EXHIBIT 10-a
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "Amendment") is made as of
this 7th day of March, 1997 (the "Effective Date"), by and among Xxxxxxx-Xxxxxxx
Company, a California corporation (the "Borrower"), the Banks (each a "Bank" and
collectively, the "Banks") named in the Credit Agreement referred to below, ABN
AMRO Bank N.V., as letter of credit issuing bank (in such capacity, the "Issuing
Bank"), and ABN AMRO Bank N.V., as Agent, (in such capacity, the "Agent").
RECITALS
A. The Borrower, the Banks, the Issuing Bank, and the Agent have executed
that certain Credit Agreement dated as of November 30, 1995 (the "Credit
Agreement").
B. The Borrower has requested that the Banks, the Issuing Bank, and the
Agent enter into this Amendment in order to allow the Borrower to take certain
writedowns of inventory while avoiding adverse consequences under the Credit
Agreement.
C. Upon the terms and conditions appearing herein, the Banks and the Agent
have agreed to enter into this Amendment.
AGREEMENT
1. Amendments to Credit Agreement.
1.1 Section 1.01 of the Credit Agreement is hereby amended by amending
the definition of "Consolidated EBITDA" to read in its entirety as follows:
"Consolidated EBITDA" means, for any period, Consolidated Net Income
plus Consolidated Interest Expense plus income tax expense plus
depreciation expense and amortization expense which were deducted in
determining Consolidated Net Income, of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with
GAAP; except that, solely for the purpose of calculating Consolidated
EBITDA for the Borrower's fiscal quarter ending December 31, 1996,
there shall be added back into Consolidated Net Income any non-cash
charges (not to exceed $9,500,000 on a pre-tax basis) relating to
writedowns of inventory taken in such fiscal quarter.
1.2 Section 10.02(d) of the Credit Agreement is amended to read in
full as follows:
During any period of four consecutive fiscal quarters, the Borrower,
on a consolidated basis, shall not incur (a) more than two quarterly
net or operating losses or (b) net or operating losses in excess of
$10,000,000 in the aggregate for any one or two quarters. The
Borrower, on a consolidated basis, shall be profitable for any period
of four consecutive fiscal quarters. In calculating Consolidated Net
Income for the Borrower's fiscal quarter ending December 31, 1996 for
the purpose of determining the Borrower's profitability under the
immediately preceding sentence only, there shall be added back into
Consolidated Net Income any non-cash charges (not to exceed $6,460,000
on a post-tax basis) relating to writedowns of inventory taken in such
fiscal quarter; and
2. Effectiveness of Amendment.
This Amendment will become effective as of the Effective Date, subject to
the satisfaction of the following conditions on or before March 14, 1997.
(a) The Agent shall have received from each of the Borrower, the
Issuing Bank, and the Banks a duly executed original of this Amendment;
(b) No Default or Event of Default shall have occurred and be
continuing on the Effective Date (and the Borrower shall have delivered to the
Agent a certificate to that effect executed by a Responsible Officer of the
Borrower);
(c) The Agent shall have received a duly executed certificate of the
Secretary or Assistant Secretary of the Borrower, dated the Effective Date,
certifying the resolutions of the Board of Directors of the Borrower authorizing
the execution and delivery of this Amendment and the performance of the
Borrower's obligations under the Credit Agreement, as amended hereby;
(d) Each of the representations and warranties set forth in Article
9.01 of the Credit Agreement shall be true and correct as of the Effective Date
(and the Borrower shall have delivered to the Agent a certificate to that effect
executed by a Responsible Officer of the Borrower); and
(e) The Borrower shall have delivered to the Banks, at the Borrower's
expense, an originally executed opinion of the Borrower's General Counsel
concerning this Amendment in form and substance satisfactory to the Agent.
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If acceptable to the Agent, any of the above documents may be delivered to
the Agent by facsimile with the original copy to follow by mail or courier. Upon
the apparent satisfaction of the above conditions, the Agent will notify the
Borrower and the Banks of such fact; provided, however that any failure by the
Agent to provide such notice shall have no effect on the effectiveness of this
Amendment.
3. Reservation of Rights. The Borrower acknowledges and agrees that the
execution and delivery by the Banks of this Amendment shall not be deemed to
create a course of dealing or otherwise obligate the Agent or the Banks to
forbear or to execute similar amendments under the same or similar circumstances
in the future.
4. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Credit Agreement are and shall remain in full force and effect
and are hereby ratified and confirmed by the parties hereto, and all references
to the Credit Agreement shall henceforth refer to the Credit Agreement as
amended by this Amendment.
(b) This Amendment shall be binding and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns. No third
party beneficiaries are intended in connection with the Amendment.
(c) This Amendment shall be governed by and construed in accordance
with the law of the State of California.
(d) This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one in the same agreement. Each of the parties hereto understands
and agrees that this document (and any other document required herein) may be
delivered by any party hereto either in the form of an executed original or an
executed original sent by facsimile transmission to be followed promptly by
mailing of a hard copy original, and that receipt by the Agent of a
facsimile-transmitted document purportedly bearing the signature of a Bank or
the Borrower shall bind such Bank or the Borrower, respectively, with the same
force and effect as the delivery of a hard copy original. Any failure by the
Agent to receive the hard copy executed original of such document shall not
diminish the binding effect of receipt of the facsimile-transmitted executed
original of such document of the party whose hard copy page was not received by
the Agent.
(e) This Amendment, reflects the entire agreement among the Borrower,
the Banks and the Agent with respect to the matter set forth herein and therein
and supersedes any prior agreements, commitments, drafts, communications,
discussions and understandings, oral or written, with respect thereto.
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(f) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions o f this Amendment or the
Credit Agreement, respectively.
(g) The Borrower covenants to pay to or reimburse the Agent, upon
demand, for all costs and expenses reasonably incurred in connection with the
preparation, negotiation, execution and delivery of this Amendment.
(h) All capitalized terms used and not otherwise defined herein shall
have the meanings given to such terms in the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment,
as of the date first above written.
THE BORROWER
XXXXXXX-XXXXXXX COMPANY
By /s/ W. Xxxxx Xxxxxxx
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Title: President and CEO
By /s/ Xxxxx X. Xxxxxxxx
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Title: Vice President and CFO
THE AGENT
ABN AMRO BANK N.V.
By /s/ Xxxxx X. Xxx
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Title: Group Vice President
By /s/ Xxxxxx X. Xxxxxxxxx
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Title: Senior Vice President
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THE BANKS
ABN AMRO BANK N.V., as Bank and Issuing
Bank
By /s/ Xxxxx X. Xxx
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Title: Group Vice President
By /s/ Xxxxxx X. Xxxxxxxxx
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Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.,
successor in interest to Union Bank
By /s/ Xxxx Schluetar
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Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Xxxxxx X. Xxxxxx
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Title: Director
THE FIRST NATIONAL BANK OF MARYLAND
By /s/ Xxxxxx X. Xxxx
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Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Xxxxx X. Xxxxx
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Title: Vice President
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