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EXHIBIT 99.5
THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT ("Third
Amendment") dated as of October 15, 1998 by and among XXXX INDUSTRIES, INC., a
corporation organized under the laws of the State of Georgia (the "Borrower"),
the Lenders appearing on the signature pages hereof (the "Lenders"),
NATIONSBANK, N.A., as Issuing Bank and Administrative Agent and SUNTRUST BANK,
ATLANTA, as Documentation Agent.
WHEREAS, the Borrower, the Lenders, the Issuing Bank and the Agents
entered into that certain Amended and Restated Credit Agreement dated as of
March 16, 1998, as amended by that certain First Amendment to Amended and
Restated Credit Agreement dated as of August 7, 1998, and that certain Second
Amendment to Amended and Restated Credit Agreement dated as of October 6, 1998
(as so amended, the "Credit Agreement"), pursuant to which the Lenders made
certain financial accommodations available to the Borrower;
WHEREAS, the Borrower has requested that the Lenders, the Issuing Bank
and the Agents amend the Credit Agreement on the terms and conditions set forth
herein; and
WHEREAS, the Lenders, the Issuing Bank and the Agents are willing to so
amend the Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties, the parties
hereto agree as follows:
Section 1. Specific Amendments to Credit Agreement.
(a) The Credit Agreement is hereby amended deleting the defined
term "Consolidated EBITDA " contained in Section 1.1 thereof and substituting in
lieu thereof the following:
" `Consolidated EBITDA' means, with respect to the Borrower
and its Subsidiaries for any period of computation thereof, the sum of,
without duplication, (a) Consolidated EBIT for such period plus (b) to
the extent deducted in determining Consolidated Net Income (i)
amortization expense of the Borrower and its Subsidiaries for such
period plus (ii) depreciation expense of the Borrower and its
Subsidiaries for such period, all in accordance with GAAP; provided,
however, that for purposes of calculating Consolidated EBITDA of the
Borrower and its Subsidiaries for any period, the Consolidated EBITDA
of any Person acquired by, or merged into or consolidated with, the
Borrower or its Subsidiaries during such period shall be included on a
pro forma basis for such period
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(assuming for purposes of such calculation that the consummation of
such acquisition, merger or consolidation in connection therewith
occurred on the first day of such period)."
(b) The Credit Agreement is hereby further amended by adding the
following new defined term to Section 1.1 thereof in the appropriate alphabetic
order:
" `Total Assets' means, at any time of determination, the
total consolidated assets of the Borrower and its Subsidiaries, as
shown on the consolidated balance sheet of the Borrower most recently
delivered to the Administrative Agent and the Lenders pursuant to
Section 9.1 or 9.2, as applicable; provided, however, that, for
purposes of calculating `Total Assets' at any time prior to the
delivery to the Agent and the Lenders of the financial statements of
the Borrower for the annual fiscal period ending January 2, 1999,
`Total Assets' include the assets (including without limitation any
related goodwill) acquired by (and at the time of determination owned
by) the Borrower pursuant to that certain Agreement and Plan of Merger
dated as of August 13, 1998, as amended by a First Amendment to
Agreement and Plan of Merger dated as of October 6, 1998, among the
Borrower, Queen Carpet Corporation, Xxxxxxxx Acquisition Corp. and the
other parties named therein."
(c) The Credit Agreement is hereby further amended by deleting the
defined term "Restricted Payment" contained in Section 1.1 thereof.
(d) The Credit Agreement is hereby further amended by deleting the
text "Sections 10.5. and" contained in the last line of Section 8.8 thereof and
substituting in lieu thereof the word "Section".
(e) The Credit Agreement is hereby further amended by deleting the
subsection (b) contained in Section 10.1 thereof and substituting in lieu
thereof the following:
"(b) Minimum Net Worth. Permit as at the end of each fiscal
quarter of the Borrower, its Consolidated Net Worth to be less than the
sum of: (i) $510,000,000 plus (ii) 50% of the cumulative positive
Consolidated Net Income of the Borrower earned after January 3, 1998
plus (iii) the aggregate net proceeds received by the Borrower and its
Subsidiaries from any sale or issuance of any shares, interests,
warrants, participations or other equity instruments of the Borrower or
its Subsidiaries occurring after January 3, 1998 minus (iv) the
aggregate amount of all cash and non-cash consideration paid by the
Borrower and its Subsidiaries in connection with any purchase,
redemption, retirement or other acquisition of any shares, interests,
warrants, participations or other equity instruments of the Borrower
and its Subsidiaries occurring after January 3, 1998 in an amount up
to, but not to exceed, $150,000,000; it
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being understood that (1) any equity issuance net proceeds received by,
or purchase, redemption, retirement or other acquisition consideration
paid to, a Subsidiary from the Borrower or vice-versa shall not be
included in determining the amounts described in items (iii) and (iv)
above; and (2) for purposes of determining the amount of non-cash
consideration paid by Borrower and its Subsidiaries in connection with
any purchase, redemption, retirement or other acquisition of any equity
instruments, the fair market value of such consideration shall be used
or, if such non-cash consideration is in the form of a note or other
debt security, the amount of non-cash consideration shall be deemed to
be the original principal amount of the note or debt security."
(e) The Credit Agreement is hereby further amended by deleting
subsection (f) contained in Section 10.2 thereof and substituting in lieu
thereof the following:
"(f) (i) Consolidated Funded Debt incurred by the Borrower
after the Effective Date and (ii) Indebtedness owing by Nylon Polymer
Company, L.L.C., a Georgia limited liability company ("Nylon Polymer")
to SunTrust Bank, Atlanta, N.A. and Wachovia Bank, N.A., as lenders
(the "Nylon Polymers Lenders"), in the original principal amounts of
$22,500,000 ("Nylon Polymer Term Loan A") and $7,500,000 ("Nylon
Polymer Term Loan B"), respectively, pursuant to that certain Term Loan
Agreement dated as of September 12, 1997, as amended from time to time,
by and among Nylon Polymer, as borrower, the Nylon Polymer Lenders and
SunTrust Bank, Atlanta, as Agent; provided, however that the amount of
Indebtedness permitted under this subsection (f) shall not (1) at any
time exceed 20% of Total Assets and (2) be secured by a Lien on any
property or other asset of the Borrower or any of its Subsidiaries;"
(f) The Credit Agreement is hereby further amended by deleting
subsection (j) contained in Section 10.2 thereof and substituting in lieu
thereof the following:
"(j) Sold Receivables Indebtedness in an aggregate amount
at any time outstanding not to exceed $325,000,000."
(g) The Credit Agreement is hereby further amended by adding the
following at the end of clause (vi) contained in Section 10.3 thereof:
"provided, however, that, in the event the fair market value of the
assets, properties, Business Unit or capital stock so purchased or
acquired exceeds $100,000,000, the Borrower shall provide the
Administrative Agent, at the time of such purchase or acquisition, a
certificate executed by the chief financial officer of the Borrower
certifying that each of the foregoing conditions in this clause (vi)
have been satisfied;"
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(h) The Credit Agreement is hereby further amended by deleting
subsection (b) of Section 10.4 thereof and substituting in lieu thereof the
following:
"(b) Enter into or assume any agreement (other than any Loan
Document), or permit any Subsidiary (other than a Receivables
Subsidiary) to enter into or assume any agreement (other than any Loan
Document), prohibiting the creation or assumption of any Lien upon its
properties, whether now owned or hereafter acquired; or"
(i) The Credit Agreement is hereby further amended by deleting
Section 10.5 thereof in its entirety and substituting in lieu thereof the
following:
"Section 10.5. [Reserved]."
(j) The Credit Agreement is hereby further amended by deleting the
"." at the end of clause (viii) contained in Section 10.6 thereof and
substituting in lieu thereof the following:
"; (D) the Board of Directors (or other similar management body) of the
Person to be merged or consolidated with or into the Borrower
recommends to its shareholders (or other similar equity holders) that
such shareholders (or other similar equity holders) approve such merger
or consolidation; and (E) immediately after giving effect to such
merger or consolidation, the Borrower would, on a pro forma basis, be
in compliance with the financial covenants set forth in Section 10.1;
provided, further, that, in the event the fair market value of the
assets of the Person to be merged or consolidated with or into the
Borrower exceeds $100,000,000, the Borrower shall provide the
Administrative Agent, at the time of such merger or consolidation, a
certificate executed by the chief financial officer of the Borrower
certifying that each of the foregoing conditions in this clause (viii)
have been satisfied;"
(k) The Credit Agreement is hereby further amended by deleting
Exhibit J thereto in its entirety and substituting in lieu thereof the Exhibit J
attached hereto.
Section 2. Effectiveness of Amendment.
This Third Amendment, and the amendments effected hereby, shall be
effective only upon the satisfaction of each of the following conditions
precedent to effectiveness:
(a) this Third Amendment shall be executed and delivered by each
of the Borrower, the Issuing Bank, the Agents and the Requisite Lenders; and
(b) the Administrative Agent shall have received a certificate
dated the date hereof from the Chief Financial Officer or the Treasurer of the
Borrower certifying that, immediately
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prior to and after giving effect to the amendment contemplated hereby, no
Default or Event of Default under the Credit Agreement exists.
Section 3. Representations and Warranties.
(a) In order to induce the Issuing Bank, the Agents and the
Lenders to enter into this Third Amendment, the Borrower hereby reaffirms each
of the representations and warranties of the Borrower contained in the Credit
Agreement as of the date hereof except for either: (i) the occurrence of any
event that would render such representations or warranties untrue, but that is
expressly permitted by the terms of the Credit Agreement or which would not
cause an Event of Default under the Credit Agreement or (ii) the occurrence of
any event that would render such representations or warranties untrue but that
previously has been disclosed in writing to the Lenders.
(b) The execution, delivery and performance of this Third
Amendment by the Borrower does not require the consent of any other Person under
any document, instrument or agreement to which the Borrower is a party or under
which the Borrower is bound.
Section 4. References to the Credit Agreement.
Each reference to the Credit Agreement in any of the Loan Documents
shall be deemed to be a reference to the Credit Agreement, as amended by this
Third Amendment, and as the same may be further amended, restated, supplemented
or otherwise modified from time to time in accordance with Section 13.6 of the
Credit Agreement.
Section 5. Benefits.
This Third Amendment shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
Section 6. GOVERNING LAW.
THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF GEORGIA.
Section 7. Effect.
Except as expressly herein amended, the terms and conditions of the
Credit Agreement shall remain in full force and effect without amendment or
modification, express or implied.
Section 8. Counterparts.
This Third Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns.
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Section 9. Definitions.
All capitalized terms which are used herein and not otherwise defined
herein shall have the meanings given such terms as set forth in the Credit
Agreement.
[Signatures Contained on Following Page]
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[Signature Page to Third Amendment to Amended and Restated Credit Agreement
dated as of October 15, 1998 with Xxxx Industries, Inc.]
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to Amended and Restated Credit Agreement to be executed under seal by their duly
authorized officers as of the date first above written.
THE BORROWER:
XXXX INDUSTRIES, INC.
By: /s/
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Title:
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THE ADMINISTRATIVE AGENT:
NATIONSBANK, N.A., as Administrative Agent
By: /s/
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Title:
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THE ISSUING BANK:
NATIONSBANK, N.A., as Issuing Bank
By: /s/
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Title:
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THE DOCUMENTATION AGENT:
SUNTRUST BANK, ATLANTA, as
Documentation Agent
By: /s/
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Title:
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[Signature Page to Third Amendment to Amended and Restated Credit Agreement
dated as of October 15, 1998 with Xxxx Industries, Inc.]
THE LENDERS:
NATIONSBANK, N.A., as a Lender and Swing
Line Lender
By: /s/
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Title:
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SUNTRUST BANK, ATLANTA
By: /s/
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Title:
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WACHOVIA BANK, N.A.
By: /s/
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Title:
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FIRST UNION NATIONAL BANK
By: /s/
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Title:
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THE FIRST NATIONAL BANK OF CHICAGO
By: /s/
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Title:
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[Signature Page to Third Amendment to Amended and Restated Credit Agreement
dated as of October 15, 1998 with Xxxx Industries, Inc.]
THE FUJI BANK, LIMITED, ATLANTA AGENCY
By: /s/
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Title:
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SOUTHTRUST BANK, N.A.
By: /s/
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Title:
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THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/
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Title:
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BANQUE NATIONALE DE PARIS, HOUSTON AGENCY
By: /s/
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Title:
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THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By: /s/
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Title:
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[Signature Page to Third Amendment to Amended and Restated Credit Agreement
dated as of October 15, 1998 with Xxxx Industries, Inc.]
THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA
AGENCY
By: /s/
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Title:
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EXHIBIT J
FORM OF COMPLIANCE CERTIFICATE
For the quarter ending _________, _____
NationsBank, N.A., as Administrative Agent
Independence Center
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxxx, Agency Services
Each of the Lenders a party to
the Credit Agreement (defined below)
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of March 16, 1998 (as amended, modified, restated or supplemented from
time to time, the "Credit Agreement"; capitalized terms used herein, and not
otherwise defined herein, shall have their respective defined meanings as set
forth in the Credit Agreement) among Xxxx Industries, Inc. (the "Borrower"), the
Lenders named therein, NationsBank, N.A., as Issuing Bank and Administrative
Agent (the "Administrative Agent") and Suntrust Bank, Atlanta, as Documentation
Agent.
Pursuant to Section 9.3 of the Credit Agreement, the undersigned hereby
certifies to the Administrative Agent, the Issuing Bank and the Lenders as
follows:
(1) The undersigned is the [Treasurer/Chief Financial
Officer/independent public accountant] of the Borrower.
(2) The undersigned has examined the books and records of the
Borrower and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.
(3) The Borrower is in compliance with Articles 9 and 10 of the
Credit Agreement and no Default or Event of Default has occurred and is
continuing [for Compliance Certificate delivered by Treasurer or Chief Financial
Officer only].
The undersigned hereby further certifies to the Administrative Agent,
the Issuing Bank and the Lenders that the following financial information of the
Borrower is true and correct as of the date hereof:
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I. EBIT to Interest Ratio (ss.10.1(a))1
A. Consolidated EBIT for Four-Quarter Period:
Consolidated Net Income $
plus, to the extent deducted in -----------------
determining Consolidated Net Income:
Consolidated Interest Expense $
-----------------
Income Taxes $
-----------------
Consolidated EBIT: $
=================
B. Consolidated Interest Expense for
Four-Quarter Period: $
-----------------
C. EBIT to Interest Ratio (A divided by B): :1:00 minimum ratio required: 2.25 to 1.00
---------
II. Minimum Net Worth (ss.10.1(b))
A. $510,000,000
B. Cumulative Positive Consolidated Net Income
since January 3, 1998: $
-----------------
C. 50% of Item B $
-----------------
D. Aggregate net proceeds from equity
issuances after January 3, 1998: $
-----------------
E. Aggregate consideration paid for equity
repurchases, etc. after January 3, 1998: $ (2)
-----------------
F. Sum of Item A plus C plus D minus E: $
-----------------
G. Consolidated Net Worth $
=================
H. Test - Item G must be greater than
Item F: yes no
----- ----
--------------------------
(1) Section references contained herein are references to the section of the
Credit Agreement requesting the respective financial data.
(2) Up to maximum amount of $150,000,000.
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III. Consolidated Funded Debt to EBITDA (ss.10.1(c))
A. Consolidated Funded Debt Outstanding: $
---------
B. Consolidated EBITDA for Four-Quarter Period:
Consolidated Net Income $
plus, to the extent deducted in ---------
determining Consolidated Net Income
Consolidated Interest Expense, plus $
---------
Income Taxes, plus $
---------
Depreciation, plus $
---------
Amortization $
---------
Consolidated EBITDA: $
=========
C. Consolidated Funded Debt to EBITDA Ratio (A _____:1:00 maximum ratio
divided by B): permitted:
4.00 to 1.00
IV. Indebtedness (ss.10.2)
A. Capital Lease Debt/Purchase Money Debt
Outstanding: $
--------- maximum
allowed:
$50,000,000
B. Consolidated Funded Debt incurred after
Effective Date plus Indebtedness related to $
Nylon Polymer (ss.10.2(f)(iii)): --------- maximum
allowed:
[20% of
Total Assets]
C. Sold Receivables Indebtedness: $
--------- maximum
allowed:
$325,000,000
V. Year-end Certificate only - Operating Leases
(ss.10.9)
Aggregate amount of all rents paid under
operating leases during fiscal year: $
--------- maximum
allowed:
$100,000,000
VI. Year-end Certificate only - Investments
(ss.10.3(vii))
Aggregate amount of all non-acquisition
related investments during fiscal year: $
--------- maximum
allowed:
$50,000,000
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Based on the Consolidated Funded Debt to EBITDA Ratio described above
in item III.C. above, the undersigned hereby confirms that the facility fee
percentage payable pursuant to Section 5.14 of the Credit Agreement for the
quarterly period described herein is _____% and the Applicable Margin for LIBOR
Loans for such period is ______%.
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Consolidated Funded Facility Fee Applicable Margin
Debt/EBITDA Ratio Percentage for LIBOR Loans
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Greater than 3.50 to 1.00 .25% 0.75%
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Less than or equal to 3.50 to 1.00
but greater than 3.00 to 1.00 .20% 0.55%
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Less than or equal to 3.00 to 1.00
but greater than 2.50 to 1.00 .175% 0.45%
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Less than or equal to 2.50 to 1.00
but greater than 2.00 to 1.00 .15% 0.35%
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Less than or equal to 2.00 to 1.00 .10% 0.22%
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IN WITNESS WHEREOF, the undersigned has executed this certificate as of
the day of __________, ____.
By:
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Title:
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