AMENDMENT NO. 4
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 4 ("Amendment") is entered into as of March 24, 1997, by
and among American Buildings Company, a corporation organized under the laws of
the State of Delaware ("Borrower") and LaSalle Business Credit, Inc.
(successor-in-interest to StanChart Business Credit, Inc.), as agent ("Agent")
for itself and the various other financial institutions as may hereafter become
parties to the Loan Agreement (as defined below) (collectively, the "Lenders"
and individually, each a "Lender") and LaSalle as "Agent" for the Lenders.
BACKGROUND
Borrower, Agent and Lenders are parties to a Loan and Security Agreement
dated as of January 19, 1993 (as amended, supplemented or otherwise modified
from time to time, the "Loan Agreement") pursuant to which Lenders provide
Borrower with certain financial accommodations.
Borrower has requested that Agent and Lenders amend the Loan Agreement and
Agent and Lenders are willing to do so on the terms and conditions hereafter set
forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lenders, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 3 below, the Loan Agreement is hereby amended as
follows:
(a) Section 1.2 of the Loan Agreement is hereby amended as follows:
(i) the following defined term is added in its appropriate
alphabetical order:
"AMENDMENT DATE" shall mean March 24, 1997.
(ii) the following defined term is amended in its entirety to
provide as follows:
"DEBT SERVICE COVERAGE RATIO" shall mean, with respect to
any applicable fiscal period (without duplication), the
ratio of (a) EBITDA to (b) current maturities of long term
debt and capitalized leases scheduled to be paid during such
period plus interest expenses paid during such period.
(b) Section 2.8(A) of the Loan Agreement is amended in its entirety to
provide as follows:
"(A) RATE, REVOLVING LOANS. Prime Loans shall bear interest,
on the Daily Balances owing, at a rate per annum (the
"Revolving Prime Rate") equal to the Reference Rate, payable
monthly in arrears on the first Business Day of each month
for the preceding month. Eurodollar Loans shall bear
interest, on the Daily Balances owing, at a rate per annum
(the "Revolving LIBOR Rate") equal to two percentage points
(2.0%) above the Eurodollar Rate, payable in arrears at the
end of the applicable Interest Period, provided, however,
that with respect to Eurodollar Loans with an Interest
Period of six months, interest shall be payable in arrears
both at the end of the three (3) month anniversary of such
Eurodollar Loan and at the end of the Interest Period,
without duplication."
(c) Section 2.10 of the Loan Agreement is amended in its entirety to
provide as follows:
"2.10 LOCKBOX; CREDITING COLLECTIONS.
On or before the Closing date, Borrower shall establish depository
account ("Depository Account") and lock box ("Lockbox") arrangements
acceptable to the Lenders at banks acceptable to the Lenders
("Collecting Banks") and, to the extent requested by Agent at any time
thereafter, invoices issued by Borrower after such request shall
direct Account Debtors to send their payments directly to the post
office box established by the aforesaid Lockbox arrangement or to a
Depository Account. Such Lockbox and Depository Account arrangements
will provide that Collecting Banks have no right of setoff against
such Lockbox or Depository Account, and the Depository Account shall
be in the name of Agent or in the name of Borrower if Agent has
obtained a perfected security interest in such Lockbox and Depository
Accounts. If Borrower receives any payments from any Account Debtor,
Borrower hereby agrees that all such payments shall be the sole
-2-
and exclusive property of the Lenders for application to the
outstanding Revolving Loans, and Borrower shall hold such payments in
trust as the Lenders' trustee and immediately deliver said payments to
Borrower's Depository Account. For purposes of calculating interest
payable hereunder, the receipt of any check, wire transfer or other
item of payment by Agent shall not be considered a payment on account
until the date the same is honored by Agent's depositary bank with
respect thereto and final settlement thereof is reflected by
irrevocable credit to Agent's account in such bank. For purposes of
calculating Revolving Loan Availability, each such item of payment
shall be considered a payment on account on the date of receipt by
Agent's depository bank. Notwithstanding the foregoing, so long as
Excess Revolving Loan Availability is equal to or greater than
$10,000,000 at all times or such lower amount that Agent in its sole
discretion may determine, payments from Account Debtors may be
received directly by Borrower, Borrower shall not be required to
direct Account Debtors to send their payments to the box or a
Depository Account and any payments received in such post office box
or Depository Account may be delivered directly to Borrower."
(d) The first sentence of Section 3.1(A) of the Loan Agreement is
amended in its entirety to provide as follows:
"This Agreement shall have a term (the "Initial Term") commencing on
the Effective Date and expiring on January 31, 1999. Upon notice by
Agent to Borrower, the term of this Agreement shall be renewed for
successive periods of one (1) year (each a "Renewal Term"). Notice of
such renewal shall be effectuated by providing Notice in the manner
set forth in Section 17 not less than thirty (30) days prior to the
effective date of such renewal (which date may only be at the end of
the Initial Term or the end of any Renewal Term)."
(e) Section 3.2 of the Loan Agreement is amended in its entirety to
provide as follows:
"3.2 PREPAYMENT; TERMINATION.
Borrower may borrow, repay and reborrow Revolving Loans subject to the
terms of this Agreement. Subject to the terms of this Section 3.2,
Borrower may, at any time, on one hundred and twenty (120) days
written notice, prepay in full the Loans and terminate this Agreement
by paying to Agent, for the ratable benefit of the Lenders, in cash or
by a wire transfer of immediately available funds, the Obligations. If
any Letters of Credit are
-3-
outstanding on the effective date of termination, Borrower shall
deliver to Agent cash collateral or back-up letters of credit in an
amount equal to the aggregate undrawn face amount of such Letters of
Credit (plus the projected amount of all fees associated therewith).
Borrower and the Lenders acknowledge and agree that, as a direct and
proximate result of the prepayment and termination of this Agreement
under any circumstances, the Lenders will suffer a loss in an amount
which is difficult to calculate and determine with certainty and,
therefore, as a result of Borrower's and each of the Lender's
reasonable endeavor to ascertain and agree in advance as to the amount
necessary to compensate the Lenders for said loss, Borrower agrees to
pay to Agent for the ratable benefit of the Lenders in cash or by wire
transfer of immediately available funds, in addition to the other
Obligations, an aggregate prepayment fee calculated as a percentage of
the Maximum Revolving Credit Facility as follows:
FEE AS A
PERCENTAGE OF
MAXIMUM REVOLVING CREDIT
FACILITY AND TERM LOAN IF PREPAID
------------------------- ----------
1% Any time on or before the first
anniversary of the Amendment
date.
1/2% Any time after the first anniversary of the
Amendment date, but on or before the second
anniversary of the Amendment date.
In the event that the Agent, any Lender or any Participant requests
reimbursement or compensation for a sum greater than $100,000 in the
aggregate under Section 2.15 and/or under Section 2.17, in either
case, as a result of the occurrence of any event described in Section
2.15 or 2.17 which is applicable only to any or all of the Agent,
Lenders and Participants, and not to financial institutions generally,
then, at any time on or after the date on which such request is made,
Borrower may pay the Obligations in full without payment of any
prepayment fee."
(f) Section 8.13 of the Loan Agreement is amended in its entirety to
provide as follows:
"8.13 DISTRIBUTIONS. Purchase, redeem or retire any of its
capital stock of any class, whether now or hereafter outstanding, pay,
directly or indirectly, any
-4-
cash, stock or other securities or property dividends or distributions
to its shareholders (or relatives thereof) or issue any stock or other
securities except (a) as described on Schedule 7.13, (b) stock and
stock options issued to Borrower's and its Subsidiaries' senior
management employees as described in Section 7.14, (c) dividends to
Borrower from any Subsidiary, (d) issuance by Borrower of equity
securities provided that no such issuance shall constitute or result
in a Change of Control and (e) so long as no Event of Default has
occurred or would exist after giving effect thereto, Borrower may
purchase, in addition to the 1,000,500 shares previously purchased by
Borrower, an additional 999,500 shares in the aggregate of its own
common stock that is designated treasury stock."
(g) Sections 11.1, 11.2, 11.3 and 11.5 of the Loan Agreement are amended in
their entirety to provide as follows:
"11.1 TANGIBLE NET WORTH. Borrower shall maintain at all times
Tangible Net Worth in an amount of not less than Thirty Million
Dollars ($30,000,000), plus an amount equal to ninety percent
(90%) of Borrower's Net Income (but not decreased for losses)
for the fiscal quarter then ending, minus the amount utilized by
Borrower to purchase up to two million (which amount includes
the 1,000,500 shares previously purchased by Borrower) in the
aggregate of its own common stock."
"11.2 DEBT SERVICE COVERAGE. Borrower shall maintain as at the end of
each fiscal quarter a Debt Service Coverage Ratio of not less
than 10.0 to 1.0 measured on a rolling four quarter basis."
"11.3 EBITDA. Borrower shall maintain as at the end of each fiscal
year, commencing with the fiscal year ending December 31, 1997,
EBITDA of at least $21,000,000."
"11.5 CAPITAL EXPENDITURES. Borrower and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures in any
Fiscal Year in excess of (a) with respect to the Fiscal Year
ended December 31, 1997, the sum of Ten Million Dollars
($10,000,000) and (b) with respect to the Fiscal Year ending
December 31, 1998 and each Fiscal Year commencing thereafter,
the sum of (i) Three Million Dollars ($3,000,000) plus (ii) the
aggregate amount of depreciation reported by Borrower and its
Subsidiaries for such Fiscal Year on their consolidated federal
income tax returns."
(h) The first parenthetical in Section 14.1 of the Loan Agreement is
amended in its entirety to provide as follows:
-5-
"(except the fees set forth in Section 2.9(D))"
3. Conditions of Effectiveness. This Amendment shall become effective upon
satisfaction of the following conditions precedent: Agent shall have received
(i) four (4) copies of this Amendment executed by Borrower and consented and
agreed to by Guarantors,(ii) a guaranty of the Obligations by AMT/Xxxxxx
Corporation, and (iii) such other certificates, instruments, documents,
agreements and opinions of counsel as may be required by Agent and Lenders or
their counsel, each of which shall be in form and substance satisfactory to
Agent, Lenders and their counsel.
4. Representations and Warranties. Borrower hereby represents and warrants
as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all
such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(d) Borrower has no defense, counterclaim or offset with respect to
the Loan Agreement.
5. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan Agreement, and all
other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of Agent or any
Lender, nor constitute a waiver of any provision of the Loan Agreement, or
any other documents, instruments or agreements executed and/or delivered
under or in connection therewith.
-6-
6. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
7. Headings. Section 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.
8. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and
year first written above.
AMERICAN BUILDINGS COMPANY,
Borrower
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Its: President
LASALLE BUSINESS CREDIT, INC.,
as Agent and Lender
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxx
Its: Vice President
Acknowledged and Agreed to by
each of the following Guarantors:
ABC TRANSPORTATION COMPANY
By: /s/ R. XXXXXXX XXXXXXXX
------------------------------
Name:R. Xxxxxxx Xxxxxxxx
Its: Assistant Secretary
ABC BROKERAGE CO.
By: /s/ R. XXXXXXX XXXXXXXX
------------------------------
Name: R. Xxxxxxx Xxxxxxxx
Its: Assistant Secretary
-7-
