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SECOND AMENDMENT TO CREDIT AGREEMENT THIS SECOND
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is
made as of the 15th day of January, 2009, by and among COMPX
INTERNATIONAL INC. (the “Borrower”), COMPX SECURITY
PRODUCTS INC., COMPX PRECISION SLIDES INC., COMPX MARINE INC.,
CUSTOM MARINE INC. (f/k/a CUSTOM MARINE ACQUISITION, INC.), LIVORSI
MARINE, INC., WACHOVIA BANK, NATIONAL ASSOCIATION
(“Wachovia”), as Administrative Agent (in such
capacity, the “Administrative Agent”) and a Lender,
COMPASS BANK and COMERICA BANK (collectively with Wachovia referred
to herein as the “Lenders”). R E C I T A L S:
The Borrower, the Administrative Agent and the Lenders have
entered into a certain Credit Agreement dated as of December 23,
2005, as amended by the First Amendment thereto dated as of October
16, 2007 (as so amended, the “Credit
Agreement”). Capitalized terms used in this
Amendment that are not otherwise defined in this Amendment shall
have the respective meanings assigned to them in the Credit
Agreement. In connection with the Credit Agreement, the
Subsidiary Guarantors have executed the Subsidiary Guaranty
Agreement in favor of the Administrative Agent, for the ratable
benefit of the Administrative Agent and the Lenders. The
Borrower and the Subsidiary Guarantors have requested that the
Administrative Agent and the Lenders extend the term of the Credit
Agreement, and, subject to the terms and conditions in this
Amendment and in the Credit Agreement, as amended hereby, the
Administrative Agent and the Lenders have agreed to such extension.
In connection with the extension of the term of the Credit
Agreement, the Lenders, the Administrative Agent, the Subsidiary
Guarantors and the Borrower desire to amend the Credit Agreement
upon the terms and conditions hereinafter set forth. NOW,
THEREFORE, in consideration of these Recitals and the mutual
promises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Subsidiary Guarantors, the
Administrative Agent and the Lenders, intending to be legally bound
hereby, agree as follows: SECTION
1. Recitals. The Recitals are incorporated
herein by reference and shall be deemed to be a part of this
Amendment. SECTION 2. Amendments. The
Credit Agreement is hereby amended as set forth in this Section 2.
(a) Amendments
to Section 1.1. Section 1.1 of the Credit Agreement is
amended as follows:
(1) By
amending and restating the definition of “Base Rate”
set forth therein to read in its entirety as follows:
“ “Base Rate” means, at any time, the highest of
(a) the Prime Rate, (b) the Federal Funds Rate plus 1/2 of 1% and
(c) the one-month LIBOR Rate plus 3.25%. Each change in
the Base Rate shall take effect simultaneously (x) in the case of
clauses (a) and (b), with the corresponding change or changes in
the Prime Rate or the Federal Funds Rate or (y) in the
case of clause (c), on the first day of each calendar month, and if
such day is not a Business Day (including for purposes of this
definition, a Business Day described in clause (b) of the
definition of Business Day), then on the immediately preceding
Business Day.”
(2) By
deleting the definition of “Calculation Date” set forth
therein; and
(3) By
amending and restating the definition of “Consolidated Net
Worth” set forth therein to read in its entirety as follows:
“ “Consolidated Net
Worth” means, with respect to the Borrower and its
Subsidiaries, on any date of determination, the total
stockholders’ equity (including capital stock, additional
paid-in capital and retained earnings after deducting the treasury
stock) of the Borrower and its Subsidiaries appearing on a
Consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with GAAP (excluding on a cumulative basis
any adjustments for foreign currency translation).”
(4) By
inserting the following new definition in appropriate alphabetical
order to read in its entirety as follows: “
“Initial Extension Date” means January 15,
2009.”
(b) Amendment
to Section 2.8. Section 2.8 of the Credit Agreement is
amended and restated to read in its entirety as follows:
“SECTION 2.8 Termination of Credit
Facility. The Credit Facility shall terminate on the
earliest of (a) January 15, 2012, (b) the date of termination by
the Borrower pursuant to Section 2.7 or (c) the date of termination
by the Administrative Agent on behalf of the Lenders pursuant to
Section 11.2(a).”
(c) Amendment
to Section 4.1. Clause (c) of Section 4.1 of the Credit
Agreement is amended and restated to read in its entirety as
follows:
“(c) “Applicable Margin” shall
mean: (i) in the case of each LIBOR Rate Loan, 3.25% and
(ii) in the case of each Base Rate Loan, 1.00%.”
(d) Amendment
to Section 4.3. Clause (a) of Section 4.3 of the Credit
Agreement is amended and restated to read in its entirety as
follows:
“(a) Commitment
Fee. Commencing on the Closing Date, the Borrower shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee at a rate per annum equal to 0.50% on
the average daily unused portion of the Aggregate Commitment;
provided that the amount of outstanding Swingline Loans and
Alternative Currency Loans shall not be considered usage of the
Revolving Credit Commitment for the purpose of calculating such
commitment fee with regard to any Lender other than the Swingline
Lender (as to outstanding Swingline Loans) and the Alternative
Currency Lender (as to outstanding Alternative Currency
Loans). The commitment fee shall be payable in arrears
on the last Business Day of each calendar quarter during the term
of this Agreement commencing March 31, 2009, and on the Revolving
Credit Termination Date. Such commitment fee shall be
distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders’ respective Commitment
Percentages.”
(e) Amendment
to Section 9.2. Section 9.2 of the Credit Agreement is
amended and restated to read in its entirety as follows:
“SECTION 9.2 Consolidated Net
Worth. Permit, at any time, Consolidated Net Worth to be
less than $77,000,000.”
(f) Amendments
to Section 10.3. Section 10.3 of the Credit Agreement is
amended as follows:
(1) by
amending clause (c) of such Section to (A) insert the word
“and” at the end of subsection (x) therein and (B)
insert a new subsection (xi) at the end of such clause (c) to read
in its entirety as follows:
“(xi) without the prior written consent of the Required
Lenders, the Costs of Acquisition of the Permitted Acquisition
(regardless of the form of consideration) together with the
aggregate Costs of Acquisition of all other Permitted Acquisitions
pursuant to this Section 10.3(c) shall not exceed $20,000,000
during the period from and including the Initial Extension Date to
the termination of this Credit Facility; provided that, for
purposes of this subsection (xi), the Required Lenders shall in no
event consist of fewer than two Lenders;”
(2) by
amending subsection (ii) of clause (d) of such Section to replace
the text “during the term of this Agreement” appearing
therein with the text “during the period from and including
the Initial Extension Date to the termination of this Credit
Facility”; and
(3) by
deleting clause (h) of such Section in its entirety, adding the
word “and” immediately afte
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