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EXHIBIT 10
AMENDMENT TO DOCUMENTS
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SUBSTITUTED FIRST AMENDMENT TO AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
(RECEIVABLES AND INVENTORY)
This Substituted First Amendment to Amended and Restated Business Loan
Agreement (Receivables and Inventory) ("First Amendment") is entered into as of
_______________, 1997, between Bank of America Texas, N.A. ("Bank") and ICO,
INC. ("Borrower") and is intended to replace in all respects, the First
Amendment to Amended and Restated Business Loan Agreement executed as of June
2, 1997..
RECITALS
A. WHEREAS, Bank and Borrower have entered into that certain Amended and
Restated Business Loan Agreement (Receivables and Inventory) (the "Agreement"),
dated February 21, 1997.
B. WHEREAS, Borrower has requested that Bank amend the Agreement to (1) allow
Borrower to issue up to $120,000,000 of unsecured, senior notes; (2) release
existing guarantors; (3) modify the leverage covenant contained in the
Agreement to allow for the issuance of the senior notes; and (4) to extend the
Availability Period to April 17, 1999; and
C. WHEREAS, Bank has agreed to the amendments requested on the terms and
conditions stated below.
CONDITIONS
THIS FIRST AMENDMENT WILL BECOME EFFECTIVE, IF AND ONLY IF, THE OFFERING OF
$120,000,000 OF SENIOR, UNSECURED NOTES CONTEMPLATED BY THE PRELIMINARY
OFFERING MEMORANDUM DESCRIBED BELOW CLOSES ON OR BEFORE JUNE 30, 1997. IF FOR
ANY REASON, THE OFFERING IS NOT CLOSED BY JUNE 30, 1997, THE LOAN AGREEMENT
DATED AS OF FEBRUARY 21, 1997 AND ALL ASSOCIATED LOAN DOCUMENTS, INCLUDING BUT
NOT LIMITED TO THE BUSINESS LOAN CONTINUING GUARANTIES DATED AS OF FEBRUARY 21,
1997, WILL REMAIN IN FULL FORCE AND EFFECT , AS IF THIS FIRST AMENDMENT HAD
NEVER BEEN EXECUTED.
AGREED
NOW, THEREFORE, in consideration of the foregoing recitals and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Bank and Borrower mutually agree to amend said Agreement as follows:
1. Paragraph 1.2(a) of the Agreement is amended and restated to read as
follows:
1.2(a) The account has resulted from the sale of goods or the
performance of services by the Borrower, or any subsidiary or
affiliate of Borrower which has executed security documents
acceptable to Bank ("Pledging Subsidiary"), in the ordinary
course of business.
2. The term Pledging Subsidiary, defined above, will be substituted for the
term Pledging Guarantor and the term subsidiary will be substituted for
the term guarantor throughout the Agreement.
3. In Paragraph 2.2 (Availability Period) of the Agreement, the date "April
17, 1999" is substituted for the date "April 17, 1998".
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4. In Paragraph 2.4 (Repayment Terms), subparagraph (b) of the Agreement, the
date "April 17, 1999" is substituted for the date "April 17, 1998".
5. The Business Loan Continuing Guaranties executed by each of Bayshore
Industrial, Inc., B&W Equipment Sales & Mfg., Inc., ICO Tubular Services,
Inc., ICO International, Inc., Permian Enterprises, Inc., FIS Acquisition
Corp., Polymer Service, Inc., Polymer Service of Indiana, Inc. and RJD
Acquisition Corp. are hereby released. The Bank has not granted or
conveyed to any other person any rights or benefits under any of such
Business Loan Continuing Guaranties and such Business Loan Continuing
Guaranties constitute the only guaranties executed by subsidiaries of the
Borrower in connection with the Agreement still in effect on the date of
execution of this First Amendment. The text of Paragraph 7.1 (e)
(Guaranties) of the Agreement is deleted in its entirety and the sentence
"This paragraph has been intentionally deleted." is substituted for the
deleted text.
6. New Paragraph 9.2 (f) (Financial Information) is added to the Agreement to
read as follows:
(f) Within 45 days of each quarter end, to provide a listing of
all credit available or outstanding to the Borrower or any of Borrower's
subsidiaries guaranteed by the Borrower.
7. In Paragraph 9.4 (Total Liabilities to Tangible New Worth Ratio) of the
Agreement is deleted and new paragraph 9.4 is added to the Agreement to
read as follows:
9.4 TOTAL DEBT TO CAPITALIZATION RATIO. To maintain, on a
consolidated basis, a ratio of all obligations and liabilities of Borrower
and its subsidiaries, including: (i) liabilities for money borrowed
evidenced by bills, notes, acceptances, letters of credit , bonds or
similar evidence of debt which are actually funded (or issued in the
case of acceptances or letters of credit) , (ii) all obligations in
respect of any guaranty or contingent liability which is due or has
matured, and (iii) all obligations in respect of any capital lease ("Total
Debt"), to Total Debt plus net worth (as determined in accordance with
GAAP ) of less than or equal to 55%.
8. A new Paragraph 9.6(f) is added to the Agreement to read as follows:
(f) The issuance by Borrower of up to $120,000,000 of senior,
unsecured notes bearing interest at no more than 11% per
annum, provided that any terms of issuance and repayment of
the senior notes which differ in any material respect from
those outlined in the Preliminary Offering Memorandum provided
by Borrower to Bank, date stamped May 16, 1997, are approved
by Bank and provided that no discretionary payments nor
optional redemption payments to the holders of the senior
notes may be made, nor liens fixed on Borrower's or any
Pledging Subsidiary's assets including subordinate liens fixed
on collateral owned by Borrower or any Pledging Subsidiary
securing Borrower's obligations to Bank, without the written
consent of the Bank.
9. Paragraph 9.7 of the Agreement is amended and restated to read as follows:
9.7 OTHER LIENS. That neither the Borrower nor any subsidiary shall
create, assume, or allow any security interest or lien (including judicial
liens) on property the Borrower or any subsidiary now or later owns,
except:
(a) Deeds of trust and security agreements in favor of the Bank.
(b) Liens for taxes not yet due on Borrower's property other than the
Personal Property Collateral.
(c) Additional liens which secure obligations in a total principal
amount not exceeding One Million and No/100 Dollars
($1,000,000.00) on Borrower's property other than the Personal
Property Collateral.
(d) Liens in existence prior to the date of this Agreement on
Borrower's property other than the Personal Property Collateral.
(e) Statutory liens of mechanics, materialmen. landlords, employees,
carriers, shippers and warehousemen for services or materials for
which payment is not yet due on Borrower's property other than the
Personal Property Collateral.
(f) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance and other types of social security on Borrower's
property other than the Personal Property Collateral.
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10. Paragraph 9.17(e) of the Agreement is amended and restated to read as
follows;
(e) acquire or purchase a business or its assets whether by
acquisition or merger, unless (a) the entity being acquired is
in a similar business; (b) the acquisition is not considered
hostile; (c) no event of default exists prior to or as a result
of the the acquisition; and (d) Borrower's acquisitions in
combination with those of any of Borrower's subsidiaries for any
single calendar year do not entail cash consideration
exceeding 25% of the Borrower's net worth and any single
acquisition does not entail cash consideration exceeding
10% of Borrower's net worth.
11. A new paragraph 11.13 ( Change of Control) is added to read as follows:
11.13 CHANGE OF CONTROL. The occurrence of any of the following:
(a) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, directly or indirectly, of all or substantially
all of the assets of Borrower or the Pledging Subsidiaries to any Person (as
defined in the Preliminary Offering Memorandum) or group( as such term is
defined in Sections 13(d) and 14(d) of the Securities and Exchange Act of
1934, as amended, or as supplemented by rules promulgated pursuant thereto ["
Exchange Act"]), (b) the adoption of a plan relating to the liquidation or
dissolution of Borrower or any of the Pledging Subsidiaries, (c) any Person or
group is or becomes the "beneficial owner" ( as defined in Rules 13d-3 and
13d-5 of the Exchange Act, except that a Person will be deemed to have
beneficial ownership of all shares that any such Person has the right to
acquire, whether the right is exercisable immediately or after the passage of
time), directly or indirectly, of more than 50% of the total voting power of
any class of the stock of the Borrower entitled to vote, including by way of
merger, consolidation or otherwise, or (d) the first day on which a majority
of the members of the Board of Directors, as that term is defined in the
Preliminary Offering Memorandum, of the Borrower are not Continuing Directors,
as that term is defined in the Preliminary Offering Memorandum.
This First Amendment will become effective as of the date first written above,
provided that each of the following conditions precedent have been satisfied in
a manner satisfactory to Bank:
The Bank has received from the Borrower a duly executed original of
this First Amendment.
Except as provided in this First Amendment, all of the terms and provisions of
the Agreement and the documents executed in connection therewith shall remain
in full force and effect. All references in such other documents to the
Agreement shall hereafter be deemed to be references to the Agreement as
amended hereby.
THIS WRITTEN FIRST AMENDMENT AND THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
IN WITNESS WHEREOF, this First Amendment has been executed by the parties
hereto as of the date first written above.
BANK OF AMERICA TEXAS, N.A. ICO, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxx X. Xxxx
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Xxxxxx X. Xxxxxx, Vice President Xxx X. Xxxx, Senior Vice President and
Treasurer
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