Exhibit 10.14
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT ("Third Amendment") is made as of
this 15th day of October, 2003, by and among FLEET CAPITAL CORPORATION
("Fleet"), a Rhode Island corporation with an office at Xxx Xxxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, individually as a Lender and as Agent
("Agent") for itself and any other financial institution which is or becomes a
party hereto (each such financial institution, including Fleet, is referred to
hereinafter individually as a "Lender" and collectively as the "Lenders"), the
CANADIAN PARTICIPANTS party hereto, the U.K. PARTICIPANTS party hereto, an
Affiliate of Fleet National Bank to be incorporated under the laws of Canada or
a province thereof and to be selected by Agent, individually as a Lender and as
Canadian Agent ("Canadian Agent"), FLEET NATIONAL BANK, London U.K. branch,
trading as FleetBoston Financial, individually as a Lender and as U.K. Agent
("U.K. Agent"), XXXXX FARGO FOOTHILL, INC. (f/k/a Foothill Capital Corporation),
as Syndication Agent ("Syndication Agent"), the LENDERS, KATY INDUSTRIES, INC.,
a Delaware corporation, with its chief executive office and principal place of
business at 000 Xxxxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxxxxx 00000
("Katy" or "U.S. Borrower"), Xxxxx Industries (Canada) Inc., a Canadian
corporation with its chief executive office and principal place of business at
000 Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxx. X0X 0X0 ("Xxxxx Canada" or "Canadian
Borrower") and Contico Manufacturing Limited ("CML" or U.K. Borrower"), a
private limited company incorporated under the laws of England and Wales and
registered with Company No. 1338772 whose registered office is Xxxxxxx Xxx,
Xxxxxxx Xxxxxxxx, XX00 0XX, Xxxxxxx. Katy, Xxxxx Canada and CML are sometimes
hereinafter referred to individually as a "Borrower" and collectively as
"Borrowers."
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Agent, Lenders, Canadian Participants, U.K. Participants, U.K.
Agent, Syndication Agent and Borrowers entered into a certain Loan Agreement
dated as of January 31, 2003 as amended by a certain First Amendment to Loan
Agreement dated as of April 30, 2003 and by a certain Second Amendment to Loan
Agreement dated as of September 12, 2003 (said Loan Agreement, as so amended, is
hereinafter referred to as the "Loan Agreement"); and
WHEREAS, Borrowers desire to amend and modify certain provisions of the
Loan Agreement pursuant to the terms and conditions hereof;
WHEREAS, subject to the terms and conditions hereof, Agent, Lenders,
Canadian Participants, U.K. Participants and U.K. Agent are willing to so amend
and modify the Loan Agreement; and
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Agent and Lenders to Borrowers, the parties hereto hereby
agree as follows:
1. Definitions. All capitalized terms used herein without definition shall
have the meanings given to them in the Loan Agreement.
95
2. Disposition of Assets. Subsection 7.2.9 of the Loan Agreement is hereby
deleted and the following is inserted in its stead:
"7.2.9 Disposition of Assets. Sell, lease or otherwise dispose of
any of, or permit any Subsidiary of any Borrower to sell, lease or
otherwise dispose of any of, its Properties, including any disposition of
Property as part of a sale and leaseback transaction, to or in favor of
any Person, except for:
(i) sales of Inventory in the ordinary course of business;
(ii) transfers of Property to a Borrower by a Subsidiary of Borrower
or transfers of Property by a Loan Party to another Loan Party;
(iii) dispositions of Property that is substantially worn, damaged,
uneconomic, redundant or obsolete; provided that the sales proceeds from
such dispositions are (A) reinvested in Equipment or other real Property
in which Agent has a Lien (subject only to Permitted Liens that are not
Purchase Money Liens) within 90 days after the date of such disposition as
provided in subsection 3.3.1 of the Agreement or (B) applied to the Loans
pursuant to subsection 3.3.1 of the Loan Agreement.
(iv) dispositions of investments described in clauses (iv), (v),
(vi) and (vii) of the definition of the term "Restricted Investments";
(v) other dispositions expressly authorized by this Agreement;
(vi) sales of Equipment and real Property in connection with the
closing of Xxxxx' wire fabrication facility in Mooresville, Indiana;
provided that the aggregate sales proceeds from such dispositions equal or
exceed $1,800,000 and that such sales proceeds net of amounts required to
remove Permitted Liens prior to the Liens of Agents as applied first, to
installments of principal due under the Term Notes ratably, to be applied
to future installments in inverse order of maturity in an amount equal to
eighty percent (80%) of the Appraised Value of the Equipment so sold,
until paid in full and second, to repay outstanding principal of U.S.
Revolving Credit Loans on a ratable basis.
(vii) sales of real Property in connection with the closing of the
Microtron facility in Pineville, North Carolina ("Microtron Sales");
provided that the aggregate sales proceeds net of sale costs and expenses
from such dispositions equal or exceed $370,000 and that such sales
proceeds are applied first, to installments of principal due under the
Term Notes ratably, to be applied to future installments in inverse order
of maturity, until paid in full and second, to repay outstanding principal
of U.S. Revolving Credit Loans ratably;
(viii) leases or subleases of unused real Property or Equipment;
provided that such leases or subleases are pursuant to arms-length
agreements with third parties at fair market rates;
(ix) the sale of all or substantially all of the Securities or
assets and business of GC/Waldom Electronics, Inc.; provided that the
aggregate sales proceeds from any such
disposition equal or exceed $8,000,000 and that such sales proceeds are
applied to the Loans pursuant to subsection 3.3.1 of the Agreement;
(x) Asset Sales of assets having a fair market value not in excess
of $10,000,000 in any single transaction (or a series of related
transactions) or in excess of $30,000,000 in the aggregate over the Term;
provided that in any such Asset Sale, (x) the consideration received for
such assets shall be in an amount at least equal to the greater of (i) the
fair market value thereof, and (ii) (A) in the case of Accounts and
Inventory, the aggregate value attributable to such Accounts and Inventory
in determining the Canadian, U.K. or U.S. Borrowing Base, as applicable
(but without giving effect to any reduction due to advance rates or any
reserves), and (B), as long as the Term Loan is outstanding, in the case
of Equipment and real Property Assets, seventy percent (70%), with respect
to real Property, or eighty percent (80%), with respect to Equipment, of
the Appraised Value of such asset; it being understood that in the case of
Asset Sales of capital stock or other equity interests (or any options or
warrants to purchase stock or other Securities exchangeable for or
convertible into stock or other equity interests) of any Person, the
consideration received therefor shall be in an amount equal to the greater
of (i) the fair market value thereof and (ii) the aggregate value
attributable to such Person's Accounts and Inventory in determining the
Canadian, U.K. or U.S. Borrowing Base, as applicable (but without giving
effect to any reduction due to advance rates or any reserves) plus seventy
percent (70%), with respect to real Property, or eighty percent (80%) with
respect to Equipment, of the Appraised Value of such Person's Equipment or
real Property; (y) the sole consideration received shall be cash or, if
the disposition in question is of a business line, entire facility or
division, assumption of Indebtedness; and (z) the proceeds of such Asset
Sales shall be applied as required by subsection 3.3.1 of the Agreement
or, with respect to sales proceeds of Equipment or real Property, are
reinvested in Equipment or other real Property in which Agent has a Lien
(subject only to Permitted Liens that are not Purchase Money Liens) within
90 days after the date of disposition as provided in subsection 3.3.1 of
the Agreement; and provided, further, that in any such Asset Sale in which
the consideration received exceeds $20,000, Agent shall have received a
certificate of an officer of Borrower Representative evidencing that the
conditions in clauses (x) and (y) above will be satisfied and certifying
that Borrowers and their Subsidiaries will comply with clause (z) above
and setting forth in reasonable detail the calculations relating thereto
and otherwise in form and substance satisfactory to Agent at least 5
Business Days prior to the consummation of the proposed Asset Sale;
(xi) sale of all or substantially all of the assets and business of
Duckback Products, Inc. (the "Duckback Asset Sale") if (x) the net sales
proceeds realized by Duckback Products, Inc. from such sale equals or
exceeds $15,000,000, (y) after giving effect to such sale, there is no
existing and continuing Event of Default, (z) Duckback Products, Inc. or
Katy shall pay to Agent for application to the U.S. Obligations the amount
of such net sales proceeds in accordance with subsection 3.3.1 of the
Agreement, which net sales proceeds shall be applied to outstanding U.S.
Obligations as provided in said subsection 3.3.1, and (aa) the terms and
conditions of such sale, including, without limitation, any asset purchase
agreement entered into in connection with such sale, are reasonably
acceptable to Agent; and
(xii) sales or liquidations of Inactive Subsidiaries."
3. Third Amendment Effective Date. This Third Amendment shall become
effective upon satisfaction of each of the following conditions:
(i) Borrowers, Agent and Majority Lenders shall have executed
and delivered to each other this Third Amendment; and
(ii) The Microtron Sales shall have been consummated in
accordance with the provisions of subsection 7.2.9 of the Loan
Agreement as amended by this Third Amendment on or before
January 31, 2004.
The date on which each of the foregoing conditions precedent
is satisfied shall be referred to as the "Third Amendment Effective Date."
4. Continuing Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and effect.
5. Governing Law. This Third 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
conflicts of laws.
6. Counterparts. This Third Amendment may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
(Signature Page Follows)
(Signature Page to Third Amendment to Loan Agreement)
IN WITNESS WHEREOF, this Third Amendment has been duly executed on the day
and year specified at the beginning of this Second Amendment.
KATY INDUSTRIES, INC.
By:___________________________________________
Name: Xxxx Xxxxxxxxx
Title: Vice President
CONTICO MANUFACTURING LIMITED
By:___________________________________________
Name:__________________________________
Title:_________________________________
XXXXX INDUSTRIES (CANADA) INC.
By:___________________________________________
Name:__________________________________
Title:_________________________________
FLEET CAPITAL CORPORATION,
as Agent and as a Lender
By:___________________________________________
Name: Xxxxx Xxxxxx
Title: Vice President
XXXXX FARGO FOOTHILL, INC. (f/k/a Foothill
Capital Corporation), as a Lender
By:___________________________________________
Name:__________________________________
Title:_________________________________
GMAC COMMERCIAL FINANCE, as a Lender
By:___________________________________________
Name:__________________________________
Title:_________________________________
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By:___________________________________________
Name:__________________________________
Title:_________________________________
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:___________________________________________
Name:__________________________________
Title:_________________________________
UPS CAPITAL CORPORATION, as a Lender
By:___________________________________________
Name:__________________________________
Title:_________________________________
Accepted and Agreed to this ___ day of October, 2003.
GUARANTORS:
KKTY HOLDING COMPANY, L.L.C.
By:_________________________________
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Authorized Manager
AMERICAN GAGE & MACHINE CO.
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
CONTINENTAL COMMERCIAL PRODUCTS, LLC
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Authorized Manager
DBPI, INC.
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
GCW, INC.
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
PTR MACHINE CORP.
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
SAVANNAH ENERGY SYSTEMS COMPANY
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
XX XXXXX XXXX PRESERVING COMPANY
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
XXXXX INDUSTRIES, INC.
By:_________________________________
Name: Xxxx Xxxxxxxxx
Title: Secretary
---------------------------
