EXHIBIT 10(F)(4)
AMENDMENT NO. 3
TO CREDIT AGREEMENT
AMENDMENT NO. 3 (the "AMENDMENT") dated as of April 19, 2000 to the Credit
Agreement dated as of October 11, 1996, as amended by Amendment No. 1 dated as
of October 24, 1997 and Amendment No. 2 dated as of October 31, 1999 (the
"CREDIT AGREEMENT"), among AEP INDUSTRIES INC. (the "COMPANY"), the ELIGIBLE
SUBSIDIARIES referred to therein, the BANKS party thereto (the "BANKS"), the
LETTER OF CREDIT ISSUING BANKS party thereto and XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent (the "AGENT").
W I T N E S S E T H:
WHEREAS, the parties named above have heretofore entered into the Credit
Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement to change
the pricing, financial covenants, mandatory prepayments provision and assignment
provision, provide for collateral and make certain other changes (in each case,
as more fully set forth herein);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. DEFINED TERMS; REFERENCES. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as the provisions referred to herein are amended
hereby.
Section 2. AMENDMENT OF SECTION 1.1. (a) The definition of "Consolidated
Interest Expense" is amended to read in its entirety as follows:
"Consolidated Interest Expense" means, for any period, the interest
expense of the Company and its Consolidated Subsidiaries determined on a
consolidated basis for such period (excluding, to the extent reflected
therein, fees paid on or before the Closing Date in connection with the
Agreement and fees paid as a condition to the effectiveness of Amendment
No. 1 and Amendment No. 3 thereto).
(b) The definition of "Excluded Sale" is amended to replace the
number "$75,000,000" with the number "$50,000,000" and to replace the
words ", the aggregate fair market value of which dispositions under
(y) does not exceed $50,000,000" with the words "(other than
Hitachi-Xxxxxx Chemical Products Inc.),".
(c) The definition of "Permitted Disposition" is amended to read in
its entirety as follows:
"Permitted Disposition" means the disposition of Xxxxxx Chimie S.A.; the
rigid plastic packaging materials business; and the Asia-Pacific
businesses (other than Hitachi-Xxxxxx Chemical Products Inc.), which are
comprised of Xxxxxx (NZ) Limited and assets transferred to the Company by
Xxxxxx Australia (Pty.) Limited.
(d) The following definitions are added to Section 1.1 in the
appropriate alphabetical order:
"Domestic Subsidiary" means any Subsidiary which is not a Foreign
Subsidiary.
"Foreign Subsidiary" means a Subsidiary organized under the laws of a
jurisdiction, and conducting substantially all of its operations, outside
the United States, other than any such
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entity that is (whether as a matter of law, pursuant to an election by
such entity or otherwise) treated as a partnership in which the Company
or any Subsidiary party to a Security Document (a "Credit Party") is a
partner or as a branch of any Credit Party for United States income tax
purposes.
Section 3. AMENDMENT OF SECTIONS 2.1 AND 2.9. Each of Section 2.1(c) and
Section 2.9(a) is amended to replace the number "$5,000,000" with the number
"$1,000,000".
Section 4. AMENDMENT OF SECTION 2.6. Section 2.6(a) is amended to replace
the words "facility" and "Facility" with the words "commitment" and
"Commitment", respectively, and to restate clause (ii) thereof to read in its
entirety as follows:
(ii) from and including such date of termination of the Term
Commitments to but excluding the date of termination of the Working Capital
Commitments in their entirety, on the daily aggregate unused amount of the
Working Capital Commitments,
Section 5. AMENDMENT OF SECTION 2.8. Clause (i)(y) of Section 2.8(b) is
amended to read in its entirety as follows:
(y) prior to the Trigger Date, the Loans shall be prepaid within
90 days after the end of each fiscal year, commencing with the fiscal year
ended October 31, 2000, in an amount equal to 50% of the Excess Cash Flow
for such fiscal year
Section 6. AMENDMENT OF SECTION 5.1. (a) Clause (c) of Section 5.1 is
amended to renumber subclause "(ii)" as subclause "(iii)", and to add after the
word "statements" at the end of subclause (i) thereof the following:
, and describing any non-cash charges and extraordinary or other
non-recurring gain or loss reflected therein, (ii) setting forth in
reasonable detail the net book value of all receivables and inventory in
which the Agent has a perfected, first priority security interest,
(b) Clause (g) of Section 5.1 is amended to read in its entirety as
follows:
(g) within 30 days after the end of each fiscal year of the Company,
a detailed budget for the current fiscal year (including a projected
consolidated balance sheet and related statements of projected income and
cash flow as of the end of and for such fiscal year and setting forth the
assumptions used in preparing such budget); and promptly upon the mailing
thereof to the shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so mailed;
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Section 7. AMENDMENT OF SECTION 5.11. The table set forth in Section 5.11 is
amended to read in its entirety as follows:
PERIOD RATIO
------ --------
November 1, 1996 through January 31, 1997................... 4.75:1
February 1, 1997 through April 30, 1997..................... 4.375:1
May 1, 1997 through July 31, 1997........................... 4.95:1
August 1, 1997 through January 31, 1998..................... 5.75:1
February 1, 1998 through April 30, 1998..................... 5.5:1
May 1, 1998 through July 31, 1998........................... 5.25:1
August 1, 1998 through January 31, 1999..................... 5.0:1
February 1, 1999 through April 30, 1999..................... 4.75:1
May 1, 1999 through July 31, 1999........................... 4.5:1
August 1, 1999 through January 31, 2000..................... 4.25:1
February 1, 2000 through July 31, 2000...................... 5.5:1
August 1, 2000 through October 31, 2000..................... 5.15:1
November 1, 2000 through January 31, 2001................... 5.0:1
February 1, 2001 through April 30, 2001..................... 4.5:1
May 1, 2001 through July 31, 2001........................... 4.25:1
August 1, 2001 through October 31, 2001..................... 4.0:1
November 1, 2001 through April 30, 2002..................... 3.75:1
Thereafter.................................................. 3.5:1
Section 8. AMENDMENT OF SECTION 5.12.. The table set forth in
Section 5.12 is amended to read in its entirety as follows:
PERIOD RATIO
------ --------
November 1, 1996 through January 31, 1997................... 1.75:1
February 1, 1997 through April 30, 1997..................... 1.875:1
May 1, 1997 through July 31, 1997........................... 1.75:1
August 1, 1997 through January 31, 1998..................... 1.15:1
February 1, 1998 through April 30, 1998..................... 1.2:1
May 1, 1998 through July 31, 1998........................... 1.3:1
August 1, 1998 through January 31, 1999..................... 1.4:1
February 1, 1999 through April 30, 1999..................... 1.5:1
May 1, 1999 through July 31, 1999........................... 1.6:1
August 1, 1999 through January 31, 2000..................... 1.65:1
February 1, 2000 through July 31, 2000...................... 1.15:1
August 1, 2000 through January 31, 2001..................... 1.25:1
February 1, 2001 through July 31, 2001...................... 1.35:1
August 1, 2001 through October 31, 2001..................... 1.5:1
November 1, 2001 through April 30, 2002..................... 1.8:1
Thereafter.................................................. 1.85:1
Section 9. AMENDMENT OF SECTION 5.17. Section 5.17 is amended to read in its
entirety as follows: SECTION 5.17. SECURITY INTEREST. (a) The Company shall
grant, and shall cause each of its Domestic Subsidiaries to grant, a security
interest in substantially all of (x) its receivables and inventory located in
the United States and Canada and (y) all shares of stock or other equity
interests owned by it (other than equity interests in Foreign Subsidiaries, with
respect to which a security interest will be granted in 66% of all equity
interests in Foreign Subsidiaries which are Material Subsidiaries), in favor of
the Agent, and shall duly authorize, execute and deliver, and shall cause each
of its Domestic Subsidiaries to duly authorize, execute and deliver, Security
Documents (and, in the case of such Domestic
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Subsidiaries, guaranties) and legal opinions relating thereto satisfactory in
form and substance to the Agent to grant, create and maintain a first priority
security interest (subject, where appropriate, to Liens permitted by
Section 5.9) under United States and Canadian federal, state and local law (and,
in the case of such foreign equity interests, relevant foreign law) in favor of
the Banks in such assets (and, in the case of such Domestic Subsidiaries, to
guarantee the Company's obligations hereunder and under the Notes) as promptly
as practicable and in any event by no later than July 19, 2000. Any Lien granted
pursuant to a Security Document shall be deemed to be permitted under
Section 5.9.
(b) Notwithstanding anything to the contrary in this Section, if the
Agent shall determine, upon the request of the Company, that satisfaction
of any or all of the Company's obligations under this Section with
respect to equity interests in Foreign Subsidiaries is impossible,
impractical or unreasonably burdensome, whether for legal, tax, cost or
other reasons, the Agent may, in its good faith discretion, consent to a
waiver of any or all of such obligations with respect to any such Foreign
Subsidiary.
Section 10. AMENDMENT OF SECTION 11.6. Section 11.6(c) is amended to replace
the phrase "(equivalent to initial Commitments aggregating not less than
$10,000,000)" with the phrase "(in an aggregate amount of at least $2,500,000)".
Section 11. AMENDMENT OF PRICING SCHEDULE.. The Pricing Schedule is amended
to read in its entirety as set forth in the attached Pricing Schedule.
Section 12. AMENDMENT OF EXHIBIT D. Section 3 of Exhibit D is amended to
replace "facility" with "commitment".
Section 13. REPRESENTATIONS OF COMPANY. The Company represents and warrants
that (i) the representations and warranties of the Company set forth in
Article 4 of the Credit Agreement will be true and correct on and as of the
Amendment Effective Date (as defined below) and (ii) no Default will have
occurred and be continuing on each such date.
Section 14. GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
Section 15. COUNTERPARTS.. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 16. EFFECTIVENESS.. This Amendment shall become effective as of the
date hereof on the date (the "Amendment Effective Date") when the Agent shall
have received (i) from each of the Company and the Required Banks a counterpart
hereof signed by such party or facsimile or other written confirmation (in form
satisfactory to the Agent) that such party has signed a counterpart hereof (each
such counterpart or confirmation, a "Signature"), (ii) an opinion of Warshaw,
Burstein, Xxxxx, Xxxxxxxxxxx & Kuh, LLC, counsel for the Company (or such other
counsel for the Company as may be acceptable to the Agent), substantially to the
effect of Exhibit B to the Credit Agreement with reference to this Amendment and
the Credit Agreement as amended hereby, (iii) for the account of each Bank from
which the Agent has received a Signature no later than 5:00 P.M. (New York City
time) on April 19, 2000, payment of a fee of .25% of the sum of such Bank's Term
Loans and Working Capital Commitments, and (iv) from the Company, a completed
perfection certificate (in the form previously provided by the Agent to the
Company) relating to receivables and inventory of the Company and its Domestic
Subsidiaries located in the United States and Canada.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
AEP INDUSTRIES INC.
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------------
Title: Vice President Treasurer
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK.
By: /s/ XXXXXXX XXXXX
-----------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ XXXXXXX XXXX
-----------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ XXXXX X. XXXXX
-----------------------------------------
Title: Managing Director
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By: /s/ W. A. XXXXXXXX
-----------------------------------------
Title: Vice President
CIBC INC.
By: /s/ XXXXXXX XXXXXX
-----------------------------------------
Title: Executive Director
CIBC World Markets Corp.
As Agent
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CREDIT LYONNAIS NEW YORK BRANCH
By:
-----------------------------------------
Title:
FLEET BANK, N.A.
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------------
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ J. XXXXXXX XXXXXX
-----------------------------------------
Title: Senior Vice President
ROYAL BANK OF CANADA
By: /s/ XXXXXX X. XXXXX
-----------------------------------------
Title: Manager
SOCIETE GENERALE NEW YORK BRANCH
By: /s/ XXXXX XXXXXX
-----------------------------------------
Title: Managing Director
ABN AMRO BANK N.V.
NEW YORK BRANCH
By: /s/ XXXXXXX XXXXXX
-----------------------------------------
Title: Group Vice President
By: /s/ XXXXXXXX XXXXXXX
-----------------------------------------
Title: Assistant Vice President
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XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
By: /s/ XXXXXX XXXXXXXXX
-----------------------------------------
Title: Director
PARIBAS
By: /s/ XXXXX XXXXXXXXX
-----------------------------------------
Title: Vice President
By: /s/ XXXXX X. MARCH
-----------------------------------------
Title: Assistant Vice President
BANCA COMMERCIALE ITALIANA
NEW YORK BRANCH
By:
-----------------------------------------
Title:
By:
-----------------------------------------
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By: /s/ XXXXXXXXXXX XXXXX
-----------------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ XXXXXXX X. XXXX
-----------------------------------------
Title: Vice President
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THE FUJI BANK, LIMITED
By: /s/ XXXX XXXXX
-----------------------------------------
Title: Vice President
THE SAKURA BANK, LIMITED
NEW YORK BRANCH
By: /s/ XXXXXX XXXXXX
-----------------------------------------
Title: General Manager
Americas Bkg. Div.
SANPAOLO IMI S.P.A.
By: /s/ XXXXX XXXXXXX
-----------------------------------------
Title: Deputy General Manager
By: /s/ XXXXXX XXXXXXX
-----------------------------------------
Title: First Vice President
STB DELAWARE FUNDING TRUST I
By: /s/ XXXXXX HARGDON
-----------------------------------------
Title: Assistant Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ XXXXX XXXXXX
-----------------------------------------
Title: Senior Vice President
SUMMIT BANK
By: /s/ XXXXXX XXXXX
-----------------------------------------
Title: Vice President
00
XXXXXXXXXXXX XXXXXXXXXX
XXXXXXXXXXXX XXX XXXX BRANCH
By: /s/ XXXX X. XXXXXX
-----------------------------------------
Title: Associate Director
By: /s/ XXXXX X. XXXXXX
-----------------------------------------
Title: Manager
EUROPEAN AMERICAN BANK
By: /s/ XXXXXX XXXXXXX
-----------------------------------------
Title: Assistant Vice President
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PRICING SCHEDULE
Each of "Euro-Dollar Margin", "Base Rate Margin", "Commitment Fee Rate" and
"LC Fee Rate" means, for any date, the rates set forth below in the row opposite
such term and in the column corresponding to the "Pricing Level" that applies at
such date:
Euro-Dollar Margin................. 1.25% 1.75% 2.25% 2.50% 2.75% 3.00%
Base Rate Margin................... 0.25% 0.75% 1.25% 1.50% 1.75% 2.00%
LC Fee Rate........................ 1.25% 1.75% 2.25% 2.50% 2.75% 3.00%
Commitment Fee Rate................ .50% .50% .50% .50% .50% .50%
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies at any date after January 31, 2001 if the Cash
Flow Ratio in effect on such date is equal to or less than 2.5:1.
"Level II Pricing" applies at any date after January 31, 2001 if (i) the
Cash Flow Ratio in effect on such date is equal to or less than 3.0:1 and
(ii) Level I Pricing does not apply.
"Level III Pricing" applies at any date after January 31, 2001 if (i) the
Cash Flow Ratio in effect on such date is equal to or less than 3.5:1 and
(ii) neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies at any date after January 31, 2001 if (i) the
Cash Flow Ratio in effect on such date is equal to or less than 4.0:1 and
(ii) none of Level I Pricing, Level II Pricing and Level III Pricing applies.
"Level V Pricing" applies at any date after January 31, 2001 if (i) the Cash
Flow Ratio in effect on such date is equal to or less than 4.5:1 and (ii) none
of Level I Pricing, Level II Pricing, Level III Pricing and Level IV Pricing
applies.
"Level VI Pricing" applies at any date if, on such date, no other Pricing
Level applies.
"Pricing Level" refers to the determination of which of Level I, Level II,
Level III, Level IV, Level V or Level VI Pricing applies at any date.
The Cash Flow Ratio used to determine Pricing Levels shall be the Cash Flow
Ratio shown in the most recent certificate required to have been delivered
pursuant to Section 5.1(c)(i). Each Cash Flow Ratio so determined shall be in
effect for all Loans made more than five days after such certificate is received
by the Agent and less than six days after the next such certificate is delivered
to the Agent; provided that if a certificate has not been delivered when
required pursuant to Section 5.1(c)(i) and such requirement has not been waived
by the Required Banks, Level VI Pricing shall apply to all Loans made more than
five days after the date by which such certificate was required to have been
delivered and less than six days after the next date a required certificate is
actually delivered to the Agent.
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