EXHIBIT 10.25
AMENDMENT NO. 6
TO
LETTER OF CREDIT AGREEMENT
THIS AMENDMENT NO. 6 TO LETTER OF CREDIT AGREEMENT (this "Amendment"),
effective as of August 30, 2001, between and among AVONDALE XXXXX, INC., an
Alabama corporation (the "Company"), AVONDALE INCORPORATED (formerly known as
Xxxxxx Xxxxxx Xxxxx, Inc.), a Georgia corporation (the "Parent"), and SUNTRUST
BANK (formerly known as Trust Company Bank), a state banking corporation
organized and existing under the laws of the State of Georgia (the "Bank");
W I T N E S S E T H:
WHEREAS, Development Authority of Xxxxxx County (the "Issuer") has
heretofore issued its $4,000,000 in original principal amount Development
Authority of Xxxxxx County Industrial Development Revenue Bonds (Xxxxxx Xxxxxx
Xxxxx, Inc. Project), Series 1992A and $2,000,000 in original principal amount
Development Authority of Xxxxxx County Industrial Development Revenue Refunding
Bonds (Xxxxxx Xxxxxx Xxxxx, Inc. Project), Series 1992B (collectively, the
"Bonds"), for the benefit of Xxxxxx Xxxxxx Xxxxx, Inc.; and
WHEREAS, the Bank has heretofore issued its irrevocable Letter of
Credit dated June 11, 1992 (the "Letter of Credit"), in connection with the
issuance of the Bonds, pursuant to the terms of a Letter of Credit Agreement,
dated as of June 1, 1992 (as heretofore and hereafter amended, the "Letter of
Credit Agreement") between the Bank and Xxxxxx Xxxxxx Xxxxx, Inc.; and
WHEREAS, Xxxxxx Xxxxxx Xxxxx, Inc. merged, effective August 27, 1993,
with AM Acquisition, Inc., and in connection therewith, changed its name from
Xxxxxx Xxxxxx Xxxxx, Inc. to Avondale Incorporated, and the Parent now owns 100%
of the outstanding capital stock of the Company; and
WHEREAS, in connection with such merger, the Parent, the Company and
the Bank (in various capacities), entered into an Assignment and Assumption
Agreement, dated as of August 27, 1993 (the "Assumption Agreement"), pursuant to
the terms of which the Parent assigned to the Company, and the Company assumed
from the Parent, all right, title and interest of the Parent in, to and under
certain Bond Documents more fully described in the Assumption Agreement,
including, without limitation, the Letter of Credit Agreement, subject to the
requirement that the Parent remain absolutely, irrevocably and unconditionally
liable, jointly and severally with the Company, under the Bond Documents, all as
more fully described in the Assumption Agreement and in that certain Amendment
No. 1 to Letter of Credit Agreement, dated as of August 27, 1993, by and among
the Parent, the Company and the Bank, entered into in connection therewith; and
WHEREAS, on March 29, 1994, the Company entered into a $175,000,000
Credit Agreement with Wachovia Bank of Georgia, N.A., as Agent and certain other
parties described therein, and in connection therewith the parties hereto
entered into that certain Amendment No. 2 to Letter of Credit Agreement, dated
as of March 29, 1994, in order to amend certain terms and conditions contained
in the Letter of Credit Agreement; and
WHEREAS, on April 29, 1996, the Company entered into an Amended and
Restated Credit Agreement (the "1996 Credit Agreement") among the Company,
Wachovia Bank of Georgia, N.A., as Agent, The First National Bank of Chicago, as
Documentation Agent, and certain other parties described therein, in order,
among other things, to acquire the assets of Graniteville Company; and
WHEREAS, in connection with the 1996 Credit Agreement, the Company, the
Parent and the Bank entered into that certain Amendment No. 3 to Letter of
Credit Agreement, dated as of April 29, 1996; and
WHEREAS, on October 19, 1999, the Company, the Parent and the Bank
entered into that certain Amendment No. 4 to Letter of Credit Agreement; and
WHEREAS, on September 28, 2000, the Company entered into a Second
Amended and Restated Credit Agreement (the "2000 Credit Agreement") among the
Company, Wachovia Bank, N.A., as Agent, and certain other parties described
therein, in order to amend in certain respects and restate in its entirety the
1996 Credit Agreement; and
WHEREAS, on March 28, 2001, the Company, the Parent and the Bank
entered into that certain Amendment No. 5 to Letter of Credit Agreement; and
WHEREAS, on August 30, 2001, the Company entered into a First Amendment
to Second Amended and Restated Credit Agreement (the "First Amendment to 2000
Credit Agreement") among the Company, Wachovia Bank, N.A., as Agent, and certain
other parties described therein, in order to amend in certain respects the 2000
Credit Agreement; and
WHEREAS, the Parent, the Company and the Bank have determined that it
would be desirable to amend certain terms and conditions contained in the Letter
of Credit Agreement, including, without limitation, certain covenants and
definitions therein;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parent, the Company and the Bank hereby agree as follows:
SECTION 1. AMOUNT AND TERMS OF LETTER OF CREDIT. Paragraph 1A of
the Letter of Credit Agreement is hereby amended by deleting such Paragraph in
its entirety and substituting in lieu thereof the following Paragraph 1A:
"1A. Amount and Terms of Letter of Credit. The Bank agrees, on the
terms and subject to the conditions hereinafter set forth, to issue the Letter
of Credit to the Trustee (i) in an amount
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not to exceed $____________ (the "Principal Component"), plus an amount equal to
the sum of 50 days' interest on the Bonds, computed at a rate of 13% per annum
notwithstanding the actual rate borne from time to time by the Bonds (the
"Interest Component"), and (ii) expiring on June 1, 2004 unless otherwise
terminated or extended."
SECTION 2. LETTER OF CREDIT FEE. Paragraph 1B of the Letter of
Credit Agreement is hereby amended by deleting such Paragraph in its entirety
and substituting in lieu thereof the following Paragraph 1B:
"1B. Letter of Credit Fee. The Parent and the Company, jointly and
severally, hereby agree to pay to the Bank a non-refundable letter of credit fee
computed at the Applicable Margin (as defined in Amendment No. 6); in each case,
calculated as a percentage of the Stated Amount of the Letter of Credit (as the
same may be reduced from time to time but including, in any event, the principal
amount of any Pledged Bonds) on the date of payment of such letter of credit
fee. Amounts payable under this Paragraph 1B shall be payable based on a 360-day
year, actual number of days elapsed, in immediately available funds, on the Date
of Issuance and quarterly thereafter on the first day of each March, June,
September and December."
SECTION 3. FINANCIAL REPORTS. Paragraph 6H of the Letter of
Credit Agreement is hereby amended by adding an additional clause (v) at the end
of said Paragraph 6H as follows:
(v) Cash Flow Forecasts. The Company's 13-week rolling
cash flow forecasts, to the extent required to be delivered to the
Lenders under Section 5.01 of the 2000 Credit Agreement, at the same
time as such 13-week rolling cash flow forecasts are required to be
delivered to such Lenders by the terms thereof.
SECTION 4. FINANCIAL COVENANTS. Paragraph 7A of the Letter of
Credit Agreement is hereby amended by deleting such Paragraph in its entirety
and substituting in lieu thereof the following Paragraph 7A:
"7A. Financial Covenants.
(i) Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, calculated at the end of each Fiscal Quarter, shall not
be less than the ratio set forth below for such Fiscal Quarter:
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FISCAL QUARTER ENDING RATIO
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August 31, 2001 2.25:1.00
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November 30, 2001 1.90:1.00
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March 1, 2002 1.90:1.00
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May 31, 2002 2.25:1.00
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August 30, 2002 2.50:1.00
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November 29, 2002 and thereafter 2.75:1.00
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(ii) Senior Debt to Capitalization Ratio. The Senior Debt
to Capitalization Ratio, calculated at the end of each Fiscal Quarter,
shall not equal or exceed 0.50 to 1.00.
(iii) Total Debt to Cash Flow Ratio. The Total Debt to Cash
Flow Ratio, calculated at the end of each Fiscal Quarter, shall be less
than the ratio set forth below for such Fiscal Quarter:
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FISCAL QUARTER ENDING RATIO
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August 31, 2001 4.75:1.00
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November 30, 2001 5.50:1.00
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March 1, 2002 5.50:1.00
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May 31, 2002 4.75:1.00
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August 30, 2002 4.25:1.00
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November 29, 2002 and thereafter 3.75:1.00
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(iv) Senior Debt to Cash Flow Ratio. The Senior Debt to
Cash Flow Ratio, calculated at the end of each Fiscal Quarter, shall be
less than the ratio set forth below for such Fiscal Quarter:
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FISCAL QUARTER ENDING RATIO
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August 31, 2001 2.75:1.00
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November 30, 2001 3.50:1.00
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March 1, 2002 3.50:1.00
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May 31, 2002 2.75:1.00
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August 30, 2002 and thereafter 2.50:1.00
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SECTION 5. NEGATIVE COVENANTS. Article 7 of the Letter of Credit
Agreement is hereby amended by adding a new Paragraph 7G at the end of said
Article 7 as follows:
7G. Restricted Payments. Neither the Company nor the
Parent will make any "Restricted Payments" (as defined in the 2000
Credit Agreement) except to the extent any such Restricted Payments are
permitted to be made under the terms of the 2000 Credit Agreement.
SECTION 6. DEFINITIONS. Paragraph 9A of the Letter of Credit
Agreement is hereby amended by:
(a) deleting the existing definitions of "Applicable Margin" and
"2000 Credit Agreement" and substituting in lieu thereof the following
definitions for such terms:
"Applicable Margin" means (i) prior to May 15, 2001, "Applicable
Margin" as such term was defined in Amendment No. 3, (ii) from May 15, 2001
until August 30, 2001, "Applicable
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Margin" as such term was defined in Amendment No. 5, and (iii) on and after
August 30, 2001, "Applicable Margin" as such term is defined in the 2000 Credit
Agreement.
"2000 Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of September 28, 2000, as amended by the First Amendment to
Second Amended and Restated Credit Agreement dated as of August 30, 2001, among
the Company, the Banks listed on the signature pages thereof, and Wachovia Bank,
N.A., as Agent, but without giving effect to any further amendments,
supplements, restatements or waivers with respect thereto or the expiration or
termination thereof.
(b) inserting into Paragraph 9A, in appropriate alphabetical
order, the following definitions:
"Amendment No. 6" means that certain Amendment No. 6 to Letter of
Credit Agreement dated as of August 30, 2001, among the Company, the Parent and
the Bank.
"Senior Debt to Cash Flow Ratio" shall have the meaning specified for
such term in, and shall be computed in accordance with the terms of, the 2000
Credit Agreement.
SECTION 7. LETTER OF CREDIT AGREEMENT RATIFIED AND CONFIRMED.
Except as provided above, all other terms and provisions of the Letter of Credit
Agreement are hereby ratified and confirmed in each respect. All future
references to the Letter of Credit Agreement shall be deemed to refer to the
Letter of Credit Agreement as amended hereby.
SECTION 8. SUCCESSORS AND ASSIGNS. This Amendment shall be
binding upon and inure to the benefit of the parties hereto, their respective
heirs, successors, successors-in-title, and assigns.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by
and construed in accordance with the laws of the State of Georgia,
notwithstanding any principles regarding conflicts of laws thereof.
SECTION 10. ENTIRE AGREEMENT. This Amendment sets forth the
entire understanding of the parties with respect to the matters set forth
herein, and shall supersede any prior negotiations or agreements, whether
written or oral, with respect thereto.
SECTION 11. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts
and may be delivered by telecopier. Each counterpart so executed and delivered
shall be deemed an original and all of which taken together shall constitute but
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
AVONDALE XXXXX, INC.
By:
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Name:
Title:
Attest:
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Name:
Title:
AVONDALE INCORPORATED
By:
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Name:
Title:
Attest:
---------------------------------
Name:
Title:
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SUNTRUST BANK
By:
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Name:
Title:
7
