AMENDMENT NO. 3
Exhibit 4.53
AMENDMENT
XX. 0
XXXXXXXXX
XX. 0, dated as of October 29, 2008 (this "Amendment"), to the
Credit Agreement, dated as of July 17, 2007 and amended by Amendment No. 1 dated
as of February 14, 2008 and Amendment No. 2 and Consent dated as of June 27,
2008 (as so amended, the "Credit Agreement"),
by and among the lenders identified on the signature pages thereof (such
lenders, together with their respective successors and permitted assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"),
ABLECO FINANCE LLC, a Delaware limited liability
company, as the administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, "Agent"), BAIRNCO CORPORATION, a
Delaware corporation ("Parent"), and each of
Parent's Subsidiaries identified on the signature pages thereof as a Borrower
(such Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and
collectively, jointly and severally, as the "Borrowers"), and each
of Parent's Subsidiaries identified on the signature pages thereof as a
Guarantor (such Subsidiaries are referred to hereinafter each individually as a
"Guarantor",
and individually and collectively, jointly and severally, as the "Guarantors"; and
together with Borrowers, each a "Loan Party" and
collectively, the "Loan
Parties").
WHEREAS,
the Borrowers have advised Agent and the Lenders that they intend to make an
optional prepayment of the Loans, and have requested that the Agent and the
Lenders agree to modify certain terms and provisions in the Credit Agreement;
and
WHEREAS,
the Agent and the Lenders are willing to consent to such requested modifications
on and subject to the terms set forth herein;
NOW
THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:
1. Definitions. Any
capitalized term used herein and not defined shall have the meaning assigned to
it in the Credit Agreement.
2. Amendments.
(a) Amendment to
Definition. The definition of "EBIDTA" in Schedule 1.1 of the
Credit Agreement is hereby amended by deleting such definition in its entirety
and replacing it with the following:
""EBITDA" means, with
respect to any fiscal period, Parent's and its Subsidiaries' consolidated net
earnings (or loss), minus
extraordinary gains, interest income, plus
interest expense, income taxes, and depreciation and amortization for such
period, plus
or
minus, as the case may be, deferred financing costs that are written off
so long as such costs arise from financings effectuated prior to the Closing
Date, non cash amortization of deferred financing costs related to the Term Loan
and the Working Capital Indebtedness, non cash gains or losses arising from the
sale of capital assets, non cash gains or losses arising from the write up or
write down of assets (including the non cash write down associated with the XX
Xxxxxxx system), non-cash period pension costs or credit related to any existing
Employee Plan, and any non cash extraordinary gains or losses (in each case, to
the extent included in determining net income) for such period, in each case,
determined on a consolidated basis in accordance with GAAP; provided, that for
the calculations contemplated in Section 6.16 of the
Agreement, EBITDA shall be determined (A) before any Approved Addback Expenses,
(B) before Kasco Non-recurring Expenses, (C) before actual costs and expenses
related to the sale process of Kasco incurred on or prior to Xxxxxxxx 00, 0000,
(X) before any moving expenses and any related plant closure or asset disposal
expenses of Xxxxx Signtech, Ltd. incurred on or prior to December 31, 2008, (E)
before actual costs and expenses related to the transactions contemplated by
this Agreement in an aggregate amount not to exceed $500,000, (F) before actual
costs and expenses related to the Rancho Sale Leaseback or the Kasco Sale in an
amount not to exceed $300,000, in each case to the extent such items impact net
income, and (G) before actual costs and expenses related to the closure of the
Parent's headquarters (including severance costs associated with such closure)
and relocation to White Plains, New York, in an aggregate amount not to exceed
$600,000, so long as the details of such costs and expenses are furnished to the
Agent to its reasonable satisfaction."
(b) New
Definitions. The following definitions are hereby added in
alphabetical order to Schedule 1.1 of the
Credit Agreement:
""Adjusted Fixed
Charges" means, with respect to any fiscal period and with respect to
Parent and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, the sum, without duplication, of (a) Interest Expense (other than
payment-in-kind and non-cash financing expenses) accrued during such period
(exclusive of any Interest Expense described in clause (d) below), (b) principal
payments in respect of Indebtedness that are required to be paid during such
period, (c) all federal, state, and local income taxes accrued during such
period, and (d) any cash interest payments accrued during such period in respect
of any Subordinated Indebtedness of the Parent and its Subsidiaries owing to
Steel Partners, calculated on a pro forma basis as if such interest accrued on
such debt during the twelve month period ending on the last day of such
period."
""Amendment No. 3"
means Amendment No. 3, dated as of October 29, 2008, by and among the Loan
Parties, the Agent and the Required Lenders."
""Amendment No. 3 Effective
Date" means the date Amendment No. 3 becomes effective pursuant to
Section 3 of Amendment No. 3."
(c) Section 6.7 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"6.7 Subordinated Debt Payments
and Amendments . Except in connection with Refinancing
Indebtedness permitted by Section 6.1,
(a) optionally
prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any
Loan Party or any Subsidiary of a Loan Party, other than (i) the Obligations in
accordance with this Agreement, and (ii) the Working Capital Indebtedness in
accordance with the Working Capital Credit Agreement; provided, that the
Loan Parties' obligations under the Subordinated Indebtedness may be transferred
or assigned to WHX, so long as (x) after giving effect to such transfer or
assignment, such obligations of any Loan Party shall be subordinated on terms
consistent with those in effect prior to such transfer or assignment (and the
Agent shall have received an executed copy of the documentation evidencing such
subordination), (y) such transaction has no adverse effect on the security
interests granted to the Agent under any of the Loan Documents and (z) any
consideration to be paid to WHX in connection with such transfer or assignment
shall be paid solely in the form of equity of the Parent.
(b) make
any payment on account of the Steel Partners Junior Investment, the Steel
Partners Working Capital Guaranty, the Steel Partners Replacement Guaranty, any
Rights Offering Payment, or any Indebtedness that has been contractually
subordinated in right of payment if such payment is not permitted at such time
under the subordination terms and conditions; provided, however, so long as no
Event of Default has occurred and is continuing after giving effect to any
repayment:
(i) the
Steel Partners Junior Investment may be repaid, and each of the Steel Partners
Lien Replacement Guaranty and the Steel Partners Working Capital Guaranty may be
terminated by the Parent so long as the Release Conditions have been
satisfied,
(ii) [intentionally
omitted],
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(iii) upon
the receipt by the Working Capital Agent of a Rights Offering Payment in an
amount not less than $8,232,000, the Steel Partners Working Capital Guaranty
shall be terminated,
(iv) in
the case of the Subordinated Indebtedness, the principal amount of such
Subordinated Indebtedness may be repaid if the following conditions are met: (A)
the Release Conditions have been met, the H&H Security Agreement is in
effect or the Replacement Conditions have been met, (B) the Rights Offering
Payment has been fully made, the Steel Partners Junior Investment was made or
the Steel Partners Working Capital Guaranty is in effect, and (C) the funds used
to repay such subordinated debt are derived solely from an equity or debt
infusion by WHX or Steel Partners (in addition to their respective commitment
under Amendment No. 1 or this Agreement), on terms no more favorable to Steel
Partners than the terms of the Subordinated Indebtedness outstanding on the
Amendment No. 1 Effective Date, and
(v) in
the case of the Subordinated Indebtedness, interest on such Subordinated
Indebtedness at a rate per annum not to exceed 15% may be paid in cash, in whole
or in part, if the following conditions are met:
(A) such
payments of cash interest shall not exceed (x) $350,000 in any fiscal quarter of
the Parent and its Subsidiaries, if TTM EBITDA for the most recently completed
fiscal quarter is less than $16,750,000, and (y) $500,000 in any fiscal quarter
of the Parent and its Subsidiaries, if TTM EBITDA for the most recently
completed fiscal quarter is greater than or equal to $16,750,000;
(B) for
the 12-month period ending on the proposed date of any such payment, the ratio
of (x) EBITDA for such period minus Capital Expenditures
made (to the extent not already incurred in a prior period) or incurred during
such period, to (y) Adjusted Fixed Charges (calculated on a pro forma basis to
give effect to the proposed cash interest payment) for such period
shall be equal to or greater than 1.10 to 1.00;
(C) as
of the date of any such payment, and immediately after giving effect to such
payment, Working Capital Availability shall be greater than or equal to
$4,500,000;
(D) if
any portion of such cash interest is not permitted to be paid during any fiscal
quarter of the Parent and its Subsidiaries under this sub-section (b)(v), all or
a portion of such accrued (but not paid or capitalized) cash interest may be
paid during any of the subsequent three fiscal quarters of the Parent and its
Subsidiaries, subject to the satisfaction of the conditions set forth in this
subsection (b)(v).
(c) directly
or indirectly, amend, modify, alter, increase, or change any of the terms or
conditions of (i) the Working Capital Loan Documents (except as specifically
permitted by the Intercreditor Agreement), (ii) any other agreement, instrument,
document, indenture, or other writing evidencing or concerning
Indebtedness permitted under Section 6.1, (iii) except to the extent that such
amendment, modification, alteration, increase, or change could not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Change, any other Material Contract, or (iv) its certificate of incorporation or
bylaws (or other similar organizational documents), including, without
limitation, by the filing or modification of any certificate of designation, or
any agreement or arrangement entered into by it, with respect to any of its
Stock (including any shareholders' agreement), or enter into any new agreement
with respect to any of its Stock, without the prior written consent of Agent,
except any such amendments, modifications or changes or any such new agreements
or arrangements pursuant to this clause (iv) that are not adverse to the
interests of any member of the Lender Group, or
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(d) amend,
modify or otherwise change its name, jurisdiction of organization,
organizational identification number or FEIN, without at least twenty (20) days
prior written notice to Agent."
(d) Section 6.10 of the
Credit Agreement is hereby amended and restated to read as follows:
"6.10 Distributions. Make any
distribution or declare or pay any dividends (in cash or other property, other
than common Stock of the Parent) on, or purchase, acquire, redeem, or retire any
of Parent's Stock, of any class, whether now or hereafter outstanding, except
(i) distributions permitted under Section 6.7(b) in connection with the
repayment of any Steel Partners Junior Investment and/or Rights Offering
Payment, and (ii) after the transfer or assignment of the Subordinated
Indebtedness to WHX in accordance with the proviso in Section 6.7(a),
distributions or dividends to WHX in an aggregate amount during any period not
to exceed the amount that would have otherwise been permitted to be paid in cash
by the Borrowers during such period under Sections 6.7(b)(iv) and (v) in respect
of the Subordinated Indebtedness."
(e) Section 6.13 of the
Credit Agreement is hereby amended by (i) deleting the word "and" at the end of
clause (a), (ii) deleting the period at the end of clause (b) and substituting
"; and" therefor, and (iii) inserting a new clause (c) to read as
follows:
(c) the
payment of reasonable fees and expenses to WHX in connection with services
performed by WHX or its Subsidiaries (other than Parent and its Subsidiaries)
and on behalf of the Parent and its Subsidiaries; provided, that (i)
such transactions are conducted on an arm's-length basis in the ordinary course
of business and desirable for the prudent operation of the Parent's and its
Subsidiaries' business, upon fair and reasonable terms, and (ii) the aggregate
amount of such payments made in any fiscal quarter of the Parent and its
Subsidiaries does not exceed $150,000, whether paid in cash or in the form of
any other distributions;
(f) Section 6.16(a) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"(a) Minimum TTM
EBITDA. Permit TTM EBITDA to be less than $15,000,000 as of
the end of each fiscal quarter ending after the Amendment No. 3 Effective
Date."
3. Conditions to
Effectiveness. The effectiveness of this Amendment are subject
to the fulfillment, in a manner satisfactory to the Agent and the Lenders, of
each of the following conditions precedent (the date such conditions are
fulfilled or waived by the Agent and the Lenders is hereinafter referred to as
the "Amendment No. 3
Effective Date"):
(a) Representations and
Warranties; No Event of Default. The representations and
warranties herein, in Section 4 of the Credit Agreement and in each other Loan
Document and certificate or other writing delivered to the Agent and the Lenders
pursuant hereto on or prior to the Amendment No. 3 Effective Date shall be true
and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) after giving effect to
this Amendment on and as of the Amendment No. 3 Effective Date as though made on
and as of such date (except to the extent such representations and warranties
expressly relate to an earlier date), and no Default or Event of Default shall
have occurred and be continuing on the Amendment No. 3 Effective Date or would
result from this Amendment becoming effective in accordance with its
terms.
(b) Payment of Fees,
Etc. The Borrowers shall have paid all fees, costs, expenses
and taxes payable on the Amendment No. 3 Effective Date by the Borrowers
pursuant to Section 17.9 of the Credit Agreement.
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(c) Delivery of
Documents. The Agent and the Lenders shall have received the
following, each in form and substance satisfactory to the Agent and, unless
indicated otherwise, dated the Amendment No. 3 Effective Date:
(i)
counterparts of this Amendment, duly executed by the Required Lenders, the
Agent, each Loan Party;
(ii) counterparts
to an amendment to the limited guaranty of H&H, duly executed by the Agent
and H&H, whereby the limit of such guaranty shall be reduced from
$10,000,000 to $7,000,000;
(iii) counterparts
to an amendment to the Subordination Agreement, duly executed by the Agent, the
Working Capital Agent and the Subordinated Debt Lender;
(iv) an
Amendment and Consent in respect of the Working Capital Credit Agreement, duly
executed by the Loan Parties, the Working Capital Agent and the Working Capital
Lenders, which shall contain the consent by the Working Capital Lenders to the
prepayment of the Term Loan as set forth in Section 3(f) below;
(v) a
certificate of an officer of each Loan Party, certifying that such Loan Party
has not amended or otherwise modified (A) its charter, certificate of formation
or other organizational document or (B) its by-laws, operating agreement or
other similar agreement, in each case since the Closing Date (or, if any such
organizational document has been amended or otherwise modified, attaching a
true, correct and complete copy of such amendment or modification);
(vi) a
certificate of an officer of each Loan Party, certifying as to the matters set
forth in subsection (a) of this Section 3;
(vii) such
other agreements, instruments, approvals, opinions and other documents as the
Agent may reasonably request.
(d) Rights Offering
Payment. The Working Capital Agent shall have received a
Rights Offering Payment (as such term is defined in the Credit Agreement) in an
amount not less than $8,232,000, which Rights Offering Payment shall be applied
by the Working Capital Agent to prepay the Working Capital Term Loan; provided, that if
less than the amount of such Rights Offering Payment is outstanding under the
Working Capital Term Loan as of the date of such prepayment, the remaining
portion of such proceeds not applied to the Working Capital Term Loan shall be
applied to prepay the Term Loan.
(e) Additional Rights Offering
Payment to Working Capital Agent. The Working Capital Agent
shall have received an additional payment from the proceeds of the Rights
Offering, in an amount not less than $2,000,000, which payment shall be applied
by the Working Capital Agent to prepay the Working Capital
Advances.
(f) Additional Rights Offering
Payment to Agent. The Agent shall have received an additional
payment from the proceeds of the Rights Offering, in an amount not less than
$3,000,000, which payment shall be applied by the Agent to prepay the Term
Loan.
4. Representations and
Warranties. Each of the Borrowers and the Guarantors
represents and warrants as follows:
(a) The
execution, delivery and performance by the Borrowers or such Guarantor of this
Amendment and the performance by the Borrowers or such Guarantor of the Credit
Agreement, as amended hereby, have been duly authorized by all necessary action,
and the Borrowers or such Guarantor has all requisite power, authority and legal
right to execute, deliver and perform this Amendment and to perform its
obligations under the Credit Agreement, as amended hereby.
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(b) This
Amendment and the Credit Agreement, as amended hereby, is a legal, valid and
binding obligation of the Borrowers or such Guarantor, enforceable against the
Borrowers or such Guarantor in accordance with the terms thereof, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(c) The
representations and warranties contained in Section 4 of the Credit Agreement
are true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) after
giving effect to this Amendment on and as of the Amendment No. 3 Effective Date
as though made on and as of the Amendment No. 3 Effective Date (except to the
extent such representations and warranties expressly relate to an earlier date),
and no Event of Default or Default has occurred and is continuing on and as of
the Amendment No. 3 Effective Date, or would result from this Amendment becoming
effective in accordance with its terms.
5. Reaffirmations and
Acknowledgments.
(a) Reaffirmation of
Guaranty. Each Guarantor consents to the execution and
delivery by the Borrowers of this Amendment and jointly and severally ratify and
confirm the terms of the Guaranty contained in Article 3 of the Credit Agreement
with respect to the indebtedness now or hereafter outstanding under the Credit
Agreement as amended hereby and all promissory notes issued
thereunder.
(b) Acknowledgment of Security
Interests. Each Loan Party hereby acknowledges that, as of the date
hereof, the security interests and Liens granted to Agent and the Lenders under
the Credit Agreement and the other Loan Documents are in full force and effect
and are enforceable in accordance with the terms of the Credit Agreement and the
other Loan Documents.
6. Miscellaneous.
(a) Continued Effectiveness of
the Credit Agreement. Except as otherwise expressly provided
herein, the Credit Agreement and the other Loan Documents are, and shall
continue to be, in full force and effect and are hereby ratified and confirmed
in all respects, except that on and after the Amendment No. 3 Effective Date (i)
all references in the Credit Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Credit Agreement shall mean
the Credit Agreement as amended by this Amendment, and (ii) all references in
the other Loan Documents to the "Credit Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended by this Amendment. To the extent
that the Credit Agreement or any other Loan Document purports to pledge to
Agent, or to grant to Agent, a security interest or lien, such pledge or grant
is hereby ratified and confirmed in all respects. Except as expressly
provided herein, the execution, delivery and effectiveness of this Amendment
shall not operate as an amendment of any right, power or remedy of the Agent and
the Lenders (including the Issuing Lender) under the Credit Agreement or any
other Loan Document, nor constitute an amendment of any provision of the Credit
Agreement or any other Loan Document.
(b) No
Waiver. Except as expressly set forth herein, this Amendment
is not a waiver of, or consent to, any Default or Event of Default now existing
or hereafter arising under the Credit Agreement or any other Loan Document, and
the Agent and the Lenders expressly reserve all of their rights and remedies
under the Credit Agreement and the other Loan Documents, under applicable law or
otherwise. The waivers, consents and modifications herein are limited
to the specific instances and for the specific purposes set forth herein, shall
not apply to any facts or occurrences other than those on which the same are
based, shall not excuse the future non-compliance with the Loan Documents, and
shall not operate as a consent to any further or other matter under the Loan
Documents.
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(c) Counterparts. This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Amendment by
telefacsimile or electronic mail shall be equally as effective as delivery of an
original executed counterpart of this Amendment.
(d) Headings. Section
headings herein are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
(e) Costs and
Expenses. The Borrowers agree to pay on demand all reasonable
fees, costs and expenses of the Agent and the Lenders in connection with the
preparation, execution and delivery of this Amendment.
(f) Amendment as Loan
Document. The Borrowers and each Guarantor hereby acknowledge
and agree that this Amendment constitutes a "Loan Document" under the Credit
Agreement. Accordingly, it shall be an Event of Default under the
Credit Agreement if (i) any representation or warranty made by the Borrowers or
any Guarantor under or in connection with this Amendment shall have been untrue,
false or misleading in any material respect when made, or (ii) the Borrowers or
any Guarantor shall fail to perform or observe any term, covenant or agreement
contained in this Amendment.
(g) Governing
Law. This Amendment shall be governed by the laws of the State
of New York.
(h) Waiver of Jury
Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS.
[Remainder
of this Page Intentionally Left Bank.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered as of the date first above written.
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BORROWERS:
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XXXXX, INC.,
a
Delaware corporation
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By:
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/s/
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Title:
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XXXXX
VISCOR LTD.,
a
Texas limited partnership
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By: Xxxxx
Partners, Inc.,
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Its General
Partner
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By:
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/s/
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Title:
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XXXXX SIGNTECH,
LTD.,
a
Texas limited partnership
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By: Xxxxx
Partners, Inc.,
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Its General
Partner
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By:
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/s/
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Title:
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KASCO
CORPORATION,
a
Delaware corporation
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By:
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/s/
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Title:
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SOUTHERN
SAW ACQUISITION CORPORATION,
a
Delaware corporation
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By:
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/s/
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Title:
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PARENT:
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BAIRNCO
CORPORATION,
a
Delaware corporation
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By:
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/s/
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Title:
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Amendment
No. 3
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AGENT
AND LENDERS:
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ABLECO
FINANCE LLC,
a
Delaware limited liability company, as Agent and as
a
Lender, on behalf of itself and its affiliate assigns
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By:
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/s/
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Title:
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Amendment
No. 3
