FIRST Amendment to Revolving Credit and Security Agreement
Exhibit 10.9
Execution Version
FIRST Amendment to Revolving Credit and Security Agreement
This First Amendment to Revolving Credit and Security Agreement (the “Amendment”) is made as of July 23, 2024, by and among WORTHINGTON STEEL, INC., an Ohio corporation (“Worthington Steel” or “Borrower”), WORTHINGTON WSP, LLC, a Michigan limited liability company (“WSP”), TEMPEL STEEL COMPANY, LLC, an Illinois limited liability company (“Tempel”), T DO B, LLC, an Illinois limited liability company (“T DO B”), TEMPEL CANADA COMPANY, a Nova Scotia company (“Tempel Canada”), TEMPEL DE MEXICO, S. DE X.X. DE C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable (“Tempel Mexico”), WORTHINGTON STEEL ROME, LLC, an Ohio limited liability company (“Rome”), THE WORTHINGTON STEEL COMPANY, LLC, an Ohio limited liability company (“Worthington Company”), THE WORTHINGTON STEEL COMPANY, an Ohio corporation (“Steel Company”), WORTHINGTON TAYLOR, LLC, a Michigan limited liability company (“Xxxxxx”), CLEVELAND PICKLING, INC., a Delaware corporation (“Cleveland”), WS MEXICO HOLDINGS, LLC, an Ohio limited liability company (“Mexico Holdings”), WORTHINGTON STEEL SERVICES, LLC, an Ohio limited liability company (“Steel Services”, and together with Worthington Steel, WSP, Tempel, T DO B, Tempel Canada, Tempel Mexico, Rome, Worthington Company, Steel Company, Xxxxxx, Xxxxxxxxx and Mexico Holdings, together with such other Persons as may hereafter become a Borrower thereunder and such other Persons as may hereafter become a Guarantor thereunder, collectively, the “Loan Parties” and each an individual “Loan Party”), the Required Lenders (as defined in the Credit Agreement (as defined below)) signatory hereto (together with the other Lenders (as defined in the Credit Agreement) and any other financial institutions as may hereafter become a lender thereunder, collectively, the “Lenders” and each an individual “Lender”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as a Lender and agent for the Lenders (in such capacity, “Agent”).
BACKGROUND
NOW, THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows:
““Fixed Charges” shall mean, with respect to any fiscal period, the sum of (a) interest expense of Worthington Steel and its Subsidiaries on a consolidated basis with respect to such period, plus (b) scheduled principal payments on Indebtedness of Worthington Steel and its Subsidiaries on a consolidated basis with respect to such period, plus (c) cash dividends and distributions paid by Worthington Steel and its Subsidiaries as permitted
Exhibit 10.9
hereunder (other than the Steel Spin-Off Distribution), plus (d) stock redemptions or repurchases by Worthington Steel and its Subsidiaries as permitted hereunder.”
“(d) Upon the occurrence of a Cash Dominion Trigger Event and prior to a Cash Dominion Trigger Satisfaction Event with respect thereto, each Loan Party shall, at such Loan Party’s cost and expense, but on Agent’s behalf and for Agent’s account (1) collect as Agent’s property and in trust for Agent all amounts due and/or received on Receivables, and shall not commingle such collections with any Loan Party’s funds or use the same except to pay Obligations, and (2) as soon as possible and in any event no later than one (1) Business Day after the receipt thereof (A) in the case of remittances paid by check, deposit all such remittances in their original form (after supplying any necessary endorsements) and (B) in the case of remittances paid by wire transfer of funds, transfer all such remittances, in each case, into Blocked Accounts(s), Mexican Deposit Account(s) (subject to the limitations set forth in Section 4.8(l)) and/or Depository Account(s)”
“(h) All proceeds of Collateral received by any Loan Party shall be deposited by Loan Parties into either (i) a lockbox account, dominion account or such other “blocked account” (each a “Blocked Account” and collectively the “Blocked Accounts”) established at a bank or banks as may be acceptable to Agent in its Permitted Discretion (each such bank, a “Blocked Account Bank” and collectively, “Blocked Account Banks”) (and provided that JPMorgan Chase and Northern Trust are acceptable Blocked Account Banks) pursuant to an arrangement with such Blocked Account Bank as may be acceptable to Agent in its Permitted Discretion, (ii) a Mexican Deposit Account (subject to the limitations set forth in Section 4.8(l)), (iii) depository accounts (“Depository Accounts”) established at Agent for the deposit of such proceeds, or (iv) an Excluded Account, provided that payment on Receivables shall not be remitted to any Excluded Account. Each applicable Loan Party, Agent and each Blocked Account Bank shall enter into a Blocked Account Agreement in form and substance satisfactory to Agent in its Permitted Discretion that is sufficient to give Agent “control” (for purposes of Articles 8 and 9 of the Uniform Commercial Code) over such Blocked Accounts. Upon the occurrence of a Cash Dominion Trigger Event and prior a Cash Dominion Trigger Satisfaction Event in respect thereof, Agent shall have the sole and exclusive right to direct, and is hereby authorized to give instructions pursuant to such Blocked Account Agreements directing, the disposition of funds in the Blocked Accounts and Depository Accounts (any such instructions, an “Activation Notice”) to Agent on a daily basis, either to a deposit account maintained by Agent at PNC or by wire transfer to a deposit account at PNC, which such funds may be applied by Agent to repay the Obligations, and, if an Event of Default has occurred and is continuing, to cash collateralize outstanding Letters of Credit in accordance with Section 3.2(b) hereof. Prior to the occurrence of a Cash Dominion Trigger Event and following a Cash Dominion Trigger Satisfaction Event, Loan Parties shall retain the right to direct the disposition of funds in the Blocked Accounts. In the event that Agent issues an Activation Notice, Agent agrees to rescind such Activation Notice upon the occurrence of a Cash Dominion Trigger Satisfaction Event (it being understood that, notwithstanding any such rescission, Agent shall have the right and is authorized to issue an additional Activation Notice if a subsequent Cash Dominion Trigger Event shall have occurred at any time thereafter). All funds deposited in the Blocked Accounts, Mexican Deposit Accounts or Depository
2
Exhibit 10.9
Accounts shall immediately become subject to the security interest of Agent, for its own benefit and the ratable benefit of the other Secured Parties. Neither Agent nor any Lender assumes any responsibility for such Blocked Account Agreements, including any claim of accord and satisfaction or release with respect to deposits accepted by any Blocked Account Bank thereunder. Upon the occurrence of a Cash Dominion Trigger Event and prior a Cash Dominion Trigger Satisfaction Event, so long as an Event of Default is not continuing, Agent shall (A) apply all funds received by it from the Blocked Accounts and/or Depository Accounts to the satisfaction of the Obligations: first, to prepay any Protective Advances that may be outstanding, second, to prepay the Revolving Advances and Swing Loans, and third, as Borrowing Agent may direct, subject to Borrowers’ ability to re-borrow Revolving Advances in accordance with the terms hereof and (B) reduce the Eligible Receivables associated with such funds as set forth in the then current Borrowing Base Certificate.”
“(k) All Deposit Accounts (including all Blocked Accounts and Depository Accounts), Securities Accounts and investment accounts of each Loan Party as of the Steel Spin-Off Effective Date are set forth on Schedule 4.8(k). Following the Steel Spin-Off Effective Date, no Loan Party shall open any new Deposit Account, Securities Account or investment account (in each case, other than an Excluded Account), unless Borrowing Agent shall have given at least fifteen (15) days prior written notice to Agent. If such account is to be maintained with a bank, depository institution or securities intermediary that is not Agent, then within thirty (30) days after the creation of such account, such bank, depository institution or securities intermediary, each applicable Loan Party and Agent shall enter into a Blocked Account Agreement in form and substance satisfactory to Agent in its Permitted Discretion sufficient to give Agent “control” (for purposes of Articles 8 and 9 of the Uniform Commercial Code) over such account, provided, that, for the avoidance of doubt, no Blocked Account Agreement will be required for an Excluded Account or a Mexican Deposit Account.”
“6.18. Depository Accounts; Blocked Account Agreements. Within 90 days of the Closing Date or such later date as Agent shall agree in its Permitted Discretion, Borrowers shall have opened Depository Accounts with Agent or, other than with respect to any Mexican Deposit Account or any Excluded Account, Agent shall have received duly executed agreements establishing the Blocked Accounts with financial institutions acceptable to Agent for the collection or servicing of the Receivables and proceeds of the Collateral and Agent shall have entered into Blocked Account Agreements or other similar agreements with the applicable financial institutions, in each case, in form and substance satisfactory to Agent, with respect to such Blocked Accounts.”
“(b) the payment of any dividend or distribution or the consummation of any redemption or repurchase within 60 days after the date of declaration thereof, if at the date of declaration or the giving of notice of such dividend, distribution, redemption or repurchase, as applicable, such payment or transaction would have complied with the
3
Exhibit 10.9
provisions of this Agreement, provided, that, if such dividend, distribution, repurchase or redemption is being made pursuant to Section 7.7(k), a Reserve may be established by the Agent in its Permitted Discretion in an amount equal to the payment so declared or amounts to be paid in respect thereof;”
“(i) so long as, at the time any distribution or dividend is made or any redemption or repurchase is consummated, no Event of Default has occurred and is continuing and no Cash Dominion Period has occurred and is continuing, any other distributions, dividends, redemptions or repurchases that, when taken together with all other dividends, distributions, redemptions and repurchases made pursuant to this clause (i) do not exceed (x) $30,000,000 during the term of this Agreement and (y) $7,500,000 during any fiscal quarter;”
“(k) if the Payment Conditions have been met, Loan Parties shall be permitted to make any dividends or distributions to any Person, and consummate any redemption or repurchase with any Person.”
4
Exhibit 10.9
5
Exhibit 10.9
13. Release. Borrower hereby acknowledges and agrees that, as of the First Amendment Effective Date: (a) it does not have any claim or cause of action against Agent (or any of the Lenders, or any of the Lenders’ Affiliates’, officers, directors, employees, attorneys, consultants or agents) arising out of the Credit Agreement and/or the Other Documents and (b) each Lender has heretofore properly performed and satisfied in a timely manner all of its obligations to Borrower under the Credit Agreement and the Other Documents. Notwithstanding the foregoing, the Lenders wish (and Xxxxxxxx agrees) to eliminate any possibility that any past conditions, acts, omissions, events or circumstances would impair or otherwise adversely affect any of the Lenders’ rights, interests, security and/or remedies under the Credit Agreement and the Other Documents. Accordingly, for and in consideration of the agreements contained in this Amendment and other good and valuable consideration, Borrower (for itself and each of the other Loan Parties and the successors, assigns, heirs and representatives of each of the foregoing) (each a “Releasor” and collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release and forever discharge the Lenders and their Affiliates, officers, directors, employees, attorneys, consultants and agents (each a “Released Party” and collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the date
6
Exhibit 10.9
hereof arising out of, connected with or related in any way to this Amendment, the Credit Agreement or any Other Document.
[Signature Pages Follow]
7
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.
LOAN PARTIES |
|
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
WORTHINGTON WSP, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
TEMPEL STEEL COMPANY, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: Title:
|
|
T DO B, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
TEMPEL CANADA COMPANY |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
TEMPEL DE MEXICO, S. DE X.X. DE C.V. |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
WORTHINGTON STEEL ROME, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
THE WORTHINGTON STEEL COMPANY, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
THE WORTHINGTON STEEL COMPANY |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
WORTHINGTON TAYLOR, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
CLEVELAND PICKLING, INC. |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
WS MEXICO HOLDINGS, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
WORTHINGTON STEEL SERVICES, LLC |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGENT AND LENDER |
PNC BANK, NATIONAL ASSOCIATION |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
LENDERS |
BANK OF AMERICA, N.A. |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
CITIBANK, N.A. |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
XXXXX FARGO BANK, N.A. |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
U.S. BANK NATIONAL ASSOCIATION |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
CIBC BANK USA |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
FIRST NATIONAL BANK OF PA |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
THE NORTHERN TRUST COMPANY |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |
|
|
|
|
|
XXXXXXX XXXXX BANK USA |
|
|
|
|
|
By: ________________________ |
|
Name: |
|
Title: |