EXHIBIT 10.8(b)
WAKEFIELD ENGINEERING, INC.
000 Xxxxxxxx Xxxxxx, Xxxxx 000X
Xxxxxxx, XX 00000
As of January 31, 1999
FLEET NATIONAL BANK
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Eighth Amendment to Loan Agreement
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement dated June 22, 1994,
as amended by the First Amendment thereto dated May 5, 1995, a Second Amendment
thereto dated as of January 30, 1996, a Third Amendment thereto dated as of
March 29, 1996, a Fourth Amendment thereto dated as of October 11, 1996, a Fifth
Amendment thereto dated as of July 1, 1997, a Sixth Amendment thereto dated as
of December 31, 1997, and a Seventh Amendment thereto dated November 12, 1998
(together the "Loan Agreement") and all promissory notes, agreements, documents
and instruments entered into by Wakefield Engineering, Inc. ("Wakefield"),
Wakefield Extrusion Corp. ("WEC"), Xxxxxxxx Industries, Inc. ("Xxxxxxxx"),
Malco, Inc. ("Malco") and Uni-Star Industries, Inc. ("Uni-Star") and any other
person or obligor pursuant thereto (collectively, the "Loan Documents") with or
for the benefit of Fleet National Bank ("Bank"). Except as otherwise defined
herein, capitalized terms used herein shall have the meanings given them in the
Loan Agreement. This Eighth Amendment to Loan Agreement is referred to as the
"Eighth Amendment".
Background. Borrowers have requested that Bank agree to extend the maturity
of the credit facilities and agree to certain other changes to the Loan
Agreement. Accordingly, Bank and Borrowers agree as follows, subject to the
terms and conditions hereof:
1. Amendments to Loan Agreement. Subject to the satisfaction of the terms and
conditions hereof, Bank and Borrower have agreed that the Loan Agreement shall
be amended as follows:
(a) Amendment to Definition of Borrowing Base. The definition of Borrowing
Base is deleted and replaced with the following:
"`Borrowing Base' means the sum of the following (as shown on the
Bank's records at any time):
(a) (i) for the period from January 31, 1999 through February 18, 1999,
eighty-five percent (85%) of the unpaid face value of all Eligible
Accounts, (ii) for the period from February 19, 1999 through February 28,
1999, eighty-three percent (83%) of the unpaid face value of all Eligible
Accounts and (iii) from March 1, 1999 and thereafter, eighty percent (80%)
of the unpaid face value of Eligible Accounts, PLUS
(b) for Eligible Inventory exclusive of Uni-Star Eligible Inventory, the
lesser of (i) (A) for the period from January 31, 1999 through February 28,
1999, fifty-five percent (55%) of the first-in, first-out cost or market
value, whichever is lower, of all such Eligible Inventory, (B) for the
period from March 1, 1999 through March 31, 1999, fifty-three percent (53%)
of the first-in, first-out cost or market value, whichever is lower, of all
such Eligible Inventory, and (C) from April 1, 1999 and thereafter, fifty
percent (50%) of the first-in, first-out cost or market value, whichever is
lower, of all such Eligible Inventory, or (ii) $4,000,000.00, PLUS
(c) as to Uni-Star Eligible Inventory, the lesser of (i) $500,000 or (ii)
thirty-five percent (35%) of the first-in, first-out cost or market value,
whichever is lower, of all Eligible Inventory of Uni-Star; LESS
(d) the face amount of all letters of credit issued by the Bank on behalf
of any Borrower, with the maximum amount of such letters of credit not to
exceed $1,000,000.00, and the estimated amount of the exposure under any
interest rate swap agreements in effect with respect to any of the
Obligations, plus all Bank's customary fees and charges with respect to the
foregoing;
PROVIDED that Bank at all times reserves the right, exercisable in Bank's
reasonable credit judgment, based upon circumstances then existing, to
adjust any of the percentages or the amounts set forth above upon fifteen
(15) days' notice to Borrower."
(b) Amendment to Revolving Loan Limit. The definition of Revolving Loan
Limit is amended to delete "Ten Million Dollars ($10,000,000.00)" and to replace
it with "Nine Million Dollars ($9,000,000.00)".
(c) Amendment to Definition of Termination Date. The definition of
Termination Date is deleted and replaced with the following:
"`Termination Date' shall mean the first to occur of (i) the
termination by Lender on or after an Event of Default of its commitments to
make Loans and extend letters of credit under this Agreement or (ii) April
30, 1999."
(d) Interest Rates. Borrowers acknowledge and agree that all rights to
elect to convert Prime Rate Advances into LIBOR Rate Advances or to extend any
outstanding LIBOR
Rate Advances have terminated as of January 31, 1999 and no further LIBOR Rate
Advances shall be made to Borrowers pursuant the Loan Agreement or otherwise.
3. Earnings/Loss Covenant. Borrowers covenant and agree that the consolidated
pretax earnings (loss) of the Borrowers as determined in accordance with GAAP
exclusive of extraordinary and nonrecurring gains ("Earnings") shall not, for
any calendar month commencing with the calendar month ending January 31, 1999,
be less than -$100,000 and that the cumulative fiscal year to date Earnings at
the end of any calendar month commencing with the calendar month ending January
31, 1999 shall not be less than $650,000.
4. Amendment Fee. Borrowers agree to pay the Bank on the date hereof, an
amendment fee of $75,000, which fee shall be fully earned and nonrefundable.
5. Representations and Warranties.
To induce Bank to enter into this Eighth Amendment, each Borrower jointly
and severally warrants, represents and covenants to Bank that:
(a) Organization and Qualification. Each Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Borrower is duly qualified or is
authorized to do business and is in good standing as a foreign corporation in
all states and jurisdictions in which the failure of such Borrower to be so
qualified would have a material adverse effect on the financial condition,
business or properties of such Borrower.
(b) Corporate Power and Authority. Each Borrower is duly authorized and
empowered to enter into, execute, deliver and perform this Eighth Amendment, and
each of the Loan Documents to which it is a party. The execution, delivery and
performance of this Eighth Amendment and each of the other Loan Documents have
been duly authorized by all necessary corporate action and do not and will not
(i) require any consent or approval of the shareholders of any Borrower; (ii)
contravene any Borrower's charter or by-laws; (iii) violate, or cause any
Borrower to be in default under, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award in effect
having applicability to such Borrower; (iv) result in a breach of or constitute
a default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Borrower is a party or by which such
Borrower's properties may be bound or affected; or (v) result in, or require,
the creation or imposition of any Lien (other than Permitted Liens) upon or with
respect to any of the properties now owned or hereafter acquired by any
Borrower.
(c) Legally Enforceable Agreement. This Eighth Amendment and each of the
other Loan Documents delivered under this Eighth Amendment will be, a legal,
valid and binding obligation of each Borrower, enforceable against each Borrower
in accordance with its respective terms subject to bankruptcy, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
(d) No Material Adverse Change. Since December 31, 1998, the date of the
last financial statements provided by the Borrowers to the Bank, there has been
no material adverse change in the condition, financial or otherwise, of
Borrowers as shown on the consolidated balance sheet thereof as of such date and
no change in the aggregate value of property and assets owned by Borrowers,
except changes in the ordinary course of business, none of which individually or
in the aggregate has been materially adverse.
(e) Continuous Nature of Representations and Warranties. Each
representation and warranty contained in the Loan Agreement and the other Loan
Documents remains accurate, complete and not misleading in any material respect
on the date of this Eighth Amendment, except for representations and warranties
that explicitly relate to an earlier date and changes in the nature of
Borrowers' business or operations that would render the information in any
exhibit attached thereto either inaccurate, incomplete or misleading, so long as
Bank has consented to such changes or such changes are expressly permitted by
the Loan Agreement.
6. Conditions Precedent.
Notwithstanding any other provision of this Eighth Amendment or any of the
other Loan Documents, and without affecting in any manner the rights of Bank
under the other sections of this Eighth Amendment, this Eighth Amendment shall
not be effective as to Bank unless and until each of the following conditions
has been and continues to be satisfied:
(a) Documentation. Bank shall have received, in form and substance
satisfactory to Bank and its counsel, a duly executed copy of this Eighth
Amendment, the Sixth Amended and Restated Revolving Credit Note in the form
attached as Exhibit A hereto, the Amendment to Subordination Agreement with
Alpha in the form attached as Exhibit B hereto, with such additional documents,
instruments and certificates as Bank and its counsel shall require in connection
therewith, all in form and substance satisfactory to Bank and its counsel.
(b) No Default. Other than any existing or prospective Events of Default
that Borrowers have disclosed to Bank on the date hereof, no Event of Default
shall exist.
(c) No Litigation. Except as previously disclosed to and consented to by
Bank, no action, proceeding, investigation, regulation or legislation shall have
been instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of the Loan Agreement or this
Eighth Amendment or the consummation of the transactions contemplated thereby or
hereby.
7. Acknowledgment of Obligations.
Each Borrower hereby (1) reaffirms and ratifies all of the promises,
agreements, covenants and obligations to Bank under or in respect of the Loan
Agreement and other Loan Documents as amended
hereby and (2) acknowledges that it is unconditionally liable for the punctual
and full payment of all Obligations, including, without limitation, all charges,
fees, expenses and costs (including reasonable attorneys' fees and expenses)
under the Loan Documents, as amended hereby, and that it has no defenses,
counterclaims or setoffs with respect to full, complete and timely payment and
performance of all Obligations. Each Borrower confirms and agrees that at
January 31, 1999 the outstanding principal balances of and accrued interest on
the Loans and the fees owed to Bank were as set forth on Exhibit C hereto.
8. Confirmation of Liens.
Each Borrower acknowledges, confirms and agrees that the Loan Documents, as
amended hereby, are effective to grant to Bank duly perfected, valid and
enforceable first priority security interests and liens in the Collateral
described therein, except for Permitted Liens, and that the locations for such
Collateral specified in the Loan Documents have not changed except as provided
herein. Each Borrower further acknowledges and agrees that all Obligations of
Borrowers are and shall be secured by the Collateral.
9. Uni-Star Accounts Remittances. Uni-Star agrees that all remittances on Uni-
Star Accounts shall be paid to a lock box and blocked account under the dominion
of the Bank upon the first to occur of (a) an Event of Default occur and
continuing under the Loan Agreement or (b) the borrowing availability of the
Borrowers (the difference between the outstanding Loans and credit extensions
and the Borrowing Base) shall be less than 100,000 for three (3) consecutive
days.
10. Miscellaneous.
Except as set forth herein, the undersigned confirms and agrees that the
Loan Documents remain in full force and effect without amendment or modification
of any kind. The execution and delivery of this Eighth Amendment by Bank shall
not be construed as a waiver by Bank of any existing or hereafter occurring
Default or Event of Default under the Loan Documents. This Eighth Amendment,
together with the Loan Agreement and other Loan Documents, constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior dealings, correspondence, conversations or
communications between the parties with respect to the subject matter hereof.
This Eighth Amendment and the transactions hereunder shall be deemed to be
consummated in the Commonwealth of Massachusetts and shall be governed by and
interpreted in accordance with the laws of that state. Any reference in any of
the Loan Documents to Lender shall be deemed to be a reference to the Bank. This
Eighth Amendment and the agreements, instruments and documents entered into
pursuant hereto or in connection herewith shall be "Loan Documents" under and as
defined in the Loan Agreement.
Executed under seal on the date set forth above.
ATTEST: WAKEFIELD ENGINEERING, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
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Name:
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Title:
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ATTEST: WAKEFIELD EXTRUSION CORP.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
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Name:
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Title:
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ATTEST: XXXXXXXX INDUSTRIES, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
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Name:
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Title:
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ATTEST: MALCO, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
-------------------------- -----------------------------
Name:
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Title:
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ATTEST: UNI-STAR INDUSTRIES, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxxx Xxxxxx
-------------------------- -----------------------------
Name:
------------------------
Title:
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Accepted in Boston, Massachusetts
as of January 31, 1999
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. XxXxxxx
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Name: Xxxxxxx X. XxXxxxx
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Title: Vice President
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