Contract
Exhibit
4.8
AMENDMENT
NO. 2 TO LOAN
AND SECURITY AGREEMENT
This
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
dated
as of March 23, 2007 is by and among Keystone Consolidated Industries,
Inc., a Delaware corporation (“Keystone”), Keystone Wire Products Inc., a
Delaware corporation (“KWP”), Engineered Wire Products, Inc., an Ohio
corporation (“EWP”), Keystone-Calumet, Inc., a Delaware corporation (“KCI”),
F V Steel and Wire Company, a Wisconsin corporation (“F V Steel” and,
together with Keystone, KWP, EWP and KCI each individually a “Borrower” and
collectively, “Borrowers”), Keystone Energy Resources, LLC, a Delaware limited
liability company (“KER”), the parties hereto as lenders (each individually, a
“Lender” and collectively, “Lenders” as hereinafter further defined) and
Wachovia Capital Finance Corporation (Central), an Illinois corporation,
in its
capacity as agent for Lenders (in such capacity, “Agent”). Capitalized terms
used and not otherwise defined herein shall have the meanings assigned
to them
in the Loan Agreement (defined below).
R
E C I T
A L S:
WHEREAS,
Borrowers (other than KCI), the Agent and the Lenders have entered into
that
certain Loan and Security Agreement dated as of August 31, 2005 (as
amended, the “Loan
Agreement”);
WHEREAS,
Keystone has formed KCI, a wholly-owned subsidiary of Keystone, to (a)
acquire
substantially all of the operating assets of Calumetals, Inc. and MZG Associates
II, LLC (collectively, the “Seller”) including real and personal property (the
“Acquisition”) and (b) become a Borrower under the Loan Agreement;
WHEREAS,
in connection with the Acquisition, Borrowers have requested that Agent
and
Lenders agree to certain amendments to the Loan Agreement as set forth
herein;
and
WHEREAS,
Agent and Lenders have agreed to such amendments upon the terms and conditions
contained herein.
NOW,
THEREFORE, in consideration of the premises contained herein, and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section
1 Amendments
to the Loan Agreement.
Immediately upon the satisfaction of each of the conditions precedent set
forth
in Section
3
below,
the Loan Agreement is hereby amended as follows:
(a) Section
1
of the
Loan Agreement is hereby amended by amending and restating clause (e) of
the
definition of “Borrowers” and adding a new clause (f) thereto, to read as
follows:
“(e)
Keystone-Calumet,
Inc., a Delaware corporation; and (f) any other Person that at any time
after
the date hereof becomes a Borrower with the prior written consent of Agent
and
the Required Lenders; each sometimes being referred to herein individually
as a
“Borrower”.
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(b) Section
1
of the
Loan Agreement is hereby amended by deleting the amount of “$35,000,000” set
forth in the definition of “Inventory Loan Limit” and replacing it with the
amount of “$45,000,000”.
(c) Section
1
of the
Loan Agreement is hereby amended by deleting the amount of “$80,000,000” set
forth in the definition of “Maximum Credit” and replacing it with the amount of
“$100,000,000”.
(d) Section
1
of the
Loan Agreement is hereby amended by deleting the amount of “$80,000,000” set
forth in the definition of “Revolving Loan Limit” and replacing it with the
amount of “$100,000,000”.
(e) Section
2.1(b)
of the
Loan Agreement is hereby amended by deleting reference to the amount of
“$35,000,000” set forth in clause (v) of Section 2.1(b)
and
replacing it with the amount of “$45,000,000”.
(f) Section
2.3(a)
of the
Loan Agreement is hereby amended by adding the following new sentence to
the end
thereof to read as follows:
“As
of
March 23, 2007, certain Lenders severally (and not jointly) agree to make
an
additional Term A Loan to KCI in an amount equal to its Pro Rata Share
of the
aggregate original principal amount of $2,890,524.”
(g) Section
2.3(b)
of the
Loan Agreement is hereby amended by adding the following new sentence to
the end
thereof to read as follows:
“As
of
March 23, 2007, certain Lenders severally (and not jointly) agree to make
an
additional Term B Loan to KCI in an amount equal to its Pro Rata Share of
the aggregate original principal amount of $1,152,000.”
(h) Section
2.3(e)
of the
Loan Agreement is hereby amended and restated to read as follows:
“(e)
The
principal amount of each Term A Loan (other than the Term A Loan made on
March
23, 2007) shall be repaid in sixty (60) consecutive equal monthly installments
(or earlier as provided herein) payable on the first day of each month
commencing on October 1, 2005, each in an amount sufficient (assuming a
like
repayment each month) to reduce each Term A Loan (other than the Term A
Loan
made on March 23, 2007) to zero ($0) by the first day of September, 2010.
The
principal amount of each Term B Loan (other than the Term B Loan made on
March
23, 2007) shall be repaid in eighty-four (84) consecutive equal monthly
installments (or earlier as provided herein) payable on the first day of
each
month commencing on the first day of the month immediately following the
date on
which such Term B Loan was made, each in an amount sufficient (assuming a
like repayment each month) to reduce each Term B Loan (other than the Term
B
Loan made on March 23, 2007) to zero ($0) on the eighty-fourth (84th)
installment. The principal amount of each Term C Loan shall be repaid in
sixty
(60) consecutive equal monthly installments (or earlier as provided herein)
payable on the first day of each month commencing on the first day of the
month
immediately following the date of which such Term C Loan was made, each
in an
amount sufficient (assuming a like repayment each month) to reduce such
Term C
Loan to zero ($0) on the sixtieth (60th)
installment. The principal amount of the Term A Loan made on March 23,
2007
shall be repaid in sixty (60) consecutive equal monthly installments (or
earlier
as provided herein) payable on the first day of each month commencing on
April
1, 2007, in an amount equal to $48,175. The principal amount of the Term
B Loan
made on March 23, 2007 shall be repaid in eight-four (84) consecutive equal
monthly installments (or earlier as provided herein) payable on the first
day of
each month commencing on April 1, 2007, in an amount equal to $13,714.
Notwithstanding the foregoing or anything in this Agreement to the contrary,
all
Term Loans shall be due and payable on the earlier of (i) the Renewal Date,
(ii)
if declared due and payable pursuant to Section 10.2 hereof or (iii) the
date
the Commitment to make Revolving Loans is terminated.”
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(i) Section
3.2(a)
of the
Loan Agreement is hereby amended by deleting reference to the amount of
“$80,000,000” set forth therein and replacing it with the amount of
“$100,000,000”.
(j) Section
9.9(e)
of the
Loan Agreement is hereby amended by deleting reference to the amount of
“$1,000,000” set forth in clause (v) thereof and replacing it with the
amount of “$1,100,000”.
(k) KCI
hereby agrees that on and after the date hereof, KCI shall be a Borrower
under
the Loan Agreement and the Fee Letter. KCI hereby assumes, and agrees to
perform, for the benefit of Lenders and Agents, all of the Obligations
of a
Borrower under the Loan Agreement and the Fee Letter, including, without
limitation, its Obligations with respect to the Loans and Letter of Credit
Obligations and its Obligations with respect to the cross-guaranty provisions
of
Section 14 of the Loan Agreement, and further agrees that KCI shall comply
with
and be fully bound by the terms of the Loan Agreement and the Fee Letter
and the
other Financing Agreements as if KCI had been a signatory thereto as of
the date
thereof. As a Borrower, KCI agrees to pay all Obligations owing by it to
Agents
and/or any of the Lenders, including, without limitation, all payments
of
principal, interest, fees, expenses and other charges due from time to
time with
respect to the Loans and other financial accommodations made, assumed or
available to KCI. Without limiting the generality of the foregoing, KCI
hereby
grants, assigns, conveys, mortgages, pledges, hypothecates and transfers
to the
Agent, for itself and the benefit of Lenders, as security for the prompt
and
complete payment, performance and observance of all Obligations, a lien
upon all
of its right, title and interest in all of its personal and real property
and
fixtures, whether now owned or hereafter acquired or existing, and wherever
located, including all of its respective Collateral (as defined in the
Loan
Agreement) in accordance with Section 5
of the
Loan Agreement.
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(l) Attached
hereto as Schedule
A
is an
information certificate on KCI that shall be deemed to supplement and amend
the
Information Certificate.
(m) With
respect to the increase in the Maximum Credit from $80,000,000 to $100,000,000
in connection with this Amendment, the Lenders’ Commitments shall be allocated
as set forth on Schedule
B
attached
hereto.
Section
2 Limited
Waiver.
Agent
and Lenders hereby (a) waive the restrictions set forth in Section
9.10
of the
Loan Agreement solely to permit (i) the formation by Keystone of KCI, as
a
wholly-owned Subsidiary of Keystone, and (ii) KCI to acquire substantially
all
the operating assets of Calumetals, Inc. and MZG Associates II, LLC so
long as
the total consideration to be paid in connection with the Acquisition does
not
exceed $6,259,000; and (b) waive the restrictions set forth in Section
9.9(e)(iv)
of the
Loan Agreement solely to permit KCI to execute a promissory note in favor
of MZG
Associates II, LLC in an amount not to exceed $1,100,000, the proceeds
of which
shall constitute partial consideration for the Acquisition and shall not
be
applied against the Obligations (the “Seller Note”).
Section
3 Conditions
to Effectiveness.
The
effectiveness of the amendments set forth in Section
1
above
are subject to the satisfaction of each of the following conditions and
in each
case in form and substance, and with results, satisfactory to
Agent:
(a) Agent
shall have received a duly executed counterpart of this Amendment from
Borrowers,
KER,
Required Lenders
and each
Lender that is increasing its Commitments as set forth in Schedule
B
hereto;
(b) Agent
shall have received a pledge of the Capital Stock of KCI, together with
certificates and endorsement representing such interests, in each case
in form
and substance satisfactory to Agent;
(c) Agent
shall have received final drafts and executed copies of all purchase agreements
and related agreements, documents, instruments, exhibits and schedules
in
connection with the Acquisition and the Acquisition shall have been consummated
on the date hereof in accordance with the terms of such purchase agreements,
documents and instruments;
(d) Agent
shall have received satisfactory UCC, tax lien and judgment search results
relating to the Seller;
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(e) Agent
shall have received an executed mortgage relating to KCI’s real property located
in Illinois, together with a UCC fixture filing, ALTA Title insurance policies
(or commitments for such policies), surveys and such other documents and
instruments as Agent shall reasonably require, all in form and substance
reasonably satisfactory to Agent;
(f) Agent
shall have received amendments to existing mortgages of Borrowers which
shall be
recorded in the appropriate recording offices;
(g) Agent
shall have received evidence that it has a duly perfected first priority
perfected lien on the assets of KCI pursuant to a filed UCC-1 financing
statement;
(h) Agent
shall have received a final draft and an executed copy of the Seller Note,
together with a subordination agreement executed by the Sellers in favor
of the
Agent;
(i) Agent
shall have received an officer’s certificate form KCI, certifying and attaching
(i) certified certificate of incorporation for KCI, (ii) bylaws of KCI,
(iii)
resolutions of KCI’s board of directors authorizing the transactions described
in this Amendment and (iv) good standing certificates from the State of
Delaware
and Illinois;
(j) Agent
shall have received the fees set forth in that certain Fee Letter dated
as of
the date hereof among Borrowers and Agent; and
(k) Agent
shall have received a copy of a release or consent from MB Financial Bank,
N.A.
with respect to all assets sold to KCI, in form and substance satisfactory
to
the Agent.
Section
4 Representations,
Warranties and Covenants.
In
order to induce Agent and Lenders to enter into this Amendment, Borrowers
and
KER represent, warrant and covenant to Agent and Lenders, upon the effectiveness
of this Amendment, which representations, warranties and covenants shall
survive
the execution and delivery of this Amendment that:
(a) No
Default; etc.
No
Default or Event of Default has occurred and is continuing after giving
effect
to this Amendment or would result from the execution or delivery of this
Amendment or the consummation of the transactions contemplated
hereby.
(b) Corporate
or Limited Liability Company Power and Authority; Authorization.
Each
Borrower and KER have the power and authority to execute and deliver this
Amendment and to carry out the terms and provisions of the Financing Agreements,
as amended by this Amendment, to which they are a party and the execution
and
delivery by such Borrower and KER of this Amendment, and the performance
by such
Borrower and KER of their obligations hereunder have been duly authorized
by all
requisite action by such Borrower and KER.
5
(c) Execution
and Delivery.
Each
Borrower and KER have duly executed and delivered this Amendment.
(d) Enforceability.
This
Amendment constitutes the legal, valid and binding obligations of each
Borrower
and KER, enforceable against each Borrower and KER in accordance with its
terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ right
generally, and by general principles of equity.
(e) Representations
and Warranties.
All of
the representations and warranties contained in the Financing Agreements
(other
than those which speak expressly only as of a different date) are true
and
correct as of the date hereof after giving effect to this Amendment and
the
transactions contemplated hereby.
Section
5 Miscellaneous.
(a) Effect;
Ratification.
Borrowers acknowledge that all of the reasonable legal expenses incurred
by
Agent in connection herewith shall be reimbursable under Section
9.23
of the
Loan Agreement. The amendments and waivers set forth herein are effective
solely
for the purposes set forth herein and shall be limited precisely as written,
and
shall not be deemed to (i) be a consent to any amendment, waiver or modification
of any other term or condition of any Financing Agreement or (ii) prejudice
any right or rights that any Lender may now have or may have in the future
under
or in connection with any Financing Agreement. Each reference in the Financing
Agreements to “this Agreement”, “herein”, “hereof” and words of like import
shall mean such Financing Agreement as amended hereby. This Amendment shall
be
construed in connection with and as part of the Financing Agreements and
all
terms, conditions, representations, warranties, covenants and agreements
set
forth in the Financing Agreements, except as herein amended are hereby
ratified
and confirmed and shall remain in full force and effect.
(b) Counterparts;
etc.
This
Amendment may be executed in any number of counterparts, each such counterpart
constituting an original but all together one and the same instrument.
Delivery
of an executed counterpart of this Amendment by fax shall have the same
force
and effect as the delivery of an original executed counterpart of this
Amendment. Any party delivering an executed counterpart of this Amendment
by fax
shall also deliver an original executed counterpart, but the failure to
do so
shall not affect the validity, enforceability or binding effect of this
Amendment.
(c) Governing
Law.
This
Amendment shall be deemed a Financing Agreement and shall be governed by,
and
construed and interpreted in accordance with the internal laws of the State
of
Illinois 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 Illinois.
(d) Reaffirmation.
Each
Borrower and KER reaffirms all of its obligations under Section
14
of the
Loan Agreement as a guarantor of the Obligations.
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Section
6 Post
Closing Requirement.
As a
condition subsequent to the effectiveness of this Amendment and as a further
covenant of the Borrowers, on or prior to thirty (30) days after the date
hereof, Borrowers shall deliver, or cause to be delivered, to Agent’s counsel an
ALTA Land Survey for the property located at 000 Xxxx 00xx
Xxxxxx,
Xxxxxxx Xxxxxxx, Xxxxxxxx in form and substance acceptable to Agent’s counsel.
Such ALTA Land Survey shall include (i)
a
certification (in the form previously provided by Agent’s counsel) executed by a
land surveyor licensed in Illinois and (ii) all applicable zoning requirements
and restrictions customarily included on ALTA surveys in Illinois (including,
without limitation, setback and buffer requirements, maximum building height
restrictions and minimum parking requirements and such other survey requirements
as previously delivered by Agent’s counsel to Mortgagor’s counsel). Failure to
comply with the foregoing shall constitute an Event of Default under the
Loan
Agreement.
[Signature
Pages Follow]
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IN
WITNESS WHEREOF, Agent, Required Lenders, Borrowers and KER have caused
this
Amendment No. 2 to Loan and Security Agreement to be duly executed as of
the day
and year first above written.
BORROWERS:
KEYSTONE
CONSOLIDATED INDUSTRIES, INC.
By:
Title:
Name:
KEYSTONE
WIRE PRODUCTS INC.
By:
Title:
Name:
ENGINEERED
WIRE PRODUCTS, INC.
By:
Title:
Name:
F V
STEEL AND WIRE COMPANY
By:
Title:
Name:
KEYSTONE-CALUMET,
INC.
By:
Title:
Name:
Agreed
and Acknowledged by:
KEYSTONE
ENERGY RESOURCES, LLC
By:
Title:
Name:
AGENT
AND LENDERS:
WACHOVIA
CAPITAL FINANCE CORPORATION (CENTRAL), as Agent and a Lender
By:
Title:
Name:
WESTERN
BANK PUERTO RICO (BUSINESS CREDIT DIVISION), as a Lender
By:
Title:
Name:
NORTH
FORK BUSINESS CAPITAL CORPORATION, as a Lender
By:
Title:
Name:
PNC
BANK
NATIONAL ASSOCIATION, as a Lender
By:
Title:
Name:
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