EXECUTION COPY
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT dated as of September 14, 1999 (the "AMENDMENT") to the Amended
and Restated Credit Agreement dated as of February 28, 1999 and amended as of
May 31, 1999 (as amended, the "CREDIT AGREEMENT") among XXXXXXX INDUSTRIES INC.
(the "BORROWER"), the LENDERS party thereto (the "LENDERS") and THE CHASE
MANHATTAN BANK, as Administrative Agent (the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, pursuant to a letter dated September 2, 1999, the Borrower has
requested that the Lenders agree to a temporary increase in availability under
the revolving credit facility provided for in the Credit Agreement, such
increase to be in effect only until December 10, 1999; and
WHEREAS, subject to the terms and conditions set forth herein, the Lenders
have agreed to such temporary increase; and
WHEREAS, the parties hereto desire to amend the Credit Agreement to provide
for such temporary increase, as well as to permit an additional use of proceeds
of revolving loans, to increase the interest rate applicable to the loans and to
make certain other amendments as 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 that 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, from and after the Amendment No. 2
Effective Date (as defined in Section 17 below), refer to the Credit Agreement
as amended hereby.
SECTION 2. SECTION 1.01. Section 1.01 of the Credit Agreement is amended
by:
(a) amending the definition of "APPLICABLE RATE" by replacing the table
set forth therein in its entirety with the following table:
LETTER OF
ABR EUROCURRENCY CREDIT COMMITMENT
APPLICABLE LEVERAGE RATIO: SPREAD SPREAD FEE RATE FEE RATE
--------------------------------------- --------- ------------- --------------- ------------
#2.00 to 1............................. .50% 1.50% 1.25% .750%
>2.00 to 1 and #2.50 to 1.............. .50% 1.75% 1.50% .8125%
>2.50 to 1 and #3.00 to 1.............. .75% 2.00% 1.75% .875%
>3.00 to 1 and #3.50 to 1.............. 1.00% 2.25% 2.00% .9375%
>3.50 to 1............................. 2.25% 3.50% 3.25% 1.00%
(b) amending the definition of "BORROWING BASE" to read in its entirety
as follows:
"BORROWING BASE" means, at any date, the amount of the Borrowing Base
as of the date of the Borrowing Base Certificate then most recently
delivered by the Borrower pursuant to Section 5.01(l) or clause (v) of
Section 17 of Amendment No.2 (the "BORROWING BASE DATE", determined by
calculating the sum of (i) 85% of the aggregate amount of Eligible
Receivables at the Borrowing Base Date PLUS (ii) 50% of the aggregate
amount of Eligible Inventory at the Borrowing Base Date PLUS (iii) the
Facilities Domestic Amount at the Borrowing Base Date PLUS (iv) (A) as of
any Borrowing Base Date occurring on or prior to December 10, 1999, the
greater of the Deemed Foreign Assets Amount or the Facilities Foreign
Amount and (B) as of any Borrowing Base Date occurring subsequent to
December 10, 1999, the Facilities Foreign Amount PLUS (v) the Crilar
Payment Amount at the Borrowing Base Date PLUS (vi) the Insurance Payment
Amount at the Borrowing Base Date PLUS (vii) the UOP Payment Amount at
the Borrowing Base Date; PROVIDED that the sum of the amounts set forth
in clauses (v) through (vii), inclusive, will in
no event, for purposes of the Borrowing Base, exceed $10,000,000 and
shall not be included in the Borrowing Base determined as of any
Borrowing Base Date occurring after December 10, 1999.
(c) inserting therein in appropriate alphabetical order the following
defined terms:
"ALUMINA ASSET SALE" means the sale by the Borrower to UOP, LLC, a
Delaware limited liability company, of the Alumina Chemicals business
unit consummated by the Borrower prior to the Amendment No. 2 Effective
Date.
"AMENDMENT NO. 2" means Amendment No. 2 to this Agreement.
"AMENDMENT NO. 2 EFFECTIVE DATE" means the date of effectiveness of
Amendment No. 2.
"CRILAR PAYMENT AMOUNT" means, at any date, the amount that is due to
be paid (but has not yet been paid) to the Borrower by Crilar JV, a
Delaware limited liability company ("CRILAR"), pursuant to operations
conducted by the joint venture created in the Limited Liability Company
Agreement dated September 25, 1995 between the Borrower and Criterion
Catalyst Co., LP, which amount constitutes advances made by the Borrower
to Crilar prior to the Amendment No. 2 Effective Date and for which
Crilar has acknowledged it is obligated to reimburse the Borrower
pursuant to arrangements in effect on the Amendment No. 2 Effective Date;
PROVIDED that if the Crilar Payment Amount at any date exceeds
$2,327,000, the Crilar Payment Amount at such date shall be deemed to be
$2,327,000.
"INSURANCE PAYMENT AMOUNT" means, at any date, the amount that is due
to be paid (but has not yet been paid) to the Borrower by the Insurance
Providers on account of certain losses suffered by the Borrower in
connection with the shut-down of the facility of the Borrower located in
Gramercy, Louisiana, which amount constitutes unreimbursed insurance
claims properly filed by the Borrower with the Insurance Providers prior
to the Amendment No. 2 Effective Date with respect to which the Insurance
Providers are obligated to reimburse the Borrower and as to which the
Insurance Providers have not disputed coverage; PROVIDED that if the
Insurance Payment Amount at any date exceeds $4,000,000, the Insurance
Payment Amount at such date shall be deemed to be $4,000,000.
"INSURANCE PROVIDERS" means Indemnity Insurance Company of North
America, Arkwright Mutual Insurance Co. and Underwriters at Lloyds of
London & Various London.
"SENIOR SUBORDINATED DEBT PAYMENT" means the $8,312,500 interest
payment due under the Refinancing Subordinated Notes on September 15,
1999.
"UOP PAYMENT AMOUNT" means, at any date, the amount that is due to be
paid (but has not yet been paid) to the Borrower by UOP, LLC, a Delaware
limited liability company ("UOP") pursuant to that certain asset purchase
agreement between the Borrower and UOP, which amount constitutes a
portion of the purchase price for the Alumina Asset Sale which UOP has
acknowledged it is contractually obligated to pay to the Borrower
pursuant to contractual arrangements in effect on the Amendment No. 2
Effective Date (such portion of the purchase price being comprised of the
following amounts: $3,100,000 in consideration of the Kaiser servitude,
$420,000 as payment of amounts held back for inventory purchases and
$2,133,750 as payment of the inventory purchase price adjustment);
PROVIDED that if the UOP Payment Amount at any date exceeds $5,653,750,
the UOP Payment Amount at such date shall be deemed to be $5,653,750.
SECTION 3. SECTION 2.09. (a) Section 2.09(b)(i) of the Credit Agreement is
amended by deleting the word "and" at the end of clause (x) thereof and
replacing it with the following proviso: "PROVIDED FURTHER that the provisions
of this clause (x) shall not apply to any amount received by the Borrower or any
of its Subsidiaries and constituting any payment of the Crilar Payment Amount or
the UOP Payment Amount; and"
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(b) The first paragraph of Section 2.09(b)(ii) of the Credit Agreement is
amended by adding, immediately after the words "Indemnity Proceeds" in the
second line thereof, the expression "(other than any amount received by the
Borrower or any of its Subsidiaries and constituting any payment of the
Insurance Payment Amount)".
(c) Section 2.09(b)(iii) of the Credit Agreement is amended by renumbering
such Section as Section 2.09(b)(iii)(x) and adding a new Section 2.09(b)(iii)(y)
immediately thereafter, to read in its entirety as follows:
(y) If on any date (other than any date described in Section
2.09(b)(iii)(x)) the aggregate Revolving Credit Exposure on such date
exceeds the Available Amount on such date (or if the Revolving Commitments
have terminated but there is still Revolving Credit Exposure), the Borrower
shall apply an amount equal to such excess to prepay the Revolving Loans and
cash collateralize Letters of Credit so that after giving effect thereto the
aggregate Revolving Credit Exposure does not exceed the Available Amount on
such date (or until there is no Revolving Credit Exposure). In addition, on
any date on which the Borrower or any of its Subsidiaries shall receive any
payment with respect to the Crilar Payment Amount, the Insurance Payment
Amount or the UOP Payment Amount, the amount of such payment shall be
applied to prepay the Revolving Loans and cash collateralize Letters of
Credit. The prepayments and cash collateralization required pursuant to this
clause shall be effected in the following order: FIRST, the Borrower shall
prepay the Revolving Loans until the Revolving Loans have been paid in full
and SECOND, the Borrower shall cash collateralize Letters of Credit by
depositing any remaining amounts in the LC Collateral Account. Solely for
the purpose of determining Revolving Credit Exposure for purposes of this
clause, LC Exposure shall be reduced to the extent that Letters of Credit
have been cash collateralized as contemplated by the previous sentence. Any
prepayment or cash collateralization required by this clause (y) shall not
require any reduction of the Revolving Commitments.
SECTION 4. SECTION 2.11. Section 2.11(d) of the Credit Agreement is
amended in its entirety and replaced by the following:
(d) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender an additional participation fee, which shall accrue
at the rate of (i) 1.00% per annum on the average daily amount (if any) by
which the aggregate Revolving Credit Exposure exceeds the Borrowing Base
MINUS the Deemed Foreign Assets Amount PLUS (ii) 2.00% per annum on the
average daily amount (if any) by which the aggregate Revolving Credit
Exposure exceeds the Borrowing Base MINUS the Crilar Payment Amount MINUS
the Insurance Payment Amount MINUS the UOP Payment Amount. Accrued
additional participation fees shall be payable on the same dates, and
computed on the same basis, as participation fees payable pursuant to
paragraph (b) of this Section.
SECTION 5. SECTION 4.03. Solely with respect to any Loan to be made on the
occasion of any Borrowing occurring on or after the Amendment No. 2 Effective
Date and on or prior to December 10, 1999 or any Letter of Credit to be issued,
amended, renewed or extended on or after the Amendment No. 2 Effective Date and
on or prior to December 10, 1999, the Lenders waive any failure by the Borrower
to satisfy the condition precedent set forth in Section 4.03(b) of the Credit
Agreement solely with respect to the truth and correctness of the representation
and warranty contained in Section 3.04(c) of the Credit Agreement, but solely to
the extent that such representation and warranty is not true and correct because
of facts, conditions or events that have been disclosed in writing by the
Borrower to the Administrative Agent and the Lenders prior to August 31, 1999.
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SECTION 6. SECTION 5.01. Section 5.01 of the Credit Agreement is amended
as follows:
(a) by relettering clause (n) thereof as clause (p) and by adding new
clauses (n) and (o) immediately after clause (m) thereof, to read in their
entirety as follows:
(n) on the first Business Day of each week, commencing with August
30, 1999, a statement of projected cash receipts and cash disbursements
for each week in the period of sixteen continuous weeks commencing with
the immediately following week (or, in the case of such statement
delivered on August 30, 1999 for such period commencing on such date and
for a twelve-week period), in a form reasonably satisfactory to the
Administrative Agent;
(o) as soon as available and in any event no later than December 1,
1999, a written plan (which shall be presented by the Borrower at a
meeting with the Lenders if such a meeting is requested by them), setting
forth in reasonable detail the terms and conditions of a proposed
restructuring of the Borrower's current capital structure (including
without limitation sources, amounts and proposed uses of additional
capital), which proposed restructuring may include a refinancing of the
Loans and the Refinancing Subordinated Notes;
(b) by amending clause (l)(x) to read in its entirety "(x) on and as of
December 10, 1999, and"
SECTION 7. SECTION 5.02. The first sentence of Section 5.02 of the Credit
Agreement is amended to read in its entirety as follows:
The Borrower will furnish to the Administrative Agent and each Lender
written notice of any of the following as promptly as possible and in any
event within two Business Days of the occurrence thereof:
SECTION 8. SECTION 5.08. The third sentence of Section 5.08 of the Credit
Agreement is amended by renumbering clause (iii) thereof as clause (iv) and by
adding a new clause (iii) immediately after clause (ii) thereof, to read in its
entirety as follows:
(iii) to pay in full, on September 15, 1999, the Senior Subordinated
Debt Payment,
SECTION 9. SECTION 5.09. Section 5.09 of the Credit Agreement is amended
by adding a new subsection (e) immediately after subsection (d) thereof, to read
in its entirety as follows:
(e) The Borrower will, at its sole cost and expense, do, execute,
acknowledge and deliver all such further notices, acts, deeds, conveyances,
mortgages, assignments, written notices of assignment and transfers and
instructions for payment and as may be necessary or desirable (in the
reasonable judgment of the Administrative Agent) from time to time to assure
that any payment with respect to the Crilar Payment Amount, the Insurance
Payment Amount and the UOP Payment Amount shall be remitted directly to an
account at The Chase Manhattan Bank designated in writing by the
Administrative Agent, at such address as the Administrative Agent shall have
specified from time to time. In addition, unless otherwise agreed to in
writing by the Required Lenders, the Borrower shall have received, on or
prior to November 15, 1999, not less than $7,182,675 on account of the
Crilar Payment Amount and the UOP Payment Amount (collectively), all of
which funds shall have been applied as provided for in Section 2.09 of this
Agreement.
SECTION 10. SECTION 5.13 BORROWER FINANCIAL ADVISOR. A new Section 5.13 of
the Credit Agreement is added immediately after Section 5.12 thereof, to read in
its entirety as follows:
SECTION 5.13. BORROWER FINANCIAL ADVISOR. The Borrower shall, as soon
as practicable but in any event no later than October 15, 1999, retain as
financial advisor a firm of recognized national standing to assist in
connection with its proposed financial restructuring.
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SECTION 11. SECTION 9.03. Section 9.03 of the Credit Agreement is amended
as follows:
(a) by inserting after the expression "The Borrower shall pay" in the
first sentence thereof the expression "within five calendar days after the
receipt of a written invoice on account of any of the following:"; and
(b) by renumbering clause (iii) of subsection (a) thereof as clause
(iv) and by adding a new clause (iii) immediately after clause (ii) thereof,
to read in its entirety as follows:
(iii) all fees and expenses of any accountants, appraisers or other
financial advisors retained by the Administrative Agent or any of its
affiliates in connection with the Loan Documents and the administration
of the credit facilities provided for herein,
SECTION 12. EXHIBIT J. Exhibit J to the Credit Agreement is amended in its
entirety and replaced by Exhibit J attached to this Amendment.
SECTION 13. NO OTHER WAIVERS. Other than as specifically provided herein,
nothing contained herein and no action by, or inaction on the part of, any
Lender or the Administrative Agent shall, or shall be deemed to, operate as a
waiver of any right, remedy, power or privilege of the Administrative Agent or
of any Lender under the Credit Agreement or any other Loan Document or of any
other term or condition of the Credit Agreement or any other Loan Document.
SECTION 14. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants that, on and as of the Amendment No. 2 Effective Date, (i) the
representations and warranties of the Obligors set forth in the Loan Documents,
including but not limited to the representation and warranty contained in
Section 3.12 of the Credit Agreement but excluding the representation and
warranty contained in section 3.04(c) of the Credit Agreement, are true and
correct, (ii) no Default has occurred and is continuing, (iii) the Borrower has
no reason to believe that either the Crilar Payment Amount (as defined in the
Credit Agreement as amended hereby) or the UOP Payment Amount (as defined in the
Credit Agreement as amended hereby) will not be paid in full on or prior to
December 10, 1999 and (iv) the Borrower has no reason to believe that the
Insurance Payment Amount (as defined in the Credit Agreement as amended hereby)
will not be paid in full by the Insurance Providers (as defined in the Credit
Agreement as amended hereby) on or prior to March 15, 2000.
SECTION 15. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 16. 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 17. EFFECTIVENESS. This Amendment shall become effective on the
date (the "AMENDMENT NO. 2 EFFECTIVE DATE") on which the Administrative Agent
shall have received:
(i) from each of the Borrower and the Required Lenders a counterpart
hereof signed by such party or facsimile or other written confirmation (in
form satisfactory to the Administrative Agent) that such party has signed a
counterpart hereof;
(ii) a certificate of the Chief Financial Officer (x) certifying that
the representations and warranties made by the Borrower pursuant to Section
14 of this Amendment are true and correct on and as of the Amendment No. 2
Effective Date and (y) demonstrating in reasonable detail the calculations
required to establish that, as of August 31, 1999, the Borrower was in
compliance with the covenants set forth in Sections 6.12, 6.13 and 6.14 of
the Credit Agreement;
(iii) (x) a duly completed Perfection Certification (as defined in the
Security Agreement) dated the Amendment No. 2 Effective Date, (y) a list of
all Patents and Trademarks (each as defined in the
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Security Agreement), together with registration numbers, held by the
Borrower or any of its Subsidiaries as of the Amendment No. 2 Effective Date
and (z) a list of all real property owned or leased by the Borrower or any
of its Subsidiaries as the Amendment No. 2 Effective Date;
(iv) the Foreign Collateral Memorandum with respect to JVC contemplated
by Section 5.09(d) of the Credit Agreement;
(v) a Borrowing Base Certificate setting forth the Borrowing Base as of
August 31, 1999, except as to the Crilar Payment, the Insurance Payment and
the UOP Payment, which amounts shall be as of the Amendment No. 2 Effective
Date;
(vi) true, correct and complete copies of all correspondence in the
possession of the Borrower or any of its Subsidiaries relating to the Crilar
Payment Amount, the Insurance Payment Amount and the UOP Payment Amount;
(vii) the statement of projected cash receipts and cash disbursements
contemplated by Section 5.01(n) of the Credit Agreement (as amended hereby)
for the period commencing on August 30, 1999;
(viii) evidence satisfactory to it that, contemporaneously with the
effectiveness of this Amendment and the making of any Revolving Loans on the
Amendment No. 2 Effective Date, the Senior Subordinated Debt Payment (as
defined in the Credit Agreement as amended hereby) will be made in full;
(ix) evidence satisfactory to it that the Borrower shall have paid in
full all fees and expenses of the Administrative Agent payable pursuant to
Section 9.03(a) of the Credit Agreement with respect to which the Borrower
shall have received any invoice delivered to the Borrower at least one
Business Day prior to the Amendment No. 2 Effective Date, it being
understood that the failure of the Administrative Agent to have provided
invoices with respect to such fees and expenses prior to the Amendment No. 2
Effective Date does not constitute a waiver of, or otherwise affect, the
Administrative Agent's right to reimbursement for such fees and expenses;
(x) for the account of each Lender that has signed a counterpart hereof
on or prior to September 14, 1999, an amendment fee in an amount equal to
0.50% of the sum of such Lender's Revolving Commitment and the aggregate
Dollar Amount of such Lender's outstanding Term Loans, in each case as in
effect on the Amendment No. 2 Effective Date;
(xi) an opinion of counsel to the Borrower satisfactory to the
Administrative Agent, in form and substance satisfactory to the
Administrative Agent; and
(xii) such documents and certificates as the Administrative Agent or
its counsel may reasonably request relating to the organization, existence,
good standing and solvency of each Obligor, the authorization of this
Amendment and the transactions contemplated hereby and any other legal
matters relating to any of the foregoing, all in form and substance
satisfactory to the Administrative Agent and its counsel.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed as of the date first above written.
XXXXXXX INDUSTRIES INC.
By:
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Name:
Title:
THE CHASE MANHATTAN BANK
By:
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Name:
Title:
HIBERNIA NATIONAL BANK
By:
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Name:
Title:
WACHOVIA BANK, N.A.
By:
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Name:
Title:
THE BANK OF NOVA SCOTIA
By:
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Name:
Title:
By:
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Name:
Title:
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PNC BANK, NATIONAL ASSOCIATION
By:
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Name:
Title:
AMSOUTH BANK
By:
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Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
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Name:
Title:
By:
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Name:
Title:
COMERICA BANK
By:
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Name:
Title:
NATIONAL BANK OF CANADA
By:
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Name:
Title:
By:
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Name:
Title:
8
PARIBAS
By:
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Name:
Title:
By:
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Name:
Title:
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EXHIBIT J
[Form of Borrowing Base Certificate]
BORROWING BASE CERTIFICATE
Reference is made to the Amended and Restated Credit Agreement dated as of
February 28, 1999, amending the Credit Agreement dated as of August 26, 1997 (as
amended, modified and supplemented and in effect from time to time, the "CREDIT
AGREEMENT") among XxXxxxx Industries Inc. (the "COMPANY"), the lenders party
thereto named therein, and The Chase Manhattan Bank, as administrative agent for
said lenders. Terms defined in the Credit Agreement are used herein as defined
therein.
Pursuant to Section 5.01(l) of the Credit Agreement, the undersigned, a
Financial Officer of the Company, hereby certifies that, to the best of
[his/her] knowledge, attached hereto as Annex 1 is a true and accurate
calculation of the Borrowing Base as at the [monthly/weekly] accounting period
ended , determined in accordance with the requirements of the
Credit Agreement.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed as of the day of , .
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Name:
Title:
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[EXHIBIT J--ANNEX 1]
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