Exhibit 4.(ii)(1)(a)(4)
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement, dated as of December 31,
1996 (this "Agreement"), is by and between DEFLECTA-SHIELD CORPORATION,
a Delaware corporation ("Borrower"), and XXXXXX FINANCIAL, INC., a
Delaware corporation ("Xxxxxx").
W I T N E S S E T H:
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WHEREAS, Borrower and Xxxxxx are parties to that certain Credit
Agreement dated as of July 21, 1994 (the "Credit Agreement"; capitalized
terms not otherwise defined herein having the definitions provided
therefor in the Credit Agreement) and to certain other documents
executed in connection with the Credit Agreement; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
provided herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendments to the Credit Agreement.
(a) As of the First Amendment Effective Date, the
projected amount outstanding under (i) Acquisition Loan A is
$2,933,793.02, (ii) Acquisition Loan B is $-0-, and (iii) Acquisition
Loan C is $-0-. On the First Amendment Effective Date, all amounts
outstanding under each of Acquisition Loan A, Acquisition Loan B and
Acquisition Loan C shall be deemed converted into Revolving Loans and
each of Acquisition Loan A Commitment, Acquisition Loan B Commitment and
Acquisition Loan C Commitment shall immediately terminate and,
thereafter, Xxxxxx shall have no further obligation or commitment to
advance any funds to Borrower under the Acquisition Loan Commitments
(collectively, the "Conversion and Termination"). Immediately after the
Conversion and Termination, the principal amount outstanding under the
Revolving Loan is projected to be $7,428,764.40. For purposes of this
Agreement, "First Amendment Effective Date" means December 1, 1996.
(b) Each of the following definitions contained in the
Credit Agreement, and each reference thereto in the Credit Agreement,
are hereby deleted in their entirety as of the First Amendment Effective
Date following the Conversion and Termination:
"Acquisition A Notes"
"Acquisition B Notes"
"Acquisition C Notes"
"Acquisition Loan A"
"Acquisition Loan A Commitment"
"Acquisition Loan B"
"Acquisition Loan B Commitment"
"Acquisition Loan C"
"Acquisition Loan C Commitment"
"Acquisition Loan Commitments"
"Acquisition Loans"
"Available Excess Cash Flow"
"Available Excess Cash Flow Certificate"
"Eligible Accounts"
"Eligible Inventory"
"Excess Cash Flow"
"Unused Acquisition Line Fee"
(c) The definition of "Base Rate" is hereby amended by
deleting references therein to "The Chase Manhattan Bank, National
Association or Chemical Bank" and inserting in lieu thereof: "or Chase
Bank, N.A."
(d) The definitions of "Borrowing Base", "'Note' or
'Notes'" and "Revolving Notes" are hereby amended and restated as
follows:
"Borrowing Base" means, as of any date of determination, (i)
three (3) multiplied by (ii) EBIDAT for the twelve (12) month
period ending on the last day of the immediately preceding month
for which Borrower has delivered the Compliance Certificate.
"Note" or "Notes" means one or more of the Revolving Notes.
"Revolving Notes" means, collectively, the amended and
restated promissory notes of Borrower substantially in the form of
Exhibit F, issued pursuant to subsection 2.1(E).
(e) The following new definitions are inserted in
subsection 1.1 in alphabetical order:
"Base Rate Loans" means Loans bearing interest at
rates determined by reference to the Base Rate.
"LIBOR" means, for each Interest Period (as defined in
subsection 2.2(A)(1)), a rate equal to: (a) the rate of interest
determined by Agent at which deposits in U.S. dollars for the
relevant Interest Period are offered based on information
presented on the Reuters Screen LIBOR Page as of 11:00 a.m.
(London time) on the day which is two (2) Business Days prior to
the first day of such Interest Period, provided that if at least
two such offered rates appear on the Reuters Screen LIBO Page in
respect of such Interest Period, the arithmetic mean of all such
rates will be the rate used, provided, further, that if fewer than
two offered rates appear or if Reuters ceases to provide LIBOR
quotations, such rate shall be the rate of interest at which
deposits in U.S. dollars are offered for the relevant Interest
Period by either Bankers Trust Company or Chase Bank, N. A to
prime banks in the London interbank market, divided by (b) a
number equal to 1.0 minus the aggregate (but without duplication)
of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) Business Days
prior to the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves
under any regulations of the Board of Governors of the Federal
Reserve System or other governmental authority having jurisdiction
with respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) which are required to
be maintained by a member bank of the Federal Reserve System; such
rate to be rounded upward to the next whole multiple of
one-sixteenth of one percent (.0625%).
"LIBOR Loans" means Loans bearing interest at rates
determined by reference to the LIBOR.
"Total Indebtedness to EBIDAT Ratio" means, for any
Calculation Period (as defined in subsection 2.4(A)(1)), the ratio
of (i) the sum of (a) the average daily principal balance of the
Revolving Loan for the one month period ending on the last day of
the month for which the Compliance Certificate most recently
delivered pursuant to subsection 5.1(C) was prepared, plus (b) all
other Indebtedness for borrowed money of the Borrower and its
Subsidiaries on a consolidated basis as of the last day of such
month, to (ii) EBIDAT for the twelve (12) month period ending on
the last day of such month.
(f) Subsections 2.1(B), 2.3(B)(2), 2.4(C)(4), 2.4(D)(3),
4.20(C), 5.1(F) and 5.1(T) and any references to said subsections in the
Credit Agreement, are hereby deleted in their entirety.
(g) The second sentence of subsection 2.1(A) is hereby
replaced with the following sentence:
"The aggregate amount of the Revolving Loan Commitments of Lenders
shall be $21,000,000."
(h) Subsection 2.1(E) is hereby amended and restated as
follows:
(E) Notes. Borrower shall execute and deliver to each
Lender an Amended and Restated Revolving Note to evidence the
Revolving Loan, such Amended and Restated Revolving Note to be in
the principal amount of the Revolving Loan Commitment of such
Lender and with other appropriate insertions. In the event of an
assignment under subsection 9.1, Borrower shall, upon surrender of
the assigning Lender's Note, issue new Notes to reflect the new
Commitments of the assigning Lender and its assignee.
(i) Subsection 2.2(A) is hereby amended and restated to
read as follows:
(A) Rate of Interest.
(1) So long as no Event of Default has occurred and is
continuing, from the Effective Date with respect to the Revolving
Loans outstanding at the Effective Date and from the date all
future Revolving Loans are made and the date all other Obligations
become due, depending upon Borrower's election from time to time,
as permitted herein, to have portions of the Loans accrue interest
based upon the LIBOR, the Loans and the other Obligations shall
bear interest at the rates set forth in below:
The Revolving Loan and all other Obligations shall bear
interest as follows:
(a) If a Base Rate Loan, then at the sum of the Base Rate
plus the Base Rate Margin.
(b) If a LIBOR Loan, then at the sum of the LIBOR plus the
LIBOR Margin.
"Base Rate Margin" shall mean, (i) for the period
commencing on the Effective Date and ending on the day preceding
the first Business Day of the calendar month commencing
immediately after the receipt by Agent of the next Compliance
Certificate delivered by Borrower pursuant to subsection 5.1(C)
(the first Business Day of the calendar month commencing
immediately after the receipt by Agent of each Compliance
Certificate delivered by Borrower pursuant to subsection 5.1(C)
being hereinafter referred to as an "Adjustment Date"), the
applicable percent per annum set forth in the pricing table below
opposite the Total Indebtedness to EBIDAT Ratio, assuming that the
Total Indebtedness to EBIDAT Ratio equals 0.8 to 1.0, and (ii)
during the period commencing on each Adjustment Date and ending on
the day preceding each subsequent Adjustment Date (each such
period being hereinafter referred to as a "Calculation Period"),
the applicable percent per annum set forth in the pricing table
below opposite the Total Indebtedness to EBIDAT Ratio calculated
for such Calculation Period.
"LIBOR Margin" shall mean, (i) for all LIBOR Loans
having an Interest Period commencing during the period commencing
on the Closing Date and ending on the day preceding the first
Adjustment Date, the applicable percent per annum set forth in the
pricing table below opposite the Total Indebtedness to EBIDAT
Ratio, assuming that the Total Indebtedness to EBIDAT Ratio equals
0.8 to 1.0, and (ii) for all LIBOR Loans having an Interest Period
commencing during the period commencing on an Adjustment Date and
ending on the day preceding the subsequent Adjustment Date, the
applicable percent per annum set forth in the pricing table below
opposite the Total Indebtedness to EBIDAT Ratio calculated for
such Calculation Period.
PRICING TABLE
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Total Indebtedness Base Rate Margin LIBOR Margin
to EBIDAT Ratio
Revolving Revolving
Loans Loans
Greater than 2.5x 0.25% 1.75%
Greater than 1.5x but less
than or equal to 2.5x 0.00% 1.50%
Less than or equal to 1.5x 0.00% 1.25%
If Borrower shall fail to deliver a Compliance
Certificate by the date required pursuant to subsection 5.1(C),
effective as of the first Business Day of the immediately
succeeding calendar month and continuing through the day preceding
the next succeeding Adjustment Date, each applicable Base Rate
Margin and each applicable LIBOR Rate Margin shall be conclusively
presumed to equal the highest applicable Base Rate Margin and the
highest applicable LIBOR Margin specified in the pricing table set
forth above.
Each LIBOR Loan may be obtained for a one (1), two
(2), three (3), or six (6) month period (each being an "Interest
Period"). With respect to all LIBOR Loans: (a) the Interest
Period will commence on the date that the LIBOR Loan is made or
the date on which a Base Rate Loan is converted into a LIBOR Loan,
as applicable, or in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires, (b) if the
Interest Period expires on a day that is not a Business Day, then
it will expire on the next Business Day, and (c) no Interest
Period shall extend beyond the Termination Date.
If the introduction of or the interpretation of any
law, rule, or regulation would increase the reserve requirement or
otherwise increase the cost to any Lender of making or maintaining
a LIBOR Loan, then Agent, on behalf of all affected Lenders, shall
submit a certificate to Borrower demonstrating the calculation of
the increased cost and requiring payment thereof to Agent for the
benefit of the affected Lenders within ten (10) days after the
date of the certificate. There are no limitations on the number
of times such certificate may be submitted.
(2) At the election of Agent, in its sole discretion,
after the occurrence of an Event of Default and for so long as
such Event of Default continues, the Loans and all other
Obligations shall bear interest until paid in full at a rate per
annum (meaning 360 days) that is three percent (3.0%) in excess of
the rate of interest otherwise payable under this Agreement.
(j) Subsection 2.3(B)(1) is hereby amended by replacing
the text following "(ii)" with the following:
"one-quarter of one percent (0.25%) per annum."
(k) Subsection 2.4(C)(5) is hereby amended and restated as
follows:
(5) Application. All mandatory repayments of the Loans
pursuant to subsections 2.4(C)(2) and (C)(3) shall in each case be
applied in payment of the Revolving Loan.
(l) Subsection 3.2 is hereby amended by (i) renaming said
subsection "Conditions to Revolving Loans for Permitted Acquisitions"
and (ii) amending all references in said subsection to "Acquisition
Loan" to refer to "Revolving Loan".
(m) Subsection 4.20(B) is hereby amended and restated as
follows:
(B) No portion of the proceeds of any Revolving
Loans shall be used by Borrower for any purpose other than (i) to
satisfy the ongoing working capital requirements of Borrower and
its Subsidiaries arising from time to time in the ordinary course
of their respective businesses; (ii) Capital Expenditures; and
(iii) Permitted Acquisitions.
(n) Subsections 6.1 and 7.8 of the Credit Agreement, and
all references thereto contained in the Credit Agreement, are hereby
deleted in its entirety.
(o) The reference to Acquisition Loan Commitments
contained on the signature page to the Credit Agreement, together with
the related commitment amounts, are hereby deleted in their entirety.
In addition, the reference to Revolving Loan Commitment contained on the
signature page is hereby amended to read as follows:
"Revolving Loan Commitment: $21,000,000"
(p) Exhibits A, X-0 X-0, B and D to the Credit Agreement
are hereby deleted in their entirety. Exhibits C and F to the Credit
Agreement are hereby replaced with new Exhibits C and F in the form
attached to this Agreement.
2. Waiver of Past Defaults. Borrower is in default under the
Credit Agreement for its failure to comply with the covenant contained
in Subsection 6.1 of the Credit Agreement for the period of August 31,
1996 through November 30, 1996. Borrower has requested that Xxxxxx
waive these Events of Default for such period.
In response to Borrower's request, Xxxxxx hereby agrees to waive
the Events of Default caused by the Borrower's failure to comply with
Subsection 6.1 of the Credit Agreement solely as it relates to
Subsection 6.1, provided, however, nothing contained herein shall be
deemed to constitute a waiver of future compliance with Subsections 6.1
or any other term or condition contained in the Credit Agreement.
3. Representations and Warranties. To induce Agent and Lenders
to enter into this Agreement, Borrower represents and warrants to Agent
on behalf of the Lenders that the execution, delivery and performance by
Borrower of this Agreement are within its corporate powers, have been
duly authorized by all necessary corporate action and do not and will
not contravene or conflict with any provision of law applicable to
Borrower, the Certificate of Incorporation or Bylaws of Borrower, or any
order, judgment or decree of any court or other agency of government or
any contractual obligation binding upon Borrower; and the Credit
Agreement as amended as of the date hereof is the legal, valid and
binding obligation of Borrower enforceable against Borrower in
accordance with its terms.
4. Conditions. The effectiveness of the amendments stated in
this Agreement is subject to each of the following conditions precedent
or concurrent:
(a) No Default. No Default or Event of Default under the
Credit Agreement, as amended hereby, shall have occurred and be
continuing;
(b) Warranties and Representations. The warranties and
representations of Borrower contained in this Agreement, the Credit
Agreement, as amended hereby, and the other Loan Documents, shall be
true and correct as of the effective date hereof, with the same effect
as though made on such date;
(c) Amended and Restated Revolving Note. Borrower shall
have executed and delivered to each Lender an Amended and Restated
Revolving Note in the form attached as Exhibit F hereto; and
(d) Reaffirmation of Guaranty. Borrower shall have
caused each of Belmor Autotron Corp. and D F M Corp. to deliver to Agent
for the benefit of each Lender a Reaffirmation of Guaranty in form and
substance satisfactory to Lender.
5. Miscellaneous.
(a) Captions. Section captions used in this Agreement are
for convenience only, and shall not affect the construction of this
Agreement.
(b) Governing Law. This Agreement shall be a contract
made under and governed by the laws of the State of Illinois, without
regard to conflict of laws principles. Whenever possible each provision
of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
(c) Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be
an original, but all such counterparts shall together constitute but one
and the same Agreement.
(d) Successors and Assigns. This Agreement shall be
binding upon Agent, Borrower and Lenders and their respective successors
and assigns, and shall inure to the sole benefit of Agent, Borrower and
Lenders and the successors and assigns of Agent, Borrower and Lenders.
(e) References. Any reference to the Credit Agreement
contained in any notice, request, certificate, or other document
executed concurrently with or after the execution and delivery of this
Agreement shall be deemed to include this Agreement unless the context
shall otherwise require.
(f) Continued Effectiveness. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do
not serve to effect a novation as to the Credit Agreement. The parties
hereto expressly do not intend to extinguish the Credit Agreement.
Instead, it is the express intention of the parties hereto to reaffirm
the indebtedness created under the Credit Agreement which is evidenced
by the Notes and secured by the Collateral. The Credit Agreement as
amended hereby and each of the other Loan Documents remains in full
force and effect.
(g) Costs, Expenses and Taxes. Borrower affirms and
acknowledges that subsection 10.1 of the Credit Agreement applies to
this Agreement and the transactions and Agreements and documents
contemplated hereunder.
Delivered at Chicago, Illinois, as of the day and year first above
written.
DEFLECTA-SHIELD CORPORATION
By:___________________________
Name Printed:_________________
Title:________________________
XXXXXX FINANCIAL, INC.,
Individually and as Agent
By:___________________________
Name Printed:_________________
Title:________________________
