AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
X.X. XXXXXXXXXX & CO., INC.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
As of February 25, 2000
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Congress Financial Corporation ("Lender"), X.X. Xxxxxxxxxx & Co., Inc.
("Borrower"), EFP Corporation ("EFP"), Xxxx Group, Inc. ("Xxxx"), Magnetic
Instruments Corp. ("MIC"), Xxxxxx Trailer Mfg. Co. ("Xxxxxx"), Truck Accessories
Group, Inc. ("TAG"), and Raider Industries Inc. ("Raider"; and together with
EFP, Xxxx, MIC, Xxxxxx and TAG, each individually, a "Guarantor" and,
collectively, "Guarantors") have entered into certain financing arrangements as
set forth in the Loan and Security Agreement, dated as of June 28, 1996, by and
among Lender, Borrower and Guarantors, as amended by Amendment No. 1 to Loan and
Security Agreement, dated May 13, 1998, Amendment No. 2 to Loan and Security
Agreement, dated as of June 30, 1998, and Amendment No. 3 to Loan and Security
Agreement, dated as of June 24, 1999 (and as amended hereby and as heretofore
amended or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, the "Loan Agreement"), together with all other agreements,
documents, supplements and instruments now or at any time hereafter executed
and/or delivered by Borrower, Guarantors or any other person, with, to or in
favor of Lender in connection therewith (all of the foregoing, together with
this Amendment and the other agreements and instruments delivered hereunder, as
the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, collectively, the "Financing
Agreements"). For purposes of this Amendment, unless otherwise defined herein,
all capitalized terms used herein, shall have the respective meanings ascribed
to them in the Loan Agreement.
(a) Borrower and Guarantors have requested that Lender enter into certain
amendments to the Financing Agreements to reduce the Interest Rate on Prime Rate
Loans and Eurodollar Rate Loans, reduce the amount of the servicing fee charged
by Lender to Borrower and Guarantors, reduce the letter of credit fee charged by
Lender in respect of Letter of Credit Accommodations, reduce the unused line fee
and extend the term of the Financing Agreements. Lender is willing to do so to
the extent and subject to the terms and conditions set forth herein.
(b)
(c) In consideration of the foregoing, the mutual agreements and covenants
contained in this Amendment No. 4 to Loan and Security Agreement (this
"Amendment"), and other good and valuable consideration, the adequacy and
sufficiency of which are hereby acknowledged, Borrower, Guarantors and Lender
agree as follows:
(d)
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2. Definitions.
3.
(a) Additional Definition. As used herein and in the other Financing
Agreements, the term "Net Worth" shall mean, for any period as to Borrower and
its Subsidiaries, on a consolidated basis for such period, the amount equal to
the assets of Borrower and its Subsidiaries minus the liabilities of Borrower
and its Subsidiaries as reported on the consolidated balance sheet of Borrower
as determined in accordance with GAAP, and the Loan Agreement and the other
Financing Agreements shall be deemed and is hereby amended to include, in
addition and not in limitation, such term as defined herein.
(b)
(i) Amendment to Definition. Effective with respect to interest accruing on and
after March 1, 2000, all references to the term "Interest Rate" contained in
Section 1.50 of the Loan Agreement shall be deemed and each such reference is
hereby amended to mean, as to Prime Rate Loans, a rate per annum equal to the
Prime Rate and, as to Eurodollar Rate Loans, a rate of two (2%) percent per
annum in excess of the Adjusted Eurodollar Rate (based on the Eurodollar Rate
applicable for the Interest Period selected by Borrower as in effect three (3)
Business Days after the date of receipt by Lender of the request of Borrower for
such Eurodollar Rate Loans in accordance with the terms hereof, whether such
rate is higher or lower than any rate previously quoted to Borrower); provided,
that, the Interest Rate shall mean the rate equal to two (2%) percent per annum
in excess of the interest rate (the "Default Interest Rate") otherwise then
payable by Borrower on Prime Rate Loans as to all Loans, at Lender's option,
without notice, for the period on and after the date of termination or
non-renewal hereof, or the date of the occurrence of any Event of Default and
for so long as such Event of Default is continuing as determined by Lender and
on the Loans at any time outstanding to the extent in excess of the amounts
available to Borrower under Section 2 hereof (whether or not such excess(es),
arise or are made with or without Lender's knowledge or consent and whether made
before or after an Event of Default). In addition to and not in limitation of
the right of Lender to charge the Default Interest Rate, if the Net Worth of
Borrower and its Subsidiaries at any time is less than negative $18,000,000,
Lender may, at its option, without in any way limiting the right of Lender to
declare an Event of Default or otherwise exercise any other rights or remedies
hereunder or under any of the other Financing Agreements, applicable law or
otherwise, increase the rate of interest in the case where the non-Default
Interest Rate is then in effect, to a rate of one-quarter of one (1/4% ) percent
per annum in excess of the Prime Rate per annum as to Prime Rate Loans and to a
rate of two and one-half (2 1/2%) percent per annum in excess of the Adjusted
Eurodollar Rate as to Eurodollar Rate Loans, and in the case where the Default
Interest Rate is then in effect, to a rate of two and one-quarter (2 1/4%)
percent per annum in excess of the Prime Rate as to all Loans.
b.
4. Letter of Credit Fee. Section 2.2(b) of the Loan Agreement is hereby
deleted and replaced with a new Section 2.2(b) as follows:
5.
a. "(b) In addition to any charges, fees or expenses charged by any bank or
issuer in connection with the Letter of Credit Accommodations, Borrower and
Guarantors shall pay to Lender a letter of credit fee at a rate equal to
one and one-half (11/2%) percent per annum on the daily outstanding balance
of the Letter of Credit Accommodations (other than acceptances with respect
to letters of credit) for the immediately preceding month (or part
thereof), and an acceptance fee at a rate equal to two and one-quarter
(21/4%) percent per annum on the daily outstanding balance of the Letter of
Credit Accommodations constituting acceptances with respect to letters of
credit, payable in arrears as of the first day of each succeeding month,
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except that Borrower shall pay to Lender such letter of credit fee, at
Lender's option, without notice, at a rate equal to three and three and
one-half (31/2%) percent per annum on such daily outstanding balance and
such acceptance fee, at Lender's option, without notice, at a rate equal to
four and one-quarter (41/4%) percent per annum on such daily outstanding
balance for: the period from and after the date of termination or
non-renewal hereof until Lender has received full and final payment of all
Obligations (notwithstanding entry of a judgment against Borrower) and the
period from and after the date of the occurrence of an Event of Default for
so long as such Event of Default is continuing as determined by Lender.
Such letter of credit fee and acceptance fee shall be calculated on the
basis of a three hundred sixty (360) day year and actual days elapsed and
the obligation of Borrower and Guarantors to pay such fee shall survive the
termination or non-renewal of this Agreement."
1. Servicing Fee. Effective as of March 1, 2000, Section 3.3 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
2.
"3.3 Servicing Fee. Borrower shall pay to Lender quarterly a
servicing fee in an amount equal to $12,500 for each quarter (or part
thereof) ending March 31, June 30, September 30 and December 31, while
this Agreement is in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be payable on March 1,
2000 for that part of the quarter ending March 31, 2000 and thereafter
in advance on the first day of each quarter thereafter, commencing on
April 1, 2000."
1. Unused Line Fee. Effective as of March 1, 2000, Section 3.4 of the Loan
Agreement is hereby amended by deleting the figure "$45,000,000" and replacing
it with the figure: "$35,000,000".
2.
3. Term
4.
(a) Section 12.1(a) of the Loan Agreement is hereby amended by deleting the
first sentence of that Section and replacing it with the following:
(b)
"(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page hereof and
shall continue in full force and effect for a term ending on March 31,
2003 (the "Renewal Date"), and from year to year thereafter, unless
sooner terminated pursuant to the terms hereof; provided, that, Lender
may, at its option, extend the Renewal Date to March 31, 2004 by
giving Borrower written notice at least sixty (60) days prior to March
31, 2003."
(a) Section 12.1(c) of the Loan Agreement is hereby amended by adding new
clauses (iii) and (iv) as follows:
(b)
"Amount Period
(iii) one half of one (1/2%) percent From February __, 2000 to and
of the Maximum Credit including March 31, 2001
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(iv) one quarter of one (1/4%) From April 1, 2001 through and
percent of the Maximum Credit including March 31, 2002"
1. Representations, Warranties and Covenants. In addition to the continuing
representations, warranties and covenants heretofore or hereafter made by
Borrower or Guarantors to Lender pursuant to the other Financing Agreements,
Borrower and Guarantors hereby represent, warrant and covenant with and to
Lender as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):
2.
(a) This Amendment has been duly authorized, executed and delivered by Borrower
and Guarantors, and the agreements and obligations of Borrower and Guarantors
contained herein constitute legal, valid and binding obligations of Borrower and
Guarantors enforceable against Borrower and Guarantors in accordance with their
respective terms.
(b)
(i) Neither the execution and delivery of this Amendment, nor the
modifications to the Financing Agreements contemplated by this Amendment shall
violate any applicable law or regulation, or any order or decree of any court or
any governmental instrumentality in any respect or does or shall conflict with
or result in the breach of, or constitute a default in any respect under, any
indenture, or any material mortgage, deed of trust, security agreement,
agreement or instrument to which Borrower or any Guarantor is a party or may be
bound, or violate any provision of the organizational documents of Borrower or
Guarantors.
(ii)
(c) All of the representations and warranties set forth in the Loan
Agreement as amended hereby, and the other Financing Agreements, are true and
correct in all material respects, except to the extent any such representation
or warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct as of such date.
(d)
(e) No Event of Default exists on the date of this Amendment (after giving
effect to the amendments to the Loan Agreement provided in this Amendment).
(f)
3. Conditions Precedent. The effectiveness of the amendments set forth herein
shall be subject to the receipt by Lender of each of the following, in form and
substance satisfactory to Lender:
(a) an original of this Amendment, duly authorized, executed and delivered
by Borrower and Guarantors;
(b)
(c) after giving effect to the amendments to the Loan Agreement provided in
this Amendment, no Event of Default shall exist or have occurred and no event,
act or condition shall have occurred or exist which with notice or passage of
time or both would constitute an Event of Default.
(d)
4. Effect of this Amendment. Except for the specific amendment expressly
set forth herein, no other changes or modifications to the Financing Agreements,
and no waivers of any provisions thereof are intended or implied, and in all
other respects the Financing Agreements are hereby specifically ratified,
restated and confirmed by all parties hereto as of the date hereof. To the
extent of conflict between the terms of this Amendment and the other Financing
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Agreements, the terms of this Amendment shall control. The Loan Agreement and
this Amendment shall be read and construed as one agreement.
5.
6. Governing Law. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the internal laws of the State of New York (without giving effect to
principles of conflicts of laws).
7.
8. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
9.
10.
11.
12.
13.
14.
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1. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.
2.
3. Please sign in the space provided below and return a counterpart of this
Amendment, whereupon this Amendment, as so agreed to and accepted by Lender,
shall become a binding agreement among Borrower, Guarantors and Lender.
4.
5. Very truly yours,
6.
7. X.X. XXXXXXXXXX & CO., INC.
8.
9. By:________________________
10.
11. Title:_____________________
12.
13. AGREED AND ACCEPTED:
14.
15. CONGRESS FINANCIAL CORPORATION
16.
17. By:
18.
19. Title:
20.
21. ACKNOWLEDGED AND
22. CONSENTED TO:
23.
24. EFP CORPORATION
25.
26. By:
27.
28. Title:
29.
30.
31. XXXX GROUP, INC.
32.
33. By:
34.
35. Title:
36.
37.
38.
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
MAGNETIC INSTRUMENTS CORP.
By:
Title:
XXXXXX TRAILER MFG. CO.
By:
Title:
TRUCK ACCESSORIES GROUP, INC.
By:
Title:
RAIDER INDUSTRIES INC.
By:
Title:
