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EXHIBIT 10(a)
THE XXXXXX & SESSIONS CO.
FIRST AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT
This First Amendment to the Amended and Restated Credit Agreement
(herein, the "Amendment") is entered into as of August 1, 2001, among The Xxxxxx
& Sessions Co., an Ohio corporation (the "Borrower"), the Guarantors party
hereto, the Lenders party hereto, and Xxxxxx Trust and Savings Bank, as
Administrative Agent for the Lenders.
PRELIMINARY STATEMENTS
A. The Borrower, the Guarantors, the Lenders, and the
Administrative Agent are parties to an Amended and Restated Credit Agreement
dated as of December 15, 2000 (the "Credit Agreement"). All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement.
B. The Borrower has requested that the Lenders waive certain defaults,
amend certain financial covenants, and make certain other amendments to the
Credit Agreement, and the Lenders are willing to do so under the terms and
conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. WAIVERS.
1.1. The Borrower has advised the Lenders that it was not in
compliance with (a) the minimum Total Funded Debt/EBITDA Ratio requirement of
Section 8.22 of the Credit Agreement for the fiscal quarter ending June 30, 2001
and (b) the minimum Interest Coverage Ratio requirement of Section 8.23 of the
Credit Agreement for the fiscal quarter ending June 30, 2001 (collectively, the
"Existing Defaults"). The Borrower has requested that the Lenders waive the
Existing Defaults through the period ending June 30, 2001 and, by signing below,
the Lenders agree to waive the Existing Defaults through the period ending June
30, 2001, subject to the satisfaction of the conditions precedent set forth in
Section 3 below.
1.2. The Borrower has advised the Lenders it was not in compliance
with the requirement of Section 8.26 of the Credit Agreement that the Borrower
deliver to the Administrative Agent a landlord waiver letter for the leased
premises located in Blythewood, South Carolina (the "Landlord Waiver Default").
The Borrower has requested that the Lenders waive the Landlord Waiver Default
and by signing below the Lenders agree to waive the Landlord Waiver Default,
subject to the satisfaction of the conditions precedent set forth in Section 3
below.
SECTION 2. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement shall be and hereby is amended as follows:
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2.1. The definition of "Applicable Margin" appearing in Section 5.1 of
the Credit Agreement shall be amended and restated in its entirety effective as
of August 1, 2001 to read as follows:
"Applicable Margin" means the following with respect to
Loans, Reimbursement Obligations, and Revolving Credit Commitment and
Letter of Credit fees payable under Section 2.1 hereof, the rate per
annum specified below:
Applicable Margin for Base Rate Loans and Reimbursement
Obligations: 1.00%
Applicable Margin for Eurodollar Loans and Letter of
Credit fee: 3.00%
Applicable Margin for Revolving Credit Commitment fee: .50%
provided, however, that the Applicable Margin shall be subject to
quarterly adjustments on each Pricing Date, and from one Pricing Date
to the next the Applicable Margin shall mean a rate per annum
determined in accordance with the following schedule:
APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE
FOR BASE RATE LOANS FOR EURODOLLAR LOANS MARGIN FOR REVOLVING
TOTAL FUNDED DEBT/ EBITDA AND REIMBURSEMENT AND LETTER OF CREDIT CREDIT COMMITMENT FEE
RATIO FOR SUCH PRICING DATE OBLIGATIONS SHALL BE FEE SHALL BE SHALL BE
Greater than or equal to 3.0
to 1.0 .75% 2.50% .50%
Greater than or equal to 2.5
to 1.0, but less than 3.0 to
1.0 .50% 2.25% .40%
Greater than or equal to 2.0
to 1.0, but less than 2.5 to
1.0 .25% 2.00% .35%
Greater than or equal to 1.5
to 1.0, but less than 2.0 to
1.0. 0% 1.75% .30%
Less than 1.5 to 1.0 0% 1.50% .25%
For purposes hereof, the term "Pricing Date" means, for any fiscal
quarter of the Borrower ending on or after December 31, 2001, the date
on which the Administrative Agent is in receipt of the Borrower's most
recent financial statements for the fiscal quarter then ended (and in
the case of the year-end financial statements, audit report), pursuant
to Section 8.5 hereof. The Applicable Margin shall be established
based on the Total Funded Debt/EBITDA Ratio for the most recently
completed
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fiscal quarter and the Applicable Margin established on a Pricing Date
shall remain in effect until the next Pricing Date. If the Borrower
has not delivered its financial statements (and, in the case of the
year-end financial statements, audit report) by the date such
financial statements are required to be delivered under Section 8.5
hereof, until such financial statements are delivered, the Applicable
Margin shall be the highest Applicable Margin (i.e., the Total Funded
Debt/EBITDA Ratio shall be deemed to be greater than 3.0 to 1.0). If
the Borrower subsequently delivers such financial statements before
the next Pricing Date, the Applicable Margin established by such late
delivered financial statements shall take effect from the date of
delivery until the next Pricing Date. In all other circumstances, the
Applicable Margin established by such financial statements shall be in
effect from the Pricing Date that occurs immediately after the end of
the fiscal quarter covered by such financial statements until the next
Pricing Date. Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be
conclusive and binding on the Borrower and the Lenders if reasonably
determined.
2.2. Section (a) of Section 8.5 shall be amended and restated in its
entirety to read as follows:
(a) (i) until December 31, 2002, as soon as available, and
in any event within 30 days after the close of each fiscal month, a
copy of the consolidated balance sheet of the Borrower and its
Subsidiaries as of the last day of such period and the consolidated
statements of income, retained earnings, and cash flows of the
Borrower and its Subsidiaries for the fiscal month and for the fiscal
year-to-date period then ended, each in reasonable detail and showing
in comparative form the figures for the corresponding date and period
in the previous fiscal year, prepared by the Borrower in accordance
with GAAP (subject to the absence of footnote disclosures and year-end
audit adjustments) and certified to by its chief financial officer or
another officer of the Borrower acceptable to the Administrative Agent
and (ii) from and after January 1, 2003, as soon as available, and in
any event within 45 days after the close of each of the first three
fiscal quarters of each fiscal year, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries as of the last day
of such period and the consolidated statements of income, retained
earnings, and cash flows of the Borrower and its Subsidiaries for the
fiscal quarter and for the fiscal year-to-date period then ended, each
in reasonable detail and showing in comparative form the figures for
the corresponding date and period in the previous fiscal year,
prepared by the Borrower in accordance with GAAP (subject to the
absence of footnote disclosures and year-end audit adjustments) and
certified to by its chief financial officer or another officer of the
Borrower acceptable to the Administrative Agent;
2.3. Subsection (h) of Section 8.5 shall be amended and restated in
its entirety to read as follows:
"(h) (i) until December 31, 2002, as soon as available, and
in any event within 30 days after the last day of each fiscal month of
the Borrower, a written certificate in the form attached hereto as
Exhibit E signed by the chief financial officer of the Borrower, or
such other officer of the Borrower acceptable to the Administrative
Agent, to the effect that to the best of such officer's knowledge and
belief no Default or Event of Default has occurred during the period
covered by the most recent financial statements furnished pursuant to
Section 8.5(a) or Section 8.5(b) above or, if any such Default or
Event of Default has occurred during such period, setting forth a
description of such Default or Event of Default and specifying the
action, if any, taken by the Borrower to remedy the same together with
calculations supporting such statements in respect of (x) for each
fiscal month end which is also a fiscal quarter end, Sections 8.21,
8.22, 8.23, 8.24, and 8.25 of this Agreement and (y) for each fiscal
month end which is not a fiscal quarter end, Sections 8.21, 8.24 and
8.25 of this
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Agreement; and (ii) from and after January 1, 2003, as soon as
available, and in any event within 45 days after the last day of each
fiscal quarter of the Borrower, a written certificate in the form
attached hereto as Exhibit E signed by the chief financial officer of
the Borrower, or such other officer of the Borrower acceptable to the
Administrative Agent, to the effect that to the best of such officer's
knowledge and belief no Default or Event of Default has occurred
during the period covered by the most recent financial statements
furnished pursuant to Section 8.5(a) or Section 8.5(b) above or, if
any such Default or Event of Default has occurred during such period,
setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Borrower to remedy the
same together with calculations supporting such statements in respect
of Sections 8.21, 8.22, 8.23, 8.24, and 8.25 of this Agreement."
2.4. Subsections (j) and (k) Section 8.9 of the Credit Agreement shall
be amended and restated in their entirety to read as follows:
(j) Permitted Acquisitions occurring after receipt of the
compliance certificate delivered by the Borrower pursuant to Section
8.5(h) hereof for the fiscal quarter ending on or about September 30,
2002; and
(k) other investments, loans, and advances in addition to
those otherwise permitted by this Section, including investments in
joint ventures entered into in the ordinary course of business, in an
aggregate amount not to exceed $2,500,000 at any one time outstanding,
made after receipt of the compliance certificate delivered by the
Borrower pursuant to Section 8.5(h) hereof for the fiscal quarter
ending on or about September 30, 2002.
2.5. Section 8.12 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 8.12. Dividends and Certain Other Restricted
Payments. The Borrower shall not, nor shall it permit any of its
Subsidiaries to, declare or pay any dividends on or make any other
distributions in respect of any class or series of its capital stock,
or directly or indirectly purchase, redeem or otherwise acquire or
retire any of its capital stock (collectively, "Restricted Payments");
provided, however, that the foregoing shall not operate to prevent:
(a) the making of dividends or distributions to the Borrower by any of
its Subsidiaries and (b) at any time after September 30, 2002, the
making of Restricted Payments by Borrower so long as (i) no Default or
Event of Default then exists or would arise after giving effect
thereto and (ii) the amount of Restricted Payments made by the
Borrower, when taken together with the aggregate amount of Restricted
Payments previously made by the Borrower during the term of this
Agreement, shall not exceed the sum of $5,000,000 plus (or minus) 25%
of Net Income for the period from December 15, 2000 through the date
of the payment of any such Restricted Payment (measured as a single
accounting period)."
2.6. Section 8.22 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 8.22. Total Funded Debt/EBITDA Ratio. The Borrower
shall not, as of the last day of each fiscal quarter of the Borrower
ending during the periods specified below, permit the Total Funded
Debt/EBITDA Ratio to be more than:
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TOTAL FUNDED DEBT/EBITDA RATIO
FROM AND INCLUDING TO AND INCLUDING SHALL NOT BE MORE THAN
April 1, 2001 June 30, 2001 3.75 to 1.0
July 1, 2001 September 30, 2001 4.10 to 1.0
October 1, 2001 December 31, 2001 4.00 to 1.0
January 1, 2002 March 31, 2002 3.85 to 1.0
April 1, 2002 June 30, 2002 3.40 to 1.0
July 1, 2002 June 30, 2003 3.00 to 1.0
July 1, 2003 and at all times thereafter 2.50 to 1.0"
2.7. Section 8.23 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 8.23. Interest Coverage Ratio. The Borrower shall
not, as of the last day of each fiscal quarter of the Borrower ending
during each of the periods specified below, permit the ratio of (a)
EBIT for the four fiscal quarters of the Borrower then ended to (b)
Interest Expense for the same four fiscal quarters then ended to be
less than:
INTEREST COVERAGE RATIO SHALL
FROM AND INCLUDING TO AND INCLUDING NOT BE LESS THAN
April 1, 2001 June 30, 2001 2.75 to 1.0
July 1, 2001 September 30, 2001 1.75 to 1.0
October 1, 2001 December 31, 2001 1.65 to 1.0
January 1, 2002 March 31, 2002 1.85 to 1.0
April 1, 2002 June 30, 2002 2.35 to 1.0
July 1, 2002 September 30, 2002 2.75 to 1.0
October 1, 2002 and at all times thereafter 3.00 to 1.0"
provided that for measurement periods ending on or before September
30, 2001, Interest Expense shall be computed by multiplying the actual
amount thereof accruing from August 8, 2000 until the end of such
period by a fraction, the numerator of which is 365 and the
denominator of which is the number of days elapsed since August 8,
2000.
2.8. Section 8.24 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 8.24. Capital Expenditures. The Borrower shall not,
nor shall it permit any Subsidiary to, incur Capital Expenditures in
an aggregate amount in excess of (a) $15,000,000 during the fiscal
year ending on or about December 31, 2001, (b) $15,000,000 during the
fiscal year ending on or about December 31, 2002 and, (c) $20,000,000
during any fiscal year of the Borrower ending thereafter."
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2.9. Section 8 of the Credit Agreement shall be amended by adding the
following Section 8.27 at the end thereof:
"Section 8.27. Minimum EBITDA. As of the last day of each
fiscal quarter of the Borrower ending during the periods specified
below, the Borrower shall not permit EBITDA for the four fiscal
quarters of the Borrower then ended to be less than:
EBITDA FOR FOUR FISCAL QUARTERS
FROM AND INCLUDING TO AND INCLUDING THEN ENDED SHALL NOT BE LESS THAN
April 1, 2001 June 30, 2001 $42,700,000
July 1, 2001 September 30, 2001 $35,800,000
October 1, 2001 December 31, 2001 $34,700,000
January 1, 2002 March 31, 2002 $35,100,000
April 1, 2002 June 30, 2002 $39,700,000"
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
3.1. The Borrower, the Administrative Agent, and the Required Lenders
shall have executed and delivered this Amendment.
3.2. The Administrative Agent shall have received an amendment fee in
the amount of $485,000 for the ratable account of the Lenders consent to this
Amendment to the satisfaction of the Administrative Agent on or before July 26,
2001.
3.3. The Guarantors shall have executed and delivered to the
Administrative Agent their consent to this Amendment in the space provided
below.
3.4. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Administrative Agent and its counsel.
SECTION 4. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment,
the Borrower hereby represents to the Lenders that as of the date hereof, and
after giving effect to the waivers and amendments provided for in this
Amendment, (a) the representations and warranties set forth in Section 6 of the
Credit Agreement are and shall be and remain true and correct (except that the
representations contained in Section 6.5 shall be deemed to refer to the most
recent financial statements of the Borrower delivered to the Lenders) and (b)
the Borrower is in compliance with the terms and conditions of the Credit
Agreement and no Default or Event of Default has occurred and is continuing
under the Credit Agreement or shall result after giving effect to this
Amendment.
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SECTION 5. MISCELLANEOUS.
5.1. The Borrower and the Guarantors have heretofore or concurrently
herewith executed and delivered to the Lenders the Mortgages, the Security
Agreement, the Pledge Agreement, and certain other Collateral Documents. The
Borrower and, by signing below, the Guarantors, hereby acknowledge and agree
that the Liens created and provided for by the Collateral Documents continue to
secure, among other things, the Obligations arising under the Credit Agreement
as amended hereby; and the Collateral Documents and the rights and remedies of
the Lenders thereunder, the obligations of the Borrower and the Guarantors
thereunder, and the Liens created and provided for thereunder remain in full
force and effect and shall not be affected, impaired or discharged hereby.
Nothing herein contained shall in any manner affect or impair the priority of
the liens and security interests created and provided for by the Collateral
Documents as to the indebtedness which would be secured thereby prior to giving
effect to this Amendment.
5.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
5.3. The Borrower agrees to pay on demand all reasonable costs and
expenses incurred by the Administrative Agent in connection with the
negotiation, preparation, execution and delivery of this Amendment, including
the reasonable fees and expenses of counsel for the Administrative Agent.
5.4. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGE TO FOLLOW]
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This First Amendment to Amended and Restated Credit Agreement is
entered into as of the date and year first above written.
"BORROWER"
THE XXXXXX & SESSIONS CO.
By /s/ Xxxxx X. Xxxx
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Name Xxxxx X. Xxxx
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Title Executive Vice President & CFO
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"GUARANTORS"
XXXXXX CHIMES CO.
By /s/ Xxxxx X. Xxxx
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Name Xxxxx X. Xxxx
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Title Vice President, Secretary & Treasurer
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DIMANGO PRODUCTS CORPORATION
By /s/ Xxxxx X. Xxxx
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Name Xxxxx X. Xxxx
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Title Secretary
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PYRAMID INDUSTRIES II, INC.
By /s/ Xxxxx X. Xxxx
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Name Xxxxx X. Xxxx
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Title Vice President & Treasurer
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VISIONTEQ, INC.
By /s/ Xxxxx X. Xxxx
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Name Xxxxx X. Xxxx
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Title Secretary & Treasurer
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"LENDERS"
XXXXXX TRUST AND SAVINGS BANK, in its individual
capacity as a Lender and as Administrative Agent
By
Name /s/ Xxxxxxx X. Xxxxxxx
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Title Managing Director
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BANK OF AMERICA, N.A.
By
Name /s/ Xxx Xxxxx Xxxxxxxx
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Title Vice President
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NATIONAL CITY BANK
By
Name /s/ Xxxxxx Kuclow
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Title Vice President
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PNC BANK, NATIONAL ASSOCIATION
By
Name /s/ Xxxxxx X. Xxxxxx
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Title Senior Vice President
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MELLON BANK, N.A.
By
Name /s/ Xxxx X. Xxxxxxxx
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Title Assistant Vice President
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BANK ONE, N.A.
By
Name /s/ Xxxxx X. Xxxxxxxxx
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Title First Vice President
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THE HUNTINGTON NATIONAL BANK
By
Name /s/ Xxxx Xxxxxx
---------------------------------------------
Title Vice President
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FIFTH THIRD BANK, NORTHEASTERN OHIO
By
Name /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Title Senior Vice President
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KEYBANK NATIONAL ASSOCIATION
By
Name /s/ X. X. Xxxxxx
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Title Vice President
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LASALLE BANK NATIONAL ASSOCIATION
By
Name /s/ Xxxx Xxxxxx
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Title Vice President
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