Exhibit 10.16
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SIXTH AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
among
OUTBOARD MARINE CORPORATION,
OMC ALUMINUM BOAT GROUP, INC.,
OMC FISHING BOAT GROUP, INC.,
OMC LATIN AMERICA/CARIBBEAN, INC.,
and
RECREATIONAL BOAT GROUP LIMITED PARTNERSHIP
as Borrowers and Guarantors,
and
OMC RECREATIONAL BOAT GROUP, INC.,
and
(and the other Borrowers and/or Guarantors, if any,
from time to time party hereto),
BANK OF AMERICA, N.A.
as Agent and a Lender,
(and the other Lenders, if any, from time to time party hereto),
as Lenders
Dated effective as of July 30, 1999
SIXTH AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
("Amendment"), dated effective as of July 30, 1999 (the "Amendment Effective
Date"), is executed and entered into by and among OUTBOARD MARINE CORPORATION, a
Delaware corporation ("OMC"), OMC ALUMINUM BOAT GROUP, INC., a Delaware
corporation OMC FISHING BOAT GROUP, INC., a Delaware corporation, OMC LATIN
AMERICA/CARIBBEAN, INC., a Delaware corporation, RECREATIONAL BOAT GROUP LIMITED
PARTNERSHIP, a Delaware limited partnership, OMC RECREATIONAL BOAT GROUP, INC.,
a Delaware corporation (collectively all of the "Loan Parties," as of the
Amendment Effective Date, under the Amended and Restated Loan and Security
Agreement referenced under the Recitals hereinbelow; herein called the "Loan
Parties"), each of the lending institutions signatory hereto (collectively all
of the "Lenders," as of the Amendment Effective Date, under the Amended and
Restated Loan and Security Agreement referenced under the Recitals hereinbelow;
herein called the "Lenders") and BANK OF AMERICA, N.A., (a national banking
association and successor in interest to Bank of America, N.A., formerly
NationsBank, N.A., successor in interest to NationsBank of Texas, N.A.), in its
capacity as agent for itself and the other Lenders (in such capacity, together
with its successors and assigns in such capacity, herein called "Agent").
RECITALS:
A. The Loan Parties, the Lenders and Agent are parties to the certain
Amended and Restated Loan and Security Agreement dated effective as of January
6, 1998, as amended by the certain First Amendment to Loan and Security
Agreement dated effective as of May 21, 1998, the Second Amendment to Amended
and Restated Loan and Security Agreement dated effective as of August 31, 1998,
the Third Amendment to Amended and Restated Loan and Security Agreement dated
effective as of December 21, 1998, the Fourth Amendment to Amended and Restated
Loan and Security Agreement dated effective as of February 1, 1999, and the
Fifth Amendment to Amended and Restated Loan and Security Agreement dated
effective as of February 25, 1999 (hereinafter called the "Agreement"). Unless
otherwise defined in this Amendment, terms defined by the Agreement, where used
in this Amendment, shall have the same meanings as are prescribed by the
Agreement, as amended by this Amendment.
B. The Loan Parties, the Lenders and Agent have agreed to amend the
Agreement as provided hereinbelow.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Unless otherwise defined in this Amendment,
each capitalized term used in this Amendment, shall have the same meaning given
to such term in the Agreement, as amended by this Amendment.
ARTICLE 2
Amendments
Section 2.1 Amendment to Definitions in Article 1 of the Agreement.
Effective as of the date hereof, the following definitions in Article 1 of the
Agreement are hereby amended and restated in their entirety to read as follows:
"Applicable Margin" means, for the period through the end of the
fiscal quarter of OMC in which Agent receives OMC's financial statements
dated December 31, 1999, pursuant to Section 11.1(a), two percent (2%)
with respect to Eurodollar Loans and one-half percent (0.5%) with
respect to Base Rate Loans, subject to adjustment from time to time
thereafter to the percentage specified for each Type of Loan,
corresponding to the Leverage Ratio, as set forth below, respectively:
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Leverage Ratio Eurodollar Loans Base Rate Loans
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Greater than or equal to 3.5 to 1.0 2.00% 0.50%
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Less than 3.5 to 1.0 but greater 1.75% 0.00%
than or equal to 2.5 to 1.0
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Less than 2.5 to 1.0 1.25% 0.00%
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provided, however, that notwithstanding the forgoing, on any day on
which the unpaid balance of Loans exceeds the aggregate amount
determined under paragraph (b) of the definition of "Borrowing Base"
without giving effect to subparagraph (vii) thereof, with respect to
that portion of the balance of the Loans which is up to, but does not
exceed, $30,000,000, "Applicable Margin" means the Applicable Margin
determined as provided above plus three-quarters of one percent
(0.75%)). For the purpose of determining the Applicable Margin, OMC's
Leverage Ratio shall be determined based upon OMC's Consolidated
financial statements for the months of March, June, September and
December delivered to Agent as required by Section 11.1, and any
resulting change, if any, in the Applicable Margin, shall become
effective (i) as to Base Rate Loans, as of the first day of the calendar
month following the month in which such financial statements are
delivered to Agent and (ii) as to Eurodollar Loans, as of the date (on
or after the effective date as referenced
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in clause (i) preceding) when any such Eurodollar Loan is made,
Continued or Converted, as the case may be.
"Borrowing Base" means, at any time, an amount equal to the
lesser of:
(a) the maximum principal amount of the Revolving Credit
Facility, minus the sum of return
(i) the Letter of Credit Reserve, plus return
(ii) the Reserve, or
(b) an amount equal to the sum of
(i) 85% (or such lesser percentage as Agent may
determine pursuant to Section 2.5) of the face
value of Eligible Receivables that are
determined by Agent in its discretion to be
Qualified L/C Supported Receivables at such
time, plus
(ii) 85% (or such lesser percentage as Agent may
determine pursuant to Section 2.5) of the face
value of Eligible Receivables that are
determined by Agent in its discretion to be
Qualified Guaranteed Receivables at such time,
plus
(iii) 85% (or such lesser percentage as Agent may
determine pursuant to Section 2.5) of the face
value of Eligible Domestic Receivables (other
than Qualified L/C Supported Receivables or
Qualified Guaranteed Receivables) at such
time, plus
(iv) 75% (or such lesser percentage as Agent may
determine pursuant to Section 2.5) of the
Dollar Equivalent face value of Eligible
Foreign Receivables (other than Qualified L/C
Supported Receivables or Qualified Guaranteed
Receivables) at such time,
plus
(v) the lesser of
(A) 60% with respect to Eligible Domestic
Inventory and 50% with respect to Eligible
Foreign Inventory (or such lesser
percentage as Agent may determine pursuant
to Section 2.5) of the lesser of cost
determined on a FIFO (or first-in-first-
out) accounting basis or fair market value
of such Eligible Inventory, as applicable,
net of the Loan Parties' reserve for
obsolescence (if any), at such time, plus,
the following percentage, as applicable
(or such lesser percentage as Agent may in
its discretion determine from time to
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time) of the lesser of cost determined on
a FIFO (or first-in-first-out) accounting
basis or fair market value of Eligible
Work-In-Process Inventory, net of the
Loan Parties' reserve for obsolescence
(if any): (i) 35% during the period of
January 1, 1998 through April 30, 1998,
(ii) 35% during the period of January 1,
1999 through June 30, 1999, (iii) 35%
during the period July 30, 1999 through
August 31, 1999, (iv) 17.5% during the
period September 1, 1999 through
September 30, 1999 and (v) 35% during the
period of January 1 through April 30 of
any calendar year thereafter, or
(B) $75,000,000, minus
(vi) the Letter of Credit Reserve; plus
(vii) provided that the representations of Borrowers
under Section 7.1(z) are and remain true and
correct, with respect to any period commencing
during any calendar year, determined as
provided hereinbelow (each such period herein
called a "Designated Period") (i) $30,000,000
at any time during any portion of any single
Designated Period that occurs from the
Agreement Date through December 30, 1998, (ii)
$20,000,000 at any time during any portion of
any single Designated Period that occurs
during the period from December 31, 1998
through January 31, 1999, (iii) $30,000,000 at
any time during any portion of any two
Designated Periods that occur during the
period February 1, 1999 through October 31,
1999, (iv) $10,000,000 at any time during any
portion of any single Designated Period that
occurs during the period from December 31,
1999 through December 30, 2000 and (v) $0.00
on and at all times after December 31, 2000;
provided, that any such Designated Period for
any calendar year shall begin on the first
Business Day, if any, occurring during such
year (or, with respect to the second of the
Designated Periods referenced in clause (iii),
on the first Business Day, if any, occurring
after expiration of the first of such
Designated Periods) on which the aggregate
outstanding balance of Loans first exceeds an
amount equal to the aggregate amount
determined under paragraph (b) of this
definition without regard to this subparagraph
(vii), and shall terminate on the earlier of
(x) the expiration of one hundred eighty
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(180) days thereafter or (y) October 31, 1999
with respect to the calendar year 1999 or
December 31 of any other calendar year,
provided, that with respect to clause (b) preceding,
Agent may deduct any Reserve prior to application of the
relevant percentages used to calculate the Borrowing Base
as set forth herein.
"Indebtedness" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following:
(a) all obligations for Money Borrowed or for the deferred
purchase price of property or services;
(b) all obligations (including, during the noncancellable term of
any lease in the nature of a title retention agreement, all future
payment obligations under such lease discounted to their present value
in accordance with GAAP) secured by any Lien to which any property or
asset owned or held by such Person is subject, whether or not the
obligation secured thereby shall have been assumed by such Person;
(c) all obligations of other Persons which such Person has
Guaranteed, including, but not limited to, all obligations of such
Person consisting of recourse liability with respect to accounts
receivable sold or otherwise disposed of by such Person;
(d) the xxxx to market settlement amount of all obligations of
such Person in respect of Interest Rate Protection Agreements to the
extent that such Person would suffer a loss thereunder; and
(e) in the case of any Borrower (without duplication) all
obligations of such Borrower under the Revolving Credit Loans.
"Leverage Ratio" means, at any time, the ratio of (i) the sum of
Indebtedness for Money Borrowed, determined as of such time, to (ii)
EBITDA, determined for the preceding four (4) completed fiscal quarters.
"Termination Date" means December 31, 2001, such earlier date as
all Secured Obligations shall have been irrevocably paid in full and the
Revolving Credit Facility shall have been terminated, or such later date
as to which the same may be extended pursuant to the provisions of
Section 2.7.
Section 2.2 Amendment Section 11.1. Section 11.1 of the Loan and
Security Agreement hereby is amended and restated to read as follows:
Section 11.1 Financial Statements.
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a. Audited Year-End Statements. As soon as available, but in any
event within one hundred twenty (120) days after the end of each of its
fiscal years OMC and each other Loan Party (to the extent its financial
statements are not reported on a consolidated basis with OMC) will
provide Agent with copies of the consolidating and consolidated balance
sheets of such Person and its Consolidated Subsidiaries as at the end of
such fiscal year and the related statements of earnings, shareholders'
equity and statement of cash flows for such fiscal year, in each case
setting forth in comparative form the figures for the previous fiscal
year of such Person, reported on, as to such consolidated statements,
without qualification (provided that OMC's financial statements for the
fiscal year ended September 30, 1997, may be qualified solely as to the
future maturity of its $150,000,000 loan facility provided pursuant to
that certain Credit Agreement, dated August 13, 1997, as amended, by and
among Greenmarine Acquisition Corp., as borrower, and American Annuity
Group, Inc. and Great American Insurance Company, as lenders, which
matures in June 1998) as to the scope of the audit or the status of such
Person as a "going concern", by independent certified public accountants
of nationally recognized standing.
b. Monthly Financial Statements. As soon as available after the
end of each month, but in any event within thirty (30) days after the
end of each month, each Loan Party will provide Agent with copies of the
unaudited consolidated balance sheet of such Loan Party and its
Consolidated Subsidiaries as at the end of such month and the related
unaudited consolidated statements of earnings and cash flows for such
Loan Party and its Consolidated Subsidiaries for such month and for the
portion of the fiscal year of such Loan Party and its Consolidated
Subsidiaries through such month, certified by a Financial Officer as
presenting fairly the financial condition and results of operations of
such Loan Party (subject to normal year-end audit adjustments).
c. Quarterly Financial Statements. As soon as available after the
end of each fiscal quarter, but in any event within forty-five (45) days
after the end of each fiscal quarter, each Loan Party will provide Agent
with copies of the unaudited consolidated and consolidating balance
sheets of such Loan Party and its Consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated and
consolidating statements of earnings and cash flows for such Loan Party
and its Consolidated Subsidiaries for such quarter and for the portion
of the fiscal year of such Loan Party and its Consolidated Subsidiaries
through such quarter, certified by a Financial Officer as presenting
fairly the financial condition and results of operations of such Loan
Party (subject to normal year-end audit adjustments).
All of the financial statements referenced in this Section 11.1 are to be
complete and correct in all material respects and prepared in accordance with
GAAP (except, with respect to the monthly financial statements referred to in
clause (b), for the omission of footnotes and for the effect of normal year-end
audit adjustments) applied consistently throughout the periods reflected
therein.
Section 2.3 Amendment Section 11.3. In Section 11.3 of the Loan and
Security Agreement the reference to "Section 11.1(b)" hereby is amended and
restated to read "Section 11.1(c)".
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ARTICLE 3
Miscellaneous
Section 3.1 Conditions Precedent. The effectiveness of this Amendment
is subject to the satisfaction of each of the following conditions precedent:
(a) Agent shall have received all of the following, each dated
the date of this Amendment (unless otherwise indicated), in form and
substance satisfactory to Agent:
(i) Amendment Documents. This Amendment and any other
instrument, document or certificate required by Agent to be
executed or delivered by any of the Loan Parties, Agent or the
Lenders in connection with this Amendment, in each case duly
executed (the "Amendment Documents");
(ii) Fees and Expenses. Evidence that the costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) incurred by Agent incident to this Amendment or
otherwise required to be paid in accordance with Section 16.2 of
the Agreement, to the extent incurred and submitted to the Loan
Parties, shall have been paid in full;
(iii) Additional Information. Agent shall have received such
additional documents, instruments and information as Agent may
reasonably request to effect the transactions contemplated
hereby; and
(iv) Consents. All consents required by Section 16.9 of the
Agreement shall have been obtained (it being understood that,
pursuant to Section 16.9 of the Agreement, consent of Agent and
all Lenders shall be required for effectiveness of Section 2.1 of
this Amendment and consent of Agent and Required Lenders shall be
required for effectiveness of all other provisions of this
Agreement.
(v) Amendment Fee. Payment of an amendment fee in an amount
agreed upon among the Loan Parties, Agent and the Lenders.
(c) The representations and warranties contained herein, in the
Agreement and in all other Loan Documents, as amended hereby, shall be
true and correct as of the date hereof as if made on the date hereof
(except those, if any, which by their terms specifically relate only to
a different date).
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all other agreements,
documents and instruments executed and/or delivered pursuant hereto, and
all legal matters incident thereto, shall be satisfactory to Agent.
(e) No Default or Event of Default shall have occurred and be
continuing.
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Section 3.2 Representations and Warranties. The Loan Parties hereby
represent and warrant to, and agree with, Agent, for the benefit of the Lenders,
that, as of the date of and after giving effect to this Amendment, (a) the
execution, delivery and performance of this Amendment and any and all other
Amendment Documents executed and/or delivered in connection herewith have been
authorized by all requisite corporate action on the part of each of the Loan
Parties (as applicable) and will not violate any of such Loan Party's
certificate of incorporation or bylaws (or, in the case of Recreational Boat
Group Limited Partnership, its certificate of limited partnership or its limited
partnership agreement), (b) all representations and warranties set forth in the
Agreement and in any other Loan Document are true and correct as if made again
on and as of such date (except those, if any, which by their terms specifically
relate only to a different date) in the Agreement), (d) no Default or Event of
Default has occurred and is continuing, (e) the Agreement (as amended by this
Amendment), and all other Loan Documents are and remain legal, valid, binding
and enforceable obligations in accordance with the terms thereof, and (f) the
certifications delivered to Agent under clause (i), clause (ii) and clause (iii)
of Section 6.1(c) of the Agreement (in the case of the certification required by
such clause (iii), as subsequently modified pursuant to Section 6.2(b) of the
Agreement) remain true, correct and complete as of the Amendment Effective Date.
Section 3.3 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan Document
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or any Lender, or any closing, shall
affect the representations and warranties or the right of Agent and the Lenders
to rely upon them.
Section 3.4 Reference to Agreement. Each of the Loan Documents,
including the Agreement, the Amendment Documents and any and all other
agreements, documents or instruments now or hereafter executed and/or delivered
pursuant to the terms hereof or pursuant to the terms of the Agreement as
amended hereby, are hereby amended so that any reference in such Loan Documents
to the Agreement, whether direct or indirect, shall mean a reference to the
Agreement as amended hereby.
Section 3.5 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 3.6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Credit Parties and the Loan Parties and their
respective successors and assigns, except each of the Loan Parties may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of Agent and the Lenders.
Section 3.7 General. This Amendment, when signed by each signatory as
provided hereinbelow (i) shall be deemed effective prospectively as of the
Amendment Effective Date, (ii) contains the entire agreement among the parties
and may not be amended or modified except in writing signed by all parties,
(iii) shall be governed and construed according to the laws of the State
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of Texas, and (iv) may be executed in any number of counterparts, each of which
shall be valid as an original and all of which shall be one and the same
agreement. A telecopy or other electronic transmission of any executed
counterpart shall be deemed valid as an original.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized officers in several counterparts
effective as of the date specified in the preamble hereof.
BORROWERS:
OUTBOARD MARINE CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Executive Vice President and
Chief Financial Officer
----------------------------
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Senior Counsel and
Assistant Secretary
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OMC ALUMINUM BOAT GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary and
Treasurer
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OMC FISHING BOAT GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary and
Treasurer
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OMC LATIN AMERICA/CARIBBEAN, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary
----------------------------
RECREATIONAL BOAT GROUP
LIMITED PARTNERSHIP
By: OMC Recreational Boat Group, Inc.,
General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary and
Treasurer
----------------------------
10
GUARANTOR:
OMC RECREATIONAL BOAT GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Chief Financial Officer
----------------------------
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: Assistant Secretary and
Treasurer
----------------------------
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AGENT:
BANK OF AMERICA, N.A.
In its capacity as Agent
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
-----------------------------
Title: Vice President
----------------------------
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LENDERS:
BANK OF AMERICA, N.A.
In its capacity as Agent
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
-----------------------------
Title: Vice President
----------------------------
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AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
14
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
----------------------------
15
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxx X. Xxxxx
-------------------------------
Name: Xxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
16
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ X.X. Xxxxx
-------------------------------
Name: X.X. Xxxxx
-----------------------------
Title: Senior Vice President
----------------------------
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FLEET BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
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