AMENDMENT NO. 2 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment"), dated as of January 15, 1998 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
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WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I to the Credit Agreement (Definitions).
The following definition is hereby added to Article I of the Credit
Agreement in the appropriate alphabetical place:
"Permitted Vendor Guaranties" is defined in Section 9.1(vi).
SECTION 2.2. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.1 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.1. Indebtedness. The Borrower shall not and shall not permit any
of its Subsidiaries (other than CHF Industries, Inc. and its operating
Subsidiaries and any Subsidiary which is not a Subsidiary of an Investment
Entity) directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Funded Indebtedness,
except:
(i) the Obligations;
(ii) the Obligations (as such term is defined in the Other Credit Agreement);
(iii) in the case of Trace Foam Sub, the DLJ Facility;
(iv) other Funded Indebtedness of the Borrower and such Subsidiaries outstanding
on the Closing Date (as such term is defined in the Other Credit Agreement);
(v) Indebtedness to the United Auto Group, Inc. in a maximum principal amount
not to exceed (x) $5,000,000 minus (y) the amount of Contingent Liabilities then
outstanding under clause (vi) below and"
(vi) Contingent Liabilities of the Borrower in respect of Indebtedness of the
Borrower or its Subsidiaries due to trade vendors to the Borrower or any of its
Subsidiaries which are not Affiliates of the Borrower, and which Indebtedness is
incurred directly to provide goods or services to the Borrower or any of its
Subsidiaries, in an aggregate amount not to exceed $5,000,000 at any time
outstanding ("Permitted Vendor Guarantees").
(b) Section 9.2 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.2. Investments. The Borrower shall not make any Investment in any
Investment Entity or any Subsidiary thereof other than (i) any Investment
existing on the Closing Date (as defined in the Other Credit Agreement), (ii)
110,000 shares of Foamex International, Inc. common stock described in the
proviso to the definition of "Restricted Management Payment", (iii) as required
by Section 4(c) of the TIHI CHF Guaranty, (iv) the New Investments and (v)
Permitted Vendor Guarantees. The Borrower shall not and shall not permit any
Subsidiary to sell, transfer or otherwise dispose of (i) any Equity Interest in
Trace Foam Sub or any of its assets or (ii) any Subject Asset to another
Subsidiary of the Borrower unless, in the case of this clause (ii), (x) such
transferee Subsidiary is a direct, wholly-owned Subsidiary of the Borrower and
(y) the Borrower shall have given prior written notice of such transaction to
the Lender."
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
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ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in 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 shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL 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 day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Senior Relationship Manager
