Exhibit 10.4
AMENDMENT NO. 1
TO
FIRST AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
July 21, 2000
Industrial Systems Associates, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the First Amended and Restated Loan and
Security Agreement dated as of April 27, 2000 among Industrial Systems
Associates, Inc. ("Borrower"), the Lenders party thereto ("Lenders") and Bank of
America, N.A., as Agent for the Lenders (the "Loan Agreement"). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed
to such terms in the Loan Agreement.
Borrower has requested that Lenders agree to amend the Loan
Agreement in certain respects, including without limitation, to extend its term
and provide for certain interest rate reductions upon the achievement by
Borrower of certain financial benchmarks. Lenders have agreed to the foregoing,
on the terms and conditions contained herein.
Therefore, the parties hereto agree as follows:
1. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is hereby
amended as follows:
(a) The definition of "Adjusted Net Earnings" in Section 1.1
of the Loan Agreement is amended by inserting the following at the end of such
definition:
, including, without limitation, the gain arising from the sale of INTERMAT
by SDI
(b) The definition of "Fixed Charges" in Section 1.1 of the
Loan Agreement is amended and restated in its entirety to read as follows:
"FIXED CHARGES" means, for any fiscal period, on a
consolidated basis, the sum of (i) interest expense (whether paid or
accrued) deducted in determining Adjusted Net Earnings from Operations
for such period, (ii) cash taxes for such period (other than the
portion of any cash taxes arising from
SDI's sale of INTERMAT), (iii) cash dividend payments by SDI during
such period, (iv) principal payments on Debt for Borrowed Money
(excluding payments of the Revolving Loans) during such period, and
(v) Capital Expenditures (if positive) during such period to the
extent not financed by Debt for Borrowed Money (provided, that for
purposes of this CLAUSE (V), Revolving Loans shall not be Debt for
Borrowed Money).
(c) The definition of "Stated Termination Date" in Section
1.1 of the Loan Agreement is amended and restated in its entirety to read as
follows:
"STATED TERMINATION DATE" means May 8, 2002.
(d) Section 9.10 of the Loan Agreement is amended by
inserting the following sentence at the end thereof:
Notwithstanding the foregoing, the Borrower may make Distributions and
loans to Affiliates not otherwise permitted by this SECTION 9.10 so
long as the amount of all such Distributions and loans plus the Capital
Expenditures permitted by the last sentence of SECTION 9.23 does not
exceed $30,000,000.
(e) Section 9.23 of the Loan Agreement is amended by
inserting the following sentence at the end thereof:
Notwithstanding the foregoing, the Borrower may make Capital
Expenditures not otherwise permitted by this SECTION 9.23 so long as
the amount of all such Capital Expenditures plus the Distributions and
loans permitted by the last sentence of SECTION 9.10 does not exceed
$30,000,000.
(f) The definition of Availability in Section 1.1 of the Loan
Agreement is amended by deleting the following: "MINUS (C) a reserve in the
amount of $5,000,000 pertaining to the loans made by the Borrower to the Mexican
Subsidiaries;".
(g) That part of the definition of Applicable Margin
appearing before Chart I in Section 1.1 of the Loan Agreement is amended and
restated in its entirety to read as follows:
"APPLICABLE MARGIN" means:
(a) with respect to Base Rate Revolving Loans, (i) (x) at all
times until Availability falls below $25,000,000 on any day and (y) at
any time thereafter that Availability is at least $25,000,000 and has
been at least $25,000,000 at all times during the immediately
preceding period of 30 consecutive days, except, in each case, when a
Default or an Event of Default has occurred and is continuing, 0%, and
(ii) at all other times (including when a Default or Event of Default
has occurred and is continuing), the per annum percentage set forth
below in Chart I in the column entitled "Applicable
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Margin for Base Rate Revolving Loans" opposite the Senior Funded Debt
to EBITDA Ratio for the most recently ended Fiscal Quarter for which
the Agent has received the certificate required under SECTION 7.2(e)
(such that adjustments to such per annum percentage occur on the first
day of the calendar month after the date the Agent receives the
certificate required under SECTION 7.2(e) for a Fiscal Quarter), and
(b) with respect to LIBOR Revolving Loans, (i) (x) at all
times until Availability falls below $25,000,000 on any day and (y) at
any time thereafter that Availability is at least $25,000,000 and has
been at least $25,000,000 at all times during the immediately
preceding period of 30 consecutive days, except, in each case, when a
Default or an Event of Default has occurred and is continuing, 1.5%,
and (ii) at all other times (including when a Default or Event of
Default has occurred and is continuing), the per annum percentage set
forth below in Chart I in the column entitled "Applicable Margin for
LIBOR Revolving Loans" opposite the Senior Funded Debt to EBITDA Ratio
for the most recently ended Fiscal Quarter for which the Agent has
received the certificate required under SECTION 7.2(e) (such that
adjustments to such per annum percentage occur on the first day of the
calendar month after the date the Agent receives the certificate
required under SECTION 7.2(e) for a Fiscal Quarter).
(h) Section 9.24 of the Loan Agreement is amended by
inserting the following at the end thereof:
; provided, the Borrower shall only be required to be in compliance
with this SECTION 9.24 at the times specified below. If Availability
falls below $25,000,000, on any day, compliance with this SECTION 9.24
will then be tested (x) as of the end of the Fiscal Quarter then most
recently ended, and (y) at the end of each succeeding Fiscal Quarter
unless Availability has not fallen below $25,000,000 for a period of
30 consecutive days prior to the end of such quarter.
2. SCOPE. This Amendment No. 1 to First Amended and Restated
Loan and Security Agreement (the "Amendment") shall have the effect of amending
the Loan Agreement and the other Loan Documents as appropriate to express the
agreements contained herein. In all other respects, the Loan Agreement and the
other Loan Documents shall remain in full force and effect in accordance with
their respective terms.
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3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective immediately upon (a) the execution and delivery of this Amendment by
Agent and each Lender, acceptance hereof by the Borrower and the acknowledgment
hereof by each guarantor of the Loan Agreement; and (b) A $75,000 extension and
amendment fee payable to the Agent for the ratable account of the Lenders.
Very truly yours,
BANK OF AMERICA, N.A., as Agent and a Lender
By /s/ Xxxxx X. Xxxxxx
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Title:
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MELLON BANK, as a Lender
By /s/ Xxxxxx X. Xxxxxx
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Title:
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Acknowledged and agreed to this
21ST day of July, 2000.
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INDUSTRIAL SYSTEMS ASSOCIATES, INC.
By: /s/ Xxxx X. Xxxxxx
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Title:
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ACKNOWLEDGMENT
Each of the undersigned as of the date first written above (a)
consents and agrees to the foregoing Amendment No. 1, (b) reaffirms its
obligations under its Guaranty in favor of the Agent and the other Lenders and
under the other Loan Documents to which it is a party, and (c) agrees that each
reference in the Loan Documents to which it is a party to the Loan Agreement
shall be a reference to the Loan Agreement as amended by Amendment No. 1.
Dated: July 21, 2000
STRATEGIC DISTRIBUTION, INC.
By: /s/ XXXX X. XXXXXX
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Title:
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STRATEGIC DISTRIBUTION (CANADA) HOLDINGS, INC.
By: /s/ XXXX X. XXXXXX
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Title:
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STRATEGIC DISTRIBUTION (CANADA)
COMPANY/STRATEGIC (CANADA) DE
COMPAGNIE DISTRIBUTION
By: /s/ XXXX X. XXXXXX
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Title:--------------------------------------
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