Exhibit 10.12
FIRST AMENDMENT TO
LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT ("First Amendment") is made as of
this 30th day of April, 2003, by and among FLEET CAPITAL CORPORATION ("Fleet"),
a Rhode Island corporation with an office at One South Wacker Drive, Suite 1400,
Chicago, Illinois 60606, individually as a Lender and as Agent ("Agent") for
itself and any other financial institution which is or becomes a party hereto
(each such financial institution, including Fleet, is referred to hereinafter
individually as a "Lender" and collectively as the "Lenders"), the CANADIAN
PARTICIPANTS party hereto, the U.K. PARTICIPANTS party hereto, an Affiliate of
Fleet National Bank to be incorporated under the laws of Canada or a province
thereof and to be selected by Agent, individually as a Lender and as Canadian
Agent ("Canadian Agent"), FLEET NATIONAL BANK, London U.K. branch, trading as
FleetBoston Financial, individually as a Lender and as U.K. Agent ("U.K.
Agent"), FOOTHILL CAPITAL CORPORATION, as Syndication Agent ("Syndication
Agent"), the LENDERS, KATY INDUSTRIES, INC., a Delaware corporation, with its
chief executive office and principal place of business at 765 Straits Turnpike,
Suite 2000, Middlebury, Connecticut 06762 ("Katy" or "U.S. Borrower"), WOODS
INDUSTRIES (CANADA) INC., a Canadian corporation with its chief executive office
and principal place of business at 375 Kennedy Road, Scarborough, Ont. MlK 2A3
("Woods Canada" or "Canadian Borrower") and CONTICO MANUFACTURING LIMITED ("CML"
or U.K. Borrower"), a private limited company incorporated under the laws of
England and Wales and registered with Company No. 1338772 whose registered
office is Cardrew Way, Redruth Cornwall, TR15 lST, England. Katy, Woods Canada
and CML are sometimes hereinafter referred to individually as a "Borrower" and
collectively as "Borrowers."
W I T N E S S E T H :
WHEREAS, Agent, Lenders, Canadian Participants, U.K. Participants, U.K.
Agent, Syndication Agent and Borrowers entered into a certain Loan Agreement
dated as of January 31, 2003 (said Loan Agreement is hereinafter referred to as
the "Loan Agreement"); and
WHEREAS, Borrowers desire to amend and modify certain provisions of the
Loan Agreement pursuant to the terms and conditions hereof;
WHEREAS, subject to the terms and conditions hereof, Agent, Lenders,
Canadian Participants, U.K. Participants and U.K. Agent are willing to so amend
and modify the Loan Agreement; and
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Agent and Lenders to Borrowers, the parties hereto hereby
agree as follows:
1. Definitions. All capitalized terms used herein without definition shall
have the meanings given to them in the Loan Agreement.
2. Permitted Distributions. Section 7.2.7 of the Loan Agreement is hereby
deleted and the following is inserted in its stead:
"7.2.7 Distributions. Declare or make, or permit any Subsidiary of
any Borrower to declare or make, any Distributions, except for:
(i) Distributions by any Subsidiary of a Borrower to such
Borrower;
(ii) Distributions paid solely in Securities of a Borrower or
any of its Subsidiaries including, without limitation,
Distributions paid by Katy solely in Securities on Katy's
Convertible Preferred Stock;
(iii) Distributions by a Borrower in amounts necessary to
permit such Borrower to repurchase Securities of such Borrower
from employees of such Borrower or any of its Subsidiaries
upon the termination of their employment, so long as no
Default or Event of Default exists at the time of or would be
caused by the making of such Distributions and the aggregate
cash amount of such Distributions, measured at the time when
made, does not exceed $1,000,000 in any fiscal year of Katy;
(iv) so long as no Default or Event of Default exists at the
time of or would be caused by the making of such
Distributions, Distributions by Katy in an amount sufficient
to permit Parent to pay Consolidated tax liabilities of
Parent, Katy and Katy's Subsidiaries relating to the business
of Borrowers and Borrowers' Subsidiaries, so long as Parent
applies the amount of such Distributions for such purpose;
(v) Distributions by Katy to the extent necessary to permit
Parent to pay administrative costs and expenses related to the
business of Borrowers and their Subsidiaries, not to exceed
$100,000 in any fiscal year of Katy, so long as Parent applies
the amount of such Distributions for such purpose;
(vi) Distributions in the form of repurchases of the Contico
Preferred Units consummated on the Closing Date pursuant to
the Contico Preferred Units Repurchase Agreement in an
aggregate amount not to exceed $10,000,000; and
(vii) Distributions in the form of repurchases of Common Stock
on the open public market provided that: (a) average U.S.
Availability for the 30 days immediately prior to any such
repurchase, computed on a pro forma basis after giving effect
to any such repurchase, equals or exceeds $10,000,000; (b)
U.S. Availability immediately after giving effect to any such
repurchase equals or exceeds $10,000,000; (c) the aggregate
amount of any such repurchases made within any fiscal year of
Borrower does not exceed $3,000,000; and (d) after giving
effect to any such repurchase, no Default or Event of Default
shall have occurred and be continuing."
3. Continuing Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and effect.
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4. Governing Law. This First Amendment and the obligations arising hereunder
shall be governed by, and construed and enforced in accordance with, the
laws of the State of Illinois applicable to contracts made and performed
in such state, without regard to the principles thereof regarding
conflicts of laws.
5. Counterparts. This First Amendment may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
(Signature Page Follows)
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(Signature Page to First Amendment to Loan Agreement)
IN WITNESS WHEREOF, this First Amendment has been duly executed on the
day and year specified at the beginning of this First Amendment.
KATY INDUSTRIES, INC.
By: /s/ Amir Rosenthal
-------------------------------------
Name: Amir Rosenthal
-------------------------------
Title: Vice President
------------------------------
CONTICO MANUFACTURING LIMITED
By: /s/ Amir Rosenthal
-------------------------------------
Name: Amir Rosenthal
-------------------------------
Title: Assistant Secretary
------------------------------
WOODS INDUSTRIES (CANADA) INC.
By: /s/ Amir Rosenthal
-------------------------------------
Name: Amir Rosenthal
-------------------------------
Title: Secretary
------------------------------
FLEET CAPITAL CORPORATION,
as Agent and as a Lender
By: /s/ Sandra J. Evans
-------------------------------------
Name: Sandra J. Evans
-------------------------------
Title: Senior Vice President
------------------------------
FOOTHILL CAPITAL CORPORATION
By: /s/ Lan Wong
-------------------------------------
Name: Lan Wong
-------------------------------
Title: AVP
------------------------------
GMAC COMMERCIAL FINANCE, as a Lender
By:
-------------------------------------
Name:
-------------------------------
Title:
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LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Mark Mital
-------------------------------------
Name: MARK MITAL
-------------------------------
Title: VICE PRESIDENT
------------------------------
U.S.BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Robin L Van Meter
-------------------------------------
Name: Robin L Van Meter
-------------------------------
Title: Vice President
------------------------------
UPS CAPITAL CORPORATION, as a Lender
By: /s/ Charles Johnson
-------------------------------------
Name: Charles Johnson
-------------------------------
Title: Senior Vice President
------------------------------
FLEET NATIONAL BANK, LONDON U.K. BRANCH,
trading as FleetBoston Financial, as
U.K. Agent and as U.K. Lender
By: /s/ V. Houghton
-------------------------------------
Name: V. Houghton
-------------------------------
Title: AVP II
------------------------------
Accepted and Agreed to this 30th of April, 2003.
GUARANTORS:
KKTY HOLDNG C0MPANY, L.L.C.
By: /s/ Christopher Anderson
---------------------------------------
Name: Christopher Anderson
Title: Authorized Manager
AMERICAN GAGE & MACHINE CO.
By:
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
CONTICO INTERNATIONAL, L.L.C.
By:
---------------------------------------
Name: Amir Rosenthal
Title: Authorized Manager
DUCKBACK PRODUCTS, INC,
By:
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
GC/WALDOM ELECTRONICS, INC.
By:
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
GLIT/DTSCO, INC.
By:
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
GLIT/GEMTEX, INC.
By:
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
Accepted and Agreed to this 30th of April, 2003.
GUARANTORS:
KKTY HOLDNG C0MPANY, L.L.C.
By:
---------------------------------------
Name: Christopher Anderson
Title: Authorized Manager
AMERICAN GAGE & MACHINE CO.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
CONTICO INTERNATIONAL, L.L.C.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Authorized Manager
DUCKBACK PRODUCTS, INC,
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
GC/WALDOM ELECTRONICS, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
GLIT/DTSCO, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
GLIT/GEMTEX, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
HALLMARK HOLDINGS, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
PTR MACHINE CORP.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
SAVANNAH ENERGY SYSTEMS COMPANY
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
WILEN PRODUCTS, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
WJ SMITH WOOD PRESERVING COMPANY
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------
WOODS INDUSTRIES, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary
---------------------------