Exhibit 10.3
FIFTH AMENDMENT
TO AMENDED AND RESTATED LOAN AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT ("Fifth
Amendment") is made as of this 4th day of August, 2005, by and among FLEET
CAPITAL CORPORATION ("Fleet"), a Rhode Island corporation with an office at One
South Wacker Drive, Suite 3400, 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, FLEET CAPITAL GLOBAL FINANCE, INC., individually as a Lender and
as Canadian Agent ("Canadian Agent"), BANK OF AMERICA, N.A., London branch (as
successor-in-interest to Fleet National Bank, London branch, trading as
FleetBoston Financial), individually as a Lender and as U.K. Agent ("U.K.
Agent"), WELLS FARGO FOOTHILL, LLC, as Syndication Agent, LASALLE BANK NATIONAL
ASSOCIATION, as Documentation 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, Ontario M1K 2A3 ("Woods Canada" or "Canadian
Borrower") and CEH LIMITED ("CEH" or "U.K. Borrower"), a private limited company
incorporated under the laws of England and Wales and registered with Company No.
4992300 whose registered office is Cardrew Way, Redruth Cornwall, TR15 1ST,
England. Katy, Woods Canada and CEH 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,
Canadian Agent, U.K. Agent and Borrowers entered into a certain Amended and
Restated Loan Agreement dated as of April 20, 2004, as amended by a certain
First Amendment to Amended and Restated Loan Agreement dated June 29, 2004, by
and among Agents, Lenders and Borrowers, by a certain Second Amendment to
Amended and Restated Loan and Security Agreement dated March 29, 2005, by and
among Agent, Lenders and Borrowers, by a certain Third Amendment to Amended and
Restated Loan and Security Agreement dated April 13, 2005, by and among Agent,
Lenders and Borrowers and by a certain Fourth Amendment to Amended and Restated
Loan and Security Agreement dated June 8, 2005 (said Loan Agreement, as so
amended, 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, U.K. Agent and Canadian 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. WIN Acquisition. Agent and Majority Lenders consent to the acquisition
(the "WIN Acquisition") by a Borrower of all or substantially all of the
assets of Washington International Non-Wovens, LLC ("WIN") so long as (x)
after giving effect to the consummation of such acquisition no Default or
Event of Default will exist and be continuing, (y) such acquisition is
consummated pursuant to a purchase and sale or similar agreement and
related documents, which true and correct copies of which have been
delivered to Agent and its counsel, and which are reasonably satisfactory
to Agent and its counsel, (z) the total cash purchase price payable by
Borrowers with respect to such acquisition, plus assumed Indebtedness does
not exceed $2,350,000, plus related usual and customary acquisition
expenses, (aa) Borrowers assume no Indebtedness in connection with such
acquisition other than total accounts payable and accrued expenses, in
each case not aged more than as provided by good business practice and
industry custom and Money Borrowed to the extent permitted by clause (ix)
of Subsection 7.2.3 and (bb) if Katy creates a new Subsidiary to effect
such acquisition, such Subsidiary shall execute a joinder agreement in
form and substance reasonably acceptable to Agent whereby such Subsidiary
shall become an additional Borrower hereunder.
3. Total Money Borrowed. Subsection 7.2.3 of the Loan Agreement is hereby
deleted and the following is inserted in its stead:
"7.2.3 Total Money Borrowed. Create, incur, assume, or suffer to
exist, or permit any Subsidiary of Borrower to create, incur or suffer to
exist, any Money Borrowed, except:
(i) Obligations owing to Agent or any Lender under this
Agreement or any of the other Loan Documents;
(ii) Money Borrowed, including without limitation Subordinated
Debt, existing on the date of this Agreement and listed on Exhibit
7.2.3;
(iii) Permitted Purchase Money Borrowed;
(iv) Guaranties of any Money Borrowed permitted hereunder;
(v) Money Borrowed in respect of intercompany loans permitted
under subsection 7.2.2(v), (vi) and (vii);
(vi) Obligations to pay Rentals permitted by subsection
7.2.18;
(vii) Second Lien Debt;
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(viii) unsecured Money Borrowed in connection with the
financing of insurance premiums; provided that the aggregate amount
of any such Money Borrowed does not exceed, at any point in time,
$2,000,000;
(ix) unsecured Money Borrowed owed from WIN to Farmers and
Merchants Bank assumed by CCP in connection with the consummation of
the WIN Acquisition (as defined in Section 2 of the Fifth Amendment)
so long as the aggregate principal amount of such Money Borrowed
does not exceed $620,000; and
(x) Money Borrowed not included in paragraphs (i) through (ix)
above, which does not exceed at any time, in the aggregate, the
greater of (x) $150,000 and (y) the excess, if any, of $500,000 over
the amount of unsecured Money Borrower owing from CCP to Farmers and
Merchants Bank permitted to be incurred by clause (ix) above."
4. Condition Precedent. This Fifth Amendment shall become effective upon the
execution and delivery of this Fifth Amendment by each of Borrowers, Agent
and Majority Lenders. The date on which such condition precedent is
satisfied shall be referred to as the "Fifth Amendment Effective Date."
5. Continuing Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and effect.
6. Governing Law. This Fifth 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.
7. Counterparts. This Fifth 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 Fifth Amendment to Loan Agreement)
IN WITNESS WHEREOF, this Fifth Amendment has been duly executed on the day
and year specified at the beginning of this Fifth Amendment.
KATY INDUSTRIES, INC.
By: /s/ Amir Rosenthal
------------------------------------
Name: Amir Rosenthal
Title: Vice President and CFO
CEH LIMITED
By: /s/ Anthony T. Castor III
------------------------------------
Name: Anthony T. Castor III
Title: Director
and
By: /s/ Christopher W. Anderson
------------------------------------
Name: Christopher W. Anderson
Title: Director
WOODS INDUSTRIES (CANADA) INC.
By: /s/ Amir Rosenthal
------------------------------------
Name: Amir Rosenthal
Title: Secretary
FLEET CAPITAL CORPORATION,
as Agent and as a Lender
By: /s/ Jason Riley
------------------------------------
Name: Jason Riley
Title: Vice-President
WELLS FARGO FOOTHILL LLC,
as Syndication Agent and Lender
By: /s/ Lan Wong
------------------------------------
Name: Lan Wong
Title: Vice-President
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agent and as a Lender
By: /s/ Mark Mital
------------------------------------
Name: Mark Mital
Title: First Vice-President
UPS CAPITAL CORPORATION, as a Lender
By: /s/ John P. Holloway
----------------------------------------
Name: John P. Holloway
Title: Director of Portfolio Operations
BANK OF AMERICA, N.A., London branch,
as U.K. Agent and U.K. Lender
By: /s/ Carmen Bernardis
------------------------------------
Name: Carmen Bernardis
Title: Senior Vice-President
FLEET CAPITAL GLOBAL FINANCE, INC.,
as Canadian Agent and Canadian Lender
By: /s/ Mark Adkins
------------------------------------
Name: Mark Adkins
Title: Vice-President
Accepted and Agreed to this 4th day of August, 2005.
GUARANTORS:
KKTY HOLDING COMPANY, L.L.C.
By: /s/ Christopher W. Anderson
---------------------------------------
Name: Christopher W. Anderson
Title: Authorized Manager
AMERICAN GAGE & MACHINE CO.
By: /s/ Amir Rosenthal
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Name: Amir Rosenthal
Title: Secretary
CONTINENTAL COMMERCIAL PRODUCTS, LLC
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
WOODS INDUSTRIES, INC.
By: /s/ Amir Rosenthal
---------------------------------------
Name: Amir Rosenthal
Title: Secretary