Exhibit 10(c)
AMENDMENT TO LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
This AMENDMENT TO LETTER OF CREDIT AND REIMBURSEMENT
AGREEMENT (the "Amendment"), dated as of January 27, 1997, and effective as of
October 31, 1996, is by and among FIRST UNION NATIONAL BANK, successor to FIRST
FIDELITY BANK, N.A., a national banking association with offices located at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 (the "Bank"), CENTRAL CASTINGS
CORPORATION, an Alabama corporation with offices located at 0000 Xxx Xxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Borrower"), CENTRAL SPRINKLER COMPANY, a
Pennsylvania corporation with offices located at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxx, XX 00000 ("CSC"), CENTRAL SPRINKLER CORPORATION, a Pennsylvania
corporation with offices located at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000
("Corporation"), and CENTRAL CPVC CORPORATION, an Alabama corporation with
offices located at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, XX 00000 ("CPVC" and,
together with CSC and the Corporation, the "Guarantors", and together with the
Borrower, the "Obligors").
Background
A. The Bank and the Borrower entered into that certain Letter of Credit
and Reimbursement Agreement, dated as of November 1, 1995 (as amended from time
to time, including without limitation, by this Amendment, the "Credit
Agreement"), pursuant to which the Bank agreed to issue for the account of
Borrower letters of credit in the aggregate face amount of $11,206,250 (the
"Letters of Credit").
B. In order to secure Borrower's obligations under the Agreement,
Borrower executed and delivered to the Bank (i) a Mortgage and Security
Agreement by Borrower and the Xxxxxxx County Economic Development Council (the
"Council") covering the Project Facilities, and (ii) a General Security
Agreement dated as of November 1, 1995 (the "Security Agreement").
C. In connection with the execution and delivery of the Agreement and
the Note and in order to secure the prompt payment and performance of the
Borrower's obligations thereunder, CSC executed and delivered to the Bank that
certain Guaranty, dated as of November 1, 1995 (together with all amendments and
modifications thereto, "CSC Guaranty").
D. In connection with the execution and delivery of the Agreement and
the Note and in order to secure the prompt payment and performance of the
Borrower's obligations thereunder, Corporation executed and delivered to the
Bank that certain Guaranty, dated as of November 1, 1995 (together with all
amendments and modifications thereto, "Corporation Guaranty").
E. in connection with the execution and delivery of the Agreement and in
order to secure the prompt payment and performance of the Borrower's obligations
thereunder, Central Sprink, Inc. (formerly, a California corporation and
subsequently merged into the Borrower) executed and delivered to the Bank that
certain Guaranty, dated as of November 1, 1995 (together with all amendments and
modifications thereto, "Sprink Guaranty", and together with Corporation
Guaranty, the "Guarantees").
F. The Agreement, the Collateral Security Documents, the Guarantees,
and all of the documents, instruments and agreements executed and delivered in
connection therewith, together with all amendments and modifications thereto,
shall be referred to hereinafter as the "Credit Documents".
G. Since the date of the Agreement, Sprink has merged into Borrower and
CPVC and Central Sprinkler Export Corporation, a Barbados corporation ("Export")
have been incorporated as subsidiaries of CSC.
H. The Bank, the Borrower, and the Guarantors, pursuant to the terms
hereof, wish to amend certain of the terms of the Credit Documents.
NOW, THEREFORE, incorporating the foregoing Background herein
by reference and for other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties agree as follows:
1. Defined Terms. Terms used herein which are capitalized but
not defined herein shall have the respective meanings ascribed to such terms in
the Credit Agreement.
2. Amendments.
a. Each of the following defined terms contained in
Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
(aq) "Consolidated Funded Indebtedness" means all obligations
of the Consolidated Corporations for borrowed money,
including, without limitation (and without duplication): (i)
all obligations, contingent or otherwise, in connection with
all letter of credit facilities (whether or not drawn),
acceptance facilities, or other similar facilities issued for
the account of the Consolidated Corporations or any of them,
(ii) all obligations of the Consolidated Corporations
evidenced by bonds, debentures, or other similar instruments,
(iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with
respect to property acquired by the Consolidated Corporations,
(iv) all capital lease obligations of the Consolidated
Corporations, (v) all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business), and
other contingent obligations of the Consolidated Corporations,
and (vi) all debt referred to in clause (i) through (v) above
secured by (or for which the holder of such debt has existing
rights, contingent or otherwise, to be secured by) any lien,
security interest, or other charge or encumbrance upon or in
property (including, without limitation, accounts and contract
rights) owned by such Person; provided, however that: (A)
trade indebtedness, tax and other accruals, tax deferrals and
deferred compensation occurring in the ordinary course of the
Company's business shall be specifically excluded from the
foregoing definition; and (B) the greater of: (x) the
aggregate outstanding amount of indebtedness under the Bonds,
and (y) the maximum aggregate amount of indebtedness for which
the Borrower or any Guarantor is obligated under the Letters
of Credit, shall be used for purposes of calculating
Consolidated Funded Indebtedness.
(bz) "Guarantor" means, individually, and "Guarantors" means,
collectively, jointly and severally, CS Corporation, CS
Company and CPVC;
(ca) "Guarantor Security Agreement" means individually and
collectively, the Security Agreement dated as of November 1,
1995, executed and delivered by Central Sprink in favor of the
Bank, substantially in the form of Exhibit F hereto and
assumed by Borrower in accordance with the terms of the
Amendment;
(cb) "Guaranty" or "Guaranty Agreement" means, individually,
and "Guaranties" or "Guaranty Agreements" means, collectively
(i) the Guaranty and Suretyship Agreements
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dated as of November 1, 1995, executed and delivered by each
Original Guarantor in favor of the Bank, substantially in the
form of Exhibit E hereto, and (ii) the Guaranty and Suretyship
Agreement in form and substance satisfactory to the Bank,
dated as of January 27, 1997, executed and delivered by CPVC
in favor of the Bank;
b. Each of the following additional definitions is
hereby added to Section 1.1 of the Credit Agreement to read in its entirety as
follows:
"Amendment" means the Amendment to Letter of Credit
and Reimbursement Agreement dated as of January 27, 1997, by
and between the Bank, Borrower, and Guarantors.
"Amendment Documents" means collectively, the
Amendment, the Guaranties executed and delivered pursuant to
Paragraph 6(a) of the Amendment and all other agreements,
documents, instruments and writings required pursuant to or
delivered in connection with the Amendment.
"CPVC" means Central CPVC Corporation, an Alabama
corporation.
"Export" means Central Sprinkler Export Corporation,
a Barbados corporation.
"Original Guarantor" means, individually, and
"Original Guarantors" means collectively, jointly, and
severally, CS Corporation, CS Company and Central Sprink.
C. Section 6.18(i) of the Credit Agreement is hereby
amended by adding a new subsection (K) thereto which states as follows:
(K) such additional liens as are described
on Schedule A attached to the Amendment relating to
the following: (a) CS Company indebtedness to
CoreStates Bank, N.A. in the original principal
amount of $688,000, (b) CPVC indebtedness now
existing or hereafter incurred to CoreStates Bank,
N.A. in the principal amount of up to $7,500,000 for
the purpose of financing CPVC's new plant and
machinery and the refinancing thereof, whether such
refinancing is with CoreStates Bank, N.A., or with
any other entity, and in any other form, including
without limitation a bond issue; and (c) Spraysafe's
indebtedness to Royal Bank of Scotland in the
original principal amount of $1,110,000;
d. Section 6.19(a) of the Credit Agreement is hereby
amended as follows
(A) the initial clause of Section 6.19(a) is hereby replaced with the
following:
(a) Not incur, create, assume or permit to
exist any indebtedness for borrowed money, or on
account of deposits (other than in the ordinary
course of business), or evidenced by notes, bonds,
debentures or similar obligations except the items
identified on Schedule A attached to the Amendment
and, with respect to the Borrower, Guarantors and
Spraysafe, indebtedness described in items (i)
through (v) below and with respect to the Guarantors
and Spraysafe, but not the Borrower, indebtedness
described below in items (vi) through (viii):
(B) clause (viii) of Section 6.19(a) is hereby replaced with the
following:
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(viii) cash borrowings under existing
unsecured lines of credit, as extended, provided that
such cash borrowings shall not exceed $45,000,000 in
the aggregate outstanding at any time;
e. Section 6.19(b) of the Credit Agreement is hereby
amended by substitution for the initial clause the following:
(b) not guaranty or otherwise in any way become or be
responsible for indebtedness or obligations of any
other Person, contingent or otherwise, except the
guarantees described in Schedule A attached to the
Amendment and, with respect to the Borrower, Guarantors
and Spraysafe, guarantees described in items (i)
through (iii) below and, with respect to the Guarantors
and Spraysafe, but not the Borrower, guarantees
described in below in items (iv):
f. Sections 7.1 through 7.4 of the Credit Agreement are
hereby amended and restated in their entirety to read as follows:
Section 7.1. Consolidated Tangible Net Worth. The
Consolidated Corporations' Consolidated Tangible Net
Worth as at the end of any fiscal quarter (tested in
connection with the delivery of financial statements
pursuant to Section 6.1 and 6.2 hereof), during the
term hereof, and from and after October 31, 1996, shall
be not less than $41,000,000.
Section 7.2. Consolidated Current Ratio. The
Consolidated Corporations shall maintain at all times
(to be measured as of the last day of each fiscal
quarter and tested in connection with the delivery of
financial statements pursuant to Sections 6.1 and 6.2
hereof) a ratio of Consolidated Current Assets to
Consolidated Current Liabilities of (a) not less than
1.40:1.00 from October 3 1, 1996 through October 30,
1997 and (b) not less than 1.75 to 1.0 from and after
October 31, 1997; provided, however, that for purposes
of computing this covenant, amounts outstanding under
the Term Loan shall be excluded from the calculation of
current liabilities.
Section 7.3 Consolidated Quick Ratio. The Consolidated
Corporations shall maintain at all times (to be
measured as of the last day of each fiscal quarter and
tested in connection with the delivery of financial
statements pursuant to Sections 6.1 and 6.2 hereof) a
Consolidated Quick Ratio of (a) not less than 0.69:1.00
from October 31, 1996 through October 30, 1997, and (b)
not less than 0.87:1.00 from and after October 31,
1997; provided, however, that for purposes of computing
this covenant, amounts outstanding under the Term Loan
shall be excluded from the calculation of current
liabilities.
Section 7.4 Ratio of Consolidated Funded Indebtedness
to Consolidated Tangible Net Worth. The Consolidated
Corporations shall maintain a ratio of Consolidated
Funded Indebtedness to Consolidated Tangible Net Worth
(to be measured as of the last day of each fiscal
quarter and tested in connection with the delivery of
financial statements pursuant to Sections 6.1 and 6.2
hereof) of not greater than the amounts set forth in
the right column for the test dates within the periods
set forth in the left column:
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Period Ratio
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October 31, 1996 through October 30, 1997 1.37:1.0
October 31, 1997 and thereafter 1.2:1.0
3. Conditions Precedent. The effectiveness of this Amendment
and the Bank's obligations hereunder are conditioned upon the satisfaction of
the following conditions precedent:
a. The Obligors shall have delivered to the Bank this
Amendment, duly executed by each of the Obligors.
b. All proceedings required to be taken by the Obligors
in connection with the transactions contemplated by this Amendment shall be
satisfactory in form and substance to the Bank and its counsel, and the Bank
shall have received all such counterpart originals or certified or other copies
of such documents as the Bank may reasonably request.
c. The Obligors shall have executed and delivered to
the Bank such other documents, instruments and agreements as the Bank may
reasonably request.
4. Representations and Warranties. In order to induce the Bank
to enter into this Amendment, the Obligors hereby represent and warrant to the
Bank as follows:
a. The representations and warranties contained in the
Credit Documents are true and correct on and as of the date of this Amendment
and after giving effect hereto, no Default or Event of Default will be in
existence or will occur as a result of giving effect hereto.
b. The execution, delivery and performance of this
Amendment will not violate any provision of any law or regulation or of any writ
or decree of any court or governmental instrumentality, or any of the Obligors'
certificate or articles of incorporation, by-laws, or other similar
organizational documents.
c. Each of the Obligors has the power to execute,
deliver and perform this Amendment and each of the documents, instruments and
agreements to be executed and/or delivered in connection herewith and has taken
all necessary action to authorize the execution, delivery and performance of
this Amendment and each of the documents, instruments and agreements executed
and/or delivered in connection herewith and the performance of the Credit
Agreement as amended hereby.
d. The execution, delivery and performance of this
Amendment and each of the documents, instruments and agreements to be executed
and/or delivered in connection herewith does not require the consent of any
other party or the consent, license, approval or authorization of, or
registration or declaration with, any governmental body, authority, bureau or
agency and the Credit Documents, this Amendment and each of the documents,
instruments and agreements executed and/or delivered in connection herewith
constitute legal, valid and binding obligations of each of the Obligors,
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and except as enforcement may be subject to
general equitable principles.
5. Consents. Subject to, and conditioned upon the Obligors'
compliance with the provisions of Paragraph 6 hereof, the Bank hereby consents
to the following:
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a. the merger of Sprink into the Borrower, which
consent is granted pursuant to Section 6.12(a) of the Credit Agreement;
b. the creation of CPVC and Export as wholly-owned
subsidiaries of CS Company, which consent is granted pursuant to Section 6.12(a)
of the Credit Agreement;
c. the intercompany transfers between the Borrower
and Export, to the extent such transfers relate to receivables arising in
connection with export sales;
d. the creation of additional liens disclosed on
Schedule A hereto, otherwise prohibited pursuant to Section 6.18 of the Credit
Agreement; and
e. the incurrence of the additional indebtedness and
guarantees thereof identified on Schedule A hereto, otherwise prohibited
pursuant to Section 6.19 of the Credit Agreement;
6. Delivery of Additional Agreements and Instruments. Obligors
covenant and agree that, within ten (10) days after the date hereof, they will
deliver or will cause to be delivered to the Bank a Guaranty Agreement by CPVC
in favor of the Bank, in form and substance satisfactory to the Bank:
7. Reaffirmation. Except as amended hereby, all of the terms,
covenants and conditions of the Credit Agreement and each of the other Credit
Documents (including, but not limited to, provisions relating to any authority
granted to the Bank to confess judgment against the Borrower and any waiver of
the right to trial by jury, if any) are ratified, reaffirmed and confirmed and
shall continue in full force and effect as therein written and are not intended
to be re-enacted as of the above date, but rather to be effective as of the
original date of such documents.
8. Confirmation of Guaranties. Each of the Original
Guarantors (other than Sprink) hereby reaffirms and ratifies all of the terms,
covenants, and conditions contained in each of their respective Guarantees and
confirms that such Guarantees are binding and enforceable against the Guarantors
as if such Guarantees had been executed as of the date hereof.
9. Continuation of Mortgages and Security Interests.
a. Borrower hereby reaffirms and ratifies all of the
terms, covenants and conditions contained in the Mortgage and confirms that such
Mortgage is binding, enforceable against Borrower and in full force and effect,
and continues to secure all of Borrowers' obligations under the Credit
Documents, as such obligations have been modified hereby;
b. The Borrower, as successor to Sprink in accordance
with the requirements of Section 6.12(a) of the Credit Agreement, hereby
assumes, reaffirms and ratifies all of the terms, covenants, and conditions
contained in the Guarantor Security Agreement and confirms that such Guarantor
Security Agreement is binding and enforceable against the Borrower and in full
force and effect and continues to secure all of such Guarantors' obligations
under the Credit Documents as such obligations have been modified hereto.
10. Binding Effect. This Amendment shall be binding upon and
inure to the benefit of the Obligors and the Bank and their respective
successors and assigns; provided, however, that the Obligors may not assign any
of their rights, nor delegate any of their obligations, under this Amendment
without the prior written consent of the Bank and any purported assignment or
delegation absent such consent shall be void. The Bank may at any time assign or
otherwise transfer (by participation or otherwise) any or all of its rights, or
delegate any or all of its obligations, hereunder.
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11. Counterparts; Effectiveness. This Amendment may be
executed in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed to be an original, but all
such counterparts shall together constitute one and the same agreement. This
Amendment shall be deemed to have been executed and delivered when the Bank has
received counterparts hereof executed by all parties listed on the signature
page(s) hereto.
12. Amendment and Waiver. No amendment or modification of this
Amendment, and no waiver of any one or more of the provisions hereof shall be
effective unless set forth in a writing and signed by the parties hereto.
13. Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Pennsylvania without reference to conflict of laws principles.
14. Severability. Any provision of this Amendment that is held
to be inoperative, unenforceable, voidable or invalid in any jurisdiction shall,
as to that jurisdiction, be ineffective, unenforceable, void or invalid without
affecting the remaining provisions in that or any other jurisdiction, and to
this end the provisions of this Amendment are declared to be severable.
15. Judicial Proceedings. Each party to this Amendment agrees
that any suit, action or proceeding, whether claim or counterclaim, brought or
instituted by any party hereto or any successor or assign of any party, on or
with respect to this Amendment, the documents, instruments and agreements
executed in connection herewith, the Credit Documents or the dealings of the
parties with respect hereto and thereto, shall be tried only by a court and not
by a jury. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. Further, each
party waives any right it may have to claim or recover, in any such suit, action
or proceeding, any special, exemplary, punitive or consequential damages or
damages other than, or in addition to, actual damages. THE OBLIGORS ACKNOWLEDGE
AND AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AMENDMENT
AND THAT THE BANK WOULD NOT ENTER INTO THIS AMENDMENT IF THE WAIVERS SET FORTH
IN THIS SECTION WERE NOT A PART OF THIS AMENDMENT.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.
ATTEST: CENTRAL CASTINGS CORPORATION
By:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: CEO Title: E.V.P. - Finance
(EXECUTIONS CONTINUED)
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ATTEST: CENTRAL SPRINKLER COMPANY
By:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------- ---------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: CEO Title: E.V.P. - Finance
ATTEST: CENTRAL SPRINKLER CORPORATION
By:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
------------------- --------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: CEO Title: E.V.P. - Finance
ATTEST: CENTRAL CPVC CORPORATION
By:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: CEO Title: E.V.P. - Finance
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx X. Storm
--------------------
Name: Xxxxxxx X. Storm
Title: Senior Vice President
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