EXHIBIT 10(b)(ii)
AMENDMENT NO. 2
TO CREDIT AGREEMENT
AMENDMENT NO. 2 (this "AMENDMENT"), dated as of December 20, 1999, under
the Credit Agreement dated as of June 30, 1997, by and among XXXXX CORPORATION,
a Delaware corporation (the "COMPANY"), the Signatory Lenders party thereto (the
"LENDERS") and THE BANK OF NEW YORK, as Agent (the "AGENT") as amended by
Amendment No. 1 to Credit Agreement, dated as of August 18, 1999 (the "CREDIT
AGREEMENT).
RECITALS
I. Capitalized terms used herein which are not herein defined shall have
the respective meanings ascribed thereto in the Credit Agreement.
II. The Company has advised the Agent that:
(a) It has decided to sell certain businesses and/or assets.
(b) It will classify, for accounting purposes, the businesses described
in Schedule 1 annexed hereto as "discontinued operations" ("1999 DISCONTINUED
OPERATIONS").
(c) It anticipates that it will incur losses in the amounts specified
in Schedule 2 annexed hereto under the heading "Anticipated Write-Offs" (the
"1999 WRITE-OFFS") in connection with the sales and other events described in
Schedule 2.
(d) It anticipates it will be required to incur additional indebtedness
to finance the completion of construction of the Jazzland project, to fund
incremental interest expense of Xxxxx Energy and with respect to bridge loans
and purchase money loans, to fund expenses with respect to its insurance
programs and for general working capital purposes (the "1999 ADDITIONAL
INDEBTEDNESS").
III. The Company has also advised the Agent that the consummation of the
transactions and the occurrence of the events described in Recitals II (a), (b)
and (c) and the incurrence of the Indebtedness described in Recital II (d) may
result in the violation by the Company of one or more covenants of the Credit
Agreement.
IV. To facilitate the consummation of the transactions described in
Recitals II (a), (b) and (c) and to permit the Company to incur the indebtedness
described in Recital II (d), the Company has requested the Agent and the Lenders
agree to amend the Credit Agreement.
V. The Agent and the Lenders have advised the Company that they are willing
to agree to the Borrower's request subject to the terms and conditions set forth
herein.
Accordingly, in consideration of the covenants, conditions and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. AMENDMENTS TO CREDIT AGREEMENT
1.1 Section 1.1 of the Credit Agreement is amended to add the following
defined terms in the appropriate alphabetical order:
"AMENDMENT NO. 2" means Amendment No. 2 to Credit Agreement, dated
as of December 17, 1999, among the Company, the Lenders party thereto and
the Agent.
"AMENDMENT NO. 2 EFFECTIVE DATE" means the date on which the
conditions set forth in Section 2.1 of Amendment No. 2 are satisfied.
"1999 ADDITIONAL INDEBTEDNESS" has the meaning ascribed to it in
Recital II (d) of Amendment No. 2 to Credit Agreement.
"1999 DISCONTINUED OPERATIONS": has the meaning ascribed to it in
Recital II (b) of Amendment No. 2 to Credit Agreement.
"1999 WRITE-OFFS": has the meaning ascribed to it in Recital II (c)
of Amendment No. 2 to Credit Agreement.
1.2 Section 1.1 of the Credit Agreement is amended by deleting in its
entirety the text of the defined term "OPERATING INCOME" and substituting
therefor the following:
"OPERATING INCOME" net income before income taxes and minority
interests of the Company and its Subsidiaries from continuing operations
and, for the purpose and only for the purpose of testing and determining
compliance with Section 8.9 of this Agreement (a) including income from
the 1999 Discontinued Operations, (b) excluding actual gains and losses
resulting from the disposition of Property made pursuant to Section
8.6(iv), (c) excluding amounts not to exceed (1) for each 1999 Write-Off
Event, the corresponding amount, pre-tax, set forth in the second column
of Schedule 2 to Amendment No. 2 to the Credit Agreement, (2) $100,000,000
in the aggregate for all 1999 Write-Offs Events and (d) write-offs
associated with the Xxxxxxx Xxxxx litigation not to exceed $23,000,000 in
the aggregate.
1.1 Section 1.1 of the Credit Agreement is amended by deleting in its
entirety the text of the defined term "SHAREHOLDERS' EQUITY" and substituting
therefor the following:
"SHAREHOLDERS' EQUITY" all amounts which would, in conformity with
GAAP, be included under shareholders' equity on a Consolidated balance
sheet, PLUS, for the purpose and only for the purpose of determining and
testing compliance with Section 8.5 of this Agreement, actual losses when
incurred (according to GAAP) in respect of
the 1999 Write-Offs, not to exceed (a) for each 1999 Write-Off Event, the
corresponding amount, after-tax, set forth in the third column of Schedule
2 to Amendment No. 2 to Credit Agreement and (b) $70,000,000 after-tax, in
the aggregate for all 1999 Write-Offs.
1.4 The Credit Agreement is amended to add the following Section 2.24:
"2.24 AVAILABILITY OF COMMITMENTS.
(a) The Company agrees that, notwithstanding any other provision of
this Agreement, during the period from the Amendment No. 2 Effective Date to and
including the date on which the Required Lenders, in their sole discretion,
agree to reinstate the availability of the Revolving Commitments and the Letter
of Credit Commitments (the "Availability Reinstatement Date") (a) the Company
shall not be entitled to request and the Lenders shall not be obligated to make
any additional Loans and (b) the Company shall not be entitled to request and
the Issuing Bank shall not be required to issue any additional Letters of
Credit.
(b) The Company and the Lenders agree that the limitation on the
availability of the Revolving Commitments and the Letter of Credit Commitments
set forth in Section 2.24(a) is not a termination or reduction of such
Commitments."
1.5 Section 8.4 of the Credit Agreement is amended to delete the words
"Sale of Property" from the heading of such section.
1.6 Section 8.5 of the Credit Agreement is amended to delete the text
thereof in its entirety and to substitute the following therefor:
"8.5 LEVERAGE RATIO
Permit its ratio of the sum of (i) Consolidated Indebtedness plus
(ii) Consolidated Contingent Obligations to the sum of (x) Consolidated
Indebtedness plus (y) Consolidated Contingent Obligations plus (z) the
Company's Shareholders' Equity to be greater than 0.650:1.0 at any time."
1.6 Section 8.6 of the Credit Agreement is amended to delete the text
thereof in its entirety and to substitute therefor the following:
"8.6 SALE OF PROPERTY
Sell, assign, exchange, lease, transfer or otherwise dispose of any
Property, whether now owned or hereafter acquired, to any Person, or
permit any Subsidiary so to do, except:
(i) dispositions to a Subsidiary for a consideration
at least equal to the fair value of the Property disposed of;
(ii) dispositions by one Subsidiary to the Company or to
another Subsidiary;
(iii) (intentionally deleted);
(iv) dispositions of Property that result in proceeds
(irrespective of whether such proceeds are paid in cash or any other form)
to the Company (or other Person that is the seller of the Property) of not
more than $35,000,000 after payment of (1) any required closing costs and
expenses directly attributable to the sale of the Property ("Closing
Costs") and (2) any Indebtedness that is secured by the Property that is
being sold ("Sale Related Debt"), PROVIDED THAT, prior to the consummation
of any such sale, the Company shall have furnished the Agent a copy of the
agreement or contract for the sale for the applicable Property and a
statement setting forth, on a PRO FORMA basis, the total consideration to
be paid to the Company (or other seller) under the agreement or contract
for the sale for such Property and the estimated amount, if any, of the
Closing Costs and Sale Related Debt to be paid from the consideration for
the sale and the net proceeds of sale to be realized (by the Company or
other seller) from the sale after the deduction or payment of the Closing
Costs and Sale Related Debt (each a "Pro-Forma Sale Statement"), and
PROVIDED FURTHER that after the consummation of such sale, the Company
shall deliver to the Agent a statement indicating any variance between the
Pro Forma Sale Statement and the actual amount received and paid in
connection with such sale;
(v) the payment of dividends and distribution of Stock of the
Company in the ordinary course of business;
(vi) (intentionally deleted)."
1.6 Section 8.9 of the Credit Agreement is amended to delete the text
thereof in its entirety and to substitute the following therefor:
"8.9 FIXED CHARGE COVERAGE RATIO
Permit the Fixed Charge Coverage Ratio to be less than (a) 1.25 to
1.00 for the four fiscal quarters (taken as a whole) preceding December
31, 1999 and (b) thereafter, 1.50 to 1.00 for any preceding period of four
fiscal quarters (taken as a whole).
2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT.
2.1 The effectiveness of this Amendment is subject to the prior or
simultaneous fulfillment of the following conditions:
(a) The Agent shall have received this Amendment executed by (i) a
duly authorized officer or officers of the Borrower and (ii) the Required
Lenders;
(b) The Agent shall have received such other documents as it shall
have reasonably requested;
(c) The Agent shall have received payment of all of its
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel incurred pursuant to the Credit Agreement through October 31, 1999 in
the amount of $18,375.00, plus any additional fees and expenses of counsel
incurred from November 1, 1999 and incurred in connection with this Amendment;
and
(d) The Agent shall have received the fees due to the Agent and the
Lenders pursuant to the letter agreements between the Agent and the Borrower.
2.2 The date on which the conditions set forth in Section 2.1 are
satisfied is the "AMENDMENT NO. 2 EFFECTIVE DATE."
3. ACKNOWLEDGMENTS AND REPRESENTATIONS AND WARRANTIES.
3.1 The Borrower hereby (a) reaffirms and admits the validity and
enforceability of the Credit Agreement and the other Loan Documents and all of
its obligations thereunder, (b) represents and warrants that there exists no
Default or Event of Default, and (c) represents and warrants that the
representations and warranties contained in the Credit Agreement as amended by
this Amendment (other than the representations and warranties made as of a
specific date) are true and correct in all material respects on and as of the
date hereof.
4. MISCELLANEOUS
4.1 This Amendment may be executed by facsimile and in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement. It shall not be necessary in making proof of this
Amendment to produce or account for more than one counterpart signed by the
party to be charged.
4.2 This Amendment is being delivered in and is intended to be performed
in the State of New York and shall be construed and enforceable in accordance
with, and be governed by, the internal laws of the State of New York without
regard to principles of conflict of laws.
4.3 Except as amended hereby, the Credit Agreement shall in all other
respects remain in full force and effect.
[THE REMAINDER OF THE PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
The parties hereto have caused this Amendment to be duly executed and delivered
by their proper and duly authorized officers as of the day and year first above
written.
