EXHIBIT 10 (ff)
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Agreement") is
made and entered into as of this 28th day of August, 1998 among:
DATA GENERAL CORPORATION, a Delaware corporation ("Borrower"),
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association formerly known
as NationsBank of Texas, National Association, THE BANK OF NEW YORK, and FLEET
NATIONAL BANK, formerly known as Fleet Bank of Massachusetts, N.A, (each
individually, a "Lender" and collectively, the "Lenders"); and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association
formerly known as NationsBank of Texas, National Association, in its capacity as
agent for the Lenders (in such capacity, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent have entered into a
Credit Agreement dated as of September 30, 1997, as amended pursuant to that
certain Amendment No. 1 to Credit Agreement dated as of January 28, 1998 (as
amended and from time to time hereafter amended, restated, modified,
supplemented, replaced or amended and restated, the "Credit Agreement"),
pursuant to which the Lenders agreed to make a Revolving Credit Facility
available to the Borrower; and
WHEREAS, the Borrower has requested that the Credit Agreement be
amended in the manner set forth herein and the Agent and the Lenders are willing
to agree to such amendment, effective immediately after the effectiveness of the
Assignment and Acceptances of even date herewith by and between each of the
Lenders and certain other financial institutions;
NOW, THEREFORE, in consideration of the mutual covenants and the
fulfillment of the conditions set forth herein, the parties hereto do hereby
agree as follows:
1. Definitions. Any capitalized terms used herein without
definition shall have the meaning set forth in the Credit Agreement.
2. Amendment. Subject to the terms and conditions set forth herein, the
Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
deleting in its entirety the definition of "Applicable Margin" and
inserting in lieu thereof the following:
"Applicable Margin" means that percent per annum set
forth below, which shall be based upon the Consolidated
Leverage Ratio for the Four-Quarter Period most recently ended
as specified below:
Applicable Margin
Consolidated Eurodollar Rate and
Leverage Ratio Letter of Credit Fee Base Rate Commitment
Fee
-------------- -------------------- --------- ----------
(a)Less than .75 to 1.00 0.875% 0% .250%
(b)Less than 1.50 to 1.00
but greater than or equal
to .75 to 1.00 1.1250% 0% .350%
(c)Less than 2.25 to 1.00
but greater than or equal
to 1.50 to 1.00 1.250% 0% .375%
(d)Less than 2.75 to 1.00
but greater than or equal
to 2.25 to 1.00 1.375% .250% .500%
(e)Greater than or equal
to 2.75 to 1.00 1.500% .250% .625%
The Applicable Margin shall be established at the end of each
fiscal quarter of the Borrower (each, a "Determination Date").
Any change in the Applicable Margin following each
Determination Date shall be determined based upon the
computations set forth in the certificate furnished to the
Agent pursuant to Section 7.1(a)(ii) and Section 7.1(b)(ii)
hereof, subject to review and approval of such computations by
the Agent, and shall be effective commencing on the date such
certificate is received until the date on which a new
certificate is delivered; provided however, if the Borrower
shall fail to deliver any such certificate within the time
period required by Section 7.1 hereof, then the Applicable
Margin shall be 1.500% for Eurodollar Rate Loans and the fee
for Letters of Credit under Section 4.3 hereof, .250% for Base
Rate Loans and .625% for the Commitment Fee, in each case,
from the date such certificate was required to be delivered,
until the appropriate certificate is so delivered. Further,
notwithstanding the foregoing, the Applicable Margin shall be
1.375% for Eurodollar Rate Loans and the fee for Letters of
Credit, 0.250% for Base Rate Loans and 0.500% for the
Commitment Fee from the Closing Date until the earlier of (i)
the date on which the certificate for the period ending June
30, 1999 is delivered or (ii) a certificate is furnished to
the Agent that demonstrates a Consolidated Leverage Ratio of
not more than 2.25 to 1.00. For purposes of this definition of
"Applicable Margin" only, the Consolidated Leverage Ratio
shall be calculated without consideration of the final proviso
of the definition of "Consolidated EBITDA" relating to the
$135,000,000 worldwide restructuring charge taken by the
Borrower in its third fiscal quarter of 1998.
(b) Section 1.1 of the Credit Agreement is hereby amended by
deleting in its entirety the definition of "Consolidated EBITDA" and
inserting in lieu thereof the following:
"Consolidated EBITDA" means, with respect to the
Borrower and its Subsidiaries for any Four-Quarter Period
ending on the date of computation thereof, the sum of, without
duplication, (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) taxes on income, (iv) amortization,
and (v) depreciation, all determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis;
provided, however, that for each of the first four fiscal
quarters following any Acquisition, the calculation of
Consolidated EBITDA for each Four-Quarter Period ending on the
last day of each such fiscal quarter shall include the
historical financial performance of the acquired business for
that portion of such Four-Quarter Period occurring prior to
such Acquisition; and provided further, however, that solely
for purposes of calculating Consolidated EBITDA for any
Four-Quarter Period which includes the Borrower's third fiscal
quarter of 1998, the Borrower shall include in the definition
of Consolidated Net Income in clause (i) above that portion of
the $135,000,000 worldwide restructuring charge against
earnings taken by the Borrower during the third fiscal quarter
of 1998 that does not constitute Consolidated Interest
Expense, taxes on income, depreciation or amortization in
clauses (ii) through (v) above.
(c) Section 1.1 of the Credit Agreement is hereby amended by
deleting in its entirety the definition of "Consolidated Fixed Charge
Ratio" and inserting in lieu thereof the following:
"Consolidated Fixed Charge Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter
Period ending on the date of computation thereof, the ratio of
(i) Consolidated EBITDA plus Consolidated Lease Expense for
such period, to (ii) Consolidated Fixed Charges for such
period.
(d) Section 1.1 of the Credit Agreement is hereby amended by
inserting in the proper alphabetical order the following definition of
"Consolidated Lease Expense":
"Consolidated Lease Expense" means, with respect to
any period of computation thereof, the gross expense related
to or arising out of the leases of the Borrower and its
Subsidiaries for such period, whether or not characterized as
rent, excluding expenses in respect of Capital Leases
constituting Indebtedness, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
(e) Section 1.1 of the Credit Agreement is hereby amended by
deleting in its entirety the definition of "Total Revolving Credit
Commitment" and inserting in lieu thereof the following:
"Total Revolving Credit Commitment" means a principal
amount equal to $45,000,000, as reduced from time to time in
accordance with Section 2.7 hereof.
(f) Section 8.1(a) of the Credit Agreement is hereby deleted
in its entirety and the following new Section 8.1(a) is inserted in
replacement thereof:
(a)Consolidated Leverage Ratio. Permit at any time
during any Four-Quarter Period of the Borrower, the
Consolidated Leverage Ratio to be greater than 3.00 to 1.00.
(g) Section 8.1(b) of the Credit Agreement is hereby deleted
in its entirety and the following new Section 8.1(b) is inserted in
replacement thereof:
(b)Consolidated Fixed Charge Ratio. Permit at any
time during any Four-Quarter Period of the Borrower the
Consolidated Fixed Charge Ratio to be less than 2.25 to 1.00.
(h)Section 8.1 of the Credit Agreement is hereby amended by
inserting the following new Section 8.1(e):
(e) Consolidated Cash and Eligible Securities. Permit
at any time the sum of cash and Eligible Securities of the
Borrower and its Subsidiaries on a consolidated basis to be
less than the sum of (i) Letter of Credit Outstandings, (ii)
Revolving Credit Outstandings and (iii) $30,000,000.00.
3. Representations and Warranties. In order to induce the Agent and the
Lender to enter into this Agreement, the Borrower represents and warrants to the
Agent and the Lenders as follows:
(a) The representations and warranties made by Borrower in
Article VI of the Credit Agreement are true and correct on and as of
the date hereof, except to the extent that such representations and
warranties expressly relate to an earlier date and except that the
financial statements referred to in Section 6.6(a) of the Credit
Agreement shall be deemed to be those financial statements most
recently delivered to the Agent and the Lenders pursuant to Section 7.1
of the Credit Agreement;
(b) There has been no material adverse change in the
condition, financial or otherwise, of the Borrower and its
Subsidiaries, taken as a whole, since the date of the most recent
financial reports of the Borrower received by the Agent and the Lenders
under Section 7.1(a) of the Credit Agreement, other than changes in the
ordinary course of business;
(c) The business and properties of the Borrower and its
Subsidiaries, taken as a whole, are not, and since the date of the most
recent financial report of the Borrower and its Subsidiaries received
by the Agent and the Lenders under Section 7.1(a) of the Credit
Agreement, have not been, adversely affected in any substantial way as
the result of any fire, explosion, earthquake, accident, strike,
lockout, combination of workers, flood, embargo, riot, activities of
armed forces, war or acts of God or the public enemy, or cancellation
or loss of any major contracts; and
(d) No event has occurred and is continuing which constitutes,
and no condition exists which upon the consummation of the transaction
contemplated hereby would constitute, a Default or an Event of Default
on the part of the Borrower under the Credit Agreement.
4. Conditions To Close. The effectiveness of this Amendment Agreement
is subject to the following:
(a) The Agent shall have received seven (7) counterparts of
this Amendment Agreement complete with all addenda and duly executed by
all signatories hereto; and
(b) The Lenders shall have each received payment of a fee
equal to 0.05% of the Total Revolving Credit Commitment, after giving
effectiveness to this Amendment Agreement.
5. Entire Agreement. This Agreement sets forth the entire understanding
and agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter.
6. Full Force and Effect of Agreement. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all other Letter of
Credit Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms.
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.
8. Governing Law. This Agreement shall in all respects be governed by
the laws and judicial decisions of the State of New York.
9. Enforceability. Should any one or more of the provisions of this
Agreement be determined to be illegal or unenforceable as to one or more of the
parties hereto, all other provisions nevertheless shall remain effective and
binding on the parties hereto.
10. Credit Agreement. All references in any of the Loan Documents to
the Credit Agreement shall mean the Credit Agreement as amended hereby.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
BORROWER:
DATA GENERAL CORPORATION
By: /s/ Xxxxxx X. XxXxxxx
Name: Xxxxxx X. XxXxxxx
Title: Vice President; Treasurer
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION, as Agent for the
Lenders
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Senior Vice President
LENDERS:
NATIONSBANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Judge
Name: Xxxxx X. Judge
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
