EXHIBIT 10.55
AMENDMENT NO. 2
TO CREDIT AGREEMENT
AMENDMENT NO. 2, dated as of February 15, 1996, among Tyco
Distribution Corp. and Tyco Manufacturing Corp. (each a "Borrower" and jointly
and severally, the "Borrowers"), Tyco Toys, Inc., the lenders party hereto (the
"Lenders") and General Electric Capital Corporation, as Agent (the "Agent").
WHEREAS, the Borrowers, Tyco Toys, Inc., the Lenders and the Agent are
parties to a Credit Agreement dated as of February 22, 1995 and as amended as of
November 10, 1995 (the "Credit Agreement") and such parties desire to amend the
Credit Agreement.
THE PARTIES AGREE AS FOLLOWS:
SECTION 1. Definitions. All capitalized terms used herein, unless
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otherwise defined, are used as defined in the Credit Agreement.
SECTION 2. Amendment to Credit Agreement. Subject to the
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satisfaction of the conditions set forth in Section 3 below, the Credit
Agreement is amended effective as of the date hereof as follows:
(a) The definition of "Applicable Margin" in Section 1 of Annex A to
the Credit Agreement is deleted in its entirety and replaced with the following:
"Applicable Margin" shall mean (a) with respect to interest based
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upon the Index Rate, one and one-half percent (1.50%) per annum and (b) with
respect to interest based upon the Adjusted LIBOR Rate, two and three-quarters
percent (2.75%) per annum; provided, however, that if as of December 31, 1996
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Tangible Net Worth shall be not less than $75,000,000 and the Minimum Debt
Service Coverage Ratio shall be not less than 1.50 to 1.0, then, beginning the
first Business Day after delivery to the Agent pursuant to Section 3(a) of Annex
E hereof of the audited financial statements and other documents described
therein which evidence to the satisfaction of the Agent the attainment of such
Tangible Net Worth and Minimum Debt Service Coverage Ratio levels and provided
there shall not then exist a Default or Event of Default, Applicable Margin
shall mean (a) with respect to interest based upon the Index Rate, one and one-
quarter percent (1.25%) per annum and (b) with respect to interest based upon
the Adjusted LIBOR Rate, two and one-half percent (2.50%) per annum.
(b) Section 3 of Annex D to the Credit Agreement is amended by
deleting the reference to "two percent (2%) per annum" appearing in the third
and fourth lines thereof and substituting therefor the following:
"two and one-quarter percent (2.25%) per annum (provided, however, that if
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as of December 31, 1996 Tangible Net Worth shall be not less than
$75,000,000 and the Minimum Debt Service Coverage Ratio shall be not less
than 1.50 to 1.0, then, beginning the first Business Day after delivery to
the Agent pursuant to Section 3(a) of Annex E hereof of the audited
financial statements and other documents described therein which evidence
to the satisfaction of the Agent the attainment of such Tangible Net Worth
and Minimum Debt Service Coverage Ratio levels and provided there shall not
then exist a Default or Event of Default, the Letter of Credit Fee shall
be two percent (2.0%) per annum)".
(c) Section 1(a) of Annex H to the Credit Agreement is deleted in its
entirety and replaced with the following:
"(a) Tyco Parent shall maintain (or cause to be maintained) as of the
end of each Fiscal Quarter ending on each date set forth below, Tangible Net
Worth of not less than the respective amount set forth below opposite each such
date:
Date Amount
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December 31, 1995 $ 61,000,000
March 31, 1996 39,900,000
June 30, 1996 38,100,000
September 30, 1996 56,300,000
December 31, 1996 65,400,000
March 31, 1997 110,500,000
June 30, 1997 111,500,000
September 30, 1997 127,400,000
December 31, 1997 136,700,000
March 31, 1998 128,700,000
June 30, 1998 129,600,000
September 30, 1998 145,800,000
December 31, 1998 155,200,000
March 31, 1999 147,300,000
June 30, 1999 148,300,000
September 30, 1999 164,800,000
December 31, 1999 174,300,000
and the last day of each
Fiscal Quarter thereafter
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By January 15, 1997, the parties hereto may agree in writing on
Tangible Net Worth amounts different from those listed above in respect of each
Fiscal Quarter for the remaining term of the Credit Agreement. Within 15 days
of the commencement of each subsequent calendar year, the parties hereto may
agree in writing on Tangible Net Worth amounts different from those listed above
or as agreed to as provided in the immediately preceding sentence in respect of
each Fiscal Quarter for the remaining term of the Credit Agreement. If the
parties fail to agree in writing on such new amounts in respect of 1997 or any
subsequent calendar year by the end of such 15th day, the amounts previously
agreed in writing by the parties pursuant to this Section 1(a) shall apply, or,
if no such amounts have been agreed in writing, the amounts listed above shall
apply."
(d) Section 1(b) of Annex H of the Credit Agreement is deleted in its
entirety and replaced with the following:
"(b) Tyco Parent shall maintain (or cause to be maintained), as of the
end of each Fiscal Quarter (commencing with the Fiscal Quarter ending December
31, 1995), for each Parent Rolling Period, a Minimum Debt Service Coverage Ratio
of not less than (v) 0.50 to 1.0 as of the end of the Fiscal Quarter ending
December 31, 1995, (w) 0.27 to 1.0 as of the end of the Fiscal Quarter ending
March 31, 1996, (x) 0.43 to 1.0 as of the end of the Fiscal Quarter ending June
30, 1996, (y) 0.63 to 1.0 as of the end of the Fiscal Quarter ending September
30, 1996 and (z) 1.30 to 1.0 as of the end of the Fiscal Quarter ending December
31, 1996 and each Fiscal Quarter thereafter.
By January 15, 1997, the parties hereto may agree in writing on
Minimum Debt Service coverage ratios different from those listed above in
respect of each Fiscal Quarter for the remaining term of the Credit Agreement.
Within 15 days of the commencement of each subsequent calendar year, the parties
hereto may agree in writing on Minimum Debt Service Coverage Ratios different
from those listed above or as agreed to as provided in the immediately preceding
sentence in respect of each Fiscal Quarter for the remaining term of the Credit
Agreement. If the parties fail to agree in writing on such new amounts in
respect of 1997 or any subsequent calendar year by the end of such 15th day, the
amounts previously agreed in writing by the parties pursuant to this Section
1(b) shall apply, or, if no such amounts have been agreed in writing, the
amounts listed above shall apply."
(e) Section 1(d) of Annex H to the Credit Agreement is deleted in its
entirety and replaced with the following:
"(d) Tyco Parent shall not permit EBITA of the International
Management Subsidiaries for any fiscal period set forth below to be less than
the respective amount set forth below opposite such fiscal period:
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Fiscal Period EBITA
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Fiscal Quarter Ending
March 31, 1996 $ (9,000,000)
Six (6) Fiscal Months Ending
June 30, 1996 (15,000,000)
Nine (9) Fiscal Months Ending
September 30, 1996 (11,000,000)
Fiscal Year Ending
December 31, 1996 0
By January 15, 1997, the parties hereto shall agree in writing on
EBITA amounts in respect of each Fiscal Quarter for the remaining term of the
Credit Agreement. If the parties fail to agree in writing on such new amounts
by the end of January 15, 1997, such failure shall be an Event of Default under
the Credit Agreement and the parties shall be entitled to exercise their
respective rights under the Credit Agreement. Within 15 days of the
commencement of each calendar year after 1997, the parties hereto may agree in
writing on EBITA amounts in respect of each Fiscal Quarter for the remaining
term of the Credit Agreement. If the parties fail to agree in writing on such
new amounts in respect of any such calendar year by the end of such 15th day,
the amounts previously agreed in writing by the parties pursuant to this Section
1(d) shall apply."
(f) Section 1(e) of Annex H to the Credit Agreement is deleted in its
entirety and replaced with the following:
"(e) Tyco Parent shall not permit EBITA of the Direct Import
Subsidiaries for any fiscal period set forth below to be less than the
respective amount set forth below opposite such fiscal period:
Fiscal Period EBITA
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Fiscal Quarter Ending
March 31, 1996 $ (2,800,000)
Six (6) Fiscal Months Ending
June 30, 1996 (2,500,000)
Nine (9) Fiscal Months Ending
September 30, 1996 2,000,000
Fiscal Year Ending
December 31, 1996 3,600,000
By January 15, 1997, the parties hereto shall agree in writing on
EBITA amounts in respect of each Fiscal Quarter for the remaining term of the
Credit Agreement. If the parties fail to agree in writing on such new amounts by
the end of January 15, 1997, such failure shall be an Event of Default under the
Credit Agreement
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and the parties shall be entitled to exercise their respective rights
under the Credit Agreement. Within 15 days of the commencement of each
calendar year after 1997, the parties hereto may agree in writing on EBITA
amounts in respect of each Fiscal Quarter for the remaining term of the Credit
Agreement. If the parties fail to agree in writing on such new amounts in
respect of any such calendar year by the end of such 15th day, the amounts
previously agreed in writing by the parties pursuant to this Section 1(e) shall
apply."
SECTION 3. Conditions Precedent.
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(a) The effectiveness of this Amendment is subject to the conditions
precedent that the Agent shall have received each of the following:
(i) This Amendment delivered by the Borrowers, Tyco Parent, the
Lenders and the Agent.
(ii) A certificate of the Secretary of each Borrower and Tyco
Parent, dated the date of this Amendment, and certifying (A) that attached
thereto is a true and complete copy of a resolution of the Board of
Directors of such Borrower or Tyco Parent, as the case may be, authorizing
the execution, delivery and performance of this Amendment and all other
documents required or necessary to be delivered hereunder and that such
resolution has not been modified, rescinded or amended and is in full force
and effect, and (B) as to the incumbency and specimen signature of each
Person's officers executing this Amendment and all other documents required
or necessary to be delivered hereunder.
(iii) Such other approvals, opinions or documents, in form and
substance satisfactory to the Agent, as the Agent may reasonably request.
SECTION 4. Confirmation of Agreement and Loan Documents. Except as
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herein expressly amended, the Credit Agreement and each of the other documents
executed in connection therewith are ratified and confirmed in all respects and
shall remain in full force and effect in accordance with its terms. Each
reference in the Credit Agreement to "this Agreement" and in each of the other
documents executed in connection therewith to the "Credit Agreement" shall mean
the Credit Agreement as amended by this Amendment, and as hereinafter amended or
restated.
SECTION 5. Borrowers' and Tyco Parent's Representations and
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Warranties. The Borrowers and Tyco Parent represent and warrant that:
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(a) this Amendment has been duly authorized, executed and delivered by
each of the Borrowers and Tyco Parent pursuant to its corporate power;
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(b) this Amendment constitutes the legal, valid and binding obligation
of such Borrower and Tyco Parent, as the case may be; and
(c) after giving effect to the amendments referred to herein, there
does not exist any Default or Event of Default.
SECTION 6. Expenses. The Borrowers and Tyco Parent jointly and
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severally agree to pay on demand all reasonable fees and out-of-pocket expenses
of the Lenders and the Agent incurred in connection with the preparation,
execution and delivery of this Amendment and any documents referred to herein
and any due diligence and collateral examinations arising hereunder (including,
without limitation, travel and living expenses, attorneys' fees, appraisal fees,
search and filing fees).
SECTION 7. Counterparts. Delivery of an executed counterpart of a
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signature page to this Amendment by facsimile shall be effective as delivery of
a manually executed counterpart of this Amendment. 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.
IN WITNESS WHEREOF, the Borrowers, the Lenders and Agent have caused
this Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
TYCO DISTRIBUTION CORP.,
as Borrower
By: /s/ Anthony DiMichele
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Title: Senior Vice President, Financial Operations
Name: Anthony DiMichele
TYCO MANUFACTURING CORP.,
as Borrower
By: /s/ Anthony DiMichele
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Title: Senior Vice President, Financial Operations
Name: Anthony DiMichele
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TYCO TOYS, INC.
By: /s/ Anthony DiMichele
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Title: Senior Vice President, Financial Operations
Name: Anthony DiMichele
GENERAL ELECTRIC CAPITAL CORPORATION,
Individually and as Agent
By: /s/ Catharine L. Midkiff
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Title: Vice Assistant - Commercial Finance
Name: Catharine L. Midkiff
Acknowledged and Consented to
GENERAL ELECTRIC CAPITAL CANADA INC., as Agent
By: /s/ Richard Sobourin
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Title: Vice President
Name: Richard Sobourin
Consented to
TYCO TOYS (CANADA) INC.
By: /s/ R. Michael Kennedy, Jr.
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Title: Director
Name: R. Michael Kennedy, Jr.
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