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EXHIBIT 10.63
AMENDMENT AND WAIVER
AMENDMENT AND WAIVER, dated as of June 30, 1999 (this
"Amendment"), to the Credit Agreement, dated as of January 12, 1999 (as modified
hereby and as further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among DENALI INCORPORATED., a Delaware
corporation (the "Borrower"), the several lenders from time to time parties
thereto (the "Lenders"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as
administrative agent (in such capacity, the "Administrative Agent") for the
Lenders, and ING (U.S.) CAPITAL LLC, as documentation agent (the "Documentation
Agent").
RECITALS
On March 18, 1999 the Borrower signed a letter of intent to
acquire (the "Xxxxx Acquisition") Xxxxx N.V. ("Xxxxx"). The Borrower has
requested the Administrative Agent and the Lenders to amend certain provisions
of the Credit Agreement as set forth in this Amendment to permit, among other
things, the acquisition of Xxxxx, and to agree to waive certain provisions of
the Credit Agreement to provide for the consummation of the Acquisition.
Additionally, the Borrower has requested the Administrative Agent and the
Lenders to amend certain provisions of the Credit Agreement as set forth in this
Amendment to permit, among other things, swing line credit facilities from both
Bank of Oklahoma N.A. and Southwest Bank of Texas, N.A. The Administrative
Agent, the Documentation Agent and the Lenders parties hereto are willing to
agree to such waivers and amendments, but only on the terms and subject to the
conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower, the Administrative Agent, the Documentation Agent
and the Lenders hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
2. Amendments. The Credit Agreement is hereby amended as follows:
(a) Section 1.1 is hereby amended by adding the following new
definitions:
"'Adjusted Domestic EBITDA': for any period during
which the Borrower or any Domestic Subsidiary has consummated
(or proposes to consummate) a Permitted Acquisition, the
Consolidated Domestic EBITDA of the Borrower for such period
plus, for each such Permitted Acquisition, the Consolidated
EBITDA of the Acquired Business for such period in respect of
such Permitted Acquisition, calculated on a pro forma basis
without duplication,
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as if such Permitted Acquisition had occurred on the first day
of such period (and for purposes of this definition, Adjusted
Domestic EBITDA shall in any event exclude the amount of any
non-cash income recognized during any period for which
Adjusted Domestic EBITDA is determined) plus hard cash savings
in connection with the Permitted Acquisition identified by the
Borrower and acceptable to the Required Lenders.
'Amendment and Waiver': the Amendment and Waiver,
dated as of June 30, 1999, among the Borrower, the
Administrative Agent, the Documentation Agent and the Lenders
parties thereto.
'Amendment Effective Date': the date on which all
conditions precedent to the effectiveness of the Amendment and
Waiver have been satisfied.
'Bank of Oklahoma': Bank of Oklahoma N.A., a national
banking association.
'Bank of Oklahoma Swing Facility': that certain Loan
Agreement, dated as of June __, 1999, between Bank of Oklahoma
and Specialty Solutions, Inc., providing for unsecured swing
notes in the maximum aggregate principal amount of
$1,000,000.00.
'Consolidated Domestic EBITDA': for any period, the
sum for such period of (a) Consolidated Domestic Net Income
for such period, (b) the sum of provisions for such period for
income taxes, interest expense, and depreciation and
amortization expense used in determining such Consolidated
Domestic Net Income, (c) amounts deducted in such period in
respect of non-cash expenses in accordance with GAAP, (d) the
amount of any aggregate net loss (or minus the amount of any
gain) during such period arising from the sale, exchange or
other disposition of capital assets and (e) non-cash expenses
deducted in such period in connection with any earn-out
agreements, stock appreciation rights, "phantom" stock plans,
employment agreements, non-competition agreements,
subscription and stockholders agreements and other incentive
and bonus plans and similar arrangements made in connection
with acquisitions of Persons or businesses by the Borrower or
its Domestic Subsidiaries or the retention of executives,
officers or employees by the Borrower or its Domestic
Subsidiaries, including (but without duplication) any Person
that has become a Domestic Subsidiary during such period, on a
pro forma basis as if such acquisition had occurred on the
first day of such period; provided, that Consolidated Domestic
EBITDA shall in any event exclude, from and after the Closing
Date, (x) the effect of any write-up of any assets acquired in
any Permitted Acquisitions and (y) the amount of any non-cash
income recognized during any period for which Consolidated
Domestic EBITDA is determined.
'Consolidated Domestic Fixed Charges': for any
period, the sum of (i) the amounts deducted for the cash
portion of Consolidated Domestic Interest
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Expense in determining Consolidated Domestic Net Income for
such period, (ii) the amount of scheduled payments of
principal of Indebtedness during such period and (iii) the
amount of cash income taxes paid during such period.
'Consolidated Domestic Funded Debt': for any period
of twelve consecutive calendar months, the sum of (a)
Consolidated Senior Indebtedness for such period and (b) all
Indebtedness of the Borrower and its Domestic Subsidiaries of
the type set forth in clauses (a), (b), (c), (d) and (e) of
Indebtedness (excluding the Permanent Subordinated Debt) as of
the last day of such period, determined on a consolidated
basis in accordance with GAAP, including, in any event any
purchase money Indebtedness.
'Consolidated Domestic Interest Expense': for any
period, the amount which, in conformity with GAAP, would be
set forth opposite the caption "interest expense" or any like
caption (including without limitation, imputed interest
included in payments under Financing Leases) on a consolidated
income statement of the Borrower and the Domestic Subsidiaries
for such period excluding the amortization of any original
issue discount.
'Consolidated Domestic Net Income': for any period,
the consolidated net income (or deficit) of the Borrower and
the Domestic Subsidiaries for such period (taken as a
cumulative whole), determined in accordance with GAAP;
provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a
Domestic Subsidiary or is merged into or consolidated with the
Borrower or any Domestic Subsidiary, (b) the income (or
deficit) of any Person (other than a Domestic Subsidiary) in
which the Borrower or any Domestic Subsidiary has an ownership
interest, except to the extent that any such income has been
actually received by the Borrower or such Domestic Subsidiary
in the form of dividends or similar distributions, (c) the
undistributed earnings of any Domestic Subsidiary to the
extent that the declaration or payment of dividends or similar
distributions by such Domestic Subsidiary is not at the time
permitted by the terms of any Contractual Obligation,
Governing Document or Requirement of Law applicable to such
Domestic Subsidiary, (d) any restoration to income of any
contingency reserve, except to the extent that provision for
such reserve was made out of income accrued during such
period, (e) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or
other disposition of capital assets (such term to include all
fixed assets, whether tangible or intangible, all inventory
sold in conjunction with the disposition of fixed assets and
all securities), (f) any write-up of any asset, (g) any net
gain from the collection of the proceeds of life insurance
policies, (h) any gain arising from the acquisition of any
securities, or the extinguishment, under GAAP, of any
Indebtedness, of the Borrower or any Domestic Subsidiary, (i)
in the case of a successor to the Borrower by consolidation or
merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or
transfer of assets,
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and (j) any deferred credit representing the excess of equity
in any Domestic Subsidiary at the date of acquisition over the
cost of the investment in such Domestic Subsidiary.
'Domestic Subsidiary': any Subsidiary of the Borrower
that is not a Foreign Subsidiary.
'Domestic Leverage Ratio': at any time, the ratio of
Consolidated Domestic Funded Debt to Consolidated Domestic
EBITDA for the immediately preceding period of four
consecutive fiscal quarters; provided that, in calculating the
Domestic Leverage Ratio for any period during which a
Permitted Acquisition was consummated, Adjusted Domestic
EBITDA shall be substituted for Consolidated Domestic EBITDA.
'Dutch Credit Facility': collectively, (a) the
Short-Term Loan Agreement among Xxxxx, the Foreign
Subsidiaries and ABN AMRO Bank N.V., (b) the Credit Agreement
among Xxxxx, the Foreign Subsidiaries and ABN AMRO Bank N.V.
providing for overdraft, rollover and contingent liability
facilities up to $40,000,000 Guilders in the aggregate, (c)
the Roll-Over Loan Agreement between Denali Xxxxx Europe N.V.
or Denali International Holdings B.V., as the case may be, ABN
AMRO Bank N.V. and ING Bank N.V. providing for an acquisition
facility of up to 15,000,000 Guilders, and (d) the Roll-Over
Loan Agreement between Xxxxx N.V. c.s., ABN AMRO Bank N.V. and
ING Bank N.V. providing for a working capital loan of up to
15,000,000 Guilders.
'Foreign Subsidiary': any Subsidiary of the Borrower
which is organized under the laws of a jurisdiction, or is
located, outside the United States of America.
'Permanent Equity Financing': $4,500,000 of common
equity securities issued by the Borrower, having terms and
otherwise in form and substance satisfactory to the
Administrative Agent, the proceeds of which will be used to
finance a portion of the purchase price of the Xxxxx
Acquisition and fees and expenses incurred in connection
therewith.
'Permanent Subordinated Debt': $15,000,000 aggregate
principal amount of subordinated debt securities, issued by
the Borrower, subordinated to the Obligations on terms
satisfactory to, and otherwise in form and substance
satisfactory to, the Administrative Agent, the proceeds of
which will be used to finance a portion of the purchase price
of the Xxxxx Acquisition and fees and expenses incurred in
connection therewith.
'Permanent Xxxxx Acquisition Financing':
collectively, the Permanent Subordinated Debt and the
Permanent Equity Financing.
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'Senior Domestic Leverage Ratio': at any time, the
ratio of Consolidated Senior Indebtedness to Consolidated
Domestic EBITDA for the immediately preceding period of four
consecutive fiscal quarters (or such other period as provided
herein); provided, that in calculating the Domestic Leverage
Ratio for any period during which a Permitted Acquisition was
consummated, Adjusted Domestic EBITDA shall be substituted for
Consolidated Domestic EBITDA.
'Southwest Bank of Texas': Southwest Bank of Texas,
N.A., a national banking association.
'Southwest Bank of Texas Swing Facility': that
certain Loan Agreement, dated June 1, 1998, between Southwest
Bank of Texas and the Borrower, providing for unsecured swing
notes in the maximum aggregate principal amount of
$1,000,000.00, as amended.
'Xxxxx': Xxxxx, N.V., a Netherlands corporation.
'Xxxxx Acquisition': the acquisition by the Borrower
or one of its Subsidiaries of 100% of the issued and
outstanding Capital Stock of Xxxxx pursuant to the Xxxxx
Acquisition Documents."
'Xxxxx Acquisition Closing Date': in respect of the
Xxxxx Acquisition, the date on which all of the conditions
described in Section 8.2 shall have been satisfied (or waived
by the Administrative Agent and the Required Lenders in
writing) for the Xxxxx Acquisition to be financed thereby.
'Xxxxx Acquisition Documents': collectively (a) the
Letter of Intent between the Borrower and Xxxxx, (b) the Dutch
Offer Document to the Xxxxx shareholders, and (c) any
documents related thereto."
(b) Section 1.1 is hereby amended by inserting the phrase "(except that
in calculating Consolidated EBITDA, any such restrictions on dividends contained
in the Dutch Credit Facility shall be disregarded)" immediately following the
word "Subsidiary" in the twelfth line of the definition of "Consolidated Net
Income".
(c) Section 1.1 is hereby amended by inserting the phrase "(excluding
any Foreign Subsidiary which is acquired using exclusively proceeds other than
financing under this Agreement and any Foreign Subsidiary which is prohibited
from becoming a Guarantor by applicable law)" immediately after the word
"Subsidiary" in the definition of "Guarantor".
(d) Section 1.1 is hereby amended by deleting the definition of
"Permitted Acquisition and substituting in lieu thereof the following new
definition:
"Permitted Acquisition:" an acquisition of (a) 100%
of the common stock or other ownership interests of a Person
(by means of stock purchase or merger) or (b) the assets of a
Person, or of a
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business unit, division or subdivision of a Person, in each
case primarily engaged in or relating to a line of business
substantially similar to the line of business engaged in by
the Borrower or any Subsidiary on the Closing Date or any
natural and logical extension thereof; provided, that, with
respect to acquisitions consummated after the Closing Date,
(i) the Domestic Leverage Ratio, as of the last day of the
calendar month in which the Acquisition Closing Date occurs,
for the twelve consecutive months immediately preceding such
date (calculated on a pro forma basis, taking into account the
acquisition of the Acquired Business, as if such Permitted
Acquisition had been consummated on the first day of such
twelve month period) is not greater than 4.00 to 1.00 for such
period, (ii) the Senior Domestic Leverage Ratio, as of the
last day of the calendar month preceding the calendar month in
which the Acquisition Closing Date occurs, for the twelve
consecutive months immediately preceding such date (calculated
on a pro-forma basis, taking into account the acquisition of
the Acquired Business, as if such Permitted Acquisition had
been consummated as of the first day of such twelve month
period) is not greater than 3.50 to 1.00 for such period,
(iii) the Senior Leverage Ratio, as of the last day of the
calendar month preceding the calendar month in which the
Acquisition Closing Date occurs, for the twelve consecutive
months immediately preceding such date (calculated on a
pro-forma basis, taking into account the acquisition of the
Acquired Business, as if such Permitted Acquisition had been
consummated as of the first day of such twelve month period)
is not greater than 3.50 to 1.00 for such period, (iv) the
Leverage Ratio, as of the last day of the calendar month
preceding the calendar month in which the Acquisition Closing
Date occurs, for the twelve consecutive months immediately
preceding such date (calculated on a pro-forma basis as if
such Permitted Acquisition had been consummated as of the
first day of such twelve month period) is not greater than
4.25 to 1.00 for such period, if such Acquisition Closing Date
occurs on or prior to December 31, 1999, and 4.00 to 1.00 for
such period, if such Acquisition Closing Date occurs
thereafter, (v) each applicable Loan Party shall have granted
a security interest in favor of the Administrative Agent to
assets acquired in accordance with Section 9.10, (vi) if the
Acquisition Consideration for such acquisition is $7,500,000
or greater, such acquisition shall require the consent and
approval of (A) Lenders having a Credit Exposure Percentage of
51% or more in the aggregate and (B) at least three Lenders
(if there are three or more Lenders holding Commitments at
such time) and (vi) if the Acquisition Consideration for such
acquisition is $12,500,000 or
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greater, such acquisition shall require the consent and
approval of (A) the Required Lenders and (B) at least three
Lenders (if there are three or more Lenders holding
Commitments at such time). For the purposes of this Agreement,
acquisitions described in clauses (a) and (b) above which have
been consummated prior to the Closing Date shall be deemed
Permitted Acquisitions (and therefore an Acquired Business for
purposes of calculation of Adjusted EBITDA and otherwise).
(e) Section 1.1 is hereby amended by deleting the word "and" at the end
of subsection (p) of the definition of "Permitted Encumbrances", changing the
lettering of the last subsection from "(f)" to "(q)", deleting the reference to
"Section 10.2(c)" and substituting in lieu thereof "Section (e) of the
definition of 'Permitted Indebtedness", replacing the period at the end of
subsection "(q)" with a semicolon and adding the following new subsections:
"(r) Lien on, and security interest in, all right,
title and interest of the assets acquired in the Xxxxx
Acquisition and in the stock or other ownership interest of
the Subsidiaries of Xxxxx, in favor of ING Bank N.V. or ABN
AMRO Bank N.V., as applicable, to secure the obligations under
Dutch Credit Facility;
(s) Lien on, and security interest in, all right,
title and interest of the assets acquired in any Foreign
Subsidiary in a Permitted Acquisition, and in the stock or
other ownership interest of the Subsidiaries of such Foreign
Subsidiary, in favor of ING Bank N.V. or ABN AMRO Bank N.V.,
as applicable, to secure the obligations under Dutch Credit
Facility; and
(t) Pledge in favor of the holders of the Permanent
Subordinated Debt of the Capital Stock of Denali Xxxxx Europe
N.V. or Denali International Holdings B.V."
(f) Section 1.1 is hereby amended by deleting the word "and" at the end
of subsection (f) of the definition of "Permitted Indebtedness", replacing the
period at the end of subsection (g) with a semicolon and adding the following
subsections:
"(h) indebtedness under the Dutch Credit Facility;
(i) indebtedness under the Permanent Subordinated
Debt;
(j) indebtedness under the Bank of Oklahoma Swing
Facility; and
(k) indebtedness under the Southwest Bank of Texas
Swing Facility."
(g) Section 6.5(c) is hereby amended by inserting at the end of clause
(i) thereof the following phrase:
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", but excluding the securities issued pursuant to
the Permanent Xxxxx Acquisition Financing so long as the
proceeds of any such securities under the Permanent Xxxxx
Acquisition Financing are applied as contemplated by the terms
of this Agreement,"
(h) Section 7.16(c) is hereby amended by deleting such Subsection in
its entirety and substituting in lieu thereof the following new Subsection:
"(c) Neither the Borrower nor any Subsidiary owns any
property, or has any interest in any property, that is not
subject to a fully perfected first priority Lien on, or
security interest in, such property in favor of the
Administrative Agent, other than the assets purchased in
connection with the Xxxxx Acquisition or any other acquisition
of a Foreign Subsidiary funded exclusively from sources other
than financing under this Agreement, or any property having an
aggregate fair market value at any one time not exceeding
$100,000."
(i) Section 9.2(c) of the Credit Agreement is hereby amended by
deleting the word "thirty" from the first line thereof and substituting in lieu
thereof the word "forty-five".
(j) Section 9.10(a) of the Credit Agreement is hereby amended by (i)
inserting in the second line thereof immediately following the phrase "or any
Subsidiary" the phrase "(other than Xxxxx, any Subsidiary of Xxxxx or any other
Foreign Subsidiary which is acquired using exclusively proceeds other than
financing under this Agreement)", and (ii) deleting the phrase "Section 10.3(g)"
and substituting in lieu thereof the phrase "Section 10.3".
(k) Section 9.10(b) of the Credit Agreement is hereby amended by
inserting in the second line thereof immediately following the phrase "such
Subsidiary" the phrase "(other than Xxxxx, any Subsidiary of Xxxxx, any other
Foreign Subsidiary which is acquired using exclusively proceeds other than
financing under this Agreement or any Foreign Subsidiary which is prohibited
from becoming a Guarantor by applicable law)".
(l) Section 10.1 of the Credit Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof the following new
Section:
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"10.1 Financial Condition Covenants.
(a) Maximum Leverage Ratio. Permit the Leverage Ratio of the
Borrower and its Subsidiaries as of the last day of any fiscal quarter
of the Borrower ending on any test date set forth on the table below to
be greater than the ratio set forth opposite such test date below:
Test Date Ratio
--------- -----
3/31/99 4.00
6/30/99 4.25
9/30/99 4.25
12/31/99 4.25
3/31/00 4.00
6/30/00 4.00
9/30/00 3.75
12/31/00 3.75
3/31/01 3.75
6/30/01 3.75
9/30/01 3.50
12/31/01 3.50
3/31/02 3.50
6/30/02 3.50
9/30/02 3.25
12/31/02 3.25
3/31/03 3.25
6/30/03 3.25
9/30/03 3.00
12/31/03 3.00
3/31/04 3.00
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(b) Maximum Senior Leverage Ratio. Permit the Senior Leverage
Ratio of the Borrower and its Subsidiaries as of the last day of any
fiscal quarter of the Borrower ending on any test date set forth on the
table below to be greater than the ratio set forth opposite such test
date below:
Test Date Ratio
--------- -----
3/31/99 3.50
6/30/99 3.50
9/30/99 3.50
12/31/99 3.50
3/31/00 3.50
6/30/00 3.50
9/30/00 3.25
12/31/00 3.25
3/31/01 3.00
6/30/01 3.00
9/30/01 2.75
12/31/01 2.75
3/31/02 2.50
6/30/02 2.50
9/30/02 2.25
12/31/02 2.25
3/31/03 2.25
6/30/03 2.25
9/30/03 2.25
12/31/03 2.25
3/31/04 2.25
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(c) Minimum Interest Coverage. Permit the ratio of
Consolidated EBITDA (or Adjusted EBITDA, in the case of any period
during which the Borrower or any Subsidiary has consummated a Permitted
Acquisition) to Consolidated Interest Expense for any period of four
consecutive fiscal quarters (or if less than four fiscal quarters have
occurred after the Closing Date, such full fiscal quarters as have been
elapsed since the Closing Date) of the Borrower ending on any test date
set forth on the table below to be less than the ratio set forth
opposite such test date below:
Test Date Ratio
--------- -----
3/31/99 3.00
6/30/99 3.00
9/30/99 3.00
12/31/99 3.00
3/31/00 3.00
6/30/00 3.00
9/30/00 3.25
12/31/00 3.25
3/31/01 3.25
6/30/01 3.25
9/30/01 3.50
12/31/01 3.50
3/31/02 3.50
6/30/02 3.50
9/30/02 3.50
12/31/02 3.50
3/31/03 3.50
6/30/03 3.50
9/30/03 3.50
12/31/03 3.50
3/31/04 3.50
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(d) Minimum Fixed Charge Coverage. Permit the ratio of
Consolidated EBITDA (or Adjusted EBITDA, in the case of any period
during which the Borrower or any Subsidiary has consummated a Permitted
Acquisition) less consolidated capital expenditures of the Borrower and
its Subsidiaries to Consolidated Fixed Charges for any period of four
consecutive fiscal quarters (or if less than four fiscal quarters have
occurred after the Closing Date, such full fiscal quarters as have been
elapsed since the Closing Date) of the Borrower ending on any test date
set forth on the table below to be less than the ratio set forth
opposite such test date below:
Test Date Ratio
--------- -----
3/31/99 1.15
6/30/99 1.15
9/30/99 1.15
12/31/99 1.15
3/31/00 1.15
6/30/00 1.15
9/30/00 1.15
12/31/00 1.15
3/31/01 1.15
6/30/01 1.15
9/30/01 1.25
12/31/01 1.25
3/31/02 1.25
6/30/02 1.25
9/30/02 1.25
12/31/02 1.25
3/31/03 1.25
6/30/03 1.25
9/30/03 1.25
12/31/03 1.25
3/31/04 1.25
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(e) Maximum Domestic Leverage Ratio. Permit the Domestic
Leverage Ratio of the Borrower and its Domestic Subsidiaries as of the
last day of any fiscal quarter of the Borrower ending on any test date
set forth on the table below to be greater than the ratio set forth
opposite such test date below:
Test Date Ratio
--------- -----
3/31/99 4.00
6/30/99 4.00
9/30/99 4.00
12/31/99 4.00
3/31/00 4.00
6/30/00 4.00
9/30/00 3.75
12/31/00 3.75
3/31/01 3.50
6/30/01 3.50
9/30/01 3.25
12/31/01 3.25
3/31/02 3.00
6/30/02 3.00
9/30/02 2.75
12/31/02 2.75
3/31/03 2.75
6/30/03 2.75
9/30/03 2.75
12/31/03 2.75
3/31/04 2.75
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(f) Maximum Senior Domestic Leverage Ratio. Permit the Senior
Domestic Leverage Ratio of the Borrower and its Domestic Subsidiaries
as of the last day of any fiscal quarter of the Borrower ending on any
test date set forth on the table below to be greater than the ratio set
forth opposite such test date below:
Test Date Ratio
--------- -----
3/31/99 3.50
6/30/99 3.50
9/30/99 3.50
12/31/99 3.50
3/31/00 3.50
6/30/00 3.50
9/30/00 3.25
12/31/00 3.25
3/31/01 3.00
6/30/01 3.00
9/30/01 2.75
12/31/01 2.75
3/31/02 2.50
6/30/02 2.50
9/30/02 2.25
12/31/02 2.25
3/31/03 2.25
6/30/03 2.25
9/30/03 2.25
12/31/03 2.25
3/31/04 2.25
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(g) Minimum Domestic Interest Coverage. Permit the ratio of
Consolidated Domestic EBITDA (or Adjusted Domestic EBITDA, in the case
of any period during which the Borrower or any Domestic Subsidiary has
consummated a Permitted Acquisition) to Consolidated Domestic Interest
Expense for any period of four consecutive fiscal quarters (or if less
than four fiscal quarters have occurred after the Closing Date, such
full fiscal quarters as have been elapsed since the Closing Date) of
the Borrower ending on any test date set forth on the table below to be
less than the ratio set forth opposite such test date below:
Test Date Ratio
--------- -----
3/31/99 3.00
6/30/99 3.00
9/30/99 3.00
12/31/99 3.00
3/31/00 3.00
6/30/00 3.00
9/30/00 3.25
12/31/00 3.25
3/31/01 3.25
6/30/01 3.25
9/30/01 3.50
12/31/01 3.50
3/31/02 3.50
6/30/02 3.50
9/30/02 3.50
12/31/02 3.50
3/31/03 3.50
6/30/03 3.50
9/30/03 3.50
12/31/03 3.50
3/31/04 3.50
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(h) Minimum Domestic Fixed Charge Coverage. Permit the ratio
of Consolidated Domestic EBITDA (or Adjusted Domestic EBITDA, in the
case of any period during which the Borrower or any Domestic Subsidiary
has consummated a Permitted Acquisition) less consolidated capital
expenditures of the Borrower and its Domestic Subsidiaries to
Consolidated Domestic Fixed Charges for any period of four consecutive
fiscal quarters (or if less than four fiscal quarters have occurred
after the Closing Date, such full fiscal quarters as have been elapsed
since the Closing Date) of the Borrower ending on any test date set
forth on the table below to be less than the ratio set forth opposite
such test date below:
Test Date Ratio
--------- -----
3/31/99 1.15
6/30/99 1.15
9/30/99 1.15
12/31/99 1.15
3/31/00 1.15
6/30/00 1.15
9/30/00 1.15
12/31/00 1.15
3/31/01 1.15
6/30/01 1.15
9/30/01 1.25
12/31/01 1.25
3/31/02 1.25
6/30/02 1.25
9/30/02 1.25
12/31/02 1.25
3/31/03 1.25
6/30/03 1.25
9/30/03 1.25
12/31/03 1.25
3/31/04 1.25
(m) Section 10.4 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of subsection (a), replacing the period at the end of
subsection (b) with a semicolon and adding the following new subsections:
"(c) any guaranty executed in connection with the Bank of
Oklahoma Swing Facility;
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(d) any guaranty executed in connection with the Southwest
Bank of Texas Swing Facility; and
(e) any guaranty executed in connection with the Permanent
Subordinated Debt."
(n) Section 10.8 of the Credit Agreement is hereby amended by (i)
inserting the phrase "and excluding any expenditures made in respect of any
Foreign Subsidiary" immediately before the closed parenthetical in the fifth
line thereof; and (ii) inserting the word "Domestic" immediately before the word
"Subsidiaries" in the sixth line thereof.
(o) Section 10.10 of the Credit Agreement is hereby amended by deleting
subsection (a) in its entirety and substituting in lieu thereof a new subsection
(a) as follows:
"(a) Make any optional payment or prepayment on or redemption
or purchase of any Indebtedness (other than (i) the Loans and (ii) the
Dutch Credit Facility),"
(p) Section 10.10 of the Credit Agreement is hereby amended by
inserting the following phrase at the end of subsection (c) and before the
period, ", provided, however that nothing contained in this Agreement shall
prohibit payments made pursuant to the terms of the Bank of Oklahoma Swing
Facility and the Southwest Bank of Texas Swing Facility."
(q) Section 11 of the Credit Agreement is hereby amended by inserting
the phrase "or (iii) any `change of control' or similar event or contingency as
defined in the Permanent Xxxxx Acquisition Facility, shall occur" immediately
before the colon in the tenth line of subsection (k) thereof.
(r) Schedule 1 of the Credit Agreement is hereby amended by deleting
such Schedule in its entirety and substituting in lieu thereof a new Schedule 1
attached hereto.
3. Waivers and Consent. Each of the Administrative Agent, the
Documentation Agent and each of the Lenders hereby waives any Default or Event
of Default based solely on the consummation of the Xxxxx Acquisition and the
requirements of Sections 8.2(c) (iii) and (iv) and Section 8.3(f), of the Credit
Agreement in connection with the Xxxxx Acquisition. Each of the Administrative
Agent, the Documentation Agent and each of the Lenders hereby consents to the
Xxxxx Acquisition and the making of an Acquisition Loan in the aggregate amount
of $11,500,000 in connection therewith.
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4. Effectiveness. This Amendment shall become effective upon the
satisfaction of the following conditions precedent:
(a) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that this Amendment has been duly executed and
delivered by the Borrower, the Required Lenders and each of the Guarantors;
(b) the Administrative Agent shall have received a legal opinion from
counsel to the Borrower in form and substance satisfactory to the Administrative
Agent;
(c) the Administrative Agent shall have been reimbursed for all fees
and expenses required to be paid pursuant to the Credit Agreement or this
Amendment;
(d) the Administrative Agent shall have received the Xxxxx Acquisition
Documents;
(e) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that definitive documentation for the Permanent
Subordinated Debt has been duly executed and delivered by the Borrower and the
purchasers of the notes relating to the Permanent Subordinated Debt and the
Administrative Agent shall have received confirmation that the Permanent
Subordinated Debt shall fund concurrently with the funding by the Lenders of the
Acquisition Loans referenced herein;
(f) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the Dutch Credit Facility documents have been
duly executed and delivered by the Borrower;
(g) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the definitive documents for the Permanent
Equity Financing have been duly executed and delivered by the Borrower and the
equity investors and the Administrative Agent shall have received confirmation
that the Permanent Equity Financing shall fund concurrently with the funding by
the Lenders of the Acquisition Loans referenced herein;
(h) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the conditions precedent contained in Section
8.2 of the Credit Agreement relating to the Xxxxx Acquisition have been
satisfied or waived by the Administrative Agent and the Lenders; and
(i) the Administrative Agent shall have received any other documents
relating hereto that shall be reasonably requested by the Administrative Agent.
5. Effectiveness of Swing Facilities. Prior to the first draw under the
Bank of Oklahoma Swing Facility or the Southwest Bank of Texas Swing Facility,
the following conditions precedent shall be satisfied, the failure of which to
comply with shall result in this Amendment becoming immediately null and void.
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(a) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the definitive documents for the Bank of
Oklahoma Swing Facility have been duly executed and delivered by the Borrower
and Bank of Oklahoma;
(b) the Administrative Agent shall have received evidence satisfactory
to the Administrative Agent that the definitive documents for the Southwest Bank
of Texas Swing Facility have been duly executed and delivered by the Borrower
and the Southwest Bank of Texas;
6. Representations and Warranties. To induce the Administrative Agent, the
Documentation Agent and the Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Administrative Agent, the Documentation
Agent and the Lenders that, after giving effect to the amendments and waivers
provided for herein, the representations and warranties contained in the Credit
Agreement and the other Loan Documents will be true and correct in all material
respects as if made on and as of the date hereof and that no Default or Event of
Default will have occurred and be continuing.
7. No Other Amendments or Waivers. Except as expressly amended or waived
hereby, the Credit Agreement, the Notes and the other Loan Documents shall
remain in full force and effect in accordance with their respective terms,
without any waiver, amendment or modification of any provision thereof.
8. Counterparts. This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
9. Expenses. The Borrower agrees to pay and reimburse the Administrative
Agent for all of the out-of-pocket costs and expenses incurred by the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including, without limitation, the fees and disbursements of
Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the Administrative Agent.
10. Applicable Law. this Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the state of New York.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.
DENALI INCORPORATED.
By: /s/ R. XXXXX XXXXXXX
--------------------------------------
Name: R. Xxxxx Xxxxxxx
Title: CFO/Treasurer
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By: /s/ XXXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: As Agent
ING (U.S.) CAPITAL LLC,
as Documentation Agent and as a Lender
By: /s/ XXXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CIBC INC.,
as a Lender
By: /s/ XXXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: As Agent
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KEY CORPORATE CAPITAL INC.,
as a Lender
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
BANK OF OKLAHOMA N.A.,
as a Lender
By: /S/ XXXXXX X. BEEN
--------------------------------------
Name: Xxxxxx X. Been
Title: Asst. Vice President
SOUTHWEST BANK OF TEXAS, N.A.,
as a Lender
By: /s/ XXXXXX X. XXXXX
--------------------------------------
Name: Xxxxxx X. XxXxx
Title: Sr. Vice President
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The undersigned guarantors hereby consent and agree to the foregoing
Amendment:
CONTAINMENT SOLUTIONS, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
CONTAINMENT SOLUTIONS SERVICES, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
INSTRUMENTATION SOLUTIONS, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
DENALI MANAGEMENT, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
SPECIALTY SOLUTIONS, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
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BELCO MANUFACTURING COMPANY, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
ERSHIGS, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
SEFCO, INC.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
FIBERCAST COMPANY
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
PLASTI-FAB, INC.
By: /S/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
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DENALI HOLDINGS MANAGEMENT L.L.C.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
DENALI OPERATING MANAGEMENT, LTD.
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Assistant Secretary
