AMENDMENT AGREEMENT NO. 8 TO CREDIT AGREEMENT AND EQUITY APPRECIATION RIGHTS AGREEMENT
EXHIBIT 4.1(h)
AMENDMENT AGREEMENT NO. 8
TO CREDIT AGREEMENT AND
EQUITY APPRECIATION RIGHTS AGREEMENT
THIS AMENDMENT AGREEMENT (this “Amendment Agreement”) is made and entered into as of this 24th day of March, 2004, by and among INSTEEL INDUSTRIES, INC., a North Carolina corporation (herein called the “Borrower”), BANK OF AMERICA, N.A., a national banking association (the “Agent”), as Agent for the lenders (the “Lenders”) party to the Credit Agreement dated January 31, 2000 as amended by the Amendment Agreement No. 1 to Credit Agreement dated January 12, 2001, by the Supplement to Amendment Agreement No. 1 to the Credit Agreement effective January 12, 2001, by the Amendment Agreement No. 2 to Credit Agreement dated May 21, 2001, by Amendment Agreement No. 3 to Credit Agreement dated August 9, 2001, by Amendment Agreement No. 4 to Credit Agreement dated November 16, 2001, by Amendment Agreement No. 5 to Credit Agreement dated January 28, 2002, by Amendment Agreement No. 6 to Credit Agreement and Equity Appreciation Rights Agreement dated May 10, 2002 and by Amendment Agreement No. 7 to Credit Agreement and Equity Appreciation Rights Agreement dated February 18, 2003 (collectively the “Agreement”), and the Equity Appreciation Rights Agreement dated May 21, 2001 (the “EAR Agreement”), among the Borrower, the Agent, and the Lenders, and the UNDERSIGNED LENDERS.
W I T N E S S E T H:
WHEREAS, the parties hereto have entered into the Agreement pursuant to which the Lenders have agreed to make loans to the Borrower as evidenced by the Notes (as defined in the Agreement) and to issue Letters of Credit for the benefit of the Borrower; and
WHEREAS, as a condition to the making of the loans pursuant to the Agreement the Lenders have required that the Subsidiaries of the Borrower guarantee payment of all Obligations of the Borrower arising under the Agreement; and
WHEREAS, the Borrower has requested that the Lenders further amend the Agreement and amend the EAR Agreement in the manner described herein; and
WHEREAS, the Lenders are willing to further amend the Agreement and amend the EAR Agreement subject to the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower, the Agent and the Lenders do hereby agree as follows:
1. Definitions. The term “Agreement” as used herein and in the Loan Documents (as defined in the Agreement) shall mean the Agreement as hereinafter amended and modified. The term “EAR Agreement” as used herein and in the Loan Documents (as defined in the Agreement) shall mean the EAR Agreement as hereinafter amended and modified. Unless the context otherwise requires, other than paragraphs 3 and 4, all terms
used herein without definition shall have the definition provided therefor in the Agreement. Unless the context requires otherwise, all terms used herein in paragraphs 3 and 4 without definition shall have the definition provided therefor in the EAR Agreement.
2. Amendment to Agreement. Subject to the conditions set forth herein, the Agreement is hereby amended, effective as of the date of this Amendment No. 8 as follows:
(a) Section 1.1 is hereby amended by adding the following new definitions thereto in the appropriate alphabetical order:
“‘Amendment No. 8’ means Amendment Agreement No. 8 to Credit Agreement and Equity Appreciation Rights Agreement which Amendment No. 8 is dated March 24, 2004.”
(b) The definition of “Revolver Reserve” in Section 1.1 is hereby amended in its entirety so that as amended it shall read as follows:
“‘Revolver Reserve’ means $3,000,000.”
(c) The definition of “Stated Termination Date” in Section 1.1 is hereby amended in its entirety so that as amended it shall read as follows:
“‘Stated Termination Date’ means May 17, 2004.”
(d) The definition of “Term Loan Maturity Date” in Section 1.1 is hereby amended in its entirety so that as amended it shall read as follows:
“‘Term Loan Maturity Date’ means May 17, 2004.”
(e) Section 2.1(c) is hereby amended by adding the following monthly installment payments of principal on the Term Loan:
March 31, 2004 |
$ | 150,000 | ||
April 30, 2004 |
$ | 150,000 |
3. Amendment to EAR Agreement. Subject to the conditions set forth herein, the EAR Agreement is hereby amended, effective as of the date of this Amendment No. 8 as follows:
(a) Section 1.01 is hereby amended by adding the following new definition thereto in the appropriate alphabetical order:
“Amendment No. 8” means Amendment Agreement No. 8 to Credit Agreement and Equity Appreciation Rights Agreement which Amendment No. 8 is dated March 24, 2004.”
(b) Section 2.02 is hereby amended by adding the following clause (e) to read in its entirety as follows:
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“(e) In the event all Obligations (as defined in the Credit Agreement) have been paid in full by the Facility Termination Date (as defined in the Credit Agreement), the Rights and this Agreement shall terminate in full.”
4. EAR Agreements. For as long as no Event of Default under the Agreement or this Agreement has occurred and is continuing, Lenders and Agent agree that they shall forbear from exercising the Rights under the EAR Agreement.
5. Wilmington, Delaware Facility. Pursuant to Section 5.4, on or before April 15, 2004 Insteel Wire Products Company shall deliver to the Agent a Mortgage with respect to the Wilmington, Delaware facility and the related Mortgage Property Support Documents.
6. Subsidiary Consents. Each Subsidiary of the Borrower that has delivered a Guaranty to the Agent has joined in the execution of this Amendment Agreement for the purpose of (i) agreeing to the amendment to the Agreement and (ii) confirming its guarantee of payment of all the Obligations.
7. Representations and Warranties. The Borrower hereby represents, warrants and covenants that:
(a) The representations and warranties made by Borrower in Article VIII of the Agreement are true on and as of the date hereof except that the financial statements referred to in Section 8.6(a) shall be those most recently furnished to each Lender pursuant to Section 9.1;
(b) There has been no material adverse change in the condition, financial or otherwise, of the Borrower and its Subsidiaries since the date of the most recent financials, other than changes in the ordinary course of business, none of which has been a material adverse change;
(c) The business and properties of the Borrower and its Subsidiaries are not and have not been adversely affected in any substantial way as the result of any fire, explosion, earthquake, accident, strike, lockout, combination of workers, flood, embargo, riot, activities of armed forces, war or acts of God or the public enemy, or cancellation or loss of any major contracts; and
(d) After giving effect to this Amendment Agreement (including the waivers by the Lenders set forth herein), no event has occurred and no condition exists which, upon the consummation of the transaction contemplated hereby, constitutes a Default or an Event of Default on the part of the Borrower under the Agreement, the Notes or any other Loan Document either immediately or with the lapse of time or the giving of notice, or both, except that the annual audited financial statements for the fiscal year ended September 27, 2003, of Borrower will be delayed pending the closing of the anticipated refinancing and the filing of the Borrower’s Form 10-K for the year ended September 27, 2003 with the Securities and Exchange Commission.
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8. Amendment Fees. Borrower agrees to pay an amendment fee with respect to this Amendment Agreement of $100,000 which is due and payable upon execution of this Amendment Agreement. In the event all Obligations have been paid in full and the Facility Termination Date has occurred prior to May 17, 2004, the amendment fee will be refunded to the Borrower as a deduction from the payment of the Loans in full.
9. Lenders Consent and Waiver. The Lenders consent to the delay in delivery of the annual audited financial statements as described in paragraph 6(d) above and waive any Event of Default under the Agreement based upon such delay.
10. Conditions. This Amendment Agreement shall become effective upon the Borrower delivering or causing to be delivered to the Agent the following:
(i) five (5) counterparts of this Amendment Agreement duly executed by the Borrower, the Agent and the Required Lenders and consented to by each of the Subsidiaries;
(ii) copy of resolutions adopted by the Board of Directors of the Borrower and each Guarantor approving this Amendment Agreement and authorizing its execution certified by the Secretary or Assistant Secretary to be a true and correct copy duly adopted; and
(iii) all other fees and expenses, including the Agent’s fees, due in connection with this Amendment Agreement.
11. Acknowledgment; Release. The Borrower and the Guarantors acknowledge that they have no existing defense, counterclaim, offset, cross-complaint, claim or demand of any kind or nature whatsoever that can be asserted to reduce or eliminate all or any part of any of their respective liability to pay the full indebtedness outstanding under the terms of the Agreement and any other Loan Documents which evidence, guaranty or secure the Obligations. The Borrower and the Guarantors hereby release and forever discharge the Agent, the Lenders and all of their officers, directors, employees, attorneys, consultants and agents from any and all actions, causes of action, debts, dues, claims, demands, liabilities and obligations of every kind and nature, both in law and in equity, known or unknown, whether matured or unmatured, absolute or contingent.
12. Costs and Expenses. The Borrower agrees to pay all costs and expenses associated with the preparation, due diligence, administration and enforcement of all documentation executed in connection with the Amendment Agreement, including without limitation, the legal fees and out-of-pocket expenses of counsel to the Agent. The Borrower also agrees to pay the expenses of the Agent and the Lenders in connection with Collateral review, field audits and retention of consultants.
13. Entire Agreement. This Amendment Agreement sets forth the entire understanding and agreement of the parties hereto in relation to the subject matter hereof and supersedes any prior negotiations and agreements among the parties relative to such subject matter. No promise, conditions, representation or warranty, express or implied, not herein set forth shall bind any party hereto, and no one of them has relied on any such promise, condition, representation or warranty. Each of the parties hereto acknowledges that, except
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as in this Amendment Agreement otherwise expressly stated, no representations, warranties or commitments, express or implied, have been made by any other party to the other. None of the terms or conditions of this Amendment Agreement may be changed, modified, waived or canceled orally or otherwise, except by writing, in the manner provided in the Agreement, specifying such change, modification, waiver or cancellation of such terms or conditions, or of any proceeding or succeeding breach thereof.
14. Full Force and Effect of Agreement. Except as hereby specifically amended, modified or supplemented, the Agreement and all of the other Loan Documents are hereby confirmed and ratified in all respects and shall remain in full force and effect according to their respective terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written.
| BORROWER: | ||||||
| INSTEEL INDUSTRIES, INC. | ||||||
WITNESS: |
||||||
| /s/ Xxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. Xxxxxxxxx | ||||
Print Name:
|
Xxxx X. Xxxxxxxx | Name: | Xxxxxxx X. Xxxxxxxxx | |||
| Title: | CFO and Treasurer | |||||
| /s/ Xxxxxx X. Xxxxxxx | ||||||
Print Name:
|
Xxxxxx X. Xxxxxxx | |||||
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| GUARANTORS: | ||||||
| INSTEEL WIRE PRODUCTS COMPANY INTERCONTINENTAL METALS CORPORATION |
||||||
| WITNESS: | ||||||
| /s/ Xxxx X. Xxxxxxxx | By: | /s/ Xxxxxxx X. Xxxxxxxxx | ||||
Print Name:
|
Xxxx X. Xxxxxxxx | Name: | Xxxxxxx X. Xxxxxxxxx | |||
| Title: | CFO and Treasurer | |||||
| /s/ Xxxxxx X. Xxxxxxx | ||||||
Print Name:
|
Xxxxxx X. Xxxxxxx | |||||
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| BANK OF AMERICA, N.A., as Agent for the Lenders |
||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxx | |||||
| Agency Officer | ||||||
| Title: | Assistant Vice President | |||||
| BANK OF AMERICA, N.A., as a Lender |
||||||
| By: | /s/ Xxxx X. XxXxxxxx | |||||
| Name: | Xxxx X. XxXxxxxx | |||||
| Title: | SVP | |||||
| BANC OF AMERICA STRATEGIC SOLUTIONS, INC., as a Lender |
||||||
| By: | /s/ Xxxx X. XxXxxxxx | |||||
| Name: | Xxxx X. XxXxxxxx | |||||
| Title: | SVP | |||||
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| BRANCH BANKING AND TRUST COMPANY | ||||||
| By: | /s/ Xxxxxxx X.X. Xxxxxxx | |||||
| Name: | Xxxxxxx X.X. Xxxxxxx | |||||
| Title: | Senior Vice President | |||||
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| WACHOVIA BANK, NATIONAL ASSOCIATION, | ||||||
| By: | /s/ Xxxxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxxxx X. Xxxxxx | |||||
| Title: | Director | |||||
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| PNC BANK, N.A., as successor in interest to National Bank of Canada, a Canadian chartered bank |
||||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||||
| Name: | Xxxxxxx Xxxxxxx | |||||
| Title: | Banking Officer | |||||
