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AMENDMENT NO. 3
TO
SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 ("Amendment No. 3") is entered into as of
May 13, 1997, by and between Cold Metal Products, Inc., a New York corporation
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ("Borrower") and The Bank of New York having an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Bank").
BACKGROUND
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Borrower and Bank are parties to a Second Amended and Restated
Credit and Security Agreement dated as of August 1, 1994, as amended by
Amendment No. 1 dated as of June 30, 1995 and Amendment No. 2 dated as of
December 31, 1996 (as amended and as may be further amended, supplemented or
otherwise modified from time to time, the "Loan Agreement") pursuant to which
Bank provided Borrower with certain financial accommodations.
Borrower has requested that Bank amend the Loan Agreement on
the terms set forth herein and Bank is 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 Bank, 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:
2.1. Section 1.2 of the Loan Agreement is hereby amended as
follows:
(a) the following defined terms are hereby added in their
appropriate alphabetical order:
"AMENDMENT NO. 3" shall mean Amendment No. 3 to Second Amended
and Restated Credit and Security Agreement dated as of May 13, 1997.
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"AVERAGE MONTHLY LIBOR RATE" shall mean the rate per annum for
the one month LIBOR rate as published in THE WALL STREET JOURNAL, averaged
monthly on a calendar month basis.
"BORROWING BASE CERTIFICATE" means a certificate duly executed
by an officer of Borrower appropriately completed and in substantially the form
of Exhibit 1.2(c).
"▇▇▇▇▇▇▇▇ MORTGAGE" shall mean the Charge/Mortgage of Land
executed by Guarantor in favor of Bank with respect to the Hamilton Property
securing the original principal amount of $55,000,000 together with all
extensions, renewals, amendments, supplements, modifications, substitutions and
replacements thereto and thereof.
"HAMILTON PROPERTY" shall mean all of Guarantor's right, title
and interest in and to its flat rolled processing facility at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"LIBOR RATE LOAN" shall mean an Advance at any time that it
bears interest based on the Average Monthly LIBOR Rate.
(b) the following defined terms are hereby amended in their
entirety to provide as follows:
"MAXIMUM LOAN AMOUNT" shall mean $55,000,000.
"MAXIMUM REVOLVING ADVANCE AMOUNT" shall mean $55,000,000.
"REVOLVING INTEREST RATE" shall mean an interest rate per
annum equal to (a) the Alternate Base Rate with respect to Domestic Rate Loans,
(b) the sum of the Average Monthly LIBOR Rate plus one half of one percent
(1/2%) with respect to LIBOR Rate Loans.
"TERM" shall mean the Closing Date through October 2, 2000, as
same may be extended in accordance with the provisions of Section 13.1.
(c) the defined terms "Eurodollar Rate" and "Eurodollar Rate
Loan" are hereby deleted and each reference in the Loan Agreement to "Eurodollar
Rate" and "Eurodollar Rate Loan" is hereby replaced with "Average Monthly LIBOR
Rate" and "LIBOR Rate Loan," respectively.
2.2. Section 2.1(a) is hereby amended in its entirety to read
as follows:
"2.1. (a) REVOLVING ADVANCES. Subject to the terms
and conditions set forth in this Agreement, Bank
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will make Revolving Advances to Borrower in aggregate amounts
outstanding at any time equal to the lesser of (x) the Maximum
Revolving Advance Amount less the aggregate amount of
outstanding Letters of Credit and Acceptances or (y) an amount
equal to the sum of:
(i) up to 85%, subject to the
provisions of Section 2.1(b) hereof ("Receivables Advance
Rate"), of Eligible Receivables (calculated after converting
the Receivables of Guarantor from Canadian Dollars to U.S.
Dollars), PLUS
(ii) up to 60%, subject to the
provisions of Section 2.1(b) hereof ("Inventory Advance
Rate"), of the value of the Eligible Inventory (the
Receivables Advance Rate and the Inventory Advance Rate shall
be referred to collectively, as the "Advance Rates");
PROVIDED, however, the maximum amount of outstanding Advances
against Eligible Inventory shall not exceed $33,000,000 at any
one time, PLUS
(iii) but only until the release of
Bank's Liens in accordance with Section 4.21 of this
Agreement, $7,900,000, which amount shall be reduced by
$100,000 on the first day of each month commencing June 1,
1997 until October 2, 2000 when the entire unpaid balance of
such amount shall be due and payable, MINUS
(iv) the aggregate amount of
outstanding Letters of Credit and Acceptances, MINUS
(v) such reserves as Bank may
reasonably deem proper and necessary from time to time.
The amount derived from (x) the sum of Sections
2.1(a)(y)(i) (ii) and (iii) minus (y) Section 2.1(a)(y)(v) at
any time and from time to time shall be referred to as the
"Formula Amount"."
2.3. Section 2.2 is hereby amended by (x) deleting the "(a)"
before the first paragraph of that Section, (y) deleting clauses (b) through (g)
of that Section, and (z) inserting the following after the first sentence
thereof:
"Notwithstanding the foregoing, Bank will not make any Advance
pursuant to any notice unless Bank has also received the most
recent Borrowing Base Certificate required under Section 9.2
hereof." Each request for a Revolving Advance shall be deemed
to be a request for a LIBOR Rate Loan unless a Domestic Rate
Loan is specifically requested. Whenever, subsequent to the
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date of this Agreement, the Alternate Base Rate or Average
Monthly LIBOR Rate is increased or decreased, the applicable
Revolving Interest Rate shall be similarly changed without
notice or demand by an amount equal to the amount of such
change in the Alternate Base Rate or Average Monthly LIBOR
Rate, as applicable.
2.4. Section 3.1 is hereby amended in its entirety to read as
follows:
"Interest on Advances shall be payable in arrears on the last
day of each month. Interest charges shall be computed on the
actual principal amount of Revolving Advances outstanding at
the end of each day at a rate per annum equal to the Revolving
Interest Rate for Domestic Rate Loans and the Average Monthly
LIBOR Rate with respect to LIBOR Rate Loans. Commencing thirty
(30) days after the due date for any financial statement
required hereunder which financial statement indicates the
occurrence of an Event of Default, and during the continuation
of such Event of Default, the Obligations shall bear interest
at the applicable Revolving Interest Rate plus two (2%)
percent per annum (the "Default Rate")."
2.5. The first sentence of the first paragraph of Section 3.2
is hereby amended in its entirety to read as follows:
"Borrower shall pay Bank (i) (A) for issuing or
causing the issuance of a standby Letter of Credit, a fee
computed at a rate per annum of one and one half percent
(1.5%) on the outstanding amount thereof from time to time,
(B) for issuing or causing the issuance of a Letter of Credit
that is not a standby Letter of Credit, a fee equal to one
percent (1%) per annum of the original and each increase in
the face amount thereof computed on the undisbursed amount
thereof from time to time, on the actual number of days
elapsed (the fees set forth in (A) and (B) referred to as
"Letter of Credit Fees"), and (C) for the acceptance of a
draft (whether or not discounted by Bank), a fee ("Acceptance
Fee") consisting of: (1) the then prevailing discount rate
applicable to Acceptances of a like tenor and amount and (2)
one percent (1%) per annum of the face amount of the accepted
draft, and (ii) Bank's other customary charges payable in
connection with Letters of Credit or Acceptances, as the case
may be, as in effect from time to time (which charges shall be
furnished to Borrower by Bank upon request)."
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2.6. Section 3.3 is hereby amended by adding "(a)" before
"Amendment Fee" and adding a clause (b) as follows:
(b) EXTENSION FEE. Upon the execution of
Amendment No. 3, Borrower shall pay Agent an extension fee of $10,000.00.
2.7. Section 7.6 is hereby amended by deleting
"$5,000,000" and inserting "$12,000,000" in its place instead.
2.8. Section 9.2 is hereby amended by inserting the
following sentences after the first sentence thereof:
"Further, Borrower shall deliver to Bank on or before the
twentieth (20th) day of each month a Borrowing Base
Certificate as of the last day of the prior month. The
Borrowing Base Certificate shall replace the daily reporting
requirements in existence prior to the effective date of
Amendment No. 3, subject to the right of Bank to require such
daily reporting requirements following the occurrence and
during the continuance of an Event of Default."
2.9. Section 13.1 is hereby amended in its entirety to
read as follows:
"13.1 TERM. This Agreement, which shall inure to the benefit
of and shall be binding upon the respective successors and
permitted assigns of each of Borrower and Bank, shall become
effective on the date hereof and shall continue in full force
and effect until the last day of the Term unless sooner
terminated as herein provided. The Term shall be automatically
extended for successive periods of one (1) year each unless
terminated by either party at the end of such initial Term or
any successive Term by giving the other party sixty (60) days
prior written notice. Borrower may terminate this Agreement at
any time upon ten (10) days' prior written notice
("Termination Date") upon payment in full of the Obligations."
2.10. Schedule 1 is hereby deleted in its entirety.
2.11. Schedule 1.2(a) is hereby amended in its entirety
as set forth on Schedule 1.2(a) attached to Amendment No. 3.
3. CONDITIONS OF EFFECTIVENESS. This Amendment No. 3 shall
become effective when Bank shall have received:
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(i) four (4) copies of this Amendment No. 3 executed by
Borrower and consented to and agreed to by Cold Metal Products Company, Ltd. as
guarantor;
(ii) $10,000 in satisfaction of the extension fee;
(iii) consent of Participants who have purchased participating
interests equal to 54.54% of the credit facility;
(iv) certified resolutions from the Board of Directors of
Borrower authorizing the execution, delivery and performance of this Amendment
No. 3;
(v) an opinion of counsel in form and substance satisfactory
to Bank and its counsel regarding the authorization, enforceability and validity
of this Amendment No. 3;
(vi) a duly executed ▇▇▇▇▇▇▇▇ Mortgage in form and substance
satisfactory to Bank;
(vii) certified resolutions from the Board of Directors of
Guarantor authorizing the execution, delivery and performance of the ▇▇▇▇▇▇▇▇
Mortgage; and
(viii) receipt of the documentation set forth on the May 9,
1997 Closing Agenda prepared by Fasken ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (except that the title
insurance may be obtained subsequent to the receipt of the other items on such
Closing Agenda pursuant to an undertaking in form and substance satisfactory to
Fasken ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇).
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants as follows:
(a) This Amendment No. 3 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) No Event of Default or Default has occurred and
is continuing or would exist after giving effect to this
Amendment No. 3.
(c) Borrower has no defense, counterclaim or offset
with respect to the Obligations.
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
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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 No. 3 shall not operate as a waiver of any right, power or remedy of
Bank, 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. GOVERNING LAW. This Amendment No. 3 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 No. 3 are
included herein for convenience of reference only and shall not constitute a
part of this Amendment No. 3 for any other purpose.
8. COUNTERPARTS. This Amendment No. 3 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 be deemed to constitute one and
the same agreement.
9. SUBSEQUENT AMENDMENT. At such time as (i) Bank shall have
received fully paid mortgagee title insurance policies (or binding commitments
to issue title insurance policies, marked to Bank's satisfaction to evidence the
form of such policies to be delivered with respect to the ▇▇▇▇▇▇▇▇ Mortgage), in
standard ALTA form, issued by a title insurance company satisfactory to Bank,
each in an amount equal to not less than the fair market value of the Hamilton
Property subject to the ▇▇▇▇▇▇▇▇ Mortgage, insuring the ▇▇▇▇▇▇▇▇ Mortgage to
create a valid Lien on the Hamilton Property with no exceptions which Bank shall
not have approved in writing and no survey exceptions, (ii) the ▇▇▇▇▇▇▇▇
Mortgage shall have been duly registered, and (iii) Bank and Borrower have
reached a mutually satisfactory resolution of the environmental issues raised by
the environmental studies and reports provided to Bank in connection with the
execution of this Amendment No. 3, Section 2.1(a)(y)(iii) shall be amended to
reflect a mutually agreeable dollar amount in lieu of the "$7,900,000" amount
presently set forth, which amended amount
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shall be "$18,000,000" subject to the resolution of the environmental issues
referred to in clause (ii) above.
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IN WITNESS WHEREOF, this Amendment No. 3 has been duly
executed as of the day and year first written above.
COLD METAL PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Executive Vice President
GUARANTOR CONSENT AND REAFFIRMATION
By its signature below, Cold Metal Products Company, Ltd. hereby consents to
Amendment No. 3 and confirms that (i) its Guaranty Agreement dated as of August
4, 1987 in favor of Bank, as confirmed by Guaranty Confirmation dated as of
▇▇▇▇▇▇ ▇, ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇"), (▇▇) the defined term "Collateral Documents"
under the Guaranty shall be deemed to include the ▇▇▇▇▇▇▇▇ Mortgage and (iii)
the Collateral Documents (as defined in the Guaranty and as amended by clause
(ii) above), each remain in full force and effect and are in no way modified or
impaired by Amendment No. 3 or any documents executed in connection therewith.
CONSENTED AND AGREED TO AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN:
COLD METAL PRODUCTS COMPANY, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman
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EXHIBIT 1.2(c)
BORROWING BASE CERTIFICATE FOR COLD METAL PRODUCTS, INC.
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This Certificate is delivered pursuant to Section 9.2 of the
Second Amended and Restated Revolving Credit and Security Agreement dated as of
August 1, 1994 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Loan Agreement"), by and between Cold Metal
Products, Inc. (the "Borrower") and The Bank of New York (the "Bank"). Unless
otherwise defined herein, capitalized terms used herein have the meanings
provided in the Loan Agreement.
The undersigned hereby certifies that he is the Chief
Financial Officer of Borrower and that, as such, he is authorized to execute
this Certificate on behalf of Borrower and further certifies that:
For purposes of this Certificate, the term "Borrowing Base
Calculation Date" shall mean _______________ __, 199_.
(a) The net face amount of all Eligible Receivables as
reflected on the books of Borrower as at the Borrowing Base Calculation Date,
net of all credits, discounts, reserves and allowances applicable to such
Eligible Receivables is $_____________.
(b) The product of (a) the Receivables Advance Rate applicable
to Borrower times (b) the amount designated in Item 1 above is: $_____________.
(c) The value (calculated at the lower of cost or market
value, determined on a first-in-first-out basis), of all Eligible Inventory as
reflected on the books of Borrower as at the Borrowing Base Calculation Date
applicable to such Eligible Inventory is: $________________.
(d) The product of (i) the Inventory Advance Rate applicable
to Borrower times (ii) the amount designated in Item 3 above is: $____________.
(e) The outstanding amount under Section 2.1(a)(y)(iii) as of
the Borrowing Base Calculation Date is: $_____________.
(f) The aggregate face amount of outstanding Letters of Credit
as of the Borrowing Base Calculation Date is: $_____________.
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(g) As of the Borrowing Base Calculation Date, the Formula
Amount (without giving effect to any reserves established by you under Section
2.1(a)(v)) which is the sum of the amount designated in Item b above PLUS the
amount designated in Item d PLUS the amount designated in Item e above is
$_______.
(h) As of the Borrowing Base Calculation Date, the aggregate
outstanding principal amount of all Advances to Borrower on such date does not
exceed the lesser of (x) $55,000,000 less the aggregate amount of outstanding
Letters of Credit and Acceptances, or (y) the amount designated in Item g above.
(i) As of the Borrowing Base Calculation Date the aggregate
outstanding principal amount of all Advances based upon Eligible Inventory of
Borrowers does not exceed $33,000,000.
(j) The information contained in this Certificate (including
the information upon which the foregoing calculations are based) is true and
complete in all material respects.
(k) Except as disclosed in this Certificate or in a prior
certificate issued pursuant to Section 9.2 of the Loan Agreement, there has been
no material adverse change in the Eligible Receivables or Eligible Inventory of
Borrower since the most recent certificate issued pursuant to Section 9.2 of the
Loan Agreement.
(l) The calculations contained herein are determined in
accordance with GAAP consistently applied. All of the foregoing information
regarding Eligible Receivables and Eligible Inventory is true and correct on the
date hereof and relates solely to Eligible Receivables and Eligible Inventory
within the meaning given such terms in the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
this ___ day of _____, 199_.
COLD METAL PRODUCTS, INC.
By:
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