THIRD AMENDMENT, dated as of July 29, 1998 (this "Third
Amendment"), to the CREDIT AGREEMENT, dated as of June 12, 1997,
among:
(a) XXXXXXXX CORPORATION, a Delaware corporation (the
"Borrower");
(b) XXXXXXXX HOLDINGS, INC., a Delaware corporation (the
"Parent");
(c) the Lenders from time to time parties thereto;
(d) SOCIETE GENERALE, as Documentation Agent for the Lenders;
(e) UBS SECURITIES LLC, as Syndication Agent for the Lenders;
and
(f) CREDIT SUISSE FIRST BOSTON, as Administrative Agent for the
Lenders.
W I T N E S S E T H :
WHEREAS, the parties hereto wish to amend certain
provisions of the Credit Agreement on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein contained, the parties hereto agree
as follows:
1. Definitions. Unless otherwise defined herein,
terms defined in the Credit Agreement shall be used as so
defined.
2. Amendment to Subsection 1.1 of the Credit
Agreement. Subsection 1.1 of the Credit Agreement is hereby
amended by deleting in its entirety the definition of "Aggregate
Tranche B Commitment" and by adding the following definitions:
"'Aggregate Tranche B Commitment': $65,000,000,
as such amount may be reduced from time to time
pursuant to this Agreement.
'Third Amendment Effective Date': as defined in
the Third Amendment to this Agreement dated as of
July 29, 1998."
3. Amendment to Section 3. Section 3 of the Credit
Agreement is hereby amended in its entirety by deleting such
Section in its entirety and substituting in lieu thereof the
following:
"SECTION III. AMOUNT AND TERMS OF TRANCHE B LOAN
COMMITMENTS
3.1. Tranche B Loans. (a) Subject to the terms
and conditions hereof, each Tranche B Lender severally
agrees to (a) continue the Tranche B Loans outstanding on
the Third Amendment Effective Date pursuant to the terms
hereof and (b) make a term loan (the Tranche B Loans
continued or made pursuant to clauses (a) and (b),
collectively, the "Tranche B Loans") to the Borrower on the
Third Amendment Effective Date in an amount not to exceed
such Tranche B Lender's Tranche B Commitment Percentage
(after giving effect to subsection 3.1(b)) of $30,000,000.
The Tranche B Loans may from time to time be (a) Eurodollar
Loans, (b) ABR Loans or (c) a combination thereof, as
determined by the Borrower and notified to the
Administrative Agent in accordance with subsections 3.2
and 7.6. The Borrower shall have the right, upon not less
than one Business Day's notice to the Administrative Agent,
to terminate up to $30,000,000 of the Aggregate Tranche B
Commitment or, from time to time prior to any borrowing
pursuant to subsection 3.2, to reduce the amount thereof.
Any such reduction shall be in an amount equal to $1,000,000
or a whole multiple of $250,000 in excess thereof and shall
reduce permanently the Aggregate Tranche B Commitment then
in effect.
(b) Subsequent to a Notice of Borrowing given by
the Borrower pursuant to subsections 3.1(a) and 3.2 and
immediately prior to any borrowing of Tranche B Loans,
without the necessity of further action by any party, one or
more Tranche B Lenders (the "Selling Lenders") as specified
on Schedule 1.1D hereto shall sell, transfer and assign to
one or more other Tranche B Lenders (the "Purchasing
Lenders") as specified on Schedule 1.1D hereto a portion of
the Selling Lender's right, title and interest in and to its
Tranche B Loans as specified on Schedule 1.1D hereto,
without recourse, representation or warranty, and each
Purchasing Lender shall purchase, take and acquire from a
Selling Lender a portion of such Selling Lender's right,
title and interest in and to its Tranche B Loans as
specified on Schedule 1.1D hereto, so that after giving
effect to all such transfers, each Tranche B Lender's
interest in the Tranche B Loans shall be as specified on
Schedule 1.1D hereto.
3.2. Procedure for Tranche B Loan Borrowing. The
Borrower shall give the Administrative Agent its irrevocable
Notice of Borrowing (which notice must be received by the
Administrative Agent prior to 11:00 A.M., New York City
time, (a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Tranche
B Loans are to be initially Eurodollar Loans or (b) on the
requested Borrowing Date, otherwise) requesting that the
Tranche B Lenders make the Tranche B Loans on the requested
Borrowing Date and specifying the amount to be borrowed.
Upon receipt of such Notice of Borrowing, the Administrative
Agent shall promptly notify each Tranche B Lender thereof.
Each Tranche B Lender will make the amount of its pro rata
share of the Tranche B Loans available to the Administrative
Agent for the account of the Borrower at the office of the
Administrative Agent specified in subsection 14.2 prior to
11:00 A.M., New York City time, on the Borrowing Date in
funds immediately available to the Administrative Agent.
Such Tranche B Loans will then be made available to the
Borrower by the Administrative Agent transferring to the
account directed by the Borrower (which account need not be
maintained by the Administrative Agent) with the aggregate
of the amounts made available to the Administrative Agent by
the Tranche B Lenders and in like funds as received by the
Administrative Agent.
3.3. Amortization of Tranche B Loans. (a) The
Borrower shall repay the Tranche B Loans on each date set
forth below by the amount set forth below opposite such
date:
Period Amount
September 30, 1998 $233,303.25
December 31, 1997 233,303.25
March 31, 1999 233,303.25
June 30, 1999 233,303.25
September 30, 1999 233,303.25
December 31, 1999 233,303.25
March 31, 2000 233,303.25
June 30, 2000 233,303.25
September 30, 2000 233,303.25
December 31, 2000 233,303.25
March 31, 2001 233,303.25
June 30, 2001 233,303.25
September 30, 2001 233,303.25
December 31, 2001 233,303.25
March 31, 2002 233,303.25
June 30, 2002 233,303.25
September 30, 2002 233,303.25
December 31, 2002 233,303.25
March 31, 2003 9,332,129.96
June 30, 2003 2,333,032.49
September 30, 2003 9,332,129.96
December 31, 2003 2,333,032.49
March 31, 2004 10,078,700.36
June 30, 2004 2,519,675.09
September 30, 2004 10,078,700.36
December 31, 2004 2,519,675.09
March 31, 2005 9,518,772.56
June 30, 2005 2,379,693.14
Total $64,625,000.00
; provided that in the event the aggregate principal amount
of Tranche B Loans outstanding on the Third Amendment
Effective Date is less than $64,625,000, an amount equal to
such difference shall be applied to reduce the then
remaining scheduled installments set forth above in the
table above pro rata based on the then remaining principal
amount of each such amount."
(b) The Borrower shall repay any then outstanding
Tranche B Loans on June 30, 2005.
3.4. Use of Proceeds of Tranche B Loans. (i) The
proceeds of the Tranche B Loans borrowed prior to the Third
Amendment Effective Date shall be utilized by the Borrower
only (a) to finance the purchase by AcquisitionCo of the
Tendered Shares, (b) to finance the Merger, (c) to refinance
outstanding Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, ERO), (d) to
finance the acquisition permitted by subsection 11.10(n)(ii)
and (e) to pay any fees and expenses relating thereto and
(ii) the proceeds of the Tranche B Loans borrowed on or
subsequent to the Third Amendment Effective Date shall be
utilized only to finance the acquisition permitted by
subsection 11.10(o), to pay related fees and expenses and to
repay Revolving Credit Loans."
4. Amendment to Subsection 11.
A. Subsection 11.1 is hereby amended by deleting the
paragraph at the end of such subsection (which paragraph
begins with the word "Notwithstanding") and substituting the
following paragraph in lieu thereof:
"Notwithstanding anything to the contrary herein,
for the purposes of determining the Leverage Ratio and
the Consolidated Interest Coverage Ratio for the
periods ending on or about September 30, 1998, December
31, 1998 and March 31, 1999, Consolidated EBITDA for
the relevant period shall be deemed to equal actual
Consolidated EBITDA for such period plus $3,800,000,
$2,600,000 and $1,200,000, respectively."
B. Subsection 11.10 is hereby amended (i) by adding a
reference in paragraph (h) in the proper order to subsection
"11.2", (ii) by deleting the reference in paragraph (k)
thereof to "$5,000,000" and substituting in lieu thereof a
reference to "$20,000,000", (iii) by deleting the reference
in paragraph (l) to "$3,000,000" and substituting in lieu
thereof a reference to $4,000,000" and (iv) by adding the
following paragraphs at the end of such subsection (and
adjusting the punctuation at the end of paragraph (n)
accordingly):
"(o) so long as after giving effect thereto no Default
or Event of Default shall have occurred and be continuing or
would result therefrom, the Borrower may purchase all of the
capital stock of Backyard Products Limited, an Ontario
corporation ("Backyard"), on terms and conditions reasonably
satisfactory to the Administrative Agent, so long as the
aggregate amount of consideration paid in connection
therewith (which may include Indebtedness permitted by
subsection 11.2(m)) shall not exceed $17,200,000, provided
that (A) such actions as may be required or reasonably
requested to ensure that the Administrative Agent, for the
ratable benefit of the Lenders, has a perfected first
priority security interest in at least 65% of the
outstanding capital stock issued by Backyard shall have been
taken, (B) (I) on a pro forma basis for the period of four
consecutive fiscal quarters most recently ended (assuming
the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith
occurred on the first day of such period of four consecutive
fiscal quarters), the Borrower shall be in compliance with
the covenants contained in subsection 11.1 and (II) the
Administrative Agent shall have received calculations in
reasonable detail reasonably satisfactory to it showing
compliance with the requirements of this clause (B)
certified by a Responsible Officer of the Borrower and (C)
such acquisition is a Permitted Acquisition; and
(p) an equity contribution by the Borrower to Xxxxxxxx
(U.K.) Limited in an aggregate amount not to exceed
$5,000,000 to eliminate an intercompany account deficit in
an equal amount, so long as in connection therewith the
Borrower satisfies the requirements of subsection 10.10(c)."
5. Amendment to Schedule 1.1A. Schedule 1.1A to the
Credit Agreement is hereby amended by deleting Schedule 1.1A in
its entirety and substituting in lieu thereof Annex A hereto.
6. Addition of Schedule 1.1D. Schedule 1.1D in the
form of Annex B hereto is hereby added to the Credit Agreement.
7. Effective Date. This Third Amendment will become
effective as of the date (the "Third Amendment Effective Date")
hereof upon (i) its execution by the Parent, the Borrower and the
Required Lenders in accordance with the terms of the Credit
Agreement, (ii) delivery to the Administrative Agent of
resolutions of the Borrower authorizing the execution and
delivery of this Third Amendment and (iii) delivery to the
Administrative Agent of stock certificates (and stock powers in
respect thereof) in respect of at least 65% of the outstanding
voting stock of Backyard.
8. Representations and Warranties. The Parent and the
Borrower represent and warrant to each Lender that (a) this Third
Amendment constitutes the legal, valid and binding obligation of
the Parent and the Borrower, enforceable against it in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyances, reorganization,
moratorium or similar laws affecting creditors' rights generally,
by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and by an implied covenant of
good faith and fair dealing, (b) the representations and
warranties made by the Credit Parties in the Credit Documents are
true and correct in all material respects on and as of the date
hereof (except to the extent that such representations and
warranties are expressly stated to relate to an earlier date, in
which case such representations and warranties shall have been
true and correct in all material respects on and as of such
earlier date) and (c) no Default or Event of Default has occurred
and is continuing as of the date hereof.
9. Continuing Effect. Except as expressly waived or
amended hereby, the Credit Agreement shall continue to be and
shall remain in full force and effect in accordance with its
terms. This Third Amendment shall constitute a Credit Document.
10. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
11. Counterparts. This Third Amendment may be
executed by the parties hereto in any number of separate
counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
12. Payment of Expenses. The Borrower agrees to pay
and reimburse the Administrative Agent for all of its out-of-
pocket costs and reasonable expenses incurred in connection with
this Third Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to the
Administrative Agent.
13. Acknowledgement with Respect to Various Credit
Documents. Each Credit Party, by its execution and delivery of
a copy of this Third Amendment, hereby consents to the extensions
of credit pursuant to the Credit Agreement. Each Credit Party
further acknowledges and agrees to the provisions of this Third
Amendment and hereby agrees for the benefit of the Lenders that
all extensions of credit (including without limitation all
Tranche B Loans) pursuant to the Credit Agreement (as same is
amended by this Third Amendment, and as same may be further
amended, modified or supplemented from time to time) shall be
fully entitled to all benefits of (and shall be fully guaranteed
pursuant to) the Master Guarantee and Collateral Agreement and
shall be fully secured pursuant to, and in accordance with the
terms of, all the Security Documents.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
XXXXXXXX CORPORATION
By:
Title:
XXXXXXXX HOLDINGS, INC.
By:
Title:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent and as a
Lender
By:
Title:
By:
Title:
SOCIETE GENERALE, as a Lender
By:
Title:
UNION BANK OF SWITZERLAND, NEW YORK
BRANCH, as a Lender
By:
Title:
By:
Title:
BANK POLSKA KASA OPIEKI S.A. -
PEKAO S.A. GROUP
By:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
Title:
By:
Title:
CITICORP USA, INC.
By:
Title:
DEEPROCK & COMPANY
By: Xxxxx Xxxxx Management,
as Investment Advisor
By:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
Title:
FIRST SOURCE FINANCIAL, LLP
By: First Source Financial, Inc.,
as Agent/Manager
By:
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By:
Title:
XXXXXXX XXXXX DEBT STRATEGIES FUND,
INC.
By:
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By:Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By:
Title:
XXXXXXX XXXXX DEBT STRATEGIES
PORTFOLIO
By:Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By:
Title:
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE
By:
Title:
ORIX USA CORPORATION
By:
Title:
SANWA BUSINESS CREDIT CORPORATION
By:
Title:
SENIOR DEBT PORTFOLIO
By:BOSTON MANAGEMENT AND
RESEARCH, as Investment Advisor
By:
Title:
PAMCO CAYMAN LTD., by Protective
Asset Management as Collateral
Manager
By:
Title:
THE CHASE MANHATTAN BANK
By:
Title:
IMPERIAL BANK
By:
Title:
ACKNOWLEDGED AND AGREED:
ERO, INC.
By:
Name:
Title:
ERO INDUSTRIES, INC.
By:
Name:
Title:
ERO MARKETING, INC.
By:
Name:
Title:
PRISS PRINTS, INC.
By:
Name:
Title:
IMPACT, INC.
By:
Name:
Title:
ERO CANADA, INC.
By:
Name:
Title:
AMAV INDUSTRIES INC.
By:
Name:
Title:
