SECOND AMENDMENT AND WAIVER
DATED AS OF MARCH 31, 1999 TO
MULTICURRENCY CREDIT AGREEMENT
DATED AS OF MARCH 18, 1998
THIS SECOND AMENDMENT AND WAIVER, dated as of March 31, 1999 (this
"Amendment") is entered into among MIDDLEBY MARSHALL INC., a Delaware
corporation ("Middleby"), the existing Subsidiaries of Middleby (together with
Middleby, individually, a "Borrower" and collectively, the "Borrowers"), and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association, having its principal office at 231 South LaSalle Street, Chicago,
Illinois 60697 (the "Bank").
RECITALS:
A. The Borrowers and the Bank have entered into a Multicurrency Credit
Agreement dated as of March 18, 1998, as amended by that certain First Amendment
dated as of July 4, 1998 (as amended, modified or supplemented, the "Agreement";
the terms defined in the Agreement and not otherwise defined herein shall be
used herein as defined in the Agreement).
B. The Borrowers have requested, and the Bank has agreed, that the Bank
shall waive any Default or Event of Default arising out of the Borrowers'
failure to satisfy the financial covenants set forth in Sections 7.13(a),
7.13(b) and 7.13(c) as measured as of the end of the fiscal quarter ending on
January 2, 1999.
C. The Borrowers and the Bank wish to amend the Agreement as hereinafter
set forth.
D. Therefore, the parties hereto agree as follows:
1. AMENDMENT TO THE AGREEMENT.
1.1 Section 1.1 of the Agreement. Section 1.1 of the Agreement is hereby
amended as of the date hereof by inserting at the end of the definition of
"Applicable Margin" the following:
"Notwithstanding the foregoing, commencing on March 31, 1999 and for
so long as the ratio of Indebtedness to EBITDA as determined pursuant to
Section 7.13(b) shall be 3.5:1.0 or greater, the following percentages
shall be in effect for all purposes under this Agreement and shall, during
such period, replace the applicable percentages shown in the pricing grid
above: (i) LIBOR or IBOR,
2.00%, (ii) Reference Rate, 0.50%, (iii) Commitment Fee, 0.35% and
(iv) Letter of Credit Fee, 1.50%."
1.2 Section 2.1 of the Agreement. Section 2.1 of the Agreement is hereby
amended as of the date hereof by deleting it in its entirety and inserting the
following in lieu thereof:
"2.1 Amounts and Terms of Commitments. The Bank agrees, on the terms
and conditions set forth herein, to make loans to any Borrower (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the date hereof to the Revolving Termination Date, in an
aggregate principal Dollar Equivalent amount not to exceed (a) $10,000,000
at any time outstanding for all Borrowers (such amount as the same may be
reduced pursuant to Section 2.6 or as a result of one or more assignments
pursuant to Section 9.8, the Bank's "Commitment"), (b) the Aggregate
Commitment Sublimit at any time outstanding for the Foreign Borrowers, or
(c) with respect to any Foreign Borrower, the Individual Commitment
Sublimit applicable thereto; provided, however, that, after giving effect
to any Borrowing of Revolving Loans or issuance of a Letter of Credit, the
aggregate principal Dollar Equivalent amount of all outstanding Revolving
Loans plus the aggregate Dollar Equivalent amount of outstanding LC
Obligations shall not exceed (a) the Commitment, (b) with respect to the
Foreign Borrowers, the Aggregate Commitment Sublimit, (c) with respect to
any Foreign Borrower, the Individual Commitment Sublimit applicable
thereto. Within the limits of the Bank's Commitment, and subject to the
other terms and conditions hereof, each Borrower may borrow under this
Section 2.1, prepay pursuant to Section 2.6 and reborrow pursuant to this
Section 2.1."
1.3 Section 7.13(a) of the Agreement. Section 7.13(a) of the Agreement is
hereby amended as of the date hereof by deleting it in its entirety and
inserting the following in lieu thereof:
"(a) Minimum Tangible Net Worth. Middleby and its Subsidiaries on a
consolidated basis shall maintain at all times Tangible Net Worth equal to
or greater than the sum of (a) $24,000,000 plus (b) an amount equal to 50%
of Net Income earned during each of its fiscal quarters beginning with its
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fiscal quarter commencing April 4, 1999 (without reduction for net losses,
if any)."
1.4 Section 7.13(b) of the Agreement. Section 7.13(b) of the Agreement is
hereby amended as of the date hereof by deleting it in its entirety and
inserting the following in lieu thereof:
"(b) Ratio of Indebtedness to EBITDA. Middleby and its Subsidiaries on
a consolidated basis shall maintain a ratio of (a) Indebtedness to (b)
EBITDA, measured at the end of each fiscal quarter for the four (4)
immediately preceding fiscal quarters then ended, for such period ending on
a date set forth below of not more than the amount set forth opposite such
date:
Date Ratio
---- -----
4/3/99 5.75:1.00
7/3/99 5.75:1.00
10/2/99 5.00:1.00
1/1/00 4.00:1.00
4/1/00 and
each fiscal quarter
thereafter 3.5:1.00
For purposes of testing compliance with this covenant, the term (i)
"Indebtedness" shall include the present value of all capital lease
obligations of Middleby and the Subsidiaries, determined as of any date the
ratio is to be determined, and (ii) in the event that Middleby or any of
its Subsidiaries shall have made an Acquisition involving any Person during
any such fiscal quarter, the term "EBITDA" shall include the allocable
earnings before interest, taxes, depreciation and amortization for the four
(4) most recently completed fiscal quarters of such Person determined in
accordance with GAAP, and, if GAAP is not applicable, determined in a
manner agreed to in writing by the Bank and Middleby. For further purposes
of testing compliance with this covenant, when the results of the fiscal
quarter ending October 3, 1998 or the fiscal quarter ending January 2, 1999
are required for the calculation of Net
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Income in the calculation of EBITDA to determine such ratio, Middleby and
its Subsidiaries are entitled to exclude as expenses from such calculation
of Net Income the amounts of $1,525,000 and $1,932,000, respectively, which
amounts refer to non-recurring charges taken in such fiscal quarters."
1.5 Section 7.13(c) of the Agreement. Section 7.13(c) of the Agreement is
hereby amended as of the date hereof by deleting it in its entirety and
inserting the following in lieu thereof:
"(c) Fixed Charge Coverage Ratio. Middleby and its Subsidiaries on a
consolidated basis shall maintain a Fixed Charge Coverage Ratio, measured
at the end of each fiscal quarter for the four (4) immediately preceding
fiscal quarters then ended, for such period ending on a date set forth
below of not less than the amount set forth opposite such date:
Date Ratio
---- -----
4/3/99 1.00:1.00
7/3/99 1.00:1.00
10/2/99 1.00:1.00
1/1/00 1.00:1.00
4/1/00 and
each fiscal
quarter thereafter 1.25:1.00
In the event that Middleby or any of its Subsidiaries shall have made an
Acquisition involving any Person during such immediately preceding fiscal
quarter, then for purposes of calculating the Fixed Charge Coverage Ratio,
Net Income shall include the allocable net income (adjusted as provided in
the definition of the term "Fixed Charge Coverage Ratio") of such Person
for the four (4) most recently completed fiscal quarters of such Person
determined in accordance with GAAP, and, if GAAP is not applicable,
determined in a manner agreed to in writing by the Bank and Middleby. For
the purpose of testing compliance with this covenant, when the results of
the fiscal quarter ending October 3, 1998 or the fiscal quarter ending
January 2, 1999 are required for the calculation of Net Income in the
calculation of EBITDA to determine such ratio, Middleby and its
Subsidiaries are entitled to exclude as expenses from such calculation of
Net Income the amounts of $1,525,000 and $1,932,000, respectively, which
amounts refer to non-recurring charges taken in such fiscal quarters."
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1.6 Section 7.13(e) of the Agreement. The Agreement is hereby amended as of
the date hereof by adding a Section 7.13(e) at the end of Section 7.13 as
follows:
"(e) Minimum EBITDA. Middleby and its Subsidiaries on a consolidated
basis shall maintain EBITDA, measured on a cumulative basis as of the dates
and for the periods set forth below, of not less than (i) $1,600,000 for
the three-month period ending on April 3, 1999, (ii) $4,750,000 for the
six-month period ending on July 3, 1999 and (iii) $8,500,000 for the
nine-month period ending on October 2, 1999."
1.7 Section 7.13(f) of the Agreement. The Agreement is hereby amended as of
the date hereof by adding a Section 7.13(f) at the end of Section 7.13 as
follows:
"(f) Maximum Indebtedness. Middleby and its Subsidiaries shall not
permit Indebtedness of Middleby and its Subsidiaries (excluding any
Indebtedness arising from the BA Leasing Documents), at any time between
and including March 31, 1999 and April 1, 2000, to exceed the sum of (i)
eighty percent (80%) of their total accounts receivable derived from
operations in the United States, plus (ii) fifty percent (50%) of their
total inventory located in the United States, plus (iii) forty percent
(40%) of their net fixed assets located in the United States, provided,
that the Bank, in its sole discretion, may change any of the above
percentages by providing notice of such change to Middleby based on the
results of any field examination of the Borrowers' accounting records and
operations."
2. WAIVER. The Bank hereby waives any Default or Event of Default arising
out of the failure of the Borrowers to satisfy the financial covenants under
Section 7.13(a), 7.13(b) and 7.13(c) of the Credit Agreement as measured as of
the end of the fiscal quarter ending on January 2, 1999. This waiver by the Bank
as described above shall not operate as a waiver of (i) any other right, power
or remedy of the Bank under the Loan Documents or (ii) any other Default or
Event of Default under the Agreement.
3. WARRANTIES. To induce the Bank to enter into this Amendment, the
Borrowers warrant that:
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3.1 Authorization. The Borrowers are duly authorized to execute and deliver
this Amendment, and are and will continue to be duly authorized to borrow monies
under the Agreement, as amended hereby, and to perform their obligations under
the Agreement, as amended hereby.
3.2 No Conflicts. The execution and delivery of this Amendment, and the
performance by the Borrowers of their respective obligations under the
Agreement, as amended hereby, do not and will not conflict with any provision of
law or of the charter or by-laws of each Borrower or of any agreement binding
upon each Borrower.
3.3 Validity and Binding Effect. The Agreement, as amended hereby, is a
legal, valid and binding obligation of the Borrowers, enforceable against the
Borrowers in accordance with its respective terms, except as enforceability may
be limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies.
4. CONDITIONS PRECEDENT. This Amendment shall be effective as of the date
first written above upon the satisfaction of each of the following conditions
precedent:
4.1 Documentation. The Borrowers shall have delivered to the Bank this
Amendment together with each of the following, all duly executed and dated the
date hereof, in form and substance satisfactory to the Bank:
(a) Resolutions. For each Borrower, as the Bank deems necessary, a copy,
duly certified by the secretary or an assistant secretary of such Borrower, of
(i) resolutions of such Borrower's Board of Directors authorizing or ratifying
the execution and delivery of this Amendment and authorizing the borrowings
under the Agreement, as amended hereby, (ii) all documents evidencing other
necessary corporate action, and (iii) all approvals or consents, if any,
necessary with respect to this Amendment.
(b) Incumbency. For each Borrower, as the Bank deems necessary, a
certificate of the secretary or an assistant secretary of such Borrower
certifying the names of such Borrower's officers authorized to sign this
Amendment and all other documents or certificates to be delivered hereunder,
together with the true signatures of such officers.
(c) Certification. A certificate of the president or chief financial
officer of Middleby as to the matters set out in Sections 4.2, 4.3 and 4.4
hereof.
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(d) Other. Such other documents as the Bank may reasonably request.
4.2 No Default. As of the date hereof, after giving effect to this
Amendment, no Event of Default or Default shall have occurred and be continuing.
4.3 Warranties. As of the date hereof, after giving effect to this
Amendment, the representations and warranties in Article V of the Agreement and
in Section 3 of this Amendment shall be true and correct as though made on such
date, except for such changes as are specifically permitted under the Agreement.
4.4 Northwestern Notes. As of the date hereof, no default or event of
default shall have occurred and be continuing under that certain Note Agreement
dated January 1, 1995 between Middleby and Northwestern Mutual Life Insurance
Company ("Northwestern") pursuant to which Middleby issued those certain
$15,000,000 10.99% Senior Notes due on January 10, 2003 which are held by
Northwestern.
5. GENERAL.
5.1 Expenses. The Borrowers agree to pay the Bank upon demand for all
reasonable expenses, including reasonable attorneys' and legal assistants' fees
(which attorneys and legal assistants may be employees of the Bank), incurred by
the Bank in connection with the preparation, negotiation and execution of this
Amendment.
5.2 Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICTS OF
LAW PROVISIONS THEREOF); PROVIDED THAT THE BANK SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.
5.3 Successors. This Amendment shall be binding upon the Borrowers and the
Bank and their respective successors and assigns, and shall inure to the benefit
of the Borrowers and the Bank and the successors and assigns of the Bank.
5.4 Confirmation of the Agreement. Except as amended and waived hereby, the
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects.
5.5 References to the Agreement. Each reference in the Agreement to "this
Agreement," "hereunder," "hereof," or words of like import, and each reference
to the Agreement in any and all instruments or documents provided for in the
Agreement or delivered or to be delivered thereunder or in connection therewith,
shall, except where the context otherwise requires, be deemed a reference to the
Agreement as amended hereby.
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5.6 Counterparts. This Amendment may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.
5.7 Reaffirmation of Guaranty. Middleby and Asbury Associates, Inc., as
guarantors (the "Guarantors") pursuant to that certain Continuing Guaranty
(Multicurrency) dated as of March 18, 1998 (the "Guaranty") executed by the
Guarantors in favor of the Bank hereby acknowledge and affirm to the Bank that
notwithstanding the execution and delivery of this Amendment, the Guarantors
hereby re-confirm the Guaranty and are and continue to be primarily liable for
the Liabilities, as defined in the Guaranty.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Chicago, Illinois by their respective officers thereunto duly
authorized as of the date first written above.
MIDDLEBY MARSHALL INC., as Borrower
and Guarantor
By:_________________________________
Name: John J. Hastings
Title: Executive Vice President and
Chief Financial Officer
MIDDLEBY PHILIPPINES CORPORATION, as
Borrower
By:_________________________________
Name: John J. Hastings
Title: Vice President
MIDDLEBY JAPAN CORPORATION, as
Borrower
By:_________________________________
Name: John J. Hastings
Title: Vice President
ASBURY WORLDWIDE (TAIWAN) CO., LTD.,
as Borrower
By:_________________________________
Name: John J. Hastings
Title: Vice President
ASBURY ASSOCIATES, INC., as Borrower
and Guarantor
By:_________________________________
Name: John J. Hastings
Title: Vice President
ASBURY WORLDWIDE KOREA CO., LTD., as
Borrower
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By:_________________________________
Name: John J. Hastings
Title: Vice President
INTERNATIONAL CATERING EQUIPMENT
AND SUPPLIES, INC., as Borrower
By:_________________________________
Name: John J. Hastings
Title: Vice President
ASBURY MEXICO, S.A. DE C.V., as
Borrower
By:_________________________________
Name: John J. Hastings
Title: Vice President
ASBURY, S.L., as Borrower
By:_________________________________
Name: John J. Hastings
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Bank
By:_________________________________
Name:_______________________________
Title:______________________________
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Certificate of Middleby Marshall Inc.
I, the undersigned, Secretary of Middleby Marshall Inc. a Delaware
corporation (the "Company"), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to Section 4.1 of that certain
Second Amendment and Waiver dated as of March 31, 1999 (the "Amendment") to
that certain Multicurrency Credit Agreement (as so amended and as
previously amended, modified or supplemented, the "Credit Agreement"),
between the Company, certain of its affiliates and Bank of America National
Trust and Savings Association (the "Bank"). Unless otherwise defined
herein, capitalized terms used in this Certificate have the meanings
assigned to such terms in the Credit Agreement.
2. There has been no change in the Certificate of Incorporation of the Company
since April 3, 1998, such Certificate of Incorporation is in full force and
effect as of the date hereof and no steps have been taken by the Board of
Directors or the stockholders of the Company to effect or authorize any
amendment or modification thereto.
3. There has been no change in the Bylaws of the Company since April 3, 1998,
such Bylaws are in full force and effect as of the date hereof and no steps
have been taken by the Board of Directors or the stockholders of the
Company to effect or authorize any amendment or modification thereto.
4. Attached hereto as Exhibit I is a true, correct and complete copy of
resolutions duly adopted by the Board of Directors of the Company, which
resolutions have not been revoked, modified, amended or rescinded and are
still in full force and effect.
5. The persons named in Exhibit II attached hereto have been duly elected,
have duly qualified as and, on the date hereof, are officers of the Company
holding the respective offices set forth therein opposite their names, and
the signatures set forth therein opposite their names are their genuine
signatures.
WITNESS my hand and seal of the Company this 31st day of March, 1999.
____________________________________
John J. Hastings
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I, the undersigned, David P. Riley, President of the Company, DO HEREBY
CERTIFY that John J. Hastings is the duly elected and qualified Secretary of the
Company and the signature above is his genuine signature.
WITNESS my hand on this 31st day of March, 1999.
____________________________________
David P. Riley
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CERTIFICATE OF CHIEF FINANCIAL OFFICER
OF MIDDLEBY MARSHALL INC.
Bank of America National Trust
and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Ladies/Gentlemen:
Reference is made to that certain Second Amendment and Waiver dated as of March
31, 1999 (the "Amendment") between Middleby Marshall Inc., a Delaware
corporation ("Middleby"), the existing Subsidiaries of Middleby (together with
Middleby, individually, a "Borrower" and collectively, the "Borrowers"), and
Bank of America National Trust and Savings Association (the "Bank"). The
Amendment effects certain amendments and a waiver, as described therein, to that
certain Multicurrency Credit Agreement dated as of March 18, 1998 between the
Borrowers and the Bank (as amended thereby and as previously amended, modified
or supplemented, the "Agreement"). Unless otherwise defined herein, terms used
in this certificate which are defined in the Agreement shall have the same
meaning herein as therein.
In connection with the execution and delivery of the Amendment, the chief
financial officer of Middleby hereby certifies to the Bank as follows:
1. As of the date hereof, no Default or Event of Default has occurred and
is continuing.
2. The warranties in Article V of the Agreement and in Section 3 of the
Amendment are true and correct as of the date hereof as though made on
the date hereof, except for such changes as are specifically permitted
under the Agreement.
3. As of the date hereof, no default or event of default has occurred and
is continuing under that certain Note Agreement dated January 1, 1995
between Middleby and Northwestern Mutual Life Insurance Company
("Northwestern") pursuant to which Middleby issued those certain
$15,000,000 10.99% Senior Notes due on January 10, 2003 which are held
by Northwestern.
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Dated: March 31, 1999
Very truly yours,
MIDDLEBY MARSHALL INC.
By: ________________________________
Name: John J. Hastings
Title: Chief Financial Officer
Certificate of Asbury Associates, Inc.
I, the undersigned, Secretary of Asbury Associates, Inc. a Florida
corporation (the "Company"), DO HEREBY CERTIFY that:
6. This Certificate is furnished pursuant to Section 4.1 of that certain
Second Amendment and Waiver dated as of March 31, 1999 (the "Amendment") to
that certain Multicurrency Credit Agreement (as so amended and as
previously amended, modified or supplemented, the "Credit Agreement"),
between the Company, certain of its affiliates and Bank of America National
Trust and Savings Association (the "Bank"). Unless otherwise defined
herein, capitalized terms used in this Certificate have the meanings
assigned to such terms in the Credit Agreement.
7. There has been no change in the Articles of Incorporation of the Company
since April 3, 1998, such Articles of Incorporation are in full force and
effect as of the date hereof and no steps have been taken by the Board of
Directors or the stockholders of the Company to effect or authorize any
amendment or modification thereto.
8. There has been no change in the Bylaws of the Company since April 3, 1998,
such Bylaws are in full force and effect as of the date hereof and no steps
have been taken by the Board of Directors or the stockholders of the
Company to effect or authorize any amendment or modification thereto.
9. Attached hereto as Exhibit I is a true, correct and complete copy of
resolutions duly adopted by the Board of Directors of the Company, which
resolutions have not been revoked, modified, amended or rescinded and are
still in full force and effect.
10. The persons named in Exhibit II attached hereto have been duly elected,
have duly qualified as and, on the date hereof, are officers of the Company
holding the respective offices set forth therein opposite their names, and
the signatures set forth therein opposite their names are their genuine
signatures.
WITNESS my hand and seal of the Company this 31st day of March, 1999.
____________________________________
John J. Hastings
I, the undersigned, David P. Riley, Chief Executive Officer of the Company,
DO HEREBY CERTIFY that John J. Hastings is the duly elected and qualified
Secretary of the Company and the signature above is his genuine signature.
WITNESS my hand on this 31st day of March, 1999.
____________________________________
David P. Riley