SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment") is
dated as of the 26th day of October, 1998 among XXXX, INC. (the "Borrower"),
WACHOVIA BANK, N.A. (successor by merger to Wachovia Bank of Georgia, N.A.),
as Agent (the "Agent"), FIRST UNION NATIONAL BANK (successor by merger to
First Union National Bank of North Carolina), as Documentation Agent and
WACHOVIA BANK, N.A.(successor by merger to Wachovia Bank of North Carolina,
N.A.), FIRST UNION NATIONAL BANK, and SUNTRUST BANK, ATLANTA (collectively,
the "Banks");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent, the Documentation Agent and the Banks
executed and delivered that certain Credit Agreement, dated as of April 23,
1997, as amended by First Amendment to Credit Agreement dated as of July 22,
1998 (as so amended, the "Credit Agreement");
WHEREAS, the Borrower has requested and the Agent, the Documentation
Agent and the Banks 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, the
Documentation Agent and the Banks 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. 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 date hereof refer
to the Credit Agreement as amended hereby.
2. Amendment to Section 1.01. Section 1.01 of the Credit Agreement
hereby is amended by (i) deleting the definitions of "EBIT" and "EBITDA" and
(ii) adding the following definitions of "Capital Expenditures",
"Consolidated Lease Expense", "EBITDA", "EBILTDA", "Performance Pricing
Recommencement Date" and "Second Amendment Effective Date":
"Capital Expenditures" means for any period the sum of all
capital expenditures incurred during such period by the Borrower and
its Consolidated Subsidiaries, as determined in accordance with GAAP.
"Consolidated Lease Expense" for any period means all
rental expense under operating leases of the Borrower and its
Consolidated Subsidiaries on a consolidated basis during such period.
"EBITDA" means at any time the sum of the following,
determined on a consolidated basis for the Borrower and its
Consolidated Subsidiaries, at the end of each Fiscal Quarter, for the
Fiscal Quarter just ended and the 3 immediately preceding Fiscal
Quarters (and with respect to any Acquisition which is made during such
4 Fiscal Quarter period, the Consolidated Subsidiary acquired in such
Acquisition shall be included as if it had been a Consolidated
Subsidiary prior to the commencement of such 3 Fiscal Quarter period):
(i) Consolidated Net Income; plus (ii) Consolidated Net Interest
Expense; plus (iii) taxes on income; plus (iv) depreciation; plus (v)
amortization; plus (vi) other non-cash charges.
"EBILTDA" means at any time the sum of the following,
determined on a consolidated basis for the Borrower and its
Consolidated Subsidiaries, at the end of each Fiscal Quarter, for the
Fiscal Quarter just ended and the 3 immediately preceding Fiscal
Quarters (and with respect to any Acquisition which is made during such
4 Fiscal Quarter Period, the Consolidated Subsidiary acquired in such
Acquisition shall be included as if it had been a Consolidated
Subsidiary prior to the commencement of such 4 Fiscal Quarter Period):
(i) EBITDA; plus (ii) Consolidated Lease Expense.
"Performance Pricing Recommencement Date" means the first
date on and after the commencement of the third Fiscal Quarter for
Fiscal Year 2000 on which the Banks receive a Compliance Certificate
furnished pursuant to Section 5.01(c) showing compliance with Sections
5.05, 5.15, 5.16, 5.17, 5.19, 5.20, 5.21 and (unless Section 5.23 has
terminated pursuant and subject to the last sentence thereof) 5.23.
"Second Amendment Effective Date" means October 26, 1998.
3. Amendment to Section 2.03(a). Section 2.03(a) of the Credit
Agreement hereby is amended by deleting the first sentence in its entirety,
and substituting therefor the following.
In addition to making Syndicated Borrowings, at any time on and after
(but not before) the commencement of Fiscal Year 2001, the Borrower
may, as set forth in this Section 2.03, request the Banks to make
offers to make Money Market Borrowings available to the Borrower.
4. Amendment to Section 2.06(a). Section 2.06(a) of the Credit
Agreement hereby is amended by deleting it in its entirety and substituting
the following therefor:
(a) "Applicable Margin" means:
(i) for the period commencing on the Second Amendment Effective
Date to the Performance Pricing Recommencement Date, (x) for any Base
Rate Loan, 0.00%, and (y) for any Euro-Dollar Loan or Foreign Currency
Loan, 1.125%; and
(ii) from and after the Performance Pricing Recommencement 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 Debt/EBITDA Ratio for the quarterly or annual period ending
immediately prior to such Performance Pricing Determination Date.
Debt/EBITDA Ratio Applicable Margin
< 1.0 to 1.0 0.25%
> 1.0 to 1.0 but < 2.0 to 1.0 0.275%
> 2.0 to 1.0 but < 2.5 to 1.0 0.30%
> 2.5 to 1.0 but < 3.0 to 1.0 0.3625%
> 3.0 to 1.0 but < 3.5 to 1.0 0.55%
> 3.5 to 1.0 0.75%
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: (x) for Fixed Rate Loans, changes in interest shall only
be effective for Interest Periods commencing on or after the
Performance Pricing Determination Date; and (y) 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.
5. Amendment to Section 2.07(a). Section 2.07(a) of the Credit
Agreement hereby is amended by deleting it in its entirety and substituting
the following therefor:
(a) The Borrower shall pay to the Agent, for the ratable account
of each Bank, a facility fee, calculated in the manner provided in the
last paragraph of Section 2.06(a)(ii), on the aggregate amount of such
Bank's Commitment (without taking into account the amount of the
outstanding Loans made by such Bank), at a rate per annum equal to: (i)
for the period commencing on the Second Amendment Effective Date to and
including the first Performance Pricing Determination Date occurring
after the commencement of the third Fiscal Quarter of Fiscal Year 2000,
0.375%; and (ii) from and after the first Performance Pricing
Determination Date occurring after the commencement of the third Fiscal
Quarter of Fiscal Year 2000, the percentage determined on each
Performance Pricing Determination Date by reference to the table set
forth below and the Debt/EBITDA Ratio for the quarterly or annual
period ending immediately prior to such Performance Pricing
Determination Date:
Debt/EBITDA Ratio Facility Fee
< 1.0 to 1.0 0.10%
> 1.0 to 1.0 but 2.0 to 1.0 0.125%
> 2.0 to 1.0 but 2.5 to 1.0 0.15%
> 2.5 to 1.0 but 3.0 to 1.0 0.1875%
> 3.0 to 1.0 0.25%
Such facility fees shall accrue from and including the Closing Date 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.
6. Amendment to Section 5.01(c). Section 5.01(c) of the Credit
Agreement hereby is amended by (i) deleting the word "and" before the
reference to "5.21" in the 7th line thereof and substituting a comma
therefor, and (ii) adding after such reference to "5.21" the word and
reference "and 5.23".
7. Amendment to Section 5.01(d). Section 5.01(d) of the Credit
Agreement hereby is amended by (i) deleting the word "and" before the
reference to "5.21" in the 7th line thereof and substituting a comma
therefor, and (ii) adding after such reference to "5.21" the word and
reference "and 5.23".
8. Amendment to Section 5.19. Section 5.19 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the
following therefor:
SECTION 5.19. Interest and Leases Coverage. At the end of
each Fiscal Quarter, the ratio of EBILTDA to the sum of (x)
Consolidated Net Interest Expense plus (y) Consolidated Lease Expense
shall not have been less than: (i) for the period from and including
the second Fiscal Quarter of Fiscal Year 1999 through and including the
first Fiscal Quarter of Fiscal Year 2000, 2.0 to 1.0; (ii) for the
period from and including the second Fiscal Quarter of Fiscal Year 2000
through and including the third Fiscal Quarter of Fiscal Year 2000,
2.25 to 1.0; and (iii) at all times thereafter, 3.0 to 1.0.
9. Amendment to Section 5.21. Section 5.21 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the
following therefor:
SECTION 5.21. Debt/EBITDA Ratio. The Debt/EBITDA Ratio at the
end of each Fiscal Quarter will be less than: (i) for the period from
and including the second Fiscal Quarter of Fiscal Year 1999 through and
including the first Fiscal Quarter of Fiscal Year 2000, 5.0 to 1.0;
(ii) for the period from and including the second Fiscal Quarter of
Fiscal Year 2000 through and including the third Fiscal Quarter of
Fiscal Year 2000, 4.0 to 1.0; and (iii) at all times thereafter, 3.5 to
1.0.
10. New Section 5.23. A new Section 5.23 hereby is added to the
Credit Agreement, as follows:
SECTION 5.23. Capital Expenditures. Commencing with
the second Fiscal Quarter of Fiscal Year 1999 and continuing through
the end of the first Fiscal Quarter of Fiscal Year 2000, Capital
Expenditures for any Fiscal Quarter shall not exceed the sum of (i)
100% of the amount set forth for Capital Expenditures for such Fiscal
Quarter in the quarterly projections of cash flows of the Borrower
dated October 26, 1998 furnished to the Banks; plus (ii) 50% of the
amount of Capital Expenditures permitted under clause (i) for the
immediately preceding Fiscal Quarter but not expended; provided that
after giving effect to the incurrence of any Capital Expenditures
permitted by this Section, no Default shall be in existence or be
created thereby. So long as no Default is in existence on the first
day of the second Fiscal Quarter of Fiscal Year 2000, this covenant
shall terminate, and thereafter all references in this Agreement to
Section 5.23 shall be ignored.
11. New Section 5.24. A new Section 5.24 hereby is added to the
Credit Agreement, as follows:
SECTION 5.24. Bank Debt. From and after the Second
Amendment Effective Date, the Borrower shall not, and shall not permit
any Subsidiary to, incur any Debt to any bank or other financial
institution, other than Debt arising in the ordinary course of business
from or with respect to (i) the endorsement of negotiable instruments
and (ii) the operating accounts of, and cash management services
provided to, the Borrower and its Subsidiaries.
12. Amendment to Section 6.01(b). Section 6.01(b) of the Credit
Agreement hereby is amended by deleting the reference "5.22" in the 3rd line
thereof and substituting therefor the reference "5.24".
13. Amendment to Exhibit F. Exhibit F to the Credit Agreement hereby
is amended by deleting paragraphs 5 and 7 thereof, substituting therefor
paragraphs 5 and 7 set forth in Exhibit F attached hereto, and adding a new
paragraph 8 thereto, as set forth in Exhibit F attached hereto.
14. Restatement of Representations and Warranties. The Borrower
hereby restates and renews each and every representation and warranty
heretofore made by it in the Credit Agreement and the other Loan Documents as
fully as if made on the date hereof and with specific reference to this
Second Amendment and all other loan documents executed and/or delivered in
connection herewith.
15. Effect of Amendment. Except as set forth expressly hereinabove,
all terms of the Credit Agreement and the other Loan Documents shall be and
remain in full force and effect, and shall constitute the legal, valid,
binding and enforceable obligations of the Borrower. The amendments
contained herein shall be deemed to have prospective application only, unless
otherwise specifically stated herein.
16. 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.
17. Counterparts. This Second Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, and
delivered by facsimile transmission, each of which when so executed and
delivered (including by facsimile transmission) shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but
one and the same instrument.
18. Section References. Section titles and references used in this
Second 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.
19. No Default. To induce the Agent and the Banks to enter into this
Second Amendment and to continue to make advances pursuant to the Credit
Agreement, the Borrower hereby acknowledges and agrees that, as of the date
hereof, and after giving effect to the terms hereof, there exists (i)-no
Default or Event of Default 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 Banks under the Credit Agreement.
20. Further Assurances. The Borrower agrees to take such further
actions as the Agent shall reasonably request in connection herewith to
evidence the amendments herein contained to the Borrower.
21. Governing Law. This Second Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of
Georgia.
22. Conditions Precedent. This Second Amendment shall become
effective only upon execution and delivery of this Second Amendment by the
Borrower, the Agent and each Bank.
IN WITNESS WHEREOF, the Borrower, the Agent and each of the Banks whose
signature appears below has caused this Second Amendment to be duly executed,
under seal, by its duly authorized officer as of the day and year first above
written.
XXXX, INC.,
as Borrower (SEAL)
By:
Title:
WACHOVIA BANK, N.A. (successor
by merger to Wachovia Bank of
Georgia, N.A. and Wachovia Bank
North Carolina, N.A.), as Agent
and as a Bank (SEAL)
By:
Title:
FIRST UNION NATIONAL BANK
(successor by merger to
First Union National Bank
of North Carolina),
as Documentation Agent and
as a Bank (SEAL)
By:
Title:
SUNTRUST BANK, ATLANTA,
as a Bank (SEAL)
By:
Title:
EXHIBIT F
5. Interest and Leases Coverage (Section 5.19)
At the end of each Fiscal Quarter, the ratio of EBILTDA to the sum of (x)
Consolidated Net Interest Expense plus (y) Consolidated Lease Expense shall
not have been less than: (i) for the period from and including the second
Fiscal Quarter of Fiscal Year 1999 through and including the first Fiscal
Quarter of Fiscal Year 2000, 2.0 to 1.0; (ii) for the period from and
including the second Fiscal Quarter of Fiscal Year 2000 through and
including the third Fiscal Quarter of Fiscal Year 2000, 2.25 to 1.0; and
(iii) at all times thereafter, 3.0 to 1.0.
(a) EBILTDA - Schedule 1 $
(b) Consolidated Net Interest Expense
- Schedule 1 $
(c) Consolidated Lease Expense
- Schedule 1 $____________
(d) Sum of (b) and (c) $____________
(e) Actual ratio of (a) to (d) to 1.0
Minimum ratio [2.0 to 1.0]
[2.25 to 1.0]
[3.0 to 1.0]
7. Debt/EBITDA Ratio (Section 5.21)
The Debt/EBITDA Ratio at the end of each Fiscal Quarter will be less than:
(i) for the period from and including the second Fiscal Quarter of Fiscal
Year 1999 through and including the first Fiscal Quarter of Fiscal Year
2000, 5.0 to 1.0; (ii) for the period from and including the second Fiscal
Quarter of Fiscal Year 2000 through and including the third Fiscal Quarter
of Fiscal Year 2000, 4.0 to 1.0; and (iii) at all times thereafter, 3.5 to
1.0.
(a) Total Debt $ ______________
(b) EBITDA - Schedule 1 $ ______________
(c) Actual ratio of (a) to (b) to 1.0
Maximum ratio [<5.0 to 1.0]
[<4.0 to 1.0]
[<3.5 to 1.0]
8. Capital Expenditures (Section 5.23)1
Commencing with the second Fiscal Quarter of Fiscal Year 1999 and
continuing through the end of the first Fiscal Quarter of Fiscal Year 2000,
Capital Expenditures for any Fiscal Quarter shall not exceed the sum of (i)
100% of the amount set forth for Capital Expenditures for such Fiscal
Quarter in the quarterly projections of cash flows of the Borrower dated
October 26, 1998 furnished to the Banks; plus (ii) 50% of the amount of
Capital Expenditures permitted under clause (i) for the immediately
preceding Fiscal Quarter but not expended; provided that after giving
effect to the incurrence of any Capital Expenditures permitted by this
Section, no Default shall be in existence or be created thereby. So long as
no Default is in existence on the first day of the second Fiscal Quarter of
Fiscal Year 2000, this covenant shall terminate, and thereafter all
references in this Agreement to Section 5.23 shall be ignored.
(a) Capital Expenditures for Fiscal
Quarter just ended $______________
(b) Capital Expenditures set forth in
10/7/98 projections for Fiscal
Quarter just ended $______________
(c) Capital Expenditures permitted under
clause (i) for Fiscal Quarter
immediately preceding Fiscal Quarter
just ended but not expended $______________
(d) 50% of (c) $______________
(e) sum of (b) plus (d) $______________
Limitation: (a) may not exceed (e)
Schedule 1
EBITDA/EBILTDA
I. EBITDA
(a) Consolidated Net Income for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
Total $______________
(b) Consolidated Net Interest Expense for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
Total $______________
(c) Income Taxes for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
Total $______________
(d) Depreciation expense for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
Total $______________
(e) Amortization expense for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
Total $______________
(f) Other Non-cash charges for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
Total $______________
TOTAL EBITDA (sum of (a) through (f)) $______________
II. EBILTDA
(a) EBITDA (from Part I) $ ____________
(b) Capital Lease Expense for:
quarter $______________
quarter $______________
quarter $______________
quarter $______________
TOTAL EBILTDA (sum of (a) and(b)) $______________
--------
1 May be deleted from and after termination of the covenant pursuant and
subject to the last sentence of Section 5.23.
