NS GROUP, INC. DECEMBER 31, 2003 FORM 10-K EXHIBIT 10.14
AMENDMENT NO. 2 TO FINANCING AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 TO FINANCING AGREEMENT AND SECURITY AGREEMENT (this
"Amendment") is made and entered into as of the 29th day of December, 2003, by
and among THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation ("CIT"),
CIT as agent for the Lenders (the "Agent"), any other party which now or
hereafter becomes a lender hereunder (collectively the "Lenders"), NEWPORT STEEL
CORPORATION, a Kentucky corporation ("Newport" and individually, a "Company"),
and XXXXXX STEEL CORPORATION, a Pennsylvania corporation ("Koppel", and
individually a "Company" and collectively Newport and Xxxxxx, the "Companies").
RECITALS
A. The Companies are the borrowers under that certain Financing
and Security Agreement dated as of March 29, 2002, as amended by an Amendment
No. 1 to Financing and Security Agreement dated as of May 19, 2003 (as amended,
the "Financing Agreement"), among the Lenders, the Agent, and the Companies.
B. The Companies and the Agent desire to amend the Financing
Agreement in the manner set forth below.
NOW, THEREFORE, in consideration of the foregoing Recitals, the
representations, warranties, covenants and agreements set forth in this
Amendment and other good and valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, the Companies, the Agent and the Lenders
hereby agree as follows:
1. INCORPORATION BY REFERENCE.
(A) The foregoing Recitals are incorporated into this Amendment by
reference as if set forth in full in the body of this Amendment.
(B) Capitalized terms used in this Amendment and not expressly
defined herein shall have the meanings given to such terms in the Financing
Agreement.
2. AMENDMENTS TO FINANCING AGREEMENT. Effective upon complete
satisfaction of the conditions set forth in Section 3 below:
2.1 The definition of "Availability" set forth in Section 1 is
amended and restated in its entirety to read as follows:
"AVAILABILITY shall mean the amount by which the Borrowing
Base of the Companies exceeds the sum, without duplication, of (a) the
outstanding aggregate
amount of all Obligations (including, without limitation, all Letter of
Credit Guaranties), plus (b) the un-drawn amount of all Letters of
Credit outstanding for the benefit of the Companies."
2.2 The definition of "Interest Rate Margin" set forth in Section
1 is amended by deleting the table set forth therein and inserting in its place
the following table:
AVERAGE CREDIT EXPOSURE CHASE RATE MARGIN LIBOR MARGIN
-------------------------- ----------------- ------------
$0.00 to $15,000,000 1.00% 2.50%
$15,000,001 to $25,000,000 1.00% 2.50%
$25,000,001 to $40,000,000 1.25% 3.00%
$40,000,001 to $45,000,000 1.75% 3.25%
2.3 The definition of "Inventory Loan Cap" set forth in Section 1
is amended and restated in its entirety to read as follows:
"INVENTORY LOAN CAP shall mean the amount of (a) $35,000,000
from December 31, 2003 through December 31, 2004, and (b) $30,000,000
at all other times."
2.4 A new Section 8.9(A) which reads as follows is inserted
immediately after Section 8.9:
"8.9(A) LINE USAGE FEE. During the period from January 1, 2004
through January 1, 2005, if the outstanding amount of the Revolving
Line of Credit at any time during any month exceeds $30,000,000, there
shall be due and payable a line usage fee of $8,333.00 on the first day
of the immediately following month."
3. CONDITIONS. The terms of Section 2 above shall become
effective only when each of the following conditions have been completely
satisfied as determined by Agent in its sole and absolute discretion:
3.1 AMENDMENT. Agent shall have received a counterpart of this
Amendment executed by the Companies and the Guarantors.
3.2 REPRESENTATIONS AND WARRANTIES; NO DEFAULT. As of the date of
this Amendment, the representations and warranties contained herein and in the
Financing Agreement shall be true and complete in all material respects (both
immediately before and after giving effect to consummation of the transactions
contemplated hereby), and no Default or Event of Default thereunder shall exist.
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4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANIES
AND THE AGENT.
4.1 In order to induce the Agent and the Lenders to enter into
this Amendment, the Companies (where appropriate) jointly and severally
represent and warrant to the Agents and the Lenders that: (a) each of the
Companies has full power, authority and legal right to execute, deliver and
perform this Amendment, and the execution, delivery and performance hereof and
thereof have been duly authorized by all necessary organizational action; (b)
this Amendment has been duly executed and delivered by each of the Companies and
constitutes the legal, valid and binding obligation of the each of the
Companies, enforceable in accordance with its terms; (c) the execution and
delivery of this Amendment by the Companies does not violate any term, provision
or condition of, or constitute a default under, any loan agreement, mortgage,
deed of trust, note, security agreement, pledge agreement, lease or indenture to
which any of the Companies is a party or by which any of the Companies' assets
are bound.
4.2 In addition to the representations and warranties set forth
above, the Companies jointly and severally reaffirm and remake all
representations and warranties made by the Companies in the Financing Agreement,
effective as of the date of this Amendment, and the Companies hereby confirm
that, as of the date hereof, (a) they have no offsets, counterclaims or defenses
to the payment of the Obligations and (b) the Lenders and the Agent have fully
performed their respective obligations under the Financing Agreement and the
other Loan Documents.
4.3 In consideration of the agreements of the Agent and the
Lenders set forth herein, the Companies agree to pay to the Lenders an amendment
fee of $50,000.00. The Agent may charge this amendment fee to the Revolving Loan
Account on the later of (i) January 2, 2004 or (ii) date on which the conditions
set forth in Section 3 of this Amendment are satisfied.
5. REFERENCE TO AND EFFECT OF AMENDMENT; RESERVATION OF THE
AGENTS' AND THE LENDERS' RIGHTS.
5.1 Upon the effectiveness of this Amendment, (i) each reference
in the Financing Agreement to "this Financing Agreement," "hereunder," "hereof,"
"herein," "hereby" or words of like import, shall mean and be a reference to the
Financing Agreement as amended hereby, (ii) each reference to the Financing
Agreement in the Promissory Notes and in any other document, instrument or
agreement executed and/or delivered by the Companies in connection with the
Financing Agreement shall mean and be a reference to the Financing Agreement, as
amended hereby, and (iii) each reference to the Promissory Notes, Guaranties,
Security Agreements, and any other document, instrument or agreement executed
and/or delivered by the Companies or Guarantors in connection with this
Amendment shall mean and be a reference to such Promissory Notes, Guaranties,
Security Agreements or any such other document, instrument or agreement, as
amended in connection with this Amendment.
5.2 Except as expressly provided in this Amendment, the execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of the
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Agent or the Lenders under the Financing Agreement, nor constitute a waiver of
noncompliance with, or a modification of, any term or provision contained
therein.
5.3 Except as expressly modified by this Amendment, all of the
terms and provisions of the Financing Agreement are and shall remain in full
force and effect, and shall apply with such force and effect to this Amendment,
and the Agent and the Lenders hereby expressly reserve all rights, remedies,
powers and privileges contained in the Financing Agreement and in any other
document executed and/or delivered by the Companies pursuant thereto.
6. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF
ILLINOIS.
7. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
COMPANIES:
NEWPORT STEEL CORPORATION, a XXXXXX STEEL CORPORATION, a
Kentucky corporation Pennsylvania corporation
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President & Treasurer Title: Vice President & Treasurer
AGENT AND LENDERS:
THE CIT GROUP/BUSINESS CREDIT,
INC., as Agent and a Lender
By: /s/Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
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The undersigned Guarantors hereby acknowledge the foregoing
amendments to the Financing Agreement, and confirm and agree with the Agent and
the Lenders that the guaranty executed by the undersigned in connection with the
Financing Agreement remains unmodified and in full force and effect
notwithstanding such amendments, and that such guaranty shall continue to apply
and extend to all loans made by the Lenders to the Companies under the Financing
Agreement.
NS GROUP, INC., a Kentucky corporation
By: /s/Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President & Treasurer
Address: 000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
ERLANGER TUBULAR CORPORATION, an
Oklahoma corporation
By: /s/Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President & Treasurer
Address: 000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
NORTHERN KENTUCKY MANAGEMENT, INC.,
a Kentucky corporation
By: /s/Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President & Treasurer
Address: 000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
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