AMENDMENT NUMBER FIVE
TO
CREDIT AGREEMENT
THIS AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT (this "Amendment") is
made as of June 1, 2000, by and among BANK OF AMERICA, N.A., formerly known as
Bank of America National Trust and Savings Association, a national banking
association, and U.S. BANK NATIONAL ASSOCIATION, a national banking association
(each a "Lender"), BANK OF AMERICA, N.A., as agent for the Lenders (the
"Agent"), and FLOW INTERNATIONAL CORPORATION, a Washington corporation
("Borrower").
RECITALS
A. Lenders, Agent and Borrower are parties to that certain Credit
Agreement dated as of August 31, 1998, as amended by that certain Amendment
Number One to Credit Agreement dated as of March 26, 1999, by that certain
Amendment Number Two to Credit Agreement dated as of June 21, 1999, by that
certain Amendment Number Three to Credit Agreement dated as of September 2,
1999, and by that certain Amendment Number Four to Credit Agreement dated as of
April 28, 2000 (the "Credit Agreement").
B. Borrower has requested, and Lenders and Agent have agreed, to amend
the Credit Agreement upon certain terms and conditions contained in this
Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS. Capitalized terms not otherwise defined in this
Amendment shall have the meaning set forth in the Credit Agreement.
2. AMENDMENTS TO DEFINITION OF "TANGIBLE NET WORTH." In Section
1.1, the definition of "Tangible Net Worth" is hereby amended to read as
follows:
"TANGIBLE NET WORTH" means the total assets less total
liabilities excluding, however, from the determination of total assets:
(a) intangible assets, (such as goodwill, patents, trademarks,
copyrights, franchises and deferred taxes, including unamortized debt
discount and research and development costs); (b) cash held in a
sinking fund or other similar fund established for the purpose of
redemption or other retirement of capital stock; (c) reserves for
depreciation, depletion, obsolescences, or amortization of properties
and other reserves or appropriations of retained earnings which have
been established in connection with Borrower's business; (d) any
revaluation or other write-up in book value of assets subsequent to the
fiscal year of Borrower last ended as of August 31, 1998; and, for
clarification purposes, excluding from total liabilities, minority
interests; and (e) cumulative translation adjustment.
3. AMENDMENT TO MINIMUM NET WORTH. Section 6.14 of the Credit
Agreement is amended and restated as follows:
SECTION 6.14 MINIMUM NET WORTH. Borrower shall maintain, on a
consolidated basis, as at the end of each fiscal quarter, a Tangible
Net Worth equal to or greater than the then applicable Minimum Net
Worth. "Minimum Net Worth" shall mean $27,800,000, PLUS cumulative
quarterly increases equal to fifty percent (50%) of Borrower's net
income for all fiscal quarters ending on or after July 31, 1999,
excluding any adjustments thereto for losses, PLUS all amounts
contributed to Borrower as equity at any time after September 1, 1999.
5. AMENDMENT TO DEBT TO TANGIBLE NET WORTH RATIO. Section 6.15 of
the Credit Agreement is amended and restated as follows:
SECTION 6.15 DEBT TO TANGIBLE NET WORTH RATIO. Borrower shall
maintain, on a consolidated basis, a ratio of Debt to Tangible Net
Worth of not more than (a) 3.70 to 1 as at the fiscal quarters ending
April 30, 2000, July 31, 2000, October 31, 2000 and January 31, 2001;
(b) 3.10 to 1 as at the fiscal quarters ending April 30, 2001, July 31,
2001, October 31, 2001 and January 31, 2002; and (c) 2.60 to 1 as at
the fiscal quarters ending April 30, 2002 and thereafter. As used
herein, "Debt" shall mean, on a consolidated basis, all liabilities of
Borrower as determined and computed in accordance with GAAP other than
Senior Unsecured Debt, Subordinated Debt, and for clarification
purposes only, minority interests.
6. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective when Borrower, Agent and each Lender have executed and delivered
counterparts hereof to Agent.
7. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to the Lenders and Agent that each of the representations and
warranties set forth in Article 5 of the Credit Agreement is true and correct in
each case as if made on and as of the date of this Amendment and Borrower
expressly agrees that it shall be an additional Event of Default under the
Credit Agreement if any representation or warranty made hereunder shall prove to
have been incorrect in any material respect when made.
8. NO FURTHER AMENDMENT. Except as expressly modified by the
terms of this Amendment, all of the terms and conditions of the Credit Agreement
and the other Loan Documents shall remain in full force and effect and the
parties hereto expressly reaffirm and ratify their respective obligations
thereunder.
9. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Washington.
10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement.
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11. ORAL AGREEMENTS NOT ENFORCEABLE.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Number Five to Credit Agreement as of the date first above written.
BORROWER: FLOW INTERNATIONAL CORPORATION
By: ___________________________________
Its: ___________________________________
LENDERS: BANK OF AMERICA, N.A.
By: ___________________________________
Its: ___________________________________
U.S. BANK NATIONAL ASSOCIATION
By: ___________________________________
Its: ___________________________________
AGENT: BANK OF AMERICA, N.A.
By: ___________________________________
Its: ___________________________________
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