FIRST AMENDMENT AND WAIVER
--------------------------
FIRST AMENDMENT AND WAIVER (this "Amendment"), dated as of January 28,
1999, among GLOBE HOLDINGS, INC., a Massachusetts corporation ("Holdings"),
GLOBE MANUFACTURING CORP., an Alabama corporation (the "Borrower"), the several
lenders from time to time party to the Credit Agreement referred to below (the
"Lenders"), MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., as Syndication Agent
(the "Syndication Agent"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent (the "Administrative Agent"). All
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings provided such terms in the Credit Agreement.
W I T N E S S E T H:
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WHEREAS, Holdings, the Borrower, the Lenders, the Syndication Agent
and the Administrative Agent are party to a Credit Agreement, dated as of July
31, 1998 (the "Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders provide the
amendments, waiver and consent provided for herein and the Lenders have agreed
to provide such amendments, waiver and consent on the terms and conditions set
forth herein;
NOW, THEREFORE, it is agreed:
1. The Lenders hereby waive any Default or Event of Default that has
occurred and is continuing under the Credit Agreement solely as a result of
Holdings' and the Borrower's failure to be in compliance with the provisions of
(x) Section 8.08 of the Credit Agreement for the Measurement Period ending on
December 31, 1998 and (y) Section 8.10 of the Credit Agreement for the period
commencing on December 31, 1998 and ending on the First Amendment Effective Date
(as hereinafter defined).
2. Section 1.01 of the Credit Agreement is hereby amended by
deleting the definition of "Consolidated Leverage Ratio" contained therein and
inserting the following new definition of "Consolidated Leverage Ratio" in lieu
thereof:
"Consolidated Leverage Ratio" means, at any time, the ratio of (i)
Consolidated Indebtedness at such time to (ii) Consolidated EBITDA for the
Measurement Period then most recently ended, it being agreed that Consolidated
EBITDA for Holdings' fiscal quarters ended September 30, 1997, December 31,
1997, March 31, 1998 and June 30, 1998, was $9,787,080, $13,018,896, $13,089,423
and $12,728,288, respectively.
3. Section 1.01 of the Credit Agreement is hereby further amended by
inserting the following new definitions in the appropriate alphabetical order:
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of Holdings who (i) was a member of such
Board of Directors on the Closing Date or (ii) was nominated for election
or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election.
"Level VI" has the meaning specified in Section 2.09(a)(ii).
"Senior Leverage Ratio" means, at any time, the ratio of (i)
Consolidated Indebtedness at such time to (ii) Consolidated EBITDA for the
Measurement Period then most recently ended, it being agreed that (A)
Consolidated EBITDA for Holdings' fiscal quarters ended December 31, 1997,
March 31, 1998 and June 30, 1998 was $13,018,896, $13,089,423 and
$12,728,288, respectively, and (B) in determining the Senior Leverage Ratio
at any time, there also shall be excluded from Consolidated Indebtedness at
such time an amount equal to the aggregate principal amount of Indebtedness
incurred with respect to any Borrower Senior Subordinated Notes at such
time.
4. Section 2.09 of the Credit Agreement is hereby amended by
deleting sub-clauses (i), (ii) and (iii) of clause (a) thereof and inserting the
following new sub-clauses (i), (ii) and (iii) in lieu thereof:
"(i) (x) for the period commencing on the Closing Date to January
28, 1999:
Applicable Margin/Tranche A
Term Loans, Revolving Loans Applicable Margin/
and Swingline Loans Tranche B Term Loans
------------------- --------------------
Base Rate 1.25% 1.75%
Eurodollar Rate 2.25% 2.75%; and
(y) for the period commencing on January 28, 1999 to the First
Adjustment Date:
Applicable Margin/Tranche A
Term Loans, Revolving Loans Applicable Margin/
and Swingline Loans Tranche B Term Loans
------------------- --------------------
Base Rate 2.00% 2.50%
Eurodollar Rate 3.00% 3.50%
(ii) from and after the First Adjustment Date, for each period from an
Adjustment Date to the next succeeding Adjustment Date, the rate per annum
for the relevant type of Loan of the respective Tranche set forth below
opposite the Consolidated Leverage Ratio determined as at the end of the
last fiscal quarter ended prior to the first day of such period:
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Applicable Margin/
Tranche A Term Loans,
Revolving Loans and Applicable Margin/
Swingline Loans Tranche B Term Loans
--------------- --------------------
Eurodollar Rate Base Rate Eurodollar Rate Base Rate
--------------- --------- --------------- ---------
Consolidated Leverage Ratio is
less than or equal to 3.00 to 1.00 1.25% 0.25% 2.50% 1.50%
("Level I")
Consolidated Leverage Ratio is
less than or equal to 3.50 to 1.0 1.50% 0.50% 2.50% 1.50%
but greater than 3.00 to 1.00
("Level II")
Consolidated Leverage Ratio is
less than or equal to 4.00 to 1.00 2.00% 1.00% 2.50% 1.50%
but greater than 3.50 to 1.00
("Level III")
Consolidated Leverage Ratio is
less than or equal to 4.50 to 1.00 2.25% 1.25% 2.75% 1.75%
but greater than 4.00 to 1.00
("Level IV")
Consolidated Leverage Ratio is
less than or equal to 6.00 to 1.00 2.50% 1.50% 3.00% 2.00%
but greater than 4.50 to 1.00
("Level V")
Consolidated Leverage Ratio is
greater than 6.00 to 1.00 ("Level 3.00% 2.00% 3.50% 2.50%
VI")
(iii) If by the last day for determining any Adjustment Date, Holdings
has failed to deliver a Leverage Ratio Certificate as at the end of the
fiscal quarter ended immediately prior to such Adjustment Date, interest
for the next succeeding period from such Adjustment Date to the next
succeeding Adjustment Date shall be computed as if the Consolidated
Leverage Ratio were at Level VI; provided, however, to the extent that
Holdings thereafter delivers a Leverage Ratio Certificate during such
succeeding period, interest for the remainder of such succeeding period
shall be computed at the rate prescribed by Section 2.09(a)(ii). In
addition, at any time that a Specified Default shall exist, the Applicable
Margin shall be computed as if the Consolidated Leverage Ratio were at
Level VI."
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5. Section 2.10(a) of the Credit Agreement is hereby amended by (i)
inserting the following new "Level VI" and corresponding percentage at the end
of the table appearing therein:
"Level VI .500%";
and (ii) deleting the reference to "Level V" each place such reference appears
in the proviso thereof and inserting the reference to "Level VI" in each such
place in lieu thereof.
6. Section 3.08(a) of the Credit Agreement is hereby amended to read
in its entirety as follows:
"(a) The Borrower shall pay to the Administrative Agent for the
account of each RL Lender a letter of credit fee with respect to the
Letters of Credit computed on the average daily maximum amount available to
be drawn on the outstanding Letters of Credit, on each Interest Payment
Date for Base Rate Loans based upon Letters of Credit outstanding for the
previous three-month period. The letter of credit fee shall be equal to
(i) for the period from the Closing Date to January 28, 1999, 2.25% per
annum, (ii) for the period from January 28, 1999 to the First Adjustment
Date, 3.00% per annum and (iii) from and after the First Adjustment Date,
for each period from an Adjustment Date to the next succeeding Adjustment
Date, the rate per annum set forth below opposite the relevant Level of
Consolidated Leverage Ratio determined as at the end of the last fiscal
quarter ended prior to the first day of such period:
Consolidated Leverage Ratio
---------------------------
Level I 1.25%
Level II 1.50%
Level III 2.00%
Level IV 2.25%
Level V 2.50%
Level VI 3.00%
provided, however, that if by the day for determining any Adjustment Date
Holdings has failed to deliver a Leverage Ratio Certificate as at the end
of the fiscal quarter ended immediately prior to such Adjustment Date, the
letter of credit fee for the next succeeding period from such Adjustment
Date to the next succeeding Adjustment Date shall be computed as if the
Consolidated Leverage Ratio were at Level VI; provided further, however, to
the extent that Holdings thereafter delivers a Leverage Ratio Certificate
during such succeeding period, the letter of credit fee for the remainder
of such succeeding period shall be computed at the rate prescribed in the
table above in this Section 3.08(a). In addition, at any time that a
Specified Default shall exist, the letter of credit fee shall be computed
as if the Consolidated Leverage Ratio were at Level VI. Such letter of
credit fee shall be due and payable in arrears on each Interest Payment
Date for Base Rate Loans."
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7. Section 8.02(x) of the Credit Agreement is hereby amended by
deleting the date "December 31, 1998" appearing in the proviso to sub-clause
(iv) thereof and inserting the date "December 31, 1999" in lieu thereof.
8. Section 8.06(iv) of the Credit Agreement is hereby amended to
read in its entirety as follows:
"(iv) so long as (i) no Default under Section 7.01, 7.02(a),
9.01(a), 9.01(f) or 9.01(g) shall exist and no Event of Default shall
exist and (ii) the Consolidated Leverage Ratio for the Measurement
Period then last ended is less than 6.50 to 1.00, the Borrower may pay
management fees to CHS Management and its Affiliates quarterly in
arrears pursuant to, and in accordance with, the terms of the CHS
Management Agreement (as in effect on January 28, 1999) in an
aggregate amount for all such Persons taken together not to exceed
$125,000 per quarter plus the reasonable out-of-pocket expenses
incurred by CHS Management and its Affiliates in performing management
services for the Borrower pursuant to the CHS Management Agreement (it
being understood and agreed that the reimbursement of such reasonable
out-of-pocket expenses may be made whether or not any Default or Event
of Default exists and whether or not the Consolidated Leverage Ratio
is less than 6.50 to 1.00), provided, however, (I) such management
fees may be increased to $250,000 per quarter if the Consolidated
Leverage Ratio for the Measurement Period then last ended is less than
6.00:1.00 and (II) no management fees may be paid pursuant to this
clause (iv) for any quarter until Holdings has delivered a Leverage
Ratio Certificate in respect of the applicable Measurement Period;".
9. Section 8.08 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"8.08 Consolidated Interest Coverage Ratio. Holdings and the
Borrower will not permit the Consolidated Interest Coverage Ratio for any
Measurement Period ending on the last day of a fiscal quarter of Holdings
set forth below to be less than the ratio set forth opposite such fiscal
quarter below:
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Fiscal Quarter Ending Ratio
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March 31, 1999 1.25:1.00
June 30, 1999 1.35:1.00
September 30, 1999 1.55:1.00
December 31, 1999 1.60:1.00
March 31, 2000 1.75:1.00
June 30, 2000 1.75:1.00
September 30, 2000 1.75:1.00
December 31, 2000 2.00:1.00
March 31, 2001 2.00:1.00
June 30, 2001 2.00:1.00
September 30, 2001 2.00:1.00
December 31, 2001 2.25:1.00
March 31, 2002 2.25:1.00
June 30, 2002 2.25:1.00
September 30, 2002 2.25:1.00
December 31, 2002
and the last day of each fiscal
quarter thereafter 2.50:1.00".
10. Section 8.10 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"8.10 Maximum Leverage Ratio. (a) Holdings and the Borrower will not
permit the Senior Leverage Ratio at any time during a period set forth
below to be greater than the ratio set forth opposite such period below:
Period Ratio
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January 28, 1999 through and
including September 29, 1999 3.75:1.00
September 30, 1999 through and
including December 30, 1999 3.50:1.00
(b) Holdings and the Borrower will not permit the Consolidated
Leverage Ratio at any time during a period set forth below to be greater
than the ratio set forth opposite such period below:
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Period Ratio
------ -----
December 31, 1999 through and
including March 30, 2000 6.25:1.00
March 31, 2000 through and
including June 29, 2000 5.55:1.00
June 30, 2000 through and
including September 29, 2000 5.25:1.00
September 30, 2000 through and
including December 30, 2000 5.20:1.00
December 31, 2000 through and
including December 30, 2001 4.85:1.00
December 31, 2001 through and
including December 30, 2002 4.50:1.00
December 31, 2002 through and
including June 29, 2003 4.25:1.00
June 30, 2003 through and
including December 30, 2003 4.00:1.00
December 31, 2003 through and
including December 30, 2004 3.75:1.00
Thereafter 3.50:1.00".
11. The Lenders hereby agree that the Borrower may amend the CHS
Management Agreement to give effect to the provisions set forth in Section 8 of
this Amendment.
12. Holdings, the Borrower and the Lenders hereby agree that the
Compliance Certificate shall be, and hereby is, amended to the extent necessary
to provide for the calculation of the Senior Leverage Ratio as required to be
determined pursuant to the Credit Agreement (as amended by this Amendment) and
Holdings shall calculate such Senior Leverage Ratio in each such Compliance
Certificate.
13. In order to induce the Lenders to enter into this Amendment, the
Borrower hereby agrees to pay to each Lender which executes and delivers to the
Administrative Agent a counterpart of this Amendment on or before 5:00 p.m. (New
York time) on January 28, 1999, a fee equal to 1/5 of 1% of the sum of (I) such
Lender's Revolving Commitment on the First Amendment Effective Date and (II) the
aggregate outstanding principal amount of such Lender's Term Loans on the First
Amendment Effective Date, with such fee to be earned on the First Amendment
Effective Date and payable on the Business Day immediately thereafter.
14. In order to induce the Lenders to enter into this Amendment, each
of Holdings and the Borrower hereby represents and warrants that (i) no Default
or Event of Default exists as of the First Amendment Effective Date after giving
effect to this Amendment and (ii) all
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representations and warranties contained in the Credit Agreement and in the
other Loan Documents are true and correct in all material respects as of the
First Amendment Effective Date after giving effect to this Amendment.
15. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when (i) the Administrative Agent, the Required
Lenders, Holdings and the Borrower shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered (including
by way of facsimile transmission) the same to the Administrative Agent as
provided in Section 12.02 of the Credit Agreement and (ii) the Borrower and CHS
Management shall have entered into an amendment to the CHS Management Agreement
to give effect to the provisions of Section 8 of this Amendment and the
Administrative Agent shall have received a true and correct copy of such
amendment.
16. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Loan Document.
17. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
18. All references in the Credit Agreement and each of the Loan
Documents to the Credit Agreement shall be deemed to be references to the Credit
Agreement after giving effect to this Amendment.
19. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
hereof.
GLOBE HOLDINGS, INC.
By:___________________________
Name:
Title:
GLOBE MANUFACTURING CORP.
By:___________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By:___________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Lender
By:___________________________
Name:
Title:
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MERRILL LYNCH CAPITAL
CORPORATION
By:___________________________
Name:
Title:
ALLIANCE INVESTMENT
OPPORTUNITIES FUND, L.L.C.
By: Alliance Investment
Opportunities Management L.L.C.,
as Managing Member
By: Alliance Capital Management
L.P., as Managing Member
By: Alliance Capital Management
Corporation, as General Partner
By:___________________________
Name:
Title:
ALLSTATE INSURANCE COMPANY
By:___________________________
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By:___________________________
Name:
Title:
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ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc., as
Collateral Manager
By:___________________________
Name:
Title:
BHF-BANK AKTIENGESELLSCHAFT
By:___________________________
Name:
Title:
CYPRESS TREE INSTITUTIONAL FUND, LLC
By: Cypress Tree Investment
Management Company, Inc., its
Managing Manager
By:___________________________
Name:
Title:
CYPRESS TREE INVESTMENT FUND, LLC
By: Cypress Tree Investment Management
Company, Inc., its Managing Manager
By:___________________________
Name:
Title:
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CYPRESS TREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf
of First Allmerica Financial Life
Insurance Company as Portfolio
Manager
By:___________________________
Name:
Title:
EATON VANCE SENIOR INCOME TRUST
By: Eaton Vance Management, as
Investment Advisor
By:___________________________
Name:
Title:
FIRST SOURCE FINANCIAL LLP
By: First Source Financial Inc.,
its Agent/Member
By:___________________________
Name:
Title:
FLEET NATIONAL BANK
By:___________________________
Name:
Title:
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HELLER FINANCIAL, INC.
By:___________________________
Name:
Title:
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, Inc. as
Investment Advisor
By:___________________________
Name:
Title:
KZH - CYPRESSTREE-1 CORPORATION
By:___________________________
Name:
Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:___________________________
Name:
Title:
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MORGAN STANLEY DEAN WITTER
PRIME INCOME TRUST
By: c/o Morgan Stanley Dean Witter
Advisors, Inc.
By:___________________________
Name:
Title:
NATIONAL CITY BANK
By:___________________________
Name:
Title:
OXFORD STRATEGIC INCOME FUND
By: Eaton Vance Management, as
Investment Advisor
By:___________________________
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and
Research, as Investment Advisor
By:___________________________
Name:
Title:
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STATE STREET BANK AND TRUST CO.
By:___________________________
Name:
Title:
SUNTRUST BANK
By:___________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:___________________________
Name:
Title:
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