EXHIBIT 4
EXECUTION COPY
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of April 17, 1995 (this "Amendment")
is entered into by and among BAIRNCO CORPORATION, a Delaware
corporation ("Bairnco"), certain of its Subsidiaries party to the
Credit Agreement referred to below (together with Bairnco,
hereinafter referred to collectively as the "Borrowers" and
individually as a "Borrower"), the several financial institutions
parties to this Amendment (collectively, the "Lenders";
individually, a "Lender"), and BANK OF AMERICA ILLINOIS (formerly
known as Continental Bank N.A.), as agent for the Lenders (in such
capacity, the "Agent").
RECITALS
The Borrowers, the Lenders and the Agent are parties to an
Amended and Restated Credit Agreement dated as of December 17, 1992
(as heretofore amended, supplemented or otherwise modified, the
"Credit Agreement"). Capitalized terms used and not otherwise
defined or amended in this Amendment shall have the meanings
respectively assigned to them in the Credit Agreement.
The Borrowers have requested that the Lenders and the Agent
amend the Credit Agreement in certain respects, and the Lenders and
the Agent have agreed to do so, all upon the terms and provisions
and subject to the conditions hereinafter set forth, including,
without limitation, payment of the amendment fee referred to in
Section C below.
AGREEMENT
In consideration of the foregoing and the mutual covenants and
agreement hereinafter set forth, the parties hereto mutually agree
as follows:
A. AMENDMENTS
1. Amendment of Introductory Paragraph. The introductory
paragraph of the Credit Agreement is hereby amended by deleting the
phrase "CONTINENTAL BANK N.A., both individually (in such capacity,
'Continental')" and substituting therefor the phrase "BANK OF
AMERICA ILLINOIS (formerly known as Continental Bank N.A.), both
individually (in such capacity 'BAI')".
2. Amendments of Section 1.1 (Defined Terms). Section 1.1
of the Credit Agreement is hereby amended by:
(a) deleting therefrom the definition of "Applicable
Euro Rate Margin" in its entirety and substituting therefor
the following:
"'Applicable Euro Rate Margin' shall mean:
(a) 0.75% for each period (i) commencing on
the fifth day following delivery by Bairnco to the Agent
of the Compliance Certificate for any Fiscal Quarter
required under Section 7.1.1(c) showing that the Interest
Coverage Ratio for such Fiscal Quarter was 4.00:1 or
greater, and (ii) ending on the earlier of (A) the fifth
day following delivery by Bairnco to the Agent of the
Compliance Certificate for the next Fiscal Quarter, or
(B) the date on which Bairnco fails to deliver to the
Agent such Compliance Certificate for the next Fiscal
Quarter as required under Section 7.1.1(c);
(b) 1.00% for each period (i) commencing on
the fifth day following delivery by Bairnco to the Agent
of the Compliance Certificate for any Fiscal Quarter
required under Section 7.1.1(c) showing that the Interest
Coverage Ratio for such Fiscal Quarter was 3.00:1 or
greater but less than 4.00:1, and (ii) ending on the
earlier of (A) the fifth day following delivery by
Bairnco to the Agent of the Compliance Certificate for
the next Fiscal Quarter, or (B) the date on which Bairnco
fails to deliver to the Agent such Compliance Certificate
for the next Fiscal Quarter as required under Section
7.1.1(c); and
(c) 1.50% at all other times."
(b) deleting therefrom the definition of "Applicable
Reference Rate Margin" in its entirety and substituting
therefor the following:
"'Applicable Reference Rate Margin' shall mean:
(a) zero for each period (i) commencing on the
fifth day following delivery by Bairnco to the Agent of
the Compliance Certificate for any Fiscal Quarter
required under Section 7.1.1(c) showing that the Interest
Coverage Ratio for such Fiscal Quarter was 3.00:1 or
greater, and (ii) ending on the earlier of (A) the fifth
day following delivery by Bairnco to the Agent of the
Compliance Certificate for the next Fiscal Quarter, or
(B) the date on which Bairnco fails to deliver to the
Agent such Compliance Certificate for the next Fiscal
Quarter as required under Section 7.1.1(c); and
(b) 0.25% at all other times."
(c) deleting therefrom the definition of "Arlon Loan
Commitment Amount" in its entirety and substituting therefor
the following:
"'Arlon Loan Commitment Amount' shall mean, at any
date, $26,000,000, as such amount may be reduced from
time to time pursuant to Section 2.2.";
(d) inserting the following new definition in its
appropriate alphabetical order:
"'BAI' is defined in the preamble.";
(e) deleting therefrom the definition of "Bairnco Loan
Commitment Amount" in its entirety and substituting therefor
the following:
"'Bairnco Loan Commitment Amount' shall mean, at any
date, $10,000,000, as such amount may be reduced from
time to time pursuant to Section 2.2.";
(f) deleting from the definition of "Commitment
Termination Date" the date "August 31, 1997" and substituting
therefor the date "August 31, 1999";
(g) deleting therefrom the definition of "Continental"
in its entirety;
(h) deleting therefrom the definition of "Cumulative Net
Income" in its entirety and substituting therefor the
following:
"'Cumulative Net Income' shall mean, at any date of
calculation, an amount (not less than zero) equal to (x)
the sum of the amounts of the net quarterly income and
losses of Bairnco and its Subsidiaries on a consolidated
basis for the period beginning on January 1, 1995 and
ending on the last day of the Fiscal Quarter immediately
preceding the Fiscal Quarter in which such date of
calculation occurs, minus (y) any amounts of income or
loss from the discontinuance of operations that represent
changes in accounting estimates used to book losses from
discontinuance of operations that were reflected in the
income statement for the year ended December 31, 1993 of
Bairnco and its Subsidiaries."
(i) deleting from the definition of "Foreign Loan
Commitment Amount" the amount "$6,000,000" and substituting
therefor the amount "$3,000,000";
(j) inserting the following new definition in its
appropriate alphabetical order:
"'Honor Date' is defined in Section 2.9.1(a).";
(k) deleting from the definition of "Intercompany Note"
the text "Schedule II to the Original Agreement" and
substituting therefor the text "Schedule II to this
Agreement";
(l) deleting therefrom the definition of "Kasco Dollar
Loan Commitment Amount" in its entirety and substituting
therefor the following:
"'Kasco Dollar Loan Commitment Amount' shall mean,
at any date, $3,000,000, as such amount may be reduced
from time to time pursuant to Section 2.2.";
(m) deleting from the definition of "Letter of Credit
Loans" the phrase "Section 2.9.2" and substituting therefor
the phrase "Section 2.9.1(c)";
(n) deleting from the definition of "Letter of Credit
Notes" the phrase "Section 2.9.3" and substituting therefor
the phrase "Section 2.9.5";
(o) deleting from the definition of "Maximum Loan
Commitment Amount" the amount "$55,000,000" and substituting
therefor the amount "$42,000,000";
(p) deleting from the definition of "Stated Maturity
Date" the date "August 31, 1997" and substituting therefor the
date "August 31, 1999";
(q) deleting therefrom the definition of "Reference Rate
Loan" in its entirety and substituting therefor the following:
"'Reference Rate Loan' shall mean (a) a Loan bearing
interest at a fluctuating rate determined by reference to
the Alternate Reference Rate or (b) a Reimbursement
Borrowing, as the context may require."
(r) inserting the following new definition in its
appropriate alphabetical order:
"'Reimbursement Advance" means each Lender's
participation in any Reimbursement Borrowing in
accordance with its Percentage.";
(s) inserting the following new definition in its
appropriate alphabetical order:
"'Reimbursement Borrowing' means an extension of
credit resulting from a drawing under any Letter of
Credit which shall not have been reimbursed on the date
when made or converted into a borrowing of Letter of
Credit Loans under Section 2.9.1(b)."; and
(t) deleting from the definition of "Uniform Customs"
the phrase "Section 2.9.2" and substituting therefor the
phrase "Section 2.9.3".
Each reference in the Credit Agreement to "Continental" shall
hereinafter be deemed to be a reference to "BAI".
3. Amendment of Section 2.2.2 (Reduction of Commitment
Amounts; Mandatory--All Loans and Specific Loans). Section 2.2.2
of the Credit Agreement is hereby amended by deleting such Section
in its entirety and substituting therefor the following:
"SECTION 2.2.2 Mandatory--All Loans and Specific Loans.
(a) As of the opening of business on each date set
forth below, the Maximum Loan Commitment Amount shall, without
any further action, automatically and permanently be reduced
by the amount set forth opposite such date:
Date Amount
January 1, 1996 $ 3,000,000
January 1, 1997 $ 4,000,000
January 1, 1998 $ 5,000,000
January 1, 1999 $10,000,000;
provided, however, that on the Commitment Termination Date,
the Maximum Loan Commitment Amount shall be zero.
(b) In order to implement the reductions in the
Maximum Loan Commitment Amount contemplated by (a) above,
automatic and permanent reductions shall, without any further
action, be made to the Bairnco Loan Commitment Amount, the
Arlon Loan Commitment Amount and the Kasco Dollar Loan
Commitment Amount, as follows:
(i) As of the opening of business on each date
set forth below, the Bairnco Loan Commitment Amount
shall, without any further action, automatically and
permanently be reduced by the amount set forth opposite
such date:
Date Amount
January 1, 1998 $2,000,000
January 1, 1999 $3,000,000
(ii) As of the opening of business on each date
set forth below, the Arlon Loan Commitment Amount shall,
without any further action, automatically and permanently
be reduced by the amount set forth opposite such date:
Date Amount
January 1, 1996 $3,000,000
January 1, 1997 $4,000,000
January 1, 1998 $2,000,000
January 1, 1999 $6,000,000
(iii) As of the opening of business on each date
set forth below, the Kasco Dollar Loan Commitment Amount
shall, without any further action, automatically and
permanently be reduced by the amount set forth opposite
such date:
Date Amount
January 1, 1998 $1,000,000
January 1, 1999 $1,000,000"
4. Amendment of Section 2.2.3 (Reduction of Commitment
Amounts; Mandatory - Sale Proceeds). Section 2.2.3 of the Credit
Agreement is hereby amended by adding the following new sentence at
the end thereof:
"Notwithstanding anything to the contrary contained herein, no
reduction of the Maximum Loan Commitment Amount shall be
required in connection with the sale by Shielding of its
Versitron division (as described in Schedule X to the
Amendment hereto dated as of March 16, 1994) to Arlon."
5. Amendment of Section 2.2.4 (Reduction of Commitment
Amounts). Section 2.2.4 of the Credit Agreement is hereby amended
by:
(a) deleting from clause (iii) of the proviso to clause
(b) thereof the phrase "as stated in Subsection 2.2.2(b)(i)"
and substituting therefor the phrase "as permanently reduced
in accordance with Subsection 2.2.2(b)(i)";
(b) deleting from clause (iv) of the proviso to clause
(b) thereof the phrase "as stated in Subsection 2.2.2(b)(ii)"
and substituting therefor the phrase "as permanently reduced
in accordance with Subsection 2.2.2(b)(ii)"; and
(c) deleting from clause (v) of the proviso to clause
(b) thereof the phrase "as stated in Subsection 2.2.2(b)(iii)"
and substituting therefor the phrase "as permanently reduced
in accordance with Subsection 2.2.2(b)(iii)".
6. Amendment of Section 2.7 (Bairnco LC Commitment).
Section 2.7 of the Credit Agreement is hereby amended by:
(a) deleting the date "June 30, 1997" appearing therein
and substituting therefor the phrase "the date that is two
calendar months prior to the Commitment Termination Date"; and
(b) deleting the date "August 31, 1997" appearing in
clause (b) of the proviso thereto and substituting therefor
the phrase "the Commitment Termination Date".
7. Amendment of Section 2.9 (Certain Provisions Relating to
the Letters of Credit). Section 2.9 of the Credit Agreement is
hereby amended by:
(a) deleting therefrom Sections 2.9.1 and 2.9.2 in their
entirety and substituting therefor the following:
2.9.1 Letter of Credit Participations; Drawings and
Reimbursements.
(a) Immediately upon the issuance of each Letter of
Credit, each Lender (other than BAI) shall be deemed to,
and hereby irrevocably and unconditionally agrees to,
purchase from BAI a participation in such Letter of
Credit and each drawing thereunder in an amount equal to
the product of (i) the Percentage of such Lender, times
(ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing,
respectively. For purposes of Section 3.3.1, each
issuance of a Letter of Credit shall be deemed to utilize
the Bairnco LC Commitment of each Lender by an amount
equal to the amount of such participation.
(b) In the event of any request for a drawing under
a Letter of Credit by the beneficiary or transferee
thereof, BAI will promptly notify Bairnco. Bairnco shall
reimburse BAI prior to 10:30 a.m., Chicago time, on each
date that any amount is paid by BAI under any Letter of
Credit (each such date, an 'Honor Date'), in an amount
equal to the amount so paid by BAI. In the event Bairnco
shall fail to reimburse BAI for the full amount of any
drawing under any Letter of Credit by 10:30 a.m., Chicago
time, on the Honor Date, BAI will promptly notify the
Agent and the Agent will promptly notify each Lender
thereof, and Bairnco shall be deemed to have requested
that Reference Rate Loans be made by the Lenders to be
disbursed on the Honor Date under such Letter of Credit,
subject to the amount of the unutilized portion of the
Bairnco LC Commitment and subject to the conditions set
forth in Section 5.2.1. Such deemed request by Bairnco
shall constitute a representation and warranty by Bairnco
that on the date of such Loans (both before and after
giving effect to such Loans and the application of the
proceeds thereof), the statements made in Section 5.2.1
are true and correct. Any notice given by BAI or the
Agent pursuant to this Section 2.9.1(b) may be oral if
immediately confirmed in writing (including by
facsimile); provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or
binding effect of such notice.
(c) Each Lender shall upon receipt of any notice
pursuant to Section 2.9.1(b) make available to the Agent
for the account of BAI an amount in Dollars and in
immediately available funds equal to its Percentage of
the amount of the drawing, whereupon the participating
Lenders shall (subject to Section 2.9.1(d)) each be
deemed to have made a loan (individually, a 'Letter of
Credit Loan'; collectively, the 'Letter of Credit Loans')
consisting of a Reference Rate Loan to Bairnco in that
amount. If any Lender so notified shall fail to make
available to the Agent for the account of BAI the amount
of such Lender's Percentage of the amount of the drawing
by no later than 1:00 p.m., Chicago time, on the Honor
Date, then interest shall accrue on such Lender's
obligation to make such payment, from the Honor Date to
the date such Lender makes such payment, at a rate per
annum equal to (i) the Federal Funds Rate in effect from
time to time during the period commencing on the Honor
Date and ending on the date three Business Days
thereafter, and (ii) thereafter at the Alternate
Reference Rate as in effect from time to time. The Agent
will promptly give notice of the occurrence of the Honor
Date, but failure of the Agent to give any such notice on
the Honor Date or in sufficient time to enable any Lender
to effect such payment on such date shall not relieve
such Lender from its obligations under this Section
2.9.1.
(d) With respect to any unreimbursed drawing which
is not converted into a Letter of Credit Loan in whole or
in part, because of Bairnco's failure to satisfy the
conditions set forth in Section 5.2.1 or for any other
reason, Bairnco shall be deemed to have incurred from BAI
a Reimbursement Borrowing in the amount of such drawing,
which Reimbursement Borrowing shall be due and payable on
demand (together with interest) and shall bear interest
at a rate per annum equal to the Alternate Reference Rate
plus 2.50% per annum, and each Lender's payment to BAI
pursuant to Section 2.9.1(c) shall be deemed payment in
respect of its participation in such Reimbursement
Borrowing and shall constitute a Reimbursement Advance
from such Lender in satisfaction of its participation
obligation under this Section 2.9.1.
(e) For purposes of this Agreement, all of the
provisions applicable to Bairnco Loans shall apply to
Letter of Credit Loans; provided, however, that any
Letter of Credit Loan outstanding shall be deemed to
utilize the Bairnco LC Commitment (without duplication of
any utilization thereof by the Letter of Credit from
which such Letter of Credit Loan arises) and not the
Bairnco Loan Commitment.
(f) Each Lender's obligation in accordance with
this Agreement to make the Letter of Credit Loans or
Reimbursement Advances, as contemplated by this Section
2.9.1, as a result of a drawing under a Letter of Credit
shall be absolute and unconditional and without recourse
to BAI and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against
BAI, Bairnco or any other Person for any reason
whatsoever, including, without limitation, any defense
based on the failure of the demand for payment under such
Letter of Credit to conform to the terms of such Letter
of Credit or the legality, validity, regularity or
enforceability of such Letter of Credit or any defense
based on the identity of the transferee of such Letter of
Credit or the sufficiency of the transfer if such Letter
of Credit is transferable; provided, however, that no
Lender shall be obligated to make Letter of Credit Loans
or Reimbursement Advances pursuant to the preceding
provisions of this Section 2.9.1 in connection with any
wrongful payment or disbursement made by BAI under any
Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on
the part of BAI or any of its officers, employees or
agents.
2.9.2 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for
the account of BAI of funds from Bairnco (i) in
reimbursement of any payment made by BAI under a Letter
of Credit with respect to which any Lender has paid the
Agent for the account of BAI for such Lender's
participation in the Letter of Credit pursuant to Section
2.9.1, or (ii) in payment of interest thereon, the Agent
will pay to each Lender that has so paid the Agent for
the account of BAI, in the same funds as those received
by the Agent for the account of BAI, the amount of such
Lender's Percentage of such funds, and BAI shall receive
the amount of the Percentage of such funds of any Lender
that did not so pay the Agent for the account of BAI.
(b) If the Agent or BAI is required at any time to
return to Bairnco, or to a trustee, receiver, liquidator,
custodian, or any official in any insolvency proceeding
in which Bairnco is the debtor, any portion of the
payments made by Bairnco to the Agent for the account of
BAI pursuant to Section 2.9.2(a) in reimbursement of a
payment made under any Letter of Credit or interest or
fee thereon, each Lender shall, on demand of the Agent,
forthwith return to the Agent or BAI the amount of its
Percentage of any amounts so returned by the Agent or BAI
plus interest thereon from the date such demand is made
to the date such amounts are returned by such Lender to
the Agent or BAI, at a rate per annum equal to the
Federal Funds Rate in effect from time to time.
2.9.3 Uniform Customs and Practice. The Uniform
Customs and Practice for Documentary Credits as most
recently published by the International Chamber of
Commerce ('Uniform Customs') shall in all respects be
deemed a part of this Section 2.9 as if incorporated
herein and (unless otherwise expressly provided in the
Letters of Credit) shall apply to the Letters of Credit.
2.9.4 Cash Collateral. Upon the termination of the
Bairnco LC Commitment, whether by occurrence of the
Commitment Termination Date or otherwise, Bairnco shall
immediately cause the cancellation of all Letters of
Credit or shall immediately provide cash collateral to
the Agent pursuant to the Security Agreement in the
aggregate outstanding amount of all Letters of Credit.";
and
(b) renumbering Section 2.9.3 as Section 2.9.5.
8. Amendment of Section 3.3.2 (Letter of Credit Fees).
Section 3.3.2 is hereby amended by deleting therefrom clauses (a)
through (d) of the second sentence thereof and substituting
therefor the following:
"(a) 0.75% per annum on the undrawn and available amount
thereof during each period (i) commencing on the fifth day
following delivery by Bairnco to the Agent of the Compliance
Certificate for any Fiscal Quarter required under Section
7.1.1(c) showing that the Interest Coverage Ratio for such
Fiscal Quarter was 4.00:1 or greater, and (ii) ending on the
earlier of (A) the fifth day following delivery by Bairnco to
the Agent of the Compliance Certificate for the next Fiscal
Quarter, or (B) the date on which Bairnco fails to deliver to
the Agent such Compliance Certificate for the next Fiscal
Quarter as required under Section 7.1.1(c);
(b) 1.00% per annum on the undrawn and available amount
thereof during each period (i) commencing on the fifth day
following delivery by Bairnco to the Agent of the Compliance
Certificate for any Fiscal Quarter required under Section
7.1.1(c) showing that the Interest Coverage Ratio for such
Fiscal Quarter was 3.00:1 or greater but less than 4.00:1, and
(ii) ending on the earlier of (A) the fifth day following
delivery by Bairnco to the Agent of the Compliance Certificate
for the next Fiscal Quarter, or (B) the date on which Bairnco
fails to deliver to the Agent such Compliance Certificate for
the next Fiscal Quarter as required under Section 7.1.1(c);
and
(c) 1.50% at all other times."
9. Amendments of Section 6.11 (Pension and Welfare Plans).
Section 6.11 of the Credit Agreement is hereby amended by:
(a) deleting from the first sentence thereof the text
"Except as disclosed in Item 6.11 ('Employee Benefit Plans')
of the Disclosure Schedule during" and substituting therefor
the word "During"; and
(b) deleting from the last sentence thereof the text
"Except as disclosed in Item 6.11 ('Employee Benefit Plans')
of the Disclosure Schedule, no" and substituting therefor the
word "No".
10. Amendment of Section 7.2.3 (Financial Condition).
Section 7.2.3 of the Credit Agreement is hereby amended by deleting
such Section in its entirety and substituting therefor the
following:
"SECTION 7.2.3 Financial Condition. The Borrowers will
not permit:
(a) Net Worth. Their Net Worth to be less than the
sum of (i) $38,000,000, plus (ii) 60% of Cumulative Net Income
after December 31, 1994, plus (iii) 60% of the net cash
proceeds of stock sold by Bairnco after December 31, 1994,
plus or minus (iv) any amounts of income or loss from the
discontinuance of operations that represent changes in
accounting estimates used to book losses from discontinuance
of operations that were reflected in the income statement for
the year ended December 31, 1993.
(b) Leverage Test. The ratio for Bairnco and its
Subsidiaries of (i) all consolidated liabilities (excluding
deferred taxes) to (ii) the sum of (A) consolidated
stockholders equity, plus (B) deferred taxes, plus (C)
Subordinated Debt permitted under Section 7.2.1(h) to exceed
(x) to and including December 31, 1996, 1.75:1, and (y) on and
after January 1, 1997, 1.50:1.
(c) Interest Coverage Ratio. The ratio for Bairnco
and its Subsidiaries of (i) consolidated earnings before
deducting interest and taxes (excluding non-recurring gains
and charges) to (ii) consolidated interest expense for
Indebtedness (including, without limitation, Subordinated Debt
and Capitalized Lease Liabilities) (the 'Interest Coverage
Ratio') to be less than 2.00:1 for any Fiscal Quarter."
11. Amendment of Section 7.2.5 (Bairnco Restricted Payments,
etc.). Section 7.2.5 of the Credit Agreement is hereby amended by
deleting paragraph (a) thereof in its entirety and substituting
therefor the following:
"(a) no Borrower will, at any time after January 1, 1995,
declare, pay or make any dividend or distribution (in cash,
property or obligations) on any shares of any class of capital
stock (now or hereafter outstanding) of Bairnco or on any
warrants, options or other rights with respect to any shares
of any class of capital stock (now or hereafter outstanding)
of Bairnco (other than dividends or distributions payable in
its common stock or warrants to purchase its common stock or
splitups or reclassifications of its stock into additional or
other shares of this common stock) or apply, or permit any of
its Subsidiaries to apply, any of its funds, property or
assets to the purchase, redemption, sinking fund or other
retirements of, or agree or permit any of its Subsidiaries to
purchase or redeem, any shares of any class of capital stock
(now or hereafter outstanding) of Bairnco, or warrants,
options or other rights with respect to any shares of any
class of capital stock (now or hereafter outstanding) of
Bairnco (all of the foregoing being called 'Bairnco Restricted
Payments'), except for (x) Bairnco Restricted Payments made
after January 1, 1995 which (A) are made when no Default
exists, (B) do not cause a Default to occur, and (C) do not in
the aggregate exceed (1) 30% of Cumulative Net Income plus (2)
$2,000,000 and (y) purchases of capital stock of Bairnco made
after January 1, 1995 which (A) are made when no Default
exists, (B) do not cause a Default to occur, and (C) do not in
the aggregate exceed $5,000,000; provided that purchases of
capital stock of Bairnco shall be allocated first to any
amounts available under clause (y) and then to amounts
available under clause (x)."
12. Amendments of Section 7.2.8 (Consolidation, Merger,
etc.). Section 7.2.8 of the Credit Agreement is hereby amended by:
(a) deleting the word "and" appearing at the end of
clause (iii) of Subsection (b) thereof;
(b) deleting the period appearing at the end of clause
(iv) of Subsection (b) thereof and substituting therefor the
following: "; and"; and
(c) adding after clause (iv) of Subsection (b) thereof
a new clause (v) reading in its entirety as follows:
"(v) Arlon may acquire substantially all the assets
of the Versitron division of Shielding."
13. Amendments of Section 7.2.9 (Asset Dispositions, etc.).
Section 7.2.9 of the Credit Agreement is hereby amended by:
(a) deleting therefrom clause (b) thereof in its
entirety and substituting therefor the following:
"(b) the net book value of such assets, together
with the net book value of all other assets sold,
transferred, leased, contributed or conveyed otherwise
than in the ordinary course of business by all Borrowers
or any of their Subsidiaries pursuant to this clause
since January 1, 1995, does not exceed $2,000,000 in the
aggregate for all Borrowers and their Subsidiaries;
provided, however, that the net book value of the assets
of the Versitron division of Shielding that were sold to
Arlon shall be excluded from the limitation set forth in
this clause; or"; and
(b) adding the following new sentence at the end of such
Section:
"Notwithstanding anything to the contrary contained in
this Agreement, none of the assets constituting
collateral security transferred by Shielding to Arlon in
connection with the sale to Arlon of substantially all
the assets of the Versitron division of Shielding shall
be released from the Lien of the Loan Documents except in
accordance with Section 10.1 hereof; provided, however,
that if such assets are subsequently sold in accordance
with the terms hereof to a Person that is not a Borrower
or a Subsidiary of a Borrower, then such assets shall be
released from the Lien of the Loan Documents as
contemplated by this Section 7.2.9."
14. Amendment of Article IX (The Agent). Article IX of the
Credit Agreement is hereby amended by adding a new Section 9.8 at
the end thereof reading in its entirety as follows:
"SECTION 9.8 BAI as Issuer of Letters of Credit. Each
Lender hereby designates BAI as issuer of the Letters of
Credit hereunder (in such capacity, the 'Issuing Bank') and
agrees that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Agent in this Article IX
with respect to any acts taken or omissions suffered by the
Issuing Bank in connection with Letters of Credit issued by it
or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Agent", as used in this
Article IX, included the Issuing Bank with respect to such
acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank."
15. Amendments of Section 10.3 (Payments of Costs and
Expenses). Section 10.3 of the Credit Agreement is hereby amended
by:
(a) deleting the first parenthetical phrase appearing
therein and substituting therefor the following:
"(including the fees and out-of-pocket expenses of
counsel to the Agent (including, without duplication, the
allocated costs and out-of-pocket expenses of the Agent's
staff counsel) and of local counsel, if any, who may be
retained by the Agent)"; and
(b) deleting the parenthetical phrase appearing in the
last sentence of such Section and substituting therefor the
following:
"(including reasonable attorneys' fees and legal expenses
(which may include, without duplication, the allocated
costs and out-of-pocket expenses of staff counsel))"
16. Amendment of Exhibit C (Form of Letter of Credit Note).
Exhibit C to the Credit Agreement is hereby amended by deleting the
schedule thereto in its entirety and substituting a new schedule in
the form of Annex I hereto. Each Lender is hereby authorized to
attach to its Letter of Credit Note a new schedule in such amended
form.
17. Amendment of Exhibit G (Form of Compliance Certificate).
Exhibit G to the Credit Agreement is hereby amended by deleting
such Exhibit in its entirety and substituting therefor a new
Exhibit G in the form of Annex II hereto.
18. Amendments of Schedules. Schedules I (Disclosure
Schedule), II (Existing Intercompany Notes) and LC (Existing
Letters of Credit) of the Credit Agreement are hereby amended by
deleting such Schedules in their entirety and substituting therefor
new Schedules I, II and LC in the respective forms set forth in
Annex III hereto.
B. REPRESENTATIONS AND WARRANTIES
The Borrowers hereby represent and warrant to the Agent and
the Lenders that:
1. No Default has occurred and is continuing; and
2. The representations and warranties of the Borrowers
contained in Article VI of the Credit Agreement are true on and as
of the date hereof as if made on and as of said date; provided,
however, that each reference to "this Agreement" contained in such
Article VI shall be deemed to be a reference to the Credit
Agreement as amended hereby.
C. CONDITIONS PRECEDENT
This Amendment will become effective as of the date first
written above upon receipt by the Agent of counterparts hereof duly
executed by each Borrower, Shielding, each of the Lenders party to
the Credit Agreement and the Agent, provided that contemporaneously
with such execution and delivery, the Agent shall have received for
the account of the Lenders, an amendment fee in an amount equal to
$100,000 to be distributed to the Lenders as set forth below:
Lender Amount
Bank of America Illinois $52,087
First Union National
Bank of Florida $15,971
NBD Bank, N.A. $15,971
Sun Bank, National Association $15,971
D. MISCELLANEOUS
1. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with same effect
as if the signatures thereto and hereto were upon the same
instrument.
2. Except as herein specifically amended, all terms,
covenants and provisions of the Credit Agreement shall remain in
full force and effect and shall be performed by the parties hereto
in accordance therewith. All references to the "Agreement" or the
"Credit Agreement" contained in the Credit Agreement or in the
Schedules or Exhibits shall henceforth refer to the Credit
Agreement as amended by this Amendment.
3. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment as of the date first written.
BAIRNCO CORPORATION
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: VP Finance & Treasurer
ARLON, INC.
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: Vice President
KASCO CORPORATION
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: Vice President
ATLANTIC SERVICE CO. (UK), LTD.
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: Director
BERTRAM & GRAF GMBH
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: Director
EUROKASCO S.A.
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: Director
BANK OF AMERICA ILLINOIS, as
Agent
By: /s/ Steve A. Aronowitz
Name: Steve A. Aronowitz
Title: Vice President
BANK OF AMERICA ILLINOIS, as a
Lender
By: /s/ Steve A. Aronowitz
Name: Steve A. Aronowitz
Title: Vice President
FIRST UNION NATIONAL
BANK OF FLORIDA
By: /s/ Mary H. Doonan
Name: Mary H. Doonan
Title: Vice President
NBD BANK (as successor to NBD
BANK, N.A.)
By: /s/ Jon P. Dady
Name: Jon P. Dady
Title: Vice President
SUN BANK, NATIONAL ASSOCIATION
By: /s/ Kristina L. Anderson
Name: Kristina L. Anderson
Title: Assistant Vice President
ACKNOWLEDGED AND AGREED:
SHIELDING SYSTEMS CORPORATION
By: /s/ J. Robert Wilkinson
Name: J. Robert Wilkinson
Title: Vice President
ANNEX I to Amendment
LETTER OF CREDIT LOANS AND PRINCIPAL PAYMENTS
Amount of Amount of Unpaid
Letter of Credit Principal Repaid Principal Balance
Loan Made
Date Alternate Interest Alternate Alternate
Reference Interbank Period (if Reference Interbank Reference Interbank Notation
Rate Rate applicable) Rate Rate Rate Rate Made By
ANNEX II to Amendment
EXHIBIT G
BAIRNCO CORPORATION
Compliance Certificate
Quarter Ended
Reference is made to that certain Amended and Restated Credit
Agreement dated as of December 17, 1992, among Bairnco Corporation,
certain of its subsidiaries as Borrowers, certain financial
institutions as Lenders, and Bank of America Illinois (formerly known
as Continental Bank N.A.), as Agent, as amended, supplemented or
otherwise modified from time to time (the "Credit Agreement").
Capitalized terms used herein without definition shall have the same
respective meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 7.1.1(c) of the Credit Agreement, the
Borrowers HEREBY CERTIFY THAT:
1. No Default. As of the date hereof, no Default under the Credit
Agreement has occurred and is continuing, except as set forth
below (If no exceptions, state "None"):
2. Net Worth (Section 7.2.3(a))
A. Net Worth
(a) Aggregate Par Value of Outstanding Shares $
(b) Paid-in Capital $
(c) Retained Earnings $
(d) Treasury Stock $
(e) Subordinated Debt with No Put Option $
(f) Initial Adjustment for SFAS 106 and 109 $
Sum of (a) + (b) + (c) + (e) less (d) +/- (f) $
B. Cumulative Net Income from 1/01/95 $
C. Proceeds of Bairnco Stock since 12/31/94 $
D. Income/Loss from discontinuance of operations
representing changes in accounting estimates
used to book losses from discontinuance of
operations reflected in 12/31/93
income statement $
E. Credit Agreement Requirements:
Net Worth (A) not to be less than:
(1) $38,000,000 plus
(2) 60% of Cumulative Net Income (B) plus
(3) 60% of net cash proceeds of Bairnco
stock sold since 12/31/94 (C) plus/minus
(4) income/loss referred to in (D) above $
Compliance Indicated . . . . . . . . . . . . . . . . .
3. Interest Coverage Ratio (Section 7.2.3(c))
A. Consolidated Earnings Before Interest
Expenses and Taxes for the fiscal quarter
ended , excluding non-recurring
gains and charges $
B. Consolidated Interest Expense for
Indebtedness for the fiscal quarter
ended $
C. Ratio of A to B
D. Credit Agreement Requires Not Less Than: 2.00:1
Compliance Indicated . . . . . . . . . . . . . . . . .
4. Leverage Test (Section 7.2.3(b))
A. All Consolidated Liabilities $
(excluding deferred taxes)
B. Consolidated Stockholders Equity $
C. Deferred Taxes $
D. Permitted Subordinated Debt $
E. Sum of B + C + D $
F. Ratio of A to E
G. Credit Agreement Requirement:
F not to exceed [1.75][1.50]:1
Compliance Indicated . . . . . . . . . . . . . . . . .
IN WITNESS WHEREOF, the undersigned has executed this
certificate on behalf of the Borrowers as of the day of
, .
BAIRNCO CORPORATION
By:
Chief Financial Officer
ANNEX III to Amendment
SCHEDULE I
DISCLOSURE SCHEDULE
Item 6.7 Litigation
1. Asbestos Cases. Keene Corporation, a wholly owned
subsidiary of Bairnco until August 6, 1990, is a defendant in many
asbestos cases. Subsequent to the announcement of the Keene spin-off
in early 1990, Bairnco was named as a defendant in a number of
individual personal injury and wrongful death cases in which it is
alleged that Bairnco is liable to the plaintiffs as the alter ego of
or the successor in interest to Keene. In 1993, Bairnco and certain
of its present and former officers and directors were also named as
defendants in two purported class actions in which the same types of
claims were made. Both of these purported class actions, which have
been consolidated in the United States District Court for the
Southern District of New York, have been stayed by order of the
Bankruptcy Court for the Southern District of New York, as described
in the following paragraph.
On December 6, 1993, Keene filed for protection under
Chapter 11 of the Bankruptcy Code. The filing and certain subsequent
proceedings led to a stay of the asbestos-related individual and
class actions referred to above. In an order entered on March 11,
1994, the Bankruptcy Court overseeing the reorganization of Keene
entered an order appointing an examiner (the "Examiner") to evaluate
and report to the Court whether there are any viable claims arising
out of the transfer of assets for value by Keene to other
subsidiaries of Bairnco or the spin-offs of certain subsidiaries,
including Keene, by Bairnco. Bairnco provided evidence and other
information to the Examiner. The Examiner's preliminary report was
released on October 3, 1994. Since that time, the Court has held a
number of hearings at which the preliminary report has been
discussed. The Court has not ruled on whether the potential claims
discussed in the report should be prosecuted, and if so by whom or
under what circumstances.
2. Keene NOL. Bairnco is party to an action in the United
States Bankruptcy Court for the Southern District of New York brought
by its former subsidiary Keene Corporation, which is presently in
Chapter 11, to determine which of the two companies is entitled to
receive the benefit of tax refunds attributable to the carryback by
Keene of certain net operating losses. (After filing this action,
Keene ceded control of the action to the official committee of
unsecured creditors that previously was formed in the Chapter 11
proceeding.) Pending resolution of the dispute by the Bankruptcy
Court, any refunds actually received are to be placed in escrow.
Keene alleges that the refunds in question could total approximately
$30 million. There can be no assurance whatsoever that refunds in
such amount will be payable or that resolution of the dispute with
Keene will result in the release of any portion of the refunds to
Bairnco.
Item 6.8 Existing Subsidiaries
Jurisdiction of
Name Incorporation Parent Ownership %
Arlon, Inc. Delaware Bairnco 100%
KASCO Corporation. Delaware Bairnco 100%
Shielding Systems
Corporation Delaware Bairnco 100%
Atlantic Service Co.,
Ltd Canada KASCO 100%
Atlantic Service Co.,
Ltd. (UK) United Kingdom KASCO 98.88%
EuroKasco S.A. France KASCO 99.77%
Bertram & Graf GmbH Germany KASCO 100%
Invabond Ireland KASCO 100%
Arlon Europe NV Belgium Arlon 100%
Note:
Atlantic Service Co. (UK), Ltd. owns three inactive subsidiaries
that are registered each year to protect trade names. They are:
Claro Hookeye Ltd., Claro Hookeye Services, and Saw Service Ltd.
Item 6.12 Environmental Matters
(b) (i) Several notices of violation of environmental law
have been issued to the Company's facilities in the past. All have
been minor in scope and have resulted in no or minimal fines (mostly
for air pollution or improper labeling of hazardous wastes).
(ii) The Company's subsidiary operations have been notified
that they are a Potentially Responsible Party (PRP) at the following:
a. National Priority Site:
Union Chemical - South Hope, Maine
A subsidiary of the Company is a de maximus PRP in connection
with the Union Chemical site and in March, 1992 pre-funded its
portion of the total estimated cleanup of the site.
b. California State Identified Site:
Omega Chemical - Sante Fe Springs, California
(c) There was a release of hazardous material at the Ray
Proof, Norwalk, Connecticut facility. This is a leased facility. The
cleanup is proceeding with approval of the Connecticut DEP. We are of
the belief that the cost of this cleanup will not have a material
adverse effect on the financial conditions, operations, assets,
business, properties or prospects of Bairnco and its subsidiaries
on a consolidated basis.
(g) See section (b) (ii)
Item 7.2.1 (b) Existing Indebtedness
Creditor Outstanding Principal Amount
Credit Agreement:
1. Arlon, Inc. $ 20,500,000
2. KASCO Corporation
Bertram & Graf GmbH DM 1,060,000
EuroKasco, S.A. FF 5,600,000
Sun Bank, N.A.
1. Arlon, Inc. - Equipment Financing
Secured by specific Arlon manufacturing $ 187,393
equipment.
2. KASCO Corp. - Equipment Financing $ 248,000
Secured by specific KASCO manufacturing
equipment.
Bank of America
Bairnco Corporation
Secured Line of Credit $5,000,000
Secured by collateral under the Credit
Agreement $ 2,125,000
(as of 3/13/95)
Delaware Economic Development Authority
Arlon, Inc. Industrial Revenue
Bond $3,000,000.
Secured by certain fixed assets of Arlon,
Inc. $ 3,000,000
Bank of Montreal
Atlantic Service Co., Ltd. CDN 3,271,990
CDN $3,500,000 (as of 3/13/95)
Unsecured Line of Credit
Barclays Bank
Atlantic Service Co., (UK) Ltd.
20,000 British Pounds (Pds)
Unsecured Line of Credit Pds - 0 -
(as of 3/13/95)
SNVB
EuroKasco S.A.
Fr 2,000,000 Line of Credit Fr - 0 -
(as of 3/13/95)
Credit Commercial De France
EuroKasco S.A.
Fr 2,500,000 Line of Credit Fr - 0 -
(as of 3/13/95)
Deutsche Bank
Bertram & Graf GmbH DM 62,400
DM Loan (as of 3/13/95)
Bertram & Graf DM 57,074
DM 400,000 Line of Credit
Zweckverband
Bertram & Graf GmbH DM 10,851
Letters of Credit
L/C Ref.
Issuer Number Amount Expiry Beneficiary
Bank of America C722936 $5,000,000 12/31/95 National Union
Bank of America C7108685 $3,262,500 2/15/96 Mfg. Traders &
Trust
Guarantees
Bairnco guaranty issued to Sun Bank N.A. in connection with Arlon,
Inc. and KASCO Corporation's equipment loan and security agreement
with Sun Bank.
KASCO Corporation guaranty issued to Sun Bank N.A. in connection
with Arlon, Inc. and KASCO Corporation's equipment loan and security
agreement with Sun Bank, in respect of all obligations under the
agreement, other than obligations under the note of which it is the
maker.
Arlon, Inc. guaranty issued to Sun Bank N.A. in connection with
Arlon, Inc. and KASCO Corporation's equipment loan and security
agreement with Sun Bank, in respect of all obligations under the
agreement, other than obligations under the note of which it is the
maker.
KASCO Corporation guaranty issued to Bank of Montreal in connection
with Atlantic Service Co., Ltd.'s banking facilities with Bank of
Montreal.
SCHEDULE II
Existing Intercompany Notes
Borrower Payee Principal Date
KASCO Corporation Bairnco Corporation $39,400,000 8/1/88
SCHEDULE LC
Existing Letters of Credit
Issuer - Bank of America
Number Beneficiary Applicant Amount Expiry
C7222936 National Union Bairnco Corporation $5,000,000 12/31/95
Fire Insurance
Co. of Pittsburgh
PA
C7108685 Mfg. Traders Arlon, Inc. $3,262,500 2/15/96
& Trust