AMENDMENT NO. 8
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 7, 1994
THIS AMENDMENT NO. 8 dated as of November 14, 1996 (this
"Amendment") is entered into among BANKAMERICA BUSINESS CREDIT, INC., a
Delaware corporation ("BABC"), THE BANK OF NEW YORK COMMERCIAL CORPORATION, a
New York corporation ("BNYCC"), (BABC and BNYCC being hereinafter referred to
collectively as the "Majority Lenders"), BANKAMERICA BUSINESS CREDIT, INC., a
Delaware corporation, as agent for the "Lenders" (as defined below)(in such
capacity as agent, the "Agent"), LACLEDE STEEL COMPANY, a Delaware corporation
(the "Parent"), LACLEDE CHAIN MANUFACTURING COMPANY, a Delaware corporation
("Laclede Chain"), and LACLEDE MID AMERICA INC., an Indiana corporation
("Laclede Mid America") (the Parent, Laclede Chain and Laclede Mid America
being sometimes hereinafter referred to collectively as the "Borrowers" and
each of the Parent, Laclede Chain and Laclede Mid America being sometimes
hereinafter referred to individually as a "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrowers, the Majority Lenders, The Boatmen's
National Bank of St. Louis, a national banking association ("Boatmen's)(the
Majority Lenders and Boatmen's and their successors and assigns being
hereinafter referred to collectively as the "Lenders") and the Agent are
parties to a certain Loan and Security Agreement dated as of September 7, 1994
(the "Loan Agreement"); and
WHEREAS, the Loan Agreement was amended by (a) Amendment Xx. 0
xxxxx xx xx Xxxxxxxx 00, 0000, (x) Amendment No. 2 dated as of May 10, 1995,
(c) Amendment Xx. 0 xxxxx xx xx Xxxx 0, 0000, (x) Amendment No. 4 dated as of
December 7, 1995, (e) Amendment No. 5 dated as of January 26, 1996, (f)
Amendment No. 6 dated as of June 26, 1996, and (g) Amendment No. 7 dated as of
July 30, 1996 (the Loan Agreement, as so amended, being hereinafter referred to
as the "Amended Loan Agreement," capitalized terms used herein without
definition having the meanings given such terms in the Amended Loan Agreement);
and
WHEREAS, the Borrowers, the Majority Lenders and the Agent
have agreed to amend the Amended Loan Agreement on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers, the Majority
Lenders and the Agent hereby agree as follows:
Section 1. Amendment of the Amended Loan Agreement.
Effective as of November 14, 1996, subject to the fulfillment of the conditions
precedent set forth in Section 3 below, the Amended Loan Agreement is amended
as follows:
(a) The definition of "Redeemable Preferred Stock" contained
in Section 1.1 is amended and restated as follows:
"Redeemable Preferred Stock" means the Parent's six
percent (6.0%) redeemable preferred capital stock, no par
value per share, 416,667 shares of which were issued on August
1, 1996, and which was recapitalized on October 28, 1996.
(b) Section 3.1(c) is amended to delete the last two sentences
thereof, with any interest rate reduction that might have become available to
any Borrower pursuant thereto being unavailable for any period prior to or on
or after the date of this Amendment.
(c) Section 5.10(b) is amended and restated as follows:
(b) Each Borrower will conduct a physical count of its
Inventory constituting pipe not less frequently than once
every four (4) months, and shall promptly supply the Agent, in
sufficient copies for distribution by the Agent to each
Lender, with a copy of such count accompanied by a report of
the value of such inventory (valued at the lower of cost or
market value). Each Borrower will maintain such perpetual
inventory reporting systems as are in place on the Closing
Date.
(d) The second and third sentences of Section 8.10(a) are
amended and restated as follows:
In addition to the foregoing, the Parent may declare and pay
dividends on the Convertible Preferred Stock to the extent
dividends would have been permitted to be paid under that
certain Indenture of Trust dated as of October 1, 1976,
between the City of Alton, Illinois, and St. Louis Union Trust
Company, as Trustee, as in effect on July 30, 1996, with
respect to the Pollution Control Bonds. Nothing contained in
this Section 8.10 or elsewhere in this Agreement shall be
construed to permit the redemption by the Parent of any of the
Redeemable Preferred Stock or Convertible Preferred Stock
during the term of this Agreement.
(e) Section 8.24 is amended to delete "1.00 to 1.00"
appearing in the table contained therein and to substitute "No required ratio"
therefor.
(f) Section 8.25 is amended to delete (1) "minus (c) the
aggregate amount of redemptions of the Redeemable Preferred Stock made in
accordance with Section 8.10(a)" and to substitute "minus (c) for the quarter
ending December 31, 1996 only, the amount of the one-time noncash charge, not
to exceed $3,500,000, as a result of the pension benefit effect of the early
retirement during 1996 of certain of the Parent's union employees employed at
the Parent's Xxxxx steel mill plant located in Alton, Illinois", (2) the amount
"$27,000,000" appearing opposite the date "12/31/96" and to substitute the
amount "$23,000,000" therefor, and (3) "minus (c) the aggregate amount of
redemptions of the Redeemable Preferred Stock made in accordance with Section
8.10(a)," and to reletter clause (d) as clause (c).
(g) Section 8.28 is amended and restated as follows:
8.28 Consolidated Pretax Loss Amount. The Borrowers
shall not permit the Consolidated Pretax Loss, calculated as
of the last day of each period specified below, to exceed for
the period indicated the amount indicated opposite such
period:
Period Amount
01/01/96 - 03/31/96 ($ 4,300,000)
01/01/96 - 06/30/96 ($ 9,000,000)
01/01/96 - 09/30/96 ($12,000,000)
01/01/96 - 12/31/96 ($18,500,000)
For purposes of this Section 8.28, Consolidated Pretax Loss
shall be calculated without regard to the amount of the one-time
noncash charge, not to exceed $3,500,000, as a result of
the pension benefit effect of the early retirement during 1996
of certain of the Parent's union employees employed at the
Parent's Xxxxx steel mill plant located in Alton, Illinois.
(h) Section 10.1(t) is amended and restated as follows:
(t) The Recapitalization shall not have been
consummated on or prior to June 30, 1997, or any of the
Redeemable Preferred Stock shall be redeemed.
Section 2. Waiver. The Agent and the Majority Lenders hereby
waive the Events of Default that have arisen as a result of (a) the Borrowers'
failure to maintain a Consolidated Adjusted Net Worth, determined as of
September 30, 1996, of not less than (i) $6,250,000 (the aggregate amount of
the proceeds received from the sale of the Redeemable Preferred Stock) plus
$26,300,000; (b) the Borrowers' Consolidated Pretax Loss exceeding
($12,000,000) for the period commencing on January 1, 1996 and ending on
September 30, 1996; and (c) the Borrowers' failure to distribute the proxy
statement in connection with the Recapitalization to the Parent's shareholders
on or prior to September 30, 1996.
Section 3. Conditions to Amendment. This Amendment shall
become effective upon the satisfaction of the following conditions precedent:
(a) The Agent shall have received, in immediately available
funds, for the ratable account of the Lenders, an accommodation fee in
the amount of $150,000, which accommodation fee shall be fully earned
on the date on which this Amendment shall become effective.
(b) The Agent shall have received six counterparts of this
Amendment, executed by each Borrower and each of the Majority Lenders,
and the Agent shall have executed this Amendment.
Section 4. Representations and Warranties. Each Borrower
hereby represents and warrants that (i) this Amendment constitutes a legal,
valid and binding obligation of such Borrower, enforceable against such
Borrower in accordance with its terms, (ii) the representations and warranties
contained in the Amended Loan Agreement are correct in all material respects as
though made on and as of the date of this Amendment, and (iii) no Event of
Default has occurred and is continuing.
Section 5. Reference to and Effect on the Amended Loan
Agreement.
(a) Upon the effectiveness of this Amendment, each
reference in the Amended Loan Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import shall mean and be a reference to
the Amended Loan Agreement, as amended hereby, and each reference to the
Amended Loan Agreement in any other document, instrument or agreement executed
and/or delivered in connection with the Amended Loan Agreement shall mean and
be a reference to the Amended Loan Agreement, as amended hereby.
(b) Except as specifically amended above, the Amended Loan
Agreement and all other documents, instruments and agreements executed and/or
delivered in connection therewith shall remain in full force and effect and are
hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Agent or the Lenders under the Amended Loan Agreement, nor constitute a waiver
of any provision of the Amended Loan Agreement, except as specifically set
forth herein.
Section 6. 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.
Section 7. Governing Law. This Amendment shall be governed
by and construed in accordance with the internal laws (as opposed to the
conflicts of laws provisions) of the State of Illinois.
Section 8. Legal Fees. The Borrowers agree to pay to the
Agent, for its benefit, on demand, all costs and expenses that the Agent pays
or incurs in connection with the negotiation, preparation, consummation,
administration, enforcement and termination of this Amendment, including,
without limitation, the allocated costs of the Agent's in-house counsel fees.
Section 9. Section Titles. The section titles contained in
this Amendment are and shall be without substance, meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of November 14, 1996.
LACLEDE STEEL COMPANY
By:________________________________
Vice President
LACLEDE CHAIN MANUFACTURING COMPANY
By:________________________________
Vice President
LACLEDE MID AMERICA INC.
By:________________________________
Vice President
BANKAMERICA BUSINESS CREDIT, INC., as the Agent
By:________________________________
Vice President
BANKAMERICA BUSINESS CREDIT,
INC., as a Lender and one of
the Majority Lenders
By:________________________________
Vice President
THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as a
Lender and one of the
Majority Lenders
By:________________________________
Vice President
