FOURTEENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
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Exhibit
10.17
Execution
Copy
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FOURTEENTH AMENDMENT TO
AMENDED AND RESTATED
FOURTEENTH
AMENDMENT, dated as of January 31, 2008 to the Amended and Restated Loan and
Security Agreement, dated as of May 22, 2000, among HWC Wire & Cable Company
(formerly known as Houston Wire & Cable Company) (“Borrower”), the lenders
or lender named therein (“Lenders”) and Bank of America, N.A. (“Bank of
America”) as successor-in-interest to Fleet Capital Corporation, as agent for
said Lenders (Bank of America, in such capacity, “Agent”). Said
Amended and Restated Loan and Security Agreement, as amended by a certain First
Amendment to Amended and Restated Loan and Security Agreement by and among
Borrower, Lenders and Agent dated as of July 13, 2000, by a certain Second
Amendment to Amended and Restated Loan and Security Agreement by and among
Borrower, Lenders and Agent dated May 30, 2001, by a certain Third
Amendment to Amended and Restated Loan and Security Agreement by and among
Borrower, Lenders and Agent dated October 22, 2001, by a certain Fourth
Amendment to Amended and Restated Loan and Security Agreement by and among
Borrower, Lenders and Agent dated December 31, 2002, by a certain Fifth
Amendment to Amended and Restated Loan and Security Agreement by and among
Borrower, Lenders and Agent dated November 19, 2003, by a certain Sixth Amended
to Amended and Restated Loan and Security Agreement dated as of May 26, 2005 by
and among Borrower, Lenders and Agent, by a certain Seventh Amendment to Amended
and Restated Loan and Security Agreement dated December 14, 2005 by and among
Borrower, Agent and Lenders, by a certain Eighth Amendment to Amended and
Restated Loan and Security Agreement dated December 30, 2005 by and among
Borrower, Agent and Lenders, by a certain Ninth Amendment to Amended and
Restated Loan and Security Agreement dated May 23, 2006 by and among Borrower,
Agent and Lenders, by a certain Tenth Amendment to Amended and Restated Loan and
Security Agreement dated as of November 3, 2006 by and among Borrower, Agent and
Lenders, by a certain Eleventh Amendment to Amendment of Restated Loan and
Security Agreement dated as of July 31, 2007 by and among Borrower, Agent and
Lenders, by a certain Twelfth Amendment to Amended and Restated Loan and
Security Agreement dated August 3, 2007 by and among Borrower, Agent and Lenders
and by a certain Thirteenth Amendment to Amended and Restated Loan and Security
Agreement dated as of September 28, 2007 by and among Borrower, Agent and
Lenders and as it may be further amended, is hereinafter referred to as the
“Loan Agreement.” The terms used herein and not otherwise defined
shall have the meanings attributed to them in the Loan
Agreement. References to Agent and/or any Lender shall include
Agent’s or such Lender’s predecessor(s)-in-interest.
WHEREAS,
Lenders, Agent and Borrower desire to make certain amendments and modifications
to the Loan Agreement.
NOW
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained and contained in the Loan Agreement, the parties hereto hereby agree
as follows:
1. Amended and Additional
Definitions. The following definitions of “Fourteenth
Amendment” and “Fourteenth Amendment Effective Date” are hereby inserted into
Appendix A to
the Loan Agreement. The definition of “Borrowing Base” contained in
Appendix A to
the Loan Agreement is hereby deleted and the following is inserted in its
stead:
* * *
“Borrowing Base – as
at any date of determination thereof, an amount equal to the lesser
of:
(i) the
Maximum Revolving Loan at such date; or
(ii) an
amount equal to:
(a) up
to eighty-five percent (85%) of the net amount of Eligible Accounts outstanding
at such date;
PLUS
(b) the
Effective Inventory Advance Rate multiplied by the value of Eligible Inventory
at such date calculated on the basis of the lower of cost or market with the
cost of raw materials and finished goods calculated on a first-in, first-out
basis;
MINUS
(subtract from the lesser of (i) or (ii) above)
(iii) an
amount equal to the sum of (a) any amount which Agent reasonably expects it may
be obligated to pay in the future for the account of Borrower, plus (b) the
amount of any reserve established by Agent pursuant to Section 1.1.1, plus (c)
the LC Amount.
For purposes hereof, the net amount of
Eligible Accounts at any time shall be the face amount of such Eligible Accounts
less, to the extent not already deducted in the calculation of Eligible
Accounts, any and all returns, rebates, discounts (which may, at Agent’s option,
be calculated on shortest terms), credits, allowances or excise taxes of any
nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such
time. Further, the value of Eligible Inventory shall be adjusted as
of each date of calculation to reflect decreases in the Comex market price of
copper as reported on the London Metals Exchange, but only to the extent that
such decrease would result in a value less than current book value.
* * *
Fourteenth Amendment
– that certain Fourteenth Amendment to Amended and Restated Loan and Security
Agreement dated as of January 31, 2008 by and among Borrower, Agent and
Lenders.
* * *
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Fourteenth Amendment
Effective Date – the date on which the conditions precedent to the
effectiveness of the Fourteenth Amendment are satisfied.”
2. Distribution. Subsection
8.2.7 of the Loan Agreement is hereby deleted and the following is inserted in
its stead:
“8.2.7 Distributions. Declare
or make, or permit any Subsidiary of Borrower to declare or make, any
Distributions, except that:
(a) Subsidiaries
of Borrower may make Distributions to Borrower with respect to their common
Stock;
(b) Borrower
may pay dividends to Guarantor in an amount sufficient to maintain the corporate
existence of Guarantor, to pay income taxes and to pay the reasonable
out-of-pocket expenses of Guarantor and audit fees and expenses, not to exceed
$100,000 per annum in the aggregate;
(c) Borrower
may pay dividends to Guarantor for further distribution to its stockholders in
an amount not to exceed the lesser of (x) income taxes on phantom income
incurred on the issuance of payment-in-kind notes with respect to the Guarantor
Subordinated Debt or (y) $125,000 per year;
(d) Borrower
may pay dividends to Guarantor of up to $100,000 in each Fiscal Year to
repurchase the capital stock of employees who die or terminate their employment
with Borrower; and
(e) Borrower
may make Distributions to Guarantor to permit Guarantor to pay dividends on
Guarantor’s common Stock so long as after giving effect to any such
Distribution, (i) no Event of Default shall have occurred and is continuing,
(ii) the aggregate amount of all such Distributions made within the most
recently ended twelve month period plus the amount of the proposed Distribution
does not exceed, within any twelve month period, $10,000,000, and (iii)
Availability was or will not be less than $15,000,000 at any time within the 90
days immediately prior to the date of such Distribution or after giving effect
to such Distribution and any pending Distribution for declared but unpaid
dividends or common Stock repurchases.
(f) On
or prior to December 31, 2009, Borrower may make Distributions to Guarantor to
permit Guarantor to make repurchases of, Guarantor’s common Stock so long as
after giving Guarantors effect to any such Distribution, (i) no Event
of Default shall have occurred and is continuing, (ii) the aggregate amount of
all such Distributions does not exceed $75,000,000, and (iii) Availability was
or will not be less than $15,000,000 at any time within the 90 days immediately
prior to the date of such Distribution or after giving effect to such
Distribution and any pending Distributions for declared but unpaid dividends or
common Stock repurchases.
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3. Financial
Covenant. Exhibit Q to the Loan
Agreement is hereby deleted and Exhibit Q attached to
this Fourteenth Amendment is hereby inserted in its stead. The
financial covenant contained in Exhibit Q to the Loan
Agreement is hereby deleted and the following is inserted in its
stead:
“EXHIBIT Q
FINANCIAL
COVENANTS
* * *
COVENANT
Fixed Charge Coverage
Ratio- If Availability at any time within the most recently ended 90 day
period is less than Fifteen Million Dollars ($15,000,000), (x) Borrower
shall not permit the Fixed Charge Coverage Ratio for the most recently ended
twelve month period ending on a March 31, June 30, September 30 or December 31
to be less than 1.10 to 1 and (y) Borrower shall not permit the Fixed Charge
Coverage Ratio for the most recently ended fiscal quarter ending on March 31,
June 30, September 30 or December 31 to be less than 2.00 to 1.”
4. Fee. In
order to induce Bank of America, as a Lender, to enter into this Fourteenth
Amendment, Borrower agrees to pay to Agent, for the benefit of Bank of America,
as sole Lender, a fee in the amount of $20,000. Said fee shall be due
and payable and fully earned and non-refundable on the date hereof.
5. Conditions
Precedent. This Fourteenth Amendment shall become effective
upon satisfaction of each of the following conditions precedent:
(a) Agent
shall have received each of the following documents, each in form and substance
acceptable to Agent:
(i) Copy
of this Fourteenth Amendment, duly executed by Borrower, Guarantor, Agent and
each Lender; and
(ii) Amended
and Restated Revolving Credit Note in the form attached hereto and incorporated
herein as Exhibit A-1 attached to this Fourteenth Amendment executed by
Borrower.
(b) Bank
of America, as Agent and Lender, and The CIT Group/Business Credit, Inc. shall
have executed and delivered to each other an Assignment and Acceptance Agreement
pursuant to which The CIT Group/Business Credit, Inc. shall have assigned to
Bank of America all of its rights, title and interest in its Loans and Revolving
Loan Commitment.
The date
on which all of the conditions precedent listed above are satisfied or waived is
hereinafter referred to as the “Fourteenth Amendment Effective
Date.” After the Fourteenth Amendment Effective Date, Lenders shall
deliver to Borrower the Revolving Credit Notes and Term Notes previously
executed and delivered by Borrower to Lenders, which Notes shall be marked
“Amended and Superceded.”
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6. Signature
Block. The signature block to the Loan Agreement is hereby
amended to read as the signature block to this Fourteenth
Amendment.
7. Continuing
Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and
effect.
8. Governing
Law. This Fourteenth Amendment and the obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of Illinois applicable to contracts made and performed in
such state, without regard to the principles thereof regarding conflict of
laws.
9. Counterparts. This
Fourteenth Amendment may be executed in any number of separate counterparts,
each of which shall, collectively and separately, constitute one
agreement.
10. No
Novation. The amended and restated Revolving Credit Note to be
delivered pursuant to this Fourteenth Amendment replaces and supercedes those
certain promissory notes in the principal amount of $55,000,000 and $20,000,000,
respectively, each dated September 27, 2007 (the “Original Notes”) and the
execution and delivery of such amended and restated Revolving Credit Note shall
not constitute (a) an extinguishment of the indebtedness of Borrower to the
applicable Lender evidenced by the Original Notes or (b) a novation of any such
indebtedness or any of the Original Notes.
(Signature
Page Follows)
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(Signature
Page to Fourteenth Amendment to Amended and Restated
Loan
and Security Agreement)
IN
WITNESS WHEREOF, this Fourteenth Amendment has been duly executed as of the
first day written above.
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HWC
WIRE & CABLE COMPANY, as Borrower
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HOUSTON
WIRE & CABLE COMPANY, as Guarantor
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By:
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/s/ Xxxxx X. Xxxxxx
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By:
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/s/ Xxxxxxx X.
Xxxxxxxxxx
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Name:
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Xxxxx
X. Xxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxxxxx
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Title:
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Vice
President and Chief Financial Officer
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Title:
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President
and Chief Executive Officer
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BANK
OF AMERICA, N.A., as Agent and a Lender
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By:
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/s/ Xxxxxx X. Xxxxx
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Name:
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Xxxxxx
X. Xxxxx
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Title:
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Sr.
Vice President
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Revolving
Loan Commitment: $75,000,000
EXHIBIT
A-1
AMENDED
AND RESTATED REVOLVING CREDIT NOTE
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$75,000,000
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Amended
and Restated
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As
of January 31, 0000
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Xxxxxxx,
Xxxxxxxx
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FOR VALUE
RECEIVED, the undersigned, (hereinafter “Borrower”), hereby PROMISES TO PAY to
the order of Bank of America, N.A., a national banking association (“Lender”),
or its registered assigns, at the principal office of Bank of America, N.A., as
agent for such Lender, or at such other place in the United States of America as
the holder of this Note may designate from time to time in writing, in lawful
money of the United States of America and in immediately available funds, the
principal amount of Seventy-Five Million Dollars ($75,000,000), or such lesser
principal amount as may be outstanding pursuant to the Loan Agreement (as
hereinafter defined) with respect to the Revolving Credit Loan, together with
interest on the unpaid principal amount of this Note outstanding from time to
time.
This Note
is one of the or, if applicable, the, Revolving Credit Notes referred to in, and
issued pursuant to, that certain Amended and Restated Loan and Security
Agreement dated as of May 22, 2000 by and among Borrower, the lender
signatories thereto (including Lender) and Fleet Capital Corporation, the
predecessor-in-interest to Bank of America, N.A. (“Bank of America”), as agent
for such Lenders (Bank of America in such capacity “Agent”) (hereinafter amended
from time to time, the “Loan Agreement”), and is entitled to the benefit and
security of the Loan Agreement. All of the terms, covenants and
conditions of the Loan Agreement and the Security Documents are hereby made a
part of this Note and are deemed incorporated herein in full. All
capitalized terms herein, unless otherwise defined, unless otherwise
specifically defined in this Note, shall have the meanings ascribed to them in
the Loan Agreement.
The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Loan Agreement and, if not sooner paid
in full, on the Commitment Termination Date, unless the term hereof is extended
in accordance with the Loan Agreement. Interest thereon shall be paid
until such principal amount is paid in full at such interest rates and at such
times as are specified in the Loan Agreement.
Upon and
after the occurrence, and during the continuation, of an Event of Default, this
Note shall or may, as provided in the Loan Agreement, become or be declared
immediately due and payable.
The right
to receive principal of, and stated interest on, this Note may only be
transferred in accordance with the provisions of the Loan
Agreement.
Demand,
presentment, protest and notice of nonpayment and protest are hereby waived by
Borrower.
This Note
shall be interpreted, governed by, and construed in accordance with, the
internal laws of the State of Illinois.
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HWC
WIRE & CABLE COMPANY
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By:
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Name:
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Title:
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A-1-1
