FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.1
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (“First Amendment”)
is made as of the 21st day of December, 2005 by and among Home Products International-North
America, Inc. (“Borrower”), the lenders who are signatories hereto (“Lenders”), and Bank of
America, N.A. (“B of A”), as successor-in-interest to Fleet Capital Corporation, as agent for
Lenders hereunder (B of A, in such capacity, being “Agent”).
W I T N E S S E T H:
WHEREAS, Borrower, Agent’s predecessor-in-interest, Fleet Capital Corporation, and Lenders
entered into a certain Amended and Restated Loan and Security Agreement dated as of December 14,
2004 (said Amended and Restated Loan and Security Agreement is hereinafter referred to as the “Loan
Agreement”); and
WHEREAS, Borrower desires to amend and modify certain provisions of the Loan Agreement and,
subject to the terms hereof, Agent and Lenders are willing to agree to such amendments and
modifications;
NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements herein
contained, and any extension of credit heretofore, now or hereafter made by Agent and Lenders to
Borrowers, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms used herein without definition shall have the
meaning given to them in the Loan Agreement.
2. Amended and Additional Definitions. The definition of “Applicable Margin”
contained in Appendix A to the Loan Agreement is hereby deleted and the following is inserted in
its stead. The following definitions of “First Amendment” and “First Amendment Effective Date” are
hereby inserted into Appendix A to the Loan Agreement in appropriate alphabetical order.
“Applicable Margin — the percentages set forth below with respect to Base Rate
Advances, LIBOR Advances, letter of credit fees and unused line fees, which percentages
shall be set on the First Amendment Effective Date and adjusted on the first day of the
month following the month in which the Borrowing Base Certificate for the period ended
December 31, 2005 is delivered to Agent pursuant to Subsection 8.1.4 and quarterly
thereafter on the first day of the month following the month in which the Borrowing Base
Certificates for periods ending on each subsequent March 31, June 30, September 30 and
December 31 are delivered to Agent pursuant to Subsection 8.1.4 by reference to Borrower’s
Average Gross Availability for the period ended on December 31, 2005, or the most recent
March 31, June 30, September 30 and December 31, as applicable, in accordance with the
following:
| Applicable Margin | ||||||||||||||||
| LIBOR | Base Rate | Unused Line | Letter of Credit and | |||||||||||||
| Average Gross Availability | Advances | Advances | Fee | LC Guaranty Fees | ||||||||||||
>$30,000,000
|
1.50 | % | 0.00 | % | 0.25 | % | 1.50 | % | ||||||||
£$30,000,000 but >$20,000,000
|
1.75 | % | 0.00 | % | 0.375 | % | 1.75 | % | ||||||||
£$20,000,000
|
2.00 | % | 0.25 | % | 0.50 | % | 2.00 | % | ||||||||
Each change in Applicable Margin shall be effective prospectively as of the first
day of the fiscal month of Borrower next following the fiscal month during which the
applicable Borrowing Base Certificates for the periods ended December 31, 2005, and each
subsequent June 30, September 30, December 31 and March 31 of Borrower are delivered to
Agent pursuant to Subsection 8.1.4, commencing with the delivery of the Borrowing Base
Certificate for the period ending December 31, 2005.
From the First Amendment Effective Date until the first adjustment date as provided
above, the Applicable Margin shall be 1.75% (LIBOR Advances), 0.00% (Base Rate Advances),
0.375 % (unused line fee) and 1.75% (Letter of Credit and LC Guaranty fee). At any time
when Borrower has failed to deliver to Agent Borrowing Base Certificates for any period
ended on March 31, June 30, September 30 and December 31 within the Original Term and such
failure has not been cured to Agent’s reasonable satisfaction, the Applicable Margin shall
be the highest percentages set forth in the above schedule.
*
* *
First Amendment – that certain First Amendment to Amended and Restated Loan and
Security Agreement dated as of December ___, 2005 by and among Borrowers, Agent and Lenders.
First Amendment Effective Date – as defined in Section 6 of the First
Amendment.”
3. Termination Fee. The following is inserted into the Loan Agreement as Section 2.8:
“2.8 Termination Fee. If Borrower elects to terminate this Agreement pursuant
to subsection 4.2.2 hereof, at the effective date of such termination, Borrower shall pay to
Agent, for the ratable benefit of Lenders (in addition to the then outstanding principal,
accrued interest and other charges owing under the terms of this Agreement and any of the
other Loan Documents) and any amounts owing pursuant to subsection 3.2.5, as liquidated
damages for the loss of the bargain and not as a penalty, an amount equal to 0.25% of the
Total Credit Facility if termination occurs prior to November 14, 2008. If termination
occurs on or after November 14, 2008, no termination fee shall be payable. The foregoing
notwithstanding, Agent and Lenders agree to waive any such termination fee if the
Obligations are repaid from the proceeds of a credit facility provided by Bank.”
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4. Financial Covenants. As of the “First Amendment Effective Date” (as defined in
Section 6 below), Exhibit 8.3 attached to the Loan Agreement is deleted in its entirety and
Exhibit 8.3 attached hereto is inserted in its stead.
5. Execution in Counterparts. This First Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same instrument.
6. Conditions Precedent. This First Amendment shall become effective on the date on
which Borrower, Agent and Lenders shall have executed and delivered to each other this First
Amendment. The date on which all of the conditions precedent to the effectiveness of this First
Amendment have been satisfied or waived is hereinafter referred to as the “First Amendment
Effective Date.”
7. Continuing Effect. Except as otherwise specifically set out herein, the provisions
of the Loan Agreement shall remain in full force and effect.
(Signature Page Follows)
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Exhibit 10.1
(Signature Page to First Amendment to
Amended and Restated Loan and Security Agreement)
Amended and Restated Loan and Security Agreement)
IN WITNESS WHEREOF, this First Amendment has been duly executed as of the day and year
specified at the beginning hereof.
| HOME PRODUCTS INTERNATIONAL-NORTH AMERICA, INC. (“Borrower”) |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | CFO | |||
| BANK OF AMERICA, N.A., (“Agent” and a “Lender”), as successor-in-interest to Fleet Capital Corporation |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxxxx | |||
| Title: | Senior Vice President | |||
| CONSENTED AND AGREED TO this 21st day of December, 2005. HOME PRODUCTS INTERNATIONAL, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | CFO | |||
EXHIBIT 8.3
FINANCIAL COVENANTS
DEFINITIONS
Consolidated Net Income — with respect to any fiscal period, the net income (or loss)
of Borrower determined in accordance with GAAP on a Consolidated basis; provided, however,
Consolidated Net Income shall not include: (a) the income (or loss) of any Person (other than a
subsidiary of Borrower) in which Borrower or any of its wholly-owned subsidiaries has an ownership
interest unless received in a cash distribution or requiring the payment of cash; (b) the income
(or loss) of any Person accrued prior to the date it became a Subsidiary of Borrower or is merged
into or consolidated with Borrower; (c) all amounts included in determining net income (or loss) in
respect of the write-up of assets on or after the Closing Date, including the subsequent
amortization or expensing of the written-up portion of the assets; (d) extraordinary gains as
defined under GAAP and extraordinary losses pursuant to the extinguishment of debt, net of the
related tax effects; and (e) gains (or losses) from asset dispositions (other than sales of
inventory).
Consolidated EBITDA — for any period, Consolidated Net Income for such period
plus, without duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense,
amortization or writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Money Borrowed (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such Consolidated Net
Income for such period, non-cash losses on sales of assets outside of the ordinary course of
business), (f) any other non-cash charges (including, without limitation, the amount of any
non-cash deduction to Consolidated Net Income as a result of any grant to members of management of
any capital stock of Borrower), (g) to the extent not included in item (e) above, non-cash charges
or expenses incurred as a result of plant or facility closures, (h) to the extend not included in
item (e) above, charges and expenses for non-cash, non-recurring, restructuring items and (i) to
the extent not included in item (e) above, costs and expenses owing in connection with the
consummation of the Tender Offer in a maximum amount not to exceed Eleven Million Dollars
($11,000,000) and minus to the extent included in the statement of such Consolidated Net
Income for such period, the sum of (x) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of the ordinary
course of business), and (y) any other non-cash income, all as determined on a consolidated basis
and (z) to the extent not already included in the determination of Consolidated EBITDA, cash
charges or expenses incurred as a result of plant or facility closings or cash charges or expenses
relating to the items described in item (h) above.
Fixed Charge Coverage Ratio – with respect to any period, the ratio of (i)
Consolidated EBITDA for such period minus the sum of (a) any provision for income taxes
payable in cash
Exhibit 8.3 — Page 1
and included in the determination of net earnings for such period plus (b) Capital
Expenditures during such period, to (ii) Fixed Charges for such period, all as determined on a
Consolidated basis and in accordance with GAAP.
Fixed Charges – with respect to any period, the sum of: (i) scheduled principal
payments required to be made or occurring during such period in respect to Indebtedness for Money
Borrowed (including the principal portion of Capitalized Lease Obligations, scheduled principal
payments on the Senior Subordinated Notes and scheduled reductions of the Fixed Asset Component but
excluding principal payments made on Revolving Credit Loans), plus (ii) Cash Interest Expense for
such period, plus (iii) Distributions made by Borrower within such period, all as determined for
Borrower and its Subsidiaries on a Consolidated basis and in accordance with GAAP.
COVENANTS
Gross Availability — Borrower shall maintain at all times Gross Availability of at
least (x) Ten Million Dollars ($10,000,000) for the period from the First Amendment Effective Date
until the date (the “First Step-Down Date”) on which Agent receives Borrower’s financial statements
for the fiscal period ended March 31, 2007, (y) $7,500,000 from the First Step-Down Date until the
date on which Agent receives Borrower’s financial statements for the fiscal period ended September
30, 2007 and (z) Five Million Dollars ($5,000,000) at all times thereafter.
Fixed Charge Coverage Ratio — Borrower shall not permit the Fixed Charge Coverage
Ratio for any fiscal period listed below to be less than the ratio set forth opposite such fiscal
period in the following schedule:
| Fiscal Period | Fixed Charge Coverage Ratio | |||
January 1, 2007 to March 31, 2007 |
1.00 to 1 | |||
January 1, 2007 to June 30, 2007 |
1.00 to 1 | |||
January 1, 2007 to September 30, 2007 |
1.02 to 1 | |||
January 1, 2007 to December 31, 2007 and each
four consecutive fiscal quarters ending on any March 31, June 30, September 30 or December 31
thereafter |
1.05 to 1 |
Exhibit 8.3 — Page 2
