EXHIBIT 99.2
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of January 31, 2001 to the Credit Agreement
referred to below, among XXXXXX INTERNATIONAL, INC., a Delaware corporation
("Holdings"), XXXXXX, INC., a Delaware corporation (the "Borrower"), XXXXXX
COMMERCIAL PAPER INC., as syndication agent (in such capacity, the
"Syndication Agent"), and BANK OF AMERICA, N.A., as administrative agent (in
such capacity, the "Administrative Agent").
Holdings, the Borrower, the Lenders party thereto, the Syndication
Agent and the Administrative Agent are parties to a Credit Agreement dated as
of August 19, 1999 (as amended, waived or otherwise modified and in effect
immediately prior to the effectiveness of this Amendment No. 1, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Lenders to the Borrower in an original
aggregate principal or face amount not exceeding $500,000,000. Holdings, the
Borrower, certain of the Lenders party thereto, the Syndication Agent and the
Administrative Agent wish to amend the Credit Agreement in certain respects
and, accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendments. Subject to Section 7 of this Amendment No. 1
and to the satisfaction of the conditions precedent specified in Section 5 of
this Amendment No. 1, but effective (a) in the case of the amendments set
forth in Section 2.8 of this Amendment No. 1, as of December 31, 2000 and (b)
in the case of the other amendments set forth below, as of the date hereof,
the Credit Agreement shall be amended as follows:
2.1. References in the Credit Agreement (including references to the
Credit Agreement as amended hereby) to "this Agreement" (and indirect
references such as "hereunder", "hereby", "herein" and "hereof') shall be
deemed to be references to the Credit Agreement as amended hereby.
2.2. Definitions. Section 1.1 of the Credit Agreement shall be
amended by inserting the following definitions (or, in the case of any of the
following terms that are already defined in the Credit Agreement as in effect
before giving effect to this Amendment No. 1, by amending and restating such
terms to read as set forth below):
"Adjustment Date": the third Business Day following the date on which
the financial statements for the most recently completed fiscal period
furnished pursuant to Section 6.1 (a) or (b), as the case maybe, and the
compliance certificate with respect to such financial statements furnished
pursuant to Section 6.2(b) are delivered to the Administrative Agent.
Amendment No. 1
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"Amendment No. 1": Amendment No. 1 to this Agreement among Holdings,
the Borrower, the Syndication Agent and the Administrative Agent.
"Amendment No. 1 Date": the date of Amendment No. 1.
"Applicable Margin": for each Type of Revolving Credit Loan, Tranche A
Term Loan and Tranche B Term Loan, the rate per annum set forth on the
Pricing Grid under the relevant column heading opposite the level of the
Consolidated Leverage Ratio most recently determined; provided that (i) the
Applicable Margin for each Type of Revolving Credit Loan, Tranche A Term
Loan and Tranche B Term Loan commencing on the Amendment No. 1 Date shall
be that set forth on the Pricing Grid under the relevant column opposite a
Consolidated Leverage Ratio captioned "_> 5.25 to 1" until the first
Adjustment Date after the Amendment No. 1 Date, (ii) the Applicable Margin
for each Type of Loan determined for any Adjustment Date (including the
first Adjustment Date after the Amendment No. 1 Date) shall remain in
effect until a subsequent Adjustment Date for which the Consolidated
Leverage Ratio falls within a different level and (iii) if the financial
statements and related compliance certificate for any fiscal period are not
delivered by the date due pursuant to Section 6.1 and 6.2, the Applicable
Margin for each Type of Revolving Credit Loan, Tranche A Term Loan and
Tranche B Term Loan shall be (x) for the first 30 days subsequent to such
due date, the Applicable Margin for such Type of Loan in effect prior to
such due date and (y) thereafter, that set forth on the Pricing Grid under
the relevant column opposite a Consolidated Leverage Ratio captioned "_5
5.25 to 1 ", in either case, until the date of delivery of such financial
statements and compliance certificate. For purposes of computing interest
on the Loans for the period prior to but excluding the Amendment No. 1
Date, the Applicable Margin shall have the meaning assigned to such term as
in effect immediately prior to the Amendment No. 1 Date.
"Consolidated Senior Debt": at any date, the aggregate principal
amount of all Funded Debt of Holdings and its Subsidiaries at such date
other than (i) Indebtedness in respect of the Existing Senior Notes, (ii)
Indebtedness in respect of the Senior Subordinated Notes and (iii) any
other unsecured, subordinated Indebtedness of Holdings and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Debt to Consolidated EBITDA Ratio": as at the
last day of any period of four consecutive fiscal quarters, the ratio of
(a) Consolidated Senior Debt on such day to (b) Consolidated EBITDA for
such period; provided that for purposes of calculating Consolidated EBITDA
of the Borrower and its Subsidiaries for any period, the Consolidated
EBITDA of any Person acquired by the Borrower or its Subsidiaries during
such period shall be included on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the
first day of such period) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the
period preceding the acquisition of such Person and the related
consolidated statements of income and stockholders' equity and of cash
flows for the period in respect
Amendment No. 1
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of which Consolidated EBITDA is to be calculated (i) have been previously
provided to the Administrative Agent and the Lenders and (ii) either (A)
have been reported on without a qualification arising out of the scope of
the audit by independent certified public accountants of nationally
recognized standing or (B) have been found acceptable by the Administrative
Agent.
"Reinvestment Event": any Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of a
Recovery Event to acquire assets useful in the business of the Borrower and
its Subsidiaries prior to the date occurring 18 months after the applicable
Reinvestment Event.
2.3. Definitions. (i) The definition of "Asset Sale" in Section 1.1 of
the Credit Agreement shall be amended by substituting "$1,000,000" for the
reference to "$500,000" therein; and (ii) the definition of "Excess Cash Flow"
in Section 1.1 of the Credit Agreement shall be amended by deleting the phrase
", any such expenditures or Investments financed with the proceeds of any
Reinvestment Deferred Amount" in the parenthetical in clause (b)(ii) therein.
2.4. Optional Prepayments. Section 2.11 (b) of the Credit Agreement
shall be amended to read in its entirety as follows:
"(b) Each optional prepayment in respect of the Tranche B Term Loans
made (i) during the year 2001 shall be accompanied by a prepayment premium
equal to 2.00% of the principal amount of such prepayment and (ii) during
the year 2002 shall be accompanied by a prepayment premium equal to 1.00%
of the principal amount of such prepayment."
2.5. Mandatory Prepayments and Commitment Reductions.
(a) Section 2.12(b) of the Credit Agreement shall be amended to read
in its entirety as follows:
"(b) (i) If on any date Holdings, the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Recovery Event
then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward
the prepayment of the Term Loans and the reduction of the Revolving
Credit Commitments as set forth in Section 2.12(d); provided that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date,
an amount equal to the Reinvestment Prepayment Amount with respect to
the relevant Reinvestment Event shall be applied toward the prepayment
of the Term Loans and the reduction of the Revolving Credit
Amendment No. 1
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Commitments as set forth in Section 2.12(d).
(ii) If on any date Holdings, the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale, such
Net Cash Proceeds shall be applied on such date toward the prepayment
of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(d)."
(b) Section 2.12(e) of the Credit Agreement shall be amended to read
in its entirety as follows:
"(e) Each mandatory prepayment in respect of the Tranche B Term
Loans (other than mandatory prepayments pursuant to Section 2.12(c))
made (i) during the year 2001 shall be accompanied by a prepayment
premium equal to 2.00% of the principal amount of such prepayment and
(ii) during the year 2002 shall be accompanied by a prepayment premium
equal to 1.00% of the principal amount of such prepayment."
2.6. Financial Statements. Section 6.1 of the Credit Agreement shall
be amended by (i) deleting the "and" at the end of clause (a) therein and
substituting "; and " for the period at the end of clause (b) therein and (ii)
adding new clause (c) immediately following clause (b) therein as follows:
"(c) as soon as available, but in any event within 30 days after the
end of each monthly accounting period of each fiscal year of Holdings
(other than the last monthly accounting period in such fiscal year), the
unaudited consolidated balance sheet of Holdings and its consolidated
Subsidiaries, as at the end of such period, and the related unaudited
consolidated statements of income and of cash flows for such period,
setting forth comparative figures for the corresponding period of the
previous year, all of which shall be certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year- end
adjustments), provide that the provisions of this clause (c) shall only be
applicable for any calendar month ending after the delivery of financial
statements pursuant to clause (a) or (b) above demonstrating that the
Consolidated Leverage Ratio is greater than or equal to 4.75 to 1 and shall
cease to be applicable (unless such ratio again goes above 4.75 to 1) after
such time as financial statements are delivered pursuant to said clause (a)
or (b) for a subsequent fiscal period demonstrating that the Consolidated
Leverage Ratio is more than 4.75 to 1."
2.7. Certificates: Other Information. Section 6.2(c) of the Credit
Agreement shall be amended by adding the words "presented for each fiscal
quarter in such fiscal year" after the words "fiscal year" and before the open
parenthesis in the third line therein.
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2.8. Financial Condition Covenants. Section 7.1 of the Credit
Agreement shall be amended to read in its entirety as follows:
"7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters
of Holdings ending with any fiscal quarter set forth below to exceed the
ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Ouarter Ending Leverage Ratio
-------------- ---------------------
December 31, 2000 6.00 to 1
March 31, 2001 7.10 to 1
June 30, 2001 7.40 to 1
September 30, 2001 7.25 to 1
December 31, 2001 6.25 to 1
March 31, 2002 6.00 to 1
June 30, 2002 5.25 to 1
September 30, 2002 5.00 to 1
December 31, 2002 4.75 to 1
March 31, 2003 4.75 to 1
June 30, 2003 4.75 to 1
September 30, 2003 4.50 to 1
December 31, 2003 4.25 to 1
March 31, 2004 4.25 to 1
June 30, 2004 4.25 to 1
September 30, 2004 4.00 to 1
December 31, 2004 4.00 to 1
March 31, 2005 4.00 to 1
June 30, 2005 4.00 to 1
September 30, 2005 3.75 to 1
December 31, 2005 3.75 to 1
March 31, 2006 3.75 to 1
June 30, 2006 3.75 to 1
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(b) Consolidated Interest Coverage. Permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters of
Holdings ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Ending Coverage Ratio
--------------------- --------------
December 31, 2000 1.40 to 1
March 31, 2001 1.20 to 1
June 30, 2001 1.20 to 1
September 30, 2001 1.20 to 1
December 31, 2001 1.30 to 1
March 31, 2002 1.40 to 1
June 30, 2002 2.00 to 1
September 30, 2002 2.25 to 1
December 31, 2002 2.50 to 1
March 31, 2003 2.50 to 1
June 30, 2003 2.50 to 1
September 30, 2003 2.75 to 1
December 31, 2003 2.75 to 1
March 31, 2004 3.00 to 1
June 30, 2004 3.00 to 1
September 30, 2004 3.00 to 1
December 31, 2004 3.00 to 1
March 31, 2005 3.25 to 1
June 30, 2005 3.25 to 1
September 30, 2005 3.25 to 1
December 31, 2005 3.25 to 1
March 31, 2006 3.25 to 1
June 30, 2006 3.25 to 1
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(c) Consolidated Senior Debt to Consolidated EBITDA Ratio. Permit the
Consolidated Senior Debt to Consolidated EBITDA Ratio as at the last day of
any period of four consecutive fiscal quarters of Holdings ending with any
fiscal quarter set forth below to exceed the ratio set forth below opposite
such fiscal quarter:
Consolidated Senior Debt
Fiscal Quarter Ending to Consolidated EBITDA Ratio
--------------------- ----------------------------
March 31, 2001 3.25 to 1
June 3 0, 2001 3.40 to 1
September 30, 2001 3.40 to 1
December 31, 2001 2.75 to 1
March 31, 2002 2.75 to 1
(d) Consolidated EBITDA. Permit Consolidated EBITDA as at the last day
of any period of four consecutive fiscal quarters of Holdings ending with
any fiscal quarter set forth below to be less than the amount set forth
below opposite such fiscal quarter:
Fiscal Quarter Ending Consolidated EBITDA
--------------------- -------------------
March 31, 2001 $110,000,000
June 30, 2001 $105,000,000
September 30, 2001 $110,000,000
December 31, 2001 $120,000,000
March 31, 2002 $130,000,000"
2.9. Limitation on Capital Expenditures. Section 7.7 of the Credit
Agreement shall be amended by (i) deleting the ":" after the word "except" in
the second line therein, deleting the "(a)" therein and deleting the "; and " at
the end of clause (a) therein and (ii) deleting clause (b) therein in its
entirety.
2.10. Investments.
(a) Clause (b) in the proviso of Section 7.8(h) of the Credit
Agreement shall be amended to read in its entirety as follows:
"(b) at the time of each such Investment (both immediately prior
to and after giving effect to such Investment), (i) there shall exist
no Default or Event of Default, (ii) the aggregate consideration paid
(excluding the portion of such consideration paid with the proceeds of
equity issuances or Excess Cash Flow but including, in the case of an
acquisition of assets, any assumed obligations of the type reflected
on a balance sheet under GAAP) in connection with all Investments
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made pursuant to this paragraph (h) (x) during any fiscal year of
Holdings shall not exceed $50,000,000 and (y) during the term of this
Agreement shall not exceed $125,000,000 and (iii) the Consolidated
Leverage Ratio calculated based upon the most recent financial
statements delivered pursuant to clause (a) or (b) of Section 6.01
prior to the date of such Investment shall be less than 4.75 to 1 and"
(b) Section 7.8(1) of the Credit Agreement shall be amended to read in
its entirety as follows:
"(1) in addition to Investments otherwise expressly permitted by
this Section, Investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost, at the time of such
Investment) not to exceed an aggregate of $10,000,000 or, if at the
time of any such Investment (both immediately prior to and after
giving effect to such Investment) the Consolidated Leverage Ratio
calculated based upon the most recent financial statements delivered
pursuant to clause (a) or (b) of Section 6.01 prior to the date of
such Investment shall be less than 4.75 to 1, $5,000,000."
2.11. Limitation on Transactions with Affiliates. Clause (v) in
Section 7.10(b) of the Credit Agreement shall be amended to read in its entirety
as follows:
"(v) so long as (x) no Default or Event of Default shall have occurred
and be continuing and (y) the Consolidated Leverage Ratio calculated based
upon the most recent financial statements delivered pursuant to clause (a)
or (b) of Section 6.01 prior to the date of such payment shall be less than
4.75 to 1, the payment of Management Fees in an aggregate amount not to
exceed $1,000,000 in respect of any single fiscal year, provided that the
amount of payments that may be made in any fiscal year pursuant to this
clause (v) shall be increased by the amount of payments that could have
been made in prior fiscal years but for the fact that the Consolidated
Leverage Ratio (so calculated) was greater than or equal to 4.75 to 1; and"
2.12. Schedule I. Schedule I to the Credit Agreement shall be amended
to read in its entirety as set forth in Schedule I hereto.
2.13. Independent Consultant. Section 6 of the Credit Agreement shall
be amended by inserting a new Section 6.12 immediately following Section 6.11 as
follows:
"6.12 Independent Consultant. Engage (within 10 days of the date of
determination of Consolidated EBITDA) an independent consultant reasonably
satisfactory to the Required Lenders to conduct a review of the respective
business plans of Holdings and the Borrower, if Consolidated EBITDA as at
the last day of any of the fiscal quarters of Holdings set forth in the
following table is determined to be less than the amount set forth in such
table opposite such fiscal quarter:
Amendment No. 1
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Fiscal Quarter Ending Consolidated EBITDA
--------------------- -------------------
March 31, 2001 $17,000,000
June 30, 2001 $28,000,000
September 30, 2001 $38,000,000
December 31, 2001 $36,000,000."
Section 3. Consents. Subject to Section 7 of this Amendment No. l and
to the satisfaction of the conditions specified in Section 5 of this Amendment
No. 1, but with effect on and after the date hereof, the Required Lenders agree
that, notwithstanding anything to the contrary contained in Section 6.10 of the
Credit Agreement, Holdings and the Borrower shall have until March 15, 2001 to
comply with the provisions in said Section 6.10 as they pertain to the recent
acquisition by the Borrower of Estate Cartridge, Inc., Fabtek Corporation and
Windsor Forestry Tools LLC.
Section 4. Representations and Warranties. Each of Holdings and the
Borrower jointly and severally represents and warrants to the Agents and the
Lenders that (a) after giving effect to this Amendment No. 1 on the dates
specified in Section 2 and Section 3 of this Amendment No. 1, no Default or
Event of Default shall have occurred and be continuing and (b) the
representations and warranties set forth in Section 4 of the Credit Agreement
are true and complete on the date hereof as if made on and as of the date hereof
(or, if any such representations and warranties expressly relate to any earlier
date, as of such earlier date), after giving effect to this Amendment No. 1 on
the dates specified in Section 2 and Section 3 of this Amendment No. 1 and as if
each reference in said Section 4 to "this Agreement" and the "Credit Documents"
included reference to this Amendment No. 1.
Section 5. Conditions Precedent. As provided in Section 2 and Section
3 of this Amendment No. 1, the amendments to the Credit Agreement set forth in
said Section 2 (including Sections 2.1 through 2.12) and the consents set forth
in Section 3 of this Amendment No. 1, subject to Section 7 of this Amendment No.
1, shall become effective as of the date hereof (except the amendments set forth
in Section 2.8 of this Amendment No. 1, which shall become effective as of
December 31, 2000) upon:
(i) the Administrative Agent receiving one or more counterparts of
this Amendment No. 1 duly executed and delivered by the Borrower, Holdings
and the Agents (with the written consent of the Required Lenders provided
in the form of the Lender Consent attached hereto as Exhibit A);
(ii) the payment by the Borrower of an amendment fee to the
Administrative Agent for the account of each Lender that has executed a
Lender Consent in the form attached hereto as Exhibit A on or before 5:00
p.m., New York City time, on January 31, 2001 in an amount equal to 0.375%
of the sum of the total Commitments of each such Lender; and
(iii) the payment by the Borrower of all fees, expenses and other
amounts due and
Amendment No. 1
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payable under the Credit Agreement (including, without limitation,
reasonable fees and disbursements and other charges of counsel to the
Agents).
Section 6. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 1 by signing any such counterpart.
Delivery of an executed signature page of this Amendment No. 1 by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This Amendment No. 1 shall be governed by, and construed in accordance
with, the law of the State of New York.
Section 7. Equity Contribution. Notwithstanding anything to the
contrary contained in this Amendment No. 1, the amendments to the Credit
Agreement set forth in Section 2 of this Amendment No. 1 (including Sections 2.1
through 2.12) and the consents set forth in Section 3 of this Amendment No. 1
shall be rescinded (and shall no longer be effective) if LB I Group, Inc.,
directly or through one of its affiliates, shall not have purchased on or prior
to March 2, 2001 convertible preferred stock or other mezzanine securities of
Holdings (on terms and at a valuation to be agreed upon between Holdings and LB
I Group, Inc.) for an amount equal to at least $20,000,000 ($20,000,000 of which
shall have been immediately contributed as cash equity by Holdings to the
Borrower). Upon such rescission, the Lenders and the Agents shall have all
rights and remedies available to them that existed immediately prior to this
Amendment No. 1 originally becoming effective.
Amendment No. 1
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In WITNESS WHEREOF, the parties hereto have caused this Amendment No.1
to be duly executed and delivered as of the day and year first above written.
HOLDINGS
--------
XXXXXX INTERNATIONAL, INC.
By /s/ Xxxxxxx X. Xxxxxx, III
-------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Senior Vice President
BORROWER
--------
XXXXXX, INC.
By /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
SYNDICATION AGENT
-----------------
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent
By /s/ G. Xxxxxx Xxxxx
-------------------------------
Name: G. Xxxxxx Xxxxx
Title: Authorized Signatory
ADMINISTRATIVE AGENT
--------------------
BANK OF AMERICA, N.A.,
as Administrative Agent
By /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
Amendment No. 1
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