Exhibit 10.6
FIFTH AMENDMENT TO INVESTMENT AGREEMENT
THIS FIFTH AMENDMENT TO INVESTMENT AGREEMENT ("Amendment"), dated as of
March 11, 1998, is made by and among (i) XXXXXXX-XXXXXXX, INC., a Delaware
corporation (the "Company"), (ii) BANC ONE CAPITAL PARTNERS CORPORATION, a Texas
corporation ("Banc One"), and PNC CAPITAL CORP, a Delaware corporation ("PNC")
(Banc One and PNC are sometimes collectively referred to as the "Senior Holders
or individually as a "Senior Holder"), (iii) XXXXXXX X. XXXXXXX, XX., an
individual residing in Connecticut ("Xxxxxxx") and (iv) XXXX X. XXXXX, an
individual residing in New York ("Xxxxx") (Xxxxxxx and Xxxxx are sometimes
collectively referred to as the "Junior Holders", or individually as a "Junior
Holder"; the Senior Holders and the Junior Holders are sometimes collectively
referred to as the "Holders").
W I T N E S S E T H:
WHEREAS, the Senior Holders, Allied (as defined in the Agreement) and the
Company entered into that certain Investment Agreement dated as of May 25, 1994
(the "Original Agreement"), as amended by that certain First Amendment to
Investment Agreement dated as of October 23, 1995, by and among Senior Holders,
Allied, Junior Holders and the Company (the "First Amendment"), that certain
Second Amendment to Investment Agreement dated as of April 12, 1996, by and
among Senior Holders, Junior Holders and the Company (the "Second Amendment"),
that certain Third Amendment to Investment Agreement dated as of January 17,
1997, by and among Senior Holders, Junior Holders and the Company (the "Third
Amendment") and that certain Fourth Amendment to Investment Agreement dated as
of September __, 1997, by and among Senior Holders, Junior Holders and the
Company (the "Fourth Amendment"; the Original Agreement, the First Amendment,
the Second Amendment, the Third Amendment and the Fourth Amendment are herein
collectively referred to as the "Agreement"), pursuant to which the Senior
Holders and Allied agreed to purchase $12,000,000 of subordinated debentures and
Junior Holders agreed to purchase $4,000,000 of junior debentures (the proceeds
of said junior debentures having been used to satisfy the senior debentures held
by Allied), all in accordance with, and as provided in, the Agreement; and
WHEREAS, the Company has requested that the Senior Holders and the Junior
Holders further amend the Agreement in certain respects; and
WHEREAS, Allied remains a "Holder" under the Agreement for limited purposes
only and, accordingly, is not required to join in this Amendment;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreement contained herein, intending to be legally bound hereby, the parties
agree as follows:
1. Senior Debt. In accordance with the provisions of Paragraph 1.03 (Senior
Debt), Holders hereby consent to a $2,514,285.99 increase in the term Senior
Debt of the Company, to aggregate amount of $7,600,000, the consolidation of
said term debt into a single term facility to be repaid in equal, monthly
installments of $200,000 each, plus accrued interest, beginning March 31, 1998,
and maturing April 30, 2001, and the extension of the maturity date of the
remaining Senior Debt to October 31, 2001.
2. Financial Covenants. Sections 7.11 (Minimum Consolidated Net Worth),
7.12 (Consolidated Interest Coverage Ratio), 7.13 (Consolidated Total
Liabilities to Consolidated Net Worth), 7.14 (Consolidated Current Ratio), 7.15
(Consolidated Fixed Charge Coverage Ratio), and 7.16 (Consolidated EBITDA) of
the Agreement are hereby deleted and the following are substituted in lieu
thereof (and, as used therein, "Quarterly Date" shall mean each January 31,
April 30, July 31 and October 31):
7.11 Minimum Consolidated Net Worth. The Company and its Consolidated
Subsidiaries shall maintain as of each date specified below a Consolidated
Net Worth of not less than the following:
Date Amount
---- ------
April 30, 1998 $22,000,000
July 31, 1998 $22,000,000
October 31, 1998 $22,000,000
January 31, 1999 $22,000,000
April 30, 1999 $25,000,000
July 31, 1999 $25,000,000
October 31, 1999 $25,000,000
January 31, 2000 $25,000,000
April 30, 2000 $25,000,000
July 31, 2000 $27,000,000
and thereafter
7.12 Consolidated Interest Coverage Ratio. The Company and its
Consolidated Subsidiaries shall maintain for each period specified below a
Consolidated Interest Coverage Ratio of not less than the following:
2
Period Ratio
------ -----
Four quarters ended
January 31, 1998 2.40 to 1.00
February 1, 1998 to
April 30, 1998 2.40 to 1.00
February 1, 1998 to
July 31, 1998 2.40 to 1.00
February 1, 1998 to
October 31, 1998 2.40 to 1.00
February 1, 1998 to
January 31, 1999 2.40 to 1.00
Four quarters ended
April 30, 1999 2.90 to 1.00
Four quarters ended
July 31, 1999 2.90 to 1.00
Four quarters ended
October 31, 1999 2.90 to 1.00
Four quarters ended
January 31, 2000 2.90 to 1.00
Four quarters ended
April 30, 2000 2.90 to 1.00
Four quarters ended
July 31, 2000 3.60 to 1.00
and on each Quarterly
Date thereafter
7.13 Consolidated Total Liabilities to Consolidated Net Worth. The
Company and its Consolidated Subsidiaries will not as of any date specified
below permit the ratio of Consolidated Current Liabilities to Consolidated
Net Worth to be greater than the following:
Date Ratio
---- -----
April 30, 1998 4.00 to 1.00
July 31, 1998 4.00 to 1.00
October 31, 1998 4.00 to 1.00
January 31, 1999 4.00 to 1.00
April 30, 1999 4.00 to 1.00
July 31, 1999 3.75 to 1.00
October 31, 1999 3.75 to 1.00
January 31, 2000 3.75 to 1.00
April 30, 2000 3.75 to 1.00
July 31, 2000 3.25 to 1.00
and each Quarterly
Date thereafter
3
7.14 Consolidated Current Ratio. The Company and its Consolidated
Subsidiaries shall have as of any date specified below a ratio of
Consolidated Current Assets to Consolidated Current Liabilities of not less
than the following:
Date Ratio
---- -----
April 30, 1998 1.08 to 1.00
July 31, 1998 1.08 to 1.00
October 31, 1998 1.08 to 1.00
January 31, 1999 1.08 to 1.00
April 30, 1999 1.08 to 1.00
July 31, 1999 1.25 to 1.00
October 31, 1999 1.25 to 1.00
January 31, 2000 1.25 to 1.00
April 30, 2000 1.25 to 1.00
July 31, 2000 1.35 to 1.00
and each Quarterly
Date thereafter
7.15 Consolidated Fixed Charge Coverage Ratio. The Company and its
Consolidated Subsidiaries shall maintain at the end of each Rolling Period
a Consolidated Fixed Charge Coverage Ratio of not less than 1.10 to 1.00.
7.16 Consolidated EBITDA. The Company and its Consolidated
Subsidiaries shall have for each period specified below an amount of
Consolidated EBITDA of not less than the following:
Period Amount
------ ------
For the four quarters
ended on January 31,
1998 $12,000,000
February 1, 1998 to
April 30, 1998 $ 2,500,000
February 1, 1998 to
July 31, 1998 $ 5,500,000
February 1, 1998 to
October 31, 1998 $ 8,500,000
February 1, 1998 to
January 31, 1999 $11,500,000
For the four quarters
ended on April 30, 1999 $13,000,000
For the four quarters
ended on July 30, 1999 $13,500,000
For the four quarters
ended on October 31, 1999 $13,500,000
For the four quarters
ended on January 31, 2000 $13,500,000
4
For the four quarters
ended on April 30, 2000 $13,500,000
For the four quarters
ended on July 31,
2000 and for the four
quarters ended on
each Quarterly Date
thereafter $14,500,000
3. Miscellaneous. The provisions of the Agreement shall remain in full
force and effect except as modified hereby.
IN WITNESS WHEREOF, the parties, by their duly authorized officers, have
executed and delivered this Fourth Amendment to Investment Agreement as of the
date first written above.
XXXXXXX-XXXXXXX, INC.
ATTEST: _______________________ By: /s/ WO Xxxxxx
---------------------------
Title: PRESIDENT
BANC ONE CAPITAL PARTNERS
CORPORATION
ATTEST: _______________________ By:/s/ Xxxxx X. Xxxxx
-------------------------------
Title: Managing Director
PNC CAPITAL CORP
ATTEST: _______________________ By: /s/ Xxxxx X. Xxxxx
-------------------------------
Title: Senior Vice President
and Principle
WITNESS: ______________________ /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
XXXXXXX X. XXXXXXX, XX.
WITNESS: ______________________ /s/ Xxxx X. Xxxxx
-------------------------------
XXXX X. XXXXX
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