FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of September 27,
2004 (this "Amendment") is entered into among XXXXXXX INDUSTRIES, INC., a
Delaware corporation (the "Borrower"), the financial institutions party
hereto (together with their respective successors and assigns, the "Banks"),
STANDARD FEDERAL BANK N.A., as administrative agent for the Banks (in such
capacity, the "Agent").
RECITAL
The Borrower, the Banks and the Agent are parties to a Credit
Agreement dated as of November 6, 2003 (the "Credit Agreement"). The
Borrower and the Guarantors desire to amend the Credit Agreement and the
Banks and the Agent are willing to do so strictly in accordance with the
terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE 1.
AMENDMENTS
The Credit Agreement is amended as follows:
1.1 The definitions of "Consolidated Interest Expense", "Line of
Credit Maturity", "Loan Documents" and "Pricing Schedule" in Section 1.1 are
restated as follows:
"Consolidated Interest Expense" means interest expense of the Borrower
and its Subsidiaries on a consolidated basis under GAAP, excluding any
amortization of any premium or discount in respect of the issuance of the
2004 Subordinated Debentures.
"Line of Credit Maturity" means the earlier of November 6, 2007 or the
date the Commitments are terminated.
"Loan Documents" means this Agreement, the Notes, the Guaranties,
applications for Letters of Credit, the Subordinated Debt Documents and all
other documents, instruments or certificates executed and delivered to the
Banks in connection with this Agreement and the Loans.
"Pricing Schedule" means the following schedule:
Eurocurrency
Capitalization Facility Applicable Margin and All-in
Tier Ratio 1 Fee Letter of Credit Fee Drawn Cost
IV3 >55% 20.0 xx0 00.0 xx 00.0 xx
XXX >45%, but 15.0 bp 60.0 bp 75.0 bp
< = 55%
II >35%, but 15.0 bp 47.5 bp 62.5 bp
< = 45%
I < = 35% 12.5 xx 00.0 xx 00.0 xx
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0 Defined as Total Debt/Capitalization.
2 "bp" means basis points per annum.
3 All fees will be calculated by the Capitalization Ratio as of the
latest fiscal quarter for which financial statements have been
delivered pursuant to Section 5.3.1, provided, however, that if such
statements are not delivered as required by Section 5.3.1, the Tier
IV fees shall apply.
As of the First Amendment Effective Date, the Applicable Margin
will be set at Tier III above.
1.2 The following definitions are added to Section 1.1 in
appropriate alphabetical order:
"First Amendment" means the First Amendment to this Agreement dated
September 27, 2004.
"First Amendment Effective Date" shall mean effective date of the
First Amendment.
"Subordinated Debt" means (a) the 2004 Subordinated Debt and (b) any
other unsecured Indebtedness of the Borrower which has subordination terms,
covenants, pricing and other terms which have been approved in writing by
the Required Banks.
"Subordinated Debt Documents" means the 2004 Subordinated Debt
Documents and all other agreements, documents and instruments relating to
any other Subordinated Debt at any time and all amendments and modifications
thereof approved by the Required Banks.
"2004 Recapitalization" means the issuance of the 2004 Subordinated
Debentures and the making of the special dividend on the common stock of the
Borrower announced by the Borrower on September 2, 2004 and consisting of
$6.50 in cash and $8.50 in 2004 Subordinated Debentures per share of common
stock.
"2004 Subordinated Debt" means all Indebtedness of the Borrower and
the Guarantors under the 2004 Subordinated Debt Documents.
"2004 Subordinated Debt Documents" means the 2004 Subordinated
Indenture, the 2004 Subordinated Debentures and all other agreements,
documents and instruments relating to the 2004 Subordinated Debentures at
any time and all amendments and modifications thereof approved by the
Required Banks.
"2004 Subordinated Debentures" means the 6.00% Subordinated Debentures
issued by the Borrower in the aggregate principal amount not to exceed
$320,000,000 due 2014 issued pursuant to the 2004 Subordinated Indenture and
any other securities issued pursuant to the 2004 Subordinated Indenture at
any time.
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"2004 Subordinated Indenture" means the Subordinated Indenture between
the Borrower, the subsidiary guarantors named therein and the trustee
thereunder, to be dated on or before November 30, 2004 (or such later date
approved by the Required Banks) pursuant to which the 2004 Subordinated
Debentures are to be issued, as amended or modified from time to time.
1.3 The following new Section 4.17 is added:
4.17 Subordinated Debt Documents/2004 Recapitalization. All
representations and warranties of the Borrower contained in any Subordinated
Debt Document are true and correct (or will be upon closing of the relevant
Subordinated Debt Documents) in all material respects as of the date such
representations and warranties are made. The subordination provisions of the
Subordinated Debt are (or will be upon closing of the relevant Subordinated
Debt Documents) enforceable against the holders of the Subordinated Debt by
the Agent and the Banks. All Obligations are senior debt (or will be upon the
closing of the relevant Subordinated Debt Document) as defined in the
Subordinated Debt Documents entitled to the benefits of the subordination
provisions contained in the Subordinated Debt Documents, and are and will be
incurred in compliance with all Subordinated Debt Documents. There is no event
of default or event or condition which would become an event of default with
notice or lapse of time or both, under any Subordinated Debt Document and
each of the Subordinated Debt Documents is (or will be upon the closing of
the relevant Subordinated Debt Document) in full force and effect. The
Borrower acknowledges that the Agent and each Bank are entering into the
First Amendment and are extending the Commitments and making Advances in
reliance upon the subordination provisions of the Subordinated Debt.
1.4 Section 5.3.15 is re-designated as Section 5.3.16, and the
following new Section 5.3.15 is added:
5.3.15 Subordinated Debt Notices. Promptly following receipt or
filing, copies of (i) any notices of default or acceleration or
of the exercise of any material rights or remedies received from any holder
or trustee (or similar representative) with respect to any Subordinated
Debt, (ii) any notices of reports required by the Trust Indenture Act of
1939, or any successor statute, or filed with the Securities and Exchange
Commission with respect to any Subordinated Debt, (iii) any other notice
from the trustee (or similar representative) with respect to any
Subordinated Debt and (iv) any other notices with respect to any
Subordinated Debt requested by the Agent.
1.5 Effective simultaneously with the completion of the 2004
Recapitalization, Sections 5.4.1, 5.4.2 and 5.4.2 are restated as follows:
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5.4.1 Tangible Net Worth Requirements. Borrower will maintain a
minimum Tangible Net Worth of $170,000,000, to be adjusted upward at the end
of each fiscal quarter, commencing with the fiscal quarter ending December
25, 2004, by twenty five percent (25%) of positive net income after taxes
and before dividends for such quarter. Once adjusted upward, the Tangible
Net Worth requirement set forth herein will not decrease downward except for
the cash cost of repurchases of treasury stock at cost.
5.4.2 Total Debt to Capitalization Ratio. Borrower will not
permit the ratio of Borrower's Total Debt to Capitalization to exceed 60.0%,
on a consolidated basis.
5.4.3 Interest Coverage Ratio. Borrower will not permit the
Interest Coverage Ratio to be less than 3.50 to 1.00, on a consolidated
basis as calculated on a rolling four (4) quarter basis.
1.6 Each reference in Section 5.12 to "eighty percent (80%)" is
deleted and "seventy-five percent (75%)" is substituted in each place
thereof.
1.7 The following new Section 5.13 is added:
5.13 Additional Covenants. If at any time the Borrower shall enter
into or be a party to any instrument or agreement with respect to any
Indebtedness which in the aggregate, together with any related Indebtedness,
exceeds $5,000,000, including all such instruments or agreements in
existence as of the date hereof and all such instruments or agreements
entered into after the date hereof, relating to or amending any terms or
conditions applicable to any of such Indebtedness which includes covenants
or defaults or the equivalent thereof not substantially provided for in this
Agreement or more favorable to the lender or lenders thereunder than those
provided for in this Agreement, then the Borrower shall promptly so advise
the Agent and the Banks. Thereupon, if the Required Banks shall request,
upon notice to the Borrower, the Agent and the Banks shall enter into an
amendment to this Agreement or an additional agreement (as the Required
Banks may request), providing for substantially the same covenants or
defaults or the equivalent thereof, as those provided for in such instrument
or agreement to the extent required and as may be selected by the Required
Banks.
1.8 Section 6.1 is restated as follows:
6.1 Indebtedness. Except as set forth on Schedule 4.13 to this
Agreement, Borrower will not, and will cause each of the Subsidiaries (but
excluding any Subsidiary organized in Europe and any Subsidiary in which
Borrower directly or indirectly owns less than a majority interest) not to,
create, incur, assume, permit or otherwise become or remain, directly or
indirectly, liable with respect to any Indebtedness except for:
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(i) the Obligations,
(ii) Indebtedness with respect to Permitted Liens,
(iii) Indebtedness under the 2004 Subordinated Debt Documents in an
aggregate principal amount not to exceed $320,000,000 incurred on or before
November 30, 2004 (or such later date approved by the Required Banks),
provided that (x) all final versions of each 2004 Subordinated Debt Document
have been delivered to the Banks, (y) all terms, covenants, pricing,
subordination provisions and other terms thereof have been approved in
writing by the Required Banks and (z) the Borrower shall have delivered such
legal opinions and other documents in connection therewith as may be
required by the Agent and are satisfactory to the Agent,
(iv) Indebtedness of Borrower and its wholly-owned Subsidiaries in an
aggregate amount not to exceed $35,000,000,
(v) Acquired Debt in an aggregate amount not to exceed $50,000,000,
and
(vi) consolidating inter-company indebtedness as shown on
consolidating financial statements delivered pursuant to Section 5.3.1 of
this Agreement.
Furthermore, Borrower and Restricted Subsidiaries, from and after the
Closing Date, shall not make new loans or advances to transfer assets to, or
make investments in Subsidiaries that are not Restricted Subsidiaries, net
of repayments or advances from Subsidiaries that are not Restricted
Subsidiaries, in excess of $45,000,000.
1.9 Reference in Section 6.3 to "recapitalization" is deleted and
"recapitalization (other than the 2004 Recapitalization completed on or
before November 30, 2004 (or such later date approved by the Required
Banks))" is substituted in place thereof.
1.10 The following new Section 6.11 is added:
6.11 Payments and Modification of Debt. The Borrower will not, nor
will it permit any Subsidiary to:
(i) make any optional payment, defeasance (whether a covenant
defeasance, legal defeasance or other defeasance), prepayment, repurchase
(including without limitation any offer to repurchase) or other redemption
of any of its or any of its Subsidiaries' Subordinated Debt unless, in each
of the foregoing cases, immediately before and after giving effect thereto
on a pro forma basis, (a) no Event of Default and no Unmatured Event of
Default will have occurred or be continuing, nor will either result from or
exist after any such payment or other transaction is consummated, and (b)
the representations and warranties contained in Section 4 of this Agreement
or which are contained in any other Loan Document shall be true and correct
in all material respects on and as of the date thereof (both before and
after any such payment or other transaction is consummated) as if made on
the date any such payment or other transaction is consummated; or
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(ii) amend or modify, or consent or agree to any amendment or
modification of (including without limitation any supplemental agreement or
other direct of indirect method of providing additional or supplemental
terms or consideration) any Subordinated Debt Document.
1.11 Section 7.1.12 is restated as follows:
7.1.12 Change of Control. (i) Any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 35% or more of the outstanding shares of
the voting stock of the Borrower; or (ii) as of any date a majority of the
Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors by
the Board of Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described in clause (B),
or (iii) any "Change of Control", "Change in Control" or similar default or
event shall occur under any Subordinated Debt Document.
1.12 The following new Section 7.1.13 is added:
7.1.13 Invalidity of Subordination Provisions, etc. Any
subordination provision in any document or instrument governing any
Subordinated Debt, or any subordination provision in any guaranty by any
Subsidiary of any Subordinated Debt, shall cease to be in full force and
effect, or the Borrower or any Subsidiary shall contest in any manner the
validity, binding nature or enforceability of any such provision.
ARTICLE 2.
REPRESENTATIONS
The Borrower represents and warrants to the Banks and the Agent that:
2.1 Each of the Borrower and each Guarantor has full power and
authority to execute, deliver and perform this Amendment (including, in the
case of the Guarantors, the Consent and Agreement to this Amendment) and any
other agreements executed in connection herewith to which it is a party
(this Amendment and all of the other foregoing documents, the "Amendment
Documents"). Each of the Borrower and each Guarantor has taken all
necessary action to authorize the execution, delivery and performance of
each Amendment Document to which it is a party. No consent or authorization
of, or filing with, any Person (including, without limitation, any
Governmental Authority) is required in connection with the execution,
delivery and performance by Borrower or any Guarantor or the validity or
enforceability against Borrower or any Guarantor of the Amendment Documents.
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2.2 The execution, delivery and performance by each of the Borrower
and each Guarantor of each Amendment Document to which it is a party do not
and will not (a) violate any Requirement of Law applicable to Borrower or
any Subsidiary, (b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contractual
obligation of Borrower or any Subsidiary, (c) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any of
Borrower's or any Subsidiary's properties or assets, other than in favor of
the Banks, or (d) require any approval of any court or Governmental
Authority or any approval or consent of any Person under any contractual
obligation of Borrower.
2.3 Each Amendment Document, when executed and delivered, will be
the legally valid and binding obligations of Borrower and of the Guarantors,
as the case may be, enforceable against it and them in accordance with their
respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium or
similar laws, or equitable principles relating to or limiting creditors'
rights generally.
2.4 After giving effect to the amendments herein contained, the
representations and warranties contained in the Credit Agreement and the
representations and warranties contained in the other Loan Documents are
true on and as of the date hereof with the same force and effect as if made
on and as of the date hereof, and no Event of Default or Unmatured Event of
Default exists or has occurred and is continuing on the date hereof.
ARTICLE 3.
CONDITIONS PRECEDENT.
This Amendment shall be effective as of the date hereof when
each of the following has been satisfied:
3.1 This Amendment shall be signed by the Borrower and the Required
Banks.
3.2 Each Guarantor shall have executed the Consent and Agreement
attached hereto.
3.3 The Borrower shall deliver to the Agent such opinions of
counsel, board resolutions and incumbency certificates as may be required by
the Agent.
3.4 The Borrower shall pay to the Agent, for the pro rata benefit of
each Bank signing this Amendment on or before 10:00 am EST on September 27,
2004, a fee equal to 12.5 basis points on each such Bank's Commitment after
giving effect to this Amendment.
3.5 The execution of such assignments among certain Lenders and
related replacement Notes as required by certain Banks and the Agent.
3.6 The Borrower shall deliver to the Agent such other agreements
and documents in connection herewith as requested by the Agent.
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ARTICLE 4.
MISCELLANEOUS.
4.1 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.
4.2 Except as expressly amended hereby, the Borrower and each
Guarantor agrees that the Loan Documents are ratified and confirmed and
shall remain in full force and effect and that it has no set off,
counterclaim, defense or other claim or dispute with respect to any of the
foregoing. The terms used but not defined herein shall have the respective
meanings ascribed thereto in the Credit Agreement.
4.3 The validity of this Amendment, its construction, interpretation
and enforcement and the rights of the parties hereto will be determined
under, governed by and construed in accordance with the internal laws of the
State of Michigan, without regard to principles of conflicts of law.
4.4 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 enforceable as
originals.
[Signatures on the following pages]
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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.
"BORROWER"
XXXXXXX INDUSTRIES, INC.
By:/s/Xxxx X. XxXxx
Print Name: Xxxx X. XxXxx
Its: Chief Financial Officer
"BANKS"
STANDARD FEDERAL BANK, N.A., as a
Bank and as Agent
By:/s/Xxxxxx X. Xxxx
Print Name: Xxxxxx X. Xxxx
Its: S.V.P.
SUNTRUST BANK, as a Bank and as
Syndication Agent
By:/s/Xxxxx X. Xxxx
Print Name: Xxxxx X. Xxxx
Its: Director
UNION PLANTERS BANK, NATIONAL
ASSOCIATION, as a Bank and as
Documentation Agent
By:/s/Xxxxxx Xxxxxxx
Print Name: Xxxxxx Xxxxxxx
Its: SVP
FIRST TENNESSEE BANK, as a Bank and as
Managing Agent
By:/s/Xxxxxxx Xxxxxxxxx
Print Name: Xxxxxxx Xxxxxxxxx
Its: Sr. Vice President
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REGIONS BANK, as a Bank
By:/s/Xxxxxxx X. May
Print Name: Xxxxxxx X. May
Its: Senior Vice President
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CONSENT AND AGREEMENT
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 terms and provisions of the above Amendment applicable to it;
(b) agrees that all Loan Documents executed by the undersigned
in connection with the Credit Agreement (collectively, the "Documents") are
hereby ratified and confirmed and shall remain in full force and effect, and
the undersigned acknowledges that it has no setoff, counterclaim, defense or
other claim or dispute with respect to any Document or any transactions in
connection therewith; and
(c) acknowledges that it is in its interest and to its
financial benefit to execute this consent and agreement.
WTC HOLDING COMPANY, INC.
By:/s/Xxxxx X. Xxxxxx
Its: President
/s/Xxxxxxx X. Xxxxxxx
as Vice President Legal
for each of the following Guarantors:
XXXXXXX BRASS CO.
XXXXXXX INDUSTRIAL REALTY CO.
ITAWAMBA INDUSTRIAL GAS COMPANY, INC.
XXXXXXX PLASTICS CORPORATION, INC.
XXXXXXX BRASS FORGING COMPANY, INC.
XXXXXXX COPPER FITTINGS COMPANY, INC.
XXXXXXX FITTINGS COMPANY, INC.
XXXXXXX COPPER TUBE COMPANY, INC.
XXXXXXX FORMED TUBE COMPANY, INC.
XXXXXXX IMPACTS COMPANY, INC.
XXXXXXX LINE SET, INC.
XXXXXXX REFRIGERATION PRODUCTS
COMPANY, INC.
XXXXXXX REFRIGERATION COMPANY, INC.
XXXXXXX STREAMLINE CO.
XXXXXXX CASTING COMPANY, INC.
B&K INDUSTRIES, INC.
XXXXXXX COPPER TUBE PRODUCTS, INC.
XXXXXXX PLASTICS HOLDING COMPANY, INC.
XXXXXXX PRESS COMPANY, INC.
XXXXXXX EAST, INC.
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