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EXHIBIT 10.26
THE CHASE MANHATTAN BANK
As of December 18, 1997
TO: XXXXXXXX INDUSTRIES, INC.
XXXXXXXX INDUSTRIES ALABAMA, INC.
XXXXXXXX INDUSTRIES COMPOSITE REINFORCEMENTS, INC.
J.I. GEORGIA, INC.
Re: $160 MILLION CREDIT AGREEMENT DATED AS OF MARCH 28, 1996, AS
AMENDED BY AMENDMENT NO. 1 TO THE CREDIT AGREEMENT DATED AS OF
JUNE 28, 1996 AND AMENDMENT NO. 2 TO THE CREDIT AGREEMENT
DATED AS OF FEBRUARY 28, 1997 (THE "AGREEMENT")
Ladies and Gentlemen:
Reference is made to the request made by Xxxxxxxx Industries,
Inc., on behalf of the Borrowers, to The Chase Manhattan Bank as Agent for the
Banks, for an amendment of certain financial covenants and obligations of the
Borrowers set forth in the Agreement. All capitalized terms used herein shall
have the meanings given to them in the Agreement, unless otherwise defined
herein.
Further to your request, we hereby confirm, as Agent on behalf
of the Banks, that the Banks are prepared to amend and otherwise modify the
Agreement on the terms and subject to the conditions set forth below:
1 . Amendment to Section 7.03 - Financial Covenants: Section
7.03 of the Agreement hereby amended to delete the financial covenants set forth
for said period and to substitute said covenants with the following:
"(a) Total Loan Commitment. Permit the Total Loan Commitment under this
credit facility to exceed $144,100,000 from January 4, 1998 through
October 3, 1998; $137,225,000 from October 4, 1998 through October 2,
1999; $126,725,000 from October 3, 1999 and all times thereafter."
"(b) Capital Expenditures. Permit Consolidated Capital Expenditures to
exceed (i) $10,500,000 for the fiscal year ending January 3, 1998, (ii)
$18,000,000 for the fiscal year ending January 2, 1999 of which no more
than $6,300,000 may be expended during the period from January 4, 1998
through March 31, 1998 and no more than $4,100,000 may be committed for
expenditure, but not expended, during the same period, and (iii)
$20,000,000 for the fiscal year ending January 1, 2000 and for all
fiscal years thereafter."
"(c) Consolidated Funded Debt. Incur or permit Consolidated Funded Debt
to exceed $149,000,000 from January 4, 1998 through October 3, 1998;
$139,000,000 from October 4, 1998 through October 2, 1999; and
$129,000,000 from October 3, 1999 and all times thereafter."
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"(d) Consolidated Tangible Net Worth. Permit its Consolidated Tangible
Net Worth, at any time, to be less than the amount set forth opposite
such period:
Period Amount
------ ------
10/l/97 - 4/3/98 $36,500,000
4/4/98 $50,000,000
4/5/98 - 7/4/98 $53,000,000
7/5/98 - 10/3/98 $56,000,000
10/4/98 - 10/2/99 $59,000,000
As of 1/l/00 - and at all
times thereafter $70,000,000"
"(e) Leverage Ratio. Permit the Leverage Ratio, as determined at the
end of each fiscal quarter, to be greater than the ratio set forth
opposite the following periods:
Period Ratio
------ -----
10/l/97 - 1/3/98 4.25:1.00
1/4/98 - 4/4/98 3.25:1.00
4/5/98 - 10/3/98 3.00:1.00
10/4/98 - 10/2/99 2.50:1.00
As of 1/1/00 - and at all times
thereafter 2.00:1.00"
"(f) Interest Coverage Ratio. Permit the Interest Coverage Ratio, as
determined at the end of each fiscal quarter, to be less than the ratio
set forth opposite the following periods:
Period Ratio
------ -----
10/l/97 - 1/3/98 0.65:1.00
1/4/98 - 4/4/98 2.00:1.00
4/5/98 - 7/4/98 2.25:1.00
7/5/98 - 10/3/98 2.50:1.00
10/4/98 - 1/2/99 2.50:1.00
1/3/99 - 10/2/99 2.50:1.00
As of 1/1/00 - and all times
thereafter 3.00:1.00"
"(g) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio, as determined at the end of each fiscal quarter, to be less than
the ratio set forth opposite the following periods:
Period Ratio
------ -----
10/1/97 - 1/3/98 0.85:1.00
1/4/98 - 4/4/98 1.35:1.00
4/5/98 - 7/4/98 1.35:1.00
7/5/98 - 10/3/98 1.35:1.00
10/4/98 - 1/2/99 1.40:1.00
1/3/99 - 10/2/99 1.40:1.00
As of 1/l/00 - and all times
thereafter 1.50:1.00"
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"(h) Debt Ratio. Permit the Debt Ratio, as determined at the end of
each fiscal quarter, to be greater than the ratio set forth opposite
the following periods:
Period Ratio
------ -----
10/l/97 - 1/3/98 4.75:1.00
1/4/98 - and all times
thereafter 3.00:1.00"
2. Amendment to Section 7.01 (b) - Reporting Requirements.
Section 7.01 (b)(iii) is hereby amended to add a new clause (iv) thereto as
follows:
" and (iv) a calculation of the Consolidated Funded Debt, Consolidated
Tangible Net Worth, Fixed Charge Coverage Ratio, Current Ratio,
Leverage Ratio, Interest Coverage Ratio, Debt Ratio and Consolidated
Capital Expenditures for the fiscal month then ended, together with a
statement as to whether or not Borrowers are in compliance with such
financial covenants."
3. Additional Reporting Obligation. In addition to the
reporting obligations of the Borrowers as set forth in Section 7.01 (b) and
elsewhere in the Agreement, the Borrowers agree to provide to the Agent, by no
later than February 13, 1998, a certificate of the chief financial officer of
Xxxxxxxx setting forth a calculation of each financial covenant of the Borrowers
under Section 7.03 of the Agreement as of Borrowers' fiscal year ending January
3, 1998 and whether or not Borrowers are in compliance with each such financial
covenant, as amended hereby, the calculations in such certificate to be prepared
in accordance with GAAP.
4. FEE. Borrowers agree to pay to the Agent on or prior to the
date hereof a fee (for the benefit of each Bank) equal to 1/8 of 1% of the
Commitment as of the date hereof in connection with this Amendment.
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Except as amended or modified hereunder, the Agreement and the
other Loan Documents shall remain in full force and effect as executed.
Please indicate your agreement to and acceptance of the
foregoing amendments on the terms and conditions herein set forth by executing
the signature line below on the enclosed copy hereof and returning same to the
undersigned via fax and courier.
Very truly yours,
THE CHASE MANHATTAN BANK
AS BANK AND AGENT
By:
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Name:
Title:
THE ADMINISTRATIVE AGENT: THE SYNDICATION AGENT:
THE CHASE MANHATTAN BANK NATIONSBANK, N.A.
By: By:
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Name: Name:
Title: Title:
THE BANKS:
NATIONSBANK, N.A.
By:
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Name:
Title:
REGIONS BANK COMERICA BANK
By: By:
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Name: Name:
Title: Title:
XXX XXXXXX AMERICAN CAPITAL CORESTATES BANK, N.A.
By: By:
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Name: Name:
Title: Title:
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WACHOVIA BANK, N.A. THE SUMITOMO BANK, LIMITED
By: By:
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Name: Name:
Title: Title:
By:
----------------------------
Name:
Title:
AGREED TO AND ACCEPTED:
THE BORROWERS:
XXXXXXXX INDUSTRIES, INC. XXXXXXXX INDUSTRIES ALABAMA, INC.
By: /s/Xxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Executive Vice President & Title: Vice President
Chief Financial Officer
XXXXXXXX INDUSTRIES COMPOSITE J.I. GEORGIA, INC.
REINFORCEMENTS, INC.
By: /s/Xxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Vice President
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