Exhibit 10.3
FIRST AMENDMENT TO
MASTER CREDIT AGREEMENT
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This FIRST AMENDMENT TO MASTER CREDIT AGREEMENT (the "First Amendment") is
made as of this 19th day of September, 1997 by and between BANK OF BOSTON
CONNECTICUT, a Connecticut savings bank, with its head office located at 000
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Bank") and THE XXXXXXX, XXXXX
COMPANY, a Delaware corporation, with its chief executive office located at 00
Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxxx 00000 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Bank and the Borrower entered into a certain Master Credit
Agreement dated as of October 3, 1996 (the "Credit Agreement") whereby the Bank
agreed to make loans and advances and otherwise extend credit to the Borrower;
and
WHEREAS, the Bank and the Borrower desire to amend the Credit Agreement in
certain respects; and
WHEREAS, Section 13.10. of the Credit Agreement provides that no
modification or amendment of the Credit Agreement shall be effective unless the
same shall be in writing and signed by the parties thereto;
NOW, THEREFORE, in consideration of one dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Bank and the Borrower hereby agree as follows:
1. Amendment of Credit Agreement. The Bank and the Borrower hereby agree to
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amend the Credit Agreement as follows:
(a) Section 1.29. of the Credit Agreement, entitled Commitment Amount, is
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hereby deleted in its entirety and the following inserted in lieu
thereof as a new Section 1.29., also entitled Commitment Amount:
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Section 1.29. "Commitment Amount" means (i) the amount of TEN MILLION
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AND NO/100 DOLLARS ($10,000,000.00) or (ii) any lesser amount,
including zero (0), resulting from a reduction or termination of such
amount in accordance with Section 2.1.6. or Section 12.1.
(b) Section 1.39. of the Credit Agreement, entitled Deposit Account, is
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hereby deleted in its entirety and is of no further force or effect
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(c) Section 1.40. of the Credit Agreement, entitled Deposit Account
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Pledge, is hereby deleted in its entirety and is of no further force or
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effect
(d) Section 1.103. of the Credit Agreement, entitled Overadvance Limit is
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hereby deleted in its entirety and the following inserted in lieu thereof
as a new Section 1.103., also entitled Overadvance Limit:
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Section 1.103. "Overadvance Limit" means, as of any date as of which
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the amount thereof shall be determined, an amount not to exceed ONE
MILLION AND NO/100 DOLLARS ($1,000,000.00) during the period
commencing as of September 19, 1997 and continuing through January 14,
1998, ONE MILLION TWO HUNDRED FIFTY THOUSAND AND N0/100 DOLLARS
($1,250,000.00) during the period commencing as of January 15, 1998
and continuing through March 14, 1998, ONE MILLION AND NO/100 DOLLARS
($1,000,000.00) during the period commencing as of March 15, 1998 and
continuing through May 14, 1998 and FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($500,000.00) during the period commencing as of May 15, 1998
and continuing through the Revolving Credit Termination Date.
(e) Section 2.1.7. of the Credit Agreement, entitled Revolving Credit Note
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is hereby deleted in its entirety and the following inserted in lieu
thereof as a new Section 2.1.7. also entitled Revolving Credit Note:
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Section 2.1.7. Revolving Credit Note. Revolving Loans shall be
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evidenced by a promissory note substantially in the form attached
hereto as Exhibit B (the "Revolving Credit Note") executed by Borrower
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in substitution for the $8,000,000.00 revolving credit note dated
October 3, 1996 which heretofore evidenced Revolving Loans.
(f) Section 2.4.6. of the Credit Agreement, entitled Mandatory Prepayment,
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is hereby deleted in its entirety and the following inserted in lieu
thereof as a new Section 2.4.6., also entitled Mandatory Prepayment:
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Section 2.4.6. Mandatory Prepayment. Notwithstanding any provision
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of this Agreement to the contrary, Borrower shall make a mandatory
prepayment in respect of the principal amount of the Term Loan within
one hundred twenty (120) days following the end of each Fiscal Year
commencing with the Fiscal Year ending June 30, 1998 in an amount
equal to twenty-five percent (25%) of Excess Cash Flow for such Fiscal
Year.
(g) Subparagraphs (ii) and (iii) of subsection (b) of Section 2.5.2. of
the Credit Agreement (which subparagraph (b) is mistakenly referred to as
subsection (a) within the
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Credit Agreement due to a scriveners' error) is hereby deleted in its
entirety and the following inserted in lieu thereof as new subparagraphs
(ii) and (iii):
(ii) If the Debt Service Coverage Ratio is greater than (x) 1.10 to
1.0 or (y) commencing with the Fiscal Quarter ending September 30,
1998, 1.20 to 1.0 but less than or equal to 1.25 to 1.0 and the Debt
to Worth Ratio is:
(a) greater than 5.0 to 1.0, then the the Base Rate Margin shall be
three-quarters of one percentage point (.75%) and the Eurodollar
Margin shall be two and one-half percentage points (2.50%); or
(b) less than 5.0 to 1.0 but greater than or equal to 4.0 to 1.0,
then the the Base Rate Margin shall be one-half of one percentage
point (.50%) and the Eurodollar Margin shall be two and one-quarter
percentage points (2.25%); or
(c) less than 4.0 to 1.0, then the the Base Rate Margin shall be one-
quarter of one percentage point (.25%) and the Eurodollar Margin shall
be two and one-quarter percentage points (2.0%).
(iii) If the Debt Service Coverage Ratio is (x) greater than 1.0 to
1.0 but less than or equal to 1.10 to 1.0 or (y) commencing with the
Fiscal Quarter ending September 30, 1998, greater than 1.0 to 1.0 but
less than or equal to 1.20 to 1.0 (Borrower hereby acknowledging that
this provision is intended only to provide a means to determine the
then applicable rate of interest for Base Rate Loans and shall not
limit or affect Bank's rights to require Borrower's compliance with
the financial covenant set forth in Section 9.2. hereof) and the Debt
to Worth Ratio is:
(a) greater than 5.0 to 1.0, then the the Base Rate Margin shall be
one percentage point (1.0%) and the Eurodollar Margin shall be three
percentage points (3.00%); or
(b) less than 5.0 to 1.0 but greater than or equal to 4.0 to 1.0,
then the the Base Rate Margin shall be three-quarters of one
percentage point (.75%) and the Eurodollar Margin shall be two and
one-half percentage points (2.50%); or
(c) less than 4.0 to 1.0, then the the Base Rate Margin shall be one-
half of one percentage points (.50%) and the Eurodollar Margin shall
be two percentage points (2.25%).
(h) Section 3.2.2. of the Credit Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof as a new Section
0.0.0.:
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Section 3.2.2. A limited guaranty agreement executed by Aristotle
with respect to that portion of the Obligations which relate to the
Term Loan in substantially the form attached hereto as Exhibit E-1
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(the "Aristotle Guaranty").
(i) Section 9.2. of the Credit Agreement, entitled Debt Service Coverage,
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is hereby deleted in its entirety and the following inserted in lieu
thereof as a new Section 9.2., also entitled Debt Service Coverage:
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Section 9.2. Debt Service Coverage. Borrower shall not permit the ratio
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of its EBITDA minus Cash Taxes and Capital Expenditures to its Total Debt
Service to be less than the following amount at the end of the following
Fiscal Quarters:
RATIO FISCAL QUARTER ENDING
1.1 to 1.0 June 30, 1997 through June 30, 1998
1.2 to 1.0 September 30, 1998 and thereafter
Borrower's compliance with this covenant shall be calculated on a rolling
basis by reference to the Fiscal Quarter then ending and the three (3)
previous Fiscal Quarters.
(j) Section 13.3. of the Credit Agreement, entitled Notices, is hereby
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amended to change the address for notices to the Bank as follows:
If to Bank:
Bank of Boston Connecticut
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Vice President
(k) Exhibit B to the Credit Agreement representing the form of the
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$8,000,000.00 revolving credit note dated October 3, 1997 is hereby deleted
and Exhibit B attached hereto is substituted in lieu thereof.
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(l) All references within the Credit Agreement and the Other Documents to
the term "The First National Bank of Boston" are hereby deleted in their
entirety and the term "BankBoston, N.A." is substituted in lieu thereof.
2. Amendment Fee. In consideration of the increase in the Commitment Amount
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as provided within this First Amendment, the Borrower shall pay an amendment fee
in the amount of $10,000.00 to the Bank upon the execution of this First
Amendment.
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3. Confirmation of Agreements. The Borrower and the Bank hereby agree and
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acknowledge that, except as provided in this First Amendment, the Credit
Agreement, the Notes and the Other Documents, and the grant of the liens,
security interests and other encumbrances thereunder, and its agreements,
covenants, obligations, representations and warranties thereunder and therein
are hereby expressly ratified, confirmed and restated as of the date hereof.
4. Effect of Amendment. The Bank and the Borrower hereby agree and
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acknowledge that except as provided in this First Amendment, the Credit
Agreement remains in full force and effect and has not been modified or amended
in any respect, it being the intention of the Bank and the Borrower that this
First Amendment and the Credit Agreement be read, construed and interpreted as
one and the same instrument.
5. Capitalized Terms. All capitalized terms not otherwise defined in this
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First Amendment shall have the meanings ascribed to such terms in the Credit
Agreement.
IN WITNESS WHEREOF, the Bank and the Borrower have executed this First
Amendment as of the date first above written.
BORROWER:
THE XXXXXXX, XXXXX COMPANY
By:__________________________________
Name:
Title:
BANK:
BANK OF BOSTON CONNECTICUT
By:__________________________________
Name:
Title:
EXHIBIT B
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SUBSTITUTE REVOLVING CREDIT NOTE
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