EXHIBIT 10.1
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of September 21, 2001 (this "Amendment"), is among DAY INTERNATIONAL GROUP,
INC., a Delaware corporation (the "Borrower"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "Lenders"), BANC ONE CAPITAL MARKETS, as advisor and arranger (in such
capacity, the "Arranger"), and BANK ONE, NA, as administrative agent (in such
capacity, the "Administrative Agent").
RECITAL
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A. The Borrower, the Lenders, the Arranger and the
Administrative Agent are parties to an Amended and Restated Credit Agreement
dated as of October 19, 1999, as modified by an Agency Assignment Agreement
dated June 29, 2001 (the "Credit Agreement").
B. The Borrower has requested that the Administrative Agent
and the Lenders amend the Credit Agreement as set forth herein, and the
Administrative Agent and the Lenders are willing to do so strictly in accordance
with the terms hereof.
TERMS
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In consideration of the premises and of the mutual agreements
herein contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set
forth in Article III hereof, the Credit Agreement shall be amended as follows:
1.1 Section 1.1 of the Credit Agreement is amended by adding
the following definitions in appropriate alphabetical order:
"FIRST AMENDMENT" means the First Amendment to this Agreement dated as
of September , 2001.
"FIRST AMENDMENT EFFECTIVE DATE" shall mean the date all the conditions
to the effectiveness of the First Amendment are satisfied.
"BANK ONE" Bank One, NA, a national banking association having its
principal office in Columbus, Ohio, in its individual capacity, and its
successors.
1.2 Section 1.1 of the Credit Agreement is amended by
restating the definitions of "Base Rate", "Borrowing Base", "Consolidated Fixed
Charge Coverage Ratio", and "Consolidated Fixed Charges" as follows:
"BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect
on such day, and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall mean means a rate
per annum equal to the prime rate of interest announced from time to time by
Bank One or its parent (which is not necessarily the lowest rate charged to any
customer), changing when and as said prime rate changes. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.
"BORROWING BASE": at any date of determination thereof, an amount equal
to the sum of (i) 80% of the Eligible Accounts Receivable at such date and (ii)
the lesser of 50% of the Eligible Inventory at such date or $10,000,000. The
Borrowing Base shall be determined from time to time by the Administrative Agent
in its reasonable judgment by reference to the Borrowing Base Certificate then
most recently delivered to it; PROVIDED that the information contained in such
Borrowing Base Certificate shall not be conclusive in calculating the Borrowing
Base and, after consultation with the Borrower, the Administrative Agent shall
be entitled to adjust the amounts and other information contained therein to the
extent that it believes in its reasonable credit judgment that such adjustment
is appropriate to cause the Borrowing Base (as so adjusted) to reflect the
standards set forth in the definitions of the terms "Eligible Accounts
Receivable" and "Eligible Inventory".
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDA for such period less the aggregate amount actually
paid by the Borrower and its Subsidiaries in cash during such period on account
of Capital Expenditures to (b) Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (i) Consolidated Interest Expense for such period, (ii) the
aggregate amount paid, or required to be paid, by the Borrower or any of its
Subsidiaries in respect of income taxes during such period (net of tax credits
and benefits, including tax benefits from net operating losses) on a
consolidated basis in respect of such period and (iii) scheduled payments paid
or payable during such period on account of principal of Indebtedness of the
Borrower or any of its Subsidiaries (including without limitation scheduled
principal payments in respect of the Term Loans).
1.3 Section 2.18(b) is restated as follows:
(b) Each payment (including each prepayment) by the Borrower on account
of principal and interest on the Term Loans shall be made PRO RATA according to
the respective outstanding principal amounts of the Term Loans then held by the
Term Loan Lenders. The amount of each principal prepayment of the Term Loans,
whether under Section 2.11, 2.12 or otherwise, shall be applied to the principal
installments due on the Term Loans in the inverse order of maturity. Amounts
prepaid on account of the Term Loans may not be reborrowed.
1.4 Section 7.1(a), (b) and (c) are restated as follows:
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
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At 9/30/01 through 12/31/01 5.85
At 3/31/02 through 6/30/02 5.75
At 9/30/02 5.50
At 12/31/02 5.25
At 3/31/03 5.00
At 6/30/03 4.75
At 9/30/03 4.50
At 12/31/03 through 3/31/04 4.25
At 6/30/04 through 9/30/04 4.00
As of the end of any fiscal quarter thereafter 3.50
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to be
less than the ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
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At 9/30/01 through 3/31/02 1.70
At 6/30/02 through 12/31/02 1.80
At 3/31/03 through 9/30/03 2.00
At 12/31/03 through 3/31/04 2.25
At 6/30/04 through 9/30/04 2.50
As of the end of any fiscal quarter thereafter 2.75
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
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at 9/30/01 0.85
at 12/31/01 through 3/31/02 1.05
at 6/30/02 through 12/31/02 1.00
at 3/31/03 through 6/30/03 1.05
As of the end of any fiscal quarter thereafter 1.10
1.5 Section 7.5 is amended by replacing the period at the end
of such Section with ":and" and adding the following new clause (k) to the end
of such Section:
(k) the sale of the Borrower's assets consisting of the net assets,
customer list and patents of the Kompac business unit of Xxxx International,
Inc., provided that the Net Cash Proceeds of such sale are applied as mandatory
prepayments in accordance with Section 2.12.
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1.6 Section 7.9 is restated as follows:
7.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS, ETC. (a) Make or offer to make any payment, prepayment, repurchase
or redemption of or otherwise defease or segregate funds with respect to the
Existing Notes (except with the proceeds of subordinated Indebtedness incurred
pursuant to Section 7.2(i)), the Senior Subordinated Notes, the Subordinated
Exchange Debentures, Senior Preferred Stock or the Preference Stock (other than
scheduled interest payments required to be made in cash on the Senior
Subordinated Notes or the Subordinated Exchange Debentures if and to the extent
not prohibited by the subordination provisions thereof) or the promissory notes
described in Section 7.2(n) (other than scheduled interest payments required to
be made in cash on such promissory notes described in Section 7.2(n) if and to
the extent not prohibited by the subordination provisions thereof), (b) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Existing Notes,
the Senior Subordinated Notes, the Subordinated Exchange Debentures, the Senior
Preferred Stock or the promissory notes described in Section 7.2(n) (other than
any such amendment, modification, waiver or other change which (i) would extend
the maturity or reduce the amount of any payment of principal thereof or which
would reduce the rate or extend the date for payment of interest thereon and
(ii) does not involve the payment of a consent fee), (c) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as "Designated Senior Indebtedness" (or any similar term) for the
purposes of the Senior Subordinated Note Indenture or the Exchange Debenture
Indenture or (d) except for the amendment of the Borrower's certificate of
incorporation and the designation of the Preference Stock pursuant to the
Certificate of Designation with respect thereto, in each case, as contemplated
by the Preference Stock Purchase Agreement, amend its certificate of
incorporation (including the Certificate of Designation with respect to the
Preference Stock) in any manner determined by the Administrative Agent to be
adverse to the Lenders without the prior written consent of the Required
Lenders.
1.7 The Pricing Grid attached as Annex A to the Credit
Agreement is replaced with the Pricing Grid attached as Annex A to this
Amendment.
ARTICLE II. REPRESENTATIONS. The Borrower represents and
warrants to the Administrative Agent and the Lenders that:
2.1 The execution, delivery and performance of this Amendment
are within its powers, have been duly authorized and is not in contravention of
any statute, law or regulation or of any terms of its Articles of Incorporation
or By-laws, or of any material agreement or undertaking to which it is a party
or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation
of it, enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments and waivers
contained herein, each of the representations and warranties made by any Loan
Party in or pursuant to the Loan Documents shall, except to the extent that they
speak as of a particular date (in which case they shall be true as of such
date), be true and correct in all material respects on and as of the First
Amendment Effective Date as if made on and as of the First Amendment Effective
Date.
2.4 After giving effect to the amendments and waivers
contained herein, no Default or Event of Default shall have occurred and be
continuing as of the First Amendment Effective Date.
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ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall
be effective as of the date hereof when each of the following conditions is
satisfied:
3.1 The Borrower and the Lenders shall have signed this
Amendment.
3.2 The Guarantors shall have signed the Consent and Agreement
attached to this Amendment.
3.3 The Borrower and the Guarantors shall have satisfied such
other conditions as requested by the Administrative Agent, including without
limitation the delivery of board resolutions of the Borrower and each Guarantor
and such legal opinions as requested by the Administrative Agent.
ARTICLE IV. MISCELLANEOUS.
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4.1 The Borrower agrees to pay an amendment fee to each Lender
signing this Amendment on or before 5:00 p.m., Columbus time, on September __,
2001 in an amount equal to 25 basis points on the sum of such Lender's Revolving
Credit Commitment and the amount of the Term Loan held by such Lender, payable
on the First Amendment Effective Date.
4.2 References in the Credit Agreement or in any other Loan
Document to the Credit Agreement shall be deemed to be references to the Credit
Agreement as amended hereby and as further amended from time to time.
4.3 The Borrower agrees to pay and to save the Administrative
Agent harmless for the payment of all reasonable documented costs and expenses
arising in connection with this Amendment, including the reasonable documented
fees of counsel to the Administrative Agent in connection with preparing this
Amendment and the related documents.
4.4 The Borrower and each Guarantor acknowledges and agrees
that, to the best of their knowledge, the Administrative Agent and the Lenders
have fully performed all of their obligations under the Loan Documents. The
Borrower represents and warrants that it is not aware of any claims or causes of
action against the Administrative Agent, the Arranger, the Issuing Lender or any
Lender or any of their successors or assigns. Notwithstanding this
representation and a further consideration for the agreements and understandings
herein, the Borrower and each Guarantor and their respective successors and
assigns hereby release the Administrative Agent, the Arranger, the Issuing
Lender and each Lender and their respective successors and assigns from any
liability, claim, right or cause of action which now exists or hereafter arises,
whether known or unknown, arising from or in any way related to facts in
existence as of the date hereof to any agreements or transactions among the
Administrative Agent, the Arranger, the Issuing Lender, the Lenders, the
Borrower, the Guarantors or any of them, or to any acts or omissions of the
Administrative Agent, the Arranger, the Issuing Lender or the Lenders in
connection therewith or otherwise related thereto in any way.
4.5 Except as expressly amended hereby, the Borrower and each
Guarantor agrees that the Loan Documents and all other documents and agreements
executed by the Borrower or any Guarantor in connection with the Credit
Agreement in favor of the Administrative Agent, the Arranger, the Issuing Lender
or any Lender are ratified and confirmed, as amended hereby, and shall remain in
full force and effect in accordance with their terms and that they are not aware
of any set off, counterclaim, defense or other claim or dispute with respect to
any of the foregoing. Terms used but not defined herein shall have the
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respective meanings ascribed thereto in the Credit Agreement. This Amendment may
be signed upon any number of counterparts with the same effect as if the
signatures thereto and hereto were upon the same instrument, and telecopied
signatures shall be effective as originals.
IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of the day and year first
above written.
DAY INTERNATIONAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxxx
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Title: Vice President and Chief Financial Officer
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BANK ONE, NA, individually and as Administrative
Agent
(Main Columbus office)
By /s/ Xxxx X. Xxxxxxxx
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Title Vice President
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PNC BANK, NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Xxxxx
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Title: Vice President
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THE FUJI BANK, LIMITED
By /s/ Xxxxxxx Xxxxx
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Title: Senior Vice President
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NATIONAL CITY BANK
By /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Title: Vice President
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FLEET NATIONAL BANK
By /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Title: Senior Vice President
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FIRSTAR BANK, NA
By /s/ Xxxxxx X. Xxxxx
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Title: Vice President
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KEYBANK NATIONAL ASSOCIATION
By /s/ Xxxxxx X. Holding
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Xxxxxx X. Holding
Title: Vice President
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BANC ONE CAPITAL MARKETS, as Arranger
By /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Director
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CONSENT AND AGREEMENT
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As of the date and year first above written, each of the
undersigned hereby:
(a) fully consents to the terms and provisions of the above
Amendment and the consummation of the transactions contemplated thereby and
agrees to all the terms and provisions applicable to it;
(b) agrees that each Loan Document to which it is a party is
hereby ratified and confirmed and shall remain in full force and effect,
acknowledges and agrees that it has no setoff, counterclaim, defense or other
claim or dispute with respect to any Loan Document to which it is a party; and
(c) represents and warrants to the Administrative Agent and
the Lenders that the execution, delivery and performance of this Consent and
Agreement are within its powers, have been duly authorized and are not in
contravention of any statute, law or regulation or of any terms of its
organizational documents or of any material agreement or undertaking to which it
is a party or by which it is bound, and this Consent and Agreement is the legal,
valid and binding obligations of it, enforceable against it in accordance with
the terms hereof and thereof. Terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
DAY INTERNATIONAL, INC.
By /s/ Xxxxxx X. Xxxxxx
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Title: Vice President and Chief Financial Officer
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XXXX INTERNATIONAL, INC.
By /s/ Xxxxxx X. Xxxxxx
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Title: Vice President and Chief Financial Officer
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DAY INTERNATIONAL FINANCE, INC.
By /s/ Xxxxxx X. Xxxxxx
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Title: Vice President and Chief Financial Officer
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Annex A
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PRICING GRID FOR REVOLVING CREDIT LOANS,
SWING LINE LOANS AND TERM LOANS
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Consolidated Leverage Ratio Applicable Margin Applicable
Margin for Base ("LR") for Eurodollar Loans Rate Loans
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LR Greater than or equal to 5.50 3.25% 2.25%
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5.50 Less than LR Greater than or equal to 5.00 3.00% 2.00%
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5.00 Less than LR Greater than or equal to 4.00 2.75% 1.75%
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4.00 Less than LR Greater than or equal to 3.50 2.50% 1.50%
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LR less than 3.50 2.25% 1.25%
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Changes in the Applicable Margin with respect to Term Loans resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the "ADJUSTMENT DATE") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed greater than or equal to 5.50 to 1. In addition, at all
times while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio shall for the purposes of this definition be deemed
to be greater than or equal to 5.50 to 1. If on any Adjustment Date the
Consolidated Leverage Ratio would result in different Applicable Margins, the
higher Applicable Margin shall govern. Each determination of the Consolidated
Leverage Ratio pursuant to this definition shall be made with respect to the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements. As of the First
Amendment Effective Date, the Applicable Margin for Eurodollar Loans is set at
3.25% and the Applicable Margin for Base Rate Loans is set at 2.25%.
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