SECOND AMENDMENT AGREEMENT
This
SECOND AMENDMENT AGREEMENT (this “Amendment”) is made as of the 13th
day
of
March, 2008 among:
(a) CONCORD
STEEL, INC. (formerly known as SIG Acquisition Corp.), a Delaware corporation
(“Borrower”);
(b) the
Lenders, as defined in the Credit Agreement, as hereinafter defined;
and
(c) LASALLE
BANK NATIONAL ASSOCIATION, as lead arranger and administrative agent for the
Lenders under the Credit Agreement (“Administrative Agent”).
WHEREAS,
Borrower, Administrative Agent and the Lenders are parties to that certain
Credit Agreement, dated as of October 3, 2006, that provides, among other
things, for loans and letters of credit aggregating Thirty-Three Million Dollars
($33,000,000), all upon certain terms and conditions (as amended and as the
same
may from time to time be further amended, restated or otherwise modified, the
“Credit Agreement”);
WHEREAS,
Borrower, Administrative Agent and the Lenders desire to amend the Credit
Agreement to modify certain provisions thereof and add certain provisions
thereto;
WHEREAS,
each capitalized term used herein and defined in the Credit Agreement, but
not
otherwise defined herein, shall have the meaning given such term in the Credit
Agreement; and
WHEREAS,
unless otherwise specifically provided herein, the provisions of the Credit
Agreement revised herein are amended effective as of the date of this
Amendment;
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
and for other valuable consideration, Borrower, Administrative Agent and the
Lenders agree as follows:
1. Retroactive
Amendment to Definitions.
Section
1.1 of the Credit Agreement is hereby retroactively amended, effective as of
December 31, 2007, to delete the definition of “Fixed Charge Coverage Ratio”
therefrom and to insert in place thereof the following:
“Fixed
Charge Coverage Ratio” means, for any Computation Period, the ratio of (a) the
total for such period of Consolidated EBITDA minus, without duplication, the
sum
of (i) Taxes paid in cash by the Parent Entities, (ii) all Consolidated Unfunded
Capital Expenditures, and (iii) tax refunds received in cash during such
period; to (b) the sum for such period of (i) cash Consolidated Interest
Expense, plus (ii) required payments of principal of Consolidated Total Funded
Debt (including the Term Loan but excluding the Revolving Loans); provided
that,
for the calculation of the Fixed Charge Coverage Ratio for the Fiscal Quarters
ending on December 31, 2007, March 31, 2008, June 30, 2008 and September 30,
2008, Two Million Dollars ($2,000,000) of Consolidated Unfunded Capital
Expenditures shall be added back to subpart (a) above.
2. Amendment
to Definitions.
Section
1.1 of the Credit Agreement is hereby amended to delete the definition of
“Applicable Margin” therefrom and to insert in place thereof the
following:
“Applicable
Margin” means, for any day, the rate per annum set forth below opposite the
level (the “Level”) then in effect, it being understood that the Applicable
Margin for (a) LIBOR Loans shall be the percentage set forth under the column
“LIBOR Margin”, (b) Base Rate Loans shall be the percentage set forth under
the column “Base Rate Margin”, (c) the Non-Use Fee Rate shall be the percentage
set forth under the column “Non-Use Fee Rate”, and (d) the L/C Fee Rate shall be
the percentage set forth under the column “L/C Fee Rate”:
|
Level
|
Total
Debt
to
EBITDA Ratio
|
LIBOR
Margin
|
Base
Rate
Margin
|
Non-Use
Fee
Rate
|
L/C
Fee
Rate
|
|||||
|
I
|
Greater
than 3.00 to 1.00
|
3.00%
|
1.50%
|
0.75%
|
3.00%
|
|||||
|
II
|
Greater
than 2.50 to 1.00 but less than or equal to 3.00 to 1.00
|
2.50%
|
1.00%
|
0.50%
|
2.50%
|
|||||
|
III
|
Greater
than 2.00 to 1.00 but less than or equal to 2.50 to 1.00
|
2.00%
|
0.50%
|
0.375%
|
2.00%
|
|||||
|
IV
|
Greater
than 1.50 to 1.00 but less than or equal to 2.00: to 1.00
|
1.75%
|
0.25%
|
0.30%
|
1.75%
|
|||||
|
V
|
Greater
than 1.00 to 1.00 but less than or equal to 1.50 to 1.00
|
1.50%
|
0.00%
|
0.25%
|
1.50%
|
|||||
|
VI
|
Less
than or equal to 1.00 to 1.00
|
1.25%
|
0.00%
|
0.20%
|
1.25%
|
The
LIBOR
Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee Rate shall
be
adjusted, to the extent applicable, on the fifth Business Day after Borrower
provides or is required to provide the annual and quarterly financial statements
and other information pursuant to Section
10.1.1
or
10.1.2,
as
applicable, and the related Compliance Certificate, pursuant to Section
10.1.3.
Notwithstanding anything contained in this paragraph to the contrary, (i) if
Borrower fails to deliver the financial statements and Compliance Certificate
in
accordance with the provisions of Sections
10.1.1,
10.1.2
and
10.1.3,
the
LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee Rate
shall be based upon Level I above, beginning on the date such financial
statements and Compliance Certificate were required to be delivered until the
fifth (5th) Business Day after such financial statements and Compliance
Certificate are actually delivered, whereupon the Applicable Margin shall be
determined by the then current Level; (ii) no reduction to any Applicable Margin
shall become effective at any time when a Default or an Event of Default has
occurred and is continuing; and (iii) the Applicable Margin on the Second
Amendment Effective Date shall be based on Level II until the date on which
the
financial statements and Compliance Certificate are required to be delivered
for
the Fiscal Quarter ending on March 31, 2008.
2
“Loan
Documents” means this Agreement, the Notes, the Letters of Credit, the Master
Letter of Credit Agreement, the L/C Applications, the Agent Fee Letter, the
Subordination Agreement, the Second Amendment Letter Agreement and the
Collateral Documents, and all documents, instruments and agreements delivered
in
connection with the foregoing.
3. Addition
to Definitions.
Section
1.1 of the Credit Agreement is hereby amended to add the following new
definitions thereto:
“Second
Amendment Effective Date” means March 13, 2008.
“Second
Amendment Letter Agreement” means that certain Second Amendment Letter
Agreement, dated as of March 13, 2008, between Borrower and Administrative
Agent, for the benefit of the Lenders.
“Stamford
Real Property” means the real property set forth on Schedule
9.17
hereto
that is located in Stamford, Connecticut.
4. Amendment
to Consolidated Capital Expenditures.
Section
10.2 of the Credit Agreement is hereby amended to delete the last sentence
therefrom and to insert in place thereof the following:
All
such
inspections or audits by Administrative Agent shall be at Borrower’s expense,
provided that, so long as no Default or Event of Default exists, Borrower shall
not be required to reimburse Administrative Agent for inspections or audits
more
frequently than two times during any Fiscal Year.
5. Post-Closing
Amendment
to Schedules to the Credit Agreement.
Upon
the delivery by Borrower of the updated Schedules to the Credit Agreement
pursuant to Section 7(b) hereof, the
Credit Agreement will be amended to delete each of the Schedules listed below
therefrom and to insert in place thereof, respectively, the updated Schedules
delivered pursuant to Section 7(b) hereof:
|
SCHEDULE
1
|
Lenders
and Pro Rata Shares
|
|
SCHEDULE
2
|
Addresses
for Notices
|
|
SCHEDULE
3
|
Guarantors
of Payment
|
|
SCHEDULE
4
|
EBITDA
Add Back
|
|
SCHEDULE
9.6
|
Litigation
and Contingent Liabilities
|
|
SCHEDULE
9.8
|
Subsidiaries
|
|
SCHEDULE
9.16
|
Insurance
|
|
SCHEDULE
9.17
|
Real
Property
|
|
SCHEDULE
9.21
|
Labor
Matters
|
|
SCHEDULE
10.10
|
Deposit
Accounts
|
|
SCHEDULE
11.1
|
Existing
Debt
|
|
SCHEDULE
11.2
|
Existing
Liens
|
|
SCHEDULE
11.10
|
Investments
|
|
SCHEDULE
12.1
|
Debt
to be Repaid
|
3
6. Closing
Items.
Concurrently with the execution of this Amendment, Borrower shall:
(a) deliver
to Administrative Agent an updated incumbency certificate for each Credit
Party;
(b) deliver
to Administrative Agent an executed copy of that certain Consulting Agreement,
dated as of September 22, 2006, between Stamford Industrial Group, Inc. and
Kanders & Company, Inc., together with all amendments thereto;
(c) pay
to
Administrative Agent, for the pro-rata benefit of the Lenders, an amendment
fee
in an amount equal to Forty-One Thousand Two Hundred Fifty Dollars ($41,250);
(d) cause
each Guarantor of Payment to execute the attached Acknowledgment and Agreement;
and
(e) pay
all
legal fees and expenses of Administrative Agent in connection with this
Amendment.
7. Post-Closing
Deliveries.
On
or
before the dates specified below, unless otherwise agreed to by Administrative
Agent in writing, Borrower shall satisfy each of the items specified
below:
(a) No
later
than March 31, 2008, Borrower shall, with respect to each parcel of the Stamford
Real Property, deliver to Administrative Agent (i) a duly
executed Mortgage providing for a fully perfected Lien, in favor of
Administrative Agent, for the benefit of the Lenders, in all right, title and
interest of Parent (and any other Credit Party) in such real property, (ii)
a
loan policy of title insurance, flood zone determinations and such other due
diligence with respect to the Stamford Real Property as Administrative Agent,
in
its sole discretion, may require, each to be in form and substance acceptable
to
Administrative Agent, and (iii) an
opinion of counsel regarding the Stamford Real Property, in form and substance
satisfactory to Administrative Agent;
4
(b) No
later
than March 31, 2008, Borrower shall deliver to Administrative Agent updated
Schedules to the Credit Agreement for each of the Schedules referenced in
Section 5 hereof.
(c)
No
later
than March 31, 2008, Borrower shall deliver to Administrative Agent the
following replacement Schedules to that certain Guaranty and Collateral
Agreement, dated as of October 3, 2006, among the Credit Parties and
Administrative Agent: Schedule
1
(Investment Property), Schedule
4
(Collateral Locations), Schedule
5
(Intellectual Property), Schedule
6
(Depository and Other Deposit Accounts), and Schedule
7
(Commercial Tort Claims).
(d) No
later
than April 15, 2008, Borrower shall deliver to Administrative Agent an annual
budget of the Parent Entities, prepared on a Consolidated and consolidating
basis, for the Fiscal Years ending on December 31, 2008 (prepared on a monthly
basis) and December 31, 2009 (prepared on a quarterly basis), in form and
substance satisfactory to Administrative Agent.
8. Representations
and Warranties.
Borrower hereby represents and warrants to Administrative Agent and the Lenders
that (a) Borrower has the legal power and authority to execute and deliver
this
Amendment; (b) the officers executing this Amendment have been duly
authorized to execute and deliver the same and bind Borrower with respect to
the
provisions hereof; (c) the execution and delivery hereof by Borrower and
the performance and observance by Borrower of the provisions hereof do not
violate or conflict with the organizational agreements of Borrower or any law
applicable to Borrower or result in a breach of any provision of or constitute
a
default under any other agreement, instrument or document binding upon or
enforceable against Borrower; (d) no Default or Event of Default exists under
the Credit Agreement, nor will any occur immediately after the execution and
delivery of this Amendment or by the performance or observance of any provision
hereof; (e) Borrower is not aware of any claim or offset against, or defense
or
counterclaim to, Borrower’s obligations or liabilities under the Credit
Agreement; and (f) this Amendment constitutes a valid and binding
obligation of Borrower in every respect, enforceable in accordance with its
terms.
9. References
to Credit Agreement.
Each
reference that is made in the Credit Agreement or any Related Writing shall
hereafter be construed as a reference to the Credit Agreement as amended hereby.
Except as herein otherwise specifically provided, all terms and provisions
of
the Credit Agreement are confirmed and ratified and shall remain in full force
and effect and be unaffected hereby. This Amendment is a Related
Writing.
10. Waiver.
Borrower, by signing below, hereby waives and releases Administrative Agent
and
the Lenders (and their respective directors, officers, employees, attorneys,
affiliates and subsidiaries) from any and all claims, offsets, defenses and
counterclaims of which Borrower is aware, such waiver and release being with
full knowledge and understanding of the circumstances and effect thereof and
after having consulted legal counsel with respect thereto.
11. Counterparts.
This
Amendment may be executed in any number of counterparts, by different parties
hereto in separate counterparts and by facsimile signature, 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 agreement.
5
12. No
Course of Dealing.
Borrower acknowledges and agrees that this Amendment is not intended, nor shall
it, establish any course of dealing with respect to the various provisions
amended herein, or otherwise, between Borrower, Administrative Agent and Lenders
that is inconsistent with the express terms of the Loan Documents.
13. Headings.
The
headings, captions and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment.
14. Severability.
Any
term or provision of this Amendment held by a court of competent jurisdiction
to
be invalid or unenforceable shall not impair or invalidate the remainder of
this
Amendment and the effect thereof shall be confined to the term or provision
so
held to be invalid or unenforceable.
15. Governing
Law.
The
rights and obligations of all parties hereto shall be governed by the laws
of
the State of New York, without regard to principles of conflicts of
laws.
[Remainder
of page intentionally left blank.]
6
JURY
TRIAL WAIVER.
BORROWER, THE LENDERS AND AGENT, TO THE EXTENT PERMITTED BY LAW, EACH HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, THE LENDERS AND AGENT,
OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL
TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR
ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
IN
WITNESS WHEREOF, the parties have executed and delivered this Amendment as
of
the date first set forth above.
|
CONCORD
STEEL, INC.,
formerly
known as SIG Acquisition Corp.
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
|
|
LASALLE
BANK NATIONAL ASSOCIATION,
as
Administrative Agent, as Issuing Lender, as Swing Line Lender and
as a
Lender
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
|
|
FIRSTMERIT
BANK, N.A.
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
|
|
FIFTH
THIRD BANK
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
|
|
RBS
CITIZENS, NATIONAL ASSOCIATION,
(d/b/a
Charter One Bank)
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
ACKNOWLEDGMENT
AND AGREEMENT
The
undersigned consent and agree to and acknowledge the terms of the foregoing
Second Amendment Agreement dated as of March 13, 2008. The undersigned further
agree that the obligations of the undersigned pursuant to the Guaranty and
Collateral Agreement executed by the undersigned are hereby ratified and shall
remain in full force and effect and be unaffected hereby.
The
undersigned hereby waive and release Administrative Agent and the Lenders and
their respective directors, officers, employees, attorneys, affiliates and
subsidiaries from any and all claims, offsets, defenses and counterclaims of
any
kind or nature, absolute and contingent, of which the undersigned are aware
or
should be aware, such waiver and release being with full knowledge and
understanding of the circumstances and effect thereof and after having consulted
legal counsel with respect thereto.
JURY
TRIAL WAIVER.
THE
UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE
A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR
OTHERWISE, AMONG BORROWERS, AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
|
formerly
known as Net Perceptions, Inc.
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
CONCORD
STEEL, INC.,
formerly
known as SIG Acquisition Corp.
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
|
|
CRC
WILMINGTON ACQUISITION, LLC
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
0000
XXXXX XXXXX XXXXXX, LLC
By:_____________________________________
Name:___________________________________
Title:____________________________________
|
SCHEDULE
1
LENDERS
AND PRO RATA SHARES
|
Lender
|
Revolving
Commitment
Amount
|
Term
Loan
Commitment
|
CAPEX
Commitment
|
Commitment
Percentage
|
Total
Commitment Amount
|
|||||
|
LaSalle
Bank National Association
|
$3,750,000.01
|
$8,625,000.02
|
$0.00
|
37.500000100%
|
$12,375,000.03
|
|||||
|
FirstMerit
Bank, N.A.
|
$2,083,333.33
|
$4,791,666.66
|
$0.00
|
20.833333300%
|
$6,874,999.99
|
|||||
|
Fifth
Third Bank
|
$2,083,333.33
|
$4,791,666.66
|
$0.00
|
20.833333300%
|
$6,874,999.99
|
|||||
|
Charter
One Bank, N.A.
|
$2,083,333.33
|
$4,791,666.66
|
$0.00
|
20.833333300%
|
$6,874,999.99
|
|||||
|
TOTALS
|
$10,000,000.00
|
$23,000,000.00
|
$0.00
|
100.000000000%
|
$33,000,000.00
|
S-1
SCHEDULE
2
ADDRESSES
FOR NOTICES
CONCORD
STEEL, INC..
Xxx
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
Attention:
Secretary and Treasurer
Telephone:
(000)-000-0000
Facsimile:
(000) 000-0000
LASALLE
BANK NATIONAL ASSOCIATION,
as
Administrative Agent, Issuing Lender and a Lender
Notices
of Borrowing , Conversion, Continuation and Letter of Credit
Issuance
000
Xxxxx
XxXxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxx Xxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
Other Notices
000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx,
Xxxx 00000
Attention:
Xxxxx Xxxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
S-2
FIRSTMERIT
BANK, N.A.
Notices
of Borrowing , Conversion, Continuation and Letter of Credit
Issuance
000
Xxxxx
Xxxx Xxxxxx, XXX00
Xxxxx,
Xxxx 00000
Attention:
Xxxxxx Xxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
Other Notices
000
Xxxxx
Xxxx Xxxxxx, XXX00
Xxxxx,
Xxxx 00000
Attention:
Xxxxxx Xxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
FIFTH
THIRD BANK
Notices
of Borrowing , Conversion, Continuation and Letter of Credit
Issuance
0000
Xxxxx & Xxxxx Xx. XX
Xxxxxx,
Xxxx 00000
Attention:
Xxxxxxxxx Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
Other Notices
000
Xxxxx
Xxxx Xxxxxx, XXX00
Xxxxx,
Xxxx 00000
Attention:
Xxxxxx X. Xxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
S-3
RBS
CITIZENS, NATIONAL ASSOCIATION d/b/a Charter One Bank
Notices
of Borrowing , Conversion, Continuation and Letter of Credit
Issuance
525
Xxxxxxx Penn Place, 153-2440
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000
Attention:
Xxxxxx Xxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
Other Notices
0000
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxx 00000
Attention:
Xxxxx Xxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
S-4
SCHEDULE
3
GUARANTORS
OF PAYMENT
Stamford
Industrial Group, Inc. (formerly known as Net Perceptions, Inc.)
CRC
Wilmington Acquisition, LLC
0000
Xxxxx Xxxxx Xxxxxx, LLC
S-5
