ELEVENTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
ELEVENTH AMENDMENT TO CREDIT AGREEMENT
This Eleventh Amendment to Credit Agreement (this “Amendment”) is entered into as of
September 15, 2008 by and among Xxxxxxx, Inc., a Delaware corporation (the “Funds
Administrator”) and the other borrowers under the Credit Agreement party hereto, each as a
debtor and debtor-in-possession (collectively, and together with the Funds Administrator, the
“Borrowers”), Deutsche Bank Trust Company Americas, as Administrative Agent, and the other
financial institutions party hereto.
RECITALS
A. The Funds Administrator, the Borrowers, the Administrative Agent and the Lenders are party
to that certain Credit Agreement dated as of February 26, 2008 (the “Credit Agreement”).
Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings
ascribed to them by the Credit Agreement.
B. The Funds Administrator, on behalf of itself and the Borrowers, the Administrative Agent
and the undersigned Lenders wish to amend the Credit Agreement on the terms and conditions set
forth below.
Now, therefore, in consideration of the mutual execution hereof and other good and valuable
consideration, the parties hereto agree as follows:
1. Amendments to Credit Agreement. Upon the Effective Date (as defined herein):
(a) Section 1.1 of the Credit Agreement shall be amended by
(i) adding the following proviso at the conclusion of clause (a) of the
definition of “Borrowing Base”:
“; provided, that in no event shall the amount calculated in (i) through (v)
above include amounts attributable to operations other than the PET Resin Business
in excess of the amount set forth opposite the relevant time period in the table
below:
Maximum Non-PET | ||||
Resin Business | ||||
Period | Borrowing Base Component | |||
September 30, 2008 to but excluding October 31,
2008 |
$ | 68,000,000 | ||
October 31, 2008 to but excluding November 30,
2008 |
$ | 41,200,000 | ||
November 30, 2008 to but excluding December 31,
2008 |
$ | 17,600,000 | ||
On or after December 31, 2008 |
$ | 0 |
(ii) adding the following definition of “Cash Liquidation Costs”
“”Cash Liquidation Costs” shall mean all expenditures specifically
related to the liquidation of the Borrowers’ polyester fiber and engineering resins
business with manufacturing facilities in Darlington, S.C. and Johnsonville, S.C.
respectively which shall be identified by a series of line items in the Cash Budget
indicating that they are part of the Cash Liquidation Costs”
(iii) adding the following definition of “Consolidated PET Resin Operating
Income”:
“”Consolidated PET Resin Operating Income” shall mean with respect to
any Person, for any period the aggregate of the net operating income (loss) of such
Person and its Subsidiaries for such period attributable to the PET Resin Business,
on a consolidated basis, determined in accordance with GAAP; provided, that (a) the
operating income of any other Person in which such Person or any of its Subsidiaries
has an interest (which interest does not cause the operating income of such other
Person to be consolidated with the operating income of such Person and its
Subsidiaries in accordance with GAAP) shall be included only to the extent of the
amount of dividends or distributions actually paid to such Person or such Subsidiary
by such other Person during such period; (b) the operating income of any Subsidiary
of such Person that is subject to any Payment Restriction shall be excluded to the
extent such Payment Restriction would prevent the payment of an amount that
otherwise could have been paid to such Person or to a Subsidiary of such Person not
subject to any Payment Restriction; and (c) there shall be excluded from
Consolidated PET Resin Operating Income:
(1) all gains and losses realized on the purchase or other acquisition by such
Person or any of its Subsidiaries of any Securities of such Person or any of its
Subsidiaries,
(2) all extraordinary gains and losses,
(3) all deferred financing costs written off or premiums paid in connection
with the early extinguishment of any Indebtedness, in each case, incurred by Xxxxxxx
or any of its Subsidiaries in connection with the Financing Transactions,
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(4) income or loss attributable to discontinued operations (including, without
limitation, operations disposed of during such period whether or not such operations
were classified as discontinued),
(5) in the case of a successor to the referent Person by consolidation or
merger or as transferee of the referent Person’s assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets, and
(6) the cumulative effect of a change in accounting principles.
(iv)
deleting the definition of ”Minimum Liquidity Availability” and replacing
it with the following:
“”Minimum Liquidity Availability” means $20,000,000.”
(v) deleting the definition of “EBITDA” and replacing it with the following
definition of “PET Resin EBITDA”:
“”PET Resin EBITDA” shall mean, with respect to any Person, for any
period, the result (without duplication) of:
(1) Consolidated PET Resin Operating Income; plus
(2) to the extent Consolidated PET Resin Operating Income has been
reduced thereby:
(a) all income taxes of such Person and its Subsidiaries paid or accrued
in accordance with GAAP for such period (other than income taxes attributable to
extraordinary gains or losses or non-recurring and non-operational charges or gains
other than restructuring charges);
(b) Consolidated Interest Expense;
(c) Consolidated Non-cash Charges;
(d) non-recurring fees, cash charges and other cash expenses made or
incurred in connection with the Transaction;
(e) cash charges for professional fees relating to the bankruptcy;
(f) Cash Liquidation Costs; and
(f) any impact from FIFO accounting.”
(vi) adding the following definition of “PET Resin Business”:
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“”PET Resin Business” means the operations of Funds Administrator and
its Subsidiaries related to the manufacture and sale of PET Resin.”
(vii) deleting the definition of “Total Commitments” and replacing it with the
following:
“”Total Commitments” shall mean the aggregate of the Commitments of all the
Lenders, which in the aggregate shall not exceed $170,000,000, and which in the
aggregate as of November 1, 2008 shall not exceed $120,000,000.
(b) deleting Section 7.1(g) of the Credit Agreement and replacing it with the
following:
“(g) within fifteen (15) days after the last day of each fiscal month, commencing
September 1, 2008, a report in the form of Exhibit K testing PET Resin EBITDA and
reconciling Capital Expenditures as of the last day of the applicable fiscal month;”
(c) The following is hereby added as Section 7.19 to the Credit Agreement:
“7.19 Borrowers shall cease purchasing raw materials related to their polyester
fiber and engineering resins business with manufacturing facilities in Darlington,
S.C. and Johnsonville, S.C. respectively no later than October 15, 2008.”
(d) Section 8.1 of the Credit Agreement is hereby amended by adding the following
sentence at the end thereof:
“Cash Liquidation Costs shall not exceed $14 million in the aggregate for the
period commencing September 15, 2008 and ending on December 1, 2008.”
(e) Section 8.2(a) of the Credit Agreement is deleted in its entirety and replaced with
the following:
“8.2(a) Minimum Monthly PET Resin EBITDA. The Borrowers shall not
permit PET Resin EBITDA for any calendar month to be less than the amount listed
below opposite such month:
Minimum Monthly | ||||
Applicable Month | PET Resin EBITDA | |||
September 2008
|
$ | 0 | ||
October 2008
|
$ | 2,000,000 | ||
November 2008
|
$ | 2,500,000 | ||
December 2008
|
$ | 3,000,000 | ||
January 2009
|
$ | 1,500,000 |
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(f) Section 9.1 of the Credit Agreement is amended by deleting Section (i)(xv) in its
entirety and replacing it with the following:
“(xv) The failure of the Borrowers (i) to have filed a
Reorganization Plan and a disclosure statement relating thereto by
September 16, 2008, (ii) to have obtained a binding commitment
without any due diligence or other similar contingencies in form and
substance reasonably satisfactory to the Majority Lenders to
backstop a rights offering or other similar commitment of not less
than $70 million in connection with such Reorganization Plan by
September 30, 2008 (iii) to have obtained a binding, fully
underwritten, commitment letter or letters to provide exit financing
which are not subject to syndication, due diligence, market material
adverse effect and/or other contingencies other than the delivery of
customary corporate and loan documentation or the occurrence of
confirmation of a Reorganization Plan, to provide the exit financing
and any other financial accommodations required to consummate the
Reorganization Plan described in (i), above, in form, substance and
amount reasonably satisfactory to the Majority Lenders by October 7,
2008, (iv) to have obtained entry of an order by the Bankruptcy
Court, in form and substance reasonably satisfactory to the Majority
Lenders, approving the disclosure statement described in (i), above,
by October 20, 2008, (v) to have provided documentation in
substantially final form relating to the rights offering, the exit
financing and any other financial accommodations required to
consummate the Reorganization Plan described in (i), above, in form
and substance reasonably satisfactory to the Majority Lenders by
October 31, 2008, (vi) to have obtained entry of an order by the
Bankruptcy Court, in form and substance reasonably satisfactory to
the Majority Lenders, confirming a Reorganization Plan by December
5, 2008 and (vii) to have caused to occur the Consummation Date by
December 10, 2008; or”;
(g) Annex I of the Credit Agreement is hereby deemed modified as of November 1, 2008 by
reducing the amount listed as the Commitment for each Lender by 5/17th of the amount
thereof.
(h) Exhibit K of the Credit Agreement is deleted and replaced with Exhibit K hereto.
2. Representations and Warranties of the Borrowers. The Borrowers represent and
warrant that:
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(a) The execution, delivery and performance by the Borrowers of this Amendment have
been duly authorized by all necessary corporate action and that this Amendment is a legal,
valid and binding obligation of the Borrowers enforceable against the Borrowers in
accordance with its terms, except as the enforcement thereof may be subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors’ rights generally;
(b) Each of the representations and warranties of the Borrowers contained in the Credit
Agreement (treating this Amendment as a Loan Document for purposes thereof) is true and
correct on and as of the date hereof as if made on the date hereof except to the extent any
such representation or warranty is stated to relate solely to an earlier date, in which case
such representation or warranty shall have been true and correct on and as of such earlier
date; and
(c) After giving effect to this Amendment, no Default or Event of Default has occurred
and is continuing.
3. Amendment Fee. Borrowers shall pay to the Agent, for the ratable benefit of the
Lenders, a fee in the amount of $450,000 (the “Amendment Fee”), which fee shall be fully
earned on the Effective Date of this Amendment and due and payable in accordance with the terms
hereof, shall be nonrefundable for any reason whatsoever and shall be in addition to any other
fees, costs or expenses payable pursuant to the Credit Agreement, the Fee Letter or any other Loan
Documents, including without limitation the fees payable under the joinder letter dated February
20, 2008. The Amendment Fee shall be paid to the Agent on the earliest to occur of December 10,
2008, the Facility Termination Date, and the Consummation Date.
4. Waiver. The Administrative Agent and the Lenders hereby waive any Default or Event
of Default that exists on the Effective Date due to the Borrowers’ inability to comply with Section
8.2(a) of the Credit Agreement for periods ending on or before August 31. 2008.
5. Cooperation Covenant. The Borrowers hereby agree that, upon the occurrence of an
Event of Default, the Borrowers shall fully cooperate with Agent and Lenders in connection with any
exercise of remedies by the Agent and Lenders, including without limitation the filing of a motion
to sell the Borrowers’ assets pursuant to section 363 of the Bankruptcy Code, the filing of a
Reorganization Plan, or the liquidation or other disposition of the Collateral, in each case on
such terms and conditions as are requested by Agent and Lenders.
6. Effective Date. This Amendment shall become effective on the date of the execution
and delivery hereof by the Funds Administrator on behalf of itself and the Borrowers, the
Administrative Agent and the Required Lenders (the “Effective Date”).
7. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically amended above, the Credit Agreement and the other Loan
Documents shall remain in full force and effect and are hereby ratified and confirmed.
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(b) The execution, delivery and effectiveness of this Amendment (i) shall not operate
as a waiver of any right, power or remedy of the Administrative Agent or any Lender under
the Credit Agreement or any Loan Document, nor constitute a waiver of any Default or
provision of the Credit Agreement or any Loan Document, except as specifically set forth
herein and (ii) shall not give rise to any obligation on the part of the Administrative
Agent or the Lenders to further modify or waive any term or condition of the Credit
Agreement or any of the other Loan Documents or give rise to any defenses or counterclaims
to the right of the Administrative Agent or the Lenders, subject to the terms hereof, to
enforce their rights and remedies under the Credit Agreement and the other Loan Documents.
Except as expressly limited herein, the Administrative Agent and the Lenders hereby
expressly reserve all of their rights and remedies under the Loan Documents and under
applicable law with respect to all existing and future Defaults. Upon the effectiveness of
this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”,
“hereof”, “herein” or words of similar import shall mean and be a reference to the Credit
Agreement as amended hereby.
(c) The parties acknowledge that this Amendment embodies the entire agreement and
understanding among the Borrowers, the Administrative Agent and the Lenders with respect to
the subject matter hereof and supersedes all prior discussions, agreements and
understandings among the Borrowers, the Administrative Agent and the Lenders relating to the
subject matter hereof.
8. Governing Law. This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
9. Headings. Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any other purposes.
10. Counterparts. This Amendment may be executed in any number of counterparts, each
of which when so executed shall be deemed an original but all such counterparts shall constitute
one and the same instrument.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first
above written.
[SIGNATURE PAGES FOLLOW]
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent, Collateral Agent and a Lender | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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JPMORGAN CHASE BANK, N.A. | ||||||
By: | ||||||
Name: | ||||||
Title: |
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GENERAL ELECTRIC CAPITAL CORPORATION | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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LASALLE BUSINESS CREDIT, LLC | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL) | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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XXXXX FARGO FOOTHILL, LLC | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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GMAC COMMERCIAL FINANCE LLC | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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XXXXXXX XXXXX CAPITAL | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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PNC BANK, NATIONAL ASSOCIATION | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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ALLIED IRISH BANK, PLC | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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XXXXXXX BUSINESS CREDIT CORPORATION | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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UPS CAPITAL CORPORATION | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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E*TRADE BANK | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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XXXXXXX, INC. | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | Chief Financial Officer | |||||
PRINCE, INC. | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | President | |||||
XXXXXXX OF MISSISSIPI, INC. | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | Vice President | |||||
CARPET RECYCLING OF GEORGIA, INC. | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | Vice President | |||||
ALG, INC. | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | President | |||||
FIBER INDUSTRIES, INC. | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | Vice President | |||||
PTA RESOURCES, LLC | ||||||
By: Name: |
/s/ Xxxxx X. Xxxxxxxx
|
|||||
Title: | Authorized Representative |
EXHIBIT K
FORM OF PET RESINS EBITDA REPORT
FORM OF PET RESINS EBITDA REPORT
Consolidated Net Income is defined as follows: |
||||
Consolidated net income during the measuring period excluding: |
$ | |||
all gains and losses realized on the purchase or other
acquisition by such Person or any of its Subsidiaries of
any Securities of such Person or any of its Subsidiaries |
||||
all extraordinary gains and losses |
||||
all deferred financing costs written off or premiums paid
in connection with the early extinguishment of any
Indebtedness, in each case, incurred by Xxxxxxx or any of
its Subsidiaries in connection with the Transactions |
||||
income or loss attributable to discontinued operations
(including, without limitation, operations disposed of
during such period whether or not such operations were
classified as discontinued) |
||||
in the case of a successor to the referent Person by
consolidation or merger or as transferee of the referent
Person’s assets, any earnings of such successor prior to
such consolidation, merger or transfer of assets |
||||
the cumulative effect of a change in accounting principles |
||||
Consolidated Net Income |
$ | |||
EBITDA is defined as follows: |
||||
Consolidated Net Income (from above) |
$ | |||
Plus: (in each case to the extent deducted in the calculation of
Consolidated Net Income, but without duplication): |
||||
all income taxes of such Person and its Subsidiaries paid
or accrued in accordance with GAAP for such period (other
than income taxes attributable to extraordinary gains or
losses or non-recurring and non-operational charges or
gains other than restructuring charges) |
||||
Consolidated Interest Expense |
||||
Consolidated Non-cash Charges |
||||
non-recurring fees, cash charges and other cash expenses
made or incurred in connection with the Transactions |
||||
EBITDA |
$ | |||
PET Resin EBITDA is defined as follows: |
||||
EBITDA (from above) |
$ | |||
Minus: Consolidated Net Income attributable to operations other than
the PET Resin Business |
$ | |||
Eleventh Amendment to Credit Agreement Signature Page
Minus: (in each case to the extent deducted in the calculation of
Consolidated Net Income attributable to operations other than the PET
Resin Business, but without duplication): |
||||
all income taxes of such Person and its Subsidiaries paid
or accrued in accordance with GAAP for such period (other
than income taxes attributable to extraordinary gains or
losses or non-recurring and non-operational charges or
gains other than restructuring charges) |
||||
Consolidated Interest Expense |
||||
Consolidated Non-cash Charges |
||||
non-recurring fees, cash charges and other cash expenses
made or incurred in connection with the Transactions |
||||
PET Resin EBITDA |
$ | |||
Minimum PET Resin EBITDA requirement for the end of the current
month, as set forth in Section 8.2(a) of the Credit Agreement |
$ | |||
In compliance? |
Yes/No |
Eleventh Amendment to Credit Agreement Signature Page