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EXHIBIT 10.10
THIRD AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
among
OUTBOARD MARINE CORPORATION,
OMC ALUMINUM BOAT GROUP, INC.,
OMC FISHING BOAT GROUP, INC.,
OMC LATIN AMERICA/CARIBBEAN, INC.,
and
RECREATIONAL BOAT GROUP LIMITED PARTNERSHIP
as Borrowers and Guarantors,
and
OMC RECREATIONAL BOAT GROUP, INC.,
and
(and the other Borrowers and/or Guarantors, if any,
from time to time party hereto),
NATIONSBANK, N.A.,
as Agent and a Lender,
(and the other Lenders, if any, from time to time party hereto),
as Lenders
Dated effective as of December 21, 1998
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THIRD AMENDMENT TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
("Amendment"), dated effective as of December 21, 1998 (the "Effective Date"),
is executed and entered into by and among OUTBOARD MARINE CORPORATION, a
Delaware corporation ("OMC"), OMC ALUMINUM BOAT GROUP, INC., a Delaware
corporation OMC FISHING BOAT GROUP, INC., a Delaware corporation, OMC LATIN
AMERICA/CARIBBEAN, INC., a Delaware corporation, RECREATIONAL BOAT GROUP LIMITED
PARTNERSHIP, a Delaware limited partnership, OMC RECREATIONAL BOAT GROUP, INC.,
a Delaware corporation (collectively all of the "Loan Parties," as of the
effective date hereof, under the Amended and Restated Loan and Security
Agreement referenced under the Recitals hereinbelow; herein called the "Loan
Parties"), each of the lending institutions signatory hereto (collectively all
of the "Lenders," as of the effective date hereof, under the Amended and
Restated Loan and Security Agreement referenced under the Recitals hereinbelow;
herein called the "Lenders") and NATIONSBANK, N.A., a national banking
association and successor in interest by merger to NationsBank of Texas, N.A.,
in its capacity as agent for itself and the other Lenders (in such capacity,
together with its successors and assigns in such capacity, herein called
"Agent").
RECITALS:
A. The Loan Parties, the Lenders and Agents are parties to the certain
Amended Restated Loan and Security Agreement dated effective as of January 6,
1998, as amended by the certain First Amendment of Loan and Security Agreement
dated effective as of May 21, 1998, and the Second Amendment to Amended and
Restated Loan and Security Agreement dated effective as of August 31, 1998
(hereinafter called the "Agreement"). Unless otherwise defined in this
Amendment, terms defined by the Agreement, where used in this Amendment, shall
have the same meanings as are prescribed by the Agreement, as amended by this
Amendment.
B. The Loan Parties, the Lenders and Agent have agreed to amend the
Agreement as provided hereinbelow.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
AMENDMENTS
Section 1.1 DEFINITIONS. As of the Effective Date the following
definitions in Section 1.1 ("Definitions") of the Agreement are hereby amended
as follows:
a. AMENDMENT TO DEFINITION OF "TANGIBLE NET WORTH". The definition
of "Tangible Net Worth" hereby is amended and restated to read in its entirety
as follows:
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"TANGIBLE NET WORTH" means the Net Worth of OMC and its Consolidated
Subsidiaries at the time in question, plus the sum of Subordinated
Indebtedness plus non-cash adjustments, excluding (i) any amounts due from
Affiliates, (ii) the amount of all intangible items reflected therein,
including, without limitation, all unamortized debt discount and expense,
unamortized research and development expense, unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights,
unamortized excess cost of investment in non-Consolidated Subsidiaries over
equity at dates of acquisition and all similar items which should properly
be treated as intangibles in accordance with GAAP, (iii) purchase
accounting adjustments to OMC's balance sheet which would otherwise be
required pursuant to GAAP, and (iv) non-cash currency translation
adjustments which would otherwise be required pursuant to GAAP.
b. AMENDMENT TO DEFINITION OF "LEVERAGE RATIO" The definition of
"Leverage Ratio" hereby is amended and restated to read in its entirety as
follows:
"LEVERAGE RATIO" means, at any time, the ratio of (i) the sum of
Indebtedness for Money Borrowed (in the case of any Indebtedness evidenced
by an Interest Rate Protection Agreement, limited, however, to an amount
equal to twenty percent (20%) of the amount of such Indebtedness),
determined as of such time, to (ii) EBITDA, determined for the preceding
four (4) completed fiscal quarters.
c. AMENDMENT OF DEFINITIONS OF "NET INCOME" The definition of "Net
Income" hereby is amended and restated to read in its entirety as follows:
"NET INCOME" means, as applied to any Person, the net income (or net
loss) of such Person for the period in question after giving effect to
deduction of or provision for all operating expenses, all taxes and
reserves (including, without limitation, reserves for deferred taxes) and
all other proper deductions, all determined in accordance with GAAP plus,
restructuring charges to the extent deducted pursuant to the foregoing,
provided that there shall be excluded:
(a) the net income (or net loss) of any Person accrued prior to
the date it becomes a Subsidiary of, or is merged into or
Consolidated with, the Person whose Net Income is being
determined or a Consolidated Subsidiary of such Person;
(b) the net income (or net loss) of any Person in which the
Person whose Net Income is being determined or any Subsidiary of
such Person has an ownership interest, except, in the case of
net income, to the extent that any such income has actually been
received by such Person or such Subsidiary in the form of cash
dividends or similar distributions;
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(c) any restoration of any contingency reserve, except to the
extent that provision for such reserve was made out of income during
such period;
(d) any net gains or losses on the sale or other disposition,
not in the ordinary course of business, of Investments, Business Units
and other capital assets, provided that there shall also be excluded
any related charges for taxes thereon;
(e) any net gain arising from the collection of the proceeds
of any insurance policy;
(f) any write-up of any asset; and
(g) any other extraordinary item.
Section 1.2 Amendment of Section 12.1(a). Effective as of the Effective
Date Subsection (a) ("Tangible Net Worth") of Section 12.1 ("Financial Ratios")
of the Agreement hereby is amended and restated to read in its entirety as
follows:
(a) Tangible Net Worth. The Loan Parties will not directly or
indirectly permit OMC's Consolidated Tangible Net Worth at any time to be
less than (i) for the period ended June 30, 1999, the amount of Tangible
Net Worth as of December 31, 1998 plus $5,000,000; (ii) for the period
ended September 30, 1999, the amount of Tangible Net Worth as of June 30,
1999, plus $5,000,000; (iii) for the period ended June 30, 2000, the amount
of Tangible Net Worth as of September 30, 1999; and (iv) for the periods
ended September 30, 2000 and thereafter, the amount of Tangible Net Worth
as of September 30, 1999, plus $18,000,000.
Section 1.3 Amendment to Section 12.1(b). Effective as of the Effective
Date Subsection (b) ("Minimum Interest Coverage") of Section 12.1 ("Financial
Ratios") of the Agreement hereby is amended and restated to read in its entirety
as follows:
(b) The Loan Parties will not permit OMC's Consolidated Interest
Coverage Ratio calculated as of the end of each of OMC's fiscal quarters,
determined in accordance with GAAP and based on the financial statements
delivered pursuant to Section 11.1, as applicable, measured as of each
fiscal quarter, in each case of the preceding twelve (12) calendar months
then ending, to be less than the following specified amounts, as
applicable:
PERIOD END REQUIREMENT
September 30, 1999 1.25 to 1.0
December 31, 1999 and thereafter 1.75 to 1.0
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Section 1.4 Amendment to Section 12.1(c). Effective as of the Effective
Date Subsection (c) ("Leverage Ratio") of Section 12.1 ("Financial Ratios") of
the Agreement hereby is amended and restated to read in its entirety as follows:
(c) Leverage Ratio. The Loan Parties will not permit OMC's
Consolidated Leverage Ratio calculated as of the end of each of OMC's
fiscal quarters, determined in accordance with GAAP and based on the
financial statements delivered pursuant to Section 11.1, as applicable,
measured as of the end of each fiscal quarter, in each case for the
preceding twelve (12) calendar months then ending, to be greater than the
following specified amounts, as applicable:
PERIOD END REQUIREMENT
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September 30, 1998.............................. 15.0 to 1.0
December 31, 1998............................... 26.0 to 1.0
March 31, 1999.................................. 17.0 to 1.0
June 30, 1999................................... 8.0 to 1.0
September 30, 1999.............................. 4.0 to 1.0
December 31, 1999 through and
including June 30, 2000....................... 4.0 to 1.0
September 30, 2000 and thereafter............... 3.5 to 1.0
Section 1.5 Amendment to Section 12.3. Section 12.3 ("Guaranties") of
the Agreement hereby is amended and restated to read in its entirety as follows:
Section 12.3 Guaranties. No Loan Party will, nor will it permit any
other Loan Party to, directly or indirectly, become or remain liable with
respect to any Guaranty of any obligation of any other Person other than
pursuant to the Guaranty Agreement to be executed by such Loan Party
pursuant to the terms of this Agreement, Indebtedness permitted pursuant to
Section 12.2(a), Section 12.2(b) or Section 12.2(c), a Guaranty of the
Senior Notes by ABG, FBG, LAC, RBG and GP, or other Indebtedness in an
aggregate amount not at any time exceeding $25,000,000.
Section 1.6 Amendment to Section 12.9. Effective as of the Effective
Date Section 12.9 ("Capitalized Lease Obligations and Permitted Purchase Money
Indebtedness") of the Agreement hereby is amended and restated to read in its
entirety as follows:
Section 12.9 Capitalized Lease Obligations and Permitted Purchase
Money Indebtedness. No Loan Party will, nor will it permit any other Loan
Party to, incur or permit to exist any Capitalized Lease Obligation, other
than Capitalized Lease Obligations existing on the Agreement Date, unless
such
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Capitalized Lease Obligation constitutes Permitted Purchase Money
Indebtedness.
Section 1.7 AMENDMENT TO SECTION 13.1. As of the Effective Date Section
13.1 ("Events of Default" is amended to (i) delete the word "and" at the end of
subsection (n), (ii) insert "and" in place of the period at the end of
subsection (o) and (iii) add a new subsection (p) which shall read as follows:
(p) INTEREST RESERVE ACCOUNTS. At any time during OMC's fiscal
quarters ending September 30, 1998 through June 30, 1999, OMC shall make
any request for a disbursement from any "Interest Reserve Account" as
defined by the Depositary Agreement.
ARTICLE 2
Waivers
Section 2.1 WAIVERS. Subject to Section 16.9 ("Amendments") of the
Agreement, any Event of Default existing as a result of noncompliance with
Subsection (a) ("Tangible Net Worth"), Subsection (b) ("Minimum Interest
Coverage") or Subsection (c) ("Leverage Ratio") of Section 12.1 ("Financial
Ratios") of the Agreement as of September 30, 1998 hereby is waived, provided,
that the waivers under this Section 2.1 are expressly limited as provided herein
and shall not apply to any other provision of the Agreement or to any other
date, it being understood that all requirements of the Agreement, as amended
hereby, shall continue in full force and effect.
ARTICLE 3
Miscellaneous
Section 3.1 CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the satisfaction of each of the following conditions precedent:
(a) Agent shall have received all of the following, each dated the
date of this Amendment (unless otherwise indicated), in form and substance
satisfactory to Agent:
(i) AMENDMENT DOCUMENTS. This Amendment and any other instrument,
document or certificate required by Agent to be executed or delivered
by any of the Loan Parties, each of the Lenders and or any other
Person in connection with this Amendment, duly executed by such
Persons (the "Amendment Documents").
(ii) FEES AND EXPENSES. Evidence that the costs and expenses
(including, without limitation, attorneys' fees and expenses) incurred
by Agent incident to this Amendment or otherwise required to be paid
in accordance with Section 16.2 of the Agreement, to the extent
incurred and submitted to the Loan Parties, shall have been paid in
full; and
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(iii) Additional Information. Agent shall have received such
additional documents, instruments and information as Agent may
reasonably request to effect the transactions contemplated hereby.
(b) The representations and warranties contained herein, in the
Agreement and in all other Loan Documents, as amended hereby, shall be true
and correct as of the date hereof as if made on the date hereof (except
those, if any, which by their terms specifically relate only to a different
date).
(c) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all other agreements,
documents and instruments executed and/or delivered pursuant hereto, and
all legal matters incident thereto, shall be satisfactory to Agent.
(d) No Default or Event of Default shall have occurred and be
continuing.
Section 3.2 Representations and Warranties. The Loan Parties hereby
represent and warrant to, and agree with, Agent, for the benefit of the Lenders,
that, as of the date of and after giving effect to this Amendment, (a) the
execution, delivery and performance of this Amendment and any and all other
Amendment Documents executed and/or delivered in connection herewith have been
authorized by all requisite corporate action on the part of each of the Loan
Parties (as applicable) and will not violate any of such Loan Party's
certificate of incorporation or bylaws (or, in the case of Recreational Boat
Group Limited Partnership, its certificate of limited partnership or its limited
partnership agreement), (b) all representations and warranties set forth in the
Agreement and in any other Loan Document are true and correct as if made again
on and as of such date (except those, if any, which by their terms specifically
relate only to a different date) in the Agreement), (d) no Default or Event of
Default has occurred and is continuing, (c) the Agreement (as amended by this
Amendment), and all other Loan Documents are and remain legal, valid, binding
and enforceable obligations in accordance with the terms thereof, and (f) the
certifications delivered to Agent under clause (i), clause (ii) and clause (iii)
of Section 6.1(c) of the Agreement remain true, correct and complete as of the
effective date of this Amendment.
Section 3.3 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan Document
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or any Lender, or any closing, shall
affect the representations and warranties or the right of Agent and the Lenders
to rely upon them.
Section 3.4 Reference to Agreement. Each of the Loan Documents, including
the Agreement, the Amendment Documents and any and all other agreements,
documents or instruments now or hereafter executed and/or delivered pursuant to
the terms hereof or pursuant to the terms of the Agreement as amended hereby,
are hereby amended so that any reference in such Loan Documents to the
Agreement, whether direct or indirect, shall mean a reference to the Agreement
as amended hereby.
Section 3.5 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this
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Amendment and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.
Section 3.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of the Credit Parties and the Loan Parties and their
respective successors and assigns, except each of the Loan Parties may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of Agent and the Lenders.
Section 3.7 GENERAL. This Amendment, when signed by the Required Lenders
(i) shall be deemed effective prospectively as of the effective date specified
in the preamble of this Amendment, (ii) contains the entire agreement among the
parties and may not be amended or modified except in writing signed by all
parties, (iii) shall be governed and construed according to the laws of the
State of Texas, and (iv) may be executed in any number of counterparts, each of
which shall be valid as an original and all of which shall be one and the same
agreement. A telecopy or other electronic transmission of any executed
counterpart shall be deemed valid as an original.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts.
BORROWERS:
OUTBOARD MARINE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Vice President and Treasurer
Authorized Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:Assistant Secretary
Authorized Officer
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OMC ALUMINUM BOAT GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary and Treasurer
Authorized Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Authorized Officer
OMC FISHING BOAT GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary and Treasurer
Authorized Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
Authorized Officer
OMC LATIN AMERICA/CARIBBEAN, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary and Controller
Authorized Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
Authorized Officer
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RECREATIONAL BOAT GROUP
LIMITED PARTNERSHIP
By: OMC Recreational Boat Group, Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary and Treasurer
Authorized Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
Authorized Officer
GUARANTOR:
OMC RECREATIONAL BOAT GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary and Treasurer
Authorized Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
Authorized Officer
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AGENT:
NATIONSBANK, N.A.
successor in interest by merger to
NationsBank of Texas, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Authorized Officer
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LENDERS:
NATIONSBANK, N.A.
successor in interest by merger to
NationsBank of Texas, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Authorized Officer
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AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Authorized Officer
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FLEET CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Authorized Officer
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THE CIT GROUP/BUSINESS CREDIT, INC.
By:_________________________
Name:_______________________
Title:______________________
Authorized Officer
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TRANSAMERICA BUSINESS CREDIT
CORPORATION
By:_________________________
Name:_______________________
Title:______________________
Authorized Officer
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SANWA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Authorized Officer
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