AMENDMENT Exhibit 4.2.4
DATED AS OF JANUARY 1, 1996
TO
CREDIT AND SECURITY AGREEMENT
DATED AS OF NOVEMBER 30, 1992
Reference is hereby made to that certain Credit and Security
Agreement ("Credit Agreement") dated as of November 30, 1992 among
Principal Mutual Life Insurance Company, Aetna Life Insurance
Company, The Northwestern Mutual Life Insurance Company, Chemical
Bank, Seattle-First National Bank and Bank of America Oregon, and
WTD Industries, Inc. and its Affiliates and the Term Notes issued
by the Borrowers in connection with the Credit Agreement.
Capitalized terms used herein shall have the same meaning ascribed
thereto in the Credit Agreement.
The Term Note originally issued to Aetna Life Insurance
Company was split into two Notes which were sold to Franklin
Principal Maturity Trust ("Franklin") and Foothill Group, Inc. The
Term Notes originally issued to Chemical Bank, Seattle-First
National Bank, and Bank of America Oregon were sold to Xxxxxxxxxxx
& Co., Inc. ("Xxxxxxxxxxx"). The Franklin note is now held by Bank
of America Illinois, ("Bank of America").
The Credit Agreement is hereby modified as follows:
1. Credit Agreement Section 6.01.C is hereby restated to
read as follows:
C. Collateral Coverage Ratio. Maintain a ratio of
Borrower's Current Collateral to the outstanding balance of
the Term Loan (the "Collateral Ratio"), not less than the
Collateral Ratio set forth below, at all times during the
periods set forth below:
Period Collateral Ratio
---------------- --------------------
Effective Date through 4/30/95 0.55 (55%)
5/1/95 through 12/31/95 0.60 (60%)
1/1/96 through 2/29/96 0.54 (54%)
3/1/96 through 3/31/96 0.55 (55%)
4/1/96 through 6/30/96 0.56 (56%)
7/1/96 through 4/30/98 0.60 (60%)
5/1/98 and beyond 0.65 (65%)
As used herein, "Current Collateral" means for Borrowers, on
a consolidated basis, all in accordance with GAAP, (i) all Current
Assets, less (ii) the sum of (x) Borrower's current assets which
are classified on Borrowers' consolidated balance sheet as "prepaid
expenses", excluding the amount of interest prepaid on the Term
Notes, and otherwise included in prepaid expenses, (y) Borrowers'
current liabilities which are classified on Borrowers' consolidated
balance sheet as "accounts payable", and (z) all of Borrowers'
current liabilities which are classified on Borrowers' consolidated
balance sheet as "timber contracts payable."
2. Credit Agreement Section 6.01.D is hereby restated to
read as follows:
D. Tangible Net Worth. Maintain a positive Tangible Net
Worth of not less than the respective amount set forth below,
at all times during the periods set forth below:
Period Tangible Net Worth
--------------- --------------------
Effective Date through 7/31/93 $ 6.5 Million
8/1/93 through 4/30/94 $ 8.0 Million
5/1/94 through 4/30/95 $10.0 Million
5/1/95 through 10/31/95 $15.0 Million
11/1/95 through 12/31/95 $13.5 Million
1/1/96 through 6/30/96 $11.0 Million
7/1/96 through 4/30/98 $15.0 Million
5/1/98 through 4/30/99 $20.0 Million
5/1/99 and beyond $25.0 Million
3. Credit Agreement Section 6.01.G is hereby restated to
read as follows:
G. Minimum Cumulative Adjusted EBITDA. Maintain a
minimum EBITDA (calculated from and including the first day of
the first calendar month following the Effective Date) minus
(a) actual Capital Expenditures, minus (b) Timber and
Timberlands Expenditures Non-Current, of not less than the
respective amount set forth below, at all times during the
periods set forth below:
Period Millions of Dollars
---------------- ---------------------
Effective Date through 4/30/93 0
5/1/93 through 7/31/93 2
8/1/93 through 1/31/94 5
2/1/94 through 7/31/94 10
8/1/94 through 12/31/95 20
1/1/96 through 6/30/96 19
7/1/96 through 4/30/97 27.5
5/1/97 through 4/30/98 35
5/1/98 through 4/30/99 50
5/1/99 through 4/30/00 65
5/1/00 and beyond 80
4. Credit Agreement Section 6.01.I is hereby restated to
read as follows:
I. Total Liabilities Ratio. Maintain a ratio of
Borrowers' Total Liabilities to Total Assets (the "Liabilities
Ratio"), not greater than the Liabilities Ratios set forth
below, at all times during the periods set forth below:
Period Liabilities Ratio
----------------- -------------------
Effective Date through 7/31/94 0.95 (95%)
8/1/94 through 4/30/95 0.90 (90%)
5/1/95 through 12/31/95 0.85 (85%)
1/1/96 through 6/30/96 0.87 (87%)
7/1/96 through 4/30/98 0.85 (85%)
5/1/98 through 4/30/99 0.80 (80%)
5/1/99 and beyond 0.70 (70%)
5. Credit Agreement Section 6.01.J is hereby restated to
read as follows:
J. Minimum Working Capital. Maintain minimum working
capital, at all times during the periods set forth below,
calculated as Current Assets minus Current Liabilities;
provided, for the purpose of computing Current Assets under
this Section 6.01.J, the portion of Current Assets which
consists of Timber and Timberlands Current or contract rights
relating thereto shall be included only up to an amount equal
to (x) on or before January 31, 1993, forty-five percent (45%)
and (y) thereafter, forty percent (40%), of the amount of
Borrowers' overall Current Assets determined in accordance
with GAAP:
Period Millions of Dollars
-------------------- -----------------------
Effective Date through 12/31/95 25
1/1/96 through 6/30/96 19
7/1/96 and beyond 25
6. In all other respects, the Credit Agreement shall remain
unchanged and in full force and effect.
EFFECTIVE DATE: January 1, 1996.
PRINCIPAL MUTUAL LIFE THE NORTHWESTERN MUTUAL
INSURANCE COMPANY LIFE INSURANCE COMPANY
By:____________________________ By:____________________________
Its:___________________________ Its:___________________________
(Pro Rata Interest: 20.235984%)
By:____________________________
Its:___________________________ FOOTHILL GROUP, INC.
(Pro Rata Interest: 47.228439%)
By:____________________________
XXXXXXXXXXX & CO., INC. Its:___________________________
(Pro Rata Interest: 18.729872%)
By:___________________________
Its:__________________________ WTD INDUSTRIES, INC.
(Pro Rata Interest: 6.838639%)
By:____________________________
BANK OF AMERICA ILLINOIS Its:___________________________
By:___________________________
Its:__________________________
(Pro Rata Interest: 6.967066%)
