FOURTH AMENDMENT AGREEMENT
THIS FOURTH AMENDMENT AGREEMENT (this "Amendment") dated
effective as of August 13, 1997 among TRION, INC. (the
"Borrower"), WACHOVIA BANK, N.A. (f/k/a/ "WACHOVIA BANK OF
GEORGIA, N.A."), as Agent (the "Agent") and WACHOVIA BANK, N.A.
(f/k/a/ "WACHOVIA BANK OF NORTH CAROLINA, N.A.") and FIRST UNION
NATIONAL BANK OF NORTH CAROLINA as lenders (the "Lenders");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Lenders executed
and delivered that certain Credit Agreement, dated September 8,
1995 (as amended by that certain First Amendment to Credit
Agreement dated June 14, 1996, that certain Second Amendment to
Credit Agreement dated March 10, 1997, and that certain Third
Amendment to Credit Agreement dated May 9, 1997, and as the same
may be otherwise amended from time to time, the "Credit
Agreement"); and
WHEREAS, the Borrower has requested and the Agent and the
Lenders have agreed to certain amendments to the Credit Agreement,
subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above
premises and other good and valuable consideration, the receipt
and sufficiency of which hereby is acknowledged by the parties
hereto, the Borrower, the Agent and the Lenders hereby covenant
and agree as follows:
1. Definitions. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit
Agreement shall have the meaning assigned to such term in the
Credit Agreement, as amended.
2. Amendments to Credit Agreement. (a) The following new
definitions are hereby added to Section 1.01 of the Credit
Agreement in alphabetical order:
"Performance Pricing Determination Date" has the
meaning set forth in Section 2.06(a).
"Fixed Charge Coverage Ratio" means, for any
period, the ratio of Borrower's EBILT to Consolidated
Fixed Charges as calculated in Section 5.19 of the
Credit Agreement.
(b) Section 2.06(a) of the Credit Agreement is hereby
amended in its entirety as set forth below:
SECTION 2.06. Interest Rates. (a) "Applicable Margin"
means (i) for the period commencing on the execution date of
this Amendment to and including the first Performance Pricing
Determination Date, (y) for any Base Rate Loan, 0%, and (z)
for any Euro-Dollar Loan, 1.45%; and (ii) from and after the
first Performance Pricing Determination Date, (x) for any
Base Rate Loan, 0.00% and (y) for each Euro-Dollar Loan, the
percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below
as to such type of Loan and the Fixed Charge Coverage Ratio
for the quarterly or annual period ending immediately prior
to such Performance Pricing Determination Date.
Fixed Charge Applicable Margin
Coverage Ratio
greater than or equal to 4.25 to 1.0 1.00%
less than 4.25 to 1.0 but
greater than or equal to 3.25 to 1.0 1.25%
less than 3.25 to 1.0 but
greater than or equal to 2.25 to 1.0 1.50%
less than 2.25 to 1.0 1.75%
In determining interest for purposes of this Section
2.06 and fees for purposes of Section 2.07, the Borrower and
the Banks shall refer to the Borrower's most recent
consolidated quarterly and annual (as the case may be)
financial statements delivered pursuant to Section 5.01(a) or
(b), as the case may be. If such financial statements
require a change in interest pursuant to this Section 2.06 or
fees pursuant to Section 2.07, the Borrower shall deliver to
the Agent, along with such financial statements, a notice to
that effect, which notice shall set forth in reasonable
detail the calculations supporting the required change. The
"Performance Pricing Determination Date" is the date which is
the last date on which such financial statements are
permitted to be delivered pursuant to Section 5.01(a) or (b),
as applicable. Any such required change in interest and fees
shall become effective on such Performance pricing
Determination Date, and shall be in effect until the next
Performance Pricing Determination Date, provided that: (i)
for Fixed Rate Loans, changes in interest shall only be
effective for Interest Periods commencing on or after the
Performance Pricing Determination Date; and (ii) no fees or
interest shall be decreased pursuant to this Section 2.06 or
Section 2.07 if a Default is in existence on the Performance
Pricing Determination Date.
(c) section 2.07(a) of the Credit Agreement is hereby amended
in its entirety as set forth below:
SECTION 2.07. Fees. (a) The Borrower shall pay to the
Agent, for the ratable account of each Bank, a commitment
fee, calculated in the manner provided in the last paragraph
of Section 2.06(a) (ii), on the average daily amount of such
Bank's Unused Commitment, at a rate per annum from and after
the last Performance Pricing Determination Date, at a rate
per annum equal to: (i) for the period commencing on the
execution date of this Amendment to and including the first
Performance Pricing Determination Date, 0.20%; and (ii) from
and after the first Performance Pricing Determination Date,
the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below
and the Fixed Charge Coverage Ratio for the quarterly or
annual period ending immediately prior to such Performance
Pricing Determination Date:
Fixed Charge Commitment Fee
Coverage Ratio
greater than or equal to 4.25 to 1.0 0.15%
less than 4.25 to 1.0 but
greater than or equal to 3.25 to 1.0 0.20%
less than 3.25 to 1.0 but
greater than or equal to 2.25 to 1.0 0.25%
less than 2.25 to 1.0 0.30%
Such commitment fees shall accrue from and including the
execution date of this Amendment to but excluding the
Termination Date and shall be payable on each March 31, June
30, September 30 and December 31 and on the Termination Date.
(d) Section 5.19 of the Credit Agreement is hereby amended in
its entirety as set forth below:
SECTION 5.19. Fixed Charges Coverage. At the end of
the Fiscal Quarter ending June 30, 1997, the ratio of EBILT
to Consolidated Fixed Charges for the Fiscal Quarter just
ended and the immediately preceding 3 Fiscal Quarters shall
be greater than 1.75 to 1.0; at the end of the Fiscal Quarter
ending September 30, 1997, the ratio of EBILT to Consolidated
Fixed Charges for the Fiscal Quarter just ended and the
immediately preceding 3 Fiscal Quarters shall be greater than
2.00 to 1.0; at the end of the Fiscal Quarter ending December
31, 1997, the ratio of EBILT to Consolidated Fixed Charges
for the Fiscal Quarter just ended and the immediately
preceding 3 Fiscal Quarters shall be greater than 2.25 to
1.0; at the end of each Fiscal Quarter thereafter, the ratio
of EBILT to Consolidated Fixed Charges for the Fiscal Quarter
just ended and the immediately preceding 3 Fiscal Quarters
shall be greater than 2.75 to 1.0. Provided, however, and
solely for the Fiscal Quarter ending on September 30, 1996
and solely for the purposes of this Section 5.19, the amount
of $914,000 (resulting from transaction charges incurred in
connection with the Borrower's acquisition of Herrmidifier
Company, Inc. and inventory reductions of the Borrower) will
be added to EBILT for such Fiscal Quarter.
(e) Section 5.21 of the Credit Agreement is hereby amended in
its entirety as set forth below:
SECTION 5.21. Ratio of Consolidated Funded Debt to
Consolidated Cash Flow. At the end of the Fiscal Quarter
ending June 30, 1997, the ratio of Consolidated Funded Debt
to Consolidated Cash flow for the Fiscal Quarter just ended
will not exceed 5.00 to 1.0; at the end of the Fiscal
Quarter ending September 30, 1997, the ratio of Consolidated
Funded Debt to Consolidated Cash Flow for the Fiscal Quarter
just ended will not exceed 4.75 to 1.0; at the end of the
Fiscal Quarter ending December 31, 1997, the ratio of
Consolidated Funded Debt to Consolidated Cash Flow for the
Fiscal Quarter just ended will not exceed 4.50 to 1.0;
thereafter the ratio of Consolidated Funded Debt to
Consolidated Cash Flow for the Fiscal Quarter just ended will
not exceed 4.25 to 1.0. Provided, however, and solely for
the Fiscal Quarter ending on September 30, 1996 and solely
for the purposes of this Section 5.21, the amount of $630,000
(resulting from transaction charges incurred in connection
with the Borrower's acquisition of Herrmidifier Company,
Inc., after taxes, and inventory reductions of the Borrower)
will be added to Consolidated Cash flow for such Fiscal
Quarter.
4. Amendment Fee. In consideration for the execution of
this Amendment, Borrower agrees to pay a one-time, fully-earned
and non-refundable amendment fee equal to $9,000 to be shared
ratably among the Banks.
5. Ratification. The Borrower hereby restates ratifies and
reaffirms each and every term, covenant and condition set forth in
the Credit Agreement and the other Loan Documents effective as of
the date hereof.
6. Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which counterparts, taken
together, shall constitute but one and the same instrument.
7. Section References. Section titles and references used
in this Amendment shall be without substantive meaning or content
of any kind whatsoever and are not a part of the agreements among
the parties hereto evidenced hereby.
8. No Additional Default. To induce the Agent and the
Lenders to enter into this Amendment and to continue to make
advances pursuant to Sections 2.01 and 2.02 of the Credit
Agreement, the Borrower hereby acknowledges and agrees that, as of
the date hereof, there exists (i) no additional Default or Event
of Default except as set forth above in this Amendment and (ii) no
right of offset, defense, counterclaim, claim or objection in
favor of the Borrower arising out of or with respect to any of the
Loans or other obligations of the Borrower owed to the Lenders
under the Credit Agreement.
9. Further Assurances. The Borrower agrees to take such
further actions as the Agent shall reasonably request in
connection herewith to evidence the provisions herein contained to
the Borrower.
10. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the
State of North Carolina.
11. Conditions Precedent. This Amendment shall become
effective only upon the execution and delivery of a duly executed
counterpart of this Amendment by each of the parties hereto. The
Agent and the Banks have waived the condition of execution and
delivery to the Agent of secretary certificates pertaining to the
Borrower and the Guarantors certifying as to the authorization
and/or ratification of the execution and delivery of this
Amendment, provided that the Borrower and Guarantors shall deliver
such duly executed secretary certificates to the Agent by no later
than August 29, 1997.
IN WITNESS WHEREOF, the Borrower, the Agent and each of the
Lenders has caused this Amendment to be duly executed, under seal,
by its duly authorized officer as of the day and year first above
written.
TRION, INC.
as Borrower (SEAL)
WACHOVIA BANK, N.A.,
as Agent (SEAL)
WACHOVIA BANK, N.A.,
as Lender (SEAL)
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Lender
(SEAL)
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the
foregoing Amendment, (ii) consents to the execution and delivery
of the Amendment by the parties thereto and (iii) reaffirms all of
its obligations and covenants under the Guaranty Agreement dated
as of September 8, 1995 executed by it or to which it has become a
party, and agrees that none of such obligations and covenants
shall be affected by the execution and delivery of the Amendment.
This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which counterparts, taken
together, shall constitute but one and the same instrument.
ENVIRCO CORPORATION (SEAL)
HERRMIDIFIER COMPANY, INC. (SEAL)
