EXHIBIT 10.01(p)
AMENDMENT NO. 12 TO THE
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 12 TO THE LOAN AND SECURITY AGREEMENT ("Amendment No.
12") is made and entered into by and among MERIDIAN NATIONAL CORPORATION, a
Delaware corporation ("MNC"), OTTAWA RIVER STEEL CO., an Ohio corporation
("ORS"), NATIONAL METAL PROCESSING, INC., a Michigan corporation ("NMP"),
INTERSTATE METAL PROCESSING, INC., an Ohio corporation ("IMP"), PRECISE PAC,
INC. (f/k/a National Metal Shearing Corp.), a Michigan corporation ("PPI"), and
MERIDIAN ENVIRONMENTAL SERVICES, INC., a Michigan corporation ("MES"; and
together with MNC, ORS, NMP, IMP and PPI sometimes shall be referred to
collectively as "Borrowers" and individually as a "Borrower"), and NATIONAL
CANADA FINANCE CORP. ("Bank")
RECITALS
A. On December 6, 1989, Borrowers and the Bank of New England, N.A.
("BNE") entered into a certain Loan And Security Agreement (the "Loan
Agreement," all terms defined therein being used in this Amendment No. 12 with
the same meaning unless otherwise stated) under the terms of which BNE loaned to
Borrowers $1,000,000 on a term loan basis, and $7,000,000 on a revolving loan
basis, pursuant to the provisions set forth in the Loan Agreement.
B. In March 1990, Borrowers and BNE entered into Amendment No. 1 to Loan
And Security Agreement ("Amendment No. 1") to provide for (1) an increase in the
amount of funds Borrowers could borrower under the Revolving Loan Borrowing Base
in the form of an over-advance of not more than Five Hundred Thousand Dollars
($500,000), and (2) such other items as are set forth in Amendment No. 1.
C. On September 14, 1990, Borrowers and Bank (as the
successor-in-interest to BNE and BNE's rights, duties, and remedies under the
Loan Agreement) entered into Amendment No. 2 To The Loan And Security Agreement
("Amendment No. 2") to (1) decrease the Revolving Loan Borrowing Base on
Eligible Inventory from $4,000,000 to $3,000,000, (2) decrease the amount of
the Revolving Loan Borrowing Base by the face amount of the Letters of Credit
issued by Bank to Borrowers, (3) modify the definition of "Revolving Loan
Borrowing Base", and (4) establish a compensating balance of $1,000,000 in
Borrowers' Collateral.
D. Effective as of May 31, 1991, each Borrowers and Bank entered into
Amendment No. 3 To The Loan And Security Agreement ("Amendment No. 3") to (1)
decrease the maximum amount of the Revolving Loan from $7,000,000 to $5,300,000,
(2) reduce the outstanding principal balance of the Term Loan to $400,000, and
(3) reduce the compensating balance to $700,000.
E. Effective as of June 22, 1992, Borrowers and Bank entered into
Amendment No. 4 To The Loan And Security Agreement ("Amendment No. 4") to
modify certain covenants set forth in the Loan Agreement.
F. On or about February 1, 1993, ORS and Canterbury Steel Corporation
(kna CSX, Inc.), a Michigan corporation ("Canterbury"), entered into that
certain Partnership Agreement of Canterbury
Steel Company ("CSC") to engage in, among other things, the steel service center
business. ORS and Canterbury acquired a 50.1% and a 49.9% general partnership
interest, respectively, in CSC.
G. On May 11, 1993, Borrowers, CSC and Bank entered into Amendment No.
5 To The Loan And Security Agreement ("Amendment No. 5") to (1) add CSC as a
co-obligor for the repayment of all loans to Borrowers and CSC by Bank, (2)
provide for certain representations, warranties and covenants of CSC, and (3)
provide for such other amendments and modifications as are set forth in
Amendment No. 5.
H. In a letter from Borrowers and CSC to Bank dated June 9, 1993 (the
"Letter Amendment"), Borrowers, CSC and Bank amended the Loan Agreement, as
amended, to modify certain financial covenants of Borrowers and CSC.
I. On October 20, 1993, Borrowers, CSC and Bank entered into Amendment
No. 6 To The Loan And Security Agreement ("Amendment No. 6") to (1) increase the
maximum amount of funds Borrowers and CSC may borrow under the Revolving Loan
from $5,300,000 to $6,000,000, (2) modify certain financial covenants of
Borrowers and CSC, and (3) provide for such other modifications as are set forth
in the provisions of Amendment No. 6.
J. In or about January of 1994, CSC was dissolved and liquidated by ORS
and Canterbury.
K. On January 31, 1994, Borrowers and Bank entered into Amendment No. 7
To The Loan And Security Agreement ("Amendment No. 7") to (1) increase the
maximum amount of funds Borrowers may borrow under the Revolving Loan from
$6,000,000 to $7,200,000, (2) provide Borrowers with a $300,000 Term Loan
facility, (3) modify certain financial covenants of Borrowers, and (4) provide
for such other amendments and modifications as are set forth in Amendment No. 7.
L. Effective as of November 30, 1994, Borrowers and Bank entered into
amendment No. 8 To The Loan And Security Agreement ("Amendment No. 8") to (1)
increase the maximum amount of funds Borrowers may borrow under the Revolving
Loan from $7,200,000 to $9,000,000, (2) increase the Revolving Loan Borrowing
Base on Eligible Inventory to $4,500,000, (3) decrease the Contract Rate on the
Revolving Loan to one (1) percentage point above the Base Rate, (4) modify
certain financial covenants of Borrowers, and (5) provide for such other
amendments and modifications as are set forth in Amendment No. 8.
M. Effective as of February 14, 1995, Borrowers and Bank entered into
Amendment No. 9 To The Loan And Security Agreement ("Amendment No. 9") to (1)
increase the maximum amount of funds Borrowers may borrow under the Revolving
Loan from $9,000,000 to $10,000,000, (2) increase the Revolving Loan Borrowing
Base on Eligible Inventory from $4,500,000 to $5,000,000, and (3) provide for
such other amendments and modifications as are set forth in Amendment No. 9.
N. Effective as of May 25, 1995, Borrowers and Bank entered into
Amendment No. 10 To The Loan And Security Agreement ("Amendment No. 10")
to (1) increase the maximum amount of funds Borrowers may borrow under the
Revolving Loan from $10,000,000 to $12,000,000, (2) increase the Revolving
Loan Borrowing Base on Eligible Inventory from $5,000,000 to $5,500,000, (3)
modify certain covenants of Borrowers, and (4) provide for such other amendments
and modifications as are set forth in Amendment No. 10.
O. Effective as of February 29, 1996, Borrowers and Bank entered into
Amendment No. 11 To The Loan And Security Agreement ("Amendment No. 11") to
(1) provide a $300,000 Term Loan facility to Environmental Purification
Industries, Inc. ("EPI"), a subsidiary of MNC, and (2) provide for such other
amendments and modifications as are set forth in Amendment No. 11.
P. Borrowers and Bank now desire to amend the Loan Agreement, as
amended, to (1) provide a $350,000 Term Loan facility to EPI, and (2) provide
for such other amendments and modifications as are set forth in this
Amendment No. 12.
Q. Due to the affiliation and financial interdependence of Borrowers,
Bank and Borrowers have determined that it would be in their respective best
interests for each Borrower to be a joint and several obligor of each other
Borrower's obligations to Bank in accordance with the provisions set forth in
the Loan Agreement, as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx
Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, the Letter Amendment, Amendment Xx. 0,
Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Amendment Xx. 0, Xxxxxxxxx Xx. 00, Xxxxxxxxx
Xx. 00 and this Amendment No. 12.
PROVISIONS
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and provisions set forth in this Amendment No. 12, the parties agree as follows:
I. AMENDMENTS TO LOAN AGREEMENT.
The Loan Agreement is amended as follows:
A. On and after the effective date of this Amendment No. 12, each
reference in the Loan Agreement, Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx.
0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, the Letter Amendment, Amendment Xx. 0,
Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 00 and
Amendment No. 11 to "this Agreement," "hereunder," and "hereof," or words of
like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0,
Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, the Letter Amendment, Amendment Xx. 0,
Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Amendment Xx. 0, Xxxxxxxxx Xx. 00, Xxxxxxxxx
Xx. 00 and Amendment No. 12. The Loan Agreement, as amended by Amendment Xx.
0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, the
Letter Amendment, Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0, Amendment
Xx. 0, Xxxxxxxxx Xx. 00, Xxxxxxxxx Xx. 00 and Amendment No. 12 is, and shall
continue to be, in full force and effect and hereby is ratified and confirmed in
all respects.
B. A new definition of "EPI First Term Note" is added to Section 1.1 of
the Loan Agreement, as amended, as follows:
EPI FIRST TERM NOTE - The term note to be executed by Environmental
Purification Industries, Inc. and MNC in the form attached to
Amendment No. 11 as EXHIBIT 1 (with such changes or modifications,
if any, to which Bank may agree) evidencing the EPI First Term Loan
made by Bank pursuant to Section 2.1(B) of this Agreement, together
with all amendments, and all notes issued in substitution or
replacement of, such term note.
C. A new definition of "EPI Second Term Note" is added to Section 1.1 of
the Loan Agreement as amended, as follows:
EPI SECOND TERM NOTE The term note to be executed by Environmental
Purification Industries, Inc. and MNC in the form attached to
Amendment No. 12 as EXHIBIT 1 (with such changes or modifications,
if any, to which Bank may agree) evidencing the EPI Second Term Loan
made by Bank pursuant to Section 2.1(C) of this Agreement, together
with all amendments, and all notes issued in substitution or
replacement of, such term note.
D. The definition of "EPI Term Note" is set forth in Section 1.1 of the
Loan Agreement, as amended, is amended and restated in its entirety as follows:
EPI TERM NOTES - The EPI First Term Note and the EPI Second Term Note.
E. The definition of "Notes" set forth in Section 1.1 of the Loan
Agreement, as amended, is amended and restated in its entirety as follows:
NOTES - The Credit Note, Term Note, EPI Term Notes and other notes
or other instruments evidencing Borrowers' obligation to repay any
Obligations.
F. Section 2.1 of the Loan Agreement, as amended, is amended and restated
in its entirety as follows:
2.1 TERM LOAN AND EPI TERM LOANS.
(A) TERM LOAN. Bank shall make a term loan (the "Term Loan")
to Borrowers in the original principal amount of Three Hundred
Thousand Dollars ($300,000). The Term Loan shall be subject to
repayment in accordance with, and bear interest as provided in,
Section 2.2(A) of this Agreement and shall otherwise be evidenced by,
and repayable in accordance with, the Term Note.
(B) EPI FIRST TERM LOAN. Bank shall make a term loan (the
"EPI First Term Loan") to Environmental Purification Industries,
Inc., a subsidiary of MNC, in the original principal amount of Three
Hundred Thousand Dollars ($300,000). The EPI First Term Loan shall be
co-signed by MNC and shall be subject to repayment in accordance with,
and bear interest as provided in, Section 2.2(B) of this Agreement and
shall otherwise be evidenced by, and repayable in accordance with, the
EPI First Term Note.
(C) EPI SECOND TERM LOAN. Bank shall make a term loan (the
"EPI Second Term Loan") to Environmental Purification Industries,
Inc., a subsidiary of MNC, in the original principal amount of Three
Hundred Fifty Thousand Dollars ($350,000). The EPI Second Term Loan
shall be co-signed by MNC and shall be subject to repayment in
accordance with, and bear interest as provided in, Section 2.2(C) of
this Agreement and shall otherwise be evidenced by, and repayable in
accordance with, the EPI Second Term Note.
F. Section 2.2 of the Loan Agreement, as amended, is amended and restated
in its entirety as follows:
2.2 PAYMENT TERMS OF TERM LOAN AND EPI TERM LOANS.
(A) TERM LOAN.
(1) INTEREST. The Term Loan shall bear interest on the unpaid
principal balance until the date paid in full at a rate per
annum equal to the Contract Rate in effect from time to
time, such interest being payable monthly on the last day of
each month commencing January 31, 1994. Any increase or
decrease in the interest rate resulting from a change in
the Base Rate shall become effective on the date of such
change. Interest shall be computed on a 360-day year basis
based upon the actual number of days elapsed.
(2) FIXED PRINCIPAL INSTALLMENTS. Subject otherwise to
the provisions of the Term Note, the principal balance of
the Term Loan shall be payable in sixty (60) equal monthly
installments of Five Thousand Dollars ($5,000) each,
commencing on January 31, 1994, and continuing on the last
day of each successive month thereafter until paid in full.
(B) EPI FIRST TERM LOAN.
(1) INTEREST. The EPI First Term Loan shall bear interest on
the unpaid principal balance until the date paid in full at
a rate per annum equal to the Contract Rate in effect from
time to time, such interest being payable monthly on the
last day of each month commencing March 31, 1996. Any
increase or decrease in the interest rate resulting from a
change in the Base Rate shall become effective on the date
of such change. Interest shall be computed on a 360 day
year basis based upon the actual number of days elapsed.
(2) PRINCIPAL. Subject otherwise to the provisions of
the EPI First Term Note, the principal amount of the EPI
First Term Loan shall be payable in full on July 31, 1996
(pursuant to letter agreement dated June 4, 1996).
(C) EPI SECOND TERM LOAN.
(1) INTEREST. The EPI Second Term Loan shall bear interest on
the unpaid principal balance until the date paid in full at
a rate per annum equal to the Contract Rate in effect from
time to time, such interest being payable monthly on the
last day of each month commencing July 31, 1996. Any
increase or decrease in the interest rate resulting from a
change in the Base Rate shall become effective on the date
of such change. Interest shall be computed on a 360 day
year basis based upon the actual number of days elapsed.
(2) PRINCIPAL. Subject otherwise to the provisions of the EPI
Second Term Note, the principal amount of the EPI Second
Term Loan and any unpaid interest shall be payable in full
on August 15, 1996.
II. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWERS.
A. Each Borrower represents, warrants and covenants that it has good and
marketable title to the Collateral free and clear of all liens, claims,
mortgages, security interests, pledges, charges or encumbrances whatsoever,
except as have been granted to Bank.
B. To the extent such representations, warranties and covenants pertain
to or are to be performed by Borrowers, all representations, warranties and
covenants in the Loan Agreement, as amended, shall continue and be binding on
Borrowers under this Amendment No. 12.
III. CONDITIONS PRECEDENT.
Each Borrower acknowledges that the effectiveness of this Amendment No. 12
is subject to the following:
A. The receipt by Bank on the date of this Amendment No. 12 in form and
substance and satisfactory to Bank and its counsel of the following:
1. A certified copy of resolutions of Members of the Board of Directors
of each Borrower approving this Amendment No. 12 and all of the matters
described in this Amendment No. 12, and every other document or instrument
required to be delivered pursuant to this Amendment No. 12.
2. A Certificate signed by a duly authorized officer of each Borrower to
the effect that:
(a) As of the date hereof, except for Events of Default which have
been disclosed to Bank concerning Borrower's compliance with certain
financial covenants, no Event of Default has occurred and is continuing,
and no event has occurred which, with the giving of notice or passage of
time or both, would constitute an Event of Default.
(b) Except as otherwise disclosed, the representations and warranties
of Borrowers set forth in Section 6 of the Loan Agreement are true and
correct on the date of this Amendment No. 12 with the same force and effect
as if made on this date.
3. A Certificate of an officer of each Borrower certifying (a) to the
incumbency and signatures of the officers of such Borrower signing this
Amendment No. 12 and every other document and instrument to be delivered
pursuant to this Amendment No. 12, and (b) to the effect that such Borrower's
Articles (or Certificate) of Incorporation and Code of Regulations (or By-laws)
have not been amended since the execution of the Loan Agreement except for (i)
the name change by PPI from "National Metal Shearing Corp." to Precise Pac, Inc.
on or about April, 1992, and (ii) the reverse stock split by MNC in August of
1993.
4. A Certificate signed by a duly authorized officer of EPI certifying:
(a) to the incumbency and signatures of the officers of EPI signing
the EPI Second Term Note;
(b) to the effect that EPI is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation and is duly qualified and authorized to do business
and is in good standing as a foreign corporation in each other
state or jurisdiction where the character of its property or the
nature of its activities makes such qualification necessary; and
(c) to the effect that EPI has the right and power and is duly
authorized and empowered to enter into, execute, deliver and
perform its obligations under the EPI Second Term Note and that
the EPI Second Term Note has been duly authorized and approved by
the Board of Directors of EPI and is the legal, valid and binding
obligation of EPI enforceable against EPI in accordance with its
terms.
5. A certified copy of resolutions of Members of the Board of
Directors of EPI approving the EPI Second Term Note and every other
document or instrument required to be delivered by EPI pursuant to
this Amendment No. 12.
6. The EPI Second Term Note, in substantially the form of
EXHIBIT 1 attached to this Amendment No. 12, duly executed by EPI and
MNC.
7. Such other documents and instruments as Bank may reasonably
request to implement this Amendment No. 12 and the transactions
described in this Amendment No. 12.
B. The receipt by Bank from Borrowers of an amendment fee in the
amount of $6,000.
IV. APPLICABLE LAW.
This Amendment No. 12 shall be deemed to be a contract under the laws of
the State of Ohio and for all purposes shall be construed in accordance with the
laws of such State.
V. COUNTERPARTS.
This Amendment No. 12 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any one
of the parties to this Amendment No. 12 may execute this Amendment No. 12 by
signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 12 by
their duly authorized officers this 25TH day of July 1996.
NATIONAL CANADA FINANCE CORP. MERIDIAN NATIONAL CORPORATION
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------ --------------------
Title: Vice President Title: Vice President - Finance
PRECISE PAC, INC. (f/k/a)
NATIONAL METAL PROCESSING, INC. National Metal Shearing
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------- --------------------
Title: Vice President - Finance Title: Vice President - Finance
OTTAWA RIVER STEEL CO. MERIDIAN ENVIRONMENTAL SERVICES,
INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------- --------------------
Title: Vice President - Finance Title: Vice President - Finance
INTERSTATE METAL PROCESSING, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------
Title: Vice President - Finance
