Exhibit 10.35
SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment"),
dated as of the 6th day of November, 2003, by and between STEEL CITY PRODUCTS,
INC., a Delaware corporation (the "Borrower"), and NATIONAL CITY BANK OF
PENNSYLVANIA (the "Bank").
BACKGROUND
A. The Borrower and the Bank entered into a certain Credit Agreement dated
as of July 13, 2001 (as amended, supplemented, replaced or otherwise modified,
the "Agreement") pursuant to which the Bank has made a credit facility or
facilities available to the Borrower.
B. The Borrower has requested the Bank to, among other things, (i) extend
the maturity date, (ii) revise the interest rate and (iii) waive a covenant
default, and the Bank is willing to do so upon the terms and conditions set
forth in this Amendment.
NOW THEREFORE, intending to be legally bound hereby, the parties hereto
amend the Agreement and agree as follows:
Section 1. Capitalized Terms.
Unless otherwise specified herein, capitalized terms used in this Amendment
(including the BACKGROUND above) without definition shall have the same meaning
as set forth in the Agreement as amended by this Amendment.
Section 2. Amendments.
The Agreement is hereby amended as follows:
2.1 Section 2.04(a) of the Agreement is hereby amended and restated in its
entirety as follows:
"(a) Interest-Rate. Subject to the terms and conditions of this
Agreement, the aggregate outstanding principal balance of the Revolving Credit
Loans shall bear interest for each day at a rate per annum equal to the Prime
Rate plus one percent (1.0%) (the "Interest Rate")."
2.2 Section 2.09(c)(ii) of the Agreement is hereby amended and restated in
its entirety as follows:
"(ii) If 35% or more of otherwise Eligible Receivables due and owing
from any obligor are more than 90 days past the invoice date, the aggregate
amount of
receivables of such obligor and its Affiliates shall be excluded until such time
as 35% or more of such Receivables are no longer more than 90 days past the
invoice date."
2.3 Section 5.12 of the Agreement is hereby amended and restated in its
entirety as follows:
"5.12 Inventory Appraisal. On or before May 31, 2004, the Borrower
shall deliver to the Bank an updated appraisal of the Eligible Inventory from an
independent appraiser, in form and substance satisfactory to the Bank."
2.4 The following defined term set forth in Annex A to the Agreement is
hereby amended and restated in its entirety as follows:
""Revolving Credit Maturity Date" shall mean December 31, 2004."
Section 3. Waiver.
3.1 Waiver of Section 6.01 of the Agreement. The Borrower has informed the
Bank that it has violated its EBITDA/Fixed Charges Ratio set forth in Section
6.01 of the Agreement for the fiscal quarters ending June 30, 2003 and September
30, 2003. The Bank agrees to waive the violation of Section 6.01 and the Event
of Default related to those violations only for the fiscal quarters ending June
30, 2003 and September 30, 2003.
3.2 No Other Waivers. The waiver by the Bank herein does not either
implicitly or explicitly alter, waive or amend, except as provided herein, the
provisions of the Agreement.
Section 4. Covenants, Representations and Warranties.
4.1 The Borrower ratifies, confirms and reaffirms, without condition, all
the terms and conditions of the Agreement and the other Loan Documents and
agrees that it continues to be bound by the terms and conditions thereof as
amended by this Amendment; and, the Borrower further confirms and affirms that
it has no defense, set off or counterclaim against the same. The Agreement and
this Amendment shall be construed as complementing each other and as augmenting
and not restricting the Banks rights, and, except as specifically amended by
this Amendment, the Agreement shall remain in full force and effect in
accordance with its terms.
4.2 The Borrower ratifies, confirms and reaffirms without condition, all
liens and security interests granted to the Bank pursuant to the Agreement and
the other Loan Documents, if any, and such liens and security interests shall
continue to secure the indebtedness and obligations of the Borrower to the Bank
under the Agreement, the Note and the other Loan Documents, including, but not
limited to, all loans made by the Bank to the Borrower as amended by this
Amendment.
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4.3 The Borrower represents and warrants to the Bank that:
(a) This Amendment has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligations of the
Borrower enforceable in accordance with its terms;
(b) The execution and delivery of this Amendment by the Borrower and
the performance and observance by the Borrower of the provisions hereof, do not
violate or conflict with the organizational agreements of the Borrower or any
law applicable to the Borrower or result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against the Borrower;
(c) The representations and warranties set forth within Article III of
the Agreement continue to be true and correct in all material respects as of the
date of this Amendment except those changes resulting from the passage of time;
and
(d) No material adverse change has occurred in the business,
operations, consolidated financial condition or prospects of the Borrower since
the dates of the most recent annual financial statement delivered to the Bank,
and no Event of Default or condition which, with the passage of time, the giving
of notice or both, could become an Event of Default has occurred and is
continuing.
4.4 The Borrower shall execute or cause to be executed and deliver to the
Bank all other documents, instruments and agreements deemed necessary or
appropriate by the Bank in connection herewith.
Section 5. Conditions Precedent.
5.1 This Amendment shall be effective on the date hereof so long as each of
the following conditions has been satisfied:
(a) No Event of Default shall have occurred and be continuing on the
date of this Amendment.
(b) The representations and warranties set forth within Article III of
the Agreement shall continue to be true and correct in all material respects as
of the date of this Amendment except those changes resulting from the passage of
time only.
(c) Contemporaneously with the execution hereof, the Borrower shall
deliver, or cause to be delivered, to the Bank:
(i) The payment of a waiver fee in the amount of $7,500;
(ii) A certificate of the corporate secretary or assistant
secretary of the Borrower, dated the date hereof, certifying (1) that the
Articles of Incorporation and By-
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Laws of the Borrower have not been changed since they were delivered to the
Bank, or if there have been any such changes, attaching copies thereof as then
in effect and (2) as to true copies of all corporate action taken by the
Borrower in authorizing the execution, delivery and performance of this
Amendment, and the transactions contemplated thereby; and
(iii) Such other documents, instruments and certificates required
by the Bank in connection with the transactions contemplated by this Amendment.
5.2 The Bank shall continue to have a first priority lien on and security
interest in the Collateral, if any, previously granted to the Bank.
5.3 All legal details and proceedings in connection with the transactions
contemplated in this Amendment shall be satisfactory to counsel for the Bank,
and the Bank shall have received all such originals or copies of such documents
as the Bank may request.
Section 6. Miscellaneous.
6.1 This Amendment shall be construed in accordance with, and governed by
the laws of the Commonwealth of Pennsylvania without giving effect to the
provisions thereof regarding conflicts of law.
6.2 Except as amended hereby, all of the terms and conditions of the
Agreement shall remain in full force and effect. This Amendment amends the
Agreement and is not a novation thereof.
6.3 This Amendment shall inure to the benefit of, and shall be binding
upon, the respective successors and assigns of the Borrower and the Bank. The
Borrower may not assign any of its rights or obligations hereunder without the
prior written consent of the Bank.
6.4 This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Seventh Amendment to Credit Agreement the
day and year first above written.
ATTEST: STEEL CITY PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx Xxxxxxx
--------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxxxxx Name: Xxxxxx Xxxxxxx
Title: Assistant Secretary Title: C.F.O.
(SEAL)
NATIONAL CITY BANK OF PENNSYLVANIA
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
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