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EXHIBIT 10.13
FIRST AMENDMENT TO
CREDIT AGREEMENT AND RELATED LOAN DOCUMENTS
THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND RELATED LOAN DOCUMENTS (the
"Amendment") is made and dated as of the 6th day of July, 2000, by and among
SANWA BANK CALIFORNIA ("Sanwa"), as the sole current Lender under the Credit
Agreement referred to below (and as the term "Lenders" and capitalized terms not
otherwise defined herein are used in the Credit Agreement), SANWA, in its
capacity as Agent for the Lenders from time to time party to the Credit
Agreement, AMVAC CHEMICAL CORPORATION, a California corporation (the
"Borrower"), AMERICAN VANGUARD CORPORATION, a Delaware corporation ("American
Vanguard"), GEMCHEM, INC., a California corporation ("GemChem"), and 2110 DAVIE
CORPORATION, a California corporation ("2110 Davie") (American Vanguard, GemChem
and 2110 Xxxx being sometimes referred to herein, collectively and severally, as
the "Guarantors").
RECITALS
A. Pursuant to that certain Credit Agreement dated as of March 26, 1999 by
and among the Agent, Sanwa as the sole Lender, the Borrower and the Guarantors
(as amended from time to time, the "Credit Agreement"), the Lender agreed to
extend credit to the Borrower on the terms and subject to the conditions set
forth therein.
B. The Borrower, the Guarantors, the Agent and the Lender desire to amend
the Credit Agreement in certain respects as set forth more particularly below.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Extension of Availability Period. To reflect the agreement of the
parties to extend the period during which Revolving Loans will be made and
Letters of Credit will be issued under the Credit Agreement, effective as of the
Effective Date (as defined in Paragraph 6 below), the definition of the term
"Revolving Loan Maturity Date" set forth in the Glossary is hereby amended to
delete the date "July 31, 2000" appearing in subparagraph (a) thereof and to
replace the same with the date "June 1, 2002."
2. Modification of Financial Covenants. To reflect the agreement of the
parties to modify the financial covenants set forth in the Credit Agreement,
effective as of the Effective Date:
(a) Paragraph 10(j) of the Credit Agreement is hereby amended to read
in its entirety as follows:
"10(j) Financial Covenants. Permit:
(1) As of the last day of any fiscal quarter of American Vanguard,
determined for such fiscal quarter and the immediately preceding three fiscal
quarters:
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(i) American Vanguard's ratio of consolidated Funded Debt to
EBITDA to exceed 2.75:1.00; or
(ii) American Vanguard's consolidated Fixed Charge Coverage
Ratio to be less than 1.20:1.00; or
(2) As of the last day of any fiscal quarter of American Vanguard,
American Vanguard's consolidated Asset Coverage Ratio to be less than
1.75:1.00."
(b) The Glossary attached as Annex 1 to the Credit Agreement is hereby
amended to add the following additional definitions, in correct alphabetical
order:
"'Asset Coverage Ratio' shall mean on any date the ratio of: (a)
cash, plus accounts receivable arising out of the sale of goods and services in
the ordinary course of business (and excluding in any event any such accounts
receivable on which an officer, employee or Affiliate of the Borrower or any of
the Guarantors is the obligor), plus the lesser of the book value or fair market
value of inventory, to (b) the aggregate principal balance of Revolving Loans
outstanding plus the outstanding principal balance of the Term Loan."
"'Fixed Charge Coverage Ratio' shall mean for any calculation
period, the ratio of: (a) EBITDA minus non-financed capital expenditures, taxes
paid in cash and cash dividends during such period, to (b) the Current Portion
of long term Debt plus interest expense for such period."
"'Funded Debt' shall mean all long-term and short-term Debt."
"'Debt' shall mean for any Person, without duplication: (a) all
liabilities for borrowed money (including liabilities secured by Liens on
property of such Person, whether or not such liabilities are non-recourse to
such Person), (b) all liabilities for the deferred purchase price of property
(excluding accounts payable arising in the ordinary course of business but
including, without limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property), (c) all capital lease obligations, (d) all liabilities with respect
to outstanding letters of credit, and (e) all guaranties and contingent
obligations relating to liabilities of the types referred to in subparagraphs
(a) through (d) above."
(c) The Glossary attached as Annex 1 to the Credit Agreement is hereby
amended to delete the definitions of "Effective Tangible Net Worth" and "Cash
Flow Coverage Ratio" appearing therein in their entirety.
(d) Paragraphs 10(e) and 10(k) of the Credit Agreement are hereby
deleted in their entirety.
3. Waiver. The Agent and the Lender hereby waive, effective as of the
Effective Date, the Event of Default existing under the Credit Agreement by
virtue of the failure of the Borrower to be in compliance with the financial
covenant set forth in Paragraph 10(j)(1)(a) of the Credit Agreement as of March
31, 3000. The Borrower hereby acknowledges and agrees that: (a) the waiver set
forth in this Paragraph 3 is the sole waiver made by the Agent and the Lender
with respect to the existence of Events of Default (or possible occurrence or
existence of additional Events of Default) under the Credit Agreement and the
other Loan Documents or otherwise relating thereto, regardless of whether the
Agent
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or the Lender is aware of, or would upon investigation have
discovered, the existence of such additional Events of Default, and (b) nothing
contained herein shall constitute any agreement by the Agent or the Lender to
waive the same or other Events of Default at any time in the future.
4. Applicable Fixed Rate Spread. To reflect the agreement of the parties
hereto to modify the spread over the Fixed Rate for Fixed Rate Loans, the
definition of the term "Applicable Fixed Rate Spread" set forth in Annex I to
the Credit Agreement is hereby amended to read in its entirety as follows:
"'Applicable Fixed Rate Spread' shall mean 2.00%."
5. Reaffirmation. The Borrower and each of the Guarantors hereby affirms
and agrees that: (a) the execution and delivery of and the performance of their
obligations under Loan Documents as amended hereby, shall not in any way amend,
impair, invalidate or otherwise affect any of the obligations of the Borrower or
any of the Guarantors or the rights of the Agent and the Lender under the Credit
Agreement and the other Loan Documents or any other document or instrument made
or given by the Borrower or any Guarantor in connection therewith, and (b) each
of the Credit Agreement and the other Loan Documents remains in full force and
effect except to the extent terms and provisions thereof are expressly amended
or waived pursuant hereto.
6. Effective Date. This Amendment shall be effective as of June 30, 2000
(the "Effective Date") upon the date on which the Agent receives:
(a) Duly executed signature pages for this Amendment from each
party hereto;
(b) For disbursement to the Lender, a non-refundable extension
fee in the amount of $100,000.00; and
(c) Such corporate resolutions, incumbency certificates and other
similar documents, instruments and agreements as the Agent may reasonably
request.
7. Representations and Warranties. In addition to all other representations
and warranties of the Borrower and the Guarantors set forth herein, the Borrower
and each of the Guarantors hereby represents and warrants to the Agent and the
Lender as follows:
(a) The Borrower and each of the Guarantors has the corporate
power and authority and the legal right to execute, deliver and perform this
Amendment and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Amendment. This Amendment has been
duly executed and delivered on behalf of the Borrower and each of the Guarantors
and constitutes the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms.
(b) At and as of the date of execution hereof and at and as of
the Effective Date and both prior to and after giving effect hereto: (1) the
representations and warranties of the Borrower and the Guarantors contained in
the Credit Agreement and the other Loan Documents are accurate and complete in
all respects, and (2) there has not occurred an Event of Default or Potential
Default (other than the Event of Default waived pursuant to Paragraph 3 above).
8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
AMVAC CHEMICAL CORPORATION, a California
corporation
By: _________________________________________
Xxxxx X. Xxxxx, Senior Vice President and
Chief Financial Officer
AMERICAN VANGUARD CORPORATION,
a Delaware corporation
By: _________________________________________
Xxxxx X. Xxxxx, Senior Vice President and
Chief Financial Officer
GEMCHEM, INC., a California corporation
By: _________________________________________
Xxxxx X. Xxxxx, Senior Vice President and
Chief Financial Officer
2110 DAVIE CORPORATION, a California
corporation
By: _________________________________________
Xxxxx X. Xxxxx, Senior Vice President and
Chief Financial Officer
SANWA BANK CALIFORNIA, as Agent
and as a Lender
By: _________________________________________
Xxxxxxx Xxxxx, Vice President
