AMENDMENT NO. 3 TO THE LETTER OF CREDIT,
REIMBURSEMENT AND GUARANTY AGREEMENT
THIS AMENDMENT NO. 3 TO THE LETTER OF CREDIT, REIMBURSEMENT
AND GUARANTY AGREEMENT, dated as of October 18, 1999, by and
among XXXXX REGULATOR CO., a Massachusetts corporation (the
"Borrower"), XXXXX INDUSTRIES, INC., a Delaware corporation (the
"Guarantor") and FIRST UNION NATIONAL BANK (successor by merger
to First Union National Bank of North Carolina), a national
banking association organized and existing under the laws of the
United States with its principal offices located in Charlotte,
North Carolina (the "Bank");
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantor and the Bank have
previously entered into the Letter of Credit, Reimbursement and
Guaranty Agreement, dated as of September 1, 1994, as amended by
Amendment No. 1 to the Letter of Credit, Reimbursement and
Guaranty Agreement, dated as of August 1, 1996 and Amendment No.
2 to the Letter of Credit, Reimbursement and Guaranty Agreement,
dated as of October 1, 1996 (collectively, the "Agreement"),
pursuant to which the Bank has issued its irrevocable letter of
credit, dated September 29, 1994; and
WHEREAS, the Borrower, the Guarantor and the Bank now desire
to amend certain provisions of the Agreement;
NOW, THEREFORE, in consideration of the premises, mutual
covenants hereinafter contained and other good and valuable
consideration, the Borrower, the Guarantor and the Bank do hereby
amend the Agreement as follows:
Section 1. Article I of the Agreement Amended. Article
I of the Agreement is hereby amended as follows:
(a) The definitions of Consolidated Total Liabilities,
Consolidated Tangible Net Worth, Consolidated Net Worth,
Consolidated Net Income, GAAP, Net Worth, Current Assets,
Current Liabilities, Capital Assets, Consolidated Worth,
Indebtedness, and Restructuring Charges are hereby deleted,
and the remaining definitions are hereby renumbered in order
from 1.1 to 1.50.
(b) The following definitions are hereby inserted at the
end of Article I.
1.51 "Balance Sheet Date" means June 30, 1997.
1.52 "Consolidated Net Worth" means Consolidated Total
Assets minus Consolidated Total Liabilities, minus any
adjustments to shareholder equity arising solely as a result
of currency translation adjustments and minus, to the extent
otherwise includable in the computation of Consolidated Net
Worth, any subscriptions receivable for the purchase of
capital stock.
1.53 "Consolidated Total Assets" means all assets of
the Guarantor, the Borrower and their Subsidiaries
determined on a consolidated basis in accordance with
generally accepted accounting principles.
1.54 "Consolidated Total Liabilities" means all
liabilities of the Guarantor, the Borrower and their
subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles.
1.55 "generally accepted accounting principles" means
(i) when used is 7.5 and 7.6, whether directly or
indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the
principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect
for the fiscal year ended on the Balance Sheet Date, and (B)
to the extent consistent with such principles, the
accounting practice of the Guarantor reflected in its
financial statements for the year ended on the Balance Sheet
Date, and (ii) when used in general, other than as provided
above, means principles that are (A) consistent with the
principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in
effect from time to time and (B) consistently applied with
past financial statements of the Parent adopting the same
principles, provided that in each case referred to in this
definition of "generally accepted accounting principles" a
certified public accountant would, insofar as the use of
such accounting principles is pertinent, be in a position to
deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting
principles) as to financial statements in which such
principles have been properly applied.
1.56 "Indebtedness" means with respect to the Borrower,
the Guarantor or any of their Subsidiaries and whether
recourse is secured by or is otherwise available against all
or only a portion of the assets of the Borrower, the
Guarantor or any of their Subsidiaries and whether or not
contingent, but without duplication:
(i) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries for money
borrowed,
(ii) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries evidenced by
bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the
acquisition of property, assets or businesses,
(iii) every reimbursement obligation of the
Borrower, the Guarantor or any of their Subsidiaries
with respect to letters of credit, bankers' acceptances
or similar facilities issued for the account of the
Borrower, the Parent or any of their Subsidiaries,
(iv) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries issued or
assumed as the deferred purchase price of property or
services (including securities repurchase agreements
but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business
which are not overdue or which are being contested in
good faith),
(v) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries under any
Capitalized Lease,
(vi) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries under any
Synthetic Lease,
(vii) all sales by the Borrower, the Guarantor or
any of their Subsidiaries of (A) accounts or general
intangibles for money due or to become due, (B) chattel
paper, instruments or documents creating or evidencing
a right to payment of money or (C) other receivables
(collectively "receivables"), whether pursuant to a
purchase facility or otherwise, other than in
connection with the disposition of the business
operations of the Borrower, the Guarantor or any of
their Subsidiaries relating thereto or a disposition of
defaulted receivables for collection and not as a
financing arrangement, and together with any obligation
of the Borrower, the Guarantor or any of their
Subsidiaries to pay any discount, interest, fees,
indemnities, penalties, recourse, expenses or other
amounts in connection therewith,
(viii) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries (an "equity
related purchase obligation") to purchase, redeem,
retire or otherwise acquire for value any shares of
capital stock of any class issued by the Borrower, the
Guarantor or any of their Subsidiaries, any warrants,
options or other rights to acquire any such shares, or
any rights measured by the value of such shares,
warrants, options or other rights,
(ix) every obligation of the Borrower, the
Guarantor or any of their Subsidiaries under any
forward contract, futures contract, swap, option or
other financing agreement or arrangement (including,
without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon
interest rates, currency exchange rates, commodities or
other indices,
(x) every obligation in respect of Indebtedness
of any other entity (including any partnership in which
the Borrower, the Guarantor or any of their
Subsidiaries is a general partner) to the extent that
the Borrower, the Guarantor or any of their
Subsidiaries is liable therefor as a result of the
ownership interest of Borrower, the Guarantor or any of
their Subsidiaries in or other relationship with such
entity, except to the extent that the terms of such
Indebtedness provide that the Borrower, the Guarantor
or any of their Subsidiaries is not liable therefor and
such terms are enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of
the Borrower, the Guarantor or any of their
Subsidiaries guaranteeing, or having the economic
effect of guarantying or otherwise acting as surety
for, any obligation of a type described in any of
clauses (i) through (x) (the "primary obligation") of
the Borrower, the Guarantor or any of their
Subsidiaries (the "primary obligor"), in any manner,
whether directly or indirectly, and including, without
limitation, any obligation of the Borrower, the
Guarantor or any of their Subsidiaries (A) to purchase
or pay (or advance or supply funds for the purchase of)
any security for the payment of such primary
obligation, (B) to purchase property, securities or
services for the purpose of assuring the payment of
such primary obligation, or (C) to maintain working
capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary
obligation.
The "amount" or "principal amount" of any Indebtedness at
any time of determination represented by (a) any
Indebtedness, issued at a price that is less than the
principal amount at maturity thereof, shall be the amount of
the liability in respect thereof determined in accordance
with generally accepted accounting principles, (b) any
Capitalized Lease shall be the principal component of the
aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to
termination by the lessee, (c) any sale of receivables shall
be the amount of unrecovered capital or principal investment
of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts
representative of yield or interest earned on such
investment, (d) any Synthetic Lease shall be the stipulated
loss value, termination value or other equivalent amount and
(e) any equity related purchase obligation shall be the
maximum fixed redemption or purchase price thereof inclusive
of any accrued and unpaid dividends to be comprised in such
redemption or purchase price.
1.57 "Synthetic Lease" means any lease treated as an
operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax
purposes.
Section 2.. Article VII of the Agreement Amended.
Article VII of the Agreement is hereby amended by deleting
Sections 7.5 through 7.8 in their entirety and inserting in lieu
thereof, the following:
7.5. Fixed Charge Coverage Ratio. Neither the Guarantor nor
the Borrower will permit the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters of the
Guarantor to be less than 3.00:1.00; provided, however,
until four (4) full fiscal quarters of the Guarantor and the
Borrower have elapsed after September 30, 1999, the
applicable calculations for determination of the Fixed
Charge Coverage Ratio for the shorter periods of one, two
and three full fiscal quarters following September 30, 1999,
shall be annualized by multiplying the relevant amounts by:
(i) for the period of one full fiscal quarter following
September 30, 1999, the number 4, (ii) for the period of tow
full fiscal quarters following September 30, 1999, the
number 2, and (iii) for the period of three full fiscal
quarters following September 30, 1999, the number 1.33.
7.6. Leverage Ratio. Neither the Guarantor nor the Borrower
will permit the ratio of (i) Total Funded Debt to (ii) the
sum of (A) Total Funded Debt plus (B) Consolidated Net Worth
on any date (a "Test Date") occurring during any period
described in the table set forth below to exceed the ratio
set forth opposite the period in the table below in which
such Test Date occurs:
Period
Ratio
Closing Date - June 30, 1998
0.42:1.00
July 1, 1998 - September 30, 1999
0.40:1.00
October 1, 1999 - March 30, 2001
0.46:1.00
March 31, 2001 - June 29, 2001
0.45:1.00
June 30, 2001 - September 29, 2001
0.44:1.00
September 30, 2001 and thereafter
0.43:1.00
Section 3. Article IX of the Agreement Amended.
Article IX of the Agreement is hereby amended by
deleting Subsection 9.1(b) and substituting the following in
lieu thereof:
(b) The occurrence of an "Event of Default" under any
of the Security Instruments or any of the Bond
Documents or the Amended and Restated Revolving Credit
Agreement dated as of March 27, 1998, among Xxxxx
Investment Company, the Guarantor and the Financial
Institutions named therein as amended by the First
Amendment to Amended and Restated Revolving Credit
Agreement dated as of October 18, 1999.
Section 4. Representations and Warranties. The Borrower
and the Guarantor each represent and warrant to the Bank as
follows:
(a) Representations and Warranties in Agreement. The
representations and warranties of the Borrower and the
Guarantor contained in the Agreement (i) were true and
correct when made, and (ii) after giving effect to this
Amendment No. 3, continue to be true and correct on the date
hereof (except to the extent of changes resulting from
transactions contemplated or permitted by the Agreement, as
amended hereby, and changes occurring in the ordinary course
of business that singly or in the aggregate are not
materially adverse, and to the extent that such
representations and warranties relate expressly to an
earlier date) except as set forth in Schedule 1 attached
hereto.
(b) Authority. The execution and delivery by each Borrower
and the Guarantor of this Amendment No. 3 and the
performance by each of the Borrower and the Guarantor of all
of its respective agreements and obligations under this
Amendment No. 3 are within its corporate authority, have
been duly authorized by all necessary corporate action and
do not and will not: (i) contravene any provision of its
charter documents or any amendment thereof; (ii) conflict
with, or result in a breach of any material term, condition
or provision of, or constitute a default under or result in
the creation of any mortgage, lien, pledge, charge, security
interest or other encumbrance upon any of its property under
any agreement, deed of trust, indenture, mortgage or other
instruments to which it is a party or by which any of its
properties are bound including, without limitation, any of
the Other Agreements; (iii) violate or contravene any
provision of any law, statute, rule or regulation to which
the Borrower or the Guarantor is subject or any decree,
order or judgment of any court of governmental or regulatory
authority, bureau, agency or official applicable to the
Borrower or the Guarantor; (iv) require any waivers,
consents or approvals by any of its creditors which have not
been obtained; or (v) require any approval, consent, order,
authorization or license by, or giving notice to, or taking
any other action with respect to, any governmental or
regulatory authority or agency under any provision of any
law, except (A) those actions which have been taken or will
be taken prior to the date of execution of this Amendment
No. 3 and (B) filings with the Securities and Exchange
Commission to be made on or prior to September 30, 1999.
(c) Enforceability of Obligations. This Amendment No. 3
and the Agreement, as amended hereby, constitute the legal,
valid and binding obligations of the Borrower and the
Guarantor enforceable against the Borrower and the Guarantor
in accordance with their respective terms, provided that:
(i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of
general application affecting the rights and remedies of
creditors; and (ii) the availability of the remedies of
specific performance and injunctive relief may be subject to
the discretion of the court before which any proceedings for
such remedies may be brought.
Section 5. Counterparts. This Amendment No. 3 to the
Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Borrower, the Guarantor and the Bank
have caused this Amendment No. 3 to the Agreement to be executed
in their respective names and their respective seals to be
hereunto affixed and attested by their duly authorized
representatives, all as of the date first above written.
THE BORROWER:
XXXXX REGULATOR CO.
By:_____________________________________
_______
Title:
THE GUARANTOR:
XXXXX INDUSTRIES, INC.
By:_____________________________________
_______
Title:
THE BANK:
FIRST UNION NATIONAL BANK
ATTEST:
By:____________________________________________
Title:
__________________________
Title:
(Corporate Seal)
8
CLTLIB01 553691.2
EXECUTION
CLTLIB01 553691.2
