EXHIBIT 10.3
AMENDMENT NO. 2
TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Second Amendment") is
entered into as of the 23rd day of December, 1998 among:
XXXX INTERNATIONAL HOLDINGS, INC., a Delaware corporation ("Holdings");
DEFLECTA-SHIELD CORPORATION, a Delaware corporation ("Deflecta"),
XXXX INDUSTRIES, INCORPORATED, a Minnesota corporation ("LII"),
BELMOR AUTOTRON CORP., a Delaware corporation ("Autotron"),
DFM CORP., an Iowa corporation ("DFM"),
(each a "Borrower" and, collectively, "Borrowers");
XXXX ACQUISITION CORP., a Minnesota corporation ("LAC"),
BAC ACQUISITION CO., a Delaware corporation ("BAC"),
TRAILMASTER PRODUCTS, INC., a Delaware corporation ("Trailmaster"),
DELTA III, INC., a Delaware corporation ("Delta"),
(each an "Active Subsidiary" and, collectively, "Active Subsidiaries");
AUTO VENTSHADE COMPANY, a Delaware corporation ("AVS");
NEW HOLDINGS, INC., a Delaware corporation ("NHI");
VENTSHADE HOLDINGS, INC., a Delaware corporation ("VHI");
The several financial institutions from time to time party to the Credit
Agreement (as defined herein) (each a "Lender" and, collectively, "Lenders");
and
XXXXXX FINANCIAL, INC., a Delaware corporation for itself as a Lender and as
Agent (in its capacity as Agent, the "Agent").
RECITALS
WHEREAS:
(A) Holdings, Borrowers, the Active Subsidiaries, Lenders and Agent
have entered into that certain Credit Agreement dated as of February 27, 1998
(as amended by Amendment No. 1 thereto, dated as of April 1, 1998 (the "First
Amendment"), the "Credit Agreement");
(B) NHI intends to acquire all of the outstanding shares of stock of
VHI for an aggregate purchase price of $66,875,000 (subject to post-closing
price adjustments) (the "AVS Acquisition") and Holdings intends to acquire all
of the outstanding shares of stock of SB for an aggregate purchase price of
$18,000,000 (subject to post-closing price adjustments) (the
1
"SB Acquisition");
(C) Upon the consummation of the AVS Acquisition, AVS shall become a
Borrower and a Corporate Guarantor under the Credit Agreement, NHI shall be
merged with and into VHI with VHI being the surviving corporation and VHI shall
become a Corporate Guarantor under the Credit Agreement;
(D) Upon consummation of the SB Acquisition, SB shall become a Borrower
under the Credit Agreement;
(E) Holdings, Borrowers, the Active Subsidiaries, Lenders and Agent
desire to amend certain provisions of the Credit Agreement; and
(F) Holdings, Borrowers, the Active Subsidiaries, Lenders and Agent are
willing to so amend, all on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and provisions
contained herein, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.
2. Certain Amendments to Credit Agreement. The Credit Agreement is
hereby amended as follows:
2.1 The Index of Defined Terms in the Credit Agreement is hereby
amended as follows:
(A) By deleting therefrom the references to "Acquisition Costs",
"Acquisition EBITDA", "Acquisition Loans", "Acquisition Loan
Commitment", "Acquisition Note", "Acquisition Pro Forma", "Acquisition
Total Indebtedness", "Cut-Off Date", "Permitted Acquisition Documents",
"Purchase Agreement", "Target" and "Test Date"; and
(B) By inserting in the proper alphabetical order each of the
following:
"AVS Preamble"
"AVS Draw ss.1.1(C)"
"NHI Preamble"
"SB Preamble"
"SB Draw ss.1.1(C)"
"Term Loan C ss.1.1(C)"
"Term Loan C Commitment ss.1.1(C)"
"Term C Note ss.10.1"
2
"VHI Preamble";
2.2 Exhibit 1.5(B) is hereby deleted in its entirety and replaced with
the attached replacement Exhibit 1.5(B);
2.3 Exhibit 3.6(B)(12) is hereby deleted in its entirety;
2.4 Exhibit 4.7(D) is hereby deleted in its entirety and replaced with
the attached replacement Exhibit 4.7(D);
2.5 Exhibit 10.1(A) is hereby amended by deleting the Form of
Acquisition Note and inserting the attached Form of Term C Note;
2.6 The Schedules to the Credit Agreement are hereby replaced by the
Supplemental Schedules attached hereto;
2.7 The recital of the parties to the Credit Agreement is hereby
amended by inserting after the words "DFM CORP., an Iowa corporation
("DFM")," the following:
"AUTO VENTSHADE COMPANY, a Delaware corporation ("AVS"),
SMITTYBILT, INC., a California corporation ("SB"),";
2.8 The recital of the parties to the Credit Agreement is further
amended by inserting after the words "DELTA III, INC., a Delaware
corporation ("Delta")," the following:
"VENTSHADE HOLDINGS, INC., a Delaware corporation ("VHI")";
2.9 The Recitals to the Credit Agreement are hereby amended by (i)
deleting from the second line of the first paragraph thereof the words
", an acquisition facility" and (ii) deleting from clause (iii) of the
first paragraph thereof the words "Permitted Acquisitions (which shall
not include the Deflecta Acquisition) and";
2.10 Subsection 1.1(A) of the Credit Agreement is hereby amended by
deleting the words, "Collectively, Term Loan A and Term Loan B will be
referred to as the 'Term Loans'. Borrowers shall repay the Term Loans
through periodic payments on the dates and in the amounts indicated
below ('Scheduled Term Installments')" and replacing them with the
following:
"Collectively, Term Loan A, Term Loan B and Term Loan C will be
referred to as the 'Term Loans'. Borrowers shall repay the Term Loans
through periodic payments on the dates and in the amounts ('Scheduled
Term Installments') indicated below (in the
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case of Term Loan A and Term Loan B) and in subsection 1.1(C) (in the
case of Term Loan C)";
2.11 Subsection 1.1(C) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"(C) Term Loan C. Each Lender agrees severally and not jointly, to lend
to Borrowers its Pro Rata Share of "Term Loan C", up to an aggregate
maximum for all Lenders of $34,500,000 (the "Term Loan C Commitment"),
in two draws as follows:
(i) The first draw (the "AVS Draw") in an amount equal to
$25,000,000; and
(ii) The second draw (the "SB Draw") in an amount equal to
$9,500,000.
Upon the occurrence of each of the AVS Draw and SB Draw, the Term Loan
C Commitment shall be reduced by the amount of such AVS Draw or SB
Draw, as the case may be. The Term Loan C Commitment of the Lenders
shall expire on the earlier of (i) the date of the SB Draw or (ii) 90
days after the date of AVS Draw. Borrowers shall repay the Term Loan C
through the Scheduled Term Installments indicated below:
Term Loan C
Term Loan C Scheduled Installments
----------------------------------
(if both the AVS Draw
Date (if only the AVS Draw occurs) and the SB Draw occur)
---- ----------------------------- ----------------------
March 31, 1999 $ 200,000 $ 269,531.25
June 30, 1999 200,000 269,531.25
September 30, 1999 200,000 269,531.25
December 31, 1999 200,000 269,531.25
March 31, 2000 250,000 377,343.75
June 30, 2000 250,000 377,343.75
September 30, 2000 250,000 377,343.75
December 31, 2000 250,000 377,343.75
March 31, 2001 562,500 754,687.50
June 30, 2001 562,500 754,687.50
September 30, 2001 562,500 754,687.50
December 31, 2001 562,500 754,687.50
March 31, 2002 625,000 862,500.00
June 30, 2002 625,000 862,500.00
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September 30, 2002 625,000 862,500.00
December 31, 2002 625,000 862,500.00
March 31, 2003 687,500 970,312.50
June 30, 2003 687,500 970,312.50
September 30, 2003 687,500 970,312.50
December 31, 2003 687,500 970,312.50
March 31, 2004 787,500 1,078,125.00
June 30, 2004 787,500 1,078,125.00
September 30, 2004 787,500 1,078,125.00
December 31, 2004 787,500 1,078,125.00
March 31, 2005 3,137,500 4,312,500.00
June 30, 2005 3,137,500 4,312,500.00
September 30, 2005 3,137,500 4,312,500.00
December 31, 2005 3,137,500 4,312,500.00
; provided, however, that the final principal Scheduled Term
Installment for Term Loan C shall be an amount equal to the aggregate
principal amount of the Term Loan C outstanding on such date.";
2.12 Subsection 1.1(E) of the Credit Agreement is hereby amended by
deleting clause (iv) thereof in its entirety and replacing it with the
following:
"(iv) a Term C Note to evidence the Term Loan C; such Note to be in the
principal amount of such Lender's Pro Rata Share of such Term Loan C";
2.13 Subsection 1.1(F) of the Credit Agreement is hereby amended as
follows:
(A) By deleting from the first sentence thereof the words "or
Acquisition Loans";
(B) By deleting from the second sentence thereof the words "or
Acquisition Loans" and replacing them with the words "or Term Loan C";
and
(C) By deleting from the last sentence thereof the words "and each
Acquisition Loan" and replacing them with the words "and the Term Loan
C";
2.14 Subsection 1.2(A) of the Credit Agreement is hereby amended as
follows:
(A) By deleting from paragraph (1) thereof the words "and the
Acquisition Loans"; and
(B) By deleting paragraph (4) thereof in its entirety and replacing it
with the following:
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"(4) Term Loan C: The Term Loan C shall bear interest as follows:
(a) If a Base Rate Loan, then at the sum of the Base Rate plus
the Base Rate Margin applicable to the Term Loan C.
(b) If a LIBOR Loan, then at the sum of the LIBOR plus the
LIBOR Margin applicable to the Term Loan C.";
2.15 The definition of "Base Rate Margin" in subsection 1.2(A) of the
Credit Agreement is hereby amended as follows:
(A) By deleting from subclause (y) of clause (i) thereof the words
"Acquisition Loans and";
(B) By inserting after the words "September 1, 1998" in clause (ii)
thereof, the following as a new subclause (y):
", (y) the date of the execution of the Second Amendment"; and
(C) By relettering existing subclause (y) of clause (ii) thereof as
subclause (z);
2.16 The definition of "LIBOR Margin" in subsection 1.2(A) of the
Credit Agreement is hereby amended as follows:
(A) By deleting from subclause (y) of clause (i) thereof the words
"Acquisition Loans and";
(B) By inserting after the words "September 1, 1998" in clause (ii)
thereof, the following as a new subclause (y):
", (y) the date of the execution of the Second Amendment"; and
(C) By relettering existing subclause (y) of clause (ii) thereof as
subclause (z);
2.17 The table entitled "Base Rate Margin Pricing Table" in subsection
1.2(A) of the Credit Agreement is hereby deleted in its entirety and
replaced with the following table:
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BASE RATE MARGIN
PRICING TABLE
================================================================================
Total Indebtedness
to Pro Forma EBITDA is: Base Rate Margin
---------------------------------------------------
Revolving
Loans Term Loan A Term Loan B Term Loan C
--------------------------------------------------------------------------------
greater than 5.00 to 1.00 2.00% 2.00% 2.50% 3.00%
--------------------------------------------------------------------------------
equal to or less than 5.00 to 1.75% 1.75% 2.25% 2.75%
1.00 but equal to or greater
than 3.75 to 1.00
--------------------------------------------------------------------------------
less than 3.75 to 1.00 1.50% 1.50% 2.00% 2.50%
--------------------------------------------------------------------------------
2.18 The table entitled "LIBOR Margin Pricing Table" in subsection
1.2(A) of the Credit Agreement is hereby deleted in its entirety and
replaced with the following table:
LIBOR MARGIN
PRICING TABLE
================================================================================
Total Indebtedness
to Pro Forma EBITDA is: Base Rate Margin
---------------------------------------------------
Revolving
Loans Term Loan A Term Loan B Term Loan C
--------------------------------------------------------------------------------
greater than 5.00 to 1.00 3.25% 3.25% 3.75% 4.25%
--------------------------------------------------------------------------------
equal to or less than 5.00 to 3.00% 3.00% 3.50% 4.00%
1.00 but equal to or greater
than 3.75 to 1.00
--------------------------------------------------------------------------------
less than 3.75 to 1.00 2.75% 2.75% 3.25% 3.75%
--------------------------------------------------------------------------------
2.19 Subsection 1.2(A) of the Credit Agreement is hereby further
amended by deleting from the second to last paragraph thereof, clause
(f) in its entirety and replacing it with the following:
"(f) no Interest Period for any portion of the Term Loan C shall extend
beyond the date of the final Scheduled Term Installment thereof.";
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2.20 Subsection 1.2(B) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"(B) Unused Fee. Borrowers shall pay Agent, for the benefit of all
Lenders committed to make Revolving Loans, subject to the immediately
following sentence, in each case based upon their respective Pro Rata
Shares, a fee ("Unused Fee") in an amount equal to (1)(a) the Revolving
Loan Commitment less (b) the sum of (i) the average daily balance of
the Revolving Loans plus (ii) the average daily aggregate amount of
outstanding Risk Participation Liability, in each case during the
preceding month, multiplied by (2) one-half of one percent (0.50%) per
annum. Any Unused Fee is to be paid quarterly in arrears on the first
day of each of January, April, July and October.";
2.21 Subsection 1.5(A) of the Credit Agreement is hereby amended as
follows:
(A) By deleting from the heading thereof the words "and Acquisition
Loans";
(B) By deleting from the second line thereof the words "and Acquisition
Loans"; and
(C) By deleting from the sixth and seventh lines thereof the words "or
the Acquisition Loans" and replacing them with the words "or the Term
Loan C";
2.22 Subsection 1.5(D) of the Credit Agreement is hereby amended by
deleting clause (4) from the parenthetical thereof in its entirety and
replacing it with the following: "(4) proceeds of the issuance of
equity securities by Holdings in connection with (i) the acquisition of
AVS in an amount not to exceed $25,000,000 and (ii) the acquisition of
SB in an aggregate amount not to exceed $5,000,000";
2.23 Subsection 1.5(E) of the Credit Agreement is hereby amended as
follows:
(A) By deleting from the third line thereof the words "and the
Acquisition Loans" and replacing them with the words "and the Term Loan
C";
(B) By deleting from the fourth and fifth lines thereof the words "and
the unpaid Scheduled Acquisition Installments of the Acquisition
Loans"; and
(C) By deleting from the fifth and sixth lines thereof the words "and
the Acquisition Loans";
2.24 Subsection 1.6 of the Credit Agreement is hereby amended by
deleting from the seventh line thereof the words "and the Acquisition
Loan Commitment have" and replacing them with the word "has";
8
2.25 Subsection 3.1(E) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"[Omitted]";
2.26 Subsection 3.1(F) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"[Omitted]";
2.27 The following shall be inserted into the Credit Agreement as a new
subsection 3.1(G) after the end of subsection 3.1(F):
"(G) subordinated Indebtedness incurred by Holdings and Borrowers
pursuant to the Securities Purchase Agreements in connection with the
AVS Acquisition and the SB Acquisition in an aggregate principal amount
not to exceed $25,000,000.";
2.28 Subsection 3.2(B) of the Credit Agreement is hereby amended by
inserting after the words "Loan Documents" in the parenthetical thereof
the words "or the Securities Purchase Agreements";
2.29 Subsection 3.3(D) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"(D) the AVS Acquisition and the SB Acquisition shall be permitted
provided that (i) in connection with the AVS Acquisition, (a) at least
$25,000,000 shall have been invested in Holdings in exchange for equity
securities on terms and conditions acceptable to Agent, (b) Holdings
and Borrowers shall have issued $20,000,000 of subordinated debt
pursuant to the terms and conditions set forth in the Securities
Purchase Agreements, (c) the AVS Acquisition shall be on the terms and
conditions set forth in the AVS Acquisition Agreement, (d) upon
consummation of the AVS Acquisition, NHI shall be merged with and into
VHI with VHI as the surviving entity, (e) upon consummation of the AVS
Acquisition, AVS shall become a Borrower hereunder and VHI shall become
a Loan Party and a Corporate Guarantor hereunder and (f) immediately
after the consummation of the AVS Acquisition, the amount equal to the
Revolving Loan Commitment less the sum of (1) the amount of outstanding
Revolving Loans plus (2) the amount of outstanding Risk Participation
Liability, shall be at least $10,000,000, and (ii) in connection with
the SB Acquisition, (a) at least $5,000,000 shall have been invested in
Holdings in exchange for equity securities on terms and conditions
acceptable to Agent, (b) Holdings and Borrowers shall have issued
$5,000,000 of subordinated debt pursuant to the terms and conditions
set forth in the Securities Purchase Agreements, (c) the SB Acquisition
shall be on substantially the same terms and conditions set forth in
the SB Acquisition Agreement and otherwise reasonably acceptable to
Agent, (d) upon consummation of the SB Acquisition, SB shall become a
Borrower hereunder and (e) immediately after the consummation of the SB
Acquisition, the amount equal to the Revolving Loan Commitment less the
sum of
9
(1) the amount of outstanding Revolving Loans plus (2) the amount of
outstanding Risk Participation Liability, shall be at least
$10,000,000;";
2.30 Subsection 3.3 of the Credit Agreement is further amended as
follows:
(A) By inserting before the period at the end of clause (G) thereof the
following:
"; and (H) The Loan Parties may accept a promissory note in form and
substance reasonably satisfactory to Agent and in a principal amount
not to exceed $500,000, in connection with the sale of the assets of
the Fibernetics division permitted under subsection 3.7(e); provided,
that the sole originally executed counterpart of such note shall be
pledged and delivered to Agent, for the benefit of Agent and Lenders,
as security for the Obligations"; and
(B) By inserting in the definition of "Investment" therein after the
words "or ownership interest in" in the third line thereof the
following: ", or all or substantially all of the assets of";
2.31 Subsection 3.4 of the Credit Agreement is hereby amended as
follows:
(A) By inserting after the semicolon at the end of clause (H) thereof
the word "and";
(B) By deleting from the end of clause (I) thereof the word "and"; and
(C) By deleting clause (J) thereof in its entirety;
2.32 Subsection 3.5 of the Credit Agreement is hereby amended by
inserting at the end of the first paragraph thereof the following:
"Notwithstanding the foregoing, the Loan Parties may, pursuant to the
subordination terms set forth in the Senior Subordinated Notes, make
Restricted Junior Payments to the extent necessary to permit Holdings
and Borrowers to make interest payments with respect to the
Indebtedness permitted to be incurred under subsection 3.1(G)"
2.33 Subsections 3.6(B), (C) and (D) of the Credit Agreement are each
hereby deleted in their entirety;
2.34 Subsection 3.7 of the Credit Agreement is hereby amended by
inserting before the period at the end of clause (d) thereof the
following:
"; and (e) the sale or disposition of the assets of the Fibernetics
division of the Loan Parties";
10
2.35 Subsection 3.8 of the Credit Agreement is hereby amended by
inserting in clause (d) thereof after the word "under" the words "the
second sentence of the first paragraph of subsection 3.5 or";
2.36 Subsection 3.10 of the Credit Agreement is hereby amended by
deleting from the third line thereof after the word "Indebtedness" the
words "of its" and replacing them with the words "which is";
2.37 Subsection 4.1 of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"4.1 Capital Expenditure Limits. The aggregate amount of all Capital
Expenditures of Holdings and Borrowers and their respective
Subsidiaries will not exceed the following amounts ('Capex Limit')
during the following periods:
Maximum Amount of Capital Expenditures
--------------------------------------
Period (if only the AVS (if both the AVS
------ Draw occurs) Draw and the SB
---------------- Draw occur)
----------------
From January 1, 1999 through December 31, 1999 $7,500,000 $8,000,000
From January 1, 2000 through December 31, 2000 $5,500,000 $6,000,000
Each Fiscal Year thereafter $5,500,000 $6,000,000
Notwithstanding the foregoing, in the event the Loan Parties
and their respective Subsidiaries do not expend the entire Capex Limit
permitted in any Fiscal Year, the Loan Parties and their respective
Subsidiaries may carry forward to the immediately succeeding Fiscal
Year the unutilized portion of the Capex Limit, provided that the
amount so carried forward shall not exceed 50% of the Capex Limit for
such immediately succeeding Fiscal Year. All Capital Expenditures made
by Loan Parties and their respective Subsidiaries shall first be
applied to reduce the applicable Capex Limit for such Fiscal Year and
then to reduce the amount, if any, carried forward from the previous
Fiscal Year.
'Capital Expenditures' will be calculated as illustrated on
Exhibit 4.7(D)."
2.38 Subsection 4.2 of the Credit Agreement is hereby amended by
deleting the figure "$1,500,000" and replacing it with the following:
"$2,500,000 (if only the AVS Draw occurs) or $3,500,000 (if both the
AVS Draw and the SB Draw occur),"
2.39 Subsection 4.3 of the Credit Agreement is hereby amended by
deleting it in its
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entirety and replacing it with the following:
"4.3 EBITDA. Holdings and Borrowers shall not permit EBITDA for the
four Fiscal Quarters (or such shorter period as indicated below) ending
on the last day of any Fiscal Quarter ending during the periods set
forth below to be less than the amount set forth below for such period.
Minimum Amount of EBITDA
-----------------------------------
Period (if only the AVS (if both the AVS
------ Draw occurs) Draw and the SB
---------------- Draw occur)
----------------
Fiscal Quarter Ending March 31, 1999 $ 3,500,000 $ 4,000,000
For the Six Months Ending June 30, 1999 $10,000,000 $11,500,000
For the Nine Months Ending September 30, 1999 $17,300,000 $20,000,000
For the Twelve Months Ending December 31, 1999 $23,700,000 $27,300,000
For the Four Fiscal Quarters Ending:
March 31, 2000 $25,700,000 $29,500,000
June 30, 2000 $26,900,000 $31,000,000
September 30, 2000 $27,000,000 $31,000,000
December 31, 2000 $27,250,000 $31,000,000
March 31, 2001 $28,000,000 $32,000,000
June 30, 2001 $28,800,000 $32,000,000
September 30, 2001 $29,700,000 $34,000,000
December 31, 2001 $30,000,000 $34,000,000
March 31, 2002 and on the last day of each
Fiscal Quarter thereafter $30,000,000 $35,000,000
'EBITDA' will be calculated as illustrated on Exhibit 4.7(D)."
2.40 Subsection 4.4 of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"4.4 Fixed Charge Coverage. Holdings and Borrowers shall not permit
Fixed Charge Coverage for the four Fiscal Quarters (or such shorter
period as indicated
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below) ending on the last day of any Fiscal Quarter ending during the
periods set forth below to be less than the ratio set forth below for
such period.
Minimum Ratio
-----------------------------------
Period (if only the AVS (if both the AVS
------ Draw occurs) Draw and the SB
---------------- Draw occur)
----------------
For the Six Months Ending June 30, 1999 0.800 to 1.0 0.850 to 1.0
For the Nine Months Ending September 30, 1999 0.900 to 1.0 0.950 to 1.0
For the Twelve Months Ending December 31, 1999 1.000 to 1.0 1.000 to 1.0
For the Four Fiscal Quarters Ending:
March 31, 2000 1.000 to 1.0 1.050 to 1.0
June 30, 2000 1.050 to 1.0 1.050 to 1.0
September 30, 2000 1.050 to 1.0 1.100 to 1.0
December 31, 2000 and on the last day of
each Fiscal Quarter thereafter 1.100 to 1.0 1.100 to 1.0
'Fixed Charge Coverage' will be calculated as illustrated on Exhibit
4.7(D)."
2.41 Subsection 4.5 of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"4.5 Total Interest Coverage. Holdings and Borrowers shall not permit
Total Interest Coverage for the four Fiscal Quarters (or such shorter
period as indicated below) ending on the last day of any Fiscal Quarter
ending during the periods set forth below to be less than the ratio set
forth below for such period.
Minimum Ratio
-----------------------------------
Period (if only the AVS (if both the AVS
------ Draw occurs) Draw and the SB
---------------- Draw occur)
----------------
For the Six Months Ending June 30, 1999 1.300 to 1.0 1.300 to 1.0
For the Nine Months Ending September 30, 1999 1.550 to 1.0 1.600 to 1.0
For the Twelve Months Ending December 31, 1999 1.650 to 1.0 1.700 to 1.0
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For the Four Fiscal Quarters Ending:
March 31, 2000 1.800 to 1.0 1.800 to 1.0
June 30, 2000 2.000 to 1.0 2.000 to 1.0
September 30, 2000 2.000 to 1.0 2.000 to 1.0
December 31, 2000 2.000 to 1.0 2.000 to 1.0
March 31, 2001 2.250 to 1.0 2.250 to 1.0
June 30, 2001 2.500 to 1.0 2.500 to 1.0
September 30, 2001 2.750 to 1.0 2.750 to 1.0
December 31, 2001 2.750 to 1.0 2.750 to 1.0
March 31, 2002 and on the last day of each
Fiscal Quarter thereafter 3.000 to 1.0 3.000 to 1.0
'Total Interest Coverage' will be calculated as illustrated on Exhibit
4.7(D).
2.42 Subsection 4.6 of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"4.6 Total Indebtedness to EBITDA Ratio. Holdings and Borrowers shall
not permit the ratio of Total Indebtedness (calculated as of the last
day of any Fiscal Quarter ending during the periods set forth below) to
EBITDA for the four Fiscal Quarters ending on the last day of any
Fiscal Quarter ending during the periods set forth below (or for
periods shorter than four Fiscal Quarters, EBITDA for such shorter
period plus a certain multiple of $28,200,000 (the "EBITDA Index") as
set forth below) to be greater than the ratio set forth below for such
period.
Period Maximum Ratio
------ -----------------------------------
(whether or not the SB Draw occurs)
For the Six Months Ending on June 30, 1999 4.500 to 1.0
(0.56 times the EBITDA Index)
For the Nine Months Ending on September 30, 1999 4.350 to 1.0
(0.26 times the EBITDA Index)
For the Twelve Months Ending on December 31, 1999 4.200 to 1.0
For the Four Fiscal Quarters Ending:
March 31, 2000 4.000 to 1.0
June 30, 2000 3.750 to 1.0
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September 30, 2000 3.500 to 1.0
December 31, 2000 3.500 to 1.0
March 31, 2001 3.500 to 1.0
June 30, 2001 3.000 to 1.0
September 30, 2001 2.750 to 1.0
December 31, 2001 and on the last day
of each Fiscal Quarter thereafter 2.500 to 1.0
"Total Indebtedness" and "EBITDA" will be calculated as illustrated on Exhibit
4.7(D).
2.43 Subsection 5.25(B) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"(B) No portion of the proceeds of the Term Loan C shall be used by
Borrowers for any purpose other than in connection with the
consummation of the AVS Acquisition or the SB Acquisition.";
2.44 Subsection 5.25(C) of the Credit Agreement is hereby amended by
deleting the words "or the Term Loans" and replacing them with the
words ", the Term Loan A or the Term Loan B";
2.45 The following shall be inserted as a new subsection 5.28:
"5.28 Year 2000. Each Loan Party has made an assessment of the
microchip and computer-based systems and the software used in its
business and based upon such assessment believes that it will be "Year
2000 Compliant" by January 1, 2000. For purposes of this subsection,
"Year 2000 Compliant" means that all software, embedded microchips and
other processing capabilities utilized by, and material to the business
operations or financial condition of, each Loan Party are able to
interpret, store, transmit, receive and manipulate data on and
involving all calendar dates correctly and without causing any abnormal
ending scenarios in relation to dates in and after the Year 2000. From
time to time, at the request of Agent, each of the Loan Parties shall
provide to Lenders such updated information as is requested regarding
the status of its efforts to become Year 2000 Compliant.";
2.46 Subsection 6.3 of the Credit Agreement is hereby amended by
deleting the words ", the Acquisition Loans";
2.47 Subsection 7.2(A) of the Credit Agreement is hereby amended by
deleting the words "or an Acquisition Loan" and replacing them with the
words "or the Term Loan C";
2.48 Subsection 7.3 of the Credit Agreement is hereby amended by
deleting it in its
15
entirety and replacing it with the following:
"7.3 Additional Conditions to AVS Draw. The obligations of Agent and
each Lender to fund the AVS Draw are subject to the condition that the
AVS Acquisition shall have occurred pursuant to the provisions set
forth in clause (i) of subsection 3.3(D), in addition to those
conditions set forth in subsections 7.1 and 7.2";
2.49 A new subsection 7.4 is hereby inserted into the Credit Agreement
following subsection 7.3:
"7.4 Additional Conditions to SB Draw. The obligations of Agent and
each Lender to fund the SB Draw are subject to the following
conditions: (i) the SB Acquisition shall have occurred pursuant to the
provisions set forth in clause (ii) of subsection 3.3(D), in addition
to those conditions set forth in subsections 7.1 and 7.2 and (ii) all
documents listed on Schedule B to the Second Amendment shall have been
delivered, all in form and substance satisfactory to Agent";
2.50 Subsection 8.1 of the Credit Agreement is hereby amended as
follows:
(A) By deleting the proviso which was inserted in the fifth line of the
first paragraph thereof pursuant to subsection 2.2 of the First
Amendment and replacing it with the following: "provided, however, no
such consent by Agent shall be required in the case of any assignment
to another Lender (including Xxxxxx) or an Affiliate or Related Fund of
a Lender (including Xxxxxx)";
(B) By deleting from the sixth and eighth lines of the first paragraph
thereof and the second line of the second paragraph thereof the words
"the Acquisition Loan Commitment (after the date specified in clause
(b)(v) of the term 'Expiry Date', the Acquisition Loans) and";
(C) By inserting after the words "the Term Loans" in the sixth and
eighth lines of the first paragraph thereof and the second line of the
second paragraph thereof the words "and, prior to the expiration of the
Term Loan C Commitment, the Term Loan C Commitment";
(D) By inserting after the word "The" and before the words
"administrative fee" in the tenth line of the first paragraph thereof
the following:
"requirement as to the minimum amount of an assignment referred to in
clause (b) of the preceding sentence and the";
(E) By inserting after the word "Affiliate" in the eleventh line of the
first paragraph thereof the words "or Related Fund";
16
(F) By deleting the words "the Acquisition Loan Commitment" from the
fifteenth line of the first paragraph thereof and replacing them with
the words "the Term Loan C Commitment";
(G) By deleting the proviso which was inserted in the fourth line of
the second paragraph thereof pursuant to subsection 2.4 of the First
Amendment in its entirety;
(H) By inserting in the fifth line of the second paragraph thereof
after the figure "$4,000,000" the following: "provided, however, that
the conditions set forth in the preceding clauses (a) and (b) shall not
apply in the case of any sale of participations to another Lender
(including Xxxxxx) or an Affiliate or Related Fund of a Lender
(including Xxxxxx)"
(I) By deleting from the eleventh line of the second paragraph thereof
the words "or Scheduled Acquisition Installment";
2.51 Subsection 8.2(F) of the Credit Agreement is hereby amended by
deleting the words "Acquisition Loan Commitment" and replacing them
with the words "Term Loan C Commitment";
2.52 Subsection 8.2(H) of the Credit Agreement is hereby amended as
follows:
(A) By deleting from the first sentence of paragraph (1) thereof the
words "and the Acquisition Loan Commitment";
(B) By deleting from the second sentence of paragraph (1) thereof the
words "the Acquisition Loan Commitment (after the date specified in
clause (b)(v) of the term 'Expiry Date', the outstanding Acquisition
Loans) and"; and
(C) By inserting in the second sentence of paragraph (1) thereof after
the words "the outstanding Term Loans" the words "and, prior to the
expiration of the Term Loan C Commitment, the Term Loan C Commitment";
2.53 Subsection 8.3(C) of the Credit Agreement is hereby amended as
follows:
(A) By deleting from the second line thereof the words "clauses (a)
through (i)" and replacing them with the words "clauses (A) and (B)";
and
(B) By deleting from clause (B) thereof the words "Acquisition Loan
Commitment" and replacing them with the words "Term Loan C Commitment";
2.54 Subsection 8.6(B) of the Credit Agreement is hereby amended by
deleting from
17
the heading and second line thereof the words "and Acquisition Loans";
2.55 Subsection 8.6(C) of the Credit Agreement is hereby amended by
deleting from paragraph (3) thereof the words "or Acquisition Loans"
and replacing them with the words "or the Term Loan C";
2.56 Subsection 9.1 of the Credit Agreement is hereby amended by
deleting from clause (b) thereof the words "Permitted Acquisition or";
2.57 Subsection 9.2 of the Credit Agreement is hereby amended as
follows:
(A) By deleting from clause (a) thereof the words "the Acquisition Loan
Commitment" and replacing them with the words "the Term Loan C
Commitment"; and
(B) By deleting from clause (c) thereof the words "or Scheduled
Acquisition Installment";
2.58 Subsection 10.1 of the Credit Agreement is hereby amended as
follows:
(A) By deleting the definitions of "Acquisition Costs", "Acquisition
Note" and "Target" in their entirety;
(B) By inserting in the proper alphabetical order the following
definition:
"'AVS Acquisition Agreement' means the Stock Purchase Agreement, dated
as of December 11, 1998, by and among VHI, the persons listed therein
as Sellers, Holdings and NHI.";
(C) By deleting from the definition of "Expiry Date" clauses (b)(iv)
and (b)(v) thereof in their entirety and replacing them with the
following:
"and (iv) December 31, 2005 for the Term Loan C";
(D) By deleting from the definition of "Expiry Date" in clause (c)
thereof the date "December 31, 2004" and replacing it with the date
"December 31, 2005";
(E) By inserting in the definition of "Harvest Partners" before the
period at the end thereof the words "and LIH Holdings III, LLC., a
Delaware limited liability company";
(F) By deleting from the definition of "Loan" the words ", the
Acquisition Loan Commitment";
18
(G) By deleting from the definition of "Note" the words "Acquisition
Notes" and replacing them with the words "Term C Notes";
(H) By deleting from the definition of "Pro Rata Share" clause (c)
thereof in its entirety and replacing it with the following:
"(c) with respect to a Lender's obligation to lend a portion of the
Term Loan C and receive payments of interest and principal with respect
thereto, the percentage obtained by dividing (i) such Lender's
commitment to lend a portion of the Term Loan C, as set forth on the
signature page of the Second Amendment opposite such Lender's signature
or in the most recent Assignment and Acceptance Agreement, if any,
executed by such Lender, by (ii) all such commitments of all Lenders to
lend the Term Loan C,";
(I) By deleting from the definition of "Pro Rata Share" clause (d)
thereof in its entirety and replacing it with the following:
"(d) with respect to all other matters (including without limitation
the indemnification obligations arising under subsection 8.2(E)), the
percentage obtained by dividing (i) the sum of the then outstanding
portion of the Term Loans which were funded by such Lender, plus the
commitment of such Lender to make Revolving Loans, as set forth on the
signature page of this Agreement opposite such Lender's signature or in
the most recent Assignment and Acceptance Agreement, if any, executed
by such Lender, plus, prior to the expiration of the Term Loan C
Commitment, the commitment of such Lender to make the Term Loan C as
set forth on the signature page of the Second Amendment opposite such
Lender's signature or in the most recent Assignment and Acceptance
Agreement, if any, executed by such Lender by (ii) the sum of the then
outstanding Term Loans plus the aggregate Revolving Loan Commitment
plus, prior to the expiration of the Term Loan C Commitment, the
aggregate Term Loan C Commitment.";
(J) By inserting in the proper alphabetical order the following
definition:
"'Related Fund' means, with respect to any Lender which is a fund that
invests in loans, any other fund that invests in loans and is managed
by the same investment advisor as such Lender or by an Affiliate of
such Lender.";
(K) By deleting from the definition of "Requisite Lenders" from clause
(a) thereof the words "the Acquisition Loan Commitment (after the date
specified in clause (b)(v) of the term 'Expiry Date', the outstanding
principal balance of the Acquisition Loans) and";
(L) By inserting in the definition of "Requisite Lenders" after the
words "the Term
19
Loans" in clause (a) thereof the words "and, prior to the expiration of
the Term Loan C Commitment, the Term Loan C Commitment";
(M) By inserting in the proper alphabetical order the following
definition:
"'SB Acquisition Agreement' means the draft of the Stock Purchase
Agreement, dated December 11, 1998, by and among Holdings, SB, Xxx X.
Xxxxx, Xxxxxx Xxxxx, The Xxx and Xxxxxx Xxxxx Family Trust.";
(N) By inserting in the proper alphabetical order the following
definition:
"'Securities Purchase Agreements' means collectively those Securities
Purchase Agreements, dated the closing date of the AVS Acquisition, by
and among Holdings, Borrowers and each of Massachusetts Mutual Life
Insurance Company, MassMutual Corporate Investors, MassMutual
Participation Investors, MassMutual Corporate Value Partners Limited
and National City Venture Corporation, as amended, modified and
supplemented from time to time.";
(O) By inserting in the proper alphabetical order the following
definition:
"'Senior Subordinated Notes' means those 12.5% Senior Subordinated
Notes due December 31, 2006 issued pursuant to the Securities Purchase
Agreements."
(O) By inserting in the proper alphabetical order the following
definition:
"'Term C Note' means each note of Borrowers in substantially the form
of Exhibit 10.1(A), as applicable, issued pursuant to subsection
1.1(E)(iv)."
3. COMMITMENT ALLOCATIONS. Upon the execution and delivery of this
Second Amendment, each of the Lenders agrees to assign such portion, if any, of
its commitment to make Revolving Loans and its outstanding principal amount of
the Term Loan A and the Term Loan B to such of the other Lenders such that, as
for any Lender, its commitment to make Revolving Loans and its portion of the
outstanding balance of the Term Loan A and the Term Loan B shall be that amount
as set forth on the signature page of this Second Amendment opposite such
Lender's signature.
4. REPRESENTATIONS AND WARRANTIES. Each of the Loan Parties hereby
represents and warrants to the Lenders and the Agent that:
4.1 No Default. After giving effect to this Second Amendment,
no Default or Event of Default shall have occurred or be continuing.
4.2 Existing Representations and Warranties. As of the date
hereof and after
20
giving effect to this Second Amendment, each and every one of the
representations and warranties of the Loan Parties set forth in the Loan
Documents are true, accurate and complete in all respects and with the same
effect as though made on the date hereof, and each is hereby incorporated herein
in full by reference as if restated herein in its entirety, except for (i)
changes in the ordinary course of business which are not prohibited by the
Credit Agreement (as amended hereby) and which do not, either singly or in the
aggregate, have a Material Adverse Effect and (ii) any representation or
warranty limited by its terms to a specific date that is prior to the date
hereof.
4.3 Authority; Enforceability. (i) The execution, delivery and
performance by each Loan Party of this Second Amendment are within its
organizational powers and have been duly authorized by all necessary action
(corporate or otherwise) on the part of each Loan Party, (ii) this Second
Amendment is the legal, valid and binding obligation of each Loan Party,
enforceable against each Loan Party in accordance with its terms, and (iii) this
Second Amendment and the execution, delivery and performance by each Loan Party
thereof does not: (A) contravene the terms of any Loan Party's corporate charter
or by-laws; (B) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any contractual
obligation to which any Loan Party is a party or any order, injunction, writ or
decree to which any Loan Party or its property is subject; (C) violate any
requirement of law.
5. CONDITIONS PRECEDENT TO SECOND AMENDMENT
The effectiveness of this Second Amendment is subject to the
satisfaction, in form and substance satisfactory to Agent, of each of the
following conditions precedent:
5.1 Delivery of Documents. All documents listed on Schedule A
hereto shall have been delivered, all in form and substance satisfactory to
Agent.
5.2 Fees and Expenses. All accrued fees and expenses of Agent
and Lenders (including the fees and expenses of counsel for Agent and local
counsel for Agent) and all fees of Agent set forth in that certain letter, dated
the date hereof, from Agent to Holdings shall have been paid.
21
6. REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT.
6.1 AVS and VHI. By their execution of this Second Amendment,
AVS hereby agrees to be a Borrower and a Corporate Guarantor under the Credit
Agreement, VHI hereby agrees to be a Corporate Guarantor under the Credit
Agreement and each of AVS and VHI hereby agrees to be bound by the terms and
provisions of the Credit Agreement.
6.2 Effect. Except as specifically amended hereby, the Credit
Agreement and the other Loan Documents shall remain in full force and effect in
accordance with their terms and are hereby ratified and confirmed.
6.3 No Waiver; References. The execution, delivery and
effectiveness of this Second Amendment shall not operate as a waiver of any
right, power or remedy of the Agent or any Lender under the Credit Agreement,
nor constitute a waiver of any provision of the Credit Agreement, except as
specifically set forth herein. Upon the effectiveness of this Second Amendment,
each reference in:
(i) the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of similar import shall mean and be a
reference to the Credit Agreement as amended hereby;
(ii) the other Loan Documents to the "Credit
Agreement" shall mean and be a reference to the Credit Agreement as amended
hereby; and
(iii) the Loan Documents to the "Loan Documents"
shall be deemed to include this Second Amendment.
7. MISCELLANEOUS.
7.1 Expenses. The Loan Parties agree to pay the Agent upon
demand for all reasonable expenses, including reasonable attorneys' fees and
expenses of the Agent, incurred by the Agent in connection with the preparation,
negotiation and execution of this Second Amendment.
7.2 Headings. Section headings in this Second Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purposes.
7.3 Law. THIS SECOND AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
7.4 Successors. This Second Amendment shall be binding upon
the Loan Parties, the Lenders and the Agent and their respective successors and
assigns (permitted
22
assigns in the case of the Loan Parties), and shall inure to the benefit of the
Loan Parties, the Lenders and the Agent and the successors and assigns
(permitted assigns in the case of the Loan Parties) of the Loan Parties, Lenders
and the Agent.
7.5 Execution in Counterparts. This Second Amendment 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 instrument.
[Signature page follows]
23
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed and delivered by their respective officers thereunto
duly authorized as of the date first written above.
XXXX INTERNATIONAL HOLDINGS, INC.
XXXX INDUSTRIES, INCORPORATED
DEFLECTA-SHIELD CORPORATION
BELMOR AUTOTRON CORP.
DFM CORP.
XXXX ACQUISITION CORP.
BAC ACQUISITION CO.
TRAILMASTER PRODUCTS, INC.
DELTA III, INC.
AUTO VENTSHADE COMPANY
NEW HOLDINGS, INC.
VENTSHADE HOLDINGS, INC.
For each of the foregoing corporations:
By: /s/ Xxx X. Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of Directors
Commitment to make XXXXXX FINANCIAL, INC.,
Revolving Loans: in its capacity as Agent and a Lender
$0
Outstanding balance of By: /s/ Xxxxxxxx Xxxxx
Term Loan A: Name: Xxxxxxxx Xxxxx
$0 Title: Assistant Vice President
Outstanding balance of
Term Loan B:
$6,712,272.70
Commitment to make
Term Loan C:
$12,598,383.89
Commitment to make DRESDNER BANK AG, NEW YORK AND
Revolving Loans: GRAND CAYMAN BRANCHES,
$3,876,923.08 as a Lender
Outstanding balance of
Term Loan A: By: /s/ Xxx Xxxxxxx
$2,487,692.30 Name: Xxx Xxxxxxx
Title: Vice President
Outstanding balance of
Term Loan B:
$1,596,363.64 By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Commitment to make Title: Assistant Vice President
Term Loan C:
$4,177,894.15
Commitment to make LASALLE NATIONAL BANK,
Revolving Loans: as a Lender
$3,876,923.08
Outstanding balance of By: /s/ Xxx X. Xxxxxxxxxxx
Term Loan A: Name: Xxx X Xxxxxxxxxxx
$2,487,692.30 Title: Senior Vice President
Outstanding balance of
Term Loan B:
$1,596,363.64
Commitment to make
Term Loan C:
$4,177,894.15
Commitment to make THE PRUDENTIAL INSURANCE COMPANY OF
Revolving Loans: AMERICA,
$3,048,621.18 as a Lender
Outstanding balance of
Term Loan A:
$1,147,698.58 By: /s/ P. Xxxxx xxx Xxxxxxx
Name: P. Xxxxx xxx Xxxxxxx
Outstanding balance of Title: Vice President
Term Loan B:
$2,721,363.64
Commitment to make
Term Loan C:
$2,981,757.16
Commitment to make IBJ XXXXXXXX BANK & TRUST COMPANY,
Revolving Loans: as a Lender
$3,876,923.08
Outstanding balance of By: /s/ Xxxxxxxx X. XxXxxxxxx
Term Loan A: Name: Xxxxxxxx X. XxXxxxxxx
$2,487,692.30 Title: Director
Outstanding balance of
Term Loan B:
$1,596,363.64
Commitment to make
Term Loan C:
$4,177,894.15
Commitment to make KEY CORPORATE CAPITAL, INC.,
Revolving Loans: as a Lender
$7,383,163.99
Outstanding balance of By: /s/ Xxx X. XxXxxxxx
Term Loan A: Name: Xxx X. XxXxxxxx
$4,737,530.27 Title: Vice President
Outstanding balance of
Term Loan B:
$0
Commitment to make
Term Loan C:
$0
Commitment to make FIRST UNION NATIONAL BANK, successor to
Revolving Loans: CORESTATES BANK, as a Lender
$5,168,214.82
Outstanding balance of By: /s/ Xxxx X. Xxxxxx
Term Loan A: Name: Xxxx X. Xxxxxx
$3,316,271.16 Title: Director
Outstanding balance of
Term Loan B:
$0
Commitment to make
Term Loan C:
$0
Commitment to make FIRST SOURCE FINANCIAL LLP, as a Lender
Revolving Loans: By: First Source Financial, Inc.,
$2,769,230.77 its Agent/Manager
Outstanding balance of By: /s/ Xxxxx X. Xxxxxx
Term Loan A: Name: Xxxxx X. Xxxxxx
$2,585,423.09 Title: Vice President
Outstanding balance of
Term Loan B:
$0
Commitment to make
Term Loan C:
$1,879,136.84
Commitment to make SENIOR DEBT PORTFOLIO, as a Lender
Revolving Loans: By: Boston Management and Research,
$0 as Investment Advisor
Outstanding balance of By: /s/ Xxxxx X. Page
Term Loan A: Name: Xxxxx X. Page
$0 Title: Vice President
Outstanding balance of
Term Loan B:
$4,486,363.64
Commitment to make
Term Loan C:
$2,854,223.79
Commitment to make ARCHIMEDES FUNDING LLC, as a Lender
Revolving Loans: By: ING Capital Advisors, Inc,
$0 as Collateral Manager
Outstanding balance of By: /s/ Xxxxx X. Xxxx
Term Loan A: Name: Xxxxx X. Xxxx
$0 Title: Vice President and
Portfolio Manager
Outstanding balance of
Term Loan B:
$3,240,909.10
Commitment to make
Term Loan C:
$1,652,815.86
