KATY INDUSTRIES, INC.
FOURTH AMENDMENT AND CONSENT
TO CREDIT AGREEMENT
This FOURTH AMENDMENT AND CONSENT TO CREDIT AGREEMENT (this
"Amendment") is dated as of October 31, 2002 and entered into by and among KATY
INDUSTRIES, INC., a Delaware corporation ("Company"), THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
"Lender" and collectively as "Lenders"), DEUTSCHE BANK TRUST COMPANY AMERICAS
(formerly Bankers Trust Company), as agent for Lenders (in such capacity,
"Agent"), and for purposes of Section 6 hereof, the Credit Support Parties (as
defined in Section 6 hereof) listed on the signature pages hereof, and is made
with reference to that certain Credit Agreement dated as of June 28, 2001, by
and among Company, Lenders and Agent, as amended by that certain First Amendment
thereto dated as of September 27, 2001, that certain Second Amendment thereto
dated as of November 26, 2001 and that certain Third Amendment thereto dated as
of April 29, 2002 (as so amended, the "Credit Agreement"). Capitalized terms
used herein without definition shall have the same meanings herein as set forth
in the Credit Agreement.
RECITALS
WHEREAS, Company has requested that Lenders (i) amend the Credit
Agreement to (a) adjust the financial covenants set forth therein, (b) extend
the date through which Eligible U.K. Accounts Receivable and Eligible U.K.
Inventory may be included in the Revolving Borrowing Base to June 30, 2006 and
(c) make certain other amendments as set forth below and (ii) consent to the
sale of substantially all of the assets of Xxxxxxxx Precision Metals, L.P.
("HPM") by HPM to HP Holding Corp. ("HHC") and the other transactions
contemplated by that certain Asset Purchase Agreement dated as of October 4,
2002 by and among Company, HPM and HHC.
NOW, THEREFORE, subject to the terms and conditions of this
Amendment and in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT RELATING TO XXXXXXXX
ASSET SALE
1.1 Amendments to Section 1: Provisions Relating to Defined Terms
A. Subsection 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions, which shall be inserted in proper
alphabetical order:
"'Fourth Amendment' means that certain Fourth Amendment and Consent
to Credit Agreement dated as of October 31, 2002 among Company,
Agent and Lenders."
"'Fourth Amendment Effective Date' has the meaning assigned to that
term in the Fourth Amendment."
"'Xxxxxxxx Asset Purchase Agreement' means that certain Asset
Purchase Agreement dated as of October 4, 2002 by and among Company,
HPM and HHC, as such agreement may be amended from time to time
after the Fourth Amendment Effective Date to the extent permitted
under subsection 7.15A."
"'Xxxxxxxx Asset Sale' means HPM's transfer of its interest in the
Assets (as defined in the Xxxxxxxx Asset Purchase Agreement) to HHC,
in accordance with the Xxxxxxxx Asset Sale Documents, and the other
transactions contemplated thereby."
"'Xxxxxxxx Asset Sale Documents' means, collectively, (i) the
Xxxxxxxx Asset Purchase Agreement, (ii) the Assignment and
Assumption Agreement dated as of October 31, 2002by and between HPM
and HHC, (iii) the Covenant Not to Compete Agreement dated as of
October 31, 2002 by and among Company, HPM and HHC, and (iv) any
agreement or document entered into by any Loan Party in connection
with any of the foregoing, in each case (for clauses (i) through
(iv) above) as any such agreement or document may be amended from
time to time after the Fourth Amendment Effective Date to the extent
permitted by subsection 7.15A."
"'HHC' means HP Holding Corp., a Delaware corporation."
"'HPM' means Xxxxxxxx Precision Metals, L.P., a Delaware limited
partnership and a Subsidiary of Company."
"'Purchase Price' has the meaning assigned to that term in the
Xxxxxxxx Asset Purchase Agreement."
B. Subsection 1.1 of the Credit Agreement is hereby further amended
by inserting the phrase "the Xxxxxxxx Asset Sale Documents," after the reference
to "the XXXXX/Montenay Transaction Documents," appearing in the definition of
"Related Agreements."
C. Subsection 1.3 is hereby amended by adding the following
subsection E at the end thereof: "E. At any time that the outstanding principal
balance of the Term Loans is reduced below $1,000 in the aggregate, the Term
Loans shall be deemed to have been paid in full for the purposes of any
provision of the Loan Documents that impose different obligations on Company
(other than the obligation to repay the outstanding principal balance of the
Term Loans) based upon whether or not there is an outstanding balance on the
Term Loans; provided, that if the Fourth Amendment is not executed by all
Lenders, then the provisions of the foregoing portion of this sentence will only
apply if such provisions would have been an amendment that would have been
permitted with the consent of Requisite Lenders (as opposed to all Lenders)."
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1.2 Amendments to Section 5: Representations and Warranties
Section 5 of the Credit Agreement is hereby amended by adding
thereto at the end thereof the following:
"5.23 Xxxxxxxx Asset Sale.
A. Company has delivered to Lenders complete and correct
copies of the Xxxxxxxx Asset Sale Documents, in each case as in
effect as of the Fourth Amendment Effective Date, and of all
exhibits and schedules thereto.
B. The representations and warranties made by Company and HPM
contained in the Xxxxxxxx Asset Sale Documents are true, correct and
complete in all material respects on and as of the date made or
deemed made and Company and HPM have performed in all material
respects all agreements and satisfied all conditions which the
Xxxxxxxx Asset Sale Documents provide shall be performed or
satisfied by Company and HPM on or before the Fourth Amendment
Effective Date.
C. Notwithstanding anything in the Xxxxxxxx Asset Sale
Documents to the contrary, the representations and warranties of
Company set forth in subsection 5.23B shall, solely for purposes of
this Agreement, survive the Fourth Amendment Effective Date for the
benefit of Lenders.
D. All Governmental Authorizations and all consents of other
Persons have been obtained, in each case that are necessary or
advisable in connection with the Xxxxxxxx Asset Sale, the related
financings and the other transactions contemplated by the Xxxxxxxx
Asset Sale Documents. Each such Governmental Authorization or
consent is in full force and effect. All applicable waiting periods
have expired without any action being taken or threatened by any
competent authority or other Person that would restrain, prevent or
otherwise impose adverse conditions on the Xxxxxxxx Asset Sale, the
related financings and the other transactions contemplated by the
Xxxxxxxx Asset Sale Documents. No action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to
any of the foregoing is pending, and the time for any applicable
Government Authority to take action to set aside its consent on its
own motion has expired.
E. Company and HPM have all requisite corporate or other
entity power and authority to enter into the Xxxxxxxx Asset Sale
Documents to which they are a party and to carry out the
transactions contemplated by, and perform their respective
obligations under, the Xxxxxxxx Asset Sale Documents.
F. The execution and delivery of the Xxxxxxxx Asset Sale
Documents by Company and HPM and the performance of the Xxxxxxxx
Asset Sale Documents by Company and HPM have been duly authorized by
all necessary corporate or other entity action.
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G. Company and HPM have duly executed and delivered the
Xxxxxxxx Asset Sale Documents to which they are a party and the
Xxxxxxxx Asset Sale Documents to which they are a party are the
legally valid and binding obligations of Company and HPM,
enforceable against Company and HPM in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles
relating to enforceability."
1.3 Amendments to Section 7: Company's Negative Covenants
A. Subsection 7.6B of the Credit Agreement is hereby amended by
deleting the table contained therein in its entirety and substituting the
following therefor:
Minimum
"Period Consolidated EBITDA
------- -------------------
Four FQs ending on or about December 31, 2001 $26,000,000
Four FQs ending on or about March 31, 2002 $26,000,000
Four FQs ending on or about June 30, 2002 $26,000,000
Four FQs ending on or about September 30, 2002 $25,000,000
Four FQs ending on or about December 31, 2002 $25,000,000
Four FQs ending on or about March 31, 2003 $25,000,000
Four FQs ending on or about June 30, 2003 $27,000,000
Four FQs ending on or about September 30, 2003 $27,000,000
Four FQs ending on or about December 31, 2003 $29,000,000"
and each four FQ period thereafter
B. Subsection 7.15A of the Credit Agreement is hereby amended by
inserting after the reference "or any XXXXX/Montenay Transaction Documents (as
in effect on the Third Amendment Effective Date)" appearing therein the phrase
"or the Xxxxxxxx Asset Sale Documents (as in effect on the Fourth Amendment
Effective Date)".
1.4 Amendments to Section 8: Events of Default
Subsection 8.17 of the Credit Agreement is hereby amended by
deleting the ":" at the end thereof and substituting "; or" therefor and adding
the following at the end thereof:
"8.18 Xxxxxxxx Asset Sale.
(i) HPC shall not have received from HHC the Closing Date
Purchase Price (as defined in the Xxxxxxxx Asset Purchase Agreement)
on the terms and conditions set forth in the Xxxxxxxx Asset Sale
Documents or (ii) the Xxxxxxxx Asset Sale, or any of the other
transactions to be consummated on or prior to the
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Fourth Amendment Effective Date pursuant to the Xxxxxxxx Asset Sale
Documents shall not be consummated in any material respect in
accordance with this Agreement and the Xxxxxxxx Asset Sale Documents
on or prior to the Fourth Amendment Effective Date, or the Xxxxxxxx
Asset Sale or any of the other such transactions shall be unwound,
reversed or otherwise rescinded in whole or in material part for any
reason (other than any such unwinding, reversal or rescission in
material part that could not adversely affect any Loan Party, Agent
or any Lenders):".
1.5 Amendment of Schedules
Schedule 1(h) to the Security Agreement is hereby amended by adding
thereto "Xxxxxxxx Asset Sale Documents" under the heading "Assigned Agreements".
Section 2. AMENDMENTS TO THE CREDIT AGREEMENT RELATING TO ELIGIBLE
U.K. ACCOUNTS RECEIVABLE AND ELIGIBLE U.K. INVENTORY
2.1 Amendments to Section 1: Provisions Relating to Defined Terms
A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the reference to "June 30, 2002" contained in the proviso to the
definition of "Eligible U.K. Accounts Receivable" and substituting "June 30,
2006" therefor.
B. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the reference to "June 30, 2002" contained in the proviso to the
definition of "Eligible U.K. Inventory" and substituting "June 30, 2006"
therefor.
2.2 Amendments to Section 6: Company's Affirmative Covenants
A. Subsection 6.10E of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor: "At least
once each Fiscal Year and in any event at the discretion of Agent upon the
occurrence of an Event of Default or a Potential Event of Default, Agent shall
be entitled to obtain at Company's expense, and Company shall cooperate fully
with Agent in obtaining, appraisals of machinery and equipment and Real Property
Assets described in Schedules 1.1A and 1.1B annexed hereto, Inventory and other
Collateral in form, scope and substance satisfactory to Agent.".
B. Subsection 6.10F of the Credit Agreement is hereby amended by
adding the following sentence at the end thereof: "In addition to the foregoing,
at least once each Fiscal Year and in any event at the discretion of Agent upon
the occurrence of an Event of Default or a Potential Event of Default, Agent
shall be entitled to obtain at Company's expense, and Company shall cooperate
fully with Agent in obtaining, an appraisal of the Inventory of the U.K.
division of Contico and a collateral examination report of the Inventory and
Accounts of the U.K. division of Contico, in each case in form and substance
satisfactory to Agent.".
Section 3.CONSENT
3.1 Consent to Xxxxxxxx Asset Sale
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Subject to the terms and conditions set forth herein and in the
Xxxxxxxx Asset Sale Documents and in reliance on the representations and
warranties of Company contained herein, Lenders hereby consent to the Xxxxxxxx
Asset Sale by HPM for the Purchase Price; provided that no later than the first
Business Day following the date of receipt by Company or any of its Subsidiaries
of any Net Asset Sale Proceeds in respect of the Xxxxxxxx Asset Sale (including
any Cash received by way of deferred payment, including, without limitation,
pursuant to the closing purchase price adjustment described in Section 2.2 of
the Xxxxxxxx Asset Purchase Agreement, the Earnout Amount (as defined in the
Xxxxxxxx Asset Purchase Agreement) and other amounts received pursuant to
Section 2.1.3 of the Xxxxxxxx Asset Purchase Agreement or the Covenant Not to
Compete Agreement (as defined in the Xxxxxxxx Asset Purchase Agreement) (it
being understood that such closing purchase price adjustment, such Earnout
Amount, such other amounts and such other payments under such Covenant Not to
Compete Agreement shall be deemed to be Net Asset Sale Proceeds in respect of
the Xxxxxxxx Asset Sale) but only as and when so received), Company shall prepay
the Loans in an aggregate amount equal to such Net Asset Sale Proceeds in
accordance with subsections 2.4B(iii)(a) and 2.4B(iv)(b)(3) of the Credit
Agreement.
3.2 Limitation of Consent
Without limiting the generality of the provisions of subsection 10.6
of the Credit Agreement, the consent set forth above shall be limited precisely
as written and relate solely to the Xxxxxxxx Asset Sale in the manner and to the
extent described above, and nothing in this Section 3 shall be deemed to:
1. constitute a waiver of compliance by Company or any of its
Subsidiaries with respect to any other term, provision or condition
of the Credit Agreement or any other instrument or agreement
referred to therein (whether in connection with the Xxxxxxxx Asset
Sale or otherwise); or
2. prejudice any right or remedy that Agent or any Lender may now
have (except to the extent that such right or remedy was based upon
existing defaults that will not exist after giving effect to this
Section 3) or may have in the future under or in connection with the
Credit Agreement or any other instrument or agreement referred to
therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
3.3 Collateral Releases
Upon receipt by Agent of Net Asset Sale Proceeds in respect of the
Xxxxxxxx Asset Sale in an amount not less than $12,500,000.00 and satisfaction
of the conditions set forth in Section 4 of this Amendment, Agent shall (and
Lenders hereby authorize Agent to), at Company's expense, execute and deliver
such reconveyances of its security interest in the property located at 0000
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx granted by HPM to Agent pursuant to
that certain Open-End Mortgage, Security Agreement, Absolute Assignment of Rents
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and Leases and Fixture Filing (Pennsylvania) dated as of June 28, 2001 by and
from HPM to Agent as Company may reasonably request. Upon receipt by Agent of
Net Asset Sale Proceeds in respect of the Xxxxxxxx Asset Sale in an amount not
less than $12,500,000.00 and satisfaction of the conditions set forth in Section
4 of this Amendment, Agent hereby authorizes Company (and Lenders hereby
authorize Agent to give such authorization), at Company's expense, to file
amendments to UCC financing statements in the forms attached hereto as Exhibit
A. Upon receipt by Agent of Net Asset Sale Proceeds in respect of the Xxxxxxxx
Asset Sale in an amount not less than $12,500,000.00 and satisfaction of the
conditions set forth in Section 4 of this Amendment and transfer of account
number 021-844-2358 maintained at Xxxxxx Bank from HPM to HHC, Agent shall (and
Lenders hereby authorize Agent to), at Company's expense, execute and deliver
such termination of that certain Blocked Account Agreement dated as of November
1, 2001 among HPM, Agent and Xxxxxx Bank with respect to such account as Company
may reasonably request.
Section 4.CONDITIONS TO EFFECTIVENESS
Sections 1, 2 and 3 of this Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "Fourth
Amendment Effective Date"):
A. On or before the Fourth Amendment Effective Date, Company shall
deliver to Lenders (or to Agent for Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the Fourth Amendment Effective Date:
(i) Officer's Certificates of Company, dated a recent date prior to
the Fourth Amendment Effective Date, certifying that (a) there has been no
change in any of the Loan Parties' Organizational Documents from the date
of the Credit Agreement, and (b) the resolutions adopted by the Board of
Directors of Company and HPM approving and authorizing the execution,
delivery, and performance of this Amendment and the Xxxxxxxx Asset Sale
Documents are in full force and effect without modification or amendment;
(ii) Signature and incumbency certificates of the officers of
Company and HPM;
(iii) A good standing certificate of Company and HPM from the
Secretary of State of the jurisdiction of its organization, each dated a
recent date prior to the Fourth Amendment Effective Date;
(iv) Twelve (12) executed copies of this Amendment executed by
Company and each Credit Support Party;
(v) Executed copies of the Xxxxxxxx Asset Sale Documents (including
all schedules, exhibits and amendments thereto), each in form and
substance satisfactory to Agent;
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(vi) Evidence in form and substance satisfactory to Agent (including
without limitation an Officers' Certificate to the effect set forth in
clauses (a) - (e) below) that:
(a) the Xxxxxxxx Asset Sale Documents shall be in full force
and effect and shall not have been amended, supplemented, waived or
otherwise modified without the consent of Agent;
(b) simultaneously with the consummation of the Xxxxxxxx Asset
Sale and the effectiveness of this Amendment, all conditions to the
Xxxxxxxx Asset Sale set forth in the Xxxxxxxx Asset Sale Documents
shall have been satisfied in all material respects or the
fulfillment of any such conditions shall have been waived with the
consent of Agent;
(c) simultaneously with the consummation of the Xxxxxxxx Asset
Sale and the effectiveness of this Amendment, the Xxxxxxxx Asset
Sale shall have occurred in accordance with the Xxxxxxxx Asset Sale
Documents, as unamended;
(d) simultaneously with the consummation of the Xxxxxxxx Asset
Sale and the effectiveness of this Amendment, HPM shall have
received the Closing Date Purchase Price (as defined in the Xxxxxxxx
Asset Purchase Agreement) in an amount not less than $13,500,000.00
in cash; and
(e) simultaneously with the consummation of the Xxxxxxxx Asset
Sale and the effectiveness of this Amendment, the calculation of the
Net Asset Sale Proceeds received by Company or any of its
Subsidiaries on or before the Fourth Amendment Effective Date in
respect of the Xxxxxxxx Asset Sale and the calculation of the
amounts therefrom to be applied to Term Loans and Revolving Loans in
accordance with subsection 2.4B(iv)(b)(3) of the Credit Agreement
(each of which calculations shall be in form and substance
satisfactory to Agent and the total amount to be applied to Term
Loans and Revolving Loans shall be not less than $12,500,000.00)
shall be as set forth in such Officer's Certificate;
(vii) An Officers' Certificate of Company, in form and substance
satisfactory to Agent, to the effect that the representations and
warranties in Section 5 of the Credit Agreement are true, correct and
complete in all material respects on and as of the Fourth Amendment
Effective Date (both before and after giving effect to the Xxxxxxxx Asset
Sale and this Amendment and any borrowings made on or before the Fourth
Amendment Effective Date to repay the Term Loans) to the same extent as
though made on and as of that date (or, to the extent such representations
and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all
material respects on and as of such earlier date) and that Company and the
other Loan Parties shall have performed in all material respects all
agreements and satisfied all conditions which this Amendment, the Credit
Agreement as amended by this Amendment, and the other Loan Documents
provide shall be performed or satisfied by Company and its Subsidiaries on
or before the Fourth Amendment Effective Date except as otherwise
disclosed to and agreed to in writing by Agent; and
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(viii) if the Fourth Amendment Effective Date occurs on or after
November 1, 2002, a Borrowing Base Certificate dated as of October 25,
2002 (after giving pro forma effect to the Xxxxxxxx Asset Sale), together
with any additional schedules and other information as Agent may
reasonably request (which Borrowing Base Certificate shall be deemed to be
described in (and delivered pursuant to) subsection 6.1(xviii) of the
Credit Agreement.
B. On or before the Fourth Amendment Effective Date, Company shall
have made arrangements, in form and substance satisfactory to Agent, for the Net
Asset Sale Proceeds received by Company or any of its Subsidiaries on or before
the Fourth Amendment Effective Date in respect of the Xxxxxxxx Asset Sale to be
paid to Lenders in accordance with subsection 2.4B(iii)(a) of the Credit
Agreement.
C. At least one Business Day before the Fourth Amendment Effective
Date (or three Business Days before the Fourth Amendment Effective Date if any
Eurodollar Rate Loans are being prepaid), Company shall have given written
notice to prepay on the Fourth Amendment Effective Date all of the outstanding
Term Loans outstanding as of the Fourth Amendment Effective Date (after giving
effect to the application of the Net Asset Sale Proceeds received by Company or
any of its Subsidiaries on the Fourth Amendment Effective Date in respect of the
Xxxxxxxx Asset Sale) and on or before the Fourth Amendment Effective Date,
Company shall have made arrangements in form and substance satisfactory to Agent
for such prepayment (which arrangements shall include, if the source of such
prepayment will be the proceeds of new Revolving Loans, the timely giving of a
Notice of Borrowing by Company for such Revolving Loans and evidence showing the
ability of Company to borrow such Revolving Loans on the Fourth Amendment
Effective Date).
D. On or before the Fourth Amendment Effective Date, Requisite
Lenders shall deliver to Agent copies of this Amendment executed by Requisite
Lenders.
E. On or before the Fourth Amendment Effective Date, Lenders and
their respective counsel shall have received copies of all opinions issued by
counsel to any party to the Xxxxxxxx Asset Sale Documents or issued to any party
to the Xxxxxxxx Asset Sale Documents relating to any transactions occurring on
or about the Fourth Amendment Effective Date pursuant to any of the Xxxxxxxx
Asset Sale Documents (including, without limitation, the opinions referenced in
Exhibits 7.5 and 8.4 of the Xxxxxxxx Asset Purchase Agreement), each of which
opinions issued by counsel to any Loan Party shall be accompanied by a written
authorization from counsel issuing such opinion stating that Agent and Lenders
may rely on such opinions as though such opinions were addressed to Agent and
Lenders.
F. On or before the Fourth Amendment Effective Date, all corporate
and other proceedings taken or to be taken in connection with this Amendment and
all documents incidental thereto not previously found acceptable by Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Agent and such counsel, and Agent and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agent may reasonably request.
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Section 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. Corporate Power and Authority. Each Loan Party has all requisite
corporate or other entity power and authority to enter into this Amendment and
each of the Xxxxxxxx Asset Sale Documents to which it is a party and to carry
out the transactions contemplated by, and perform its obligations under, the
Credit Agreement as amended by this Amendment (the "Amended Agreement") and each
of the Xxxxxxxx Asset Sale Documents to which it is a party.
B. Authorization of Agreements. The execution and delivery of this
Amendment and each of the Xxxxxxxx Asset Sale Documents to which it is a party
and the performance of the Amended Agreement and each of the Xxxxxxxx Asset Sale
Documents to which it is a party have been duly authorized by all necessary
corporate or other entity action on the part of each Loan Party. C. No Conflict.
The execution, delivery and performance by each Loan Party of this Amendment and
each of the Xxxxxxxx Asset Sale Documents to which it is a party and the
performance by such Loan Party of the Amended Agreement and each of the Xxxxxxxx
Asset Sale Documents to which it is a party do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to the
Loan Parties, the Organizational Documents of the Loan Parties or any order,
judgment or decree of any court or other Government Authority binding on the
Loan Parties, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
the Loan Parties, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Loan Parties (other than Liens
created under any of the Loan Documents in favor of Agent on behalf of Lenders),
or (iv) require any approval of members or stockholders or any approval or
consent of any Person under any Contractual Obligation of the Loan Parties,
except for such approvals or consents which will be obtained on or before the
Fourth Amendment Effective Date and disclosed in writing to Lenders.
D. Governmental Consents. The execution, delivery and performance by
the Loan Parties of this Amendment and each of the Xxxxxxxx Asset Sale Documents
to which they are a party and the performance by Loan Parties of the Amended
Agreement and each of the Xxxxxxxx Asset Sale Documents to which they are a
party do not and will not require any Governmental Authorization (other than any
Governmental Authorizations obtained on or before the Fourth Amendment Effective
Date and disclosed in writing to Lenders).
E. Binding Obligation. This Amendment and each of the Xxxxxxxx Asset
Sale Documents to which any Loan Party is a party have been duly executed and
delivered by the Loan Parties party thereto and this Amendment, the Amended
Agreement and each of the Xxxxxxxx Asset Sale Documents to which any Loan Party
is a party are the legally valid and binding obligations of such Loan Parties
party thereto, enforceable against the Loan Parties in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
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reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Fourth Amendment Effective Date (both before and after
giving effect to the Xxxxxxxx Asset Sale and this Amendment) to the same extent
as though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. Certain U.K. Collateral Related Matters. Each of the conditions
set forth in clauses (1), (2) and (3) in clause (ii) of the proviso in each of
the definitions of Eligible U.K. Inventory and Eligible U.K. Accounts Receivable
has been satisfied and continues to be satisfied as of the date hereof.
H. Absence of Default. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment and the Xxxxxxxx Asset Sale Documents that would constitute an Event
of Default or a Potential Event of Default (after giving effect to the consent
set forth in Section 3).
I. No Term Loans Outstanding. After giving effect to the application
of the Net Asset Sale Proceeds in respect of the Xxxxxxxx Asset Sale and other
prepayment of Loans made on or prior to the Fourth Amendment Effective Date, the
aggregate outstanding principal balance of the Term Loans shall equal $1.
Section 6. ACKNOWLEDGEMENT AND CONSENT
Holdings and each of the Subsidiary Guarantors is a party to certain
of the Holdings Guaranty and Subsidiary Guaranty and the Collateral Documents
and Company is a party to certain of the Collateral Documents. Company, Holdings
and each of the Subsidiary Guarantors are collectively referred to herein as the
"Credit Support Parties," and the Guaranties and Collateral Documents are
collectively referred to herein as the "Credit Support Documents."
Each Credit Support Party hereby acknowledges that it has reviewed
the terms and provisions of the Credit Agreement and this Amendment and consents
to the amendment of the Credit Agreement effected pursuant to this Amendment.
Each Credit Support Party hereby confirms that each Credit Support Document to
which it is a party or otherwise bound and all Collateral encumbered thereby
will continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
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Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Fourth Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than Company) acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment, and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
Section 7. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other
Loan Documents.
(i) On and after the Fourth Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Agent or any Lender under, the Credit Agreement or any of the other Loan
Documents.
B. Fees and Expenses. Company acknowledges that all costs, fees and
expenses as described in subsection 10.2 of the Credit Agreement incurred by
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
12
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.
E. Counterparts; Effectiveness. 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 an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than the
provisions of Sections 1, 2 and 3 hereof, the effectiveness of which is governed
by Section 4 hereof) shall become effective upon the execution of a counterpart
hereof by Company, Requisite Lenders and each Credit Support Party and receipt
by Company and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
13
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
KATY INDUSTRIES, INC.
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
KKTY HOLDING COMPANY, L.L.C. (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Authorized Manager
AETNA LIQUIDATING COMPANY
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
ALL RISK MANAGEMENT SERVICES, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
AMERICAN GAGE & MACHINE COMPANY
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-1
ASHFORD HOLDING CORPORATION
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
BACH XXXXXXX, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
BLUFF CITY BUILDING CORP.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
CAPACITY MANAGERS INTERNATIONAL,
INC. (for purposes of Section 6 only) as a
Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
CHATHAM RESOURCE RECOVERY
SYSTEMS, INC. (for purposes of Section 6
only) as a Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-2
CONTICO INTERNATIONAL, L.L.C. (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
DUCKBACK PRODUCTS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
E-R LIQUIDATING COMPANY, INC. (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
XXXXXX IRON WORKS COMPANY (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
GC/WALDOM ELECTRONICS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-3
GLIT/DISCO, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
GLIT/GEMTEX, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
GLIT, INC. (for purposes of Section 6 only)
as a Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
HALLMARK HOLDINGS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
XXXXXXXX PRECISION METALS, L.P.
By: HPMNC, Inc., its General Partner
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-4
XXXXXXX XXXXXXXXXXX, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
HPM OF PENNSYLVANIA, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
HPMNC, INC. (for purposes of Section 6 only)
as a Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
JEI LIQUIDATING, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
KATY INTERNATIONAL INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-5
KATY INTERNATIONAL, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
KATY OIL COMPANY OF INDONESIA (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
KATY-XXXXXXX, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
KATY-TEWEH PETROLEUM COMPANY
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-6
K-S ENERGY CORP. (for purposes of Section 6
only) as a Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
MICROTRON ABRASIVES, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
PANHANDLE INDUSTRIAL COMPANY, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
PTR MACHINE CORP.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
PRIMARY COATINGS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-7
PROCESS METALS COMPANY (for purposes
of Section 6 only) as a Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
SAVANNAH ENERGY CONSTRUCTION COMPANY, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
SAVANNAH ENERGY SYSTEMS COMPANY
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
XXXXXXX ELECTRIC BUILDING CO. (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: President
S-8
SPIRAL STEP-TOOL COMPANY (for
purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
STERLING-SALEM CORPORATION
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
TTI HOLDINGS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
TRANS-CONTINENTAL LEATHERS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-9
WABASH HOLDING CORP. (for purposes of
Section 6 only) as a Credit Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
XXXXX PRODUCTS, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
XXXXX INDUSTRIES, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
WP LIQUIDATING CORP.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-10
X. X. XXXXX WOOD PRESERVING COMPANY
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
CRL EXPORT, INC.
(for purposes of Section 6 only) as a Credit
Support Party
By:
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Secretary
S-11
DEUTSCHE BANK TRUST COMPANY AMERICAS
(formerly Bankers Trust Company),
Individually and as Agent
By:
-----------------------------
Name: Xxxxxxxxxx X. Xxxxxxx
Title: Director
S-12
FLEET CAPITAL,
as a Lender
By:
-----------------------------
Name:
Title:
S-13
THE PROVIDENT BANK,
as a Lender
By:
-----------------------------
Name:
Title:
S-14
FOOTHILL CAPITAL CORPORATION,
as a Lender
By:
-----------------------------
Name:
Title:
S-15
LASALLE BANK NATIONAL
ASSOCIATION, as a Lender and as an Issuing
Lender (with respect to Commercial Letters of
Credit)
By:
-----------------------------
Name:
Title:
S-16
GMAC COMMERCIAL CREDIT L.L.C.,
as a Lender
By:
-----------------------------
Name:
Title:
S-17
US BANK,
as a Lender
By:
-----------------------------
Name:
Title:
S-18
UPS CAPITAL CORPORATION,
as a Lender
By:
-----------------------------
Name:
Title:
X-00
XXXXXXXX XXXX, XX, Xxx Xxxx Branch
as an Issuing Lender (with respect to Standby
Letters of Credit)
By:
-----------------------------
Name: Xxxxxxxxxx X. Xxxxxxx
S-20
EXHIBIT A
[FORM OF AMENDMENTS TO UCC FINANCING STEMENTS]
[TO COME FROM COMPANY COUNSEL]
A-1
