Exhibit 10.10
Waiver and Amendment to Credit Agreement
This waiver and amendment to credit agreement (this "Amendment")
is entered into as of October 29, 1999, by and among Xxxxxx, Inc.
a Colorado corporation (the "Company"), Botanicals International,
Inc., a Delaware corporation, ZetaPharm, Inc., a New York
corporation, and Xxxxxxx Laboratories, Inc., a Massachusetts
corporation (collectively, the "Borrowers"), and Xxxxx Fargo Bank
N.A. (the "Lender").
Recitals
Whereas, the Borrowers are currently indebted to the Lender
pursuant to the terms and conditions of that certain Credit
Agreement dated as of June 11, 1999 (the "Agreement"); and
Whereas, the Lender has agreed to waive compliance by the
Borrowers with certain provisions of the Agreement, and the
Lender and the Borrowers have agreed to certain changes in the
terms and conditions set forth in the Agreement and have agreed
to amend the Agreement to reflect the changes.
Now, therefore, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree to the following waivers and that the Agreement shall be
amended as follows:
1.Section 1.01 of the Agreement is amended by deleting entirely
the defined term "Consolidated Funded Indebtedness" and replacing
it with the following new definition:
"'Consolidation Funded Indebtedness' means, as of the date of
determination, (i) all Indebtedness of the Company and its
Subsidiaries, determined on a consolidated basis in accordance
with GAAP, that by its terms matures more that one year after the
date of calculation and (ii) any such Indebtedness maturing
within one year from such date that is renewable or extendable
at the option of the obligor to a date more than one year from
such date."
2.Section 1.01 of the Agreement is further amended by inserting
between the defined terms "Total Expense" and "Transactions" the
following additional defined term:
"'Totals Liabilities' means, at any time, all liabilities of the
Borrowers which would be construed as such in accordance with
GAAP, excluding (i) Indebtedness which is subordinated to the
Obligations to the Lender under a subordination agreement in form
and substance acceptable to the Lender or by subordination
language acceptable to the Lender in the instrument evidencing
such Indebtedness, and (ii) indebtedness for accounts payable and
borrowed money due to Affiliates."
3.Section 2.11(a) of the Agreement is amended as follows:
A. Clause (i) of Section 2.11(a) is amended by deleting entirely
the provisions thereof and replacing them with the following:
"(i) Base Rate Term Loan Borrowing shall bear interest at the
Base Rate;"
B. Clause (ii) of Section 2.11(a) is amended by deleting entirely
the provisions thereof and replacing them with the following:
"(ii) LIBOR Term Loan Borrowing shall bear interest at the LIBOR
Rate for the Interest Period in effect for such Borrowing plus
a margin of two and twenty one-hundredths of one percent
(2.20%)."
C. Clause (iii) of Section 2.11(a) is amended by deleting
entirely the provisions thereof and replacing them with the
following:
"(iii) Base Rate Revolving Loan Borrowings shall bear interest
at the Base Rate minus a margin of one-quarter of on percent
(0.25%); and"
D. Clause (iv) of Section 2.11(a) is amended by deleting entirely
the provisions thereof and replacing them with the following:
"(iv) LIBOR Revolving Loan Borrowing shall bear interest at the
LIBOR Rate for the Interest Period in effect for such Borrowing
plus a margin of one and ninety-five one-hundredths of one
percent (1.95%)."
4. Section 6.07(a) of the Agreement is amended by changing the
date reference form "fiscal year ending April 30, 2000" to
"fiscal year ending March 31, 2000."
5. Section 6.07(b) of the Agreement is amended by deleting
entirely the provisions thereof and replacing them with the
following:
"The Borrowers shall not permit the Consolidation Tangible Net
Worth at the end of any fiscal quarter of the Company until June
30, 2000 to be less than $36,000,000, and thereafter to be not
less than an amount to be mutually agreed upon by the Lender and
the Company, or $40,000,000 if no agreement is reached."
6. Section 6.07(d) of the Agreement is amended by deleting
entirely the provisions thereof and replacing them with the
following:
"The Borrowers shall not permit the ratio of Total Liabilities
to Consolidate Tangible Net Worth at the end of any fiscal
quarter of the Company to be greater than 1.3 to 1.0."
7. Section 6.07(e) is amended by deleting entirely the provisions
thereof and replacing them with the following:
"(e) The Borrowers will not permit the ratio of (i) Consolidated
Liquid Assets to (ii) the sum of (x) Consolidated Current
Liabilities (excluding Accounts Receivable of Affiliates) plus
(y) the Revolving Credit Exposure to be less than 0.35 to 1.0 at
the end of the fiscal quarter of the Company ending July 31,
1999; 0.40 to 1.0 at the end of the fiscal quarter of the Company
ending October 21, 1999; 0.45 to 1.0 at the end of the fiscal
quarter of the Company ending January 31, 2000; 0.50 to 1.0 at
the end of the fiscal quarter of the Company ending March 31,
2000 or at the end of any subsequent fiscal quarter of the
Company."
8. Section 6.07(f) of the Agreement is amended by deleting
entirely the provisions thereof and replacing them with the
following:
"The Borrowers shall not permit the Consolidation Debt Service
Coverage Ratio for the fiscal year of the Company ending March
31, 2000 to be less that 1.25 to 1.0; for the fiscal year of the
Company ending March 31, 2001, to be less than 2.0 to 1.0; and
for all fiscal years of the Company ending thereafter to be less
than 2.25 to 1.0."
9. Borrowing Base Certificate attached to the Agreement as
Exhibit A is amended as follows:
A. The following new sentence shall be added at the end of the
first paragraph appearing immediately after "Subject..." and
immediately before "A. Accounts Receivable ("A/R")":
"For all purposes of this Borrowing Base Certificate, Xxxxxx,
Inc. and Zuellig Botanical Extracts, Inc. shall be deemed to be
a single Co-Borrower (collectively, "Xxxxxx Extracts").
B. Item C.7.(c) is amended by deleting entirely the provisions
thereof and replacing them with the following:
"(c) Note: For Xxxxxx, there is a special overadvance facility
of $5.5 million from January to July and $7millionfrom August to
December independent of the Consolidated Borrowing Base and the
overall $20 million Inventory cap."
C. Immediately following item C.7.(c), add the following:
"(d) Note: For Xxxxxx Extracts, there is a special overadvance
facility of $2.5 million from September 30, 1999 to December 31,
1999, $1.0 million from January 1, 2000 to March 31, 2000, $0.5
million from April 1, 2000 to June 30, 2000 and zero thereafter
independent of the Consolidated Borrowing Bases and the overall
$20 million Inventory cap."
"(e) Note: For Xxxxxx, Inc. on a consolidated basis, there is a
special overadvance facility of $2.5 million from September 30,
1999 to December 31, 1999, $1.5 million from January 1, 2000 to
March 31, 2000, $1.0 million from April 1, 2000 to June 30, 2000
and zero thereafter independent of the Consolidated Borrowing
Base and the overall $ 20 million Inventory Cap."
The Lender hereby waives, for the Company's fiscal year ending
March 31, 2000 only, compliance by the Borrowers with their
covenant contained in Section 6.07(c) of the Agreement.
Except as specifically provided herein, all terms and conditions
of the Agreement remain in full force and effect, with out waiver
or modification, all terms defined in the Agreement shall have
the same meaning when used in the Amendment. This Amendment and
the Agreement shall be read together as one document.
The Borrowers hereby remake all representations and warranties
contained in the Agreement and reaffirm all covenants set forth
therein. The Borrowers further certify that as of the date of
the Amendment, giving effect to the provisions hereof, there
exists on Event of Default as defined in the Agreement, not any
condition, act or event which with the giving of notice or the
passage of time or both would constitute any such Event of
Default.
In witness whereof, the parties hereto have caused this Amendment
to be executed as of the day and year first written above.
Xxxxxx, Inc.
Name:
/s/Xxxxx Xxxxxxx
Title: CFO
Xxxxx Fargo Bank, N.A.
Name:
/s/Xxxxxx Xxxx
Title: Vice President
Botanicals International Extracts, Inc.
/s/Xxxxx Xxxxxxx
Title: President
ZetaPharm, Inc.
/s/Xxxxx Xxxxxxx
Secretary/Treasurer
Xxxxxx Natural Products, Inc.
/s/Xxxxx Xxxxxxx
Secretary/Treasurer
Xxxxxxx Laboratories, Inc.
/s/Xxxx X. Xxxxx
