SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx
Gentlemen:
The undersigned, BADGER PAPER XXXXX, INC., a Wisconsin corporation
("Badger"), and PLAS-TECHS, INC., a Wisconsin corporation ("Plas-Techs")
(collectively, Badger and Plas-Techs are hereinafter sometimes referred to
as "Borrowers"), refers to the Credit Agreement dated as of June 30, 1993,
as amended from time to time (the "Agreement") and currently in effect
between the Borrowers and you (the "Bank"). All capitalized terms used
herein without definition shall have the same meanings as they have in the
Agreement.
The Borrowers hereby apply to the Bank for certain modifications to the
Agreement and the Borrowers' borrowing arrangements with the Bank, and for
the waiver of certain covenants of the Agreement.
1. AMENDMENT.
Upon your acceptance hereof in the space provided for that purpose
below, the Agreement shall be and hereby is amended as follows:
(a) Section 7.6 of the Agreement is hereby amended in its entirety to
read as follows:
Section 7.6. Current Ratio. Badger will, as of the
last day of each fiscal month maintain a Consolidated
Current Ratio of not less than 1.90 to 1.0 for each
fiscal month of Badger ending on or prior to June 30,
1997 and not less than 1.70 to 1.0 for each fiscal
month thereafter.
(b) Section 7.7 of the Agreement is hereby amended in its entirety to
read as follows:
Section 7.7. Consolidated Tangible Net Worth. Badger
will, as of the last day of each fiscal month ending
during each of the periods specified below maintain
Consolidated Tangible Net Worth of not less than:
FROM AND INCLUDING TO AND INCLUDING CONSOLIDATED
TANGIBLE NET WORTH
SHALL NOT BE LESS
THAN
July 1, 1997 December 30, 1997 $17,700,000
December 31, 1997 June 29, 1998 $18,800,000
June 30, 1998 December 30, 1998 $20,000,000
December 31, 1998 Thereafter $22,000,000
(c) Section 7.8 of the Credit Agreement is hereby amended in its
entirety to read as follows:
Section 7.8. Leverage. Badger will as of the last day of each
fiscal month of Badger, maintain its Leverage Ratio at not more
than 2.05 to 1.0.
(d) Section 7.10 of the Credit Agreement shall be and hereby is amended
in its entirety and as so amended shall read as follows:
Section 7.10. Liquid Assets. Badger will at all times
maintain on a consolidated basis Liquid Assets in an amount
equal to not less than $3,019,774.
(e) Section 7.13 of the Agreement is hereby amended in its entirety to
read as follows:
Section 7.13. Capital Expenditures. Badger will not, nor will
it permit any Subsidiary to, expend or become obligated for
Capital Expenditures in an aggregate amount in excess of the
following:
Fiscal Year 1997......$6,500,000
Fiscal Year 1998......$5,000,000
Fiscal Year 1999......$4,000,000
(f) Section 10 of the Credit Agreement is hereby amended by amending the
definition of "Eurodollar Margin" in its entirety to read as
follows:
"Eurodollar Margin" means (i) 1.50% for any Pricing Period the
Compliance Certificate delivered by Badger for the most
recently completed fiscal month shows Leverage Ratio of less
than or equal to 1.50 to 1.00; (ii) 1.75% for any Pricing
Period the Compliance Certificate delivered by Badger for the
most recently completed fiscal month shows a Leverage Ratio
greater than 1.50 to 1.00 but less than or equal to 1.65 to
1.00; (iii) 2.00% for any Pricing Period the Compliance
Certificate delivered by Badger for the most recently completed
fiscal month shows a Leverage Ratio in excess of 1.65 to 1.00
but less than or equal to 1.90 to 1.00; and (iv) 2.25% for any
Pricing Period the Compliance Certificate delivered by Badger
for the most recently completed fiscal month shows a Leverage
Ratio in excess of 1.90 to 1.00 or for which Badger has not
delivered a Compliance Certificate as required by Section 7.6
hereof.
2. WAIVER.
Badger has indicated that as of June 30, 1997 it was not in
compliance with the terms of the Agreement as follows and upon
satisfaction of the conditions precedent set forth in Section 3 hereof:
(a) As of such date, Badger's Tangible Net Worth was $18,046,831.
Section 7.7 of the Agreement requires Badger maintain a Consolidated
Tangible Net Worth of not less than $18,500,000. The Bank hereby
waives non-compliance by the Borrowers with Section 7.7 of the
Agreement for the period ending June 30, 1997 through the effective
date of this Amendment.
(b) Section 7.11 of the Credit Agreement restricts Badger's ability to
grant Liens on property owned by the Borrowers. Badger has
requested that we allow the Borrower to xxxxx x Xxxx on their ABB
Computer Control System for the Yankee Paper Machine. The Lien on
the ABB Computer Control System for the Yankee Paper Machine will
not exceed $750,000. The Bank hereby waives the restriction on
Badger to allow Liens on only the ABB Computer Control System for
the Yankee Paper Machine up to $750,000.
(c) Section 7.16 of the Credit Agreement restricts Badger's ability to
sell assets. Badger has requested that the Bank allow Badger to
sell and lease back a ABB Computer Control System for the Yankee
Paper Machine. The sale of the Computer Control System for the
Yankee Paper Machine will not exceed $750,000. The Bank hereby
waives the restriction on Badger to sell only the ABB Computer
Control System and lease it back, not to exceed $750,000.
(d) The waiver contained in Sections 2(a), 2(b) and 2(c) of this
Amendment is limited to matters set forth in those Sections, and the
Borrowers agree that they remain obligated to comply with the terms
of the Agreement, including Sections 7.7, 7.11 and 7.16 of the
Agreement, and that the Bank shall not be obligated in the future to
waive any provision of the Agreement.
3. CONDITIONS PRECEDENT.
The effectiveness of this Seventh Amendment is subject to the
satisfaction of all of the following conditions precedent:
(a) The Borrowers and the Bank shall have executed this Seventh
Amendment.
(b) The Bank shall have received copies executed or certified (as may be
appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery hereof and the other
instruments and documents contemplated hereby.
(c) All legal matters incident to the execution and delivery hereof and
of the instruments and documents contemplated hereby shall be
satisfactory to the Bank and its counsel.
4. REPRESENTATIONS.
In order to induce the Bank to execute and deliver this Seventh
Amendment, the Borrowers hereby represent to the Bank that as of the date
hereof and as of the time that this Seventh Amendment becomes effective,
each of the representations and warranties set forth in Section 5 of the
Agreement are and shall be and remain true and correct (except that the
representations contained in Section 5 shall be deemed to refer to the
most recent financial statements of the Borrowers delivered to the Bank)
and the Borrowers are in full compliance with all of the terms and
conditions of the Agreement and no Default as defined in the Agreement as
amended hereby nor any Event of Default as so defined, shall have occurred
and be continuing or shall arise after giving effect to this Seventh
Amendment.
5. MISCELLANEOUS.
(a) Collateral Security Unimpaired. The Borrowers hereby agree that
notwithstanding the execution and delivery hereof, the Collateral
Documents shall be and remain in full force and effect and that any
rights and remedies of the Bank thereunder, obligations of the
Borrowers thereunder and any liens or security interests created or
provided for thereunder shall be and remain in full force and effect
and shall not be affected, impaired or discharged hereby. Nothing
herein contained shall in any manner affect or impair the priority
of the liens and security interest created and provided for by the
Collateral Documents as to the indebtedness which would be secured
thereby prior to giving effect hereto.
(b) Effect of Amendment. Except as specifically amended and modified
hereby, the Agreement shall stand and remain unchanged and in full
force and effect in accordance with its original terms. Reference
to this specific Amendment need not be made in any note, instrument
or other document making reference to the Agreement, any reference
to the Agreement in any of such to be deemed to be a reference to
the Agreement as amended hereby.
(c) Costs and Expenses. The Borrowers agree to pay on demand all out-
of-pocket costs and expenses incurred by the Bank in connection with
the negotiation, preparation, execution and delivery of this Seventh
Amendment and the documents and transactions contemplated hereby,
including the fees and expenses of counsel to the Bank with respect
to the foregoing.
(d) Counterparts; Governing Law. This Seventh Amendment may be executed
in any number of counterparts and by different parties hereto on
separate counterparts, each of which when so executed shall be an
original but all of which to constitute one and the same agreement.
This Amendment shall be governed by the internal laws of the State
of Illinois.
Dated as of August 6, 1997.
BADGER PAPER XXXXX, INC.
By: /s/ Miles X. Xxxxx, Xx.
Its: Vice President
PLAS-TECHS, INC.
By: /s/ Miles X. Xxxxx, Xx.
Its: Secretary & Treasurer
Accepted and agreed to at Chicago, Illinois, as of the date and year
last above written.
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxxx X. Xxxxx
Its: Vice President
