THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), dated as of November 18, 1999, is entered into between KATY
INDUSTRIES, INC., a Delaware corporation (the "Company"), the several
financial institutions party to the Credit Agreement referred to below
(the "Banks"), and Bank of America, N.A. (formerly known as Bank of America
National Trust and Savings Association), as letter of credit issuing bank
and as administrative agent for the Banks (the "Agent").
RECITALS
WHEREAS, the Company, the Banks, and the Agent are parties to the Amended
and Restated Credit Agreement dated as of December 11, 1998 (the "Credit
Agreement"), pursuant to which the Banks have extended certain credit
facilities to the Company; and
WHEREAS, the Company, the Banks, and the Agent now hereby wish to amend
the Credit Agreement in certain respects, all as set forth in greater
detail below;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to them in the Credit Agreement.
2. Amendments to Credit Agreement.
(a) Amendments to Section 1.01. Section 1.01 of the Credit
Agreement is hereby amended as follows:
(i) The definition of "Applicable Margin" is amended by
deleting the table therein in its entirety and replacing it with the
following:
Pricing Pricing Ratio Facility A Facility B
Level at End of Applicable Margin Applicable Margin
Fiscal Quarter
Offshore Base Rate Offshore Base Rate
Rate Loans Loans Rate Loans Loans
I Less Than 0.775% 0.000% 0.750% 0.000%
1.00 to 1.00
II Greater than 0.975% 0.000% 0.950% 0.000%
or equal to
1.00 to 1.00
but less than
1.75 to 1.00
III Greater than 1.175% 0.000% 1.150% 0.000%
or equal to
1.75 to 1.00
but less than
2.25 to 1.00
IV. Greater than 1.400% 0.000% 1.375% 0.000%
or equal to
2.25 to 1.00
but less than
2.75 to 1.00
V. Greater than 1.625% 0.375% 1.600% 0.375%
or equal to
2.75 to 1.00
but less than
3.25 to 1.00
VI. Greater than 1.900% 0.750% 1.875% 0.750%
or equal to
3.25 to 1.00
(ii) The definition of "Facility A Revolving Termination Date"
is amended to delete the date "December 10, 1999" and replace it with
the date "December 9, 2000".
(iii) The definition of "Electrical/Electronic Group" is
amended by deleting it in its entirety and replacing it with the
following:
"Electrical/Electronic Group" means lines of
business operated as of November 18, 1999, by the following
Subsidiaries and assets associated therewith: (i) GC/Waldom
Electronics, Inc. and its Subsidiaries Katy International,
Inc. (formerly known as HMO, Inc.) and XX Xxxxxxx
International Ltd., (ii) Xxxxx Industries, Inc., (iii)
Xxxxx Industries (Canada), Inc., and (iv) Xxxxxxx Tools,
Inc.
(iv) The definition of "Facility Fee Percentage" is amended
by deleting the table therein in its entirety and replacing it with
the following:
Pricing Pricing Ratio Facility A Facility B
Level at End of Facility Fee Facility Fee
Fiscal Quarter
I Less Than 1.00 to 1.00 0.225% 0.250%
II Greater than or equal to 0.275% 0.300%
1.00 to 1.00 but less
than 1.75 to 1.00
III Greater than or equal to 0.325% 0.350%
1.75 to 1.00 but less
than 2.25 to 1.00
IV. Greater than or equal to 0.350% 0.375%
2.25 to 1.00 but less
than 2.75 to 1.00
V. Greater than or equal to 0.375% 0.400%
2.75 to 1.00 but less
than 3.25 to 1.00
VI. Greater than or equal to 0.475% 0.50%
3.25 to 1.00
(v) The following new definitions shall be inserted in the
Credit Agreement in their proper alphabetical order:
"Contico LLC Agreement" means, the Amended and Restated
Limited Liability Company Agreement of Contico International.
"Priority Return" has the meaning specified in the Contico
LLC Agreement as in effect on the Closing Date.
(b) Amendments to Section 8.2. Section 8.2(d) of the Credit
Agreement is hereby amended as follows:
(i) subsection 8.2(d) is amended by deleting it in its entirety
and replacing it with the following:
(d) dispositions for fair market value of assets of
Subsidiaries in the Machinery Manufacturing Group or assets associated
with lines of business operated at the Closing Date by Savannah Energy
Construction Company, Inc., Savannah Energy Systems Company, Inc., or
assets owned at the time of disposition by any Unrestricted
Subsidiary, or of Investments in Unrestricted Subsidiaries or of
Investments listed in Schedule 8.2; and
(ii) the following new subsections are added as subsections
8.2(e) and 8.2(f);
(e) dispositions for fair market value consummated on or
before June 30, 2000 of assets associated with Subsidiaries in the
Electrical/Electronic Group, as long as (1) the Company shall not
dispose of the combined assets of Xxxxx Industries, Inc., Xxxxx
Industries (Canada), Inc. and Xxxxxxx Tools except as part of a
transaction in which the Company and its Subsidiaries shall receive
cash proceeds in an amount not less than $40,000,000, and (2) the
Company shall not dispose of the assets of GC/Waldom Electronics
except as part of a transaction in which the Company and its
Subsidiaries shall receive not less than $15,000,000 of which at
least $10,000,000 shall be cash proceeds; and
(f) dispositions not otherwise permitted hereunder for fair
market value as long as (1) at the time of such disposition, no
Event of Default shall exist or shall result from such disposition,
(2) the aggregate sales price from such disposition shall be paid
in cash, (3) the aggregate value of all assets so sold under this
subsection (f) by the Company and its Restricted Subsidiaries,
together, shall not exceed in any fiscal year 15% of the book value
of the consolidated assets of the Company and its Restricted
Subsidiaries, and (4) prior to becoming contractually committed to
make any such disposition, the Company shall have delivered to the
Banks pro forma consolidated financial statements for the Company
and its Restricted Subsidiaries accompanied by a Compliance Certificate
signed by a Responsible Officer certifying that at the end of the
last fiscal quarter for which such financial statements and
Compliance Certificate have been delivered pursuant to Sections 7.1
and 7.2, (A) the Company and its Restricted Subsidiaries would
have been in compliance with the conditions in preceding clauses
(1)-(3) with respect to the proposed disposition, and (B) after
giving pro forma effect for four trailing quarters to such
disposition by excluding EBITDA with respect to the assets so
sold, the Company and its Restricted Subsidiaries would have been
in compliance with the financial covenants set forth in Sections
8.18, 8.19, 8.20 and 8.21.
(c) Amendment to Subsection 8.4(b). Subsection 8.4(b) of the
Credit Agreement is amended to add the following clause at the end thereof
before the semicolon:
or from the disposition of assets of GC/Waldom
Electronics permitted under subsection 8.2(e)
(d) Amendments to Section 8.8. Section 8.8 of the Credit
Agreement is amended to:
(i) renumber subsections "8.8(e)" and "8.8(f)" as
subsections "8.8(f)" and "8.8(g)" respectively; and
(ii) insert the following subsection as subsection
"8.8(e)":
(e) Contingent Obligations of the Company or its
Restricted Subsidiaries representing guaranties of
obligations of Wholly Owned Subsidiaries that are
Restricted Subsidiaries that are otherwise permitted
hereunder;
(e) Amendment to Section 8.11. Section 8.11 of the Credit
Agreement is hereby amended to add the following as subsection 8.11(e);
(e) declare or pay cash dividends equal to fifty
percent (50%) of the Priority Return due under Section
10.1 of the Contico LLC Agreement to holders of the
Preferred Units provided that such dividends shall
not exceed $1,344,000 in any fiscal year.
3. Extension of the Facility A Revolving Termination Date.
Each of the Company, the Agent, and the Banks acknowledges and agrees that
the extension of the Facility A Revolving Termination Date effected by this
Amendment constitutes one of the two extensions permitted under Section 2.16
of the Credit Agreement.
4. Departing Bank. Each of the Company, the Agent, and the
Banks acknowledges and agrees that:
(a) no later than 11:00 a.m. on November 18, 1999,
subject to all applicable conditions precedent to the Loans to be made on
that date, the Company shall repay all Facility A Revolving Loans and
Facility B Revolving Loans outstanding on such date, along with interest
due thereon and any sums owing to any Bank under subsection 4.4 and any
sums due through that date to Societe Generale (the "Departing Bank") under
subsection 2.10(b) with proceeds of Loans made by the Banks excluding the
Departing Bank according to each Bank's Pro Rata Share as set forth opposite
such Bank's name on Schedule 2.1 to this Amendment and pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, and subject to all
applicable conditions precedent, each Bank (other than the Departing Bank)
agrees to make such Loan on such date; and
(b) upon repayment to the Banks of the amounts
indicated in subsection 4(a) above, (i) the Departing Bank shall cease to
be a Bank and shall relinquish its rights (except its rights with respect
to indemnification or compensation arising out of an event occurring
before the Effective Date) and be released from its obligations under
the Credit Agreement, and (ii) Schedule 2.1 to this Amendment shall
replace Schedule 2.1 previously in effect.
5. Representations and Warranties. The Company hereby
represents and warrants to the Agent and each of the Banks as follows:
(a) No Default or Event of Default has occurred
and is continuing.
(b) The execution, delivery and performance by the
Company of this Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any
registration with, consent or approval of, notice to or action by, any
person (including any Governmental Authority) in order to be effective
and enforceable. The Credit Agreement as amended by this Amendment
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its respective terms,
without defense, counterclaim or offset.
(c) All representations and warranties of the
Company contained in the Credit Agreement are true and correct as
though made on and as of the date hereof (except to the extent such
representations and warranties specifically relate to an earlier date,
in which case they were true and correct as of such earlier date).
(d) The Company is entering into this Amendment
on the basis of its own investigation and for its own reasons, without
reliance upon the Agent and the Banks or any other person.
6. Effective Date. This Amendment, other than Section 2,
will become effective on the first Business Day that each of the
following conditions precedent has been satisfied (the "Effective Date"):
(a) The Agent has received from the Company and
each of the Banks other than the Departing Bank a duly executed original
or facsimile of this Amendment, together with a duly executed original or
facsimile Guarantor Acknowledgment and Consent in the form attached
hereto (the "Consent").
(b) The Agent has received from the Departing Bank
a duly executed original or facsimile of the Consent to Amendment in the
form attached hereto as Exhibit A.
(c) All representations and warranties contained
herein are true and correct as of the Effective Date.
7. Amendment Effective Date. Section 2 of this Amendment
will become effective upon the funding of the Loans described in Section
4(a) above.
8. Miscellaneous.
(a) Except as herein expressly amended, all terms,
covenants and provisions of the Credit Agreement are and shall remain in
full force and effect and all references therein and in the other Loan
Documents to the Credit Agreement shall henceforth refer to the Credit
Agreement as amended by this Amendment. This Amendment shall be deemed
incorporated into, and a part of, the Credit Agreement.
(b) This Amendment shall be binding upon and inure
to the benefit of the parties hereto and thereto and their respective
successors and assigns. No third party beneficiaries are intended in
connection with this Amendment.
(c) This Amendment shall be governed by and construed
in accordance with the law of the State of California (without regard to
principles of conflicts of laws).
(d) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
(e) This Amendment, together with the Credit
Agreement, contains the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein and therein.
This Amendment supersedes all prior drafts and communications with
respect thereto. This Amendment may not be amended except in accordance
with the provisions of Section 11.1 of the Credit Agreement.
(f) If any term or provision of this Amendment shall
be deemed prohibited by or invalid under any applicable law, such provision
shall be invalidated without affecting the remaining provisions of this
Amendment or the Credit Agreement, respectively.
(g) Company covenants to pay to or reimburse the
Agent and the Banks, upon demand, for all costs and expenses (including
Attorney Costs) incurred in connection with the development, preparation,
negotiation, execution and delivery of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the date first above written.
KATY INDUSTRIES, INC.
By:
Name:
Title:
BANK OF AMERICA, N.A., as Agent,
Issuing Bank, and a Bank
By:
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION
(formerly known as LaSalle National
Bank), as Managing Agent and a Bank
By:
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
as a Bank
By:
Name:
Title:
MERCANTILE BANK NATIONAL ASSOCIATION,
as a Bank
By:
Name:
Title:
THE NORTHERN TRUST COMPANY, as a Bank
By:
Name:
Title:
NORWEST BANK COLORADO NATIONAL
ASSOCIATION, as a Bank
By:
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as a Bank
By:
Name:
Title:
UNION PLANTERS BANK, N.A., as a Bank
By:
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as a Bank
By:
Name:
Title:
GUARANTOR ACKNOWLEDGMENT
AND CONSENT
The undersigned, each a Guarantor with respect to the Company's
obligations to the Agent and the Banks under the Credit Agreement, each
hereby (i) acknowledge and consent to the execution, delivery and
performance by Company of the foregoing Amendment to Credit Agreement
("Amendment"), and (ii) reaffirm and agree that the respective guaranty
to which the undersigned is party and all other documents and agreements
executed and delivered by the undersigned to the Agent and the Banks in
connection with the Credit Agreement are in full force and effect, without
defense, offset or counterclaim. (Capitalized terms used herein have the
meanings specified in the Amendment.)
IN WITNESS WHEREOF, each Guarantor hereto has caused its duly
authorized officers to execute and deliver this acknowledgement and
consent as of November 18, 1999.
Aetna Liquidating Company,
as Guarantor
By:
Name:
Title:
American Gage & Machine Company,
as Guarantor
By:
Name:
Title:
Bach Xxxxxxx, Inc.,
as Guarantor
By:
Name:
Title:
Xxxx Universal, Inc.,
as Guarantor
By:
Name:
Title:
Chatham Resource Recovery Systems, Inc.,
as Guarantor
By:
Name:
Title:
Duckback Products, Inc.,
as Guarantor
By:
Name:
Title:
Xxxxxx Iron Works Company,
as Guarantor
By:
Name:
Title:
XX Xxxxxxx International Limited,
as Guarantor
By:
Name:
Title:
GC/Waldom Electrical, Inc.
(formerly known as XX Xxxxxxx, Inc.),
as Guarantor
By:
Name:
Title:
Glit/DISCO, Inc.,
as Guarantor
By:
Name:
Title:
Glit/Gemtex, Inc.,
as Guarantor
By:
Name:
Title:
Hallmark Holdings, Inc.,
as Guarantor
By:
Name:
Title:
Xxxxxxxx Precision Metals, Inc.,
as Guarantor
By:
Name:
Title:
Katy International, Inc.
(formerly named HMO, Inc.),
as Guarantor
By:
Name:
Title:
Katy-Xxxxxxx, Inc.,
as Guarantor
By:
Name:
Title:
K-S Energy Corp.,
as Guarantor
By:
Name:
Title:
Panhandle Industrial Company, Inc.,
as Guarantor
By:
Name:
Title:
PTR Machine Corp. (formerly known
as Xxxxxx Machinery Company), as
Guarantor
By:
Name:
Title:
Savannah Energy Systems Company,
as Guarantor
By:
Name:
Title:
Wabash Liquidation Corp.
(formerly known as Xxxxx Machines,
Inc.), as Guarantor
By:
Name:
Title:
Xxxxx Products, Inc.,
as Guarantor
X.X. Xxxxx Xxxx Preserving Company,
as Guarantor
By:
Name:
Title:
Xxxxx Industries, Inc.,
as Guarantor
By:
Name:
Title:
WP Liquidating Corp.,
as Guarantor
Exhibit A to Amendment
CONSENT TO AMENDMENT
November 18, 0000
Xxxx xx Xxxxxxx, X.X., as Agent
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Katy Industries, Inc.
0000 Xxxxx Xxxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Ladies and Gentlemen:
Reference is made to the Amended and Restated Credit Agreement dated
as of December 11, 1998 (the "Credit Agreement"), among Katy Industries,
Inc. (the "Company"), the several financial institutions from time to time
party thereto (collectively, the "Banks"; individually, a "Bank"), and Bank
of America, N.A. (formerly known as Bank of America National Trust and
Savings Association), as Agent. Capitalized terms used herein have the
meanings specified in the Credit Agreement.
The undersigned (the "Departing Bank") is a Bank under the Credit
Agreement. The Departing Bank hereby acknowledges notice of the proposed
first amendment to the Credit Agreement in such form as may be agreed
among the parties thereto (the "First Amendment to the Credit Agreement").
The Departing Bank hereby consents to, and agrees that the Departing Bank
shall not be a party to, the Credit Agreement, as amended by the First
Amendment to the Credit Agreement, subject to payment in full of all
outstanding Loans, interest accrued thereon, and fees and other sums
owed to the Departing Bank as described in the First Amendment to the
Credit Agreement.
In consideration of the Departing Bank's consent to the First
Amendment to the Credit Agreement, the Company acknowledges and agrees
that the representations and warranties (as of the dates made and deemed
made) and the indemnities of the Company set forth in the Credit Agreement
and the Loan Documents to or for the benefit of the Departing Bank shall,
in each case, survive the execution and delivery of the First Amendment
to the Credit Agreement and the Company, the Issuing Bank and the Agent
agree that the Departing Bank shall have no obligations under or with
respect to the Credit Agreement.
SOCIETE GENERALE
By: _____________________________
Title: __________________________
Accepted and Agreed:
KATY INDUSTRIES, INC.
By: ___________________________
Title: ________________________
BANK OF AMERICA, N.A., as Issuing Bank and Agent
By: ___________________________
Title: __________________________
SCHEDULE 2.1
Commitments and Pro Rata Shares
Facility A Revolving Loans Commitments
Bank Commitment Pro Rata Share
Bank of America, N.A. $ 8,139,534.89 18.00000000%
LaSalle Bank, N.A. $ 6,976,744.19 16.00000000%
Union Bank of California $ 5,813,953.49 13.51351351%
Mercantile Bank $ 5,813,953.49 13.51351351%
Norwest $ 5,813,953.49 13.51351351%
The Northern Trust Company $ 0.00 0.0%
KeyBank $ 3,488,372.09 8.10810811%
Union Planters Bank $ 3,488,372.09 8.00000000%
U.S. Bank $ 3,488,372.09 8.10810811%
TOTAL $43,023,255,82 100.000000%
Facility B Revolving Loans Commitments
Bank Commitment Pro Rata Share
Bank of America, N.A. $ 26,860,465.11 16.00000000%
LaSalle Bank, N.A. $ 23,023,255.81 14.00000000%
Union Bank of California $ 19,186,046.51 11.90476191%
Mercantile Bank $ 19,186,046.51 11.90476191%
Norwest $ 19,186,046.51 11.90476191%
The Northern Trust Company $ 19,186,046.51 11.00000000%
KeyBank $ 11,511,627.91 7.14285714%
Union Planters Bank $ 11,511,627.91 7.00000000%
U.S. Bank $ 11,511,627.91 7.14285714%
TOTAL $161,162,790.69 100.0000000%
