EXHIBIT 10.51
EIGHTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THE EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Eighth
Amendment") is made as of the 13th day of March, 1997 by and among Xxxxxx
Products Ltd., a Delaware corporation having its chief executive office at 000
XxXxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000 ("Borrower"), the lenders who are or
who may from time to time become signatories hereto ("Lenders") and Fleet
Capital Corporation, a Connecticut corporation having an office at 00000 Xxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000 ("FCC") which is the successor-in-interest to
Barclays Business Credit, Inc., as agent for the Lenders ("FCC," in such
capacity being "Agent").
W I T N E S S E T H:
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WHEREAS, FCC, as Agent and Lender, and Borrower entered into a certain
Loan and Security Agreement dated as of July 14, 1994 as amended by (i) a
certain First Amendment to Loan and Security Agreement ("First Amendment") dated
as of September 30, 1994 by and among Agent, Borrower and the lender signatories
thereto, (ii) a certain Second Amendment to Loan and Security Agreement ("Second
Amendment") dated as of October 20, 1994 by and among Agent, Borrower and the
lender signatories thereto. (iii) a certain First (sic) Amendment to Loan and
Security Agreement dated as of March 29, 1995 by and among Agent, Borrower and
the lender signatories thereto, (iv) a certain Fourth Amendment to Loan and
Security Agreement dated as of October 30, 1995 by and among Agent, Borrower and
the lender signatories thereto (v) a certain Fifth Amendment to Loan and
Security Agreement dated as of June 30, 1996 by and among Agent, Borrower and
the lender signatories thereto, (vi) a certain Sixth Amendment to Loan and
Security Agreement dated as of August 30, 1996 by and among Agent, Borrower and
the Lender signatories thereto and (iii) a certain Seventh Amendment to Loan and
Security Agreement dated as of October 22, 1996 by and among Agent, Borrower and
the Lender signatories thereto. Said Loan and Security Agreement, as amended
from time to time, is hereinafter referred to as the "Loan Agreement"; and
WHEREAS, Borrower, Lenders and Agent desire to amend and modify certain
provisions of the Loan Agreement.
NOW THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Lenders and Agent to Borrower, the parties hereto hereby agree
as follows:
1. Definitions. Except as otherwise specifically provided for herein,
all capitalized terms used herein without definition shall have the meanings
given to them in the Loan Agreement.
2. Amended Definitions. The definitions of "Borrowing Base", "Interest
Coverage Ratio", "Interest Rate Coverage Ratio and 'Letter of Credit" contained
in Section 1.1 of the Loan Agreement are hereby deleted and the following are
inserted in their stead:
"1.1 Defined Terms. When used herein, the following terms
shall have the following meanings (terms defined in the singular to
have the same meaning when used in the plural and vice versa):
* * *
"Borrowing Base" - as at any date of determination thereof, an amount
equal to the lesser of:
(a) the Maximum Revolving Credit Loan: and
(b) an amount equal to:
(i) eighty-five percent (85%) or such lesser percentage as
Agent in its reasonable discretion deems appropriate, of the net amount of
Eligible Accounts outstanding at such date:
PLUS
(ii) the lesser of (A) Thirty-Five Million Dollars
($35,000,000) for the period from October 30, 1995 to and including February 27,
1997 and Forty Million Dollars ($40,000,000) for the period from February 28,
1997 to and including the Commitment Termination Date and (B) the Inventory
Percentage of the value of Eligible Inventory at such date consisting of raw
materials and finished goods, calculated on the basis of the lower of cost or
market, as determined by Agent, in its reasonable discretion, on a first-in,
first-out ("FIFO") basis:
MINUS (subtract from the lesser of clauses (a) and (b) above)
(c) an amount equal to the sum of (A) the face amount of all LC
Guaranties and Letters of Credit issued by Agent or Bank and outstanding at such
date, plus (B) any amounts which Agent and/or Lenders may then be obligated to
pay for the account of Borrower under this Agreement.
For purposes hereof, the net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts less any and all returns,
rebates, discounts (which if granted outside the ordinary course of business as
in effect on the Closing Date, may, at Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time, all as determined by Agent in the reasonable
exercise of its discretion.
* * *
Interest Coverage Ratio - with respect to any fiscal period, the ratio
of Borrower's (a) net income before interest, income tax expense, depreciation
expense, amortization expense, any gain or loss (in excess of $40,000 within the
immediately previous twelve month period) from the sale of assets outside the
ordinary course of business and any charge or expense to net income (in an
amount not to exceed $5,500,000 in total for fiscal year 1996 and beyond) in
respect to the restructuring of Borrower for or taken within such period to (b)
Borrower's interest expense for such period.
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* * *
Interest Rate Coverage Ratio - with respect to any fiscal period, the
ratio of Borrower's (a) net income before interest, income tax expense, any gain
or loss (in excess of $40,000 within the immediately previous twelve month
period) from the sale of assets outside the ordinary course of business and any
charge or expense to net income (in an amount not to exceed $5,500,000 in total
for fiscal year 1996 and beyond) in respect to the restructuring of Borrower for
or taken within such period to (b) Borrower's interest expense for such period.
* * *
Letter of Credit - a standby or commercial letter of credit at any time
issued by Agent or Bank for the account of Borrower."
* * *
3. Total Indebtedness and Capital Expenditures. Sections 9.2(C) and
9.2(L) of the Loan Agreement are hereby deleted and the following are inserted
in their stead:
"9.2. Negative Covenants. During the Term of this Agreement,
and thereafter for so long as there are any Obligations to Agent or any
Lender, Borrower covenants that, unless Required Lenders have first
consented thereto in writing, it will not:
* * *
(C) Total Indebtedness. Create, incur, assume, or suffer to exist, or
permit any Subsidiary to create, incur or suffer to exist, any Indebtedness,
except: (i) Obligations owing to Agent and Lenders: (ii) Indebtedness of any
Subsidiary to Borrower: (iii) accounts payable to trade creditors which are not
more than thirty (30) days past due and current operating expenses (other than
for Money Borrowed) which are not more than thirty (30) days past due, in each
case incurred in the ordinary course of business and paid within such time
period, unless the same are actively being contested in good faith and, if
appropriate, by lawful proceedings and the Borrower shall have set aside such
reserves, if any, with respect thereto as are required by GAAP and deemed
adequate by Borrower and, in respect to reserves contained on year-end
statements, its independent accountants: (iv) obligations to pay Rentals
permitted by Section 9.2(X): (v) Permitted Purchase Money Indebtedness: (vi)
contingent liabilities arising out of endorsements of checks and other
negotiable instruments for deposit or collection in the ordinary course of
business; (vii) Indebtedness to Agent, any Lender or any Affiliate of either
under any interest rate hedging, swap, cap or similar agreement between Borrower
and such Person: (viii) obligations under Capitalized Leases to the extent not
prohibited by any other section of this Section 9.2: (ix) Indebtedness for
deferred compensation owed by Borrower to its highly compensated
employees;(x)Indebtedness arising in connection with employee benefit plans
entered into or incurred in the ordinary course of business: (xi) Indebtedness
for Money Borrowed arising out of or in connection with the existing Industrial
Revenue Bonds secured by a Lien on Borrower's facility in Oshkosh, Wisconsin and
by certain Equipment of
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Borrower located in Oshkosh, Wisconsin and Borrower's Distribution Centers;
(xii) Indebtedness for deferred taxes; and (xiii) Indebtedness not included in
paragraphs (i) through (xii) above which does not exceed at any time, in the
aggregate, the sum of One Million Five Hundred Thousand Dollars ($1,500,000).
* * *
(L) Capital Expenditures. Make Capital Expenditures which, in the
aggregate, as to Borrower and its Subsidiaries, exceed, (i) during any fiscal
year of Borrower (other than fiscal year 1997) Five Million Dollars ($5,000,000)
or (ii) during fiscal year 1997 of' Borrower Six Million Dollars ($6,000,000)."
* * *
4. Specific Financial Covenants. Section 9.3(C) of the Loan Agreement
is hereby deleted and the following is inserted in its stead:
"9.3. Specific Financial Covenants. During the Term of this
Agreement, and thereafter for so long as there are any Obligations to
Agent or any Lender, Borrower covenants that, unless otherwise
consented to by Required Lenders in writing, it shall:
* * *
(C) Interest Coverage Ratio. Have at the end of each fiscal quarter of
Borrower within the Term hereof commencing with the fiscal quarter ending
September 30, 1994, an Interest Coverage Ratio for the twelve consecutive months
then ended equal to or greater than the Interest Coverage Ratio set forth
opposite such fiscal quarter in the following schedule:
Interest Coverage
Fiscal Quarter Ending Ratio
--------------------- -----
Fiscal Quarters Ending on or
Prior to March 30, 1995 1.30 to 1
June 30, 1995 1.30 to 1
September 30, 1995 .90 to 1
December 31, 1995 1.00 to 1
March 31, 1996 .80 to 1
June 30, 1996 .95 to 1
September 30, 1996 1.60 to 1
December 31, 1996 2.20 to 1
March 31 1997 2.75 to 1
June 30,1997 and each
Fiscal Quarter thereafter 2.75 to l
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* * *
5. Notices. Section 13.10 (A) and (B) are hereby deleted and the
following are inserted in its stead:
(A) If to Agent: Fleet Capital Corporation
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopier No.: (000) 000-0000
With a copy to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxx
Telecopier No.: (000) 000-0000
(B) If to Borrower: Xxxxxx Products Ltd.
000 XxXxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Vice President and
Chief Financial Officer
Telecopier No.: (000) 000-0000
With a copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Financial Centre
000 Xxxx Xxxx Xxxxxx
Post Office Box 6760
Stamford, CT 06904-8274
Attention: Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
6. Continuing Effect. Except as otherwise specifically set out herein,
the provisions of the Loan Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, this Eighth Amendment has been duly executed as of
the day and year specified at the beginning hereof.
XXXXXX PRODUCTS LTD.
("Borrower")
By: /s/ Xxxx X. Xxxxxx
_________________________________________
Name: Xxxx X. Xxxxxx
Title: Treasurer, Assistant Secretary
FLEET CAPITAL CORPORATION
("Agent" and "Lender")
By: /s/ Xxxxxx Xxxxx
_________________________________________
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX TRUST AND SAVINGS BANK
("Lender")
By: /s/ Xxx X. Xxxxxxxxxx
_________________________________________
Name:
Title:
BANK OF AMERICA ILLINOIS
("Lender")
By: /s/ Xxxxxxxx X. Xxxxxx
_________________________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
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