver does not affect any other covenant or compliance by Borrower
with the covenants contained in Section 9.3(A) and 9.3(C) for any other period."
5. Fee. In order to induce Lenders to enter into this Fourth Amendment,
Borrower agrees to pay, on the date hereof, an amendment fee in the amount of
One Hundred Thousand Dollars ($100,000). Said fee shall be apportioned among
Lenders in accordance with their respective Revolving Credit Percentages.
6. Continuing Effect. Except as otherwise specifically set out herein,
the provisions of the Loan Agreement shall remain in full force and effect.
IN WITNESS "WHEREOF, this Fourth Amendment has been duly executed as of the
day and year specified at the beginning hereof.
XXXXXX PRODUCTS LTD., ("Borrower")
By: ____________________________
Name: Xxxxxxx X. XxxXxxxxx
Title: Vice President and Chief Financial Officer
SHAWMUT CAPITAL CORPORATION ("Agent" and "Lender")
By:
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX TRUST AND SAVINGS BANK ("Lender")
By: ______________________________
Name: _____M. Xxxxxxxxx Gilliam_____
Title: _____Vice President___________
BANK OF AMERICA ILLINOIS ("Lender")
By: ______________________________
Name: ___Joseph T. Koch_____________
Title: ___Sr. Vice President_________
