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EXHIBIT 10.47
WAIVER AND AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this
"Amendment") is dated as of June 24, 1999 and is entered into by and among the
financial institutions listed on the signature pages hereof (individually, a
"Lender" and collectively, the "Lenders"), Bank of America National Trust and
Savings Association, successor-in-interest to BankAmerica Business Credit, Inc.,
as agent for the Lenders (in its capacity as agent, the "Agent"), and XxXxxxx
Steel Company, XxXxxxx International, Inc., Xxxxxx Forge Company, Erie Bronze &
Aluminum Company, American Handling, Inc., Northern Steel Company, Micafil, Inc.
and Eballoy Glass Products Company (individually, a "Borrower" and collectively,
the "Borrowers"). All capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to them in the Agreement (as hereinafter
defined).
WITNESSETH:
WHEREAS, the Lenders, the Agent and the Borrowers have entered into
that certain Loan and Security Agreement dated as of February 25, 1999 (the
"Agreement");
WHEREAS, certain Events of Default, as more particularly described
herein, have occurred under the Agreement; and
WHEREAS, the Borrowers desire to have the Events of Default waived and
to amend the Agreement and the Lenders and the Agent are willing to do so,
subject to the terms and conditions stated herein;
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Borrowers, the Lenders and the Agent hereby agree as
follows:
SECTION 1. Waiver of Default. The Agent and the Lenders hereby waive
the Events of Default and any remedies available to the Agent and Lenders
arising from the following: (a) the Consolidated Adjusted Tangible Net Worth of
Centrum and its Subsidiaries determined as of March 31, 1999, was less than
$6,500,000, the minimum amount required under Section 9.26 of the Agreement,
provided, however, that such waiver shall be subject to the condition that the
final calculation of the Consolidated Adjusted Tangible Net Worth of Centrum and
its Subsidiaries as of March 31, 1999 shall not be less than $4,000,000; and (b)
the Fixed Charge Coverage Ratio of Centrum and its Subsidiaries for the period
of four consecutive fiscal quarters ended on March 31, 1999, was less than 1.10
to 1.0, the minimum ratio required under Section 9.27 of the Agreement,
provided, however, that such waiver shall be subject to the condition that the
final calculation of the net loss (before taxes) of Centrum and its Subsidiaries
for the period of four consecutive fiscal quarters ended on March 31, 1999 shall
not be greater than ($5,815,000). This waiver is only applicable and shall only
be effective for the specific instances, for the specific purposes, and for the
specific periods for which given. Such waiver is expressly limited to the facts
and circumstances
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referred to herein and shall not operate (a) as a waiver of or consent to
non-compliance with any other section of the Agreement or any other Loan
Document, (b) as a waiver of, or a restriction on or prejudice with respect to,
any right, power or remedy of the Agent or any Lender under the Agreement or any
other Loan Document, or (c) as a waiver of or consent to any other Event of
Default or Default under the Agreement or any other Loan Document.
SECTION 2. Amendment to the Agreement. The Agent, the Lenders and the
Borrowers agree that the Agreement shall be amended, effective as of the date
hereof (unless otherwise expressly provided) as follows:
(a) Effective as of June 1, 1999, clauses (a), (b) and (c) of
Section 3.1(a) of the Agreement are hereby amended and restated to read
in their entirety as follows:
"(a) with respect to Base Rate Capital Expenditure
Loans, Base Rate Term Loans, Acquisition Line advances based
on the Base Rate, and all other Obligations (other than the
Base Rate Revolving Loans and LIBOR Rate Loans), 0.75% per
annum (the `First Base Rate Margin'), provided, however, that
the First Base Rate Margin shall be reduced to 0.50% per annum
at such time (if ever) as both of the following conditions
shall have been met to the satisfaction of the Agent: (i)
Centrum and its Subsidiaries shall have maintained a Fixed
Charge Coverage Ratio of at least 1.1 to 1.0 (A) for the
fiscal quarter ending June 30, 1999, for the period of the one
fiscal quarter ended on such date, (B) for the fiscal quarter
ending September 30, 1999, for the period of the two
consecutive fiscal quarters ended on such date, or (C) for the
fiscal quarter ending December 31, 1999, for the period of the
three consecutive fiscal quarters ended on such date; and (ii)
no Default or Event of Default shall have occurred and be
continuing at the time of such proposed reduction of the First
Base Rate Margin; provided further, however, that after any
such reduction of the First Base Rate Margin, if Centrum and
its Subsidiaries shall not continue to maintain a Fixed Charge
Coverage Ratio of at least 1.1 to 1.0 in any succeeding fiscal
quarter, for the respective periods stated in clause (i) of
the preceding proviso, prior to the fiscal quarter ending
March 31, 2000, the First Base Rate Margin shall be increased
to 0.75% per annum;
(b) with respect to Base Rate Revolving Loans, 0.25%
per annum (the `Second Base Rate Margin'), provided, however,
that the Second Base Rate Margin shall be reduced to 0% per
annum at such time (if ever) as both of the following
conditions shall have been met to the satisfaction of the
Agent: (i) Centrum and its Subsidiaries shall have maintained
a Fixed Charge Coverage Ratio of at least 1.1 to 1.0 (A) for
the fiscal quarter ending June 30, 1999, for the period of the
one fiscal quarter ended on such date, (B) for the fiscal
quarter ending September 30, 1999, for the period of the two
consecutive fiscal quarters ended on such date, or (C) for the
fiscal quarter ending December 31, 1999, for the period of the
three consecutive fiscal quarters ended on such date; and (ii)
no Default or Event of Default shall have occurred and be
continuing at the time of such proposed reduction of the
Second Base Rate Margin; provided further, however, that after
any such reduction of the Second Base Rate Margin, if Centrum
and its Subsidiaries shall not continue to maintain a
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Fixed Charge Coverage Ratio of at least 1.1 to 1.0 in any
succeeding fiscal quarter, for the respective periods stated
in clause (i) of the preceding proviso, prior to the fiscal
quarter ending March 31, 2000, the Second Base Rate Margin
shall be increased to 0.25% per annum; and
(c) with respect to LIBOR Revolving Loans, 2.50% per
annum (the `First LIBOR Rate Margin'), and with respect to
LIBOR Term Loans, LIBOR Capital Expenditure Loans and
Acquisition Line advances based on the LIBOR Rate, 3.0% per
annum (the `Second LIBOR Rate Margin'), provided, however,
that the First LIBOR Rate Margin shall be reduced to 2.25% per
annum and the Second LIBOR Rate Margin shall be reduced to
2.75% per annum at such time (if ever) as both of the
following conditions shall have been met to the satisfaction
of the Agent: (i) Centrum and its Subsidiaries shall have
maintained a Fixed Charge Coverage Ratio of at least 1.1 to
1.0 (A) for the fiscal quarter ending June 30, 1999, for the
period of the one fiscal quarter ended on such date, (B) for
the fiscal quarter ending September 30, 1999, for the period
of the two consecutive fiscal quarters ended on such date, or
(C) for the fiscal quarter ending December 31, 1999, for the
period of the three consecutive fiscal quarters ended on such
date; and (ii) no Default or Event of Default shall have
occurred and be continuing at the time of such proposed
reduction of the First LIBOR Rate Margin and the Second LIBOR
Rate Margin; provided further, however, that after any such
reduction of the First LIBOR Rate Margin and the Second LIBOR
Rate Margin, if Centrum and its Subsidiaries shall not
continue to maintain a Fixed Charge Coverage Ratio of at least
1.1 to 1.0 in any succeeding fiscal quarter, for the
respective periods stated in clause (i) of the preceding
proviso, prior to the fiscal quarter ending March 31, 2000,
the First LIBOR Rate Margin shall be increased to 2.50% per
annum and the Second LIBOR Rate Margin shall be increased to
3.00% per annum;"
(b) Section 6.9(c) of the Agreement is hereby amended and
restated to read in its entirety as follows:
"(c) All payments, including immediately available
funds received by the Agent at a bank designated by it,
received by the Agent on account of Accounts or as proceeds of
other Collateral will be the Agent's sole property for its
benefit and the benefit of the Lenders and will be credited to
the Borrower's Loan Account (conditional upon final
collection) after allowing one (1) Business Day for
collection; provided, however, that such payments shall be
deemed to be credited to the Borrower's Loan Account
immediately upon receipt for purposes of (i) determining
Availability, (ii) calculating the Unused Line Fee pursuant to
Section 3.5, and (iii) calculating the amount of interest
accrued thereon solely for purposes of determining the amount
of interest to be distributed by the Agent to the Lenders (but
not the amount of interest payable by the Borrower). At the
discretion of Agent, all such payments that are received by
the Agent on account of Accounts shall also be deemed to have
been applied to the payment of such Accounts, and also applied
to the reduction of the aggregate amount of the Net Amount of
Eligible Accounts and any corresponding reduction of the
Availability, immediately upon receipt."
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(c) Section 9.26 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"9.26 Adjusted Tangible Net Worth. Centrum and its
Subsidiaries will maintain Consolidated Adjusted Tangible Net
Worth, determined as of the last day of each fiscal quarter,
of not less than $4,000,000, plus an amount equal to 90% of
Centrum's and its Subsidiaries' consolidated net income
(without regard to any loss) from each fiscal year of Centrum
and its Subsidiaries commending with the fiscal year ending
March 31, 1999, provided that commencing at such time as the
Consolidated Adjusted Tangible Net Worth of Centrum and its
Subsidiaries shall equal or exceed $6,500,000 as of the last
day of any fiscal quarter, the amount to be added to the
minimum Consolidated Adjusted Tangible Net Worth requirement
under this Section 9.26 shall be 50%, rather than 90%, of
Centrum's and its Subsidiaries' consolidated net income
(without regard to any loss) from each fiscal year of Centrum
and its Subsidiaries occurring thereafter."
(d) Section 9.27 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"9.27 Fixed Charge Coverage Ratio. Centrum and its
Subsidiaries will maintain a Fixed Charge Coverage Ratio for
each period of four consecutive fiscal quarters ended at the
end of the fiscal quarter set forth below (except that (i) for
the fiscal quarter ending June 30, 1999, the ratio shall be
determined for the period of the one fiscal quarter ended on
such date, (ii) for the fiscal quarter ending September 30,
1999, the ratio shall be determined for the period of the two
consecutive fiscal quarters ended on such date, and (iii) for
the fiscal quarter ending December 31, 1999, the ratio shall
be determined for the period of the three consecutive fiscal
quarters ended on such date) of not less than the ratio set
forth below opposite such fiscal quarter:
Fiscal Quarter Ratio
June 30, 1999 1.0 to 1.0
September 30, 1999 1.0 to 1.0
December 31, 1999 1.0 to 1.0
March 31, 2000 1.1 to 1.0
June 30, 2000 1.1 to 1.0
September 30, 2000 1.1 to 1.0
December 31, 2000 1.1 to 1.0
March 31, 2001 1.1 to 1.0
June 30, 2001 and
each fiscal quarter thereafter 1.25 to 1.0"
SECTION 3. Conditions. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:
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(a) Amendment. Fully executed copies of this Amendment signed
by the Borrowers, the Lenders and the Agent and ratifications signed by
the Corporate Guarantors shall be delivered to the Agent.
(b) Resolutions from the Borrowers. A certificate executed by
the Secretary or Assistant Secretary of each Borrower certifying that
such Borrower's Board of Directors has adopted resolutions authorizing
the execution, delivery and performance by such Borrower of this
Amendment shall be delivered to the Agent.
(c) Resolutions from the Corporate Guarantors. A certificate
executed by the Secretary or Assistant Secretary of each Corporate
Guarantor certifying that such Corporate Guarantor's Board of Directors
has adopted resolutions authorizing the execution, delivery and
performance by such Corporate Guarantor of the ratification of this
Amendment shall be delivered to the Agent.
(d) Fee. The Borrowers shall have paid the Agent, for the
account of the Lenders, a waiver and amendment fee in the amount of
$25,000, which fee shall be earned upon execution of this Amendment and
shall be non-refundable upon such payment to the Agent. The Agent, the
Lenders and the Borrowers agree that such fee shall be financed by the
Lenders as a Revolving Loan.
(e) Other Documents. The Borrower shall have executed and
delivered to the Agent such other documents and instruments as the
Agent may request.
SECTION 4. Miscellaneous.
(a) Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other
document or documents relating thereto, including, without limitation,
any Loan Document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by the Agent or any Lender or any
closing shall affect the representations and warranties or the right of
the Agent or such Lender to rely thereon.
(b) Reference to Agreement. The Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof,
or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference therein to the Agreement shall mean a
reference to the Agreement as amended hereby.
(c) Agreement Remains in Effect. The Agreement and the Loan
Documents remain in full force and effect, and each Borrower ratifies
and confirms its agreements and covenants contained therein. Each
Borrower hereby confirms that, after giving effect to this Amendment,
no Event of Default or Default exists as of such date.
(d) Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this
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Amendment and the effect thereof shall be confined to the provision so
held to be invalid or unenforceable.
(e) APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE
AND TO BE PERFORMABLE IN THE STATE OF ILLINOIS AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
(f) Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of the Agent, the Lenders and the Borrowers
and their respective successors and assigns; provided, however, that no
Borrower may assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Agent and the
Lenders.
(g) Counterparts. This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be
an original, but all of which when taken together shall constitute one
and the same instrument.
(h) Headings. The headings, captions and arrangements used in
this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
(i) Expenses of the Agent. The Borrowers jointly and severally
agree to pay on demand all costs and expenses incurred by the Agent in
connection with the preparation, negotiation and execution of this
Amendment and the other Loan Documents executed pursuant hereto and any
and all subsequent amendments, modifications, and supplements hereto or
thereto, including, without limitation, the costs and fees of the
Agent's legal counsel and the allocated cost of the Agent's in-house
counsel.
[signatures continued on following pages]
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IN WITNESS WHEREOF, the parties have executed this Amendment on the
date first written above.
"BORROWERS":
XXXXXXX STEEL COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Chief Financial Officer/Treasurer
-----------------------------------
XXXXXXX INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
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Title: Treasurer
-----------------------------
XXXXXX FORGE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President/Treasurer
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ERIE BRONZE & ALUMINUM COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Treasurer
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AMERICAN HANDLING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President
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NORTHERN STEEL COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Treasurer
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MICAFIL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Treasurer
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EBALLOY GLASS PRODUCTS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Treasurer
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"AGENT":
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as the Agent
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: V.P./Sr. Account Executive
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"LENDERS":
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Lender
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: V.P./Sr. Account Executive
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CONSENTS AND REAFFIRMATIONS
The undersigned hereby consent to the terms and conditions of that
Waiver and Amendment No. 1 to Loan and Security Agreement dated as of February
25, 1999, among the financial institutions listed on the signature pages thereto
(individually, a "Lender" and collectively, the "Lenders"), Bank of America
National Trust and Savings Association, successor-in-interest to BankAmerica
Business Credit, Inc., as agent for the Lenders (in its capacity as agent, the
"Agent"), and XxXxxxx Steel Company, XxXxxxx International, Inc., Xxxxxx Forge
Company, Erie Bronze & Aluminum Company, American Handling, Inc., Northern Steel
Company, Micafil, Inc. and Eballoy Glass Products Company, and reaffirm their
obligations under those certain Guaranty of Payment Agreements each dated as of
February 25, 1999 (collectively, the "Corporate Guaranties") made by the
undersigned in favor of the Agent and the Lenders, and acknowledge and agree
that the Corporate Guaranties and all other Loan Documents remain in full force
and effect.
Dated as of June 24, 1999
CENTRUM INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Chief Financial Officer
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XXXXXXX SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Secretary/Treasurer
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LASALLE EXPLORATION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Treasurer/Assistant Secretary
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