EXHIBIT 10.2
As of March 31, 1997
SunTrust Banks, Inc.
00 Xxxx Xxxxx
Xxxxxxx, XX 00000
Re: Waiver and Modification Agreement No. 2 to
CONVERTIBLE SUBORDINATED NOTE PURCHASE AGREEMENT
Dear Sirs:
Reference is made to the Convertible Subordinated Note Purchase Agreement
dated as of October 18, 1996 by and between Consolidated Stainless, Inc., Xxxxxx
X. Xxxxx, Xxxxxx X. Xxxxx and SunTrust Banks, Inc. (as heretofore amended, the
"Note Agreement"). All capitalized terms used herein without definition have the
respective meanings ascribed to them in the Note Agreement.
This will confirm the agreement of the Company and the Purchaser to amend
certain covenants contained in the Note Agreement, as follows:
1. TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO. Section 6.8(a) of
the Note Agreement is hereby amended, solely with respect to the fiscal
quarter ending March 31, 1997, so as to require the Company's ratio of
Total Liabilities to Tangible Net Worth to be not less than 7.75:1.0 as
of such date.
2. FUNDED DEBT TO EBITDA. Section 6.8(b) of the Note Agreement is
hereby amended, solely with respect to the fiscal quarter ending March
31, 1997, so as to require the Company's ratio of Funded Debt to EBITDA
not to exceed 52.00:1.0 as of such date.
3. SENIOR FUNDED DEBT TO EBITDA. Section 6.8(c) of the Note
Agreement is hereby amended, solely with respect to the fiscal quarter
ending March 31, 1997, so as to require the Company's ratio of Senior
Funded Debt to EBITDA not to exceed 48.00:1.00 as of such date.
Except as expressly set forth herein, all of the terms and conditions of the
Note Agreement shall remain unchanged and in full force and effect, and are
hereby reaffirmed.
The amendments set forth herein shall only be applicable for the specific
date and time period stated herein, and shall not be applicable to any other
dates or any other time periods whatsoever. Furthermore, this amendment shall
not be applicable to, and shall not imply the Purchaser's agreement to grant any
amendment, consent or waiver in respect of, any covenant not specified herein,
or for any date or time period not specified herein, or in any other
circumstances (whether of like or unlike nature).
The effectiveness of this amendment is expressly subject to the execution
and delivery by Mellon Bank, N.A. ("Mellon"), of a certain modification
agreement with the Company relating to certain covenants under the Loan and
Security Agreement dated March 10, 1997 by and between the Company and Mellon,
in substantially the form attached hereto.
The Company hereby requests that the Purchaser acknowledge and confirm its
agreement to the foregoing amendments by countersigning a counterpart copy of
this letter. When signed, this amendment may not be altered or amended except in
the manner provided in the Note Agreement.
Very truly yours,
CONSOLIDATED STAINLESS, INC.
By: __________________________________
Acknowledged, Confirmed and
Agreed to:
SUNTRUST BANKS, INC.
By: ____________________________
