FOURTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND LIMITED WAIVER OF DEFAULTS
Exhibit
10.56b
FOURTH
AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND LIMITED WAIVER OF
DEFAULTS
THIS
FOURTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT AND LIMITED WAIVER OF DEFAULTS
(the “Amendment”), dated April 14, 2009, is
entered into by and among MISCOR GROUP, LTD., an Indiana corporation (“MISCOR”),
MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana corporation (“MIS”), XXXXXXX
ELECTRIC, LLC, an Indiana limited liability company (“Xxxxxxx”), HK ENGINE
COMPONENTS, LLC, an Indiana limited liability company (“HK”), IDEAL
CONSOLIDATED, INC., an Indiana corporation (“Ideal”), 3-D SERVICE, LTD., an Ohio
limited liability company (“3D”), and AMERICAN MOTIVE POWER, INC., a Nevada
corporation (“AMP” and together with MISCOR, MIS, Xxxxxxx, XX, Ideal and 3D, the
“Borrowers” and each a “Borrower”) and XXXXX FARGO BANK, NATIONAL ASSOCIATION
(the “Lender”), acting through its Xxxxx Fargo Business Credit operating
division.
The
Lender and the Borrowers are parties to a Credit and Security Agreement dated
January 14, 2008, as amended (the “Credit Agreement”).
The
Borrowers have requested that the Lender waive certain defaults under the Credit
Agreement and that certain amendments be made to the Credit Agreement, which the
Lender is willing to do pursuant to the terms and conditions set forth
herein.
1. Defined
Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 of the
Credit Agreement shall be amended by adding or amending, as applicable, the
following definitions:
“Daily
Three Month LIBOR” means, for any day, the rate of interest equal to LIBOR then
in effect for delivery for a three (3) month period. When interest is
determined in relation to Daily Three Month LIBOR, each change in the interest
rate shall become effective each Business Day that the Lender determines that
Daily Three Month LIBOR has changed.
“EBITDA”
means, for any period, the net income (loss) from the Borrowers’ operations
before (a) interest, (b) taxes, (c) depreciation, amortization and other
non-cash charges and income, and (d) extraordinary items, all as determined on a
consolidated basis in accordance with GAAP, applied in a manner consistent with
the financial statements for such period and acceptable to the
Lender.
“LIBOR”
means the rate per annum (rounded upward, if necessary, to the nearest whole one
eighth of one percent (1/8 %) determined pursuant to the following
formula:
LIBOR
=
|
Base
LIBOR
|
|
100%
- LIBOR Reserve Percentage
|
(i) “Base
LIBOR” means the rate per annum for United States dollar deposits quoted by the
Lender for loans that reference Daily Three Month LIBOR as the Inter-Bank Market
Offered Rate in effect from time to time for three (3) month delivery of funds
in amounts approximately equal to the principal amount of such
loans. The Borrowers understand and agree that the Lender may base
its quotation of the Inter-Bank Market Offered Rate upon such offers or other
market indicators of the Inter-Bank Market as the Lender in its discretion deems
appropriate, including but not limited to the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.
(ii) “LIBOR
Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency
Liabilities” (as defined in Regulation D of the Federal Reserve Board, as
amended), adjusted by the Lender for expected changes in such reserve percentage
during the applicable term of the Revolving Note and the Real Estate
Note.
“LIBOR
Advance Rate” means an annual interest rate equal to the sum of Daily Three
Month LIBOR, plus five and
one-quarter percent (5.25%), which interest rate shall change whenever Daily
Three Month LIBOR changes.
“Maximum
Line Amount” means Eleven Million Dollars ($11,000,000).
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utilization
of the Lender’s Loan Manager service, shall be deemed to be a representation by
the Borrowers that all conditions set forth in Article IV of this Agreement have
been satisfied as of the time of the request.
Date
|
Minimum Book Net Worth
|
December
31, 2009
|
$38,750,000
|
December
31, 2010, and each December 31 thereafter
|
Book
Net Worth as of prior December 31 plus
$1,000,000
|
Date
|
Minimum Net Income
|
Fiscal
year ending December 31, 2010, and each fiscal year
thereafter
|
$1,000,000
|
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In
addition, Section 6.2 shall be amended by adding the following as subsection
(e):
Date
|
Minimum EBITDA
|
One
(1) month period ending April 30, 2009
|
<$414,000>
|
Two
(2) month period ending May 31, 2009
|
<$751,000>
|
Three
(3) month period ending June 30, 2009
|
<$994,000>
|
Four
(4) month period ending July 31, 2009
|
<$647,000>
|
Five
(5) month period ending August 31, 2009
|
<$206,000>
|
Six
(6) month period ending September 30, 2009
|
$466,000
|
Seven
(7) month period ending October 31, 2009
|
$909,000
|
Eight
(8) month period ending November 30, 2009
|
$1,321,000
|
Nine
(9) month period ending December 31, 2009
|
$1,715,000
|
Ten
(10) month period ending January 31, 2010
|
$1,715,000
|
(r) The
Borrowers shall fail to deliver to the Lender on or before May 7, 2009, the
Borrowers’ final projected balance sheets, income statements, statements of cash
flow and projected Availability for each remaining month of the fiscal year
ending December 31, 2009, each in reasonable detail. Such items will
be certified by the Borrowers’ chief financial officer as being the most
accurate projections available and identical to the projections used by the
Borrowers for internal planning purposes and be delivered with a statement of
underlying assumptions and such supporting schedules and information as the
Lender may in its discretion require.
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(a) The
Acknowledgment and Agreement of Subordinated Creditors set forth at the end of
this Amendment, duly executed by each Subordinated
Creditor.
(b) With
respect to each Borrower, a Certificate of the Secretary of the Borrower
certifying as to (i) the resolutions of the board of directors or manager,
as applicable, of the Borrower approving the execution and delivery of this
Amendment, (ii) the fact that the Constituent Documents of the Borrower,
which were certified and delivered to the Lender pursuant to the Certificate of
Authority of the Borrower’s secretary issued in connection with the original
execution of the Credit Agreement, continue in full force and effect and have
not been amended or otherwise modified except as set forth in the Certificate to
be delivered, and (iii) certifying that the officers and agents of the
Borrower who have been previously certified to the Lender as being authorized to
sign and to act on behalf of the Borrower continue to be so authorized or
setting forth the sample signatures of each of the officers and agents of the
Borrower authorized to execute and deliver this Amendment and all other
documents, agreements and certificates on behalf of the Borrower.
(c) Such
other matters as the Lender may require.
(a) The
Borrower has all requisite power and authority to execute this Amendment, and
this Amendment, and has been duly executed and delivered by the
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Borrower
and constitutes the legal, valid and binding obligations of the Borrower,
enforceable in accordance with its terms.
(b) The
execution, delivery and performance by the Borrower of this Amendment, has been
duly authorized by all necessary action and does not (i) require any
authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) violate
any provision of any law, rule or regulation or of any order, writ, injunction
or decree presently in effect, having applicability to the Borrower, or the
Constituent Documents of the Borrower, or (iii) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which the Borrower is a party or by
which it or its properties may be bound or affected.
(c) All
of the representations and warranties contained in Article V of the Credit
Agreement are correct on and as of the date hereof as though made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date.
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counsel
to the Lender for the services performed by such counsel in connection with the
preparation of this Amendment and the documents and instruments incidental
hereto. The Borrower hereby agrees that the Lender may, at any time
or from time to time in its sole discretion and without further authorization by
the Borrower, make a loan to the Borrower under the Credit Agreement, or apply
the proceeds of any loan, for the purpose of paying any such fees,
disbursements, costs and expenses.
Signatures
appear on following page.
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XXXXX
FARGO BANK, NATIONAL ASSOCIATION
|
||||
By:
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/s/ Xxxxxx X. Xxxxxx |
By:
|
/s/ Xxxx X. Xxxxxxx | |
Xxxxxx
X. Xxxxxx, Vice President
|
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
|||
MAGNETECH
INDUSTRIAL SERVICES, INC.
|
XXXXXXX
ELECTRIC, LLC
|
|||
By:
|
/s/ Xxxx X. Xxxxxxx |
By:
|
/s/ Xxxx X. Xxxxxxx | |
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
|||
HK
ENGINE COMPONENTS, LLC
|
3-D
SERVICE, LTD.
|
|||
By:
|
/s/ Xxxx X. Xxxxxxx |
By:
|
/s/ Xxxx X. Xxxxxxx | |
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
|||
IDEAL
CONSOLIDATED, INC.
|
||||
By:
|
/s/ Xxxx X. Xxxxxxx | |||
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
||||
AMERICAN
MOTIVE POWER, INC.
|
||||
By:
|
/s/ Xxxx X. Xxxxxxx | |||
Xxxx
X. Xxxxxxx, Chief Executive Officer
|
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ACKNOWLEDGMENT
AND AGREEMENT OF SUBORDINATED CREDITORS
The
undersigned, each a subordinated creditor of MISCOR GROUP, LTD., an Indiana
corporation (“MISCOR”), MAGNETECH INDUSTRIAL SERVICES, INC., an Indiana
corporation (“MIS”), XXXXXXX ELECTRIC, LLC, an Indiana limited liability
company (“Xxxxxxx”), HK ENGINE COMPONENTS, LLC, an Indiana limited liability
company (“HK”), IDEAL CONSOLIDATED, INC., an Indiana corporation (“Ideal”), 3-D
SERVICE, LTD., an Ohio limited liability company (“3D”), and AMERICAN MOTIVE
POWER, INC., a Nevada corporation (“AMP” and together with MISCOR, MIS, Xxxxxxx,
XX, Ideal and 3D, the “Borrowers” and each a “Borrower”) to XXXXX FARGO BANK,
NATIONAL ASSOCIATION (the “Lender”), acting through its Xxxxx Fargo Business
Credit operating division pursuant to a Subordination Agreement dated as of
January 14, 2008 (the “Subordination Agreement”), hereby (i) acknowledges
receipt of the foregoing Amendment; (ii) consents to the terms and
execution thereof; and (iii) reaffirms his or its obligations to the Lender
pursuant to the terms of his or its Subordination Agreement.
BDEWEES,
INC.
|
||
By:
|
/s/ Xxxxxxx X. XxXxxx | |
Xxxxxxx
X. XxXxxx, President
|
||
XGEN
III, LTD.
|
||
By:
|
/s/ Xxxxxx X. Xxxxxxxxx | |
Xxxxxx
X. Xxxxxxxxx, Manager
|
||
/s/ Xxxx X. Xxxxxxx | ||
Xxxx
X. Xxxxxxx
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