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Exhibit (10)(s)
AMENDMENT NO. 2
TO
SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 ("Amendment No. 2") is entered into as of
December 31, 1996, by and between Cold Metal Products, Inc., a New York
corporation having its principal place of business at 0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000 ("Borrower") and The Bank of New York having an office at
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Bank").
BACKGROUND
Borrower and Bank are parties to a Second Amended and Restated
Credit and Security Agreement dated as of August 1, 1994, as amended by
Amendment No. 1 dated as of June 30, 1995 (as modified from time to time, the
"Loan Agreement") pursuant to which Bank provided Borrower with certain
financial accommodations.
Borrower has requested that Bank amend the Loan Agreement to,
among other things, adjust certain financial covenants set forth in the Loan
Agreement and to increase the maximum amount of permitted capital expenditures
from $5,000,000 to $20,000,000 through March 31, 1997 and Bank is willing to do
so on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant
of credit heretofore or hereafter made to or for the account of Borrower by
Bank, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan
Agreement.
2. AMENDMENT TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan
Agreement is hereby amended as follows:
2.1. Section 1.2 of the Loan Agreement is hereby amended as
follows:
(a) the following defined terms are hereby added in their
appropriate alphabetical order:
"AMENDMENT NO. 2" shall mean Amendment No. 2 to Second Amended
and Restated Credit and Security Agreement dated as of December 31, 1996.
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2.2. Section 6.5 of the Loan Agreement is hereby amended in its entirety to
provide as follows:
"6.5 Current Ratio. Cause the ratio of consolidated current
assets to consolidated current liabilities to be not less than
(a) 1.31 to 1 at the end of the fiscal quarter ending December
31, 1996 and (b) 1.23 to 1 at the end of the fiscal quarter
ending March 31, 1997 and at the end of each fiscal quarter
thereafter during the Term; provided, however, that for the
fiscal quarter ending June 30, 1997 and thereafter during the
Term the ratio may be adjusted by the mutual agreement of
Borrower and Bank based upon projections delivered to Bank in
accordance with Section 9.12 hereof. The above ratios shall be
calculated exclusive of the effect of any conversion to a current
liability of any Indebtedness to Bank."
2.3. Section 6.8 of the Loan Agreement is hereby amended in its entirety to
provide as follows:
"6.8 FIXED CHARGE COVERAGE. Cause the ratio of (x) the
sum of aggregate consolidated net income during each fiscal
period set forth below plus the aggregate amount of income tax,
and the interest, depreciation, amortization and all other
non-cash expense deducted in determining such net income during
such fiscal period to (y) aggregate consolidated interest expense
during such fiscal period plus aggregate amount of tax expense
and capital expenditures paid in cash during such fiscal period
plus, without duplication, the aggregate amount of scheduled
reductions in availability during such fiscal period pursuant to
Section 2.1 (a)(y)(iii) hereof to be not less than the ratio
corresponding to the fiscal periods set forth below:
FISCAL PERIOD RATIO
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1/1/96 - 12/31/96 1.00 to 1
4/1/96 - 3/31/97 1.00 to 1
and each four quarter
fiscal period thereafter
during the Term
; PROVIDED, HOWEVER, that for the fiscal period ending June 30,
1997 and thereafter during the Term the ratio may be adjusted by
the mutual agreement of Borrower and Bank based upon projections
delivered to Bank in accordance with section 9.12 hereof. The
above ratios shall be calculated exclusive of capital
expenditures associated with the Ottawa Expansion Program."
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2.4. Section 6.9 of the Loan Agreement is hereby amended in its entirety to
provide as follows:
"6.9 TOTAL LIABILITIES TO EQUITY. Cause the ratio of
total consolidated Indebtedness to consolidated stockholders
equity (exclusive of Borrower's foreign currency translation
adjustment account) to be not more than (a) 3.84 to 1 at the
end of the fiscal quarter ending December 31, 1996 and (b)
3.89 to 1 at the end of the fiscal quarter ending March 31,
1997 and at the end of each fiscal quarter thereafter during
the Term; PROVIDED, HOWEVER, that for the fiscal quarter
ending June 30, 1997 and thereafter during the Term the ratios
provided in this Section 6.9 may be adjusted by the mutual
agreement of Borrower and Bank based upon projections
delivered to Bank in accordance with Section 9.12 hereof. The
above ratios shall be calculated exclusive of any future
accounting changes and their impact on non-current liabilities
and shareholders' equity."
2.5. Section 7.6 of the Loan Agreement is hereby amended in its entirety to
provide as follows:
"7.6 CAPITAL EXPENDITURES. Contract for, purchase or
make any expenditure or commitments for fixed or capital
assets (including capitalized leases) in any fiscal year in an
amount in excess of $5,000,000 in the aggregate for itself and
its Subsidiaries; PROVIDED, however, that Borrower may make
such capital expenditures or commitments of up to $ 20,000,000
in the aggregate for fiscal year ended March 31, 1997."
3. CONDITIONS OF EFFECTIVENESS. This Amendment No. 2 shall become effective as
of December 31, 1996, when and only when Bank shall have received (i) four
(4) copies of this Amendment No.2 executed by Borrower and consented to and
agreed to by Cold Metal Products Company, Ltd.. a guarantor and by the
Participants and (ii) consent of Participants.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants as
follows:
a) This Amendment No. 2 and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance
with their respective terms.
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b) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this
Amendment No.2.
c) Borrower has no defense, counterclaim or offset with
respect to the Obligations.
5. EFFECT ON THE LOAN AGREEMENT.
a) Upon the effectiveness of SECTION 2 hereof, each reference
in the Loan Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be
a reference to the Loan Agreement as amended hereby.
b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed
and/or delivered in connection therewith, shall remain in
full force and effect, and are hereby ratified and
confirmed.
c) The execution, delivery and effectiveness of this Amendment
No.2 shall not operate as a waiver of any right, power or
remedy of Bank, nor constitute a waiver of any provision of
the Loan Agreement, or any other documents, instruments or
agreements executed and/or delivered under or in connection
therewith.
6. GOVERNING LAW. This Amendment No. 2 shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the
State of New York.
7. HEADINGS. Section headings in this Amendment No. 2 are included herein for
convenience of reference only and shall not constitute a part of this
Amendment No. 2 for any other purpose.
8. COUNTERPARTS. This Amendment No. 2 may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all
of which taken together shall be deemed to constitute one and the same
agreement.
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IN WITNESS WHEREOF, this Amendment No. 2 has been duly executed as of the day
and year first written above.
COLD METAL PRODUCTS, INC.
By:/S/X.X. XXXX
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Name: XXXX X. XXXX
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Title: VICE PRESIDENT CFO
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THE BANK OF NEW YORK
By:/S/XXXXXXX XXXXX
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Name: XXXXXXX XXXXX
Title: VICE PRESIDENT
GUARANTOR CONSENT AND REAFFIRMATION
By its signature below, Cold Metal Products Company, Ltd. hereby consents to
Amendment No. 2 and confirms that (i) its Guaranty Agreement dated as of August
4, 1987 in favor of Bank, as confirmed by Guaranty Confirmation dated as of
August 1, 1994 (the "Guaranty") and (ii) the Collateral Documents (as defined in
the Guaranty), each remain in full force and effect and are in no way modified
or impaired by Amendment No. 2 or any documents executed in connection
therewith.
CONSENTED AND AGREED TO:
COLD METAL PRODUCTS COMPANY, LTD.
By:/S/ A. R. XXXXXX
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Name: A. R. XXXXXX
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Title: SECRETARY, TREASURER
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