Exhibit 10.56a
SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AND SECURITY
AGREEMENT (the “Second Amendment”), dated August 28,
2008, is entered into by and among MISCOR GROUP, LTD., an Indiana
corporation (“MISCOR”), MAGNETECH INDUSTRIAL SERVICES,
INC., an Indiana corporation (“MIS”), MARTELL
ELECTRIC, LLC, an Indiana limited liability company
(“Martell”), HK ENGINE COMPONENTS, LLC, an Indiana
limited liability company (“HK”), MAGNETECH POWER
SERVICES, LLC, an Indiana limited liability company
(“MPS”), IDEAL CONSOLIDATED, INC., an Indiana
corporation (“Ideal”), 3-D SERVICE, LTD., an Ohio
limited liability company (“3D”), and AMERICAN MOTIVE
POWER, INC., a Nevada corporation (“AMP” and together
with MISCOR, MIS, Martell, HK, MPS, Ideal and 3D, the
“Borrowers” and each a “Borrower”) and
WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”),
acting through its Wells Fargo Business Credit operating
division.
RECITALS
The Borrowers and the Lender are parties to a
Credit and Security Agreement dated January 14, 2008, as amended by
the First Amendment to Credit and Security Agreement dated April
15, 2008 (the “Credit Agreement”).
The Borrowers have advised the Lender that AMP
has created a Canadian subsidiary known as AMP Rail Services
Canada, ULC and have requested that the Lender permit loans by AMP
to such subsidiary from time to time, which the Lender is willing
to do pursuant to the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants and agreements herein contained, it is
agreed as follows:
1.
Defined Terms . Capitalized terms used in this
Amendment which are defined in the Credit Agreement shall have the
same meanings as defined therein, unless otherwise defined
herein. In addition, Section 1.1 of the Credit Agreement
shall be amended by adding or amending, as applicable, the
following definitions:
“AMP-Canada” means AMP Rail Services
Canada, ULC, an Alberta corporation and a wholly owned subsidiary
of AMP.
“Book Net Worth” means the aggregate
of the Stockholders’ equity in the Borrowers and AMP-Canada,
determined on a consolidated basis in accordance with
GAAP.
“Borrowing Base” means at any time
the lesser of:
(a) The
Maximum Line Amount; or
(b) Subject
to change from time to time in the Lender’s sole discretion,
the sum of:
(i) The
lesser of (A) the sum of (1) the product of the Accounts Advance
Rate times Eligible Accounts of each of MIS, HK, MPS, 3D,
Martell, Ideal and AMP, plus (2) the lesser of (w) the
product of the Accounts Advance Rate times the Eligible AMP-Canada
Accounts, or (x) $500,000, plus (3) the lesser of (y) the
product of the Special Accounts Advance Rate times Eligible
Progress Accounts of each of Martell and Ideal, or (z) $2,000,000,
or (B) $13,750,000, less
(ii) The
Borrowing Base Reserve, less
(iii) The
Personal Property Tax Reserve, less
(iv) The
Real Estate Tax Reserve, less
(v) The
Landlord Reserve, less
(vi) Indebtedness
that any Borrower owes to the Lender that has not yet been advanced
on the Revolving Note, including, without limitation, the L/C
Amount, and the dollar amount that the Lender in its reasonable
discretion then determines to be a reasonable determination of each
Borrower’s credit exposure with respect to any swap,
derivative, foreign exchange, hedge, deposit, treasury management
or other similar transaction or arrangement offered to any Borrower
by Lender that is not described in Article II of this
Agreement.
“Collateral Assignment” means that
certain Collateral Assignment from AMP the Lender dated August
____, 2008 pursuant to which AMP has collaterally assigned to the
Lender its interests in each of the Intercompany Note and that
certain Hypothec on Movanles between AMP-Canada and AMP.
“Current Maturities of Long Term
Debt” means as of a given date, the amount of each
Borrower’s and
AMP-Canada’s long-term debt (other than Revolving
Advances) and capitalized leases which became due during the fiscal
year-to-date period ending on the designated date.
“Eligible AMP-Canada Accounts”
means, as to AMP-Canada, all unpaid Accounts of AMP-Canada which
otherwise constitute Eligible Accounts (as if AMP-Canada were a
Borrower) provided that such Accounts may be denominated in
Canadian dollars.
“Intercompany Note” means
AMP-Canada’s promissory note, payable to the order of AMP, as
the same may be renewed or amended from time to time, and all
replacements thereto.
“Net Income (Loss)” means the
Borrowers’ and AMP-Canada’s aggregate fiscal
year-to-date after-tax net income (loss) from
continuing operations, including extraordinary,
non-operating or non-cash losses but excluding
extraordinary, non-operating or non-cash gains, all as determined
on a consolidated basis in accordance with GAAP.
“Security Documents” means this
Agreement, the Wholesale Lockbox and Collection Account Agreement,
the Patent and Trademark Security Agreement, the Mortgage, the
Collateral Pledge Agreement, the Collateral
Assignment and any other document delivered to the
Lender from time to time to secure the Indebtedness.
“Unfinanced Capital Expenditures”
means Capital Expenditures for which a Borrower or AMP-Canada, as
applicable, has not become indebted to another party or incurred a
contractual liability (other than to the Lender).
2.
Amendment of Section 6.2(c) . Section 6.2(c) of
the Agreement shall be amended to read as follows:
(c)
Capital Expenditures . The Borrowers and
AMP-Canada, collectively, will not incur or contract to incur
Capital Expenditures of more than Two Million Dollars ($2,000,000)
in the aggregate during fiscal year 2008 or One Million Five
Hundred Thousand Dollars ($1,500.000.00) during any fiscal year
thereafter during the term hereof, wit
