AMENDMENT AGREEMENT NO. 7
Doc. 1
Amendment Agreement No. 7 dated as of December 19, 1996
by and between GIBRALTAR STEEL CORPORATION, a Delaware
corporation ("Company"), GIBRALTAR STEEL CORPORATION OF NEW YORK,
a New York corporation ("Borrower"), THE CHASE MANHATTAN BANK
(successor by merger to THE CHASE MANHATTAN BANK, N.A. and
CHEMICAL BANK) ("Chase"), FLEET BANK ("Fleet"), MELLON BANK, N.A.
("Mellon") (Chase, Fleet and Mellon shall collectively be
referred to herein as "Banks") and The Chase Manhattan Bank
(successor by merger to The Chase Manhattan Bank, N.A. and
Chemical Bank), as Administrative Agent for the Banks
("Administrative Agent").
A. Preliminary Statement
Company, Borrower, the Banks and the Administrative
Agent are parties to a Credit Agreement dated November 10, 1994,
as amended from time to time including, without limitation, the
following amendments: letter agreement dated November 28, 1994;
letter agreement dated May 9, 1995; Certificate and Modification
to Credit Agreement dated April 3, 1995; Amendment Agreement
dated as of July 18, 1995; Amendment Agreement dated as of
December 28, 1995; Credit Agreement Amendment dated as of
February 14, 1996; and Amendment Agreement dated May 30, 1996
("Credit Agreement"). Company, Borrower, the Banks and the
Administrative Agent desire to amend the Credit Agreement to
extend the Termination Date and amend certain other provisions
thereof.
All capitalized terms used but not otherwise defined in
this Amendment Agreement shall have the meanings set forth in the
Credit Agreement.
B. Amendment
1. The definition "Collateral Documents" in the
Credit Agreement is hereby amended to add the following language
at the end of such definition:
", as such agreements may be amended from time to
time."
2. The definition "Credit Pricing Agreement" in the
Credit Agreement is hereby deleted in its entirety and the
following is inserted in its place:
"'Credit Pricing Agreement' - The Agreement dated
November 10, 1994, among the Company, the Borrower, the
Banks and the Administrative Agent setting forth the
pricing with respect to the Revolving Credit and the
Term Credit, as such agreement may be amended, replaced
or restated from time to time."
-41-
3. The definition "Guaranty" in the Credit Agreement
is amended to insert "or Section 6.9" after the words "Section
3.1 d".
4. The definition "Security Agreement" in the Credit
Agreement is amended to insert "or Section 6.9" after the words
"Section 3.1 e".
5. The definition "Termination Date" in the Credit
Agreement is hereby deleted in its entirety and the following is
inserted in its place:
"'Termination Date' - The maturity date of the
Credit, which shall be initially November 17, 2000,
which may be converted in accordance with Section 2.3
hereof and may be shortened in accordance with Section
2.11 or 7.2 hereof."
6. Section 2.10 of the Credit Agreement is hereby
deleted in its entirety and the following is inserted in its
place:
"Facility Fee. The Borrower shall pay to the
Administrative Agent for the account of the Banks a per
annum Facility Fee (based on a 360 day year) on the
unused amount of the Commitments, which facility fee
shall be payable quarterly, in arrears, on December 31,
1996 and on the first day of each March, June,
September and December thereafter to and including the
Termination Date. The Facility Fee shall be computed
in accordance with the provisions of the Credit Pricing
Agreement."
7. Section 5.8, clause (a) of the Credit Agreement is
hereby amended to delete the reference therein to "$500,000.00"
and insert in its place "$2,000,000.00".
8. Section 5.9, clause (a) of the Credit Agreement is
hereby amended to delete the reference therein to "$500,000.00"
and insert in its place "$1,000,000.00".
9. Section 6.3, clause (iii) of the Credit Agreement
is hereby deleted in its entirety and the following is inserted
in its place:
"(iii) in addition to the guaranty
permitted in accordance with clause (ii), the
Company and/or the Borrower may guaranty
obligations of any Subsidiary to Third
Persons not to exceed $4,000,000.00 in the
aggregate at any time."
-42-
10. The following sentence is added to Section 6.4:
"Borrower has not, and so long as this Agreement
is in effect, will not, enter into any covenant or
agreement with any other person or entity that
prohibits the granting or existence of a lien in the
personal or real property of Borrower in favor of the
Administrative Agent, as administrative agent and for
the benefit of the Banks."
11. Section 6.8, clause (iv) of the Credit Agreement
is hereby amended to delete the reference therein to
"$500,000.00" and insert in its place "$1,000,000.00".
12. Section 6.12 of the Credit Agreement is hereby
amended to delete the reference therein to "$1,000,000.00" and
insert in its place "five (5%) percent of the Company's Tangible
Net Worth on a Consolidated basis".
13. Section 6.13 of the Credit Agreement is hereby
amended to delete the reference therein to "$3,000,000.00" and
insert in its place "$5,000,000.00".
14. Section 6.14 of the Credit Agreement is hereby
deleted in its entirety and the words "Intentionally Omitted" are
inserted in its place.
15. Section 6.15 of the Credit Agreement is hereby
deleted in its entirety and the following is inserted in its
place:
"Interest Coverage Ratio. Permit, in the
case of the Company on a Consolidated basis,
the ratio of Earnings before Taxes and
Interest plus depreciation (excluding Capital
Expenditures made in connection with
permitted acquisitions) and amortization
minus Capital Expenditures to interest
payable on Total Liabilities, calculated on
an annual rolling basis of four fiscal
quarters, to be less than (i) 2.7 to 1.0 as
of the last day of any fiscal quarter from
December 31, 1995 through December 31, 1996
and (ii) 3.0 to 1.0 as of the last day of any
fiscal quarter from March 31, 1997 and
thereafter."
16. Section 6.16 of the Credit Agreement is hereby
deleted in its entirety and the following is inserted in its
place:
-43-
"6.16 Tangible Net Worth. Permit, in the case of
the Company on a Consolidated basis, the Tangible Net
Worth (a) as of the last day of any fiscal quarter to
be less than $75,000,000 plus 50% of Cumulative Net
Income (as defined below) and (b) as of any fiscal year
end, to be less than the greater of (i) $75,000,000
plus 50% of Cumulative Net Income and (ii) the Tangible
Net Worth of the Company on a Consolidated basis as of
the end of the prior fiscal year plus $10,000,000.
Cumulative Net Income means net income of the Company
on a Consolidated basis from June 30, 1996 through the
end of the fiscal quarter for which the calculation of
Tangible Net Worth is being made."
17. Section 6.17 of the Credit Agreement is hereby
deleted in its entirety and the following is inserted in its
place:
"Funded Debt/EBITDA. Permit, in the case of the
Company on a Consolidated basis, the ratio of Funded
Debt (as defined below) to Earnings before Interest and
Taxes plus depreciation and amortization as of the last
day of any fiscal quarter, calculated on an annual
rolling basis of four fiscal quarters, to be greater
than the ratio stated below as of any fiscal quarter
end during the corresponding periods set forth below:
Period Ratio
December 31, 1995 to and
including December 30, 1996 3.0 to 1.0
December 31, 1996 to and
including December 30, 1997 3.0 to 1.0
December 31, 1997 to and
including December 30, 1998 2.75 to 1.0
December 31, 1998 to and
including December 30, 1999 2.25 to 1.0
December 31, 1999 to and
including December 30, 2000 2.0 to 1.0
"Funded Debt" means debt for money borrowed which
is bearing interest. For the purposes of calculating
this covenant, upon the consummation of a permitted
acquisition, the 12 month historical Earnings before
Interest and Taxes plus depreciation and amortization
of the acquired entity shall be included in the
calculation of the ratio, subject to the Banks' review
-44-
and approval, in their discretion, of such acquired
entity's financial information."
18. Section 6.18 of the Credit Agreement is hereby
amended to delete the reference therein to "1.5" and insert "2.0"
in its place.
19. A new Section 6.19 is hereby added to the Credit
Agreement as follows:
"Net Operating Loss. Permit, in the case of the
Company on a consolidated basis, as of the end of any
fiscal quarter a net operating loss."
20. Section 10.11 of the Credit Agreement is hereby
deleted in its entirety and the following is inserted in its
place:
"Release of Collateral. Subject to the satisfaction
of the following conditions, the Banks hereby
agree to release the security and collateral agree-
ments delivered in accordance with Section 3.1.e
of this Agreement after the Administrative Agent's
receipt of written request from the Company and
Borrower to so release:
(i) the execution and delivery by the
Company and the Borrower to the
Administrative Agent for the benefit of the
Banks of a pledge and security agreement in
form and content acceptable to the Majority
Banks pledging to the Banks all of the issued
and outstanding capital stock of the
Subsidiaries held by such entities, together
with the delivery to the Administrative Agent
of the certificates evidencing the shares of
such capital stock and appropriate stock
powers;
(ii) delivery to the Administrative
Agent of executed releases and terminations
of Fleet Bank's security interest in all of
the personal and real property of Gibraltar
Steel Corporation of Tennessee, such releases
and terminations to be in form and content
acceptable to the Majority Banks;
(iii) as of the Release Date (as defined
below), no Event of Default, or event which
with notice, or lapse of time, or both, would
constitute an Event of Default, shall exist;
-45-
(iv) the execution and delivery as of the Release
Date by the Company and the Borrower
to the Administrative Agent of a Compliance
Certificate - Financial Covenants (based on
the end of the fiscal quarter most recent
to the Release Date) and Compliance
Certificate - General;
(v) the Banks shall have determined in
their sole and absolute discretion that as of
the Release Date there has been no material
adverse change since the end of the fiscal
quarter most recent to the request for the
release of collateral to the financial
condition, business, operations or properties
of the Company or the Borrower, on a
Consolidated basis, and that no conditions or
circumstances exist that, with the passage of
time, could reasonably be expected to cause
such a material adverse change; and
(vi) the execution and delivery by the
Company, Borrower and each Subsidiary to the
Banks of an agreement which contains a
covenant that provides that so long as any of
the Indebtedness as defined in any Collateral
Document remains outstanding and the
Commitments have not been terminated, such
entities will not, at any time, permit to
exist any Lien in the assets or property
(personal and real) of such entities other
than the Permitted Encumbrances.
"Release Date" as used in this Section
10.11 means the date that the Administrative
Agent on behalf of the Banks, delivers to the
Company and Borrower documents evidencing the
release of the security and collateral
agreements in accordance with this Section
10.11."
21. Section 7.1(j) of the Credit Agreement is deleted
in its entirety and the following is inserted in its place:
"7.1(j) Collateral Documents. Any Collateral Document
shall cease to be in full force and effect (other than pursuant
to Section 10.11 of this Agreement), or the occurrence of an
event of default or breach of any term, covenant or provision of
any Collateral Document."
-46-
C. Extension Fee
In consideration of the Banks entering into this
Amendment Agreement, upon execution hereof, Company and Borrower
shall pay to the Administrative Agent for the benefit of the
Banks $50,000.00 ("Extension Fee"). The Administrative Agent
shall distribute the Extension Fee to the Banks on a pro rata
basis.
D. Other Provisions
1. The Credit Agreement, except as specifically
modified by this Amendment Agreement, shall remain in full force
and effect and the Company and Borrower hereby reaffirm the
Credit Agreement as modified by this Amendment Agreement and all
documents executed and delivered to the Banks in connection with
the Credit Agreement and agrees that The Chase Manhattan Bank has
succeeded to all of the rights and benefits of The Chase
Manhattan Bank, N.A. and Chemical Bank under the Credit
Agreement, the Revolving Note dated December 28, 1995 in the
amount of $43,750,000.00 payable to the Chase Manhattan Bank,
N.A. and in the amount of $25,000,000.00 payable to Chemical
Bank, and all other documents executed in connection therewith.
In connection with this Amendment Agreement, the Borrower shall
execute and deliver to Chase a replacement Revolving Note in the
form Exhibit A attached hereto, which note replaces the Revolving
Notes executed and delivered to Chase and Chemical Bank dated
December 28, 1995. All references in the Credit Agreement and
Collateral Documents to the Credit Agreement shall mean the
Credit Agreement as amended by this Amendment Agreement.
2. This Amendment Agreement may be executed in any
number of counterparts and by the parties hereto on separate
counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together
constitute one and the same agreement.
3. This Amendment Agreement shall only become
effective upon execution by all parties hereto and delivery by
the Borrower to the Administrative Agent of (i) corporate
certificates and resolutions from the parties hereto, (ii) an
Amendment and Reaffirmation Agreement or Security Agreement and
Unlimited Continuing Guaranty from each of the Company's direct
and indirect subsidiaries, (iii) a counsel opinion, (iv) an
amendment to the Intercreditor Agreement and Credit Pricing
Agreement, both dated as of November 10, 1994 among Chase, Fleet
Bank and the Administrative Agent, and (v) the Extension Fee, all
in form and content satisfactory to the Administrative Agent and
its counsel.
-47-
4. Company and Borrower further represent and warrant
that, as of the date hereof, Company and Borrower have no claims
against the Banks or the Administrative Agent, and that there is
not existing any defense to, or counterclaim or set-off against
the enforcement of the Credit Agreement; and Company and Borrower
forever release any such claim existing on the date hereof which
Company and Borrower may have against the Banks or the
Administrative Agent.
5. The terms Administrative Agent and Banks as used
herein shall include the successors and assigns of those parties.
6. This Amendment Agreement shall be governed by and
construed under the internal laws of the State of New York, as
the same may from time to time be in effect, without regard to
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment Agreement No. 7 to be executed and delivered by their
duly authorized officers all as of the date first set forth
above.
Administrative Agent:
THE CHASE MANHATTAN BANK (successor
by merger to THE CHASE MANHATTAN BANK,
N.A. and CHEMICAL BANK), as
Administrative Agent and a Bank
By: /x/ Thomas J. Button
Thomas J. Button
Vice President & Manager
-48-
FLEET BANK, as a Bank
By: /x/ John J. Larry
John J. Larry
Vice President
MELLON BANK, N.A.
By: /x/ Sam S. Pepper, Jr.
Sam S. Pepper, Jr.
Vice President
Borrower:
GIBRALTAR STEEL CORPORATION OF NEW YORK
By: /x/ Walter T. Erazmus
Name: Walter T. Erazmus
Title: Vice President - Finance
Company:
GIBRALTAR STEEL CORPORATION
By: /x/ Walter T. Erazmus
Name: Walter T. Erazmus
Title: Vice President - Finance
-49-