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Exhibit 10(q)
AMENDMENT NO. 1
TO
THIRD AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 ("Amendment No. 1") is entered into as of October 9,
1998, by and between Cold Metal Products, Inc., a New York corporation having
its principal place of business at 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000
("Borrower") and BNY Financial Corporation, a New York corporation having an
office at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender").
BACKGROUND
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Borrower and Lender are parties to a Third Amended and Restated Credit and
Security Agreement dated as of April 1, 1998, (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement") pursuant to which
Lender provided Borrower with certain financial accommodations.
Borrower has requested that Lender amend the Loan Agreement on the terms
set forth herein and Lender is willing to do so on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lender, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. AMENDMENT TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is hereby
amended as follows:
2.1. Section 1.2 of the Loan Agreement is hereby amended as follows:
(a) the following defined term is hereby added in its
appropriate alphabetical order:
"AMENDMENT NO. 1" shall mean Amendment No. 1 to Third
Amended and Restated Credit and Security Agreement dated as of October 9, 1998.
2.2. Sections 6.5, 6.8 and 6.9 are hereby amended in their entirety to
read as follows:
6.5 CURRENT RATIO. Cause the ratio of consolidated current
assets to consolidated current liabilities to be not less than (i) 1.23 to 1 at
the end of the fiscal quarter ending March 31,
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1998 and (ii) 1.40 to 1 at the end of the fiscal quarter ending June 30, 1998
and at the end of each fiscal quarter thereafter during the Term; PROVIDED,
HOWEVER, that for the fiscal quarter ending September 30, 1999 and thereafter
during the Term the ratio may be adjusted by the mutual agreement of Borrower
and Lender based upon projections delivered to Lender in accordance with Section
9.12 hereof. The above ratios shall be calculated exclusive of the effect of any
conversion to a current liability of any Indebtedness to Lender.
6.8 FIXED CHARGE COVERAGE. Cause the ration of (x) the sum of
aggregate consolidated net income during each fiscal period set forth below plus
the aggregate amount of income tax, and the interest, depreciation, amortization
and all other non-cash expense deducted in determining such net income during
such fiscal period to (y) aggregate consolidated interest expense during such
fiscal period plus aggregate amount of tax expense and capital expenditures paid
in cash during such fiscal period plus, without duplication, the aggregate
amount of scheduled reductions in availability during such fiscal period
pursuant to Section 2.1(a)(y)(iii) hereof to be not less than the ratio
corresponding to the fiscal periods set forth below:
Fiscal Period Ratio
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4/1/97 to 3/31/98 1.00 to 1
7/1/97 t 6/30/98 1.00 to 1
10/1/97 to 9/30/98 0.75 to 1
1/1/98 to 12/31/98 0.75 to 1
4/1/98 to 3/31/99 0.75 to 1
7/1/98 to 6/30/99 0.75 to 1
10/1/98 to 9/30/99 0.75 to 1
1/1/99 to 12/30/99 1.00 to 1
and each four quarter fiscal period
thereafter during the Term;
PROVIDED, HOWEVER, that for the fiscal period ending September 30, 1999 and
thereafter during the Term the ratio may be adjusted by the mutual agreement of
Borrower and Lender based upon projections delivered to Bank in accordance with
Section 9.12 hereof.
6.9 TOTAL LIABILITIES TO EQUITY. Cause the ratio of total
consolidated Indebtedness to consolidated stockholders equity (exclusive of
Borrower's foreign currency translation adjustment account) to be not more than
(i) 3.89 to 1 at the end of the fiscal quarter ending March 31, 1998 and (ii)
3.75 to 1 at the end of the fiscal quarter ending June 30, 1998 and at the end
of each fiscal quarter thereafter during the Term; PROVIDED, HOWEVER, that for
the fiscal quarter ending September 30, 1999 and thereafter during the Term the
ratios provided in this Section 6.9 may be adjusted by the mutual agreement of
the Borrower and Lender based upon projections delivered to Lender in accordance
with Section 9.12 hereof. The above ratios shall be calculated exclusive of any
future accounting changes and their impact on non-current liabilities and
shareholders' equity."
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3. CONDITIONS OF EFFECTIVENESS. This Amendment No. 1 shall become
effective when Lender shall have received:
(i) four (4) copies of this Amendment No. 1 executed by
Borrower and consented to and agreed to by Cold Metal Products, Limited as
guarantor;
(ii) an amendment fee equal to $5,000;
(iii) consent of Participants.
4. Representations and Warranties. Borrowers hereby represents and
warrants as follows:
(a) This Amendment No. 1 and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective terms.
(b) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment No. 1.
(c) Borrower has no defense, counterclaim or offset with respect
to the Obligations.
5. EFFECT ON THE LOAN AGREEMENT.
(a) Upon effectiveness of SECTION 2 hereof, each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Loan agreement as amended
hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
No. 1 shall not operate as a waiver of any right, power or remedy of Lender, nor
constitute a waiver of any provision of the Loan Agreement, or any other
documents, instruments or agreements executed and/or delivered under or in
connection therewith.
6. GOVERNING LAW. This Amendment No. 1 shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of New York.
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7. HEADINGS. Section headings in this Amendment No. 1 are included
herein for convenience of reference only and shall not constitute a part of this
Amendment No. 1 for any other purpose.
8. COUNTERPARTS. This Amendment No. 1 may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed an original
and all or which taken together shall be deemed to constitute one and the same
agreement.
IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of
the day and year first written above.
COLD METAL PRODUCTS, INC.
By: /s/ A. R. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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BNY FINANCIAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: Vice President
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CONSENTED AND AGREED TO AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN:
COLD METAL PRODUCTS, LIMITED
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: President
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