First Amendment to Credit Agreement
Exhibit
10.1:
First
Amendment to Credit Agreement
This
First Amendment to Credit Agreement (the “Amendment”) dated as of
December 19, 2008, between Oil-Dri Corporation of America (the “Company”) and Xxxxxx X.X.
(the “Bank”).
Preliminary
Statements
A.The Company and the Bank are parties to
a Credit Agreement dated as of January 27, 2006 (the “Credit
Agreement”). All capitalized terms used herein without
definition shall have the same meanings herein as such terms are defined in the
Credit Agreement.
B.The Company and the Bank have agreed to
amend the Credit Agreement under the terms and conditions set forth in this
Amendment.
Section 1.
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Amendments.
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Upon
satisfaction of the conditions precedent contained in Section 3 below, the
Credit Agreement shall be and hereby is amended as follows:
1.1.The definitions of “Adjusted LIBOR,”
“Base Rate,” and “Termination Date” set forth in Section 4.1 of the Credit
Agreement (Definitions) shall each be amended and restated in their entirety to
read as follows:
“Adjusted LIBOR” means a rate
per annum determined by the Bank in accordance with the following
formula:
Adjusted LIBOR
= LIBOR
100%-Reserve Percentage
“Reserve Percentage” means
the maximum reserve percentage, expressed as a decimal, at which reserves
(including, without limitation, any emergency, marginal, special, and
supplemental reserves) are imposed by the Board of Governors of the Federal
Reserve System (or any successor) on “eurocurrency liabilities”,
as defined in such Board’s Regulation D (or any successor thereto), subject
to any amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto. For
purposes of this definition, the relevant Portions of the Loans shall be deemed
to be “eurocurrency
liabilities” as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D. The Reserve
Percentage shall be adjusted automatically on and as of the effective date of
any change in any such reserve percentage. “LIBOR” means,
for each Interest Period, (a) the LIBOR Index Rate for such Interest
Period, if such rate is available, and (b) if the LIBOR Index Rate cannot
be determined, the arithmetic average of the rates of interest per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) at which deposits
in U.S. Dollars in immediately available funds are offered to the Bank at
11:00 a.m. (London, England time) 2 Business Days before the beginning of
such Interest Period by 3 or more major banks in the interbank eurodollar market
selected by the Bank for a period equal to such Interest Period and in an amount
equal or comparable to the applicable LIBOR Portion scheduled to be outstanding
from the Bank during such Interest Period. “LIBOR Index Rate” means, for
any Interest Period, the rate per annum (rounded upwards, if necessary, to the
next higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period, which appears on the LIBOR01
Page as of 11:00 a.m. (London, England time) on the day 2 Business
Days before the commencement of such Interest Period. “LIBOR01 Page” means the
display designated as “LIBOR01
Page” on the Reuters Service (or such other page as may replace the
LIBOR01 Page on that service or such other service as may be nominated by the
British Bankers’ Association as the information vendor for the purpose of
displaying British Bankers’ Association Interest Settlement Rates for U.S.
Dollar deposits). Each determination of LIBOR made by the Bank shall
be conclusive and binding absent manifest error.
1
“Base Rate” means, for any
day, the rate per annum equal to the greatest of: (a) the rate
of interest announced or otherwise established by the Bank from time to time as
its prime commercial rate as in effect on such day, with any change in the Base
Rate resulting from a change in said prime commercial rate to be effective as of
the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Bank’s best or lowest
rate), (b) the sum of (i) the rate determined by the Bank to be the
average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the
rates per annum quoted to the Bank at approximately 10:00 a.m. (Chicago
time) (or as soon thereafter as is practicable) on such day (or, if such day is
not a Business Day, on the immediately preceding Business Day) by two or more
Federal funds brokers selected by the Bank for sale to the Bank at face value of
Federal funds in the secondary market in an amount equal or comparable to the
principal amount for which such rate is being determined, plus (ii) 1/2 of 1%, and
(c) the LIBOR Quoted Rate for such day plus 1.00%. As
used herein, the term “LIBOR
Quoted Rate” means, for any day, the rate per annum equal to the quotient
of (i) the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a one-month interest period which appears on the LIBOR01 Page as of
11:00 a.m. (London, England time) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day) divided by
(ii) one (1) minus the Reserve Percentage.
“Termination Date” means December 31, 2011,
or such earlier date on which the Revolving Credit Commitment is terminated in
whole pursuant to Section 3.4, 8.2 or 8.3 hereof.
1.2.The pricing grid appearing within the
definition of “Applicable Margin” set forth in Section 4.1 of the Credit
Agreement (Definitions) shall be amended and restated in its entirety to read as
follows (which shall be deemed amended effective as of December 15,
2008):
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When
Following
Status
Exists For
any
Margin
Determination
Date
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Applicable
Margin
For
Base
Rate
Portion
is:
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Applicable
Margin
For
LIBOR
Portions
is:
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Applicable
Margin
For
Commitment
Fee
is:
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Applicable
Margin
For
Letter
of
Credit
Fee is:
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Level
I Status
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0.0 | % | 0.375 | % | 0.15 | % | 0.375 | % | ||||||||
Level
II Status
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0.0 | % | 0.50 | % | 0.20 | % | 0.50 | % | ||||||||
Level
III Status
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0.0 | % | 0.625 | % | 0.25 | % | 0.625 | % | ||||||||
Level
IV Status
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0.25 | % | 0.875 | % | 0.30 | % | 0.875 | % | ||||||||
Level
V Status
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0.25 | % | 1.00 | % | 0.35 | % | 1.00 | % |
1.3.Section 2.5 of the Credit
Agreement (Unavailability of Deposits or Inability to Ascertain Adjusted LIBOR)
shall be amended and restated in its entirety to read as follows:
Section 2.5. Unavailability of Deposits or
Inability to Ascertain, or Inadequacy of, Adjusted
LIBOR. Notwithstanding any other provision of this Agreement
or the Note, if prior to the commencement of any Interest Period, the Bank shall
determine reasonably and in good faith that deposits in the amount of any LIBOR
Portion scheduled to be outstanding during such Interest Period are not readily
available to the Bank in the interbank eurodollar market or, by reason of
circumstances affecting the interbank eurodollar market, adequate and reasonable
means do not exist for ascertaining Adjusted LIBOR or that LIBOR as determined
hereby will not adequately and fairly reflect the cost to the Bank of funding
any LIBOR Portion for such Interest Period or that the making or funding of
LIBOR Portions has become impracticable, then the Bank shall promptly give
notice thereof to the Company and the obligations of the Bank to create,
continue or effect by conversion any such LIBOR Portion in such amount and for
such Interest Period shall be suspended until deposits in such amount and for
the Interest Period selected by the Company shall again be readily available in
the interbank eurodollar market and adequate and reasonable means exist for
ascertaining Adjusted LIBOR.
1.4.Section 7.17 of the Credit
Agreement (Financial Covenants) shall be amended and restated in its entirety to
read as follows:
Section 7.17. Financial Covenants.
(a) Consolidated Debt
Ratio. The Company will, as of the last day of each fiscal
quarter of the Company, maintain a ratio of Consolidated Debt to Total
Capitalization of less than 0.55 to 1.0.
(b) Fixed Charge Coverage
Ratio. The Company will, as of the last day of each fiscal
quarter of the Company, maintain a ratio of (a) Consolidated EBITR for the
four fiscal quarters then ended to (b) Consolidated Fixed Charges for the
same period of four fiscal quarters then ended of greater than 1.50 to
1.0.
1.5.Exhibit B to the Credit Agreement
(Compliance Certificate) shall be amended and restated in its entirety to read
as set forth on Exhibit B attached hereto and made a part
hereof.
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Section 2.
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Representations.
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In order
to induce the Bank to execute and deliver this Amendment, the Company hereby
represents and warrants to the Bank that (a) each of the representations
and warranties set forth in Section 5 of the Credit Agreement is true and
correct on and as of the date of this Amendment as if made on and as of the date
hereof and as if each reference therein to the Credit Agreement referred to the
Credit Agreement as amended hereby and (b) no Default or Event of Default
exists under the Credit Agreement or shall result after giving effect to this
Amendment.
Section 3.
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Conditions
Precedent.
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This
Amendment shall become effective upon satisfaction of the following conditions
precedent:
3.1.The Company and the Bank shall have
executed and delivered this Amendment.
3.2.The Company shall have paid to the Bank
on the date hereof an amendment fee of $30,000, which fee shall be fully earned
and nonrefundable on the date of payment.
3.3.Each Guarantor shall have executed and
delivered its consent to this Amendment in the space provided for that purpose
below.
3.4.Legal matters incident to the execution
and delivery of this Amendment shall be satisfactory to the Bank and its
counsel.
Section 4.
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Miscellaneous.
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4.1.Except as specifically amended herein,
the Credit Agreement shall continue in full force and effect in accordance with
its original terms. Reference to this specific Amendment need not be
made in the Credit Agreement, the Note, or any other instrument or document
executed in connection therewith, or in any certificate, letter or communication
issued or made pursuant to or with respect to the Credit Agreement, any
reference in any of such items to the Credit Agreement being sufficient to refer
to the Credit Agreement as amended hereby.
4.2.The Company agrees to pay on demand all
costs and expenses of or incurred by the Bank in connection with the
negotiation, preparation, execution and delivery of this Amendment.
4.3.This Amendment may be executed in any
number of counterparts, and by the different parties on different counterpart
signature pages, all of which taken together shall constitute one and the same
agreement. Any of the parties hereto may execute this Amendment by
signing any such counterpart and each of such counterparts shall for all
purposes be deemed to be an original. Delivery of executed
counterparts of this Amendment by facsimile transmission or by e-mail
transmission of an Adobe portable document format file (also known as a “PDF”
file) shall be effective as an original. This Amendment shall be
governed by, and construed in accordance with, the internal laws of the State of
Illinois.
[Signature
Pages to Follow]
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This
First Amendment to Credit Agreement is dated as of the date first above
written.
Oil-Dri
Corporation of America
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By
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/s/
Xxxxxx X. Xxxxxx
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Name:
Xxxxxx X. Xxxxxx
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Title:
President and Chief Executive Officer
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Xxxxxx
X.X.
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By
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/s/
Xxxxxx X. Xxxxx
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Name:
Xxxxxx X. Xxxxx
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Title:
Senior Vice
President
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5
Guarantors’
Acknowledgment, Consent, and Reaffirmation
Each of
the undersigned has heretofore guaranteed the due and punctual payment of all
present and future Obligations pursuant to Section 9 of the Credit
Agreement and hereby consents to the amendment to the Credit Agreement as set
forth above and confirms that all of the obligations of the undersigned
thereunder remain in full force and effect. Each of the undersigned
further agrees that the consent of the undersigned to any further amendments to
the Credit Agreement shall not be required as a result of this consent having
been obtained. Each of the undersigned acknowledges that the Bank is
relying on the assurances provided for herein and entering into this First
Amendment and maintaining credit outstanding to the Borrower under the Credit
Agreement as so amended.
Oil-Dri
Corporation of Georgia
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Oil-Dri
Production Company
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By
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/s/ Xxxxxxx X. Xxxxxxxx
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By
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/s/ Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Title:
Vice President
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Title:
Vice President
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Mounds
Production Company, LLC
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Mounds
Management, Inc.
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By
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Mounds
Management, Inc.
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Its
Managing Member
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By
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/s/ Xxxxxxx X. Xxxxxxxx
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By
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/s/ Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Title:
Vice President
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Title:
Vice President
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Blue
Mountain Production Company
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Oil-Dri
Corporation of Nevada
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By
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/s/ Xxxxxxx X. Xxxxxxxx
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By
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/s/ Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Title:
Vice President
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Title:
Vice President
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Xxxx
Production Company
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By
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/s/
Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Title:
Vice
President
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6
Exhibit B
Compliance
Certificate
This
Compliance Certificate is furnished to Xxxxxx X.X. (the “Bank”) pursuant to that
certain Credit Agreement dated as of January 27, 2006, by and between
Oil-Dri Corporation of America (the “Company”) and the Bank (the
“Credit
Agreement”). Unless otherwise defined herein, the terms used
in this Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.
The
Undersigned hereby certifies that:
1.I am the duly elected
_____________________________________ of the Company;
2.I have reviewed the terms of the Credit
Agreement and I have made, or have caused to be made under my supervision, a
detailed review of the transactions and conditions of the Company and its
Subsidiaries during the accounting period covered by the attached financial
statements;
3.The examinations described in
paragraph 2 did not disclose, and I have no knowledge of, the existence of
any condition or the occurrence of any event which constitutes a Default or
Event of Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate, except as
set forth below;
4.The financial statements required by
Section 7.5 of the Credit Agreement and being furnished to you concurrently
with this certificate are, to the best of my knowledge, true, correct and
complete as of the dates and for the periods covered thereby; and
5.The Attachment hereto sets forth
financial data and computations evidencing the Company’s compliance with certain
covenants of the Credit Agreement, all of which data and computations are, to
the best of my knowledge, true, complete and correct and have been made in
accordance with the relevant Sections of the Credit Agreement.
Described
below are the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and the
action which the Company has taken, is taking, or proposes to take with respect
to each such condition or event:
____________________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________________
The
foregoing certifications, together with the computations set forth in the
Attachment hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this _________ day of
__________________ 20___.
___________________________________________
____________________________, ______________
(Type
or Print
Name) (Title)
7
Attachment
to Compliance Certificate
Oil-Dri
Corporation of America
Compliance
Calculations for Credit Agreement
Dated as
of January 27, 2006
Calculations
as of _____________, 20___
Consolidated
Debt Ratio (Section 7.17(a))
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1.
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Consolidated
Debt as defined
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2.
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Net
Worth
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3.
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Ratio
of Line A1 to A2
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(“Consolidated Debt
Ratio”)
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______________
to 1.0
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4.
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As
listed in Section 7.17(b), for the date of this Certificate, the
Consolidated Debt Ratio shall be less than
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0.55
to 1.0
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5.
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Company
is in compliance?
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(Circle
yes or no) Yes/No
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B.
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Fixed Charge Coverage Ratio (Section 7.17(b)) | |||||||
1.
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Net
Income
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2.
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||||||||
(a)
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Interest
Expense __________________
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(b)
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Federal,
state, and local taxes __________________
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(c)
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Lease
and rental expense __________________
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3.
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Sum
of Lines 1, 2(a), (b) and (c)
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4.
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Interest
Income
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5.
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Gains
on sales of fixed assets
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6.
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Sum
of Lines 4 and 5
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7.
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Line
3 minus Line 6
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(“Consolidated EBITR”)
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8.
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Sum
of Line 2(a) and 2(c)
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9.
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Line
8 minus line 4
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(“Consolidated Fixed
Charges”)
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10.
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Ratio
of Line 7 to Line 9
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11.
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As
listed in Section 7.17(c), for the date of this Certificate, the
Line 10 ratio shall not be greater than
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1.50:1
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Company
is in compliance?
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(Circle
Yes or No)
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Yes/No
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