Exhibit 4.5
AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
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AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT (this "Amendment No.
4"), dated as of May 20, 2005, by and among Handy & Xxxxxx, a New York
corporation ("H&H"), OMG, Inc., formerly known as Olympic Manufacturing Group,
Inc., a Delaware corporation ("OMG"), Continental Industries, Inc., an Oklahoma
corporation ("Continental"), Maryland Specialty Wire, Inc., a Delaware
corporation ("Maryland Wire"), Handy & Xxxxxx Tube Company, Inc., a Delaware
corporation ("H&H Tube"), Camdel Metals Corporation, a Delaware corporation
("Camdel"), Xxxxxxxx Metal Coating Corporation, a Delaware corporation
("Canfield"), Micro-Tube Fabricators, Inc., a Delaware corporation
("Micro-Tube"), Indiana Tube Corporation, a Delaware corporation ("Indiana
Tube"), Xxxxx-Xxxxxxxx, Inc., a Wisconsin corporation ("Xxxxx"), Handy & Xxxxxx
Electronic Materials Corporation, a Florida corporation ("H&H Electronic"),
Sumco Inc., an Indiana corporation ("Sumco" and together with H&H, OMG,
Continental, Maryland Wire, H&H Tube, Camdel, Xxxxxxxx, Micro-Tube, Indiana
Tube, Xxxxx and H&H Electronic, each individually, a "Borrower" and
collectively, "Borrowers"), Handy & Xxxxxx of Canada, Limited, an Ontario
corporation ("H&H Canada"), ele Corporation, a California corporation ("ele"),
Alloy Ring Service Inc., a Delaware corporation ("Alloy"), Xxxxxx Radiator
Corporation, a Texas corporation ("Xxxxxx"), H&H Productions, Inc., a Delaware
corporation ("H&H Productions"), Handy & Xxxxxx Automotive Group, Inc., a
Delaware corporation ("H&H Auto"), Handy & Xxxxxx International, Ltd., a
Delaware corporation ("H&H International"), Handy & Xxxxxx Peru, Inc., a
Delaware corporation ("H&H Peru"), KJ-VMI Realty, Inc., a Delaware corporation
("KVR"), Xxx-Xxxx Realty, Inc., a Delaware corporation ("Xxx-Xxxx"), Platina
Laboratories, Inc., a Delaware corporation ("Platina"), Sheffield Street
Corporation, a Connecticut corporation ("Sheffield"), SWM, Inc., a Delaware
corporation ("SWM") and Willing B Wire Corporation, a Delaware corporation
("Willing" and together with each of H&H Canada, ele, Alloy, Xxxxxx, H&H
Productions, H&H Auto, H&H International, H&H Peru, KVR, Xxx-Xxxx, Platina,
Sheffield and SWM, each individually, a "Guarantor" and collectively,
"Guarantors"), Wachovia Bank, National Association, a national banking
association, successor by merger to Congress Financial Corporation, in its
capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting
for the financial institutions party thereto as lenders (in such capacity,
together with its successors and assigns, "Agent") and the financial
institutions party thereto as lenders (collectively, "Lenders").
W I T N E S S E T H:
- - - - - - - - - --
WHEREAS, Agent, Lenders, Borrowers and Guarantors have entered into
financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders)
have made and may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Loan and Security Agreement,
dated as of March 31, 2004, by and among Agent, Lenders, Borrowers and
Guarantors (as amended by Consent and Amendment No. 1 to Loan and Security
Agreement, dated as of August 31, 2004, Amendment No. 2 to Loan and Security
Agreement, dated as of October 29, 2004 and Amendment No. 3 to Loan and Security
Agreement, dated as of December 29, 2004, and as the same may hereafter be
further amended, modified, supplemented, extended, renewed, restated or
replaced, the "Loan Agreement"), and the other agreements, documents and
instruments referred to therein or at any time executed and/or delivered in
connection therewith or related thereto (all of the foregoing, together with the
Loan Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the "Financing Agreements");
WHEREAS, Borrowers and Guarantors have requested that Agent and
Lenders agree to certain amendments to the Loan Agreement and the other
Financing Agreements, and Agent and Lenders are willing to agree to such
amendments, subject to the terms and conditions contained herein; and
WHEREAS, by this Amendment Xx. 0, Xxxxxxxxx, Xxxxxxxxxx, Agent and
Lenders desire and intend to evidence such consents and amendments;
NOW THEREFORE, in consideration of the foregoing, and the respective
agreements and covenants contained herein, the parties hereto agree as follows:
1. AMENDMENTS TO DEFINITIONS.
(a) All references to the term "Olympic" in the Loan Agreement
and in any of the other Financing Agreements are hereby deleted and replaced
with "OMG".
(b) All references to the term "Olympic Expansion Project" in the
Loan Agreement and in any of the other Financing Agreements are hereby deleted
and replaced with "OMG Expansion Project".
(c) The definition of "Applicable Margin" in Section 1.8 of the
Loan Agreement is hereby amended by deleting such definition and replacing it
with the following:
"1.8 'Applicable Margin' shall mean, at any
time, as to the Interest Rate for Prime Rate Loans
and the Interest Rate for Eurodollar Rate Loans,
the applicable percentage (on a per annum basis)
set forth below if the Quarterly Average Excess
Availability for the immediately preceding fiscal
quarter is at or within the amounts indicated for
such percentage:
Applicable Prime Applicable Eurodollar
Rate Margin Rate Margin
----------- -----------
Equipment Equipment
Revolving Purchase Revolving Term Purchase
Excess Availability Loans Term Loans Term Loans Loans Loans Term Loans
------------------- ----- ---------- ---------- ----- ----- ----------
(a) $12,500,000 or more 0% .25% .25% 1.75% 2.00% 2.00%
(b) Equal to or greater .25% .50% .50% 2.00% 2.25% 2.25%
than $10,000,000 but
less than $12,500,000
(c) Less than $10,000,000 .50% .75% .75% 2.25% 2.50% 2.50%
2
PROVIDED, THAT, the Applicable Margin shall be
calculated and established once each fiscal
quarter (commencing with the fiscal quarter
beginning January 1, 2005)."
(d) The definition of "Commitment" in Section 1.24 of the Loan
Agreement is hereby amended by deleting such definition and replacing it with
the following:
"1.24 'Commitment' shall mean, at any time,
as to each Lender, the principal amount set forth
opposite such Lender's name on Schedule 1 hereto
or on Schedule 1 to the Assignment and Acceptance
pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of
Section 13.7 hereof, as the same may be adjusted
from time to time in accordance with the terms
hereof; sometimes being collectively referred to
herein as "Commitments".
(e) The definition of "EBITDA" in Section 1.32 of the Loan
Agreement is hereby amended by deleting such definition and replacing it with
the following:
"1.32 "EBITDA" shall mean, as to any Person,
with respect to any period, an amount equal to:
(a) the Consolidated Net Income of such Person for
such period, plus (b) depreciation and
amortization for such period (to the extent
deducted in the computation of Consolidated Net
Income of such Person), all in accordance with
GAAP, plus (c) Interest Expense for such period
(to the extent deducted in the computation of
Consolidated net Income of such Person), plus (d)
the Provision for Taxes for such period (to the
extent deducted in the computation of Consolidated
Net Income of such Person), plus (e) the net loss
attributed to the operations of Maryland Wire for
each of the periods and in the respective amounts
listed in Schedule 1.32-A hereto, plus (f) the
charge attributed to the Fairfield facility for
the period and in the amount listed in Schedule
1.32-B; provided, that, EBITDA of the Parent and
its Subsidiaries, on a consolidated basis, for the
fiscal quarters ending March 31, June 30,
September 30 and December 31, 2003 shall equal the
applicable amounts set forth on Schedule 1.32
corresponding to such period."
(f) The definition of "Excess Availability" in Section 1.46 of
the Loan Agreement is hereby amended by deleting "the Term Loans" and replacing
it with "the Term Loans or the Equipment Purchase Term Loans".
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(g) The definition of "Fixed Charges" in Section 1.57 of the
Loan Agreement is hereby amended by deleting such definition and replacing it
with the following:
"1.57 'Fixed Charges' shall mean, as to any
Person and its Subsidiaries with respect to any
period, the sum of, without duplication, (i) all
cash Interest Expense, provided that any annual
fees paid to the Tranche B Term Loan Lenders or
Tranche B Term Loan Agent will be considered to be
a cash Interest Expense when such amounts are
recognized as an expense in the income statement
of any Borrower or Guarantor, (ii) all regularly
scheduled (as determined at the beginning of the
respective period) principal payments of
Indebtedness for borrowed money (including,
without limitation, all regularly scheduled
payments of principal in respect of the Term Loans
and the Equipment Purchase Term Loans) and
Indebtedness with respect to Capitalized Leases
(and without duplicating amounts in item (i) of
this definition, the interest component with
respect to Indebtedness under Capitalized Leases),
but excluding all payments in kind or non-cash
payments of interest on account of Indebtedness
under the WHX Subordinated Note, (iii) all cash
income taxes (including, without limitation,
payments made pursuant to Section 9.12(b)(iii)),
(iv) cash dividends, repurchases or redemptions
paid by such Person and its Subsidiaries (other
than to such Person or such Person's Subsidiaries)
in respect of Capital Stock, (v) management fees
paid in cash (in each case as to such Person and
its Subsidiaries) and (vi) all cash payments for
pension expenses paid by such Person and its
Subsidiaries during such period to the extent such
payments are not deducted from the determination
of Consolidated Net Income, including but not
limited to payments for pension expenses to WHX."
(h) The definition of "Interest Rate" in Section 1.69 of the
Loan Agreement is hereby amended by deleting clauses (a) and (b) of such
definition and replacing it with the following:
"(a) Subject to clauses (b) and (c) of this
definition below:
(i) as to Revolving Loans which are
Prime Rate Loans, a rate equal to one-half of one
(.50%) percent per annum in excess of the Prime
Rate,
(ii) as to Revolving Loans which are
Eurodollar Rate Loans, a rate equal to two and
one-quarter (2.25%) percent per annum in excess of
the Adjusted Eurodollar Rate (in each case, based
on the Eurodollar Rate applicable for the Interest
Period selected by a Borrower, or by
Administrative Borrower on behalf of such
4
Borrower, as in effect three (3) Business Days
after the date of receipt by Agent of the request
of or on behalf of such Borrower for such
Eurodollar Rate Loans in accordance with the terms
hereof, whether such rate is higher or lower than
any rate previously quoted to any Borrower or
Guarantor).
(iii) as to Term Loans or Equipment
Purchase Term Loans which are Prime Rate Loans, a
rate equal to three-quarters of one (.75%) percent
per annum in excess of the Prime Rate, and
(iv) as to Term Loans or Equipment
Purchase Term Loans which are Eurodollar Rate
Loans, a rate equal to two and one-half (2.50%)
percent per annum in excess of the Adjusted
Eurodollar Rate (in each case, based on the
Eurodollar Rate applicable for the Interest Period
selected by a Borrower, or by Administrative
Borrower on behalf of such Borrower, as in effect
three (3) Business Days after the date of receipt
by Agent of the request of or on behalf of such
Borrower for such Eurodollar Rate Loans in
accordance with the terms hereof, whether such
rate is higher or lower than any rate previously
quoted to any Borrower or Guarantor).
(b) Subject to clause (c) of this
definition below, effective as of the first (1st)
day of the second (2nd) month of each fiscal
quarter (commencing with the fiscal quarter
beginning on or about January 1, 2005), the
Interest Rate payable by Borrowers with respect to
Loans shall be increased or decreased, as the case
may be, (i) as to Revolving Loans which are Prime
Rate Loans, to the rate equal to the Applicable
Margin on a per annum basis in excess of the Prime
Rate, (ii) as to Revolving Loans which are
Eurodollar Rate Loans, to the rate equal to the
Applicable Margin on a per annum basis in excess
of the Adjusted Eurodollar Rate, (iii) as to Term
Loans or Equipment Purchase Term Loans which are
Prime Rate Loans, to the Rate equal to the
Applicable Margin on a per annum basis in excess
of the Prime Rate and (iv) as to Term Loans or
Equipment Purchase Term Loans which are Eurodollar
Rate Loans, to the rate equal to the Applicable
Margin on a per annum basis in excess of the
Adjusted Eurodollar Rate."
(i) The definition of "Loans" in Section 1.79 of the Loan
Agreement is hereby amended by deleting such definition and replacing it with
the following:
"1.79 'Loans' shall mean, collectively,
the Revolving Loans, the Term Loans and the
Equipment Purchase Term Loans."
5
(j) The definition of "Maximum Credit" in Section 1.82 of the
Loan Agreement is hereby amended by deleting such definition and replacing it
with the following:
"1.82 'Maximum Credit' shall mean the
amount of $85,050,000; provided, that, effective
upon the Initial Equipment Purchase Term Loan
Request Date the Maximum Credit shall,
automatically and without any further action, be
increased to $88,050,000."
2. ADDITIONAL DEFINITIONS. As used herein, the following terms shall
have the following meanings given to them below, and the Loan Agreement and the
other Financing Agreements are hereby amended to include, in addition and not in
limitation, the following:
(a) "Amendment No. 4" shall mean Amendment No. 4 to Loan and
Security Agreement by and among Borrowers, Guarantors, Agent and the Lenders, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(b) "Amendment No. 4 Effective Date" shall mean the first date
on which all of the conditions precedent to the effectiveness of Amendment No. 4
shall have been satisfied or waived.
(c) "Eligible New Equipment" shall mean all new Equipment owned
by OMG which is acquired with the proceeds of the Equipment Purchase term Loans
in connection with the OMG Expansion Project and is in good order, repair,
running and marketable condition, and acceptable to Agent in good faith. In
general, Eligible New Equipment shall not include: (i) Equipment located at or
purchased by OMG and contracted for delivery to premises other than the Real
Property in Agawam, Massachusetts owned and controlled by OMG; (ii) Equipment
subject to a security interest or lien in favor of any person other than Agent,
except those permitted in this Agreement that are subject to an intercreditor
agreement in form and substance satisfactory to Agent between the holder of such
security interest or lien and Agent; (iii) Equipment which is not located in the
United States of America; (iv) Equipment which is not subject to the first
priority, valid and perfected security interest of Agent; (v) worn-out,
obsolete, damaged or defective Equipment or Equipment not used or usable in the
ordinary course of OMG's business as presently conducted; (vi) computer
hardware; or (vii) Equipment that is or becomes a fixture to any Real Property
unless such Real Property is located in Agawam, Massachusetts and is encumbered
by the Mortgage made by OMG. The criteria for Eligible New Equipment set forth
above may only be changed and any new criteria for Eligible New Equipment be
only be revised by Agent from time to time in good faith based on either (A) an
event, condition or other circumstance arising after the Amendment No. 4
Effective Date, or (B) an event, condition or other circumstance existing on the
Amendment No. 4 Effective Date to the extent Agent has no written notice thereof
from OMG prior to the Amendment No. 4 Effective Date, in either case under
clause (A) or (B) which adversely affects or could reasonably be expected to
adversely affect the Equipment in the good faith determination of Agent. Any
Equipment which is not Eligible New Equipment shall nevertheless be part of the
Collateral.
(d) "Equipment Purchase Term Loan Request" shall have the
meaning specified in Section 2.3(A)(d)(i) hereof.
6
(e) "Equipment Purchase Term Loans" shall mean, collectively,
the equipment purchase term loans made by or on behalf of Lenders to OMG as
provided for in Section 2.3A hereof; each sometimes being referred to herein
individually as an "Equipment Purchase Term Loan".
(f) "Equipment Purchase Term Note" shall mean the promissory
note made by OMG in favor of Agent for the benefit of Lenders in connection with
the Equipment Purchase Term Loans made pursuant to Section 2.3A hereof, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(g) "Hard Costs" shall mean, with respect to the purchase by OMG
of an item of Eligible New Equipment, the net cash amount actually paid to
acquire title to such item, net of all incentives, trade-in allowances,
discounts and rebates, and exclusive of freight, delivery charges, installation
costs and charges, software costs, charges and fees, warranty costs, taxes,
insurance and other incidental costs or expenses and all indirect costs or
expenses of any kind.
(h) "Initial Equipment Purchase Term Loan Request Date" shall
mean the date on which Agent receives the initial Equipment Purchase Term Loan
Request from OMG.
(i) "OMG" shall mean OMG, Inc., formerly known as Olympic
Manufacturing Group, Inc., a Delaware corporation, and its successors and
assigns.
3. EQUIPMENT PURCHASE TERM LOANS. Section 2 of the Loan Agreement is
hereby amended by adding the following immediately after Section 2.3:
"2.3A Equipment Purchase Term Loans.
(a) Subject to and upon the terms and conditions
contained herein, each Lender shall fund its Pro Rata
Share of the Equipment Purchase Term Loans to OMG,
from time to time on or prior to December 31, 2005, at
the request of OMG, in an aggregate principal amount
of up to eighty (80%) percent of the Hard Costs of
Eligible New Equipment to be purchased by OMG with the
proceeds of such Equipment Purchase Term Loans. Each
Equipment Purchase Term Loan shall be in an amount of
not less than $500,000 (and in integral multiples of
$100,000 greater than such amount). All of the
proceeds of each Equipment Purchase Term Loan shall be
used solely for the payment of the purchase price of
the Eligible New Equipment specified in the notice
required to be delivered to Agent pursuant to Section
2.3A(d)(i) below.
(b) The outstanding aggregate principal amount
of the Equipment Purchase Term Loans shall not exceed,
at any time, the lower of (i) the aggregate amount of
the above percentage of the Hard Costs of all Eligible
New Equipment purchased by OMG pursuant hereto or (ii)
$3,000,000. If at any time the outstanding aggregate
principal amount of all Equipment Purchase Term Loans
7
shall exceed eighty (80%) percent of the Hard Costs of
all Eligible New Equipment purchased by OMG with the
proceeds of Equipment Purchase Term Loans, OMG shall
remain liable therefor, and Agent may, at its option,
create a Reserve against amounts otherwise available
to OMG pursuant to the formulas set forth in Section
2.1 of this Agreement, in an amount equal to the
entire amount of such excess(es) or OMG shall, upon
the demand by Agent, which may be made at any time and
from time to time, repay to Agent, for the benefit of
Lenders the entire amount of such excess(es).
(c) Each Equipment Purchase Term Loan shall be
(i) evidenced by the Equipment Purchase Term Note
executed and delivered by OMG to Agent, (ii) repaid,
together with interest and other amounts payable
thereunder, in accordance with the provisions of the
Equipment Purchase Term Note, this Agreement and the
other Financing Agreements, and (iii) secured by all
of the Collateral.
(d) In addition to the other conditions
precedent to any Loan or Letter of Credit
Accommodation set forth in this Agreement, the making
of each Equipment Purchase Term Loan shall be subject
to the satisfaction of each of the following
additional conditions precedent as determined by
Agent:
(i) Agent shall have received from OMG not
less than ten (10) Business Days prior written notice
of the proposed Equipment Purchase Term Loan (each, an
"Equipment Purchase Term Loan Request"), which notice
shall specify the following: (A) the proposed date and
amount of the Equipment Purchase Term Loan, (B) a list
and description of the Eligible New Equipment (by
model, make, manufacturer, serial number and/or such
other identifying information as may be requested by
Agent), (C) the Hard Costs and the total purchase
price for the Eligible New Equipment to be purchased
with the proceeds of such Equipment Purchase Term Loan
(and the terms of payment of such purchase price), and
(D) such other information and documents as Agent may
from time to time request with respect thereto;
(ii) upon OMG acquiring any rights in the
Equipment, Agent shall have a valid and perfected
first priority security interest in and lien upon the
Eligible New Equipment to be purchased with the
proceeds of the Equipment Purchase Term Loan, and the
Eligible New Equipment shall be free and clear of all
other liens, security interests, claims or other
encumbrances (except for liens permitted by this
Agreement that are subject to an intercreditor
agreement in form and substance satisfactory to Agent
8
between the holder of such lien and Agent), and OMG
shall have delivered to Agent such evidence thereof,
as Agent may from time to time require;
(iii) the amount of each Equipment Purchase
Term Loan shall not exceed (80%) percent of the Hard
Costs of the Eligible New Equipment to be purchased by
OMG with the proceeds of such Equipment Purchase Term
Loan;
(iv) Agent shall have received copies, or
upon Agent's request, originals, of all agreements,
documents and instruments relating to the sale of the
Eligible New Equipment to OMG, including, without
limitation, any purchase orders, invoices, bills of
sale or similar documents, each in form and substance
satisfactory to Agent;
(v) no Default or Event of Default shall
exist or have occurred and be continuing; and
(vi) the aggregate principal amount of all
Equipment Purchase Term Loans made by Lenders shall
not exceed $3,000,000.
(e) In addition to all other terms, conditions,
covenants and provisions set forth herein and in the
other Financing Agreements, on or prior to July 31,
2005, Agent shall have received evidence satisfactory
to Agent that all of the Eligible New Equipment has
been installed by OMG and is in good working order and
operating for its intended purpose.
(f) The principal amount of each Equipment
Purchase Term Loan shall be payable (subject to
earlier payment as provided herein or in such
Equipment Purchase Term Note) in sixty (60) equal,
consecutive monthly installments of principal, each in
an amount calculated in accordance with clause (f)
below, commencing on the first day of the second month
after the date of the making of such Equipment
Purchase Term Loan, together with interest and other
amounts as provided herein and in the Equipment
Purchase Term Note with respect thereto.
(g) The amount of each monthly installment of
principal in respect of each Equipment Purchase Term
Loan (other than the last installment which shall be
in an amount equal to the entire unpaid balance of the
Equipment Purchase Term Note) shall equal: (i) the
original principal amount of such Equipment Purchase
Term Loan divided by (ii) one-sixtieth (1/60)."
9
4. MANDATORY PREPAYMENTS. Section 2.4 of the Loan Agreement is
hereby amended as follows:
(a) Section 2.4(a)(i) of the Loan Agreement is hereby amended by
deleting "and third" and replacing it with ", third, to the outstanding
principal amount of the Equipment Purchase Term Loans, and fourth";
(b) Section 2.4(a)(ii) of the Loan Agreement is hereby amended
by deleting "and second" and replacing it with ", second, to the outstanding
principal amount of the Equipment Purchase Term Loans, and third";
(c) Section 2.4(b) of the Loan Agreement is hereby amended by
deleting "and second" and replacing it with ", second, to the outstanding
principal amount of the Equipment Purchase Term Loans, and third";
(d) Section 2.4(c)(i) of the Loan Agreement is hereby amended by
deleting "and third" and replacing it with "third, to the outstanding principal
amount of the Equipment Purchase Term Loans, and fourth";
(e) Section 2.4(c)(ii) of the Loan Agreement is hereby amended
by deleting "and second" and replacing it with ", second, to the outstanding
principal amount of the Equipment Purchase Term Loans, and third";
(f) Section 2.4(c)(iii) of the Loan Agreement is hereby amended
by deleting such Section and replacing it with the following:
"(iii) if such sale or disposition is of
any Specified Properties, then fifty (50%) percent of
such Net Cash Proceeds shall be applied to the
outstanding principal amount of the Term Loans or the
Equipment Purchase Term Loans (as Agent may elect) and
fifty (50%) percent of such Net Cash Proceeds shall be
applied to the outstanding principal amount of the
Tranche B Term Loan until the aggregate amount of such
Net Cash Proceeds so applied equals $2,000,000, and
thereafter any such additional Net Cash Proceeds shall
be applied, first, to the outstanding principal amount
of the Tranche B Loan, second, to the outstanding
principal amount of the Term Loans, third to the
outstanding principal amount of the Equipment Purchase
Term Loans, and fourth, to the outstanding principal
amount of the Revolving Loans."; and
(g) Section 2.4(d) of the Loan Agreement is hereby amended by
deleting "the Term Loans" from each place it appears and replacing it with "the
Term Loans, the Equipment Purchase Term Loans".
5. INTEREST. Section 3.1(b)(v)(A) of the Loan Agreement is hereby
amended by deleting "the Term Loans" and replacing it with "the Term Loans and
the Equipment Purchase Term Loans".
10
6. EQUIPMENT PURCHASE TERM LOAN FEE. Section 3.2 of the Loan
Agreement is hereby amended by adding the following at the end of such Section:
"(c) On the date of the initial Equipment
Purchase Term Loan, Borrowers shall pay to Agent, for
the account of Lenders, a facility fee in the amount
of $25,000, which will be fully earned, due and
payable on the date of the initial Equipment Purchase
Term Loan and which may be charged directly to any
loan account of Borrowers maintained by Agent."
7. AMENDMENTS TO FINANCIAL COVENANTS.
(a) Section 9.17(a) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
"(a) EBITDA. Parent and its Subsidiaries shall
not permit EBITDA of Parent and its Subsidiaries, on a
consolidated basis, for the four (4) consecutive
fiscal quarters ending on the last day of the fiscal
quarter set forth below to be less than the applicable
amount set forth below:
FISCAL QUARTER END MINIMUM EBITDA
------------------ --------------
March 31, 2004 $25,784,000
June 30, 2004 $25,874,000
September 30, 2004 $27,658,000
December 31, 2004 $30,202,000
March 31, 2005 $27,000,000
June 30, 2005 $27,000,000
September 30, 2005 $30,000,000
December 31, 2005 $35,000,000
March 31, 2006 $36,000,000
June 30, 2006 $37,000,000
September 30, 2006 $38,000,000
December 31, 2006 and each $39,000,000"
fiscal quarter ending thereafter
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(b) Section 9.17(b) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
"(b) FIXED CHARGE COVERAGE RATIO. Parent and its
Subsidiaries shall not permit the Fixed Charge
Coverage Ratio for the applicable period set forth
below to be less than the ratio set forth opposite
such period:
MINIMUM FIXED
FISCAL QUARTER END CHARGE COVERAGE RATIO
------------------ ---------------------
For the 3 months ending June 30, 2004 0.75 to 1
For the 6 months ending September 30, 2004 0.90 to 1
For the 9 months ending December 31, 2004 0.75 to 1
For the 3 months ending March 31, 2005 0.10 to 1
For the 6 months ending June 30, 2005 0.75 to 1
For the 9 months ending September 30, 2005 1 to 1
For the 12 months ending December 31, 2005 1 to 1
For the four (4) consecutive fiscal quarters
ending on the last day of each fiscal quarter 1 to 1"
thereafter
(c) Section 9.17(c) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
"(c) MAXIMUM CAPITAL EXPENDITURES. Parent and it
Subsidiaries shall not, directly or indirectly, make
or commit to make (whether through purchase, capital
lease or otherwise) Capital Expenditures for the
applicable period set forth below to be in excess of
the applicable amount set forth opposite such period:
MAXIMUM
PERIOD CAPITAL EXPENDITURES
------ --------------------
Fiscal year ending December 31, 2004 $16,000,000
For the 3 months ending March 31, 2005 $ 5,700,000
For the 6 months ending June 30, 2005 $10,700,000
For the 9 months ending September 30, 2005 $15,700,000
For the 12 months ending December 31, 2005 $18,500,000"
and for each 12 months ending on the last day
of each fiscal quarter thereafter
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(d) Section 9.17(d) of the Loan Agreement is hereby amended by
deleting such Section and replacing it with the following:
"(d) LEVERAGE RATIO. Parent and its Subsidiaries
shall not permit the Leverage Ratio of the Parent and
its Subsidiaries, on a consolidated basis, as of the
last day of the fiscal quarter set forth below to be
greater than the applicable ratio set forth below:
MAXIMUM
FISCAL QUARTER END LEVERAGE RATIO
------------------ --------------
June 30, 2004 4.30 to 1
September 30, 2004 4.20 to 1
December 31, 2004 4.20 to 1
March 31, 2005 5.25 to 1
June 30, 2005 5.25 to 1
September 30, 2005 4.75 to 1
December 31, 2005 4.00 to 1
March 31, 2006 4.00 to 1
June 30, 2006 4.00 to 1
September 30, 2006 4.00 to 1
December 31, 2006 and each fiscal 4.00 to 1"
quarter ending thereafter
8. TERM. Section 13.1(d) of the Loan Agreement is hereby amended by
deleting "the Term Loans" from the last sentence of such Section and replacing
it with "the Term Loans and/or the Equipment Purchase Term Loans".
13
9. SCHEDULES TO LOAN AGREEMENT. The Loan Agreement is hereby amended
by adding new Schedules 1, 1.32-A and 1.32-B to the Loan Agreement, each in the
respective forms thereof as set forth on Exhibit A attached to this Amendment
No. 4.
10. AMENDMENT FEE. In addition to all other fees, charges, interest
and expenses payable by any Borrower or Guarantor to Agent or Lenders under the
Loan Agreement and the other Financing Agreements, Borrowers and Guarantors
shall pay to Agent for the account of Lenders (in such manner as Agent may
agree), contemporaneously with the effectiveness of this Amendment No. 4, an
amendment fee in the amount of $125,000, which fee shall be fully earned and
nonrefundable as of the date hereof and may be charged to any loan account of
Borrowers.
11. REPRESENTATIONS, WARRANTIES AND COVENANTS. Each Borrower and
Guarantor hereby represents, warrants and covenants to Agent and Lenders the
following (which shall survive the execution and delivery of this Amendment No.
4), the truth and accuracy of which are a continuing condition of the making of
Loans and providing Letter of Credit Accommodations to Borrowers:
(a) This Amendment No. 4 and each other agreement or instrument
to be executed and delivered by Borrowers and Guarantors in connection herewith
(collectively, together with this Amendment No. 4, the "Amendment Documents")
have been duly authorized, executed and delivered by all necessary action on the
part of each of the Borrowers and Guarantors which is a party hereto and thereto
and, if necessary, their respective stockholders and is in full force and effect
as of the date hereof, as the case may be, and the agreements and obligations of
each of the Borrowers and Guarantors, as the case may be, contained herein and
therein constitute the legal, valid and binding obligations of each of the
Borrowers and Guarantors, enforceable against them in accordance with their
terms, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
(b) The execution, delivery and performance of this Amendment
No. 4 (a) are all within each Borrower's and Guarantor's corporate or limited
liability company powers and (b) are not in contravention of law or the terms of
any Borrower's or Guarantor's certificate or articles of incorporation, by laws,
or other organizational documentation, or any indenture, agreement or
undertaking to which any Borrower or Guarantor is a party or by which any
Borrower or Guarantor or its property are bound.
(c) No Default or Event of Default exists or has occurred and is
continuing.
(d) The Tranche B Amendment (as defined below) has been executed
and delivered by all parties thereto and is in full force and effect.
(e) All of the representations and warranties set forth in the
Loan Agreement and the other Financing Agreements, each as amended hereby, are
true and correct in all material respects on and as of the date hereof, as if
made on the date hereof, except to the extent any such representation or
warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct as of such date.
14
12. CONDITIONS PRECEDENT. The provisions contained herein shall only
be effective upon the satisfaction of each of the following conditions precedent
in a manner satisfactory to Agent:
(a) Agent shall have received this Amendment No. 4, duly
authorized, executed and delivered by Borrowers, Guarantors and Required
Lenders;
(b) Agent shall have received the initial Equipment Purchase
Term Note, in form and substance satisfactory to Agent, duly authorized,
executed and delivered by OMG;
(c) Agent shall have received, in form and substance
satisfactory to Agent, a Secretary's Certificate from each Borrower and
Guarantor with respect to, among other things, the resolutions of the Board of
Directors of such Borrower and Guarantor evidencing the adoption and subsistence
of resolutions approving the execution, delivery and performance by such
Borrower and Guarantor of this Amendment No. 4 and the other Amendment
Documents;
(d) Agent shall have received (i) an amendment to the Tranche B
Term Loan Agreement (the "Tranche B Amendment"), in form and substance
satisfactory to Agent, duly authorized, executed and delivered by each of the
parties thereto, which Tranche B Amendment shall be in full force and effect,
and (ii) an amendment to the Intercreditor Agreement (the "Intercreditor
Amendment"), in form and substance satisfactory to Agent, duly authorized,
executed and delivered by Tranche B Term Loan Agent and acknowledged by
Borrowers and Guarantors, which Intercreditor Amendment shall be in full force
and effect;
(e) Agent shall have received a true and correct copy of any
consent, waiver or approval to or of this Amendment No. 4 or any other Amendment
Documents which any Borrower or Guarantor is required to obtain from any other
Person, and such consent, waiver or approval shall in form and substance
satisfactory to Agent; and
(f) no Default or Event of Default shall exist or have occurred
and be continuing.
13. MORTGAGES. Solely for purposes of construing the Mortgages and
the Obligations secured thereby, the parties hereto agree that (a) the Equipment
Purchase Term Loans shall be deemed to be "Term Loans" and (b) the Equipment
Purchase Term Loans and all Obligations relating thereto shall be secured by the
Mortgages and the liens created thereby.
14. EFFECT OF THIS AGREEMENT. Except as expressly amended pursuant
hereto, no other changes or modifications to the Financing Agreements are
intended or implied, and, in all other respects, the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof. To the extent that any provision of the Loan
Agreement or any of the other Financing Agreements are inconsistent with the
provisions of this Amendment No. 4, the provisions of this Amendment No. 4 shall
control.
15
15. FURTHER ASSURANCES. Borrowers and Guarantors shall execute and
deliver such additional documents and take such additional action as may be
requested by Agent to effectuate the provisions and purposes of this Amendment
No. 4.
16. GOVERNING LAW. The validity, interpretation and enforcement of
this Agreement and the other Financing Agreements (except as otherwise provided
therein) and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of New York but excluding any principles of conflicts
of law or other rule of law that would cause the application of the law of any
jurisdiction other than the laws of the State of New York.
17. BINDING EFFECT. This Amendment No. 4 shall be binding upon and
inure to the benefit of each of the parties hereto and their respective
successors and assigns.
18. HEADINGS. The headings listed herein are for convenience only
and do not constitute matters to be construed in interpreting this Amendment No.
4.
19. COUNTERPARTS. This Amendment No. 4 may be executed in any number
of counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Amendment No. 4 by telefacsimile shall have the same force
and effect as the delivery of an original executed counterpart of this Amendment
No. 4. Any party delivering an executed counterpart of this Amendment No. 4 by
telefacsimile shall also deliver an original executed counterpart, but the
failure to do so shall not affect the validity, enforceability or binding effect
of such agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 4 to be executed on the day and year first above written.
AGENT BORROWERS
----- ---------
WACHOVIA BANK, NATIONAL
ASSOCIATION, successor by merger to
Congress Financial Corporation, as Agent HANDY & XXXXXX
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxx
----------------------------------- -------------------------
Title: Vice President Title: Vice President and CFO
OMG, INC., formerly known as
Olympic Manufacturing Group,
Inc.
By: /s/ Xxxxxx Xxxxx
---------------------------
LENDERS Title: Vice President and Treasurer
-------
WACHOVIA BANK, NATIONAL
ASSOCIATION, successor by merger to
Congress Financial Corporation CONTINENTAL INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxx
----------------------------------- -------------------------
Title: Vice President Title: Vice President and Treasurer
TEXTRON FINANCIAL CORPORATION MARYLAND SPECIALTY WIRE, INC.
By: /s/ Xxxx Kalliomoa By: /s/ Xxxxxx Xxxxx
----------------------------------- -------------------------
Title: Senior Account Executive Title: Vice President and Treasurer
BANK OF AMERICA, N.A. HANDY & XXXXXX TUBE COMPANY,
INC.
By: /s/ Xxx Xxxxxx By: /s/ Xxxxxx Xxxxx
----------------------------------- -------------------------
Title: SVP Title: Vice President and Treasurer
[SIGNATURE PAGES CONTINUE ON NEXT PAGE]
[SIGNATURE PAGES CONTINUED FROM PREVIOUS PAGE]
CAMDEL METALS CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
XXXXXXXX METAL COATING
CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Title: Secretary
MICRO-TUBE FABRICATORS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
INDIANA TUBE CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
XXXXX-XXXXXXXX, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
HANDY & XXXXXX ELECTRONIC
MATERIALS CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
SUMCO INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
[SIGNATURE PAGES CONTINUE ON NEXT PAGE]
[SIGNATURE PAGES CONTINUED FROM PREVIOUS PAGE]
GUARANTORS
----------
HANDY & XXXXXX OF CANADA,
LIMITED
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
ELE CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
ALLOY RING SERVICE INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
XXXXXX RADIATOR CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
H&H PRODUCTIONS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
HANDY & XXXXXX AUTOMOTIVE
GROUP, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
HANDY & XXXXXX INTERNATIONAL,
LTD.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
[SIGNATURE PAGES CONTINUE ON NEXT PAGE]
[SIGNATURE PAGES CONTINUED FROM PREVIOUS PAGE]
HANDY & XXXXXX PERU, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
KJ-VMI REALTY, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
XXX-XXXX REALTY, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
PLATINA LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
SHEFFIELD STREET CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
SWM, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
WILLING B WIRE CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Title: Vice President and Treasurer
Exhibit A to
Amendment No. 4
Schedule 1
COMMITMENTS
-----------
A. COMMITMENTS PRIOR TO THE INITIAL EQUIPMENT PURCHASE TERM LOAN REQUEST DATE
Lender Commitment
Wachovia Bank, National Association $46,147,586
Textron Financial Corporation $15,828,621
Bank of America, N.A. $23,073,793
Total.................................$85,050,000
B. COMMITMENTS EFFECTIVE UPON THE INITIAL EQUIPMENT PURCHASE TERM LOAN REQUEST
DATE
Lender Commitment
Wachovia Bank, National Association $47,775,367
Textron Financial Corporation $16,386,950
Bank of America, N.A. $23,887,683
Total.................................$88,050,000
Schedule 1.32-A
Net Loss Attributed to Maryland Specialty Wire, Inc. for the quarters ended:
March 31, 2004 $ 0
June 30, 2004 $ 1,303,000
September 30, 2004 $ 1,901,000
December 31, 2004 $ 5,293,000
March 31, 2005 $ 3,638,000
June 30, 2005 $ 750,000
-----------
Total $12,885,000
Schedule 1.32-B
Charge Attributed to Fairfield Facility for December 31, 2004: $3,523,000
