Exhibit 10.1
AMENDMENT NO. 2 TO
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 25, 2003
AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT among
POLYONE CORPORATION, an Ohio corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders parties to the Amended and Restated
Credit Agreement referred to below (collectively, the "Lenders") and CITICORP
USA, INC., as administrative agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders and the Agent have entered into
an Amended and Restated Credit Agreement dated as of May 6, 2003, as amended by
Amendment No. 1 dated as of August 27, 2003 (such Agreement, as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined in the Credit Agreement are used herein as therein
defined).
(2) The Borrower has requested, and the Required Lenders have
agreed, that the Credit Agreement be amended as hereinafter set forth.
SECTION 1. Amendment to Credit Agreement. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2, hereby amended as follows:
(1) Section 2.02(a) is hereby amended by deleting the phrase
"Exhibit B" in the seventh line therein and replacing it with the phrase
"Exhibit B-1";
(2) Section 2.03(a)(i) is hereby amended to (a) add the phrase
"in substantially the form of Exhibit B-2" immediately after the phrase "or
telecopier or telex" in the second sentence thereof and (b) add the following
sentence at the end thereof:
"Unless otherwise precluded by the context, in this Agreement,
including without limitation, Sections 2.03 and 3.02 hereof, the use of
the words `issue' or `issuance' with respect to a Letter of Credit
shall be deemed to include the renewal or extension of a Letter of
Credit.";
(3) Section 3.02(a) is hereby amended to (a) delete the word
"and" from the end of clause (iii) thereof, (b) add the word "and" to the end of
clause (iv) thereof immediately following the semicolon, and (c) add the
following provision in its appropriate numerical order:
"(v) in the case of a Borrowing, after giving pro forma effect
to such Borrowing as if such Borrowing were made on the first day of
the period of determination, the Interest Coverage Ratio most recently
calculated would not be less than 1.00:1 and the Borrowed Debt/Adjusted
EBITDA Ratio most recently calculated
would not be more than 4.75:1; and, in the case of an issuance of a
Letter of Credit, the aggregate Available Amount of the Letters of
Credit outstanding will not exceed $35,000,000, unless, after giving
pro forma effect to such Issuance as if such Issuance were made on the
first day of the period of determination, the Interest Coverage Ratio
most currently calculated would not be less than 1.00:1 and the
Borrower Debt/Adjusted EBITDA Ratio most recently calculated would not
be more than 4.75:1;";
(4) Section 5.03(a) is hereby amended and restated in its
entirety to read as follows:
(a) Interest Coverage Ratio. Maintain an Interest Coverage
Ratio during each fiscal quarter set forth below of not less than the
ratio set opposite such fiscal period:
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Period Ratio
-------------------------------------------------- -------------------
July 1, 2003 through September 30, 2003 0.50:1
-------------------------------------------------- -------------------
October 1, 2003 through December 31, 2003 0.65:1
-------------------------------------------------- -------------------
January 1, 2003 through March 31, 2004 0.75:1
-------------------------------------------------- -------------------
April 1, 2004 through June 30, 2004 1.00:1
-------------------------------------------------- -------------------
July 1, 2004 through September 30, 2004 1.50:1
-------------------------------------------------- -------------------
October 1, 2004 through December 31, 2004 1.90:1
-------------------------------------------------- -------------------
January 1, 2005 through March 31, 2005 2.25:1
-------------------------------------------------- -------------------
April 1, 2005 through June 30, 2005 2.50:1
-------------------------------------------------- -------------------
July 1, 2005 through March 31, 2006 2.75:1
-------------------------------------------------- -------------------
April 1, 2006 through June 30, 2006 3.00:1
-------------------------------------------------- -------------------
July 1, 2006 and thereafter 3.25:1
-------------------------------------------------- -------------------
(5) Section 5.03(b) is hereby amended and restated in its
entirety to read as follows:
(b) Borrowed Debt/Adjusted EBITDA Ratio. Maintain a Borrowed
Debt/Adjusted EBITDA Ratio during each fiscal quarter set forth below
of not more than the ratio set opposite such fiscal period:
--------------------------------------------------- ------------------
Period Ratio
--------------------------------------------------- ------------------
July 1, 2003 through September 30, 2003 20.00:1
--------------------------------------------------- ------------------
October 1, 2003 through December 31, 2003 15.00:1
--------------------------------------------------- ------------------
2
January 1, 2004 through March 31, 2004 13.00:1
--------------------------------------------------- ----------------------------
April 1, 2004 through June 30, 2004 10.25:1
--------------------------------------------------- ----------------------------
July 1, 2004 through September 30, 2004 7.50:1
--------------------------------------------------- ----------------------------
October 1, 2004 through December 31, 2004 5.75:1
--------------------------------------------------- ----------------------------
January 1, 2005 through March 31, 2005 4.85:1
--------------------------------------------------- ----------------------------
April 1, 2005 through June 30, 2005 4.50:1
--------------------------------------------------- ----------------------------
July 1, 2005 through September 30, 2005 4.25:1
--------------------------------------------------- ----------------------------
October 1, 2005 through March 31, 2006 3.85:1
--------------------------------------------------- ----------------------------
April 1, 2006 through June 30, 2006 3.75:1
--------------------------------------------------- ----------------------------
July 1, 2006 and thereafter 3.25:1
--------------------------------------------------- ----------------------------
(6) Exhibit B is hereby re-deisgnated to be "Exhibit B-1" and
is hereby amended to (a) delete the word "and" at the end of clause (B) thereof,
(b) change the period at the end of clause (C) thereof to a semicolon and add
the word "and" to the end of said clause (C) immediately following such
semicolon, and (c) add the following after clause (C) thereof:
"(D) the Available Capital (as defined in the Receivables
Purchase Agreement) under the Receivables Financing, after giving
effect to all Capital Investments (as defined in the Receivables
Purchase Agreement) is less than $5,000,000; and
(E) after giving pro forma effect to such Proposed Borrowing
as if such Borrowing were made on the first day of the period of
determination, the Interest Coverage Ratio most recently calculated
would not be less than 1.00:1 and the Borrowed Debt/Adjusted EBITDA
Ratio most recently calculated would not be more than 4.75:1;";
(7) Exhibit B-2 attached as Annex I hereto is hereby added to
the Credit Agreement.
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SECTION 2. Conditions to Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when the Agent shall
have received (i) counterparts of this Amendment executed by the Borrower and
the Required Lenders, (ii) certified copies of the resolutions of the Board of
Directors of the Borrower approving this Amendment and (iii) in immediately
available funds, for the ratable benefit of the Lenders, an amendment fee in the
amount of $62,500. This Amendment is subject to the provisions of Section 8.01
of the Credit Agreement.
SECTION 3. Representations and Warranties of the Company. The Company
represents and warrants as follows:
(a) The execution, delivery and performance by the Borrower of
this Amendment and the Credit Agreement, as amended hereby, and the consummation
of the transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and do not
(i) contravene the Borrower's charter or code of regulations, (ii) violate any
applicable law, rule, regulation, order, writ judgment, injunction, decree,
determination or award, or (iii) breach or result in a default under, or result
in the acceleration of (or entitle any party to accelerate) the maturity of any
obligation of the Borrower under, or result in or require the creation of any
Lien upon any property of the Borrower pursuant to the terms of any agreement or
instrument binding on or affecting the Borrower or any of its properties other
than in favor of the Collateral Trustee for the benefit of the Secured Parties.
(b) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery and performance by
the Borrower of this Amendment and the Credit Agreement, as amended hereby.
(c) This Amendment and the Credit Agreement, as amended
hereby, have been duly executed and delivered by the Borrower. This Amendment
and the Credit Agreement, as amended hereby, are the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and to
general equitable principles.
(d) The representations and warranties contained in the Loan
Documents are correct on and as of the date of this Amendment, as though made on
and as of such date.
SECTION 4. Reference to and Effect on the Credit Agreement.
(a) On and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
each of the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended by this Amendment.
(b) The Credit Agreement and each of the other Loan Documents,
as specifically amended by this Amendment, is and shall continue to be in full
force and effect and is hereby in all respects ratified and confirmed. Without
limiting the generality of the foregoing,
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the Collateral Documents and the Collateral described therein do and shall
continue to secure the payment of all Obligations of the Loan Parties under the
Loan Documents, in each case as amended by this Amendment.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under the Credit Agreement
or any other Loan Document, nor constitute a waiver of any provision of the
Credit Agreement.
SECTION 5. Costs and Expenses. The Borrower agrees to pay on demand all
costs and expenses of the Agent in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment and
the other instruments and documents to be delivered hereunder (including,
without limitation, title insurance premiums and search fees and the reasonable
fees and expenses of counsel for the Agent) in accordance with the terms of
Section 8.04 of the Credit Agreement
SECTION 6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
POLYONE CORPORATION
By /s/ Xxxx Xxxxxxxxx
--------------------------------------------
Title: Treasurer
CITICORP USA, INC.,
as Agent and as Lender
By /s/ Xxxxxxx X. Xxxxxxxx
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Title: Managing Director & Vice President
NATIONAL CITY BANK,
as Issuing Bank and as Lender
By /s/ Xxxxx Xxxxxxx
--------------------------------------------
Title: Vice President
NATIONAL CITY COMMERCIAL FINANCE, INC.,
as Lender
By /s/ Xxxxx Xxxxxxx
--------------------------------------------
Title: Vice President
KEYBANK NATIONAL ASSOCIATION,
as Lender
By /s/ Xxxxxxxx X. Xxxx
--------------------------------------------
Title: Vice President
Annex I
EXHIBIT B-2 - FORM OF NOTICE OF
ISSUANCE
-------------,
as an Issuing Bank under the
Credit Agreement referred to
below
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, PolyOne Corporation, refers to the Amended and
Restated Credit Agreement, dated as of May 6, 2003 (as amended or modified from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders parties
thereto and Citicorp USA, Inc., as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that the
undersigned hereby requests an issuance of a Letter of Credit under the Credit
Agreement, and in that connection sets forth below the information relating to
such issuance (the "Proposed Issuance") as required by Section 2.03(a) of the
Credit Agreement:
(a) The Business Day of the Proposed Issuance is _______________, 200_.
(b) The Available Amount of such Letter of Credit is $____________.
(c) The expiration date of such Letter of Credit is ____, 200_.
(d) The name and address of the beneficiary of such Letter of Credit is
as follows:
NAME:___________________
ADDRESS:________________
________________
(e) The form of such Letter of Credit is attached hereto as Annex II.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Issuance:
1. the representations and warranties contained in the Loan Documents are
correct, before and after giving effect to the Proposed Issuance and to
the application of the proceeds therefrom, as though made on and as of
such date;
2. no event has occurred and is continuing, or would result from such
Proposed Issuance or from the application of the proceeds therefrom,
that constitutes a Default;
3. the Indenture Limit exceeds the aggregate principal amount of the
Advances plus the aggregate Available Amount of all Letters of Credit to
be outstanding after giving effect to such Proposed Issuance, as
evidenced by the calculations set forth on Annex I hereto; and
4. after giving effect to such Proposed Issuance, the aggregate Available
Amount of the Letters of Credit outstanding will not exceed $35,000,000,
unless, after giving pro forma effect to such Proposed Issuance as if
such Proposed Issuance were made on the first day of the period of
determination, the Interest Coverage Ratio most recently calculated
would not be less than 1.00:1 and the Borrower Debt/Adjusted EBITDA
Ratio most recently calculated would not be more than 4.75:1.
Very truly yours,
POLYONE CORPORATION
By
---------------------------------
Title:
2
ANNEX I
2002 2003
POLYONE POLYONE
AMOUNT % GEON INDENTURE XXXXX 9 3/8 INDENTURE XXXXX MTNS INDENTURE INDENTURE
-------- -------------- --------------------- ---------- --------- ---------
Consolidated Tangible Assets 5%
Consolidated Net Tangible Assets 10%
Consolidated Shareholders Equity 10%
Consolidated Net Tangible Assets 10%
MAXIMUM LIMIT X .95
-------------- --------------------- ---------- --------- ---------
ANNEX II
[Insert Form of Letter of Credit]
