EXHIBIT 10.108
WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
This WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT ("Amendment") is
dated as of November __, 2000 and is entered into by and among XXXX
INTERNATIONAL HOLDINGS, INC. ("Holdings"), XXXX INDUSTRIES, INCORPORATED,
DEFLECTA-SHIELD CORPORATION, BELMOR AUTOTRON CORP., DFM CORP., AUTO VENTSHADE
COMPANY and SMITTYBILT, INC. (each a "Borrower" and, collectively, the
"Borrowers"), XXXX ACQUISITION CORP., BAC ACQUISITION CO., TRAILMASTER PRODUCTS,
INC., DELTA III, INC. (together with Borrowers and Holdings, each a "Loan
Party", and collectively, the "Loan Parties"), XXXXXX FINANCIAL, INC.,
individually as a Lender and in its capacity as Agent ("Agent"), and the other
Lenders which are signatories hereto.
WHEREAS, Agent, Lenders and the Loan Parties are parties to a certain
Credit Agreement dated February 27, 1998 (as such agreement has from time to
time been amended, supplemented or otherwise modified, the "Agreement"); and
WHEREAS, Events of Default are in existence under the Agreement as a
result of Borrower's breach of the following two financial covenants for the
twelve (12) month period ending September 30, 2000: EBITDA (subsection 4.3) and
Total Indebtedness to EBITDA Ratio (subsection 4.6) (the "Existing Events of
Default"), and Borrowers have requested that Agent and Lenders waive the
Existing Events of Default; and
WHEREAS, the Borrowers propose to sell the owned real estate located at
0000 X. 0xx Xxxxxx, Xxxxxxxxx, Xxxx and/or the owned real estate located at 000
Xxxx Xxxxxxxxx, Xxxxx, Xxxxxxxxx (collectively, the "Properties" and such sale
or sales of the Properties, the "Proposed Real Estate Transactions") with
aggregate Net Proceeds to the Borrowers of at least $10,000,000, such aggregate
Net Proceeds to be applied to the prepayment of the Term Loans pursuant to
subsection 1.5(C) of the Credit Agreement;
WHEREAS, concurrently with the execution of this Agreement, Holdings,
the Borrowers and Harvest Partners III, L.P. ("Harvest Partners") shall enter
into a Capital Call Agreement (the "Capital Call Agreement") pursuant to which
Harvest Partners agrees to invest up to an additional $10,000,000 in the equity
of Holdings;
WHEREAS certain of the terms of the Capital Call Agreement would
require the consent of Lenders; and
WHEREAS, the parties desire to amend the Agreement as hereinafter set
forth.
NOW THEREFORE, in consideration of the execution and delivery of the
Capital Call Agreement, the mutual conditions and agreements set forth in the
Agreement and this Amendment, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meanings ascribed to such terms in the
Agreement.
2. Amendments. Subject to the conditions set forth below, the Agreement
is amended as follows:
a. Subsection 1.1(B)(1) is amended by deleting the definition of
"Maximum Revolving Loan Balance" set forth in the fourth sentence therein by
deleting such sentence in its entirety and replacing it with the following:
"The 'Maximum Revolving Loan Balance' will be, as of any date of
determination, the lesser of (a) the Borrowing Base or (b) the
Revolving Loan Commitment less the sum of (x) outstanding Risk
Participation Liability, (y) the IDRB Reserve and (z) the Capital
Call Reserve."
b. Subsection 3.7(b) is amended by deleting such subsection in its
entirety and replacing it with the following:
"(b) the sale or disposition of the Indianola Property and the Anoka
Property if all of the following conditions are met: (i) the
consideration received for each such property is at least equal to
the fair market value of such property, (ii) the consideration is
received entirely in cash; and (iii) the Net Proceeds of such Asset
Disposition are applied as required by subsection 1.5(C)"
c. Subsection 3.8(f) is amended by deleting such subsection in its
entirety and replacing it with the following:
"(f) any Loan Party may make payments in cash in respect of
Management Fees to Holdings or Harvest Partners, provided, that such
Management Fees are reasonably satisfactory to Agent; provided,
however, that from and after November __, 2000, no Loan Party may
make payments in cash in respect of Management Fees to Harvest
Partners unless and until such time as Agent and Lenders shall have
received quarterly financial reports pursuant to subsection 4.7(B)
and a Compliance Certificate indicating that the ratio of Senior
Indebtedness as of the end of such Fiscal Quarter to EBITDA for the
four Fiscal Quarters then ended of the Loan Parties is less than 3.0
to 1.0; provided, further, that any Management Fees to Harvest
Partners that are not paid when due by reason of the immediately
preceding proviso shall accrue (without interest or penalty), but
shall not be paid in cash unless and until such time as Agent and
Lenders shall have received quarterly financial reports pursuant to
subsection 4.7(B) and a Compliance Certificate indicating that the
ratio of Senior Indebtedness as of the end of such Fiscal Quarter to
EBITDA for the four Fiscal Quarters then ended of the Loan Parties
is less than 2.5 to 1.0."
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d. Subsection 4.3 is amended by deleting the minimum EBITDA amount
for the period of "Four Fiscal Quarter ending December 31, 2000" and replacing
it with the amount "$22,073,000".
e. Subsection 4.4 is amended by deleting the minimum Fixed Charge
Coverage ratio for the period of "Four Fiscal Quarters ending December 31, 2000"
and replacing it with the ratio "0.92".
f. Subsection 4.5 is amended by deleting the minimum Total Interest
Coverage ratio for the period of "Four Fiscal Quarters ending December 31, 2000"
and replacing it with the ratio "1.46".
g. Subsection 4.6 is amended by deleting the maximum ratio of Total
Indebtedness to EBITDA for the period of "Four Fiscal Quarters ending December
31, 2000" and replacing it with the ratio "4.65".
h. Subsection 6.1 is amended by inserting the following as new
paragraphs (V) and (W) at the end thereof:
"(V) Capital Call Agreement. Harvest Partners III, L.P. shall
breach, or default in the performance of or compliance with, any
term of the Capital Call Agreement."
"(W) 2001 Management Plan. Holdings and Borrowers shall fail to
deliver to Agent and Lenders copies of a management plan for the
year 2001 prepared in a manner and in detail reasonably acceptable
to Agent on or before November 30, 2000."
i. Subsection 10.1 is amended by deleting the definition of "Asset
Disposition" in its entirety and replacing it with the following:
"'Asset Disposition' means the disposition, whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise, of
any of the assets of any Loan Party or any of its Subsidiaries other
than sales of inventory in the ordinary course of business."
j. Subsection 10.1 is further amended by inserting in the definition
of "Loan Documents" after the words "Environmental Indemnity Agreement" the
words ", the Capital Call Agreement".
k. Subsection 10.1 is further amended by deleting the definition
of "Management Fees" in its entirety and replacing it with the following:
"'Management Fees' means any payment made in cash or otherwise by
the Loan Parties to Holdings or Harvest Partners in connection with
Holdings or Harvest Partners, as the case may be, providing to the
Loan Parties management and supervisory services, human resource
services, accounting and computer services
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and other similar corporate services, in all such cases being
reasonable in amount."
l. Subsection 10.1 is further amended by inserting the following
definitions in the proper alphabetical order:
"'Anoka Property' means the real estate located at 000 Xxxx
Xxxxxxxxx, Xxxxx, Xxxxxxxxx."
"'Capital Call Agreement' means that certain Capital Call Agreement,
dated as of November __, 2000, by and among Holdings, the Borrowers,
Harvest Partners III, L.P. and Agent, as the same may be amended,
restated, supplemented or otherwise modified from time to time."
"'Capital Call Reserve' means, as of any date of determination, the
amount of any reserve placed on the Borrowing Base pursuant to the
terms of the Capital Call Agreement."
"'Senior Indebtedness' means all Indebtedness of the Loan Parties
other than (x) Indebtedness under the Senior Subordinated Notes and
(y) Indebtedness related to leases (other than capital leases and
other leases treated as a loan or financing for creditors' rights
purposes); provided, however, that solely for purposes of
calculating Senior Indebtedness, the outstanding principal amount of
the Term Loans as determined at the time of the consummation of the
sale or sales of the Anoka Property and the Indianola Property shall
be reduced by no more than $11,000,000 of Net Proceeds from such
sale or sales."
3. Waiver. Agent and Lenders hereby waive the Existing Events of
Default. This is a limited waiver (limited solely to the Existing Events of
Default) and shall not be deemed to constitute a waiver of any other Event of
Default or any future breach of the Agreement or any of the other Loan
Documents.
4. Consents. Agent and Lenders hereby consent to the following:
a. Notwithstanding the provisions of subsection 1.5(E) of the Credit
Agreement, Agent and Lenders hereby consent to the application of any equity
contributions made pursuant to the Capital Call Agreement to the outstanding
principal balance of the Revolving Loans, but not as a permanent reduction of
the Revolving Loan Commitment, in accordance with the terms and provisions of
the Capital Call Agreement.
b. Notwithstanding the provisions of subsection 3.5 of the Credit
Agreement, Agent and Lenders hereby consent to the making of Restricted Junior
Payments by the Borrowers and Holdings for the sole purpose of redeeming the
equity securities (including any additional shares of such equity securities
issued as a dividend thereon) issued to Harvest Partners or its designee
acceptable to Agent in its sole discretion in exchange for the equity
contributions made pursuant to the Capital Call Agreement, subject to the
satisfaction of each of the following conditions precedent:
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(i) in the case of any equity securities (including any
additional shares of such equity securities issued as a dividend thereon) issued
in exchange for the First Capital Call (as such term is defined in the Capital
Call Agreement), the circumstances set forth in either Section 2(c)(ii) or
Section 2(e)(iii)(B) of the Capital Call Agreement shall have occurred or, in
the case of any equity securities (including any additional shares of such
equity securities issued as a dividend thereon) issued in exchange for the
Second Capital Call (as such term is defined in the Capital Call Agreement), the
circumstances set forth in Section 2(e)(iii)(C) of the Capital Call Agreement
shall have occurred;
(ii) the Borrowers shall have entered into a binding agreement
or binding agreements, in each instance in form and substance reasonably
satisfactory to Agent, on or before the Third Test Date (as such term is defined
in the Capital Call Agreement) providing for the Proposed Real Estate
Transactions and the Proposed Real Estate Transactions shall have occurred with
aggregate Net Proceeds to the Borrowers of at least $10,000,000 and the
Borrowers shall have applied such aggregate Net Proceeds to the prepayment of
the Term Loans pursuant to subsection 1.5(C) of the Credit Agreement on or
before June 30, 2002;
(iii) the Borrowers shall be in compliance with all of the
covenants set forth in Section 4 of the Credit Agreement, both before and after
giving effect on a pro forma basis to the making of any such Restricted Junior
Payment;
(iv) the ratio of Senior Indebtedness (as of the last day of
the Fiscal Quarter immediately preceding the date of such Restricted Junior
Payments) to EBITDA (for the four Fiscal Quarters ending on the last day of the
Fiscal Quarter immediately preceding the date of such Restricted Junior
Payments) shall be less than or equal to 3.0 to 1.0, both before and after
giving effect on a pro forma basis to the making of any such Restricted Junior
Payment;
(v) EBITDA for the four Fiscal Quarters ending on the last day
of the Fiscal Quarter immediately preceding the date of such Restricted Junior
Payment shall be at least $22,000,000;
(vi) such Restricted Junior Payments shall have been made on
or before August 31, 2002; and
(vii) no Default or Event of Default shall have occurred and
be continuing on the date such Restricted Junior Payments are made or would
result from the making of such Restricted Junior Payments.
5. Conditions. The effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions precedent (unless specifically
waived in writing by Agent and Lenders):
a. The Loan Parties and Lenders shall have executed and delivered
this Amendment, and all such other documents and instruments as Agent may
require shall have been executed and/or delivered to Agent.
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b. All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other legal
matters incident thereto shall be satisfactory to Agent and its legal counsel.
c. No Default or Event of Default other than the Existing Events
of Default shall have occurred and be continuing.
d. Borrowers shall have provided Agent and Lenders with evidence
satisfactory to Agent and Lenders that Massachusetts Mutual Life Insurance
Company, MassMutual Corporate Investors, MassMutual Participation Investors,
MassMutual Corporate Value Partners Limited, National City Venture Corporation
and Great Lakes Capital Investment I, L.L.C. shall have (i) previously waived in
writing any and all existing defaults under the Securities Purchase Agreement
dated December 23, 1998, in a manner satisfactory to Agent, (ii) reset the
covenants contained therein to levels satisfactory to Agent and Lenders and
(iii) made such other amendments thereto as shall be requested by Agent and
Lenders.
e. The Capital Call Agreement (in form and substance satisfactory
to Agent) shall have been executed and delivered by each of the parties thereto.
Any equity securities proposed to be issued to Harvest Partners in exchange for
the equity contributions made pursuant to the Capital Call Agreement shall be
subject to redemption only upon the satisfaction of the conditions precedent set
forth in Section 4(b) of this Amendment and shall otherwise contain terms and
conditions and be in form and substance satisfactory in all respects to Agent.
6. Representations and Warranties. To induce Agent and Lenders to enter
into this Amendment, the Loan Parties represent and warrant to Agent and Lenders
that (a) the execution, delivery and performance of this Amendment has been duly
authorized by all requisite corporate action on the part of each Loan Party and
that this Amendment has been duly executed and delivered by such Loan Party, (b)
each of the representations and warranties set forth in Section 5 of the
Agreement (other than those which, by their terms, specifically are made as of a
specific date prior to the date hereof) are true and correct in all material
respects as of the date hereof and (c) no Default or Event of Default, other
than the Existing Events of Default, has occurred and is continuing.
7. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
8. References. Any reference to the Agreement contained in any
document, instrument or agreement executed in connection with the Agreement
shall be deemed to be a reference to the Agreement as modified by this
Amendment.
9. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be as
effective as delivery of a manually executed counterpart of this Agreement.
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10. Ratification. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions of the
Agreement and shall not be deemed to be a consent to the modification or waiver
of any other term or condition of the Agreement. Except as expressly modified
and superseded by this Amendment, the terms and provisions of the Agreement are
ratified and confirmed and shall continue in full force and effect.
[Signatures appear on the following pages.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXX INDUSTRIES, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
DEFLECTA-SHIELD CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
BELMOR AUTOTRON CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
DFM CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
AUTO VENTSHADE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
SMITTYBILT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXX ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
BAC ACQUISITION CO.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
TRAILMASTER PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
DELTA III, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
XXXXXX FINANCIAL, INC.,
in its capacity as Agent and a Lender
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as a Lender
By: /s/ Olivier A. Tabouret
-----------------------
Name: Olivier A. Tabouret
Title: Asst. Vice President
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as a Lender
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Asst. Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
---------------------
Name: Xxxxxx X. Xxxxx
Title: Corp. Banking Officer
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, as a Lender
By: /s/ B. Xxxx Xxxxx
-----------------
Name: B. Xxxx Xxxxx
Title: Vice President
IBJ WHITEHALL BANK & TRUST COMPANY,
as a Lender
By: /s/ Xxxxxxx Xxxxxx
------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
KEY CORPORATE CAPITAL, INC., as a Lender
By: /s/ Xxx X. XxXxxxxx
-------------------
Name: Xxx X. XxXxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK, as a Lender
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: Vice President
FIRST SOURCE FINANCIAL LLP, as a Lender
By: First Source Financial, Inc., its Agent/Manager
By: /s/ Xxxx X. Xxxxx
---------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President
SENIOR DEBT PORTFOLIO, as a Lender
By: Boston Management and Research, Inc., as
Investment Advisor
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
ARCHIMEDES FUNDING LLC, as a Lender
By: ING Capital Advisors, Inc., as Collateral Manager
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
