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EXHIBIT 10.26
THIRD AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this "Amendment") is dated as of the 22nd day of March, 1995, and
entered into by and between (i) BANK OF AMERICA TEXAS, N.A., a national banking
association, with offices at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (the "Lender") as assignee of BankAmerica Business Credit, Inc., and
(ii) SUN COAST HOLDINGS, INC., a Nevada corporation, with offices at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(herein referred to as "Borrower"), Borrower being a wholly-owned subsidiary of
(iii) SUN COAST INDUSTRIES, INC., a Delaware corporation, with offices at ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (herein referred to as "Industries"),
(iv) PLASTICS MANUFACTURING COMPANY, a Delaware corporation, with offices at
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Plastics"), (v) SUN COAST
CLOSURES, INC., a Florida corporation with offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Closures"), (vi) ALLIANCE MANUFACTURING, INC., a
Tennessee corporation, with offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("AFE"), and (vii) CUSTOM LAMINATES, INC., a Nevada corporation, with
offices at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Laminates").
Industries, Plastics, Closures, AFE and Laminates are referred to from time to
time herein individually as "Guarantor" and jointly as "Guarantors."
WHEREAS, Lender, Borrower and Guarantors have entered into an Amended
and Restated Loan and Security Agreement dated as of April 29, 1994, as amended
by that certain First Amendment to Amended and Restated Loan and Security
Agreement dated effective as of June 30, 1994 (the "First Amendment") and the
Second Amendment to Amended and Restated Loan and Security Agreement dated as
of November 23, 1994 (the "Second Amendment") (as so amended by the First
Amendment and the Second Amendment, and as amended and modified from time to
time, the "Agreement");
WHEREAS, in connection with the execution of the Agreement, Borrower
executed and delivered unto Lender that certain Amended and Restated Capital
Expenditures Term Note dated of even date therewith, in the maximum original
principal amount of $10,000,000.00, payable to the order of Lender (the
"Note");
WHEREAS, Borrower has requested and Lender has agreed to extend to
Borrower an additional term loan in the principal amount of $3,500,000 which
term loan is memorialized by that certain Additional Term Note dated of even
date herewith in the original principal amount of $3,500,000 (the "Additional
Note"); and
WHEREAS, Lender, Borrower and Guarantors desire to amend the Agreement
and the Note as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Agreement and this Amendment, and other good and
valuable consideration, the receipt
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and sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I
Amendments to Definitions
Section 1.01. Definitions. Capitalized terms used in this
Amendment, to the extent not otherwise defined herein, shall have the same
meanings as in the Agreement, as amended hereby.
Section 1.02. Amendment to Definition of "Applicable Interest
Rate". The term "Applicable Interest Rate" as defined in the Agreement is
amended in its entirety to read as follows:
" Applicable Interest Rate means at all times a per annum
interest rate as follows:
(a) in the case of Reference Rate Revolving
Loans, a fluctuating rate equal to the Reference Rate; or
(b) in the case of Offshore Rate Revolving Loans,
a fixed rate equal to the Offshore Rate plus one percent (1%);
or
(c) in the case of Reference Rate Term Loans, a
fluctuating rate equal to the Reference Rate; or
(d) in the case of Offshore Rate Term Loans, a
fixed rate equal to the Offshore Rate plus one percent (1%);
or
(e) in the case of Reference Rate Capex Loans, a
fluctuating rate equal to the Reference Rate; or
(f) in the case of Offshore Rate Capex Loans, a
fixed rate equal to the Offshore Rate plus one percent (1%);
or
(g) at any time after the Renewal Date, Borrower
may elect to fix the interest rate (a "Fixed Rate") with
respect to either the Term Loan or the Capital Expenditures
Term Loan from the date of such election until the final
maturity date of such Loans, and the Fixed Rate shall be Bank
of America's Fixed Rate Index on the date of such election for
the applicable Interest Period plus one percent (1%) for the
Term Loan and the Capital Expenditures Term Loan. Once a
Fixed Rate has been elected for a Loan, no other Interest Rate
Election may be made with respect to the Loan subject to the
Fixed Rate."
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Section 1.03. Amendment to Definition of the Term Availability.
The term "Availability" as defined in the Agreement is amended in its entirety
to read as follows:
" Availability means at any time the lesser of:
A. The amount of Fifteen Million and no/100 Dollars
($15,000,000.00) (the "Maximum Revolving Credit
Line"), or
B. The sum of
(1) eighty percent (80%) of the amount of
Eligible Accounts, plus
(2) the lesser of
(a) fifty percent (50%) of the value of
Eligible Inventory; or
(b) up to fifty percent (50%) of the
Availability;
provided, however, that at all times Availability shall be
reduced by the sum of:
(i) the unpaid balance of Revolving
Loans at that time; and
(ii) the aggregate undrawn face amount of
all outstanding Letters of Credit
which the Lender has, or has caused
to be, issued or obtained for the
Borrower's account; and
(iii) reserves for potential landlord
liens in amounts reasonably required
by Lender and identified by Lender
to Borrower."
Section 1.04. The definitions "Closures Availability", "Closures
Eligible Accounts", Closures Eligible Inventory", "Closures Revolving Loans",
"Plastics Availability", "Plastics Eligible Accounts", "Plastics Eligible
Inventory", and "Plastics Revolving Loans" are hereby deleted from the
Agreement.
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ARTICLE II
Amendments to Sections
Section 2.01. Amendment to Section 2.1 of the Agreement. Section
2.1 of the Agreement is hereby amended in its entirety to read as follows:
"2.1 Total Facility. Subject to the terms and conditions
of this Agreement, the Lender shall make available up to a
Thirty-Three Million Three Hundred Thousand and No/100 Dollars
($33,300,000.00) total credit facility (the "Total Facility") for
Borrower's use from time to time during the term of this Agreement.
The Total Facility shall be comprised of: (a) a revolving line of
credit up to the limits of the Availability, consisting of Revolving
Loans and Letters of Credit as described in Section 2.2 and Section
2.5, (b) a Capital Expenditures Term Loan as described in Section 2.3,
and (c) a Term Loan as described in Section 2.4."
Section 2.02. Amendment to Section 2.3 of the Agreement. Section
2.3(i)(a) of the Agreement is hereby amended to read as follows:
"(a) the aggregate amount of up to Eleven Million and No/100
Dollars ($11,000,000) during the term of this Agreement. "
All other provisions of Section 2.3 remain unchanged.
Section 2.03. Amendment to Section 2.4 of the Agreement. Section
2.4 of the Agreement is hereby amended in its entirety to read as follows:
"2.4 Term Loan. The Lender has previously made a Term
Loan to Borrower in the original aggregate principal amount of
$4,000,000 repayable in accordance with the terms of a certain
promissory note previously authorized, issued and delivered by
Plastics and Industries to Lender, and assumed by Borrower, in the
form attached as Exhibit C-2 to the Agreement. Borrower has, of even
date with this Amendment, executed an additional Term Note (the
"Additional Term Note") in the aggregate principal amount of
$3,500,000 repayable in accordance with the terms of such Additional
Term Note the form of which is attached to this Amendment as Exhibit
C-3. The indebtedness represented by the Term Note and the Additional
Term Note is referred to herein as the "Term Loan". Upon the
termination of this Agreement for whatever reason, the entire unpaid
balance of the Term Loan (both principal and accrued interest) shall
become immediately due and payable in full."
Section 2.04. Amendment to Section 2.5 of the Agreement. The
second sentence of Section 2.5 is hereby amended to read in its entirety:
"Without intending to limit the Lender's discretion with
respect to Letters of Credit, the Lender will not cause to be opened
any Letter of Credit if: (a) the maximum
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face amount of the requested Letter of Credit is less than $25,000; or
(b) the maximum face amount of the requested Letter of Credit, plus
the aggregate undrawn face amount of all outstanding Letters of
Credit, would exceed $2,000,000; or (c) the maximum face amount of the
requested Letter of Credit, and all commissions, fees, and charges due
from Borrower to Lender in connection with the opening thereof, exceed
the Availability at such time."
All other provisions of Section 2.5 remain unchanged.
Section 2.06. Amendment to Section 4.2 of the Agreement. Section
4.2 of the Agreement is hereby amended in its entirety to read as follows:
"4.2 Repayment of Term Loan. The Borrower shall repay the
principal under the Term Note in twenty-seven (27) consecutive
quarterly installments of Sixty-Six Thousand Six Hundred Sixty-Six and
No/100 Dollars ($66,666) each, commencing on the first day of July,
1994 and continuing on the same day of each consecutive Fiscal Quarter
thereafter, with a final installment of the remaining balance due on
April 1, 2001. The Borrower shall repay the principal of the
Additional Term Note in three annual principal installments as
follows: $1,000,000 on April 1, 1996; $1,250,000 on April 1, 1997;
and $1,250,000 on April 1, 1998."
Section 2.07. Amendment to Section 9.16(b) of the Agreement.
Section 9.16(b) of the Agreement is hereby amended in its entirety to read as
follows:
"(b) Borrower may form a wholly-owned United States
Subsidiary which may in turn form a wholly-owned Mexican Subsidiary.
This Mexican Subsidiary may purchase the major assets (through either
a stock or asset purchase) of a Mexico City based injection molder and
may pay all or part of the following consideration therefor: (i)
approximately $1,800,000 in cash, (ii) a note issued by the Mexican
Subsidiary for approximately $500,000 or the peso equivalent of such
sum (with the risk of devaluations of the peso being borne by the
issuer of the note), and (iii) a note issued by the Mexican Subsidiary
for approximately $750,000 or the peso equivalent of such sum (with
the risk of devaluations of the peso being borne by the holder of the
note). Borrower may provide the two foregoing Subsidiaries (x) with
(A) the funds necessary to make the cash payments in subparagraph (i);
and, in addition, (y) with (B) up to a $500,000 working capital
facility; and (C) sufficient funds to enable the Subsidiaries to make
their regularly scheduled payments of principal only* under the notes
described in subparagraphs (ii) and (iii) in an amount not to exceed
$500,000 per year, provided (x) no Event of Default has occurred and
is continuing under the Agreement or (y) the making of any such
payment would result in an Event of Default. [*The Subsidiaries will
be required to make interest payments under the notes.] Borrower
will, at Lenders' request, cause either or both of such Subsidiaries
to execute an Affiliate Guaranty, pledge its stock in such United
States Subsidiary to Lender, and/or cause such United Stated
Subsidiary to pledge its stock in such Mexican Subsidiary to Lender.
Either Borrower or Industries may guarantee one
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or both of the foregoing notes, but any such guaranty must be fully
subordinated to its Obligations to Lender."
Section 2.08. Amendment to Section 9.17 of the Agreement. Section
9.17 of the Agreement is hereby amended in its entirety to read as follows:
"9.17 Capital Expenditures. Neither Industries nor any of
its Subsidiaries shall make or incur any Capital Expenditure if, after
giving effect thereto, the aggregate amount of all Capital
Expenditures by the Borrower and its Subsidiaries would exceed Eleven
Million and No/100 Dollars ($11,000,000) for the Fiscal Year ending
June 30, 1995; Six Million and No/100 Dollars ($6,000,000) for the
Fiscal Year ending June 30, 1996; and Five Million and No/100 Dollars
($5,000,000) for each Fiscal Year ending thereafter."
Section 2.09. Amendment to Section 9.19 of the Agreement. Section
9.19 of the Agreement is hereby amended in its entirety to read as follows:
"9.19 Debt Ratio. Industries and its Subsidiaries on a
consolidated basis will not permit the ratio of Debt to Adjusted
Tangible Net Worth to exceed the following amounts during the
following respective periods:
Period Ending Ratio
------------- -----
11/23/94 to 6/30/95 2.4 to 1
7/1/95 to 6/30/96 2.25 to 1
7/1/96 to 6/30/97 2.0 to 1
7/1/97 and thereafter 1.75 to 1"
Section 2.10. Amendment to Section 9.20 of the Agreement. Section
9.20 of the Agreement is hereby amended in its entirety to read as follows:
"9.20 Current Ratio. Industries and its Subsidiaries on a
consolidated basis will not permit the ratio of (a) Current Assets to
(b) Current Liabilities to be less than 1.1 to 1 at the end of any
Fiscal Quarter. Outstanding Revolving Loans shall be included as part
of Current Liabilities."
Section 2.11. Amendment to Section 9.21 of the Agreement. Section
9.21 of the Agreement is hereby amended in its entirety to read as follows:
"9.21 Adjusted Tangible Net Worth.
(a) Industries and its Subsidiaries on a consolidated
basis will not permit Adjusted Tangible Net Worth to be less
than the following amounts during the following respective
periods:
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Period Ending Amount
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Current to 6/30/95 $ 16,000,000
7/1/95 to 6/30/96 18,000,000
7/1/96 to 6/30/97
and thereafter 22,000,000
(b) Plastics will not permit the Plastics Adjusted
Tangible Net Worth to be less than $4,000,000 at any time.
(c) Closures will not permit the Closures Adjusted
Tangible Net Worth to be less than $3,000,000 at any time."
ARTICLE III
Miscellaneous
Section 3.01. Ratifications. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions
set forth in the Agreement and, except as expressly modified and superseded by
this Amendment, the terms and provisions of the Agreement and the Note,
including, without limitation, all financial covenants contained therein, are
ratified and confirmed and shall continue in full force and effect. Lender,
Borrower and each Guarantor agree that the Agreement, as amended hereby, and
the Note shall continue to be legal, valid, binding and enforceable in
accordance with its terms.
Section 3.02. Representations and Warranties. Borrower and each
Guarantor hereby represents and warrants to Lender that the execution, delivery
and performance of this Amendment and all other loan documents to which it is
or is to be a party executed and/or delivered in connection herewith, have been
authorized by all requisite corporate action on the part of Borrower or such
Guarantor and will not violate the Certificate or Articles of Incorporation or
Bylaws of Borrower or such Guarantor.
Section 3.03. Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent (unless
specifically waived in writing by the Lender):
(a) Each Loan Party shall have executed and delivered
such other documents and instruments as Lender may require, including,
without limitation, a certificate executed by an officer of each Loan
Party certifying as to the following:
(i) Resolutions. The Board of Directors of each
Loan Party have adopted resolutions which authorize the
execution, delivery, and performance by such Loan Party of
this Agreement and the other Loan Documents to which such Loan
Party is or is to be a party;
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(ii) Incumbency. The incumbency of the officers of
such Loan Party authorized to sign this Agreement and each of
the other Loan Documents to which such Loan Party is or is to
be a party;
(iii) Articles of Incorporation. The certificate or
articles of incorporation of each Loan Party;
(iv) Bylaws. The bylaws of each Loan Party;
(v) Good Standing, etc. The existence, good
standing and qualification of each Loan Party.
(b) All corporate proceedings taken in connection with
the transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to Lender and its legal counsel, Jenkens & ▇▇▇▇▇▇▇▇▇, a
Professional Corporation.
Section 3.04. Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation
by Lender or any closing shall affect the representations and warranties or the
right of Lender to rely thereon.
Section 3.05. Reference to Agreement. The Agreement and the Note,
each of the Loan Documents, and any and all other agreements, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference therein to the Agreement shall mean a reference
to the Agreement as amended hereby.
Section 3.06. Severability. Any provision of this Amendment held
by a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Amendment and the effect thereof
shall be confined to the provision so held to be invalid or unenforceable.
Section 3.07. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN THE STATE OF TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 3.08. Successors and Assigns. This Amendment is binding
upon and shall inure to the benefit of Lender, Borrower, Guarantors and their
respective successors and assigns; provided, however, that neither Borrower nor
any Guarantor may assign or transfer any of its rights or obligations hereunder
without the prior written consent of Lender. Lender may assign
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any or all of its rights or obligations hereunder without the prior consent of
Borrower and Guarantors.
Section 3.09. Counterparts. This Amendment may be executed in one
or more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument.
Section 3.10. Effect of Waiver. No consent or waiver, express or
implied, by Lender to or of any breach of or deviation from any covenant or
condition of the Agreement or duty shall be deemed a consent or waiver to or of
any other breach of or deviation from the same or any other covenant, condition
or duty.
Section 3.11. Headings. The headings, captions and arrangements
used in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
Section 3.12. Expenses of Lender. Borrower agrees to pay on demand
(i) all costs and expenses reasonably incurred by Lender in connection with the
preparation, negotiation and execution of this Amendment and the other Loan
Documents executed pursuant hereto and any and all subsequent amendments,
modifications, and supplements hereto or thereto, including, without
limitation, the costs and fees of Lender's legal counsel and the allocated cost
of staff counsel and (ii) all costs and expenses reasonably incurred by Lender
in connection with the enforcement and termination of any rights under the
Agreement, this Amendment and/or other Loan Documents, including, without
limitation, the reasonable costs and fees of Lender's legal counsel and the
allocated cost of staff counsel.
Section 3.13. CONSENTS AND REAFFIRMATIONS. Each Grantor hereby
consents to the terms and conditions of this Amendment and reaffirms its
obligations under its Guaranty and agrees that the Security Interests granted
to Lender pursuant to the Loan Documents, together with such Guaranty, remain
in full force and effect and are hereby ratified and confirmed.
Section 3.14. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS AMONG
LENDER, BORROWER GUARANTORS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties have executed this Amendment on the
date first above written.
BANK OF AMERICA TEXAS, N.A.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
SUN COAST HOLDINGS, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice Chairman of the Board
SUN COAST INDUSTRIES, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
PLASTICS MANUFACTURING COMPANY
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
SUN COAST CLOSURES, INC.
By:/s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇
Chief Executive Officer
ALLIANCE MANUFACTURING, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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CUSTOM LAMINATES, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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