Exhibit 10.3.6
SIXTH AMENDMENT TO LOAN AGREEMENT
This Sixth Amendment to Loan Agreement, dated as of January 30, 2006
("Amendment"), amends the Loan Agreement dated June 16, 2000, as amended by a
First Amendment dated as of May 28, 2002, a Second Amendment dated as of April
15, 2003, a Third Amendment dated as of October 13, 2003, a Fourth Amendment
dated as of March 17, 2004 and a Fifth Amendment dated as of July 30, 2004
(collectively, "Agreement"), both between XX Xxxxxx Xxxxx Bank, NA, successor to
American National Bank and Trust Company of Chicago ("Bank"), Boss Holdings,
Inc. and Boss Manufacturing Company (collectively, "Borrowers").
The parties agree that the Agreement shall be amended as follows:
1. The definition of "Adjusted LIBOR Rate" set forth in Section 1.1 of
the Agreement shall be deleted in its entirety, and the following
definition shall be substituted in its place:
"Adjusted LIBOR Rate" shall mean the LIBOR Rate plus or minus the
Applicable Margin.
2. The following definition shall be added to Section 1.1 of the
Agreement, immediately after the definition of "Affiliate":
"Applicable Margin" means, with respect to the Adjusted LIBOR Rate or
the Base Rate, as the case may be, the rate per annum set forth in the
following grid:
Basis for Pricing XXXXX X XXXXX XX XXXXX XXX XXXXX XX
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> 1.0:1.0 >2.0:1.0
Funded Debt/EBITDA Ratio < 1.0:1.0 But < 2.0:1.0 But < 3.0:1.0 > 3.0:1.0
- - -
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Adjusted LIBOR Rate 1.00% 1.25% 1.50% 1.75%
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Base Rate (1.50%) (1.25%) (1.00%) (.75%)
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The Applicable Margin shall, in each case, be determined and adjusted
quarterly on the first day of the month after the date of delivery of
the quarterly and annual financial statements required by this
Agreement, provided however, that if such financial statements are not
delivered within two Business Days after the required date (each, an
"Interest Determination Date"), the Applicable Margin shall increase
to the maximum percentage amount set forth in the table above from the
date such financial statements were required to be delivered to the
Bank until received by the Bank. The Applicable Margin shall be
effective from an Interest Determination Date until the next Interest
Determination Date. Such determinations by the Bank shall be
conclusive absent manifest error. Notwithstanding the foregoing, from
the date hereof to June 30, 2006, the Appplicable Margin for Adjusted
LIBOR Rate advances shall be 1.50 % and the Applicable Margin for Base
Rate advances shall be (1.00%).
3. The definition of "Base Rate" set forth in Section 1.1 of the
Agreement shall be deleted in its entirety, and the following
definition shall be substituted in its place:
"Base Rate" means at any time and from time to time the rate of
interest per annum which Bank most recently announces as its corporate
base rate in Chicago, Illinois, which rate shall not necessarily be
the lowest rate of interest which Bank charges its customers, plus or
minus the Applicable Margin. The Base Rate shall change automatically
and immediately as and when such corporate base rate shall change,
without notice to the Borrower, and any notice to which )t may be
entitled is hereby waived, and any such change in such corporate base
rate shall not affect any of the terms and conditions of this
Agreement, all of which remain in full force and effect.
4. The definition of "Borrowing Base" set forth in Section 1.1 of the
Agreement shall be deleted in its entirety and the following
definition shall be substituted in its place:
"Borrowing Base" means, as of any time the same is to be determined,
80% of Eligible Receivables and 40% of Eligible Inventory provided,
however, that (i) advances relying upon Eligible Inventory shall not
exceed a maximum of $4,000,000 and (ii) advances relying upon Eligible
Inventory included in the Borrowing Base from Galaxy Balloons,
Incorporated and Boss Balloon Company shall not, in the aggregate,
exceed $500,000; and further provided that the amount shall be reduced
by a sum equal to the outstanding principal balance of the loan from
Bank to Boss Holdings, Inc. and Boss Manufacturing Company evidenced
by a Term Promissory Note dated as of July 30, 2004 in the face
principal amount of $1,750,000 less $300,000.
5. Subsection (g) of the definition of "Eligible Receivables" set forth
in Section 1.1 of the Agreement shall be deleted in its entirety, and
the following language shall be substituted in its place:
(g) is not owed by an account debtor who is obligated on
accounts owed to the Borrower or such Subsidiary if 25% of
all amounts owing is unpaid more than 90 days after the date
of the invoice (without regard to any stated grace period)
and, if less than 25% is overdue, such portion which is
overdue shall not be an Eligible Receivable.
6. The following definition shall be added to Section 1.1 of the
Agreement, immediately after the definition of "Facilities":
"Funded Debt/EBITDA Ratio" means, as of any fiscal quarter end, the
ratio of (a) total liabilities, excluding (i) accounts arising from
the purchase of goods and services in the ordinary course of business,
(ii) deferred compensation, accrued expenses or losses, and (iii)
deferred revenues or gains, to (b) net income plus amortization
expense, depreciation expense, interest expense and income tax
expense, for the twelve month period ending with such fiscal quarter
end.
7. The definition of "Revolving Credit Commitment" set forth below in
Section 1.1 of the Agreement shall be deleted in its entirety and the
following definition shall be substituted in its place:
"Revolving Credit Commitment" means the revolving credit facility in
an amount not to exceed $7,000,000.
8. The definition of "Revolving Credit Termination Date" set forth in
Section 1.1 of the Agreement shall be deleted in its entirety and the
following definition shall be substituted in its place:
"Revolving Credit Termination Date" means January 2, 2009, as such
date may be amended upon the written consent of all of the parties
hereto.
9. Section 2.2 of the Agreement shall be deleted in its entirety, and the
following section shall be substituted in its place:
2.2 Borrowing Procedures for Revolving Loans. The Borrower shall
give the Bank written or verbal notice (effective upon
receipt) of the Borrower's intent to draw down an advance
under the Note no later than 2:00 p.m. New York time, on the
date of disbursement, if the full amount of the drawn
advance is to be disbursed as a Base Rate advance and no
later than 2:00 p.m. New York time if any part of such
advance is to be disbursed as an Adjusted LIBOR Rate
advance. The Borrower's notice must specify: (a) the
disbursement date, (b) the amount of each advance, (c) the
type of each advance (Base Rate advance or Adjusted LIBOR
Rate advance), and (d) for each Adjusted LIBOR Rate advance,
the duration of the applicable interest period; provided
however, that the Borrower may not elect an interest period
ending after the Revolving Credit Expiration Date. Each
Adjusted LIBOR Rate advance shall be in a minimum amount of
$100,000 (and in $50,000 increments thereof). All notices
under this paragraph are irrevocable. By the Bank's close of
business on the disbursement date and upon fulfillment of
the conditions set forth herein and in any other of the
Other Agreements, the Bank shall disburse the requested
advances in immediately available funds by crediting the
amount of such advance to the Borrower's account with the
Bank.
10. Section 5.1(a) and 5.3(g) of the Agreement shall be deleted in its
entirety
11. Section 7.2(d)(ii) of the Agreement shall be deleted in its entirety,
and the following section shall be substituted in its place:
(ii) as soon as available and in any event within forty-five (45)
days after the end of each month beginning with the month
ending May 31, 2000, consolidated and consolidating
financial statements of the Parent, including a balance
sheet and a income statement as of the end of such month and
for the portion of the fiscal year ended at the end of such
month, all in reasonable detail and certified (subject to
normal year-end adjustments) as to fairness of presentation,
in accordance with GAAP, by an Authorized Officer, and a
Borrowing Base Certificate;
12. Section 7.2(d)(iii) of the Agreement shall be deleted in its entirety,
and the following section shall be substituted in its place:
(iii) for the fiscal year ending December 30, 2000, and for all
fiscal years thereafter, as soon as available and in any
event within ninety (90) days after the close of each fiscal
year of the Borrower, consolidated and consolidating
financial statements of Parent, including balance sheet,
income statement, statements of operation, statements of
cash flows and statements of changes in equity as of the end
of such fiscal year, which present fairly and accurately in
all material respects the financial condition of the Parent
as at such date and the results of operations of the Parent
and its subsidiaries for such fiscal year and setting forth
in each case in comparative form the corresponding figures
for the corresponding period of the preceding fiscal year,
all in reasonable detail, prepared in conformity with GAAP
consistently applied, and audited by independent certified
public accountant reasonably acceptable to Bank;
13. Section 7.2 (d) (viii) of the Agreement shall be deleted in its
entirety, and the following section shall be substituted in its place:
(viii) covenant compliance statements in the form of Exhibit
7.2(d)(viii) demonstrating compliance as of each fiscal
quarter, such certificates to be delivered within 45 days
after the end of each fiscal quarter respectively (provided,
however, that for the fourth quarter, such certificates
shall be delivered within 60 days after the end of such
quarter) and to be certified by Borrower's Chief Financial
Officer; and
14. The following new Subsection 7.2(d)(x) shall be added to the
Agreement, immediately after 7.2(d)(ix):
(x) Within forty-five (45) days after the end of each fiscal
quarter of Borrower, a listing of all accounts receivable of
Borrower as of the end of such fiscal quarter, aged from the
date of invoice, certified as correct by an Authorized
Officer.
15. Section 7.3(g) of the Agreement shall be deleted in its entirety, and
the following section shall be substituted in its place:
(g) Borrowed Debt. Create, incur, assume or suffer to exist any
Borrowed Debt by itself or any of its Subsidiaries other
than (i) Debt to Bank; (ii) Debt secured by liens permitted
by Section 7.3(a)(vi) hereof; and (iii) Debt disclosed on
Schedule 7.3(g) hereto.
16. Exhibit 2.2 of the Agreement is hereby deleted.
17. Except as specifically amended herein the Agreement shall continue in
full force and effect in accordance with its original terms. Reference
to this specific Amendment need not be made in any note, document,
letter, certificate, the Agreement itself, or any communication issued
or made pursuant to or with respect to the Agreement, any reference to
the Agreement being sufficient to refer to the Agreement as amended
hereby. All terms used herein which are defined in the Agreement shall
have the same meaning herein as in the Agreement. In the event of any
conflict between the terms of the Agreement and the terms of this
Amendment, this Amendment shall control.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of
the day and year first above written.
XX XXXXXX XXXXX BANK, NA BOSS HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ J. Xxxxx Xxxxxxxxx
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Its: Regional President Its: Executive Vice President
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BOSS MANUFACTURING COMPANY
By: /s/ J. Xxxxx Xxxxxxxxx
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Its: Executive Vice President
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The undersigned Guarantors of the obligations of Borrowers under the Agreement
consent to this Amendment, acknowledge and agree that the Guaranty Agreement
between them and Bank dated as of June 16, 2000 shall remain in full force and
effect and apply to the obligations of Borrowers as amended by this Amendment.
Guarantors further agree that the term "Guaranteed Obligations" as used in the
above-described Guaranty Agreement shall mean, among other things, obligations
of Borrowers under the Agreement as amended by this Amendment.
BOSS MANUFACTURING HOLDINGS, INC. BOSS BALLOON COMPANY
By: /s/ J. Xxxxx Xxxxxxxxx By: /s/ J. Xxxxx Xxxxxxxxx
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Its: President Its: President
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Date: Februay 6, 2006 Date: February 6, 2006
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The undersigned Guarantor of the obligations of Borrowers under the Agreement
consents to this Amendment, acknowledges and agrees that the Guaranty between it
and Bank dated as of March 17, 2004 shall remain in full force and effect and
apply to the obligations of Borrowers as amended by this Amendment. The
undersigned Guarantor further agrees that the term "Obligations" as used in the
above-described Guaranty shall mean, among other things, obligations of
Borrowers under the Agreement as amended by this Amendment.
BOSS PET PRODUCTS, INC.
By: /s/ J. Xxxxx Xxxxxxxxx
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Its: President
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Date: February 6, 2006
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The undersigned Guarantor of the obligations of Borrowers under the Agreement
consents to this Amendment, acknowledges and agrees that the Guaranty between it
and Bank dated as of July 30, 2004 shall remain in full force and effect and
apply to the obligations of Borrowers as amended by this Amendment. The
undersigned Guarantor further agrees that the term "Obligations" as used in the
above-described Guaranty shall mean, among other things, obligations of
Borrowers under the Agreement as amended by this Amendment.
GALAXY BALLOONS, INCORPORATED
By: /s/ J. Xxxxx Xxxxxxxxx
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Its: Executive Vice President
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Date: February 6, 2006
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