FIFTH AMENDMENT AND CONSENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
FIFTH AMENDMENT AND
CONSENT
TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
This
Fifth Amendment and Consent to
Second Amended and Restated Credit Agreement (this “Amendment”)
is executed effective as of April 29, 2010 (the “Effective
Date”), by and among AZZ
incorporated, a Texas corporation (“Borrower”),
and Bank of America,
N.A., as Lender, Administrative Agent, Swing Line Lender and L/C Issuer
(“Administrative
Agent”).
A. Borrower
and Administrative Agent are party to that certain Second Amended and Restated
Credit Agreement dated as of May 25, 2006 (as heretofore amended, modified,
supplemented, restated or amended and restated from time to time, the “Agreement”).
B. Borrower
has advised Administrative Agent that Borrower, Big Kettle Merger Sub, Inc., a
Delaware corporation and wholly-owned indirect subsidiary of Borrower (“Big
Kettle”), and North American Galvanizing & Coatings, Inc., a Delaware
corporation (“NAG&C”),
have entered into that certain Agreement and Plan of Merger dated as of March
31, 2010 (the “Plan of
Merger”), pursuant to which Big Kettle will purchase all of the shares of
common stock of NAG&C and merge with and into NAG&C (the “NAG&C
Acquisition”), with NAG&C being the surviving corporation as a
wholly-owned indirect subsidiary of Borrower. Borrower has requested
that Administrative Agent consent to the NAG&C Acquisition upon and subject
to the terms and conditions set forth in the Plan of Merger.
C. Borrower
has also requested that Administrative Agent amend certain terms and provisions
of the Agreement.
D. Upon
the following terms and conditions, Administrative Agent has agreed to give the
requested consent, and Administrative Agent and Borrower have agreed to amend
the Agreement subject to and upon the terms and conditions provided
herein.
NOW, THEREFORE, in
consideration of the mutual promises herein contained, and for other valuable
consideration, the parties hereto agree as follows:
Section
1. Defined Terms;
References. Unless otherwise specifically defined herein, each
term used herein that is defined in the Agreement shall have the meaning
assigned to such term in the Agreement.
Section
2. Consent. Administrative
Agent hereby consents to the execution, delivery and performance by Borrower and
Big Kettle of the Plan of Merger and to the consummation of the transactions
contemplated thereby.
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Fifth Amendment - 1
Section
3. Amendments to
Agreement. Effective as of the Effective Date, but subject to
satisfaction of the conditions precedent set forth in Section 4
hereof, the Agreement is hereby amended as set forth below.
(a) The
definition of “Applicable
Rate” set forth in Section
1.01 of the Agreement is amended to read in its entirety as
follows:
“Applicable
Rate” means, from time to time, the following percentages per annum,
based upon the Leverage Ratio as set forth in the most recent Compliance
Certificate received by Agent pursuant to Section 6.02(a):
|
Applicable Rate
|
||||
|
Pricing
Level
|
Leverage
Ratio
|
Commitment
Fee
|
Eurodollar
Rate + Letters of Credit
|
Base
Rate +
|
|
1
|
<
1.00:1
|
0.200
|
1.00
|
0.00
|
|
2
|
≥
1.00:1 but < 2.00:1
|
0.250
|
1.25
|
0.25
|
|
3
|
≥
2.00:1 but < 2.50:1
|
0.275
|
1.50
|
0.50
|
|
4
|
≥
2.50:1
|
0.300
|
1.75
|
0.75
|
Any
increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective commencing on the 3rd Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section
6.02(a); provided,
however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing
Level 3 shall apply commencing on the 3rd Business Day following the date such
Compliance Certificate was required to have been delivered. The
Applicable Rate in effect from April 29, 2010, until the 3rd Business Day
after the Compliance Certificate for the fiscal quarter ending May 31, 2010
is delivered pursuant to Section
6.02(a) shall be determined based upon Pricing Level 2.
(b) The
definition of “Fixed Charge
Coverage Ratio” set forth in Section
1.01 of the Agreement is amended to read in its entirety as
follows:
“Fixed Charge
Coverage Ratio” means, for any Rolling Period, with respect to Borrower
and its Subsidiaries on a consolidated basis, the ratio of: (a) the sum of: (i) EBITDAR, less (ii) Capital
Expenditures in respect of repairs or replacements of fixed assets, and less (iii) Taxes paid in
cash, to (b) the sum
of: (i) cash Interest Expense, plus (ii) scheduled
payments of principal of Funded Debt, plus (iii) Rental
Expense; in each case for such Rolling Period.
(c) The
definition of “Maturity
Date” set forth in Section
1.01 of the Agreement is amended to read in its entirety as
follows:
“Maturity
Date” means May 25, 2014 or, if such date is not a Business Day, the
Business Day immediately preceding such date.
(d) Section 6.12(a)
of the Agreement is amended in its entirety as follows:
“(a) Net
Worth. Maintain on a consolidated basis Net Worth equal to at
least the sum of the following:
(i) $182,288,030;
plus
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(ii) the
sum of 50% of Net Income (without subtracting losses) earned in each fiscal
quarter ending after February 28, 2010; plus
(iii) the
net proceeds from the issuance by Borrower or any Subsidiary of any Equity
Interests after February 28, 2010.”
(e) Section 6.12(c)
of the Agreement is amended in its entirety as follows:
“(c) Fixed Charge Coverage
Ratio. Maintain on a consolidated basis a Fixed Charge
Coverage Ratio of at least 1.75:1.0. This ratio will be calculated at
the end of each reporting period for which this Agreement requires Borrower to
deliver financial statements for the Rolling Period then ended.”
(f) Section 6.12(d)
of the Agreement is amended in its entirety as follows:
“(d) Capital
Expenditures. Not to make Capital Expenditures on a
consolidated basis in an amount in excess of $30,000,000 during any fiscal year,
without the prior consent of the Required Lenders.”
(g) Section 7.06(d)
of the Agreement is amended in its entirety as follows:
“(d) Borrower
may declare and make cash dividends in an amount that does not exceed
$15,000,000 during any fiscal year; and”
(h) Section 7.06(e)
of the Agreement is amended in its entirety as follows:
“(e) Borrower
may purchase, redeem or otherwise acquire its Equity Interests for an aggregate
consideration that does not exceed $40,000,000 during the period from
April 29, 2010 through the Maturity Date.”
(i) Schedule 2.01
to the Agreement is deleted and replaced by Replacement
Schedule 2.01 hereto.
(j) Section I.
of Schedule 2
of Exhibit D
to the Agreement is deleted and replaced by the following:
“I. Section 6.12(a) – Net
Worth.
A. 1. $182,288,030: $___________
2. plus the sum of 50% of Net
Income
(without subtracting losses) earned in
each fiscal quarter
ended after February 28,
2010: $___________
3. plus the net proceeds from
any Equity Interests
issued after February 28,
2010 $___________
4. Minimum Required Net
Worth
(Lines I.A.1 plus I.A.2 plus
I.A.3) $___________
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B. Actual
Net Worth at Statement
Date: $___________
C. Excess
(deficiency) for covenant compliance (Line I.B. less I.A.4): $___________”
(k) Section III.
of Schedule 2
of Exhibit D
to the Agreement is hereby amended by replacing “1.50 to 1.0” with “1.75 to
1.0”.
(l) Section IV.
of Schedule 2
of Exhibit D
to the Agreement is deleted and replaced by the following:
“IV. Section 6.12(d) – Capital
Expenditures.
A. Capital
Expenditures during current fiscal year to Statement Date: $___________
B. Maximum
permitted Capital Expenditures: $30,000,000
C. Excess
(deficiency) for covenant compliance (Line IV.B – IV.A): $___________”
Section
4. Conditions to
Effectiveness. This Amendment shall become effective as of the
Effective Date when and if Administrative Agent has received the
following:
(a) this
Amendment, duly executed by Borrower, each Guarantor and Administrative
Agent;
(b) an
amended and restated Note payable to Administrative Agent in the amount of its
Commitment under the Agreement after giving effect to this
Amendment;
(c) a
Guaranty Joinder Agreement, duly executed by Big Kettle (the “Guaranty Joinder
Agreement”);
(d) a
certificate of a Responsible Officer, certifying the names and true signatures
of the officers of Borrower authorized to execute and deliver this
Amendment;
(e) a
certificate of a Responsible Officer (or general partner or other appropriate
managing partner, as applicable) of each Guarantor, certifying the names and
true signatures of the officers of such Guarantor authorized to execute and
deliver this Amendment;
(f) a
certificate of a Responsible Officer of Big Kettle, certifying the Organization
Documents of Big Kettle and the names and true signatures of the officers of Big
Kettle authorized to execute and deliver the Guaranty Joinder
Agreement;
(g) for
Borrower and each Guarantor that is not a partnership, copies of the resolutions
of the Board of Managers or Board of Directors of Borrower or such Guarantor,
approving and authorizing the execution, delivery and performance by Borrower or
such Guarantor of this Amendment and the transactions contemplated hereby,
certified by a Responsible Officer of Borrower or such Guarantor; and (ii) for
each Guarantor that is a partnership, evidence of approval and authorization of
the execution, delivery and performance by such Guarantor of this Amendment and
the transactions contemplated hereby, accompanied by a certificate from the
general partner or other appropriate managing partner;
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(h) for
Big Kettle, copies of the resolutions of the Board of Directors of Big Kettle,
approving and authorizing the execution, delivery and performance by Big Kettle
of the Guaranty Joinder Agreement and the transactions contemplated thereby,
certified by a Responsible Officer of Big Kettle;
(i) payment
by Borrower of an Amendment Fee of $100,000; and
(j) such
other assurances, certificates, Loan Documents, other documents, consents and
opinions as Administrative Agent may reasonably require.
Section
5. Representations and
Warranties of Borrower. Borrower represents and warrants to
Administrative Agent as set forth below.
(a) The
execution, delivery and performance by Borrower and each Guarantor of this
Amendment and the transactions contemplated hereby, including the increase in
the Commitment of Administrative Agent under the Agreement, and the Agreement,
as amended hereby, have been duly authorized by all necessary corporate action
and do not and will not (i) require any consent or approval of any
stockholder, member, partner, security holder or creditor of Borrower or such
Guarantor, (ii) violate or conflict with any provision of Borrower’s or
such Guarantor’s Articles of Incorporation, Bylaws, partnership agreement,
limited liability company agreement, or other organizational documents,
(iii) result in or require the creation or imposition of any Lien upon or
with respect to any property now owned or leased or hereafter acquired by
Borrower or such Guarantor, (iv) violate any Laws applicable to Borrower or
such Guarantor (v) result in a breach of or constitute a default under, or
cause or permit the acceleration of any obligation owed under, any indenture or
loan agreement or any other material agreement to which Borrower or such
Guarantor is a party or by which Borrower or such Guarantor or any of its
Property is bound or affected.
(b) No
authorization, consent, approval, order license or permit from, or filing,
registration or qualification with, any Governmental Authority is or will be
required to authorize or permit under applicable Law the execution, delivery and
performance by Borrower or any Guarantor of this Amendment and the transactions
contemplated hereby, including the increase in the Commitment of Administrative
Agent under the Agreement, and the Agreement, as amended hereby.
(c) Each
of this Amendment and the Agreement, as amended hereby, has been duly executed
and delivered by Borrower and each Guarantor and constitutes the legal, valid
and binding obligation of Borrower and each Guarantor, enforceable against
Borrower and each Guarantor in accordance with its terms, except as enforcement
may be limited by Debtor Relief Laws or equitable principles relating to the
granting of specific performance and other equitable remedies as a matter of
judicial discretion.
(d) The
representations and warranties of Borrower contained in Article V
of the Agreement are true and correct as though made on and as of the Effective
Date (except to the extent such representations and warranties expressly refer
to an earlier date, in which case they were true and correct as of such earlier
date).
(e) No
Default or Potential Default exists or would result from the effectiveness of
this Amendment.
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(f) Borrower
has delivered to Administrative Agent true and correct copies of the Plan of
Merger and all schedules and exhibits thereto, and the Plan of Merger is in full
force and effect.
(g) Borrower
and each Guarantor agrees to perform such acts and duly authorize, execute,
acknowledge, deliver, file, and record such additional documents and
certificates as Administrative Agent may reasonably request in order to create,
perfect, preserve, and protect the guaranties, assurances, and Liens granted,
conveyed or assigned by the Agreement and the other Loan Documents.
Section
6. Affirmative
Covenant. Borrower shall, within [three (3)] Business Days
after the consummation of the merger of Big Kettle with and into NAG&C,
cause NAG&C to deliver to Administrative Agent (a) certified copies of
NAG&C’s Organization Documents and (b) a certificate of a Responsible
Officer of NAG&C, certifying the names and true signatures of the officers
of NAG&C authorized to execute and deliver documents on behalf of
NAG&C.
Section
7. Reference to and Effect on
Loan Documents.
(a) On
and after the Effective Date, each reference in the Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein” or any other expression of like
import referring to the Agreement, and each reference in the other Loan
Documents to “the Agreement,” “thereunder,” “thereof,” “therein” or any other
expression of like import referring to the Agreement, shall mean and be a
reference to the Agreement as amended and modified by this
Amendment.
(b) Except
as specifically amended hereby, all provisions of the Agreement and all
Collateral Documents shall remain in full force and effect and are hereby
ratified and confirmed.
(c) Except
as otherwise expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as a consent to any other
matter requiring the consent of any Lender or Administrative Agent under the
Loan Documents or a waiver of any right, power or remedy of any Lender or
Administrative Agent under any of the Loan Documents or constitute a waiver of
any provision of any of the Loan Documents.
Section
8. Costs and
Expenses. Borrower agrees to pay on demand all reasonable
costs and expenses of Administrative Agent in connection with the preparation,
execution and delivery of this Amendment and the other instruments, agreements
and Loan Documents to be delivered hereunder, including the reasonable fees and
out-of-pocket expenses of counsel for Administrative Agent with respect thereto
and with respect to advising Administrative Agent as to its rights and
responsibilities hereunder and thereunder.
Section
9. Execution in
Counterparts. This Amendment may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which taken together shall constitute one and the same
instrument. This agreement, when executed by the parties hereto,
shall be a “Loan Document” as defined and referred to in the Agreement and the
other Loan Documents. Delivery of an executed counterpart hereof by
fax shall be effective as the delivery of a manually executed counterpart
hereof.
Section
10. Governing
Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
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Fifth Amendment - 6
Section 11. ENTIRETY. THIS AMENDMENT, THE
AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES
HERETO.
[Remainder
of page intentionally left blank.]
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Fifth Amendment - 7
AZZ
incorporated
By: /s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, Vice President
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Title: Vice
President
BANK OF AMERICA, N.A., as a
Lender, L/C Issuer and Swing Line Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Title: Vice
President
Signature
Page to AZZ Fifth Amendment
To induce
Administrative Agent to enter into this Amendment, the undersigned hereby
consent and agree (a) to its execution and delivery and terms and conditions
thereof, (b) that this document in no way releases, diminishes, impairs,
reduces, or otherwise adversely affects any guaranties, assurances, or other
obligations or undertakings of any of the undersigned under any Loan Documents,
and (c) waive notice of acceptance of this Amendment, which Amendment binds each
of the undersigned and their respective successors and permitted assigns and
inures to the benefit of Administrative Agent and their respective successors
and permitted assigns.
GUARANTORS:
AAA
GALVANIZING – JOLIET, INC.
AAA
GALVANIZING – ▇▇▇▇▇, INC.
AAA
GALVANIZING – CHELSEA, INC.
AAA
GALVANIZING – ▇▇▇▇▇▇▇▇, INC.
AAA
GALVANIZING – PEORIA, INC.
AAA
GALVANIZING – WINSTED, INC.
AZTEC
INDUSTRIES, INC.
THE
▇▇▇▇▇▇▇ COMPANY, INC.
GULF
COAST GALVANIZING, INC.
ARKGALV,
INC.
ARBOR-▇▇▇▇▇▇▇,
INC.
▇▇▇▇▇▇▇▇
INDUSTRIES, INC.
AZTEC
INDUSTRIES, INC. - ▇▇▇▇ POINT
AUTOMATIC
PROCESSING INCORPORATED
ARIZONA
GALVANIZING, INC.
▇▇▇▇▇▇
GALVANIZING, INC.
CGIT
SYSTEMS, INC.
WESTSIDE
GALVANIZING SERVICES, INC.
▇▇▇▇▇▇
AND ▇▇▇▇▇▇▇, INC.
CENTRAL
ELECTRIC COMPANY
CENTRAL
ELECTRIC MANUFACTURING COMPANY
ELECTRICAL
POWER SYSTEMS, INC.
▇▇▇▇
GALVANIZING - CINCINNATI, INC.
▇▇▇▇
GALVANIZING - MUNCIE, INC.
▇▇▇▇
GALVANIZING - PLYMOUTH, INC.
Signature
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|
|
AZTEC
MANUFACTURING PARTNERSHIP, LTD.
|
By: AZZ GROUP, LP, its General
Partner
By: AZZ GP, LLC, its General
Partner
|
|
AZTEC
MANUFACTURING – ▇▇▇▇▇▇ PARTNERSHIP,
LTD.
|
By: AZZ GROUP, LP, its General
Partner
By: AZZ GP, LLC, its General
Partner
RIG-A-LITE
PARTNERSHIP, LTD.
By: AZZ GROUP, LP, its General
Partner
By: AZZ GP, LLC, its General
Partner
|
|
INTERNATIONAL
GALVANIZERS PARTNERSHIP, LTD.
|
By: AZZ GROUP, LP, its General
Partner
By: AZZ GP, LLC, its General
Partner
|
|
DRILLING
RIG ELECTRICAL SYSTEMS CO. PARTNERSHIP,
LTD.
|
By: AZZ GROUP, LP, its General
Partner
By: AZZ GP, LLC, its General
Partner
|
|
AZZ
GROUP, LP
|
By: AZZ GP, LLC, its General
Partner
|
|
AZZ
GP, LLC
|
|
|
AZZ
LP, LLC
|
AZZ
HOLDINGS, INC.
AZZ
DELAWARE INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, Secretary of each of
the
foregoing entities
Signature
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REPLACEMENT SCHEDULE
2.01
COMMITMENTS AND APPLICABLE
PERCENTAGES
|
LENDER
|
COMMITMENT
|
COMMITMENT
PERCENTAGE
|
|
Bank
of America, N.A.
|
$80,000,000.00
|
100.00%
|
|
Total
|
$80,000,000.00
|
100.00%
|
Signature
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