AMENDMENT NUMBER TWO TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER TWO TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT (this "Amendment") is entered into as of
September 30, 1998, by and between Foothill Capital Corporation, a California
corporation ("Foothill"), on the one hand, and National-Standard Company, an
Indiana corporation ("Borrower"), with reference to the following facts:
A. Foothill and Borrower heretofore have entered into that
certain Amended and Restated Loan and Security Agreement,
dated as of September 17, 1997, as amended by that certain
Amendment Number One to Amended and Restated Loan and Security
Agreement, dated as of June 30, 1998 (as heretofore modified
or supplemented from time to time, the "Agreement");
B. Borrower is or will be in violation of Section 7.10 of the
Agreement as of the fiscal year ending September 30, 1998
(such violation as of such date, the "Designated Event of
Default") and Borrower has requested Foothill to waive the
Designated Event of Default;
C. Borrower has requested Foothill to amend the Agreement to,
among other things, extend the Maturity Date to October 1,
2001, make an additional term loan, and consolidate, amend,
restate, and renew the Equipment/Real Property Term Loan and
such additional term loan, all as set forth in this Amendment;
D. Foothill is willing to so amend the Agreement and waive the
Designated Event of Default in accordance with the terms and
conditions hereof; and
E. All capitalized terms used herein and not defined herein shall
have the meanings ascribed to them in the Agreement, as
amended hereby.
NOW, THEREFORE, in consideration of the above recitals and the
mutual promises contained herein, Foothill and Borrower hereby agree as follows:
1. Amendments to the Agreement.
a. Section 1.1 of the Agreement hereby is amended by
adding the following new defined terms in alphabetical order:
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"Second Amendment" means that certain Amendment
Number Two to Amended and Restated Loan and Security Agreement, dated
as of September 30, 1998, between Foothill and Borrower.
"Second Amendment Effective Date" means the later to
occur of (a) October __, 1998, and (b) the date, if ever, that all of
the conditions set forth in Section 4 of the Second Amendment shall be
satisfied (or waived by Foothill in its sole discretion).
b. The following definitions contained in Section 1.1
of the Agreement are amended and restated in their entirety to read,
respectively, as follows:
"Maturity Date" means October 1, 2001.
"Measurement Period" means any of the following
periods: (a) the two-quarter period ending December 31, 1997; (b) the
two-quarter period ending June 30, 1998; (c) the two-quarter period
ending December 31, 1998; (d) the two- quarter period ending June 30,
1999; (e) the two-quarter period ending December 31, 1999; (f) the
two-quarter period ending June 30, 2000; (g) the two-quarter period
ending December 31, 2000; (h) the two-quarter period ending June 30,
2001; and (i) the "stub" (i.e., less than two-quarter) period
commencing July 1, 2001 and ending on the Maturity Date.
"New Equipment Term Loan Commitment" means, as of any
date of determination, the lesser of: (a) the sum of (i) Five Million
Dollars ($5,000,000) PLUS (ii) the aggregate amount of principal paid
in respect of the Equipment/Real Property Term Loan since the Second
Amendment Effective Date pursuant to Section 2.3(b); and (b) Ten
Million Dollars ($10,000,000).
"Warrant Amendment" means, collectively, (a) that
certain Amendment Number One to Warrant Purchase Agreement, dated as of
the Closing Date, between Borrower and Foothill and in the form of
Exhibit W-2, whereby Borrower agrees to extend the end of the term of
the Warrant from October 31, 1997 to October 31, 2001; and (b) that
certain Amendment Number Two to Warrant Purchase Agreement, dated as of
September 30, 1998, between Borrower and Foothill and in the form of
Exhibit W-3, whereby Borrower agrees to further extend the end of the
term of the Warrant from October 31, 2001 to October 31, 2002.
c. Section 2.3(a) of the Agreement hereby is amended
and restated in its entirety as follows:
(a) Subject to the terms and conditions of
this Agreement, Foothill: (i) agreed to make the "Equipment Term Loan"
(as defined in the Existing Loan Agreement) to Borrower on the Old
First Amendment Closing Date and the
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"Real Property Term Loan" (as defined in the Existing Loan Agreement)
to Borrower on the Original Closing Date; (ii) agreed to make a term
loan to Borrower on the Closing Date; and (iii) has agreed to make an
additional term loan to Borrower on the Second Amendment Effective
Date; in the original aggregate principal amount of Fifteen Million
Dollars ($15,000,000) (collectively, the "Equipment/Real Property Term
Loan"), to be evidenced by and repayable in accordance with the terms
and conditions of a consolidated, amended, and restated renewal
promissory note in the form of Exhibit E-1 (the "Equipment/Real
Property Term Note"), dated as of September 30, 1998, executed by
Borrower in favor of Foothill. All amounts evidenced by the
Equipment/Real Property Term Note shall constitute Obligations and
shall be secured by the security interests and liens granted by
Borrower to Foothill in and to the Collateral and Real Property. The
Equipment/Real Property Term Loan shall be repaid in accordance with
Section 2.3(b).
d. Section 2.3(b) of the Agreement hereby is amended
and restated in its entirety as follows:
(b) The Equipment/Real Property Term Loan
shall be repaid in monthly installments of principal, each in the
amount of Two Hundred Fifty Thousand Dollars ($250,000). Each such
installment shall be due and payable on the first day of each month
commencing on November 1, 1998 and continuing until and including the
date on which the unpaid balance of the Equipment/Real Property Term
Loan is paid in full. The outstanding principal balance and all accrued
and unpaid interest under the Equipment/Real Property Term Loan shall
be due and payable upon the termination of this Agreement, whether by
its terms, by prepayment, by acceleration, or otherwise.
e. Section 3.6 of the Agreement hereby is amended and
restated in its entirety as follows:
3.6 EARLY TERMINATION BY BORROWER. Borrower has the
option, at any time upon ninety (90) days prior written notice to
Foothill, to terminate this Agreement by paying to Foothill, in cash,
the Obligations (including an amount equal to the full amount of the
L/Cs or L/C Guarantees), together with a premium (the "Early
Termination Premium") equal to: (a) if such payment is made on or prior
to October 1, 1998, two percent (2.0%) of the Maximum Amount; (b) if
such payment is made during the period commencing on October 2, 1998
and ending on October 1, 1999, one percent (1.0%) of the Maximum
Amount; (c) if such payment is made during the period commencing on
October 2, 1999 and ending on April 1, 2001, one-half of one percent
(0.5%); and (d) if such payment is made thereafter, zero; provided,
however, that if Borrower is acquired by or merged with and into
another Person and the Obligations are concurrently repaid in full in
cash by
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Borrower as a result of funds proximately provided by Foothill in
connection with such merger or acquisition, Borrower need not pay the
Early Termination Premium.
2. Waiver of Designated Event of Default. Initially effective
upon the Second Amendment Effective Date, Foothill hereby waives the Designated
Event of Default. Such waiver is specific in time and in intent and does not
constitute, nor should it be construed as constituting, except to the extent
expressly set forth herein, a waiver or modification of any term of, or right,
power, or privilege under, the Agreement, the other Loan Documents, or any
agreement, contract, indenture, document, or instrument mentioned therein.
Nothing herein constitutes a waiver of any Event of Default, or any potential
Event of Default related or preliminary thereto, based on facts or occurrences
other than those on which the Designated Event of Default specifically were
premised. Such waiver does not preclude any exercise or further exercise of any
other right, power, or privilege under any Loan Document, including without
limitation, the taking of any action or remedy based upon an Event of Default
other than the Designated Event of Default.
3. Representations and Warranties. Borrower hereby represents
and warrants to Foothill that (a) the execution, delivery, and performance of
this Amendment and of the Agreement, as amended by this Amendment, are within
its corporate powers, have been duly authorized by all necessary corporate
action, and are not in contravention of any law, rule, or regulation, or any
order, judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected, and (b) this Amendment and the Agreement, as amended
by this Amendment, constitute Borrower's legal, valid, and binding obligation,
enforceable against Borrower in accordance with its terms.
4. Conditions Precedent to Amendment. The satisfaction of each
of the following, unless waived or deferred by Foothill in its sole discretion,
shall constitute conditions precedent to the effectiveness of this Amendment:
a. Foothill shall have received payment of an
amendment fee in the amount of $30,000, which shall be fully earned,
non-refundable, and due and payable concurrently with the execution and delivery
of this Amendment (regardless of whether all conditions herein are satisfied or
paid);
b. Foothill shall have received the reaffirmation and
consent of Guarantor attached hereto as Exhibit A, duly executed and delivered
by an authorized official of each entity thereof;
c. Foothill shall have received a certificate from
the Secretary of Borrower attesting to the incumbency and signatures of
authorized officers of Borrower and to the resolutions of Borrower's Board of
Directors authorizing its execution and delivery
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of this Amendment and the other Loan Documents to which it is a party and
contemplated in this Amendment and the performance of this Amendment, the
Agreement as amended by this Amendment, and such other Loan Documents, and
authorizing specific officers of Borrower to execute and deliver the same;
d. Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force and
effect:
i) the Equipment/Real Property Term Note;
ii) the Warrant Amendment; and
iii) all required consents of Foothill's
participants in the Obligations to
Foothill's execution, delivery, and
performance of this Amendment, in each case
in form and substance satisfactory to
Foothill.
e. The representations and warranties in this
Amendment, the Agreement as amended by this Amendment, and the other Loan
Documents shall be true and correct in all respects on and as of the date
hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
f. No Event of Default or event which with the giving
of notice or passage of time would constitute an Event of Default shall have
occurred and be continuing on the date hereof, nor shall result from the
consummation of the transactions contemplated herein;
g. No injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any governmental authority against Borrower, Foothill, or any of their
Affiliates; and
h. All other documents and legal matters in
connection with the transactions contemplated by this Amendment shall have been
delivered or executed or recorded and shall be in form and substance
satisfactory to Foothill and its counsel.
5. Condition Subsequent. Borrower hereby agrees to deliver to
Foothill, within 60 days following the Second Amendment Effective Date, each of
the following documents, duly executed:
a. such amendments of or supplements to the
Mortgages as Foothill may require, in each
case in form and substance satisfactory to
Foothill; and
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b. such amendments of or endorsements to title
insurance policies held by Foothill with
respect to the Mortgages as Foothill may
require, in each case in form and substance
satisfactory to Foothill.
6. Effect on Agreement. The Agreement, as amended hereby,
shall be and remain in full force and effect in accordance with its respective
terms and hereby is ratified and confirmed in all respects. The execution,
delivery, and performance of this Amendment shall not operate as a waiver of or,
except as expressly set forth herein, as an amendment, of any right, power, or
remedy of Foothill under the Agreement, as in effect prior to the date hereof.
7. Miscellaneous.
a. Upon the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof"
or words of like import referring to the Agreement shall mean and refer to the
Agreement as amended by this Amendment.
b. Upon the effectiveness of this Amendment, each
reference in the Loan Documents to the "Loan Agreement", "thereunder",
"therein", "thereof" or words of like import referring to the Agreement shall
mean and refer to the Agreement as amended by this Amendment.
c. Upon the effectiveness of this Amendment, each
reference in the Loan Documents to "Exhibit E-1" to the Agreement or words of
like import shall mean and refer to Exhibit E-1 attached hereto.
d. Upon the effectiveness of this Amendment, each
reference in the Loan Documents to "Exhibit W-3" to the Agreement or words of
like import shall mean and refer to Exhibit W-3 attached hereto.
e. This Amendment shall be governed by and construed
in accordance with the laws of the State of California.
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f. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver an original executed
counterpart of this Amendment but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By____________________________
Title:________________________
NATIONAL-STANDARD COMPANY, an Indiana
corporation
By____________________________
Title:________________________
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EXHIBIT A
Reaffirmation and Consent
All capitalized terms used herein but not otherwise defined
herein shall have the meanings ascribed to them in that certain Amendment Number
Two to Amended and Restated Loan and Security Agreement, dated as of September
30, 1998 (the "Amendment"). The undersigned hereby jointly and severally (a)
represent and warrant to Foothill that the execution, delivery, and performance
of this Reaffirmation and Consent are within each of their corporate or
organizational powers, have been duly authorized by all necessary corporate or
other organizational action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which either of them is a party or
by which any of their properties may be bound or affected; (b) consents to the
amendment of the Agreement by the Amendment; (c) acknowledges and reaffirms its
obligations owing to Foothill under its respective guaranty and each of the
other Loan Documents to which it is party; and (d) agrees that each of the
guaranties and the other Loan Documents to which they are parties is and shall
remain in full force and effect. Although the undersigned have been informed of
the matters set forth herein and have acknowledged and agreed to same, they
understand that Foothill has no obligation to inform it of such matters in the
future or to seek its acknowledgement or agreement to future amendments, and
nothing herein shall create such a duty.
NATIONAL-STANDARD COMPANY OF CANADA,
LIMITED, a Canadian corporation
By ___________________________
Title:________________________
NATIONAL-STANDARD COMPANY, LTD., a
company organized under the laws of England
By ___________________________
Title:________________________
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