E-6
Exhibit 10.12
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT (this "Agreement") dated as of December 29, 1997 by
and among The X.X. Xxx Company (the "Borrower"), BankBoston, N.A. (successor by
merger to Bank of Boston Connecticut) ("BankBoston") and Rhode Island Hospital
Trust National Bank ("RIHT" and, collectively with BankBoston, the "Banks"),
with respect to a certain Revolving Credit and Deferred Payment Sales Agreement
dated as of October 8, 1996 by and among the Borrower and the Banks (the "Credit
Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Credit Agreement, the Banks provided
certain financing to the Borrower; and
WHEREAS, the Borrower has requested that the Banks amend certain provisions
of the Credit Agreement; and
WHEREAS, the Banks are willing to amend certain terms and conditions of the
Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ss.1. Definitions. Capitalized terms used herein without definition
that are defined in the Credit Agreement shall have the same meanings herein as
therein.
ss.2. Ratification of Existing Agreements. All of the Borrower's
obligations and liabilities to the Banks as evidenced by or otherwise arising
under the Credit Agreement, the Note, the Letters of Credit and the other Loan
Documents, are, by the Borrower's execution of this Amendment, ratified and
confirmed in all respects. In addition, by the Borrower's execution of this
Amendment, the Borrower represents and warrants that no counterclaim, right of
set-off or defense of any kind exists or is outstanding with respect to such
obligations and liabilities.
ss.3. Representations and Warranties. All of the representations and
warranties made by the Borrower in the Credit Agreement, the Note, the Letters
of Credit and the other Loan Documents are true and correct on the date hereof
as if made on and as of the date hereof, except to the extent of changes
permitted by the Credit Agreement, the Note, the Letters of Credit, the other
Loan Documents or this Agreement or specifically consented to in writing by the
Banks, and except to the extent that any of such representations and warranties
relate by their terms to a prior date.
ss.4. Amendment to the Credit Agreement.
4.1. Amendment to ss.1.1. Section 1.1 of the Credit Agreement is hereby
amended as follows: (i) the definition of "Availability Amount" is hereby
amended in its entirety to read as follows:
"Availability Amount. The lesser of (a) the amount by which
the Commitment exceeds the sum of (i) the aggregate outstanding balance
of all Revolving Loans, plus (ii) the Deferred Payment Sale Amount,
plus (iii) the Fair Market Value of Consigned Precious Metal plus (iv)
the Maximum Drawing Amount, plus (v) the aggregate amount of all Unpaid
Reimbursement Obligations plus (vi) the Fair Market Value of all
Segregated Precious Metal and (b) after giving effect to any proposed
Deferred Payment Sale with respect to any type of Precious Metal, 90%
of the aggregate number of ounces of such type of Precious Metal that
are (i) owned by the Borrower and (ii) not subject to any liens other
than liens in favor of the Banks (e.g. if the Borrower owns 1000 ounces
of silver Precious Metal (exclusive of Segregated Precious Metals and
Consigned Precious Metals) prior to a Deferred Payment Sale of silver,
the Borrower will be limited to a Deferred Payment Sale of 9000 ounces
of silver under this clause (b))."
(ii) the definition of "Borrowing Base" is hereby amended and restated
in its entirety to read as follows:
"Borrowing Base. The sum of (a) 85% of Eligible Receivables in
respect of account debtors located within the United States, plus (b)
70% of the Eligible Receivables in respect of account debtors located
outside of the United States, plus (c) the Applicable Percentage of
each type of Eligible Precious Metal Inventory after subtracting from
the number of ounces of each type of Precious Metals owned by the
Borrower to be included in Eligible Precious Metal Inventory hereunder
(1) the Fair Market Value of 110% of the number of ounces of that type
of Precious Metal that is the subject of a Deferred Payment Sale, (2)
the Fair Market Value of 110% of the number of ounces of that type of
Consigned Precious Metals and (3) the Fair Market Value of 110% of the
number of ounces of that type of Segregated Precious Metals."
(iii) the definition of "Consolidated Financial Obligations" is hereby
amended and restated in its entirety to read as follows:
"Consolidated Financial Obligations. With respect to any
period, an amount equal to the sum of all payments on Indebtedness that
become due and payable or that are to become due and payable during
such period pursuant to any agreement or instrument to which the
Borrower or any of its Subsidiaries is a party relating to the
borrowing of money or the obtaining of credit or in respect of
Capitalized Leases (including, without limitation, Deferred Payment
Sale Interest). Demand obligations shall be deemed to be due and
payable during any fiscal year during which such obligations are
outstanding."
(iv) the definition of "Deferred Payment Sale Interest" is hereby
amended and restated in its entirety to read as follows:
"Deferred Payment Sale Interest. Interest on the principal balance of
Deferred Payment Sale Amount calculated in accordance with the method
and/or amount set forth on the Confirmation Order for the applicable
sale (which will be the Consignment Rate plus the Applicable Margin)."
(v) the definition of "Eligible Receivables" is hereby amended by
deleting the phrase "(iv) as to which the account debtor is located outside the
United States (except as otherwise agreed in writing in its discretion by BKB
with respect to specific foreign account debtors)" and inserting the phrase
"(iv) as to which the account debtor is located outside the United States
(except (x) if such account debtor is located within any other country which is
a member of the Organization for Economic Cooperation and Development and has
been an account debtor of the Borrower in good standing for at least six
consecutive months and (y) as otherwise agreed in writing in its discretion by
BKB with respect to specific foreign account debtors)" in its place.
(vi) the definition of "EBITDA" is hereby amended and restated in
its entirety to read as follows:
"EBITDA. The sum of (a) Consolidated Net Income (or Net Loss)
for any period, plus (b) any income taxes (as calculated in accordance
with the Tax Sharing Agreement) and interest expense of the Borrower
and its Subsidiaries for such period, plus (c) depreciation and
amortization of the Borrower and its Subsidiaries for such period, all
as determined in conformity with generally accepted accounting
principles."
(vii) the definition of "Generally Accepted Accounting Principles or
generally accepted accounting principles" is hereby amended by adding the
following sentence at the end thereof: "Notwithstanding anything to the contrary
in the foregoing, the Borrower shall base its accounting and financial
calculations (including without limitation those pursuant to ss.9) on the
"first-in, first-out" or "FIFO" method. Financial statements may be prepared
using the "last-in first-out" or "LIFO" method, but shall for purposes of the
Banks be adjusted to the "first-in first-out" or "FIFO" method."
(viii) the definition of "Obligations" is hereby amended by adding the
phrase ", Purchase and Consignment" immediately after the word "Loans" appearing
in the eighth line thereof.
(ix) the definition of "Revolving Loan Maturity Date" is hereby amended
and restated in its entirety to read as follows:
"Revolving Loan Maturity Date. December 29, 2002."
(x) the following new definitions are hereby inserted into Section 1.1
in their appropriate alphabetical order:
"Applicable Margin. With respect to any LIBOR Rate Loan,
Purchase and Consignment or Deferred Payment Sale, at any time, the
Applicable Margin shall be the interest rate margin determined by BKB
(in the case of LIBOR Rate Loans) or RIHT (in the case of a Purchase
and Consignment or Deferred Payment Sale) based upon the OCF/TDS Ratio
for the immediately preceding fiscal quarter end, effective as of the
fifth Business Day after the financial statements referred to in ss.7.4
hereof have been received or, if earlier, are required to be furnished
by the Borrower to the Banks for such fiscal quarter, expressed as a
per annum rate of interest as follows:
---------------------------------- ---------------------- -------------------- ------------------
OCF/TDS Ratio Deferred Payment Consigned Rate LIBOR Rate
Sale Applicable Applicable Margin Applicable Margin
Margin
---------------------------------- ---------------------- -------------------- ------------------
-------------------- ------------- ---------------------- ------------------- -------------------
Greater Than But Less
Or Equal To Than
-------------------- ------------- ---------------------- ------------------- -------------------
-------------------- ------------- ---------------------- ------------------- -------------------
-------------------- ------------- ---------------------- ------------------- -------------------
-------------------- ------------- ---------------------- ------------------- -------------------
1.50:1 - 1.75% 1.75% 1.75%
-------------------- ------------- ---------------------- ------------------- -------------------
-------------------- ------------- ---------------------- ------------------- -------------------
1.25:1 1.50:1 2.00% 2.00% 2.00%
-------------------- ------------- ---------------------- ------------------- -------------------
provided, however, that, in the event that the Borrower fails to timely
provide the financial statements referred to above in accordance with
the terms hereof, and without prejudice to any additional rights
under Section 12 hereof, no downward adjustment of the Applicable
Margin shall occur until the second Business Day afte the actual
delivery of such statements."
"Consigned Precious Metal. Precious Metal (a) located at Permitted
Inventory Locations, (b) subject to a Purchase and Consignment and consigned by
RIHT to the Borrower pursuant to the terms of this Credit Agreement and (c) for
which RIHT has not received payment or which has not been Redelivered to RIHT."
"Consigned Precious Metal Report. A Consigned Precious Metal Report
signed by the principal financial or accounting officer of the Borrower and in
substantially the form of Exhibit C hereto."
"Consignment Advance Rate Percentage. Ninety percent (90%)."
"Consignment Commitment. With respect to RIHT, RIHT's commitment to make
Purchases and Consignments of Precious Metal in an aggregate amount up to the
Consignment Limit, as the same may be reduced from time to time; or, if such
commitment is terminated pursuant to the provisions hereof, zero."
"Consignment Drawdown Date. The date on which any Purchase and Consignment
is made or is to be made."
"Consignment Fees. Consignment fees on Consigned Precious Metal at the
rates set forth in ss.4A.2."
"Consignment Limit. The amount by which the Commitment exceeds the sum
of (i) the aggregate outstanding balance of all Revolving Loans, plus (ii) the
Deferred Payment Sale Amount, plus (iii) the Fair Market Value of Segregated
Precious Metals plus (iv) the Maximum Drawing Amount, plus (v) the aggregate
amount of all Unpaid Reimbursement Obligations."
"Consignment Purchase Price. See ss.4A.1."
"Consignment Rate. A rate determined by RIHT in its discretion by
reference to its cost of leasing metals."
"Management Agreement. That certain Financial, Investment Banking and
Professional Services Agreement dated as of December 1, 1997 between the
Borrower and Xxxxxxxx Group, Inc."
"OCF/TDS Ratio. See ss.9.1."
"Permitted Indebtedness. Indebtedness permitted pursuant to ss.8.1."
"Purchases and Consignments. Purchases and consignments of the Borrower's
Precious Metal made or to be made by RIHT pursuant to ss.4A.1(a)."
"Purchase and Consignment Request. See ss.4A.3."
"Redeliver(ed) or Redelivery. The delivery by the Borrower to RIHT's
Head Office, at the Borrower's sole risk and expense, of Precious Metal in
bullion form of a type and quality which is acceptable to RIHT."
"Segregated Precious Metal. See ss.4B.1."
"Segregated Storage Limit. The amount by which the Commitment exceeds
the sum of (i) the aggregate outstanding balance of all Revolving Loans, plus
(ii) the Deferred Payment Sale Amount, plus (iii) the Fair Market Value of
Consigned Precious Metal plus (iv) the Maximum Drawing Amount, plus (v) the
aggregate amount of all Unpaid Reimbursement Obligations."
"Segregated Storage. The storage of RIHT's Precious Metal in a vault
located at Borrower's principal office, such Precious Metal located therein to
be in the form as originally delivered by RIHT to customer and to be physically
segregated from the Borrower's other Precious Metal in such vault, if any, by
means of a physical barrier acceptable to RIHT."
"Spot Value. At any time, with respect to the calculation of the Dollar
value of Precious Metal, (a) in all cases in which the Borrower is purchasing
Precious Metal or in which the value of Consigned Precious Metal or Segregated
Precious Metal is being calculated (for purposes of determining the Consignment
Limit or Segregated Storage Limit, as the case may be), RIHT's "ask" spot
quotation for Precious Metal at such times times the number of ounces of such
Precious Metal and (b) in all cases in which RIHT is purchasing Precious Metal,
RIHT's "bid" spot quotation for Precious Metal at such time times the number of
ounces of such Precious Metal."
"Subordinate Indebtedness. The Indebtedness of the Borrower to the
Subordinate Lender pursuant to the Subordinate Loan Documents."
"Subordinate Lender. BankBoston, N.A., as lender pursuant to the
Subordinate Loan Documents, but excluding BankBoston, N.A.'s successors and
assigns thereunder."
"Subordinate Loan Documents. That certain Securities Purchase Agreement
dated as of December 29, 1997 between the Borrower and the Subordinate Lender,
and all other documents and agreements entered into and/or delivered in
connection therewith."
"Warrant. Those certain warrants each dated as of December 29, 1997 between
the Borrower and Subordinate Lender, in respect of the purchase of up to an
aggregate of 40,000 shares of the common stock of the Borrower, as amended and
in effect from time to time, together with any replacement warrants."
4.2. Amendment to ss.2.1. Section 2.1 of the Credit Agreement
is hereby amended by adding the phrase ", the Fair Market Value of Consigned
Precious Metals, the Fair Market Value of Segregated Precious Metals"
immediately after the word "Obligations" appearing in the eighth line thereof.
4.3. Amendment to ss.2.2. Section 2.2 of the Credit Agreement
is hereby amended by adding the phrase ", the Fair Market Value of Consigned
Precious Metals, the Fair Market Value of Segregated Precious Metals"
immediately after the word "Obligations" appearing in the sixth line thereof.
4.4. Amendment to ss.2.5(b). Section 2.5(b) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
each Interest Period with respect thereto at the LIBOR Rate determined
for such Interest Period plus the Applicable Margin from time to time
in effect."
4.5. Amendment to Credit Agreement by Addition of New Sections
4A and 4B. The Credit Agreement is hereby amended by adding the new Sections 4A
and 4B thereto that are set forth on Exhibit A attached hereto.
4.6. Amendment to ss.5.1(a). The last sentence of Section
5.1(a) of the Credit Agreement is hereby amended in its entirety to read as
follows:
"The Deferred Payment Sale Amount and all amounts due
and payable in connection with Consigned Precious Metals and
Segregated Precious Metals that are owed to RIHT, including,
without limitation, all Deferred Payment Sale Interest, all
Consignment Fees, all Purchase Prices, Precious Metals Fees
and Brokerage Fees, shall be repaid by the Borrower to RIHT in
the applicable Precious Metal or in immediately available
Dollars and in accordance with the terms hereof or the
requirements of the applicable Confirmation Order."
4.7. Amendment to ss.5.2. Section 5.2 of the Credit Agreement
is hereby amended by (a) adding the phrase ", Consignment Fees" immediately
after the word "Loans" appearing in the second line thereof and (b) adding the
phrase "and the aggregate amount of Consigned Precious Metals and Segregated
Precious Metals" immediately after the word "Amount" appearing in the tenth line
thereof.
4.8. Amendment toss.5.5. Section 5.5 of the Credit Agreement
is hereby amended in its entirety to read as follows:
"ss.5.5. Additional Costs, Etc. If any present or
future applicable law, which expression, as used herein,
includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with
the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time
to time hereafter made upon or otherwise issued to any Bank by
any central bank or other fiscal, monetary or other
governmental authority (whether or not having the force of
law), shall:
(a) subject any Bank to any tax, levy, impost, duty
charge, fee, deduction or withholding of any nature with
respect to this Agreement, the other Loan Documents, the
Commitment or the Consignment Commitment or the Revolving
Loans, Letters of Credit, Consigned Precious Metals,
Segregated Precious Metals or Deferred Payment Sales (other
than taxes based upon or measured by the income or profits of
such Bank), or
(b) materially change the basis of taxation (except
for change in taxes on income or profits) of payments to any
Bank of the principal of or the interest on any Revolving
Loan, Letters of Credit, the aggregate amount of Consignment
Precious Metals or Segregated Precious Metals, Deferred
Payment Sale Amount, or any other amounts payable to any Bank
under this Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other
than to the extent specifically provided for elsewhere in this
Agreement) any special deposit, reserve, assessment,
liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of
any Bank, or
(d) impose on any Bank any other conditions or
requirements with respect to this Agreement, the other Loan
Documents, the Commitment, the Consignment Commitment, the
Revolving Loans, the Letters of Credit, Consigned Precious
Metals, Segregated Precious Metals the Deferred Payment Sales,
or any class of loans or commitments of which any of the
Revolving Loans, the Letters of Credit, Consigned Precious
Metals, Segregated Precious Metals or Deferred Payment Sales
forms a part, and the result of any of the foregoing is:
(i) to increase the cost to any Bank of
making, funding, issuing, renewing, extending or
maintaining any of the Revolving Loans, Letters of
Credit, Consigned Precious Metals, Segregated
Precious Metals, Deferred Payment Sales, the
Consignment Commitment or the Commitment, or
(ii) to reduce the amount of principal,
interest or other amount payable to such Bank
hereunder on account of the Commitment or the
Consignment Commitment or any of the Revolving Loans,
Letters of Credit, the Consigned Precious Metals,
Segregated Precious Metals or Deferred Payment Sales,
or
(iii) to require such Bank to make any
payment or to forego any interest or other sum
payable hereunder the amount of which payment or
foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable
or deemed received by such Bank from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank at
any time and from time to time and as often as the occasion therefor may arise,
pay to such Bank such additional amounts as will be sufficient to compensate
such Bank for such additional cost, reduction, payment or foregone interest or
other sum."
4.9. Amendment to ss.5.6. Section 5.6 of the Credit Agreement
is amended by (a) adding the phrase "or the Consignment Commitment immediately
after the word "Commitment" appearing in the seventh line thereof, (b) adding
the phrase ", the Consigned Precious Metals, the Segregated Precious Metals"
immediately after the word "Credit" appearing in the eighth line thereof and (c)
adding the phrase ",Consignment Rate" immediately after the word "Rate"
appearing in the tenth line thereof.
4.10. Amendment to ss.5.9. Section 5.9(a) of the Credit
Agreement is hereby amended by adding the phrase ", the aggregate amount of any
Consigned Precious Metals or Segregated Precious Metals" immediately after the
word "Loan" appearing in the second line thereof. Section 5.9(b) of the Credit
Agreement is hereby amended by adding the phrase " the Fair Market Value of
Consigned Precious Metals, the Fair Market Value of Segregated Precious Metals"
immediately after the word "Obligations," appearing in the third line thereof.
4.11. Amendment to ss.5.10. Section 5.10 of the Credit
Agreement is hereby amended by adding the phrase "all amounts due and payable in
connection with Consigned Precious Metals and Segregated Precious Metals"
immediately after the word "Obligations" appearing in the fourth line thereof.
4.12. Amendment to ss.6.4. Section 6.4 of the Credit Agreement
is hereby amended by deleting the phrase "ending February 29, 1996" appearing
therein and inserting the phrase "ended February 28, 1997, and the quarterly
financial statements for the fiscal quarter ending August 31, 1997" in its
place.
4.13. Amendment toss.7. The preamble to Section 7 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"ss.7. Affirmative Covenants of the Borrowers. The Borrower
covenants and agrees that, so long as any Revolving Loan or Letter of
Credit, the Deferred Payment Sale Amount, any amount of Consigned
Precious Metals or Segregated Precious Metals or other Obligation is
outstanding hereunder or under any Loan Document or any Bank has any
obligation to make an Revolving Loan, Deferred Payment Sale or Purchase
and Consignment or issue any Letter of Credit."
4.14. Amendment to ss.7.3. Section 7.3 of the Credit Agreement
is hereby amended by inserting the following sentence at the end thereof: "The
Borrower shall base its accounting and financial calculations (including without
limitation those pursuant to ss.9) on the "first-in, first-out" or "FIFO"
method."
4.15. Amendment to ss.7.4(e). Section 7.4(e) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"(e) on (i) the fourth day of each calendar week, a Borrowing
Base report in respect of Eligible Precious Metal Inventory, and (ii)
the fourth day of each calendar month, a Borrowing Base report in
respect of Eligible Receivables, in each case certified by the chief
financial officer, controller or president of the Borrower, and in form
reasonably acceptable to BKB;"
4.16. Amendment to ss.7.4(g). Section 7.4(g) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"(g) (i) until the effectiveness of an IPO, promptly upon the
mailing or filing thereof, copies of all financial statements, reports
and proxy statements mailed to the public shareholders of Xxxxxxxx
Group, Inc. or any controlling stockholder of the Borrower, and copies
of all registration statements and Forms 10-K, 10-Q and 8-K filed with
the Securities and Exchange Commission (or any successor thereto) or
any national securities exchange by Xxxxxxxx Group, Inc. or any
controlling stockholder of Xxxxxxxx Group, Inc.; and (ii) after the
effectiveness of an initial public offering of the stock of the
Borrower, promptly upon the mailing or filing thereof, copies of all
financial statements, reports and proxy statements mailed to the public
shareholders of the Borrower, and copies of all registration statements
and Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission (or any successor thereto) or any national securities
exchange by the Borrower or any controlling stockholder of the
Borrower."
4.17. Amendment toss. 7.4(h). Section 7.4(h) of the Credit
Agreement is amended in its entirety to read as follows:
"(h) as soon as available and in any event not later than 6:00
p.m. on the fourth Business Day of each calendar week, (i) a summary
(certified by the chief financial officer, controller or president of
the Borrower and substantially in form reasonably acceptable to BKB) of
the long and short positions of the Borrower (including, without
limitation, their respective open, forward, and options and future
contracts) for Precious Metal and the Precious Metal Inventory of the
Borrower as at the close of business on the previous Friday (or if such
Friday was not a Business Day, then as at the close of business on the
next prior Business Day), and promptly thereafter, a written advice
with respect to the foregoing, together with such reasonable detail as
to permit the Banks to ascertain the basis of such calculations and
summaries, (ii) a schedule (certified by the chief financial officer,
controller or president of the Borrower) setting forth the calculations
necessary to show the Borrower's compliance with the terms of Section
8.10 hereof; and (iii) a Consigned Precious Metal Report setting forth
(A) the aggregate amount of Consigned Precious Metals, Segregated
Precious Metals and the Borrower's other Precious Metal as of the end
of such date, and (B) a calculation of the Consignment Advance Rate
Percentage multiplied by the Fair Market Value of the sum of (1)
Borrower's Precious Metal (exclusive of Segregated Precious Metal and
Precious Metal that is the subject of a Deferred Payment Sale) plus (2)
Consigned Precious Metal as of such date."
4.18. Amendment toss.8. The preamble to Section 8 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"ss.8. Certain Negative Covenants of the Borrower. The
Borrower covenants and agrees that, so long as any Revolving Loan,
Letter of Credit, any amount of Consigned Precious Metals or Segregated
Precious Metals, the Deferred Payment Sale Amount or other amount due
and payable under any of the Loan Documents is outstanding or any Bank
has any obligation to make any Revolving Loan or Deferred Payment Sale
or Purchase and Consignment or issue any Letter of Credit:"
4.19. Amendment to ss.8.1. Section 8.1 of the Credit Agreement
is hereby amended by (i) deleting the reference to "$800,000" appearing in
clause (j) thereof and inserting a reference to "$1,000,000" in its place, and
(ii) adding the following new clauses (k), (l) and (m) at the end of Section
8.1:
(k) Subordinate Indebtedness to the Subordinate Lender
underwritten by Equitable Securities Corp.;
(l) Subordinate Indebtedness to Xxxxxxxx Group, Inc. that
satisfies each of the following conditions: (a) the obligation to repay
such Indebtedness is evidenced by a written agreement between the
Borrower (or its Subsidiary, as applicable) and Xxxxxxxx Group, Inc.,
and (b) the Borrower (or its Subsidiary, as applicable) and Xxxxxxxx
Group, Inc. shall have entered into a Subordination Agreement in form
and substance satisfactory to the Banks in respect of such
Indebtedness; and
(m) Indebtedness in an aggregate amount not to exceed
$3,000,000 that: (i) is incurred or assumed solely in connection with
an acquisition permitted pursuant to ss.8.4(a)(iv), and (ii) consists
of either (x) the Borrower's obligation to pay to the seller of the
assets or stock so acquired all or a portion of the purchase price for
the assets or stock so acquired, or (y) the Borrower's assumption of
indebtedness that (1) existed prior to such acquisition (and was not
created in contemplation of such acquisition) in connection with the
assets or stock so acquired, and (2) is payable to a third party
lender."
4.20. Amendment to ss.8.2. Section 8.2 of the Credit Agreement
is hereby amended by (i) deleting the word "and" at the end of clause (vii)
thereof, (ii) deleting the punctuation "." at the end of clause (viii) thereof
and inserting the phrase "; and" in its place, and (iii) adding the following
new clauses (ix) and (x) immediately following clause (viii) thereof:
"(ix) second priority liens created by the Subordinate
Loan Documents to secure the Subordinate Indebtedness; and
(x) liens which (a) secure Indebtedness permitted pursuant to
ss.8.1(m) and (b) encumber the assets and/or stock acquired by the
Borrower pursuant to the provisions of ss.8.4(a)(iv)."
4.21. Amendment to ss.8.3. Section 8.3 of the Credit Agreement
is hereby amended by (i) deleting the words "of United States banks having total
assets in excess of $1,000,000,000" appearing in clause (b) thereof and
inserting the words "(x) of United States banks having total assets in excess of
$1,000,000,000 or (y) which deposits, certificates and acceptances are fully
insured by the Federal Deposit Insurance Corporation" in their place, and (ii)
deleting the reference to "$1,000,000,000" appearing in clause (h) thereof and
inserting a reference to "$250,000,000" in its place.
4.22. Amendment to ss.8.4(a). Section 8.4(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"(a) The Borrower will not, and will not permit any
of its Subsidiaries to, become a party to any merger or consolidation,
or agree to or effect any asset acquisition or stock acquisition other
than (i) the sale of inventory and leasing of equipment in the ordinary
course of business; (ii) the merger or consolidation of one or more of
the Subsidiaries of the Borrower with and into the Borrower, (iii) the
merger or consolidation of two or more Subsidiaries of the Borrower,
provided, that, if a merger or consolidation occurs between a
Subsidiary which is partially owned by the Borrower and a Subsidiary
which is wholly owned by the Borrower, the wholly owned subsidiary
shall be the surviving entity, and (iv) so long as no Default or Event
of Default shall have occurred, the acquisition by the Borrower of the
assets or stock of another Person, provided that such acquisition meets
each of the following criteria: (v) the aggregate purchase price to be
paid by the Borrower in respect of such acquisition (when aggregated
with the aggregate purchase price paid by the Borrower in respect of
all other acquisitions effected pursuant to this Section 8.4(a)(iv))
does not exceed $5,000,000, (w) the assets acquired (or, in the case of
a stock acquisition, the assets and business of the Person acquired)
are of a type, quality and character consistent with the Borrower's
existing business plan and strategy, and do not cause a material change
in the nature of the business in which the Borrower is engaged, all as
determined by BKB, (x) as of the date of such acquisition, the Borrower
shall have granted to the Banks a first priority perfected lien on and
security interest in (except for Permitted Liens) all of the assets and
stock acquired by the Borrower and all of the assets and stock directly
or indirectly held by any Person acquired by the Borrower, (y) all
corporate, partnership, governmental and other proceedings and
approvals in connection with such acquisition, and all transaction
documents incidental to such acquisition, shall be in form and
substance reasonably satisfactory to the Banks, and (z) the Borrower
shall have provided the Banks with evidence that, after giving effect
to the proposed acquisition, the Borrower shall continue to satisfy the
financial covenants set forth in ss.9 on a pro forma basis."
4.23. Amendment to ss.8.4(b). Section 8.4(b) of the Credit
Agreement is hereby amended by adding the following new sentence at the end
thereof:
"Notwithstanding the foregoing, and subject to the following
proviso, the Borrower may dividend and transfer to Xxxxxxxx Group, Inc.
(or, in the case of the assets described in the following clause (y),
transfer to Ney Ultrasonics Inc.) each of the following: (x) the stock
of Ney Ultrasonics Inc. and (y) after delivery to the Banks of a pro
forma asset statement approved by the Banks, the personal property used
primarily by Ney Ultrasonics Inc. in its Ultrasonics business with an
aggregate value not to exceed the value shown on such asset statement
and approved by the Banks; provided, that (i) the aggregate unpaid
principal and interest in respect of all loans made by the Borrower to
Ney Ultrasonics Inc. does not exceed $750,000 as of the applicable date
of such dividend, (ii) after giving effect to such dividend, the
Borrower shall retain all rights to repayment of such loans theretofore
made by the Borrower to Ney Ultrasonics Inc., and (iii) Xxxxxxxx Group,
Inc. shall agree in writing that the net proceeds of the sale of Ney
Ultrasonics Inc. shall be applied first to pay off such loans made by
the Borrower to Ney Ultrasonics Inc. prior to any other application of
such net sale proceeds."
4.24. Amendment to ss.8.8. Section 8.8 of the Credit Agreement
is hereby amended by adding the following new sentence at the end thereof:
"Notwithstanding anything to the contrary in this ss.8.8, the
Borrower may (i) make payments to Xxxxxxxx Group, Inc. pursuant to the
Tax Sharing Agreement, as provided in ss.8.9, (ii) enter into the
Management Agreement with Xxxxxxxx Group, Inc. as provided in
ss.ss.8.1(l) and 8.14, and (iii) issue a note in an aggregate principal
amount of up to $4,000,000 to Xxxxxxxx Group, Inc. as provided in
ss.ss.8.1(l) and 8.14, provided that the Borrower shall in no event
fail to comply with ss.ss.8.1(l), 8.9 and 8.14."
4.25. Amendment toss.8.9. Section 8.9 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"ss.8.9 Dividends and Distributions. Except for (i) accrued
and unpaid dividends in the amount of $1,413,163 declared as of
December 1, 1997 and (ii) any additional distributions as may be
declared based on the Borrower's net income through November 30, 1997
in accordance with ss.8.9 of this Agreement as in effect prior the
effectiveness of the Amendment Agreement dated as of December 29, 1997
among the Banks and the Borrower, the Borrower shall not make any
dividend or distribution to or for the benefit of its shareholders;
provided, that as long as (a) no Default or Event of Default has
occurred, and (b) after giving
effect to such dividend or distribution, the Borrower will be
in compliance with all of its covenants in ss.9 herein, the Borrower
may make payments to Xxxxxxxx Group, Inc. in any fiscal year of the
Borrower ending on or after February 28, 1997 in an aggregate amount
equal to required payments under the Tax Sharing Agreement; and
provided further that (i) the Borrower may repurchase its securities in
accordance with the Subordinate Loan Documents, (ii) the Borrower may
pay dividends to the holders of its common stock pro rata solely in
shares of common stock, and (iii) the Borrower may dividend the stock
and assets of Ney Ultrasonics Inc. to Xxxxxxxx Group, Inc. in
accordance with ss.8.4(b)."
4.26. Addition of ss.8.13. The following new Section 8.13 is
hereby inserted in the Credit Agreement immediately following Section 8.12:
"ss.8.13 Amendments to Subordinate Indebtedness. The Borrower
will not amend, modify or waive in any material respect any term or condition of
any Subordinate Loan Document without the prior written consent of the Banks."
4.27. Addition of ss.8.14. The following new Section 8.14 is
hereby inserted in the Credit Agreement immediately following Section 8.13:
"ss.8.14. Payments to Xxxxxxxx Group. The Borrower will not
(and will not permit any of its Subsidiaries to) repay any Indebtedness
held by, pay any management fees due to, or make any other payments
(other than distributions permitted hereunder) (the "Subordinated
Payments") to Xxxxxxxx Group, Inc.; provided, that the Borrower may
(and shall) make Subordinated Payments in respect of such subordinated
management fees and interest accrued on such subordinated Indebtedness
as earned or accrued quarterly in arrears so long as: (a) the
obligation to pay such Subordinated Payments shall be evidenced by a
written agreement between the Borrower (or such Subsidiary, as
applicable) and Xxxxxxxx Group, Inc., (b) the Borrower or such
Subsidiary and Xxxxxxxx Group, Inc. shall have entered into a
Subordination Agreement in form and substance satisfactory to the Banks
with respect to the payment of any Subordinated Payments (a
"Subordination Agreement"), (c) both before and after giving effect to
such payment, no Default or Event of Default shall have occurred and be
continuing under the Loan Documents, (d) both before and after giving
effect to such payment, the Borrower's Consolidated Net Income for the
fiscal quarter ending immediately preceding such date of payment is not
less than $1.00 (as evidenced by a certificate delivered by the
Borrower to the Banks prior to making such payment), (e) both before
and after giving effect to such payment, the difference between (x) the
Borrower's Consolidated Net Income for the fiscal quarter ending
immediately preceding such date of payment minus (y) the amount of such
payment, is not less than $1.00 (as evidenced by a certificate
delivered by the Borrower to the Banks prior to making such payment),
and (f) the aggregate amount of all Subordinated Payments made to
Xxxxxxxx Group, Inc. during any fiscal year of the Borrower does not
exceed the sum of (x) required payments under the Tax Sharing Agreement
for such fiscal year plus (y) fifty percent (50%) of the Borrower's net
income for the immediately preceding fiscal year of the Borrower."
4.28. Amendment toss.9. The preamble to Section 9 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"ss.9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The
Borrower covenants and agrees that, so long as any Revolving Loan or
Letter of Credit, or the Deferred Payment Sale Amount, any amount of
Consigned Precious Metals or Segregated Precious Metals or other amount
due and payable under any of the Loan Documents, is outstanding or any
Bank has any obligation to make any Revolving Loan, Purchase and
Consignment or Deferred Payment Sale or issue any Letter of Credit."
4.29. Amendment toss.9.1. Section 9.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"ss.9.1 Ratio of EBITDA to Debt Payments. As of the last day
of the four fiscal quarters of the Borrower most recently ended, the
Borrower shall not permit the ratio (the "OCF/TDS Ratio") of (a) EBITDA
of the Borrower for such period of four fiscal quarters plus, to the
extent deducted in determining EBITDA, any accrued Subordinated
Payments payable by the Borrower to Xxxxxxxx Group, Inc. for such
period and which are permitted pursuant to ss.ss.8.1(l) and 8.14, less
(i) Capital Expenditures (other than Capital Expenditures of the
Borrower during the fiscal year ending February 28, 1999 in an
aggregate amount of up to $1,000,000) that were not financed for their
express purpose by BKB and (ii) taxes paid by the Borrower for such
period of four fiscal quarters, to (b) Consolidated Financial
Obligations (excluding the amounts of any accrued Subordinated Payments
payable by the Borrower to Xxxxxxxx Group, Inc. for such period and
which are permitted pursuant to ss.ss.8.1(l) and 8.14) during the such
period of four fiscal quarters, to be less than 1.25 to 1."
4.30. Amendment toss.9.2. Section 9.2 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"ss.9.2 Ratio of Liabilities to Tangible Net Worth. At all
times set forth in the chart below, the Borrower shall not permit the
ratio of (a) Consolidated Total Liabilities of the Borrower (excluding
accrued subordinated Permitted Indebtedness payable by the Borrower to
Xxxxxxxx Group, Inc. which is permitted pursuant to ss.ss.8.1(l) and
8.14), to (b) the sum of the Borrower's Consolidated Tangible Net Worth
plus accrued subordinated Permitted Indebtedness payable by the
Borrower to Xxxxxxxx Group, Inc. which is permitted pursuant to
ss.ss.8.1(l) and 8.14, to exceed the applicable ratio set forth in the
table below:
--------------------------------------------------------- ----------------------
Period Ratio
--------------------------------------------------------- ----------------------
--------------------------------------------------------- ----------------------
December 29, 1997 2.50 to 1
through November 30, 1998
--------------------------------------------------------- ----------------------
--------------------------------------------------------- ----------------------
December 1, 1998 through 2.25 to 1
November 30, 1999
--------------------------------------------------------- ----------------------
--------------------------------------------------------- ----------------------
December 1, 1999 through 2.00 to 1
maturity
--------------------------------------------------------- ----------------------
4.31. Amendment toss.9.3. Section 9.3 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"ss.9.3 Minimum Net Worth. The Borrower shall not at any time
permit (a) the sum of (i) the Borrower's Consolidated Tangible Net
Worth plus (ii) subordinated Permitted Indebtedness due and owing to
Xxxxxxxx Group, Inc., to be less than (b) the sum (x) of $9,500,000
plus (y) 50% of the Borrower's positive Consolidated Net Income for
each fiscal year ending on or after February 28, 1998."
4.32. Amendment toss.9.5. Section 9.5 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"ss.9.5 Consecutive Net Losses. The Borrower shall not permit
Consolidated Net Income plus, to the extent deducted in determining
Consolidated Net Income, any accrued Subordinated Payments payable by
the Borrower to Xxxxxxxx Group, Inc. for such period and which are
permitted pursuant to ss.ss.8.1(l) and 8.14, to be less than $0.00 in
any two consecutive fiscal quarters of the Borrower."
4.33. Amendment toss.9.6. Section 9.6 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"ss.9.6 Capital Expenditures. The Borrower shall not make or
commit to Capital Expenditures in excess of $2,750,000 during any
fiscal year of the Borrower ending on or after February 28, 1997,
unless the Banks agree in writing to finance Capital Expenditures in
excess of $2,750,000 during the applicable fiscal year on terms
acceptable to the Banks and the Borrower."
4.34. Amendment toss.11. The preamble to Section 11 of the
Credit Agreement s hereby amended in its entirety to read as follows:
"ss.11. Conditions to All Borrowings. The obligations of the
Banks to make any Revolving Loan, Purchases and Consignments or
Deferred Payment Sales or issue any Letter of Credit, whether on or
after the Closing Date, shall also be subject to the satisfaction of
the following conditions precedent:
4.35. Amendments to ss.12.1(a), (k) and (n).
(i) Sections 12.1(a), (k) and (o) of the Credit Agreement are hereby
amended in their entirety to read as follows:
"(a) the Borrower shall fail to pay when due any principal of
any Revolving Loan, any Reimbursement Obligation or any Deferred
Payment Sale Amount or pay for or Redeliver Consigned Precious Metal or
Segregated Precious Metal when the same shall become due and payable;"
"(k) any uninsured loss, theft or destruction of or damage to
any Consigned Precious Metal or Segregated Precious Metal or any
Precious Metal that is the subject of a Deferred Payment Sale or to any
products or property which includes Precious Metal that is Consigned
Precious Metal or Segregated Precious Metal or the subject of a
Deferred Payment Sale or to any other Collateral;"
"(o) Xxxxxxxx Group, Inc., shall, at any time prior to an IPO
of the Borrower, legally or beneficially own less than a majority of
the issued and outstanding voting stock of the Borrower (other than
pursuant to Subordinate Lender's exercise of the Warrant); or"
(ii) Section 12.1 of the Credit Agreement is hereby amended by adding
the following new clause (p) immediately following clause (o) thereof:
"(p) the Borrower or any of its Subsidiaries shall fail to pay
or perform when due, or within any applicable period of grace, any
payment or other obligation under any of the Subordinate Loan
Documents."
(iii) The last paragraph of Section 12.1 of the Credit Agreement
is amended in its entirety to read as follows:
"then, and in any such event, (1) the Borrower shall purchase
all Consigned Precious Metal and Segregated Precious Metal in
accordance with the provisions of ss.4A.4 and ss.4B hereof (as
applicable) and (2) the Banks may, by notice in writing to the Borrower
declare all amounts owing with respect to this Credit Agreement, the
Notes and the other Loan Documents to be, and they shall thereupon
forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby
expressly waived by the Borrower; provided that in the event of any
Event of Default specified in ss.ss.12.1(g) or 12.1(h), all such
amounts shall become immediately due and payable automatically and
without any requirement of notice from any Bank. For the purposes of
this ss.12, RIHT shall have the right in its discretion to calculate
the Deferred Payment Sale Amounts and the applicable repurchase price
for all Consigned Precious Metals and Segregated Precious Metals based
upon RIHT's spot prices for the applicable Precious Metals as of the
date that the Event of Default is declared to have occurred or as of
such date that RIHT determines to be appropriate under the
circumstances."
4.36. Amendment to ss.12.2. Section 12.2 of the Credit
Agreement is hereby amended by adding the phrase ", Purchases and Consignments,
the outstanding amount of Segregated Precious Metals" immediately after the word
"Loans" appearing in the fourth and tenth lines thereof.
4.37. Amendment to ss.12.3. Section 12.3 of the Credit
Agreement is hereby amended by adding the phrase ", Purchases and Consignments"
immediately after the word (a) "Credit" appearing in the third line thereof and
(b) "Loans" appearing in the fifth line thereof.
4.38. Amendment to ss.15. Section 15 of the Credit Agreement
is hereby amended by adding the phrase ", Purchases and Consignments, Segregated
Precious Metals" immediately after the word "Loans" appearing in the eighth line
thereof.
4.39. Amendment to ss.16. Section 16 of the Credit Agreement
is hereby amended by adding the phrase ", Purchases and Consignments, Segregated
Precious Metal delivery" immediately after the word "Loans" appearing in the
seventh and eleventh lines thereof.
4.40. Amendment to ss.17.1. Section 17.1 of the Credit
Agreement is hereby amended by adding the phrase "Consignment Commitment or"
immediately after the word "of" appearing on the fourth line thereof.
4.41. Amendment to Schedule 6.7. Schedule 6.7 to the Credit
Agreement is hereby amended and restated in its entirety to read as set forth on
Schedule 6.7 annexed hereto.
ss.5. Conditions Precedent. The effectiveness of the amendments
contemplated herein shall be subject to the satisfaction of each of the
following conditions precedent:
5.1. All of the representations and warranties made by
Borrower and the Guarantor herein, whether directly or incorporated by
reference, shall be true and correct on the date hereof, except as provided in
ss.3 hereof;
5.2. Agent shall have received evidence satisfactory to Agent
that no Default or Event of Default shall have occurred and be continuing; and
5.3. Borrower shall have paid all fees, expenses and other
costs incurred by Agent and the Banks in connection with this Amendment
(including, without limitation, all attorney's and other professionals' fees and
expenses).
ss.6. Miscellaneous Provisions.
6.1. Except as otherwise expressly provided by this Agreement,
all of the respective terms, conditions and provisions of the Credit
Agreement, the Note and the other Loan Documents shall remain the same.
It is declared and agreed by each of the parties hereto that the Credit
Agreement, the Note and the other Loan Documents, each as amended
hereby, shall continue in full force and effect, and that this
Agreement and the Credit Agreement, the Note and the other Loan
Documents, as applicable, shall be read and construed as one
instrument.
6.2. This Agreement is intended to take effect under, and
shall be construed according to and governed by, the laws of the State
of Connecticut.
6.3. This Agreement may be executed in any number of
counterparts, but all such counterparts shall together constitute but
one instrument. In making proof of this Agreement it shall not be
necessary to produce or account for more than one counterpart signed by
each party hereto by and against which enforcement hereof is sought.
6.4. After the sale or other distribution of the Borrower's
Ultrasonics business (including any dividend of all the shares of Ney
Ultrasonics Inc. to Xxxxxxxx Group, Inc.), the Banks shall, promptly
after the Borrower's request and at the Borrower's expense, release the
Guaranty and the liens in favor of the Banks on the assets of Ney
Ultrasonics Inc.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed in its name and behalf by its duly authorized officer
as of the date first written above.
THE X.X. XXX COMPANY
By: /s/ Xxxxxx X. X'Xxxx
------------------------
Its Chief Financial Officer
BANKBOSTON, N.A.
By:/s/ Xxxxx Xxxxxxxx
---------------------
Its Sr. Vice President
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
By:/s/ Xxx Zi
-------------
Its Sr. Vice President
