AMENDMENT NUMBER TWO
TO
CREDIT AGREEMENT
THIS AMENDMENT NUMBER TWO TO CREDIT AGREEMENT (this "Amendment") is made as
of this 21st day of June, 1999 by and among BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association, d/b/a SEAFIRST BANK, and
U.S. BANK NATIONAL ASSOCIATION, a national banking association (each a
"Lender"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association, d/b/a SEAFIRST BANK, as agent for the Lenders (the
"Agent"), and FLOW INTERNATIONAL CORPORATION, a Washington corporation
("Borrower").
RECITALS
A. Lenders, Agent and Borrower are parties to that certain Credit
Agreement dated as of August 31, 1998, as amended by that Amendment Number One
to Credit Agreement dated as of March 26, 1999 (the "Credit Agreement").
B. Borrower has requested, and Lenders and Agent have agreed to amend the
Credit Agreement upon certain terms and conditions contained in this Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS. Capitalized terms not otherwise defined in this Amendment
shall have the meanings set forth in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is amended as
follows:
a. AMENDMENT TO DEFINITION OF "TANGIBLE NET WORTH." In Section 1.1,
the definition of "Tangible Net Worth" is hereby amended as follows:
"TANGIBLE NET WORTH" means the total assets less Total Liabilities,
excluding, however, from the
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determination of total assets: (a) intangible assets, (such as goodwill,
patents, trademarks, copyrights, franchises and deferred taxes,
including unamortized debt discount and research and development costs);
(b) cash held in a sinking fund or other similar fund established for
the purpose of redemption or other retirement of capital stock; (c)
reserves for depreciation, depletion, obsolescences, or amortization of
properties and other reserves or appropriations of retained earnings
which have been established in connection with Borrower's business; and
(d) any revaluation or other write-up in book value of assets subsequent
to the fiscal year of Borrower last ended as the date the Tangible Net
Worth is being measured.
b. ADDITION OF DEFINITION OF "TOTAL LIABILITIES." In Section 1.1,
the definition of "Total Liabilities" is hereby added as follows:
"TOTAL LIABILITIES" means, on a consolidated basis, all liabilities of
Borrower as determined and computed in accordance with GAAP; PROVIDED,
HOWEVER, that Subordinated Debt, and for clarification purposes only,
minority interests, shall not be included in any such amounts. As used
herein, "Subordinated Debt" means all Indebtedness of Borrower then
outstanding that satisfies the following conditions: the terms of the
instrument or agreement creating or evidencing such Indebtedness shall have
been approved in writing by Lenders and Agent and shall provide that such
Indebtedness is subordinated in right of payment to the Indebtedness of
Borrower to Lenders hereunder.
c. AMENDMENT TO SECTION 6.15. Section 6.15 is hereby amended and
restated as follows:
SECTION 6.15 DEBT TO TANGIBLE NET WORTH RATIO. Borrower shall
maintain, on a consolidated basis, as at the end of each fiscal quarter
commencing with the fiscal quarter ending October 31, 1998, a ratio of Debt
to Tangible Net Worth of not more than (a) 1.75 to 1 as at the fiscal
quarters ending October 31, 1998 and
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January 31, 1999, (b) 4.0 to 1 as at the fiscal quarter ending April 30,
1999, (c) 3.85 to 1 as at the fiscal quarter ending July 31, 1999, (d)
3.50 to 1 as at the fiscal quarters ending October 31, 1999 and January
31, 2000, (e) 3.25 to 1 as at the fiscal quarters ending April 30, 2000,
July 31, 2000, October 31, 2000 and January 31, 2001, and (f) 2.50 to 1
as at the fiscal quarters ending April 30, 2001 and thereafter. As used
herein, "Debt" shall mean the Total Liabilities of Borrower.
3. CONDITIONS TO EFFECTIVENESS. Notwithstanding anything contained herein
to the contrary, this Amendment shall not become effective until each of the
following conditions is fully and simultaneously satisfied:
a. DELIVERY OF AMENDMENT. Borrower, Agent and each Lender shall
have executed and delivered counterparts of this Amendment to Agent.
b. REPRESENTATIONS TRUE; NO DEFAULT. The representations of Borrower
as set forth in Article 5 of the Credit Agreement shall be true on and as of the
date of this Amendment with the same force and effect as if made on and as of
this date. No Event of Default and no event which, with notice or lapse of time
or both, would constitute a Event of Default, shall have occurred and be
continuing or will occur as a result of the execution of this Amendment.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Lenders and Agent that each of the representations and
warranties set forth in Article 5 of the Credit Agreement is true and correct in
each case as if made on and as of the date of this Amendment and Borrower
expressly agrees that it shall be an additional Event of Default under the
Credit Agreement if any representation or warranty made hereunder shall prove to
have been incorrect in any material respect when made.
5. NO FURTHER AMENDMENT. Except as expressly modified by the terms of
this Amendment, all of the terms and conditions of the Credit Agreement and the
other Loan Documents shall remain in
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full force and effect and the parties hereto expressly reaffirm and ratify their
respective obligations thereunder.
6. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Washington.
7. 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 one and the same agreement.
8. ORAL AGREEMENTS NOT ENFORCEABLE.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment Number
Two to Credit Agreement as of the date first above written.
BORROWER: FLOW INTERNATIONAL CORPORATION
By
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Its
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LENDERS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, d\b\a SEAFIRST
BANK
By
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Its
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U.S. BANK NATIONAL ASSOCIATION
By
--------------------------------
Its
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AGENT: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, d\b\a SEAFIRST
BANK
By
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Its
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