EXHIBIT 10.1
SECOND AMENDMENT, dated as of September 22, 2000 (this "Second
Amendment"), to the Amended and Restated Credit Agreement, dated as of
September 8, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Home Products International, Inc.
(the "Borrower"), the several banks and other financial institutions or
entities from time to time parties thereto (the "Lenders"), and The Chase
Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement the Lenders have agreed
to make, and have made, certain extensions of credit to the Borrower;
WHEREAS, the Borrower has requested that the Lenders amend, and
the Lenders have agreed to amend, certain of the provisions of the Credit
Agreement upon the terms and subject to the conditions set forth below;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined are used herein as defined in the Credit Agreement.
2. Amendment to Section 1.1. Section 1.1 of the Credit Agreement
is hereby amended by adding the following defined terms in proper
alphabetical order:
"Covenant Reinstatement Condition": shall occur upon any
date after the Second Amendment Effective Date on which the
Borrower would be in compliance on a pro forma basis with the
covenants set forth in Section 7.1(a), (b) and (c), as such
covenants existed prior to the amendments thereto provided in the
Second Amendment, as of the last day of the fiscal quarter
immediately preceding such date.
"Second Amendment": the Second Amendment dated as of
September 22, 2000 to this Agreement.
"Second Amendment Effective Date": the date on which the
Second Amendment becomes effective in accordance with its terms.
3. Amendment to Section 6.1. Section 6.1 of the Credit Agreement
is amended by (i) deleting the word "and" which appears at the end of
paragraph (a), (ii) deleting the period from the end of paragraph (b) and
(iii) adding the following new paragraph (c):
(c) as soon as available, but in any event not
later than the last Business Day of the calendar month
(or (1) in the case of the December fiscal months, no
later than the last Business Day of the second calendar
month and (2) in the case of January fiscal months, no
later than the following March 15) after the end of each
fiscal month of the Borrower, the unaudited consolidated
balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal month and the
related unaudited consolidated statements of income and
of cash flows for such fiscal month and the portion of
the fiscal year through the end of such fiscal month,
setting forth in each case in comparative form the
figures for the previous year (beginning with the fiscal
month ending October 31, 2001), certified by a
Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit
adjustments).
4. Amendment to Section 6.2. Section 6.2 of the Credit Agreement
is hereby amended by adding the following immediately at the end of
paragraph (b) thereof:
and concurrently with the delivery of any financial
statements pursuant to Section 6.1(c) (i) a certificate
of a Responsible Officer stating that such Responsible
Officer has obtained no knowledge of any Default or
Event of Default during the period covered by such
financial statements except as specified in such
certificate (including, in the case of any such Default
or Event of Default, an explanation of the proposed
actions the Borrower intends to take with respect
thereto), and (ii) a compliance certificate in a form
approved by the Administrative Agent executed by a
Responsible Officer of the Borrower containing all
information necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of
Section 7.1(d) for the period of 12 consecutive fiscal
months ending as of the last day of the month of the
Borrower for which such financial statements are
delivered;
5. Amendment to Section 7.1. (a) Section 7.1(a) of the Credit
Agreement is hereby amended by deleting the table setting forth the maximum
permitted Consolidated Total Leverage Ratio and substituting, in lieu
thereof, the following:
Consolidated Total
Period Leverage Ratio
------ --------------
September 30, 2000 6.25 to 1.00
December 31, 2000 - March 31, 2001 7.00 to 1.00
June 30, 2001 - September 30, 2001 6.75 to 1.00
December 31, 2001 6.50 to 1.00
March 31, 2002 - June 30, 2002 5.00 to 1.00
September 30, 2002 - June 30, 2003 4.75 to 1.00
September 30, 2003 - September 30, 2004 4.50 to 1.00
6. (b) Section 7.1(b) of the Credit Agreement is hereby amended by
deleting the table setting forth the maximum permitted Consolidated Senior
Leverage Ratio and substituting, in lieu thereof, the following:
Consolidated Senior
Period Leverage Ratio
------ --------------
September 30, 2000 3.000 to 1.00
December 31, 2000 3.250 to 1.00
March 31, 2001 3.250 to 1.00
June 30, 2001 3.250 to 1.00
September 30, 2001 3.125 to 1.00
December 31, 2001 3.000 to 1.00
March 31, 2002 - June 30, 2002 2.750 to 1.00
September 30, 2002 - September 30, 2004 2.500 to 1.00
7. (c) Section 7.1(c) of the Credit Agreement is hereby amended by
deleting the table setting forth the maximum permitted Consolidated Interest
Coverage Ratio and substituting, in lieu thereof, the following:
Consolidated Interest
Period Coverage Ratio
------ --------------
September 30, 2000 1.75 to 1.00
December 31, 2000 1.50 to 1.00
March 31, 2001 1.50 to 1.00
June 30, 2001 - September 30, 2001 1.50 to 1.00
December 31, 2001 1.55 to 1.00
March 31, 2002 - June 30, 2002 2.25 to 1.00
September 30, 2002 - September 30, 2004 2.50 to 1.00
(d) Section 7.1 of the Credit Agreement is hereby amended by
adding the following new paragraph (d):
(d) Consolidated EBITDA. Permit Consolidated EBITDA for any
period of 12 consecutive fiscal months ending after the Second
Amendment Effective Date to be less than $33,000,000.
8. Amendment to Section 7.6. Section 7.6 of the Credit Agreement
is hereby amended by adding the following at the end thereof:
Notwithstanding the foregoing, the Borrower and its Subsidiaries
may not make any of the Restricted Payments or engage in any of
the transactions permitted by the preceding clauses (ii) - (v)
after the Second Amendment Effective Date unless at the time of
the making of such Restricted Payment or the consummation of such
transaction the Covenant Reinstatement Condition is satisfied.
9. Amendment to Section 7.7. Section 7.7 of the Credit Agreement
is hereby amended by (i) deleting the word "and" from the end of paragraph
(a), (ii) deleting the period from the end of paragraph (b) and substituting
therefor the phrase "; and" and (iii) adding the following new paragraph
(c):
(c) Notwithstanding the foregoing paragraph (a), the
Capital Expenditures of the Borrower and its Subsidiaries
permitted by paragraph (a) to be made and committed to be made
shall not exceed $15,000,000 in any fiscal year, beginning with
fiscal year 2000, unless at the time of making or committing to
make each such Capital Expenditure in excess of $15,000,000 in
any such fiscal year the Covenant Reinstatement Condition is
satisfied.
10. Amendment to Section 7.8. Section 7.8 of the Credit Agreement
is hereby amended by adding the following at the end of paragraph (g):
notwithstanding the foregoing, the Borrower and its
Subsidiaries may not make any Acquisition pursuant to
this paragraph (g) unless at the time of such
Acquisition (x) the Covenant Reinstatement Condition is
satisfied and (y) the pro forma compliance with the
financial covenants contained in Section 7.1 required by
clause (i) above is based on Section 7.1 as it existed
prior to the amendments thereto provided in the Second
Amendment;
11. Amendment to Section 7.9. Section 7.9 of the Credit Agreement
is hereby amended by adding the following at the end of clause (a) thereof:
provided further that notwithstanding the foregoing the
Borrower and its Subsidiaries may not Take Out any
Senior Subordinated Notes (other than scheduled interest
payments required to be made in cash) in accordance with
the preceding clauses (i) or (ii) unless at the time of
any Take Out the Covenant Reinstatement Condition is
satisfied,
12. Amendment to Section 7. Section 7 of the Credit Agreement is
hereby amended by adding the following new Section 7.18:
7.18 Maintenance of Cash. Have or maintain any cash, cash
equivalents, proceeds of Collateral or any other monies, investments,
instruments, securities or cash equivalents in any banking, investment
or other account or in any place other than (a) in an account opened
and maintained at a Lender or (b) in the possession of the
Administrative Agent.
13. Reduction of Total Revolving Commitments. On the Condition
Satisfaction Date (as defined below) the Total Revolving Commitments will
be automatically and permanently reduced by $15,000,000 to $85,000,000.
14. Amendment to Annex A. Annex A of the Credit Agreement is
hereby amended by deleting it in its entirety and substituting, in lieu
thereof, the Annex A attached to this Amendment.
15. Effectiveness. This Second Amendment shall become effective
as of September 22, 2000 on the date (the date the following conditions are
satisfied, the "Condition Satisfaction Date") that (i) the Administrative
Agent shall have received counterparts of this Second Amendment duly
executed by the Borrower and the Required Lenders, and (ii) the Borrower
shall have paid all fees and expenses required to be paid to the
Administrative Agent and the Lenders in connection with this Second
Amendment and the Credit Agreement, including any fees and expenses of
counsel to the Administrative Agent.
16. Amendment Fee. The Borrower shall pay to the Administrative
Agent, for the account of each Lender which delivers to the Administrative
Agent an executed copy of this Second Amendment on or prior to the
Condition Satisfaction Date an amendment fee equal to 0.25% of the sum of
such Lender's Revolving Commitment (after giving effect to the reduction in
the Total Revolving Commitments set forth in Section 11 above) and
Term Loans on the Condition Satisfaction Date, payable on the Condition
Satisfaction Date.
17. Representations and Warranties. On and as of the date hereof
after giving effect to this Second Amendment, the Borrower hereby
represents and warrants to the Lenders that:
(a) Each of the representations and warranties contained in
Section 4 of the Credit Agreement or in any certificate, document
or financial or other statement furnished at any time under or in
connection therewith are true and correct in all material
respects on and as of such date as if made on and as of such
date, except to the extent that such representations and
warranties specifically relate to an earlier date, in which case
such representations and warranties shall be true and correct in
all material respects as of such earlier date; provided that the
references to the Credit Agreement therein shall be deemed to
include this Second Amendment;
(b) No Default or Event of Default has occurred and is
continuing.
18. Conditions Subsequent. The Borrower agrees that on or prior
to the date which is 30 days after the Conditions Satisfaction Date it
shall:
(a) deliver to the Administrative Agent an update of the Schedules
to the Guarantee and Collateral Agreement;
(b) deliver to the Administrative Agent (i) a list of all
Subsidiaries, Capital Stock, promissory notes and other instruments
owned by any Loan Party; (ii) all Intellectual Property (as defined in
the Guarantee and Collateral Agreement) owned by any Loan Party; (iii)
all real property in which any Loan Party has a fee or leasehold
interest; and (iv) all locations at which any Collateral owned by any
Loan Party is located; and
(c) take all action required by Section 6.9 of the Credit
Agreement or reasonably requested by the Administrative Agent with
respect to matters addressed in such Section 6.9.
19. Continuing Effect; No Other Amendments. Except as expressly
amended or waived hereby, all of the terms and provisions of the Credit
Agreement and the other Loan Documents are and shall remain in full force
and effect. The amendments and waivers contained herein shall not
constitute an amendment or waiver of any other provision of the Credit
Agreement or the other Loan Documents or for any purpose except as expressly
set forth herein.
20. GOVERNING LAW; Counterparts. (a) THIS SECOND AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
(b) This Second Amendment may be executed in any number of
counterparts, all of which counterparts, taken together, shall constitute
one and the same instrument. This Second Amendment may be delivered by
facsimile transmission of the relevant signature pages hereof.
IN WITNESS WHEREOF, the parties have caused this Second Amendment
to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
HOME PRODUCTS INTERNATIONAL, INC.
By___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By___________________________________
Name:
Title:
BANK OF AMERICA, N.A.
By___________________________________
Name:
Title:
KEY CORPORATE CAPITAL INC.
By___________________________________
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION
By___________________________________
Name:
Title:
SOCIETE GENERALE
By___________________________________
Name:
Title:
BANK ONE, NA
By___________________________________
Name:
Title:
Annex A
PRICING GRID FOR TERM LOANS REVOLVING LOANS, SWINGLINE LOANS,
AND COMMITMENT FEES
Consolidated Total Applicable Applicable Commitment Fee
Leverage Ratio Margin for Margin for ABR Rate
Eurodollar Loans Loans
-------------------------- ---------------- -------------- --------------
Greater than or equal to
6.25 to 1.00 3.50% 2.50% .50%
Less than 6.25 to 1.00 and
greater than or equal to 3.25% 2.25% .50%
5.75 to 1.00
Less than 5.75 to 1.00 and
greater than or equal to 3.00% 2.00% .50%
5.25 to 1.00
Less than 5.25 to 1.00 and
greater than or equal to 2.75% 1.75% .50%
4.75 to 1.00
Less than 4.75 to 1.00 and
greater than or equal to 2.50% 1.50% .50%
3.75 to 1.00
Less than 3.75 to 1.00 2.00% 1.00% .375%
Changes in the Applicable Margin with respect to Revolving Loans or
Swingline Loans or in the Commitment Fee Rate resulting from changes in the
Consolidated Total Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th
day after the end of each of the first three quarterly periods of each
fiscal year or the 90th day after the end of each fiscal year, as the case
may be) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above
are not delivered within the time periods specified above, then, until such
financial statements are delivered, if the Administrative Agent or the
Required Lenders so determine, the Consolidated Total Leverage Ratio as at
the end of the fiscal period that would have been covered thereby shall for
the purposes of this definition be deemed to be greater than 6.25 to 1.00.
In addition, at all times while an Event of Default shall have occurred and
be continuing and the Administrative Agent or the Required Lenders so
determine, the Consolidated Total Leverage Ratio shall for the purposes of
this definition be deemed to be greater than 6.25 to 1.00. Each
determination of the Consolidated Total Leverage Ratio pursuant to this
definition shall be made with respect to the period of four consecutive
fiscal quarters of the Borrower ending at the end of the period covered by
the relevant financial statements.
