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EXHIBIT 10.20(c)
SECOND MODIFICATION AGREEMENT
BY THIS SECOND MODIFICATION AGREEMENT (the "Agreement"), made and entered
into as of the 28th day of March, 2000, XXXXX FARGO BANK, NATIONAL ASSOCIATION,
a national banking association, whose address is 000 Xxxx Xxxxxxxxxx, Xxxxxxx,
Xxxxxxx 00000 (hereinafter called "Lender"), and XXXXXX STEEL COMPANY, a
Delaware corporation, whose address is 000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx
00000 (hereinafter called "Borrower"), in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby confirm and agree as
follows:
SECTION 1. RECITALS.
1.1 Borrower and Lender, as Lender, Arranger, Administrative Agent, Issuing
Bank and Swing Line Lender, entered into a Credit Agreement dated June 30, 1998
(the "Credit Agreement"), which provided for, among other things, (a) a
revolving line of credit (the "RLC") in the amount of $25,000,000.00, evidenced
by a Revolving Promissory Note dated June 30, 1998, executed by the Borrower
(the "RLC Note"), and (b) a revolving line of credit (the "Swing Line" and with
the RLC, the "Loans") in the amount of $5,000,000.00, evidenced by a Revolving
Promissory Line dated June 30, 1998, executed by the Company (the "Swing Line
Note" and with the RLC Note the "Notes"), all upon the terms and conditions
contained therein. The Credit Agreement was subsequently amended by that
Modification Agreement dated as of March 10, 1999 (the "Modification"). All
undefined capitalized terms used herein shall have the meaning given them in the
Credit Agreement. The Credit Agreement, the Notes and all other agreements,
documents and instruments relating to the Loans, as modified by the
Modification, are referred to as the Loan Documents.
1.2 Borrower and Lender desire to modify the Loan Documents as set forth
herein.
SECTION 2. LOAN AGREEMENT.
2.1 Section 6.11 of the Credit Agreement is hereby amended to read as
follows:
6.11 Financial Covenants. Permit the following, (collectively, the
"Financial Covenants"):
(a) Its Leverage Ratio at the end of the applicable Fiscal
Quarter to exceed the following:
Leverage
Fiscal Quarter Ending Ratio
--------------------- -----
December 31, 1999 4.25 to 1.0
March 31, 2000 4.25 to 1.0
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Leverage
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2000 4.00 to 1.0
September 30, 2000 4.00 to 1.0
December 31, 2000 and
thereafter 3.75 to 1.0
(b) Its Interest Coverage Ratio at the end of the applicable
Fiscal Quarter for the prior twelve-month period to be less than the
following:
Interest Coverage
Fiscal Quarter Ending Ratio
--------------------- ------------------
December 31, 1999 2.00 to 1.0
March 31, 2000 2.00 to 1.0
June 30, 2000 and thereafter 2.25 to 1.0
(c) Its Fixed Charge Coverage Ratio, as hereinafter adjusted, at
the end of the applicable Fiscal Quarter for the prior twelve-month
period to be less than the following:
Fixed Charge
Fiscal Quarter Ending Coverage Ratio
--------------------- --------------
December 31, 1999 1.00 to 1.0
March 31, 2000 1.00 to 1.0
June 30, 2000 and thereafter 1.25 to 1.0
(d) Its EBITDA at the end of any Fiscal Quarter to be less than
$25,000,000.00 for the prior twelve-month period. For this purpose,
EBITDA will be calculated on a pro-forma basis to include all entities
acquired;
where in the calculation of Fixed Charge Coverage Ratio, actual
capital expenditures are to be reduced by expenditures associated with
the Xxxxxx Xxxx plant, which include $1,875,000 for the fiscal quarter
ending September 30, 1999, $2,410,000 for the fiscal quarter ending
December 31, 1999 and future actual amounts, not to exceed $1,500,000
in any Fiscal Quarter.
2.2 Schedule 3.1 of the Credit Agreement is hereby amended to read as
attached hereto.
2.3 Exhibit B of the Credit Agreement is hereby amended to read as attached
hereto.
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SECTION 3. OTHER MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.
3.1 All references to the Credit Agreement in the Loan Documents are hereby
amended to refer to the Credit Agreement as hereby amended.
3.2 Borrower acknowledges that the indebtedness evidenced by the Notes is
just and owing, that the balance thereof is correctly shown in the records of
Lender as of the date hereof, and Borrower agrees to pay the indebtedness
evidenced by the Notes according to the terms thereof, as herein modified.
3.3 Borrower hereby reaffirms to Lender each of the representations,
warranties, covenants and agreements of Borrower set forth in the Notes and the
Credit Agreement, with the same force and effect as if each were separately
stated herein and made as of the date hereof.
3.4 Borrower hereby ratifies, reaffirms, acknowledges, and agrees that the
Notes and the Credit Agreement, represent valid, enforceable and collectible
obligations of Borrower, and that there are no existing claims, defenses,
personal or otherwise, or rights of setoff whatsoever with respect to any of
these documents or instruments. In addition, Borrower hereby expressly waives,
releases and absolutely and forever discharges Lender and its present and former
shareholders, directors, officers, employees and agents, and their separate and
respective heirs, personal representatives, successors and assigns, from any and
all liabilities, claims, demands, damages, action and causes of action, of which
Borrower has, or may reasonably be expected to have knowledge, that Borrower may
now have, or has had prior to the date hereof, or that may hereafter arise with
respect to acts, omissions or events occurring prior to the date hereof and,
without limiting the generality of the foregoing, from any and all liabilities,
claims, demands, damages, actions and causes of action, known or unknown,
contingent or matured, arising out of, or in any way connected with, the Loans.
Borrower further acknowledges and represents that no event has occurred and no
condition exists that, after notice or lapse of time, or both, would constitute
default under this Agreement, the Notes or the Credit Agreement.
3.5 All terms, conditions and provisions of the Notes and the Credit
Agreement are continued in full force and effect and shall remain unaffected and
unchanged except as specifically amended hereby. The Notes and the Credit
Agreement, as amended hereby, are hereby ratified and reaffirmed by Borrower,
and Borrower specifically acknowledges the validity and enforceability thereof.
SECTION 4. GENERAL.
4.1 This Agreement in no way acts as a release or relinquishment of those
rights securing payment of the Loans. Such rights are hereby ratified,
confirmed, renewed and extended by Borrower in all respects.
4.2 The modifications contained herein shall not be binding upon Lender
until Lender shall have received all of the following:
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(a) An original of this Agreement fully executed by the Borrower.
(b) An original Consent and Agreement of Guarantors executed by each
Guarantor.
(c) Such resolutions or authorizations and such other documents as
Lender may require relating to the existence and good standing of the
Borrower and each Subsidiary and the authority of any person executing this
Agreement or other documents on behalf of the Borrower and each Subsidiary.
4.3 Borrower shall execute and deliver such additional documents and do as
Lender may reasonably require to fully implement the intent of this Agreement.
4.4 Borrower shall pay all costs and expenses, including, but not limited
to, reasonable attorneys' fees incurred by Lender in connection herewith,
whether or not all of the conditions described in Paragraph 4.2 above are
satisfied. Lender, at its option, but without any obligation to do so, may
advance funds to pay any such costs and expenses that are the obligation of the
Borrower, and all such funds advanced shall bear interest at the highest rate
provided in the RLC Note and shall be due and payable upon demand.
4.5 Notwithstanding anything to the contrary contained herein or in any
other instrument executed by Borrower or Lender, or in any other action or
conduct undertaken by Borrower or Lender on or before the date hereof, the
agreements, covenants and provisions contained herein shall constitute the only
evidence of Lender's consent to modify the terms and provisions of the Credit
Agreement. Accordingly, no express or implied consent to any further
modifications involving any of the matters set forth in this Agreement or
otherwise shall be inferred or implied by Lender's execution of this Agreement.
Further, Lender's execution of this Agreement shall not constitute a waiver
(either express or implied) of the requirement that any further modification of
the Loans or of the Notes or the Credit Agreement, shall require the express
written approval of Lender; no such approval (either express or implied) has
been given as of the date hereof.
4.6 Time is hereby declared to be of the essence hereof of the Loans, of
the Notes and of the Credit Agreement, and Lender requires, and Borrower agrees
to, strict performance of each and every covenant, condition, provision and
agreement hereof, of the Notes and the Credit Agreement.
4.7 This Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their heirs, personal representatives, successors and
assigns.
4.8 This Agreement is made for the sole protection and benefit of the
parties hereto, and no other person or entity shall have any right of action
hereon.
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4.9 This Agreement shall be governed by and construed according to the laws
of the State of Arizona.
IN WITNESS WHEREOF, these presents are executed as of the date indicated
above.
XXXXXX STEEL COMPANY, a Delaware
corporation
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
-----------------------------
Its: Vice President and CFO
-------------------------------
COMPANY
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, a national banking association
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
-----------------------
Its: Vice President
------------------------------
LENDER
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SCHEDULE 3.1
PRICING GRID
Eurodollar Rate
Leverage Ratio Spread Base Rate Spread Facility Fee Rate
-------------- ------ ---------------- -----------------
4.00 or higher 3.50% 1.50% .625%
3.75 or higher 3.25% 1.25% .500%
3.50 or higher 3.00% 1.00% .500%
3.00 or higher 2.50% .50% .375%
below 3.0 2.25% 0% .250%
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EXHIBIT "B"
COMPLIANCE CERTIFICATE
FOR FISCAL QUARTER/YEAR ENDING
__________________, 20__
Xxxxx Fargo Bank, National Association
000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx Date:_________________
#4101-251
Dear Ladies and Gentlemen:
This Compliance Certificate refers to the Credit Agreement dated as of June
30, 1998 (as it may hereafter be amended, modified, extended or restated from
time to time, the "Credit Agreement"), among XXXXXX STEEL COMPANY, a Delaware
corporation ("Borrower"), the Lenders named therein, and XXXXX FARGO BANK,
NATIONAL ASSOCIATION, as Administrative Agent for the Lenders and as Arranger,
Issuing Bank and Swing Line Lender. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
Pursuant to Section 7.1 of the Credit Agreement, the undersigned certifies
that:
1. Enclosed are the required financial statements for the [fiscal quarter]
[fiscal year] ending ____________ ("Reporting Period") for Borrower as required
under Section 7.1 of the Credit Agreement.
2. To the best of the undersigned's knowledge, no "Event of Default" or
"Default" has occurred [or if so, specifying the nature and extent thereof and
any corrective actions taken or to be taken].
3. As of the last day of the Reporting Period, the computations below were
true and correct:
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I. SECTION 6.11(a) LEVERAGE RATIO
Numerator: Net Funded Debt A
------------------
Divided by
Denominator: EBITDA B
------------------
Ratio: Equals (A/B): X
------------------
Maximum Permitted: Leverage
Fiscal Quarter Ending Ratio
--------------------- --------
December 31, 1999 4.25 to 1.0
March 31, 2000 4.25 to 1.0
June 30, 2000 4.00 to 1.0
September 30, 2000 4.00 to 1.0
December 31, 2000 and
thereafter 3.75 to 1.0
II. SECTION 6.11(b) INTEREST COVERAGE RATIO
Numerator: EBITDA A
-------------------
Divided by
Denominator: Interest Expense B
-------------------
Ratio: Equals (A/B): X
-------------------
Minimum Permitted: Interest Coverage
Fiscal Quarter Ending Ratio
--------------------- ------------------
December 31, 1999 2.00 to 1.0
March 31, 2000 2.00 to 1.0
June 30, 2000 and
thereafter 2.25 to 1.0
III. SECTION 6.11(c) FIXED CHARGE COVERAGE RATIO
Numerator: EBITDA
------------------
- Capital Expenditures(1)
------------------
- Taxes Paid
------------------
Equals: A
------------------
----------
(1) Actual capital expenditures are to be reduced by expenditures associated
with the Xxxxxx Xxxx plant, which include $1,875,000 for the fiscal quarter
ending September 30, 1999, $2,410,000 for the fiscal quarter ending December 31,
1999 and future actual amounts, not to exceed $1,500,000 in any Fiscal Quarter.
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Divided by
Denominator: Scheduled Principal Payments
------------------
+ Interest Payments
------------------
+ Lease Payments
------------------
Equals: B
------------------
Ratio: Equals (A/B): X
------------------
Minimum Permitted: Fixed Charge
Fiscal Quarter Ending Coverage Ratio
--------------------- --------------
December 3 1, 1999 1.00 to 1.0
March 31, 2000 1.00 to 1.0
June 30, 2000 and thereafter 1.25 to 1.0
IV. SECTION 6.11(d) EBITDA (prior twelve months)
Minimum Permitted $ 25,000,000
------------------
Actual
------------------
XXXXXX STEEL COMPANY, a Delaware
corporation
By:_________________________________________
Name:_______________________________________
Its:__________________________________________
Senior Officer
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CONSENT AND AGREEMENT OF GUARANTORS
Each of the undersigned Guarantors executed a Continuing Guaranty dated as
of March 10, 1999 as described in the Cred - it Agreement dated as of June 30,
1998 between XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, and XXXXXX STEEL COMPANY, a Delaware corporation. Each of the
undersigned Guarantors hereby consents and agrees to, the modifications and all
other matters contained in the foregoing Second Modification Agreement of even
date herewith.
XXXXXXXXX STEEL INC., a California
corporation
By: /s/ Xxx Xxxxxx
--------------------------------------
Name: Xxx Xxxxxx
--------------------------------------
Its: President
--------------------------------------
ADDISON STEEL, INC., a Florida corporation
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
--------------------------------------
Its: President
--------------------------------------
ADDISON STRUCTURAL SERVICES, INC., a
Florida corporation
By: /s/ Xxx Xxxxxxx
--------------------------------------
Name: Xxx Xxxxxxx
--------------------------------------
Its: Secretary - Treasurer
--------------------------------------
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QUINCY JOIST COMPANY, a Florida corporation
By: /s/ Xxx Xxxxxxx
--------------------------------------
Name: Xxx Xxxxxxx
--------------------------------------
Its: President
--------------------------------------
SIX INDUSTRIES, INC., a Texas corporation
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
--------------------------------------
Its: President
--------------------------------------
Dated as of March 28, 2000
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