Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
AND WAIVER
THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER dated as of March 14, 2007 (the “Amendment”) is entered into among Georgia Gulf Corporation, a Delaware corporation (“GGC”), Royal Group, Inc. (formerly known as Royal Group Technologies Limited), a Canadian federal corporation (the “Canadian Borrower”; together with GGC, the “Borrowers”), the Guarantors, the Lenders party hereto, Bank of America, National Association, as Domestic Administrative Agent and Bank of America, National Association acting through its Canada branch, as Canadian Administrative Agent. All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement (as defined below).
RECITALS
WHEREAS, the Borrowers, the Guarantors, the Lenders, Bank of America, National Association, as Domestic Administrative Agent, Domestic Collateral Agent and Domestic L/C Issuer, Bank of America, National Association acting through its Canada branch, as Canadian Administrative Agent, Canadian Collateral Agent and Canadian L/C Issuer and The Bank of Nova Scotia, as Canadian Swing Line Lender entered into that certain Credit Agreement dated as of October 3, 2006 (as amended from time to time, the “Credit Agreement”); and
WHEREAS, GGC has requested that the Lenders provide the waivers set forth below in Section 1 and also amend the Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Waivers.
(a) Notwithstanding the terms of Section 7.14 of the Credit Agreement, the Lenders hereby agree that the Canadian Borrower shall not be required to give the Canadian Collateral Agent or GGC a Lien on its right, title and interest in and to (a) that certain Lease of Industrial Building dated November 14, 2006 between OMERS Realty Corporation and the Canadian Borrower (the “Industrial Lease”); provided that the Industrial Lease is not extended beyond March 31, 2007 and (b) that certain Lease of Multi-Tenant Industrial Space dated November 14, 2006 between OMERS Realty Corporation and the Canadian Borrower (the “Multi-Tenant Lease”); provided that the Multi-Tenant Lease is not extended beyond September 30, 2007.
(b) Notwithstanding the terms of Section 8.11(a) of the Credit Agreement, the Lenders hereby agree that the Loan Parties shall not be required to comply with the terms of Section 8.11(a) of the Credit Agreement as of the end of the fiscal quarter ending December 31, 2006.
(c) The above waivers shall not modify or affect the Loan Parties’ obligations to comply fully with the terms of Section 7.14, Section 8.11(a) or any other duty, term, condition or covenant contained in the Credit Agreement or any other Loan Document in the future. This waiver is limited solely to the specific waivers identified above, and nothing contained in this Amendment shall be deemed to constitute a waiver of any other rights or remedies the
Administrative Agents or any Lender may have under the Credit Agreement or any other Loan Document or under applicable law.
2. Amendments.
(a) The following definitions are hereby added to Section 1.01 of the Credit Agreement in the appropriate alphabetical order to read as follows:
“Permitted Canadian Dispositions” means, subsequent to the Second Amendment Effective Date, the sale or disposition by the Canadian Loan Parties of properties having a fair market value not exceeding $65,000,000 in the aggregate.
“Permitted Sale and Leaseback Transactions” means, subsequent to the Second Amendment Effective Date, the sale and leaseback by the Canadian Loan Parties of properties having a fair market value not exceeding $125,000,000 in the aggregate.
“Second Amendment Effective Date” means March 14, 2007.
(b) The proviso in the definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:
provided that Consolidated EBITDA for the fiscal quarter periods ending March 31, 2006, June 30, 2006 and September 30, 2006 shall be deemed to equal the amounts set forth on Schedule 1.01(a) opposite each such fiscal quarter period.
(c) The definition of “Consolidated Net Income” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:
“Consolidated Net Income” means, for any period, for GGC and its Subsidiaries on a consolidated basis, the net income of GGC and its Subsidiaries for that period (exclusive of, without duplication, (x) the effect of (1) any extraordinary gain, (2) any extraordinary non-cash loss, (3) for any fiscal quarter period ending prior to the Closing Date, any extraordinary loss paid in cash during such period and (4) for the fiscal quarter ending December 31, 2006, any charge or loss during such period but only to the extent similar types of charges or losses were added back to Consolidated EBITDA in calculating Consolidated EBITDA for the fiscal quarters ending March 31, 2006, June 30, 2006 and September 30, 2006 pursuant to the proviso in the definition of Consolidated EBITDA, each in accordance with GAAP and (y) the income of any Person (other than GGC) in which any other Person (other than GGC or any Subsidiary or any director holding qualifying shares in compliance with applicable law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to GGC or any Subsidiary during such period), determined on a consolidated basis in accordance with GAAP for such period.
(d) Subclause (a) of the definition of “Domestic L/C Issuer” in Section 1.01 of the Credit Agreement is hereby amended to read as follows:
(a) with respect to the Existing Domestic Letters of Credit set forth in Schedule 1.01(c), JPMorgan Chase Bank
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(e) The “.” at the end of the subclause (n) of Section 8.03 of the Credit Agreement is hereby replaced with “; and” and the following new subclause (o) is hereby added at the end of Section 8.03 to read as follows:
(o) Indebtedness of GGC under that certain letter of credit number issued by Wachovia Bank, National Association in favor of First Citizens Bank & Trust Company, as trustee, in the face amount of US$17,736,667.
(f) Section 2.05(b)(vi)(B)(2) of the Credit Agreement is hereby amended to read as follows:
(2) subject to clause (E) below, if the assets subject to any such Disposition or Involuntary Disposition were owned by the Canadian Borrower or any of its Canadian Subsidiaries, to the Canadian Revolving Loans (other than the Bankers’ Acceptance Advances), a cash collateral account in respect of the Bankers’ Acceptance Advances and the Canadian Swing Line Loans and then to Cash Collateralize the Canadian L/C Obligations; or
(g) A new Section 2.05(b)(vi)(E) is hereby added to the Credit Agreement following Section 2.05(b)(vi)(D) to read as follows:
(E) with respect to any Net Cash Proceeds received by the Canadian Borrower or any of its Canadian Subsidiaries from any Permitted Sale and Leaseback Transaction or any Permitted Canadian Disposition, the Canadian Borrower may elect to use such Net Cash Proceeds to prepay the Holdco Loan rather than prepay the Canadian Obligations in accordance with Section 2.05(b)(vi)(B)(2); provided, that, GGC immediately uses the proceeds received from such prepayment of the Holdco Loan to prepay the Term Loan (ratably to the remaining principal amortization payments thereof), or if the Term Loan has been paid in full, to the Domestic Revolving Loans and then to Cash Collateralize the Domestic L/C Obligations.
(h) Section 8.02(g) of the Credit Agreement is hereby amended to read as follows:
(g) Holdco Loan by GGC to Holdco in the aggregate principal amount of CAN$666,000,000 (as such aggregate amount may be reduced in accordance with Section 8.12(c)); provided that (x) such Holdco Loan is evidenced by the Holdco Note and secured by the assets of Holdco and its Canadian Subsidiaries pursuant to the Intercompany Security Documents and such other documentation reasonably satisfactory to the Domestic Collateral Agent, (y) the rights of GGC under such Holdco Note and Intercompany Security Documents have been pledged to the Domestic Collateral Agent pursuant to the Collateral Assignment Documents and (z) the entire principal amount of such Holdco Loan remains outstanding for the entire term of this Agreement (other than reductions in the principal amount thereof pursuant to any prepayment of the Holdco Loan permitted by Section 8.12(c));
(i) Section 8.02(j) of the Credit Agreement is hereby amended to read as follows:
(j) any other Investments (valued on the date each such Investment is made and without regard to subsequent changes in value) in an amount not to exceed $25,000,000 in the aggregate at any time outstanding.
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(j) Section 8.05 of the Credit Agreement is hereby amended to read as follows:
8.05 Dispositions.
Make any Disposition other than (a) the sale of those certain Subsidiaries and assets identified in the Disposition and Dissolution Letter, (b) the Permitted Sale and Leaseback Transactions, (c) the Permitted Canadian Dispositions and (d) any other Dispositions in which (i) at least 80% of the total consideration paid in connection therewith shall be cash or Cash Equivalents paid contemporaneous with consummation of the transaction and shall be in an amount not less than the fair market value of the property disposed of, (ii) if such transaction is a Sale and Leaseback Transaction, such transaction is not prohibited by the terms of Section 8.14, (iii) such transaction does not involve the sale or other disposition of a minority equity interest in any Subsidiary, (iv) such transaction does not involve a sale or other disposition of receivables other than (A) receivables owned by or attributable to other property concurrently being disposed of in a transaction otherwise permitted under this Section 8.05 and (B) the sale of accounts receivable pursuant to a permitted Securitization Transaction and (v) the aggregate fair market value of all of the assets sold or otherwise disposed of by GGC and its Subsidiaries in all such transactions in any fiscal year of GGC pursuant to this clause (d) shall not exceed $150,000,000.
(k) Section 8.12(c) of the Credit Agreement is hereby amended to read as follows:
(c) (i) Accept or permit to be made any principal payment on the Holdco Loan (other than any prepayment of the Holdco Loan in accordance with the terms of Section 2.05(b)(vi)(E)); provided, however, prepayments may be made by Holdco, and accepted by GGC, on the Holdco Loan provided that after giving effect to any such prepayment the U.S. Dollar Equivalent of the principal amount outstanding under the Holdco Loan equals or exceeds the sum of (A) the principal amount of the Term Loan then outstanding and (B) the Aggregate Domestic Revolving Commitments then in effect, (ii) amend or modify the Holdco Note or any Intercompany Security Document or (iii) assign, or consent to any assignment by Holdco or any Canadian Subsidiary, of the Holdco Note or any Intercompany Security Document.
(l) Section 8.14 of the Credit Agreement is hereby amended to read as follows:
8.14 Sale Leasebacks.
Enter into subsequent to the Closing Date any Sale and Leaseback Transactions which, considered in the aggregate with all Sale and Leaseback Transactions engaged in by GGC and its Subsidiaries subsequent to the Closing Date, involve properties having a fair market value in excess of $10,000,000; provided, that the foregoing limitation shall not apply to (i) temporary, short-term leasebacks with a term not to exceed six (6) months at a market rent to facilitate transition following a sale of a business, (ii) other sale leasebacks of space for convenience where the aggregate lease payments (undiscounted) for such leases do not exceed $20,000,000 at any time or (iii) the Permitted Sale and Leaseback Transactions; provided that the Net Cash Proceeds received from any such Sale and Leaseback Transaction are used by the Loan Parties to prepay the Obligations to the extent and in the manner required by Section 2.05. For the avoidance of doubt, it is understood and agreed that all Sale and Leaseback Transactions are Dispositions and therefore subject to the limitations on Dispositions in Section 8.05.
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(m) Schedule 1.01(a) of the Credit Agreement is hereby amended to read as provided on Schedule 1.01(a) attached hereto.
(n) Schedule 1.01(c) of the Credit Agreement is hereby amended to remove the reference to Wachovia Bank, National Association and that certain letter of credit issued by Wachovia Bank, National Association referenced thereon.
(o) Schedule 11.02 of the Credit Agreement is hereby amended to read as provided on Schedule 11.02 attached hereto.
3. Conditions Precedent. This Amendment shall become effective upon receipt by the Domestic Administrative Agent of counterparts of this Amendment duly executed by the Borrowers, the Guarantors, the Required Lenders, the Required Domestic Revolving Lenders, the Required Canadian Revolving Lenders and the Administrative Agents.
4. Miscellaneous.
(a) The Credit Agreement, and the obligations of the Loan Parties thereunder and under the other Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms.
(b) Each Guarantor (a) acknowledges and consents to all of the terms and conditions of this Amendment, (b) affirms all of its obligations under the Loan Documents and (c) agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the Loan Documents.
(c) The Borrowers and the Guarantors hereby represent and warrant as follows:
(i) Each Loan Party has taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered by the Loan Parties and constitutes each of the Loan Parties’ legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(iii) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by any Loan Party of this Amendment.
(d) The Loan Parties represent and warrant to the Lenders that (i) the representations and warranties of the Loan Parties set forth in Article VI of the Credit Agreement and in each other Loan Document are true and correct in all material respects as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate solely to an earlier date and (ii) no event has occurred and is continuing which constitutes a Default or an Event of Default.
(e) This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the
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same instrument. Delivery of an executed counterpart of this Amendment by telecopy shall be effective as an original and shall constitute a representation that an executed original shall be delivered.
(f) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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