EXHIBIT 10.8(c)
WAKEFIELD ENGINEERING, INC.
000 Xxxxxxxx Xxxxxx, Xxxxx 000X
Xxxxxxx, XX 00000
As of February 8, 1999
FLEET NATIONAL BANK
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Ninth Amendment to Loan Agreement
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement dated June 22, 1994,
as amended by the First Amendment thereto dated May 5, 1995, a Second Amendment
thereto dated as of January 30, 1996, a Third Amendment thereto dated as of
March 29, 1996, a Fourth Amendment thereto dated as of October 11, 1996, a Fifth
Amendment thereto dated as of July 1, 1997, a Sixth Amendment thereto dated as
of December 31, 1997, a Seventh Amendment thereto dated November 12, 1998, and
an Eighth Amendment thereto dated January 31, 1999 (together the "Loan
Agreement") and all promissory notes, agreements, documents and instruments
entered into by Wakefield Engineering, Inc. ("Wakefield"), Wakefield Extrusion
Corp. ("WEC"), Xxxxxxxx Industries, Inc. ("Xxxxxxxx"), Malco, Inc. ("Malco") and
Uni-Star Industries, Inc. ("Uni-Star") and any other person or obligor pursuant
thereto (collectively, the "Loan Documents") with or for the benefit of Fleet
National Bank ("Bank"). Except as otherwise defined herein, capitalized terms
used herein shall have the meanings given them in the Loan Agreement. This
Ninth Amendment to Loan Agreement is referred to as the "Ninth Amendment".
Background. Borrowers have requested that Bank agree to extend the
maturity of the credit facilities and agree to certain other changes to the Loan
Agreement. Accordingly, Bank and Borrowers agree as follows, subject to the
terms and conditions hereof:
1. Amendments to Loan Agreement. Subject to the satisfaction of the terms and
conditions hereof, Bank and Borrowers have agreed that the Loan Agreement shall
be amended as follows:
(a) Amendment to Definition of Borrowing Base. The definition of Borrowing
Base is deleted and replaced with the following:
"`Borrowing Base' means the sum of the following (as shown on the Bank's
records at any time):
(a) (i) for the period from January 31, 1999 through February 18, 1999,
eighty-five percent (85%) of the unpaid face value of all Eligible
Accounts, (ii) for the period from February 19, 1999 through February 28,
1999, eighty-three percent (83%) of the unpaid face value of all Eligible
Accounts, (iii) for the period from March 1, 1999 through May 14, 1999,
eighty percent (80%) the ("Accounts Advance Rate") of the unpaid face value
of Eligible Accounts, (iv) on May 15, 1999 and on the first day and
fifteenth day of each calendar month thereafter the Accounts Advance Rate
shall be reduced by 2% until such time as the Accounts Advance Rate equals
seventy-five percent (75%), (v) for the period from November 15, 1999
through November 30, 1999, the Accounts Advance Rate shall be seventy-three
percent (73%), (vi) for the period from December 1, 1999 through December
15, 1999, the Accounts Advance Rate shall be seventy-one percent (71%) and
(vii) on December 15, 1999 and thereafter the Accounts Advance Rate shall
be seventy percent (70%); PLUS
(b) for Eligible Inventory exclusive of Uni-Star Eligible Inventory, the
lesser of (i) (A) for the period from January 31, 1999 through February 28,
1999, fifty-five percent (55%) of the first-in, first-out cost or market
value, whichever is lower, of all such Eligible Inventory, (B) for the
period from March 1, 1999 through March 31, 1999, fifty-three percent (53%)
of the first-in, first-out cost or market value, whichever is lower, of all
such Eligible Inventory, (C) for the period from April 1, 1999 through
April 30, 1999, fifty percent (50%) (the "Inventory Advance Rate") of the
first-in, first-out cost or market value, whichever is lower, of all such
Eligible Inventory and (D) on the first day and sixteenth day of each
calendar month thereafter commencing May 1, 1999, the Inventory Advance
Rate Shall reduce by 2% until such time as the Inventory Advance Rate
equals 30%, or (ii) $4,000,000.00, PLUS
(c) as to Uni-Star Eligible Inventory, the lesser of (i) $500,000 or (ii)
thirty-five percent (35%) (the "Uni-Star Inventory Advance Rate") of the
first-in, first-out cost or market value, whichever is lower, of all
Eligible Inventory of Uni-Star on the first day and sixteenth day of each
calendar month thereafter commencing May 1, 1999, the Inventory Advance
Rate shall reduce by 2% until such time as the Inventory Advance Rate
equals 25%; LESS
(d) the face amount of all letters of credit issued by the Bank on behalf
of any Borrower, with the maximum amount of such letters of credit not to
exceed $1,000,000.00, and the estimated amount of the exposure under any
interest rate swap agreements in effect with respect to any of the
Obligations, plus all Bank's customary fees and charges with respect to the
foregoing;
PROVIDED that Bank at all times reserves the right, exercisable in Bank's
reasonable credit judgment, based upon circumstances then existing, to
adjust any of the percentages or the amounts set forth above upon fifteen
(15) days' notice to Borrower."
(b) Amendment to Definition of Termination Date. The definition of
Termination Date is deleted and replaced with the following:
"`Termination Date' shall mean the first to occur of (i) the
termination by Lender on or after an Event of Default of its commitments to
make Loans and extend letters of credit under this Agreement or (ii)
December 31, 1999."
3. Additional Covenants.
(a) Borrowers covenant and agree that the consolidated pretax earnings
(loss) of the Borrowers as determined in accordance with GAAP exclusive of
extraordinary and nonrecurring gains ("Earnings") shall not, for any calendar
month commencing with the calendar month ending January 31, 1999 and ending with
the calendar month ending April 30, 1999, be less than -$100,000 and that the
cumulative fiscal year to date Earnings at the end of any calendar month
commencing with the calendar month ending January 31, 1999 and ending with the
calendar month ending April 30, 1999 shall not be less than $650,000.
(b) Borrowers covenant and agree, for each calendar month commencing May 1,
1999, that the Earnings of the Borrowers for each such month shall not be less
than eighty percent (80%) of the Earnings set forth on the operating budget of
the Borrowers attached as Exhibit D hereto.
4. Commitment Fee. Borrowers shall pay to the Bank a commitment fee of $25,000
for each month or portion thereof after April 30, 1999 that the Obligations
remain outstanding and the Bank's commitments under the Loan Agreement remain in
effect, payable in advance and fully earned and nonrefundable on the first day
of each calendar month commencing on May 1, 1999 and continuing until the
Obligations are paid in full and the Bank's commitments under the Loan Agreement
are terminated.
5. Amendment Fee. Borrower shall pay to the Bank an amendment fee of $10,000
which shall be paid and fully earned and nonrefundable on the date of the Ninth
Amendment.
6. Representations and Warranties.
To induce Bank to enter into this Ninth Amendment, each Borrower jointly and
severally warrants, represents and covenants to Bank that:
(a) Organization and Qualification. Each Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Borrower is duly qualified or is
authorized to do business and is in good standing as a foreign corporation in
all states and jurisdictions in which the failure of such
Borrower to be so qualified would have a material adverse effect on the
financial condition, business or properties of such Borrower.
(b) Corporate Power and Authority. Each Borrower is duly authorized and
empowered to enter into, execute, deliver and perform this Ninth Amendment, and
each of the Loan Documents to which it is a party. The execution, delivery and
performance of this Ninth Amendment and each of the other Loan Documents have
been duly authorized by all necessary corporate action and do not and will not
(i) require any consent or approval of the shareholders of any Borrower; (ii)
contravene any Borrower's charter or by-laws; (iii) violate, or cause any
Borrower to be in default under, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award in effect
having applicability to such Borrower; (iv) 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 any Borrower is a party or by which such
Borrower's properties may be bound or affected; or (v) result in, or require,
the creation or imposition of any Lien (other than Permitted Liens) upon or with
respect to any of the properties now owned or hereafter acquired by any
Borrower.
(c) Legally Enforceable Agreement. This Ninth Amendment and each of the
other Loan Documents delivered under this Ninth Amendment will be, a legal,
valid and binding obligation of each Borrower, enforceable against each Borrower
in accordance with its respective terms subject to bankruptcy, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
(d) No Material Adverse Change. Since December 31, 1998, the date of the
last financial statements provided by the Borrowers to the Bank, there has been
no material adverse change in the condition, financial or otherwise, of
Borrowers as shown on the consolidated balance sheet thereof as of such date and
no change in the aggregate value of property and assets owned by Borrowers,
except changes in the ordinary course of business, none of which individually or
in the aggregate has been materially adverse.
(e) Continuous Nature of Representations and Warranties. Each
representation and warranty contained in the Loan Agreement and the other Loan
Documents remains accurate, complete and not misleading in any material respect
on the date of this Ninth Amendment, except for representations and warranties
that explicitly relate to an earlier date and changes in the nature of
Borrowers' business or operations that would render the information in any
exhibit attached thereto either inaccurate, incomplete or misleading, so long as
Bank has consented to such changes or such changes are expressly permitted by
the Loan Agreement.
7. Conditions Precedent.
Notwithstanding any other provision of this Ninth Amendment or any of the
other Loan Documents, and without affecting in any manner the rights of Bank
under the other sections of this Ninth Amendment, this Ninth Amendment shall not
be effective as to Bank unless and until each of the following conditions has
been and continues to be satisfied:
(a) Documentation. Bank shall have received, in form and substance
satisfactory to Bank and its counsel, a duly executed copy of this Ninth
Amendment, the Seventh Amended and Restated Revolving Credit Note in the form
attached as Exhibit A hereto, the Amendment to Subordination Agreement with
Alpha in the form attached as Exhibit B hereto, with such additional documents,
instruments and certificates as Bank and its counsel shall require in connection
therewith, all in form and substance satisfactory to Bank and its counsel.
(b) No Default. Other than any existing or prospective Events of Default
that Borrowers have disclosed to Bank on the date hereof, no Event of Default
shall exist.
(c) No Litigation. Except as previously disclosed to and consented to by
Bank, no action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of the Loan Agreement or this
Ninth Amendment or the consummation of the transactions contemplated thereby or
hereby.
8. Acknowledgment of Obligations.
Each Borrower hereby (1) reaffirms and ratifies all of the promises,
agreements, covenants and obligations to Bank under or in respect of the Loan
Agreement and other Loan Documents as amended hereby and (2) acknowledges that
it is unconditionally liable for the punctual and full payment of all
Obligations, including, without limitation, all charges, fees, expenses and
costs (including reasonable attorneys' fees and expenses) under the Loan
Documents, as amended hereby, and that it has no defenses, counterclaims or
setoffs with respect to full, complete and timely payment and performance of all
Obligations. Each Borrower confirms and agrees that at February 5, 1999 the
outstanding principal balances of and accrued interest on the Loans and the fees
owed to Bank were as set forth on Exhibit C hereto.
9. Confirmation of Liens.
Each Borrower acknowledges, confirms and agrees that the Loan Documents, as
amended hereby, are effective to grant to Bank duly perfected, valid and
enforceable first priority security interests and liens in the Collateral
described therein, except for Permitted Liens, and that the locations for such
Collateral specified in the Loan Documents have not changed except as provided
herein. Each Borrower further acknowledges and agrees that all Obligations of
Borrowers are and shall be secured by the Collateral.
10. Uni-Star Accounts Remittances. Uni-Star agrees that all remittances on Uni-
Star Accounts shall be paid to a lock box and blocked account under the dominion
of the Bank upon the first to occur of (a) an Event of Default occur and
continuing under the Loan Agreement or (b) the borrowing availability of the
Borrowers (the difference between the outstanding Loans and credit extensions
and the Borrowing Base) shall be less than 100,000 for three (3) consecutive
days.
11. Miscellaneous.
Except as set forth herein, the undersigned confirms and agrees that the
Loan Documents remain in full force and effect without amendment or modification
of any kind. The execution and delivery of this Ninth Amendment by Bank shall
not be construed as a waiver by Bank of any existing or hereafter occurring
Default or Event of Default under the Loan Documents. Nothing herein shall
limit or restrict the Borrowers right under the Loan Agreement to prepay the
Obligations at any time without premium or penalty provided that in connection
with any such prepayment the Borrowers indefeasibly pay in full all Obligation
by immediately available funds including, without limitation, all make-whole
payments on any outstanding LIBOR Loans and amounts due on any outstanding
interest rate swap transaction and provide cash collateral to Bank in a manner
and amount satisfactory to Bank to secure payment on all amounts relating to any
outstanding letters of credit. This Ninth Amendment, together with the Loan
Agreement and other Loan Documents, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
dealings, correspondence, conversations or communications between the parties
with respect to the subject matter hereof. This Ninth Amendment and the
transactions hereunder shall be deemed to be consummated in the Commonwealth of
Massachusetts and shall be governed by and interpreted in accordance with the
laws of that state. Any reference in any of the Loan Documents to Lender shall
be deemed to be a reference to the Bank. This Ninth Amendment and the
agreements, instruments and documents entered into pursuant hereto or in
connection herewith shall be "Loan Documents" under and as defined in the Loan
Agreement.
Executed under seal on the date set forth above.
ATTEST: WAKEFIELD ENGINEERING, INC.
Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxxx Xxxxxx
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Title:
ATTEST: WAKEFIELD EXTRUSION CORP.
Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
------------ -------------------
Name: Xxxxxxxx Xxxxxx
---------------
Title:
ATTEST: XXXXXXXX INDUSTRIES, INC.
Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
------------ -------------------
Name: Xxxxxxxx Xxxxxx
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Title:
ATTEST: MALCO, INC.
Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
------------ -------------------
Name: Xxxxxxxx Xxxxxx
---------------
Title:
ATTEST: UNI-STAR INDUSTRIES, INC.
Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
------------ -------------------
Name: Xxxxxxxx Xxxxxx
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Title:
Accepted in Boston, Massachusetts
as of February 8, 1999
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. XxXxxxx
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Name: Xxxxxxx X. XxXxxxx
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Title: Vice President
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