AMENDMENT NO. 3 TO CREDIT AGREEMENT
This Amendment No. 3 is dated as of January 24, 1997 by and
among Xxxx X. Xxxxxxxxxx & Son, Inc. (the "Borrower"), the Lenders
parties hereto and Bank of America Illinois, as Agent for the
Lenders ("Amendment No. 3").
W I T N E S S E T H;
WHEREAS, the Borrower, the Lenders and the Agent are parties
to that certain Credit Agreement dated as of March 27, 1996, as
amended by that certain Amendment No. 1 and Waiver to Credit
Agreement dated as of August 1, 1996 and that certain Amendment No.
2 and Waiver to Credit Agreement dated as of October 30, 1996 (the
"Credit Agreement");
WHEREAS, the Borrower and the other Obligors are concurrently
pledging substantially all their assets to secure, inter alia,
their Obligations arising under or in connection with the Credit
Agreement; and
WHEREAS, the Borrower and the Lenders desire to amend the
Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises herein
contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Each capitalized term used herein but not otherwise
defined herein shall have the meaning ascribed to such term in the
Credit Agreement.
2. Amendments to Credit Agreement. Subject to the terms and
conditions set forth in Section 5 of this Amendment No. 3, the
Credit Agreement is hereby amended as follows:
(a) The following definitions are inserted into Section 1.1
of the Credit Agreement in appropriate alphabetical order:
""Collateral Agent" means Bank of America Illinois, as
collateral agent for the Secured Lenders, and the successors
and assigns thereof as collateral agent for the Secured
Lenders.
"Collateral Documents" means the Security Agreement, the
Collateral Agency Agreement and other Collateral Documents (as
such term is defined in the Collateral Agency Agreement).
"Collateral Agency Agreement" means that certain
Intercreditor and Collateral Agency Agreement dated as of
January 23, 1997 among Bank of America Illinois, as Collateral
Agent, Agent, Lenders, Prudential and Teachers, as from time
to time amended, restated, supplemented or otherwise modified.
"Quantz" means Quantz Acquisition Co., Inc., a Delaware
corporation and a wholly-owned subsidiary of Borrower.
"Security Agreement" means that certain Security
Agreement dated as of January 23, 1997 among Borrower,
Sunshine, Quantz, and Bank of America Illinois, as Collateral
Agent for the Lenders, Prudential and Teachers, as from time
to time amended, restated, supplemented or otherwise modified.
"Teachers" means Teachers Insurance and Annuity
Association of America."
(b) The following definitions in Section 1.1 of the Credit
Agreement are amended and restated in their entirety as follows:
""Fixed Asset Advance" means, for each calendar
month, the greater of:
(i) the sum of (a) 60% of the appraised orderly
liquidation value of certain equipment on a list to be
provided to the Agent by the Borrower less prior liens if
any and (b) 60% of the appraised market value of certain
real estate on a list to be provided to the Agent by the
Borrower less prior liens if any, provided that (A) any
appraisals shall be performed by professionals engaged by
Agent and (B) Borrower shall have obtained title
insurance policies and surveys for all appraised real
estate; and
(ii) the amount shown in the table below for the
applicable month:
Calendar Month Fixed Asset Advance
-------------- -------------------
January $20,000,000
February $20,000,000
March $20,000,000
April $15,000,000
May $15,000,000
June $10,000,000
July $10,000,000
August $10,000,000
September $10,000,000
October $15,000,000
November $20,000,000
December $20,000,000
provided that in no event shall the Fixed Asset Advance for
any calendar month exceed the sum of the total principal
amounts then outstanding under the Prudential Senior Notes and
the Teachers Senior Notes.
"Fixed Charge Coverage Ratio" means the ratio, as
measured at the end of each Fiscal Quarter for the applicable
Fiscal Quarter, of (i) the sum of(a) EBIT, plus (b) Rental
Payments to (ii) the sum of(y) Consolidated Interest Expense,
plus (z) Rental Payments.
"Letter of Credit Availability" means, at any time, the
lesser of
(a) the excess of
(i) the then Total Commitment Amount (subject
to the limit with respect to aggregate Credit
Extensions under Section 8.2.15)
over
(ii) the sum of (x) the then aggregate
outstanding principal amount of all Loans and
Acceptance Obligations and (y) the then aggregate
outstanding Letter of Credit Outstandings
and
(b) the excess of
(i) $3.5 million
over
(ii) the then aggregate outstanding Letter of
Credit Outstandings, not including the outstanding
amount of the Bainbridge IRB Letter of Credit."
(c) The word "or" is deleted from the end of subparagraph (a)
of the definition of "Change of Control" in Section 1.1 of the
Credit Agreement and the following text is added to the end of such
definition:
"or;
(c) the failure of the Borrower to own, directly and
beneficially, 100% of Quantz's outstanding shares of common
stock of all classes."
(d) The word "or" is deleted from the end of subparagraph (i)
of the definition of "Eligible Inventory" in Section 1.1 of the
Credit Agreement and the following text is added to the end of such
definition:
";
(h) on or after Xxxxx 00, 0000, xxxx of such Inventory is
stored with a bailee, warehouseman or similar person, or is
otherwise located on premises not owned or leased by Borrower
or any of its Subsidiaries, unless a satisfactory bailee
letter has been delivered to Collateral Agent; and
(i) none of such Inventory is placed on consignment.
(e) Section 8.1.1(c) of the Credit Agreement is amended and
restated in its entirety as follows:
"(c) as soon as available and in any event within 30 days
after the end of each Fiscal Month, a certificate in the form
of Exhibit E hereto (a "Compliance Certificate"), executed by
the chief financial Authorized Officer of the Borrower, (i)
showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to
the Agent) compliance with covenants contained in Sections
8.2.1, 8.2.2, 8.2.4, 8.2.6, 8.2.7, 8.2.10, 8.2.11, 8.2.12,
8.2.14, 8.2.15 and 8.2.16 of the Credit Agreement, paragraphs
6B, 6C, 6F, 6H, 6K, 6M, 6N, 6O, 6Q, 6R, 6S of the Prudential
Note Agreement, and Sections 8.7, 8.8, 8.9, 8.11, 9.1, 9.2,
9.3, 9.4 and 9.5 of the Teachers Note Agreement and (ii)
certifying that (A) no Event of Default has occurred and is
continuing pursuant to Section 9.1.2, 9.1.7. 9.1.8 or 9.1.11
of the Credit Agreement, (B) no "Event of Default" (as such
term is used in the Prudential Agreement) has occurred and is
continuing pursuant to paragraph 7(a) (iv), (viii), (ix), (x),
(xvii) or (xviii) of the Prudential Agreement, and (C) no
"Event of Default" (as such term is used in the Teachers
Agreement) has occurred and is continuing pursuant to Section
__ of the Teachers Agreement."
(f) Section 8.1.1(e) of the Credit Agreement is amended and
restated in its entirety as follows:
"(e) as soon as possible and in any event no later than
30 days following the end of each Fiscal Month, reports in
respect of (i) the aging of Accounts by Account Debtor, (ii)
accounts payable, and (iii) Inventory by type and location.
Such reports shall be in such form and in such detail as the
Agent shall reasonably require;"
(g) The phrase "or any substantial dispute between Borrower
or any of its Subsidiaries and any governmental authority," is
inserted after the second reference to "Section 7.7" in Section
8.1.1(h) of the Credit Agreement.
(h) The last sentence of Section 8.1.7 of the Credit
Agreement is deleted and replaced with the following:
"Borrower shall pay costs and expenses incurred in connection
with two such audits per Fiscal Year in an amount not to
exceed an aggregate of $15,000 per Fiscal Year. In addition,
all costs and expenses incurred in connection with any audit
shall be paid by the Borrower if a Default pursuant to Section
9.1.8 shall have occurred and be continuing."
(i) Section 8.2.2(g) is amended and restated in its entirety
as follows:
"(g) Indebtedness of Sunshine from time to time owing to
the Borrower and incurred in the ordinary course of business
on account of the Borrower's payment of ordinary course
payables of Sunshine and on account of Sunshine's properly
allocable share of ordinary course overhead expenses incurred
and paid by the Borrower on behalf of Sunshine, provided that
the aggregate amount of such Indebtedness shall not exceed
$30,000,000 outstanding at any one time, and provided further
such Indebtedness shall not be evidenced at any time by a
promissory note or other written instrument."
(j) The following text shall be inserted as Section 8.2.3(i)
of the Credit Agreement:
"(i) Liens granted pursuant to the Collateral Documents."
(k) Subsection 8.2.4(d) of the Credit Agreement is deleted in
is entirety and replaced with the following:
"(d) The Fixed Charge Coverage Ratio to be less than the
following amounts during the following periods:
Minimum Fixed Charge For the
Coverage Ratio Quarter Ended
-------------------- -------------
1.00 December 31, 1996
0.50 March 27, 1997
1.00 June 26, 1997
1.75 September 25, 1997
2.00 Xxxxxxxx 00, 0000"
(x) Subsection 8.2.4(f) of the Credit Agreement is deleted in
its entirety.
(m) Section 8.2.5(e) of the Credit Agreement is deleted in its
entirety and replaced with the following:
"(e) [Intentionally deleted];"
(n) Section 8.2.7 of the Credit Agreement is amended and
restated in its entirety as follows:
"SECTION 8.2.7. Capital Expenditures, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, make
Capital Expenditures in any Fiscal Years, except (a) Capital
Expenditures incurred before December 31, 1996 related to
acquisitions for the Xxxxxx Nut Co. business, (b) other
Capital Expenditures incurred during Fiscal Year 1996 not
exceeding $8,200,000 in the aggregate on a consolidated basis,
(c) Capital Expenditures incurred during Fiscal Year 1997 not
exceeding $7,200,000 in the aggregate on a consolidated basis,
and (d) Capital Expenditures in subsequent Fiscal Years that
do not exceed in the aggregate for each such Fiscal Year
$10,000,000."
(o) The reference in Section 8.2.8 of the Credit Agreement to
"$500,000" as the maximum aggregate amount of Rental Obligations
for any Fiscal Year is hereby deleted and replaced with a reference
to "$650,000."
(p) The following text is added to the end of Section 8.2.12
of the Credit Agreement:
"Without limiting the foregoing, Borrower will not
consent to or permit any amendment, supplement or other
modification which has the effect of (i) increasing the
interest rate or fees under such agreement, (ii) increasing
the amount of obligations of Borrower or any Subsidiary under
such agreement, (iii) amending the financial covenants
contained in such agreement or (iv) permitting any prepayment
of obligations under such agreement."
(q) The reference to "$25,000,000" as the Maximum Permitted
Amount of Credit Extensions for the period August through September
is hereby deleted from the chart in Section 8.2.15 of the Credit
Agreement and replaced with a reference to "$40,000,000".
(r) The following text is inserted as Section 9.1.11 of the
Credit Agreement:
"SECTION 9.1.11. Impairment of Liens. Collateral Agent
shall cease to have a first priority perfected security
interest and lien (subject to liens permitted pursuant to
Section 8.2.3) in substantially all of the property of the
Borrower, Sunshine and Quantz pursuant to the Collateral
Documents."
(s) The following text is inserted as Section 9.1.12 of the
Credit Agreement:
"SECTION 9.1.12. Breach of Certain Teachers Covenants.
Borrower (a) shall breach any of the covenants set forth in
Sections 9.1 or 9.2 of the Teachers Note Agreement and such
breach shall have continued for a period of more than 15 days
after any Authorized Officer has actual knowledge thereof or
the Borrower receives written notice thereof from the Agent or
any holder of a "Senior Note" as such term is defined in the
Teachers Note Agreement or (b) shall breach any of the
covenants set forth in Sections 10.1 or 10.2 of the Teachers
Note Agreement and such breach shall have continued for a
period of more than 30 days after any Authorized Officer has
actual knowledge thereof or the Borrower receives written
notice thereof from the Agent or any holder of a Subordinated
Note as such term is defined in the Teachers Note Agreement."
(t) The last sentence of Section 11.3 of the Credit Agreement
is amended and restated in its entirety as follows:
"The Borrower also agrees to reimburse the Agent upon demand
for all reasonable out-of-pocket expenses (including
attorneys' fees and legal expenses) incurred by the Agent or
such Lender in connection with (x) the negotiations of any
restructuring or "work-out", whether or not consummated, of
any Obligations, (y) the enforcement of any Obligations, and
(z) costs and expenses incurred pursuant to Section 10 of the
Security Agreement."
(u) Exhibit E to the Credit Agreement is amended in its
entirety to read as provided in Schedule I hereto.
(v) Exhibit F to the Credit Agreement is amended in its
entirety to read as provided in Schedule II hereto.
3. Limited Waivers. Subject to the terms and conditions set
forth in Section 5 of this Amendment No. 3:
(a) The Agent and the Lenders hereby waive compliance with
Section 8.2.4(d) of the Credit Agreement (as in effect before the
execution of this Amendment No. 3) solely for the Fiscal Quarter
ending December 31, 1996.
(b) The Agent and the Lenders hereby waive any default
pursuant to Section 9.1.5 of the Credit Agreement that may result
from the Obligors' failure to comply with Sections 5L and 6N of the
Prudential Note Agreement and Sections 9.1 and 10.1 of the Teachers
Note Agreement, solely for the Fiscal Quarter ending December 31,
1996, which compliance is being waived by Prudential and Teachers
pursuant to the amendments to the Prudential Note Agreement and
Teachers Note Agreement, respectively, each dated as of the date
hereof.
(c) The Agent and the Lenders hereby waive compliance with
Section 8.2.12 of the Credit Agreement only to the extent necessary
to allow the Borrower to execute amendments to the Teachers Note
Agreement and Prudential Agreement pursuant to Section 5(a)(ii) of
this Amendment No. 3.
4. The Borrower represents and warrants that:
(a) after giving effect to this Amendment No. 3, (i) no
Default or Event of Default exists and is continuing under the
Agreement and (ii) no breach or other default exists under either
the Teachers Note Agreement or the Prudential Note Agreement.
(b) the execution, delivery and performance by Borrower of
this Amendment No. 3 are within its corporate powers, have been
duly authorized by all necessary corporate action (including,
without limitation, any necessary shareholder approval), have
received all necessary governmental approval (if any shall be
required), 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.
(c) This Amendment No. 3 does not contain any misstatement of
a material fact or fail to state a material fact necessary to make
the statement or statements of Borrower contained herein not
misleading, and Borrower has disclosed to Agent all facts or
circumstances of which Borrower is aware following due and diligent
inquiry, which are material to, or could adversely affect in any
way, the purposes or subject matter of this Amendment No. 3 and/or
consummation of the terms and conditions hereof.
(d) Since the financial statements dated September 26, 1996,
there has been no material adverse change in the assets or the
financial condition of the Borrower and its Subsidiaries taken as
a whole.
(e) The warranties and representations of Borrower contained
in this Amendment No. 3, the Credit Agreement, as amended hereby,
and the Collateral Documents, shall be true and correct as of the
date hereof, with the same effect as though made on such date,
except to the extent that such warranties and representations
expressly relate to an earlier date, in which case such warranties
and representations shall have been true and correct as of such
earlier date.
5. This Amendment No. 3 shall become effective as of January
24, 1997 upon satisfaction of the following conditions:
(a) Required Documents. Agent shall have received the
documents listed below on or prior to the date hereof, each duly
executed, in form and substance satisfactory to Agent and in
quantities specified by Agent:
(i) Amendment. This Amendment No. 3 among the Borrower,
Sunshine, the Agent and each of the Lenders.
(ii) Teachers and Prudential Amendments and Guaranties.
A copy of an Amendment to the Teachers Note Agreement and an
Amendment to the Prudential Note Agreement, each of even date
herewith, each such amendment to be acceptable to Collateral
Agent and to include a consent to this Amendment No. 3, and
copies of the guaranties executed by Quantz in favor of each
of Prudential and Teachers, each of even date herewith.
(iii) Collateral Agency Agreement. That certain
Intercreditor and Collateral Agency Agreement of even date
herewith among Agent, as Collateral Agent, Lenders, and the
holders of promissory notes under the Prudential Note
Agreement and the Teachers Note Agreement.
(iv) Security Agreement. That certain Security Agreement
of even date herewith made by Obligors in favor of Collateral
Agent.
(v) Security Interests and UCC filings. Evidence
satisfactory to Collateral Agent that Collateral Agent has a
valid and perfected first priority security interest (subject
to Liens permitted under the Credit Agreement) in the
Collateral, including (A) such documents duly executed by
Obligors (including financing statements under the UCC and
other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens) as Collateral Agent
may request in order to perfect its security interests in the
Collateral and (B) copies of UCC search reports listing all
effective financing statements that name any Obligor, as
debtor, together with copies of such financing statements,
none of which shall cover the Collateral.
(vi) Stock Pledge Agreement; Stock Certificates. (A)
That certain Stock Pledge Agreement of even date herewith made
by Borrower in favor of Collateral Agent relating to all of
the stock of Sunshine and Quantz Acquisition Co., Inc. and (B)
for the Pledged Stock (as such term is defined in the Stock
Pledge Agreement), stock certificates with negotiable stock
powers endorsed in blank.
(vii) Mortgages. Mortgages covering the real estate in
Gustine, California, Garysburg, North Carolina and Selma,
Texas (collectively, the "Mortgaged Properties"), together
with (a) copies of existing title insurance policies, as-built
surveys, zoning letters and certificates of occupancy, the
contents of which are satisfactory to Collateral Agent in its
sole discretion; (b) evidence that counterparts of the
Mortgages have been recorded in all places to the extent
necessary or desirable, in the judgment of Collateral Agent,
to create a valid and enforceable first priority lien on each
Mortgaged Property in favor of Collateral Agent; and (c) an
opinion of counsel in each state in which any Mortgaged
Property is located in from and substance and from counsel
satisfactory to Collateral Agent.
(viii) Leasehold Mortgages. Leasehold Mortgages covering
the leased real estate in Elk Grove Village, Illinois (Xxxxx
Road property) and Des Plaines, Illinois (the "Mortgaged
Leasehold Properties"), together with (a) copies of all leases
related to the Mortgaged Leasehold Properties and (b) as
deemed appropriate by Collateral Agent in its sole discretion,
a consent by the holder of any mortgage on either Mortgaged
Leasehold Property.
(ix) Collateral Assignment of Copyrights, Patents,
Trademarks and Licenses. That certain Collateral Assignment
of Copyrights, Patents, Trademarks and Licenses of even date
herewith made by Obligors in favor of Collateral Agent.
(x) Reaffirmation of Sunshine Guaranty. Reaffirmation
of Guaranty by Sunshine, of even date herewith.
(xi) Guaranty by Quantz Acquisition Co., Inc. A Guaranty
executed and delivered by Quantz Acquisition Co., Inc.,
substantially in the form of the Sunshine Guaranty.
(xii) Obligors' Bylaws, Resolutions and Incumbency. A
certificate from each Obligor's corporate secretary certifying
as to (A) attached resolutions of such Obligor's board of
directors authorizing the execution, delivery and performance
of this Amendment No. 3 and the other documents to be executed
by such Obligor pursuant hereto, (B) attached by-laws of such
Obligor and (C) the officers of such Obligor executing this
Amendment No. 3 and the other documents to be executed by such
Obligor pursuant hereto are authorized to execute such
documents on behalf of such Obligor.
(xiii) Articles of Organization. For each Obligor, a
charter or certificate of incorporation and all amendments
thereto, each to be dated a recent date prior to the date
hereof and certified by the applicable Secretary of State or
other authorized governmental entity.
(xiv) Good Standing/Existence. For each Obligor, copies
of good standing certificates and certificates of existence
(including verification of tax status, where available), as
applicable, from (A) each such Obligor's state of
incorporation or formation, (B) the state in which each such
Obligor's principal place of business is located and (C) all
states in which the laws thereof require such Obligor to be
qualified to do business, each to be dated a recent date prior
to the date hereof and certified by the applicable Secretary
of State or other authorized governmental entity.
(xv) Officers' Certificates. A certificate from the each
Obligor's chief financial Authorized Officer certifying that
on the date hereof and after giving effect to this Amendment
No. 3, (A) no Default or Event of Default has occurred and is
continuing and that (B) the representations and warranties of
such Obligor are true and correct.
(xvi) Opinion of Counsel. Duly executed originals of
opinion of Jenner & Block, counsel for Borrower, in form and
substance satisfactory to Agent and its counsel, dated the
Closing Date, and accompanied by a letter addressed to such
counsel from Borrower, authorizing and directing such counsel
to address its opinion to Agent, on behalf of Lenders, and to
include in such opinion an express statement to the effect
that Agent and Lenders are authorized to rely on such opinion.
(xvii) Insurance Policies. Copies of insurance policies
and loss payable endorsements required by the Security
Agreement.
(xviii) Other Documents. Such other documents as Agent may
reasonably request.
(b) Representations and Warranties. The warranties and
representations of Borrower contained in this Amendment No. 3
shall be true and correct as of the date hereof.
(c) Fees and Expenses. The Borrower shall have paid the
outstanding fees and out-of-pocket costs and expenses of
counsel for the Agent and the additional fees and out-of-
pocket costs and expenses incurred in connection with the
negotiation, preparation, execution and delivery of this
Amendment No. 3.
(d) Field Review Audit Expenses. The Borrower shall have paid
the outstanding costs and expenses of the Agent incurred in
connection with a field review audit performed earlier this
year pursuant to Section 8.1.7 of the Credit Agreement.
6. Except as specifically set forth in this Amendment No. 3,
the Credit Agreement and the other Loan Documents shall remain
unaltered and in full force and effect and the respective terms,
conditions and covenants thereof are hereby ratified and confirmed
in all respects.
7. The Agent and Lenders are not aware of any default or
event of default in existence on the date hereof after giving
effect to this Amendment No. 3.
8. The execution, delivery and effectiveness of this
Amendment No. 3 shall not operate as a waiver of any right, power
or remedy of Agent or any Lender under the Credit Agreement or any
Loan Document, nor constitute a waiver of any provision of the
Credit Agreement or any Loan Document, except as expressly set
forth herein. Upon the effectiveness of this Amendment No. 3, each
reference in the Credit Agreement to "this Agreement", "hereof",
"herein" or "hereunder" or words of like import, and all references
to the Credit Agreement in any other Loan Documents shall mean and
be a reference to the Credit Agreement as amended hereby.
9. This Amendment No. 3 may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
10. THIS AMENDMENT NO. 3 SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS.
[signature pages follow]
Document Number: 0139931.17
2-27-97/:43a
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 3 to Credit Agreement as of the date first above
written.
XXXX X. XXXXXXXXXX & SON, INC.
By: /s/ Xxxx X. Xxxxxx
------------------
Title: Executive Vice President and
Chief Financial Officer
BANK OF AMERICA ILLINOIS, in its capacity
as Agent
By: /s/ Xxxxx X. Xxxxxx
---------------------
Title: Agency Management Services
Senior Agency Officer
BANK OF AMERICA ILLINOIS, in its capacity
as a Lender, Issuing Lender and Issuer
By: /s/ Xxxx Xxxxxxx
----------------
Title: Vice President
THE NORTHERN TRUST COMPANY, in its
capacity as a Lender
By: /s/ Xxxxxx X. Xxxxx
-------------------
Title: Vice President
NATIONAL CITY BANK, in its capacity as a
Lender
By: /s/ Xxxxx Xxxxx
---------------
Title: Vice President
The undersigned acknowledges
receipt of a copy of the foregoing
Amendment No. 3 and Waiver,
consents to the terms thereof,
and ratifies and confirms its Guaranty,
dated as of March 27, 1996, in favor
of the Lenders, and all documents,
instruments and agreements executed
in connection therewith.
SUNSHINE NUT CO.
By: /s/ Xxxx X. Xxxxxx
------------------
Title: President
Schedule I to Amendment No. 3 to Credit Agreement
EXHIBIT E
COMPLIANCE CERTIFICATE
To Bank of America, as Agent, and
to all financial institutions
parties to the Credit Agreement.
Re: Credit Agreement, dated as of March __, 1996 (herein,
together with all amendments, if any, thereafter from
time to time made thereto, called the "Credit
Agreement"), among Xxxx X. Xxxxxxxxxx & Son, Inc., a
Delaware corporation (herein called "Borrower"), the
various financial institutions as are parties thereto,
and Bank of America Illinois, as Agent.
Gentlemen/Ladies:
Borrower hereby certifies and warrants that as of
________________, 199__ (herein called the "Computation Date"):
(a) the Tangible Net Worth was (and in any event
was not less than) $__________________, as computed on
Attachment 1 hereto;
(b) the ratio of Senior Funded Indebtedness to
Total Capitalization was (and in any event was not more
than) ____%, as computed on Attachment 2 hereto;
(c) the ratio of Funded Indebtedness to Total
Capitalization was (and in any event was not more than)
____%, as computed on Attachment 3 hereto;
(d) the Fixed Charge Coverage Ratio was (and in
any event was not less than) ____%, as computed on
Attachment 4 hereto;
(e) the Current Ratio was (and in any event was
not less than) ___%, as computed on Attachment 5
hereto; and
(f) except as set forth in Attachment 6 hereto, no
Default had occurred and was continuing.
Borrower further certifies and warrants that as of the
Computation Date:
(a) Borrower is in compliance with the covenants
contained in each of the following sections of the
Credit Agreement:
Section 8.2.2 Indebtedness
Section 8.2.4 Financial Condition
Section 8.2.6 Restricted Payment, etc
Section 8.2.7 Capital Expenditures, etc
Section 8.2.10 Consolidation, Merger, etc
Section 8.2.11 Dispositions of Assets
Section 8.2.12 Modification of Certain
Agreements
Section 8.2.14 Negative Pledges, Restrictive
Agreements, etc
Section 8.2.15 Clean Down
Section 8.2.16 Subsidiary Debt
(b) Borrower is in compliance with each of the
covenants contained in each of the following paragraphs
of the Prudential Note Agreement:
Xxxxxxxxx 0X Xxxxxxxxxxxx and Liabilities
Xxxxxxxxx 0X Consolidations, Mergers
Paragraph 6F Disposal of Property
Paragraph 6H Distributions
Paragraph 6K Other Business
Paragraph 6M Amendments to Certain
Documents
Paragraph 6N Capital Expenditures
Paragraph 6O Teachers Notes
Paragraph 6Q Negative Pledges, Restrictive
Agreements
Paragraph 6R Financial Covenants
Paragraph 6S Subsidiary Indebtedness
(c) Borrower is in compliance with each of the
covenants contained in each of the following sections
of the Teachers Note Agreement:
Section 8.7 Current Ratio
Section 8.8 Subsidiary Debt
Section 8.9 Restricted Payments and
Restricted Investments
Section 8.11 Lines of Business
Section 9.1 Financial Tests
Section 9.2 Consolidated Tangible Net
Worth
Section 9.3 Indebtedness
Section 9.4 Consolidation, Merger or
Disposition of Substantially
All Assets
Section 9.5 Disposition of Assets
(d) no Event of Default has occurred and is
continuing pursuant to any of the following sections of
the Credit Agreement:
Section 9.1.2 Breach of Warranty
Section 9.1.7 Change in Control
Section 9.1.8 Bankruptcy, Insolvency, etc.
Section 9.1.11 Impairment of Liens
(e) no "Event of Default" (as such term is used in
the Prudential Agreement) has occurred and is
continuing pursuant to any of the following paragraphs
of the Prudential Agreement:
Paragraph 7A(iv) False or misleading
representation or warranty
Paragraph 7A(viii) Bankruptcy or similar event
Paragraph 7A(ix) Voluntary bankruptcy or
similar event
Paragraph 7A(x) Involuntary bankruptcy or
similar event
Paragraph 7A(xvii) Change of control
Paragraph 7A(xviii) Impairment of liens
(f) no "Event of Default" (as such term is used in
the Teachers Agreement) has occurred and is continuing
pursuant to any of the following sections of the
Teachers Agreement:
Section 12.1(D) False or misleading warranty
Section 12.1(H) Bankruptcy or similar event
Section 12.1(I) Voluntary bankruptcy or
similar event
Section 12.1(J) Involuntary bankruptcy or
similar event
Section 12.1(Q) Impairment of liens.
IN WITNESS WHEREOF, the Borrower has caused this Certificate
to be executed and delivered by its duly Authorized Officer
this_____ day of ______________, ____.
XXXX X. XXXXXXXXXX & SON, INC.
By:________________________________
Title:__________________________
ATTACHMENT 1
(to __/__/ __ Compliance
Certificate)
TANGIBLE NET WORTH
ON _______________, _____
COMPUTATION DATE
On a Consolidated basis for Borrower and its Subsidiaries:
Tangible Net Worth as of ___/____/____ $____________
(Not permitted to be less than $55,000,000 plus 50% of
cumulative net income (excluding losses))
ATTACHMENT 2
(to __/__/__ Compliance
Certificate)
SENIOR FUNDED INDEBTEDNESS RATIO
ON ____________, ____
COMPUTATION DATE
On a Consolidated basis for Borrower and its Subsidiaries:
1. Senior Funded Indebtedness.................$_________
2. Total Capitalization.......................$_________
3. Ratio of Item 1 to Item 2..........................____%
(Line 3 is not permitted to be more than 57%).
ATTACHMENT 3
(to __/__/__ Compliance
Certificate)
FUNDED INDEBTEDNESS RATIO
ON ___________, ____
COMPUTATION DATE
On a Consolidated basis for Borrower and its Subsidiaries:
1. Funded Indebtedness.................$___________
2. Total Capitalization................$___________
3. Ratio of Item 1 to Item 2......................_____%
(Line 3 is not permitted to be more than 60%).
ATTACHMENT 4
(to __/__/__ Compliance
Certificate)
FIXED CHARGE COVERAGE RATIO
ON __________, ____
COMPUTATION DATE
On a Consolidated basis for Borrower and its Subsidiaries:
1. Consolidated Net Income.................$___________
2. Aggregate Consolidated Interest Expense
deducted in calculation of Consolidated
Net Income..............................$___________
3. Aggregate amount deducted in respect of
Federal, state, local and foreign income
taxes in calculation of Consolidated
Net Income..............................$___________
4. Sum of Item 1, Item 2 and Item 3........$___________
5. Aggregate non-cash gains arising other
than in the ordinary course of business.$___________
6. EBIT: Subtract Item 5 from Item 4.......$___________
7. Rental Payments.........................$___________
8. Sum of Item 6 and Item 7................$___________
9. Consolidated Interest Expense...........$___________
10. Sum of Item 7 and Item 9................$___________
11. Fixed Charge Coverage Ratio: Ratio of
Item 8 to Item 10..............................____%
(Fixed Charge Coverage Ratio is not permitted to be less than the
following amounts during the following periods:
Minimum Fixed Charge For the
Coverage Ratio Quarter Ended
-------------------- -------------
1.00 December 31, 1996
0.50 March 27, 1997
1.00 June 26, 1997
1.75 September 25, 1997
2.00 December 31, 1997)
ATTACHMENT 5
(to __/__/__ Compliance
Certificate)
CURRENT RATIO
ON _________, ____
COMPUTATION DATE
On a consolidated basis for Borrower and its Subsidiaries:
1. All current assets . . . . . . . . . . . . $___________
2. All current liabilities (except current
liabilities with respect to deferred
taxes) . . . . . . . . . . . . . . . . . $___________
3. Current Ratio: Ratio of Item 1 to Item 2 . . . . . . . ____%
(Line 3 is not permitted to be less than 1.25 to 1.0)
