Exhibit 10.2
EXECUTION COPY
AMENDMENT NO. 4 TO CREDIT AGREEMENT
This AMENDMENT NO. 4 TO CREDIT AGREEMENT (the "AMENDMENT") is dated as
of January 25, 2006, by and among AVONDALE XXXXX, INC., an Alabama corporation,
as the Borrower (in such capacity, the "BORROWER") and as a Credit Party;
AVONDALE XXXXX GRANITEVILLE FABRICS, INC., a Delaware corporation, as a Credit
Party (together with Avondale Xxxxx, Inc., the "CREDIT PARTIES" and each a
"CREDIT PARTY"), AVONDALE INCORPORATED, a Georgia corporation ("HOLDINGS") and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as the sole Lender
(in such capacity, the "LENDER") and as agent (in such capacity, the "AGENT").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in Annex A to the Credit Agreement referred to
below.
RECITALS
WHEREAS, the Borrower, the Credit Parties, the Lender and the Agent
are parties to a Credit Agreement dated as of November 7, 2003 (as amended,
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"); and
WHEREAS, the parties hereto have also agreed, on the terms and
conditions set forth below, to amend the Credit Agreement;
NOW, THEREFORE, in consideration of the continued performance by
Borrower and each Credit Party of their respective promises and obligations
under the Credit Agreement and the other Loan Documents, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Credit Parties, Holdings, the Lender, and the
Agent hereby agree as follows:
1. Amendments to Credit Agreement. Effective as of the date hereof and
subject to the satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement is hereby amended as follows:
(a) The definition of "Activation Event" appearing in Annex A of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"Activation Event" means, at any date, that Excess Availability is
less than the Specified Amount at such date and the average Excess
Availability during the four week period immediately preceding such date is
the Specified Amount or less, with such Activation Event being deemed to
exist thereafter until such time, if any, as a Deactivation Event shall
occur.
(b) The definition of "Availability Block" appearing in Annex A of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"Availability Block" means (i) for the period from January 20, 2006
until May 31, 2007, $0; provided, that, if an Insurance Event occurs during
such period, the "Availability Block" shall mean $10,000,000, and (ii) at
all times after May 31, 2007, $10,000,000.
(c) The definition of "Deactivation Event" appearing in Annex A of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"Deactivation Event" means, subsequent to any Activation Event, any
period of 90 consecutive days during which Excess Availability at all times
exceeds the Specified Amount and at the end of such 90-day period no
Default or Event of Default has occurred and is then continuing.
(d) Annex A to the Credit Agreement is hereby amended to add the
following defined terms in the appropriate alphabetical locations:
"Insurance Event" means the receipt by Holdings and its Subsidiaries
from the insurance providers of Holdings and its Subsidiaries, in
connection with the train collision, train derailment, release of chlorine
and other gases, and other events occurring because of the foregoing
described train collision, train derailment and release of chlorine and
other gases near the facilities of Holdings and its Subsidiaries in
Graniteville, South Carolina on January 6, 2005 (the "Derailment"), of an
amount that is at least $60,000,000 more that the amounts actually paid by
Holdings and its Subsidiaries in connection with the chlorine abatement and
rehabilitation of the chlorine damage in connection with the Derailment.
"Specified Amount" means (i) for the period from January 25, 2006
until May 31, 2007, (A) if no Insurance Event has occurred, $10,000,000 or
(B) if an Insurance Event has occurred, $20,000,000 and (ii) at all times
after May 31, 2007, $20,000,000.
(e) Annex G to the Credit Agreement is hereby amended to amend and
restate paragraphs (a) and (b) of thereof in their entirety as follows:
(a) Minimum Fixed Charge Coverage Ratio. With respect to any
Fiscal Quarter in which Liquidity Availability falls below the Specified
Amount and average Liquidity Availability during the four calendar week
period immediately preceding such date is the Specified Amount or less,
Parent and its Subsidiaries shall have on a consolidated basis, as of the
end of the most recent calendar month, a Fixed Charge Coverage Ratio for
the 12-month period then ended of not less than 1.0 to 1.0.
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(b) Minimum EBITDA. With respect to any Fiscal Quarter in which
Liquidity Availability falls below the Specified Amount and average
Liquidity Availability during the four calendar week period immediately
preceding such date is the Specified Amount or less, Parent and its
Subsidiaries on a consolidated basis shall have, as of the end of the most
recent calendar month, as set forth below, EBITDA for the 12-month period
then ended of not less than $35,000,000.
2. Effectiveness of this Amendment; Conditions Precedent. The
provisions of Paragraph 1 of this Amendment shall be deemed to have become
effective as of the date of this Amendment, but such effectiveness shall be
expressly conditioned upon the Agent's receipt of each of the agreements,
certificates, opinion letters and other documents described on Schedule I
hereto.
3. Miscellaneous.
(a) Headings. The various headings of this Amendment are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
(b) Counterparts. This Amendment may be executed by the parties hereto
in several counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
(c) Interpretation. No provision of this Amendment shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party's having or
being deemed to have structured, drafted or dictated such provision.
(d) Reaffirmation, Ratification and Acknowledgment; Reservation. Each
of the Borrower, the Credit Parties and Holdings hereby (a) ratifies and
reaffirms all of its payment and performance obligations, contingent or
otherwise, and each grant of security interests and liens in favor of the Agent
on behalf of the Lender, under each Loan Document to which it is a party, (b)
agrees and acknowledges that such ratification and reaffirmation is not a
condition to the continued effectiveness of such Loan Documents, and (c) agrees
that neither such ratification and reaffirmation, nor the Agent's, or the
Lender's solicitation of such ratification and reaffirmation, constitutes a
course of dealing giving rise to any obligation or condition requiring a similar
or any other ratification or reaffirmation from the Borrower, Holdings or such
Credit Party with respect to any subsequent modifications to the Credit
Agreement or the other Loan Documents. The Credit Agreement is in all respects
ratified and confirmed. Each of the Loan Documents shall remain in full force
and effect and are hereby ratified and confirmed. Neither delivery nor
effectiveness of this Amendment shall operate as a waiver of any right, power or
remedy of the Agent or the Lender, or of any Default or Event of Default
(whether or not known to the Agent or the Lender), under any of the Loan
Documents, all of which rights, powers and remedies, with respect to any such
Default or Event of Default or otherwise, are hereby expressly
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reserved by the Agent and the Lender. This Amendment shall constitute a Loan
Document for purposes of the Credit Agreement.
(e) Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF GEORGIA.
(f) Effect. Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Amendment," "hereunder," "hereof" or words of
like import shall mean and be a reference to the Credit Agreement as amended
hereby and each reference in the other Loan Documents to the Credit Agreement,
"thereunder," "thereof," or words of like import shall mean and be a reference
to the Credit Agreement as amended hereby. Except as expressly provided in this
Amendment, all of the terms, conditions and provisions of the Credit Agreement
and the other Loan Documents shall remain the same. Each of the Borrower, the
Credit Parties and Holdings hereby represents and warrants to the Lender and the
Agent that all authorizations, consents and approvals of such Person's board of
directors and shareholders, and all other Persons, necessary to permit such
Person to execute and deliver this Amendment and to perform its obligations
hereunder and under the Credit Agreement as amended hereby, and to permit the
Lender and the Agent to enforce such obligations, have been obtained.
(g) No Novation or Waiver. Except as specifically set forth in this
Amendment the execution, delivery and effectiveness of this Amendment shall not
(a) limit, impair, constitute a waiver by, or otherwise affect any right, power
or remedy of, the Agent or the Lender under the Credit Agreement or any other
Loan Document, (b) constitute a waiver of any provision in the Credit Agreement
or in any of the other Loan Documents or of any Default or Event of Default that
may have occurred and be continuing, or (c) alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Credit Agreement or in any of the other Loan Documents, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect.
(h) Agent's Expenses. The Borrower hereby agrees to promptly reimburse
the Agent for all of the reasonable out-of-pocket expenses, including, without
limitation, attorneys' and paralegals' fees, it has heretofore or hereafter
incurred or incurs in connection with the preparation, negotiation and execution
of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and the sole Lender
By:
-------------------------------------
Name:
-----------------------------------
Title: Duly Authorized Signatory
AVONDALE XXXXX, INC., as the Borrower
and as a Credit Party
By:
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Name: Xxxx X. Xxxxxxx, Xx.
Title: Vice Chairman and
Chief Financial Officer
AVONDALE XXXXX GRANITEVILLE FABRICS,
INC., as a Credit Party
By:
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Name: Xxxx X. Xxxxxxx, Xx.
Title: Vice Chairman and
Chief Financial Officer
AVONDALE INCORPORATED
By:
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Name: Xxxx X. Xxxxxxx, Xx.
Title: Vice Chairman and
Chief Financial Officer
