EXHIBIT 10.21
FIFTH AMENDMENT TO
CREDIT FACILITY AND SECURITY AGREEMENT
WHEREAS, ALLIED CONSTRUCTION PRODUCTS, INC. (herein called the
"Borrower") and SOCIETY NATIONAL BANK (herein called the "Bank") entered
into a certain Credit Facility and Security Agreement dated March 1, 1993
which was previously amended (as amended herein called the "Agreement"),
and
WHEREAS, the Borrower and the Bank have agreed to further amend the
Agreement.
NOW, THEREFORE, for valuable consideration received to their mutual
satisfaction, the Borrower and the Bank hereby agree as follows:
1. The definition of "Borrowing Base" appearing in Section 1.2 of
the Agreement is hereby amended to delete it in its entirety and to
substitute therefor the following:
"'Borrowing Base' means an amount not in excess of the sum of
the following:
(a) seventy-five percent (75%) of the amount due and owing on
Eligible Accounts Receivable, plus
(b) up to the lesser of (i) $3,000,000 or (ii) up to
seventy-five percent (75%) of the amount due and owing on the
sum of Eligible Notes Receivable and Eligible Dating
Receivables, plus
(c) the lesser of (1) forty percent (40%) of the cost on a
first-in, first-out inventory cost basis or market value
(whichever is lower) of Borrower's Eligible Parts Inventory
during the preceding month, (ii) fifty percent (50%) of the cost
on a first-in, first-out inventory cost basis or market value
(whichever is lower) of Borrower's Eligible Finished Goods
Inventory, or (iii) Two Million Dollars ($2,000,000), less
(d) Ineligible FFC Receivables in the form of an availability
block against the Borrowing Base for such amount."
2. The definition of "Termination Date" appearing in Section 1.2 of
the Agreement is hereby amended to delete it in its entirety and to
substitute therefor the following:
"'Termination Date' means June 30, 1997, or such earlier date on
which the commitment of Bank to make Advances pursuant to
Section 2.1 of this Agreement shall have been terminated
pursuant to Sections 10 or 14 of this Agreement."
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3. Section 1.2 of the Agreement is hereby amended by adding
the following definitions:
"'Interest Period' means, with respect to any Libor Rate Loan, the
period commencing on the date such Loan is made, continued, or
converted and ending on the last day of such period as selected by
the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of such period
as selected by the Borrower pursuant to the provisions below. The
duration of each Interest Period for any Libor Rate Loan shall be 1
month, 2 months, or 3 months, in each case as the Borrower may select
upon notice, as set forth in Section 2.1(b), provided that:
'Libor Rate' means, for any Interest Period for any Libor Rate Loan,
an interest rate per annum (rounded upwards to the next higher whole
multiple of 1/16% if such rate is not such a multiple) equal at all
times during such Interest Period to the quotient of (a) the rate per
annum (rounded upwards to the next higher whole multiple of 1/16% if
such rate is not such a multiple) at which deposits in United States
dollars are offered at 11:00 a.m. (London, England time) (or as soon
thereafter as is reasonably practicable) by prime banks in the London
interbank eurodollar market two Business Days prior to the first day
of such Interest Period in an amount and maturity of such Libor Rate
Loan, divided by (b) a number equal to 1.00 minus the aggregate
(without duplication) of the rates (expressed as a decimal fraction)
of the Libor Reserve Requirements current on the date two Business
Days prior to the first day of such Interest Period.
'Libor Rate Loan' means any Advance that bears interest with
reference to the Libor Rate.
'Libor Reserve Requirements' means, for any Interest Period for any
Libor Rate Loan, the maximum reserves (whether basic, supplemental,
marginal, emergency, or otherwise) prescribed by the Board of
Governors of the Federal Reserve System (or any successor) with
respect to liabilities or assets consisting of or including
'Eurocurrency liabilities' (as defined in Regulation D of the Board
of Governors of the Federal Reserve System) having a term equal to
such Interest Period.
'Prime Rate Loan' means any Advance that bears interest with
reference to the Prime Rate.
'Special Dividend' means a cash dividend in an amount not to exceed
One Million Dollars ($1,000,000), which may be paid exclusively
during the month of December, 1995."
4. The sixth line of Section 2.1(a) of the Agreement is hereby
amended to delete the words "Three Million Dollars ($3,000,000)" and to
substitute therefor the words "Four Million Five Hundred Thousand Dollars
($4,500,000)".
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5. Section 2.1(b) of the Agreement is hereby amended by deleting in
its entirety and substituting the following in place thereof:
"(b) As compensation for the Advances made by Bank, Borrower
undertakes and agrees to pay to Bank with respect to each Advance
interest at an annual rate to be elected by Borrower equal to either
the Libor Rate plus two and one-half percent (2-1/2%) or the Prime
Rate. Interest on Advances shall be payable monthly in arrears
commencing on the first day of the month following the month in which
such Advance is made and continuing on the first day of each
consecutive month thereafter by debiting the Operating Account.
Interest on the Advances shall accrue upon the average daily balance
in Borrower's Loan Account during the preceding month with respect to
all Advances. Bank shall use its best efforts to give Borrower
notice prior to debiting the Operating Account."
6. The Agreement is hereby amended by a new Section 2.5 reading as
follows:
"2.5. (i) Advances. Advances shall be made pursuant to
Borrower's written, telegraphic, or telephonic
request therefor (a "Request for a Advance"), given
by Borrower to Bank (upon three Business Days notice
for a Libor Rate Loan) stating the date of the
proposed borrowing, the amount of Bank's Advance,
whether it will be a Prime Rate Loan, or Libor Rate
Loan, the applicable Interest Period, if any, and
the total amount to be borrowed. Each written
Request for a Advance shall be signed by an
authorized person of Borrower and accompanied by a
Borrower's Certificate, and each telephonic request
for a Advance shall be made, and confirmed in
writing thereafter, by such an authorized person and
accompanied by a Borrower's Certificate. No Request
for a Advance shall become effective until actually
received by Bank. Each Libor Rate Loan shall not be
an amount less than $100,000.
(ii) Change in Interest Rates. The interest rate elected
by the Borrower under this Section 2.5 shall, as to
each Advance, remain in effect until changed by the
Borrower by written notice to Bank on or prior to
the date of change or, in the case of Prime Rate
Loans until changed by the terms thereof; provided
however, (a) that a change to the Libor Rate, or the
election of a Libor Rate Loan, can be effected only
upon three (3) Business Days' notice (with notice to
be received by Bank not later than 11:00 a.m.
Cleveland, Ohio time on such day), and (b) when the
rate of interest is the Libor Rate it may be changed
to a Prime Rate Loan before the end of the
applicable Interest Period subject, however, to
payment of any applicable additional amount required
by Section 2.5(v) hereof (but without requiring
prepayment of the effected borrowing);
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(iii) Limitations in Interest Rate Selections. The
Borrower may not elect the Libor Rate if U.S. dollar
deposits are not available to any Bank in the London
Eurodollar Interbank Market for the period and in
the amount requested by the Borrower;
(iv) Special Provisions for Libor Rate Loans and Taxes.
If the making or maintaining of a Libor Rate Loan
becomes illegal for Bank as a result of any change
in an applicable law, governmental regulation,
guideline or order or the interpretation thereof by
an authority charged with the administration
thereof, then upon notice thereof by Bank, the
Borrower (a) shall not cause a new Libor Rate Loan
to be made or elect another Libor Rate Interest
Period for an outstanding Libor Rate Loan for so
long as the making of a Libor Rate Loan by Bank
remains illegal, and (b) shall prepay, or select
another interest rate for, any then outstanding
Libor Rate Loans and pay any applicable additional
amount required by Section 2.5(vi) but without
giving effect to any notice requirements in each
case when and to the extent required by such change.
(v) Increased Costs. With respect to Libor Rate Loans,
if the effect of any change occurring after the date
of this Agreement in an applicable law, governmental
regulation, guideline or order or the interpretation
or application of any thereof by any authority
charged with the administration thereof is to
increase the actual cost to Bank of making or
maintaining such Libor Rate Loans (assuming for such
purpose that each such borrowing is funded by Bank
from sources referred to in the definition of the
interest rate applicable to such borrowing) such as,
but not limited to, any reserve, special deposit or
similar requirements against assets held by, or
deposits in or for the account of, or loans by, or
any other acquisition of funds for loans by Bank, or
to reduce the amount of any payment of principal or
of interest, in respect of any Libor Rate Loan,
received by Bank (including any reduction for
withholding taxes), the Borrower will, after demand
by Bank, pay to Bank such additional amounts as will
compensate Bank for such additional cost or
reduction, such payments to be made on the next date
when interest is payable to Bank pursuant to such
borrowings. The Borrower shall have the option,
upon being notified by Bank pursuant to this
Section, to change the interest rate on the affected
borrowings pursuant to Section 2.5(vi) but without
giving effect to the notice requirements provided
therein or make any prepayments permitted under this
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Agreement and, in each case, with payment of any
additional applicable amount required by Section
2.5(vi). If either (i) any law, rule, or regulation
now or hereafter in effect, and whether or not
presently applicable to Bank, or (ii) the compliance
with any guideline or request from any central bank
or other governmental authority (whether or not
having the force of law), affects or would affect
the amount of capital required or expected to be
maintained by Bank or any corporation controlling
Bank and Bank determines that the amount of such
capital is increased by or based upon the existence
of the Advances (or commitment to make the Advances)
and other extensions of credit (or commitments to
extend credit) of similar type, then, upon demand by
Bank, the Borrower shall pay to Bank from time to
time as specified by Bank additional amounts
sufficient to compensate Bank in the light of such
circumstances, to the extent that Bank reasonably
determines such increase in capital to be allocable
to the existence of Bank's Advances (or commitment
to make the Advances). A certificate of Bank
submitted to the Borrower as to such amounts shall
be conclusive and binding for all purposes, absent
manifest error. Upon notice from the Borrower to
Bank within five (5) Business Days after Bank
notifies the Borrower of any such additional costs
pursuant to this Section, the Borrower may either
(A) prepay in full all Advances of any types so
affected then outstanding, together with interest
accrued thereon to the date of such prepayment, or
(B) convert all Advances of any types so affected
then outstanding into Advances of any other type not
so affected upon not less than four (4) Business
Days' notice to Bank. If any such prepayment or
conversion of any Libor Rate Loan occurs on any day
other than the last day of the applicable Interest
Period for such Advance, the Borrower also shall pay
to Bank such additional amount sufficient to
indemnify Bank against any loss, cost, or expense
incurred by Bank as a result of such prepayment or
conversion, including, without limitation, any loss
(including loss of anticipated profits), cost, or
expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by
Bank to fund any such Loan, and a certificate as to
the amount of any such loss, cost, or expense
submitted by Bank to the Borrower shall be
conclusive and binding for all purposes, absent
manifest error.
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(vi) Indemnification. If the Borrower makes any payment
of principal with respect to any Libor Rate Loan on
any other date than the last day of an Interest
Period applicable thereto (whether pursuant to
Sections 2.1, 7, 8, and 10 hereof, or otherwise), or
if the Borrower fails to borrow any Libor Rate Loan
after notice has been given to Bank in accordance
with Section 2.5 or if the Borrower fails to make
any payment of principal or interest in respect of a
Libor Rate Loan or when due, the Borrower shall
reimburse Bank on demand for any resulting loss or
expense incurred by Bank, including without
limitation any loss incurred in obtaining,
liquidating or employing deposits from third
parties, whether or not Bank shall have funded or
committed to fund such Loan. A statement as to the
amount of such loss or expense, prepared in good
faith and in reasonable detail by Bank and submitted
by Bank to the Borrower, shall be conclusive and
binding for all purposes absent manifest error in
computation. Calculation of all amounts payable to
Bank under this Section shall be made as though Bank
shall have actually funded or committed to fund its
relevant Libor Rate Loan through the transfer of
such deposit from an offshore office of Bank to a
domestic office of Bank in the United States of
America; provided, however, that Bank may fund any
Libor Rate Loan in any manner it sees fit and the
foregoing assumption shall be utilized only for the
purpose of calculation of amounts payable under this
Section.
(vii) Contribution and Conversion of Loans. In the event
that the Borrower shall fail to give timely notice
of its election to convert or continue any Advance
as provided above, or in the event that any such
conversion or continuation shall be prohibited by
the terms of this Agreement, such Advance (unless
repaid) shall automatically be deemed to be
refinanced with a Prime Rate Loan at the end of the
Interest Period then in effect with respect to such
Advance. For purposes of this Section, notice
received by Bank after 11:00 a.m. on a Banking Day
shall be deemed to be received on the immediately
succeeding Banking Day.
(viii) Computation of Interest. Interest under this
Agreement shall be calculated on the basis of a year
of 360 days, for the actual number of days
(including the first day but excluding the last day)
elapsed. For any Prime Rate Loan, the rate will
increase or decrease on the day of, and by an amount
equal to, each increase or decrease in the Prime
Rate. The rate charged to Borrower under this
Agreement shall change when and as the Prime Rate is
changed.
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(ix) Default Interest Rate. After maturity (whether by
acceleration or otherwise), the unpaid principal and
accrued interest on any Advance shall bear interest
at a rate per annum equal to the greater of three
percent (3%) in excess of the interest rate prior to
default or twelve percent (12%). Prior to maturity,
if any payment of principal or interest is not paid
when due, Borrower shall pay a late fee of an amount
equal to the greater of ten percent (10%) of such
payment or one hundred dollars ($100).
Notwithstanding the Bank's remedies as set forth in
Section 10 hereof, prior to maturity hereof, upon
the occurrence of any Event of Default under this
Agreement and until such Event of Default is cured
by Borrower, at Bank's option and upon written
notice to Borrower, the unpaid principal and accrued
interest on any Advance shall bear interest at a
rate per annum equal to the greater of three percent
(3%) in excess of the interest rate prior to
default, or twelve percent (12%)."
7. Section 5.10 of the Agreement entitled "Cash Flow" shall be
amended to read as follows:
"5.10 Cash Flow Borrower shall at all times maintain a Cash Flow
Coverage Ratio of at least 1.1 to 1.0, calculated at the end of the
fiscal period of Borrower ending closest to the end of each calendar
quarter based upon a cumulative year calculation.
8. Section 6.4(d) of the Agreement is hereby amended by deleting it
in its entirety and substituting the following in place thereof:
"(d) pay or declare dividends in any fiscal year (except the
following (i) payments pursuant to a tax sharing arrangement with
Xxxxxx Management Company in form and substance acceptable to Bank,
so long as the amount paid is equivalent to the amount that would
have been paid by Borrower in taxes, if it had filed a separate
return, (ii) a Special Dividend provided that such Special Dividend
could be paid exclusively during the month of December 1995 if all of
the following conditions are met: (1) no Event of Default (financial
or otherwise) exists prior to the payment of the Special Dividend;
(2) no Event of Default (financial or otherwise) exists after the
payment of the Special Dividend; with the exception of the Cash Flow
Coverage Ratio; and (3) excess availability under the Borrowing Base
during the preceding three (3) months prior to payment of the Special
Dividend (in addition to the month of December 1995) would have
exceeded Five Hundred Thousand Dollars ($500,000) on a look-back
basis, (iii) dividends may be declared after December 31, 1995 if no
Event of Default would exist after the payment of such dividends)."
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9. Section 6.6 of the Agreement entitled "Leverage" shall be
amended to read as follows:
"6.6 Leverage. Borrower shall not permit the ratio of its Adjusted
Debt to its Tangible Net Worth, measured and reviewed monthly, to
exceed 2.0 to 1.0."
10. The Borrower hereby agrees that it will, contemporaneously with
the execution of this Amendment to the Agreement, execute and deliver to
the Bank a new Revolving Credit Promissory Note in the form of Exhibit
A-1, attached hereto, to replace the Revolving Credit Promissory Note
currently held and owned by the Bank representing the Borrower's
borrowings under the Agreement.
11. In consideration for entering into this Amendment, Borrower
agrees to pay Bank on the date hereof a renewal fee of $1,000.
12. Except as herein specifically amended, directly or by reference,
all of the terms and conditions set forth in the Agreement are confirmed
and ratified and shall remain in full force and effect.
13. In consideration of this Amendment, Borrower hereby releases and
discharges the Bank and its shareholders, directors, officers, employees,
attorneys, affiliates and subsidiaries from any and all claims, demands,
liability, and causes of action whatsoever, now known or unknown, arising
out of or in any way related to the extension or administration of the
Loan, the Agreement or any mortgage or security interest related thereto.
14. Borrower hereby represents and warrants to Bank that (a)
Borrower has the legal power and authority to execute and deliver this
Amendment; (b) the officials executing this Amendment have been duly
authorized to execute and deliver the same and bind Borrower with respect
to the provisions hereof; (c) the execution and delivery hereof by
Borrower and the performance and observance by Borrower of the provisions
hereof do not violate or conflict with the organizational agreements of
Borrower or any law applicable to Borrower or result in a breach of any
provisions of or constitute a default under any other agreement,
instrument or document binding upon or enforceable against Borrower, and
(d) this Amendment constitutes a valid and binding obligation upon
Borrower in every respect.
IN WITNESS WHEREOF, the Borrower and the Bank have caused this Second
Amendment to the Agreement to be executed by their duly authorized
officers as of the 30th day of June, 1995.
BANK: BORROWER:
SOCIETY NATIONAL BANK ALLIED CONSTRUCTION PRODUCTS, INC.
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EXHIBIT A-l
REVOLVING CREDIT PROMISSORY NOTE
$4,500,000.00 , 1995
Cleveland, Ohio
FOR VALUE RECEIVED, ALLIED CONSTRUCTION PRODUCTS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of SOCIETY
NATIONAL BANK (the "Holder") on June 30, 1997, or sooner as hereinafter
provided, the principal amount of Four Million Five Hundred Thousand and
no/100 Dollars ($4,500,000.00) or, if less, the aggregate unpaid
principal amount from time to time borrowed by the Borrower from the
Holder pursuant to the Credit Agreement (hereinafter defined). The
unpaid principal balance outstanding on this Revolving Credit Promiossory
Note from time to time (the "Outstanding Principal Balance") shall be
determined by the ledgers and records of the Holder as accurately
maintained.
This Revolving Credit Promissory Note is the "Revolving Note" defined
and referred to in, and is entitled to the benefits of, a certain Credit
Facility and Security Agreement dated March 1, 1993 (said Credit Facility
and Security Agreement as amended and including, as it may be from time
to time further amended, restated or otherwise modified, being herein
called the "Credit Agreement"), between the Borrower and the Holder, to
which reference is hereby made for a statement of the rights of the
Holder and the duties and obligations of the Borrower in relation
thereto, but neither this reference to the Credit Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the Borrower to pay the principal of and interest on this
Revolving Credit Promissory Note when due. Capitalized terms used in
this Revolving Credit Promissory Note not defined hereinafter shall have
the respective meanings given to such terms in the Credit Agreement.
This Revolving Credit Promissory Note is being executed and delivered
in substitution for an existing Revolving Credit Promissory Note executed
by Borrower and dated June 1, 1994, and the execution and delivery of
this Revolving Credit Promissory Note shall not constitute a novation and
shall not terminate or otherwise affect the first lien and security
interest of the Bank in Borrower's property.
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The Outstanding Principal Balance of this Revolving Credit Promissory
Note shall bear interest from and including the date hereof until the
date of payment in full at the rate per annum as set forth in the Credit
Agreement. All interest on this Revolving Credit Promissory Note shall
be paid in accordance with the terms of the Credit Agreement. Interest
shall be computed on the basis of a year of 360 days for the actual
number of days elapsed. All unpaid principal and interest on this
Revolving Credit Promissory Note shall be due on the maturity date hereof
as set forth in the Credit Agreement.
Reference is hereby made to the Credit Agreement which contains
provisions for the acceleration of the maturity hereof upon the happening
of certain stated events and for mandatory prepayments and voluntary
prepayments hereon. The term "Holder" includes the successors and
assigns of Holder.
This Revolving Credit Promissory Note is secured by collateral
assigned, pledged or granted to the Holder; reference is made to the
Credit Agreement and the documents and instruments assigning, pledging or
granting said collateral for a description of the Holder's rights with
respect thereto.
Payment of the principal of and interest on this Revolving Credit
Promissory Note shall be made in lawful money of the United States of
America, by federal funds wire transfer to the main office of Holder, 000
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, or at such other place or in
such other manner of payment as Holder or any subsequent holder hereof
shall have designated to the Borrower in writing.
The Borrower waives demand, presentment for payment, notice of
dishonor, protest, and notice of protest and diligence in collection and
bringing suit and agrees that Holder may extend the time for payment,
accept partial payment, take security therefor, or exchange or release
any collateral, without discharging or releasing the Borrower.
This Revolving Credit Promissory Note was executed in Cleveland,
Cuyahoga County, Ohio. The construction, validity, and enforceability of
this Revolving Credit Promissory Note shall be governed by the laws of
the State of Ohio.
The Borrower authorizes any attorney at law to appear before any
court of record, state or federal, in the county where this Revolving
Credit Promissory Note was executed or where the Borrower resides or may
be found, after the unpaid principal balance of this Revolving Credit
Promissory Note becomes due, either by lapse of time or by operation of
any provision for acceleration of maturity contained in the Credit
Agreement, and waive the issuance and service of process, admit the
maturity of this Revolving Credit Promissory Note, by reason of
acceleration or otherwise, and confess judgment against the Borrower in
favor of the holder of this Revolving Credit Promissory Note for the
amount then appearing due on this Revolving Credit Promissory Note,
together with interest thereon and costs of suit, and thereupon
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to release all errors and to waive all rights of appeal and stay of
execution. The foregoing warrant of attorney shall survive any judgment
and may be used from time to time without exhausting the right to further
use the warrant of attorney and, if any judgment be vacated for any
reason, the holder of this Revolving Credit Promissory Note nevertheless
may use the foregoing warrant of attorney to obtain an additional
judgment or judgments against the Borrower. Borrower agrees that the
holder's attorney may confess judgment pursuant to the foregoing warrant
of attorney. Borrower further agrees that the attorney confessing
judgment pursuant to the foregoing warrant of attorney may receive a
legal fee or other compensation from the holder.
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST
YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO
COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO
COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
ALLIED CONSTRUCTION PRODUCTS, INC.
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