Exhibit 10.2
AMENDMENT NO. 18 AND WAIVER
TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 18 AND
WAIVER dated as of
March 30, 2009 (the “Amendment and Waiver”) to the
Credit Agreement, dated as of June 30, 2004, by and among
P&F INDUSTRIES, INC., a Delaware corporation
(“P&F”), FLORIDA PNEUMATIC MANUFACTURING
CORPORATION, a Florida corporation (“Florida
Pneumatic”), EMBASSY INDUSTRIES, INC., a New York
corporation (“Embassy”), GREEN MANUFACTURING,
INC., a Delaware corporation (“Green”),
COUNTRYWIDE HARDWARE, INC., a Delaware corporation
(“Countrywide”), NATIONWIDE INDUSTRIES, INC., a
Florida corporation (“Nationwide”), WOODMARK
INTERNATIONAL, L.P. , a Delaware limited partnership
(“Woodmark”), PACIFIC STAIR PRODUCTS, INC. , a
Delaware corporation (“Pacific”), WILP HOLDINGS,
INC. , a Delaware corporation (“WILP”),
CONTINENTAL TOOL GROUP, INC., a Delaware corporation
(“Continental”) and HY-TECH MACHINE, INC. , a
Delaware corporation (“Hy-Tech”; and collectively with
P&F, Florida Pneumatic, Embassy, Green, Countrywide,
Nationwide, Woodmark, Pacific, WILP and Continental, the
“Co-Borrowers”), CITIBANK, N.A. and HSBC BANK
USA, NATIONAL ASSOCIATION (formerly known as HSBC Bank USA)
(collectively, the “Lenders”) and CITIBANK, N.A
., as Administrative Agent for the Lenders (as same has been and
may be further amended, restated, supplemented or otherwise
modified, from time to time, the “Credit
Agreement”).
RECITALS
The Co-Borrowers have requested that
the Lenders make additional loans to the Co-Borrowers, the proceeds
of which shall be used to refinance the outstanding principal
amount of the Term Loan and the New Term Loan and the Lenders have
agreed to make such Loans available to the Co-Borrowers.
In connection therewith, the
Co-Borrowers have requested, and the Administrative Agent and the
Lenders have agreed, subject to the terms and conditions of this
Amendment and Waiver to amend and waive compliance with certain
provisions of the Credit Agreement as set forth herein.
Accordingly, in consideration of the
premises and of the mutual covenants and agreements hereinafter set
forth, the parties hereto agree as follows:
ARTICLE I.
Amendments to Credit
Agreement .
Section 1.1.
The Co-Borrowers acknowledge and agree that the outstanding
principal amount of the Term Loan and the New Term Loan shall be
amended, replaced and recast as set forth herein. The
Co-Borrowers further acknowledge and agree that the Term Loan, the
Term Loan Commitment, the New Term Loan and the New Term Loan
Commitment shall be null and void and that the Banks shall have no
further obligations or commitments with respect thereto and that
any references to such terms in the Credit Agreement and the other
Loan Documents, other than as amended hereby, shall be deemed to
mean the Additional Term Loan and the Additional Term Loan
Commitment (as such terms are herein defined).
Section 1.2.
The Co-Borrowers acknowledge and agree that the Equipment Loan and
the Equipment Loan Commitment shall be null and void and that the
Banks shall have no further obligations or commitments with respect
thereto and that any references to such terms in the Credit
Agreement and the other Loan Documents, other than as amended
hereby, shall be deemed deleted.
Section 1.3.
The following definitions in Section 1.01 of the Credit
Agreement are each
hereby amended in their entirety to provide as
follows:
“Aggregate Outstandings”
shall mean on the date of determination thereof, the sum of
Aggregate RC Outstandings.
“Applicable Revolving Credit
Loan Margin” shall mean (a) 2.00%, with respect to
Revolving Credit Loans that are Prime Rate Loans and
(b) 3.50%, with respect to Revolving Credit Loans that are
LIBOR Loans, each such margin in (a) and (b) hereinafter
the “Prime Rate Margin”.
“Available Revolving Credit
Commitment” shall mean at any time the lesser of (a) the
Borrowing Base less Aggregate RC Outstandings or
(b) the Revolving Credit Commitment less Aggregate
Outstandings.
“Commitment Proportion”
shall mean, with respect to each Lender at the time of
determination, the ratio, expressed as a percentage, which such
Lender’s Commitments bear to the Total Commitment or, if the
Commitments have expired or have been terminated, the ratio,
expressed as a percentage, which (a) the sum of aggregate
Loans advanced by such Lender, plus the Aggregate Banker’s
Acceptance Outstandings and the Aggregate Letters of Credit
Outstandings of such Lender to (b) the Aggregate Outstandings
plus the aggregate amount of Additional Term Loans outstanding, at
such time.
“Commitments” shall
mean, collectively, the Revolving Credit Commitment and the
Additional Term Loan Commitment.
“Loans” shall mean,
collectively, the Revolving Credit Loans and the Additional Term
Loans and shall refer to a Prime Rate Loan, a LIBOR Loan or a Fixed
Rate Loan, each of which shall be a “Type” of
Loan.
“Revolving Credit
Commitment” shall mean, with respect to each Lender, the
obligation of such Lender to make Revolving Credit Loans to the
Co-Borrowers and to acquire participations in Letters of Credit and
Banker’s Acceptances in an aggregate amount in an aggregate
amount not to exceed the amount set forth opposite such
Lender’s name on the signature page to Amendment
No. 18 under the caption “Revolving Credit
Commitment”, as such amounts may be adjusted in accordance
with the terms of this Agreement.
“Revolving Credit Commitment
Termination Date” shall mean March 30, 2010.
“Total Commitment” shall
mean, at any time, the aggregate of the Commitments in effect at
such time which, as of the Amendment No. 18 Effective Date,
shall be $29,116,000.
“Total Revolving Credit
Commitment” shall mean, at any time, the aggregate of the
Revolving Credit Commitments in effect at such time, which, as of
the Amendment No. 18 Effective Date, shall be
$22,000,000.
Section 1.4.
The following definitions are hereby added to Section 1.01 of
the Credit Agreement in their appropriate alphabetical
order:
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“Additional Term Loan
Commitment” shall mean, with respect to each Lender, the
obligation of such Lender to make the Additional Term Loan to the
Co-Borrowers in an aggregate amount not to exceed the amount set
forth opposite such Lender’s name on the signature
page to Amendment No. 18 under the caption
“Additional Term Loan Commitment”.
“Additional Term Loan”
shall have the meaning specified in Section 2.09.
“Additional Term Loan Maturity
Date” shall mean March 30, 2012.
“Additional Term Loan
Note” shall mean the promissory note of the Co-Borrowers in
the form attached as Exhibit M hereto evidencing the
Additional Term Loans, as the same may be amended, supplemented or
otherwise modified from time to time.
“Additional Term Loan
Commitment” shall mean the aggregate of the Additional Term
Loan Commitments in effect on the Amendment No. 18 Effective
Date, which shall be $7,116,000.
“Amendment No. 18”
shall mean Amendment No. 18 to Credit Agreement, dated as of
the amendment No. 18 Effective Date, among the Co-Borrowers,
the Lenders and the Administrative Agent.
“Amendment No. 18
Effective Date” shall mean March 30, 2009.
Section 1.5.
The definition of the term “Applicable Term Loan/Equipment
Loan Margin” is hereby deleted and replaced with the
following definition:
“Applicable Additional Term
Loan Margin” shall mean (a) 2.00%, with respect to
Additional Term Loans that are Prime Rate Loans and (b) 3.75%,
with respect to Additional Term Loans that are LIBOR Loans each
such margin in (a) and (b) hereinafter the “LIBOR
Margin.”;
and all references in the documents to
“Applicable Term Loan/Equipment Loan Margin” are hereby
deleted and replaced with the term “Applicable Additional
Term Loan Margin.”
Section 1.6.
The first sentence of the definition of the term “Borrowing
Base” in Section 1.01 of the Credit Agreement is hereby
amended and restated in its entirety to provide as
follows:
“Borrowing Base” shall
mean as of any Borrowing Date an amount equal to the sum of
(a) 80% of the value of the Obligor’s Eligible Accounts
Receivable, and (b) the lesser of (i) 50% of the
aggregate value of the Obligor’s Eligible Inventory, and
(ii) $15,000,000; provided , however , such
percentages and the foregoing inventory limitation may be revised
from time to time solely by the Required Lenders in their Permitted
Discretion (i) after review of each field audit of the
Obligor’s receivables and inventory, upon 30 days’
prior written notice to the Co-Borrowers so long as no Default or
Event of Default has occurred and is then continuing or
(ii) immediately upon written notice if a Default or Event of
Default has occurred and is then continuing.”
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Section 1.7.
Clause “(b)(iv)” of the definition of the term
“Interest Period” in Section 1.01 of the Credit
Agreement is hereby amended and restated in its entirety to provide
as follows:
“(iv) no Interest Period
may be selected with respect to (a) a Revolving Credit Loan
which ends later than the Revolving Credit Commitment Termination
Date, or (b) the Additional Term Loan which ends later than
the Additional Term Loan Maturity Date; and”
Section 1.8.
Section 2.01(a) of the Credit Agreement is hereby amended
by amending and restating clause “(ii)” thereof to
provide as follows:
“(ii) Aggregate RC
Outstandings would exceed the then current Borrowing
Base”
Section 1.9.
Section 2.03, Section 2.04, Section 2.05,
Section 2.07 and Section 2.08 of the Credit Agreement are
hereby amended and restated in their entirety to provide as
follows:
“SECTION 2.03.
Intentionally Omitted .”
“SECTION 2.04.
Intentionally Omitted .”
“SECTION 2.05.
Intentionally Omitted .”
“SECTION 2.07.
Intentionally Omitted .”
“SECTION 2.08.
Intentionally Omitted .”
Section 1.10.
Section 2.06(a) of the Credit Agreement is hereby amended
by amending and restating clause “(ii)” thereof to
provide as follows:
“(ii) Aggregate RC
Outstandings would exceed the then current Borrowing
Base”
Section 1.11.
Article II of the Credit Agreement is hereby amended to add
the following new sections 2.09 and 2.10 immediately following
Section 2.08 thereof:
“ SECTION 2.09.
Additional Term Loan. Subject to the terms and
conditions hereof, each Lender severally agrees to make a term loan
(individually, a “ Additional Term Loan ” and,
collectively, the “ Additional Term Loans ”) to
the Co-Borrowers on the Amendment No. 18 Effective Date in an
amount not to exceed its Additional Term Loan Commitment. The
Co-Borrowers shall give the Administrative Agent irrevocable
written notice on or before the Amendment No. 18 Effective
Date specifying (i) the amount to be borrowed, which shall not
exceed the Total Additional Term Loan Commitment, (ii) the
Type or Types of such Additional Term Loan and the related amounts
for each, and (iii) if all or any portion of the Additional
Term Loan is a LIBOR Loan, the initial Interest Period selected for
the Additional Term Loan. Upon receipt of such notice from
the Co-Borrowers, the Administrative Agent shall promptly notify
each Lender thereof. The Additional Term Loans may, at the
election of the Co-Borrowers, be (i) LIBOR Loans,
(ii) Prime Rate Loans or (iii) a combination
thereof. The Additional Term Loan Commitment shall terminate
upon funding of the Additional Term Loans on the Amendment
No. 18 Effective Date.
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SECTION 2.10.
Additional Term Loan Notes. The Additional Term Loan made by each Lender
shall be evidenced by an Additional Term Loan Note, appropriately
completed, duly executed and delivered on behalf of the
Co-Borrowers and payable to the order of each Lender in a principal
amount equal to the Additional Term Loan Commitment of such
Lender. Each Lender is authorized to record the Type of its
Additional Term Loan and the date and amount of each payment or
prepayment of principal thereof in such Lender’s records or
on the grid schedule annexed to the Additional Term Loan Note;
provided , however , that the failure of a Lender to
set forth each payment and other information shall not in any
manner affect the obligation of the Co-Borrowers to repay the
Additional Term Loan made by such Lender in accordance with the
terms of its Additional Term Loan Note and this Agreement.
The Additional Term Loan Note, the grid schedule and the books and
records of each Lender shall constitute presumptive evidence of the
information so recorded absent demonstrable error. Each
Additional Term Loan Note shall (a) be dated the Amendment
No. 18 Effective Date, (b) be stated to mature on the
Additional Term Loan Maturity Date and (c) be payable as to
principal in thirty six (36) consecutive monthly installments
commencing on April 30, 2009 and continuing on the last day of
each month thereafter as follows, each in an aggregate amount equal
to $148,250, all for the pro-rata distribution to the Lenders based
upon their Additional Term Loan Commitment, provided that the final
payment on the Additional Term Loan Maturity Date shall be in an
amount equal to the outstanding unpaid principal amount of the
Additional Term Loan. Each Additional Term Loan Note, the
grid schedule and the books and records of each Lender shall be
prima facie evidence of the information so recorded absent manifest
error. Notwithstanding anything to the contrary herein,
interest on the Additional Term Loan shall be payable in accordance
with Section 3.01 herein and shall commence with the first
applicable Interest Payment Date following the Amendment
No. 18 Effective Date.
Section 1.12.
Section 3.01(a) of the Credit Agreement is hereby amended
and restated in its entirety to provide as follows:
(a) Each Prime Rate Loan shall
bear interest for the period from the date thereof on the unpaid
principal amount thereof at a fluctuating rate per annum equal to
the Prime Rate, plus , in the case of Revolving Credit
Loans, the applicable “Prime Rate Margin” as provided
in the definition of “Applicable Revolving Credit Loan
Margin,” and in the case of the Additional Term Loans, the
applicable “Prime Rate Margin” as provided in the
definition of “Applicable Additional Term Loan
Margin.”
Section 1.13.
Section 3.01(b) of the Credit Agreement is hereby amended
and restated to provide as follows:
(b)
Each LIBOR Loan shall bear interest for the Interest Period
applicable thereto on the unpaid principal amount thereof at a rate
per annum equal to the Reserve Adjusted Libor determined for each
Interest Period thereof in accordance with the terms hereof,
plus , in the case of Revolving Credit Loans, the applicable
“LIBOR Margin” as provided in the definition of
“Applicable Revolving Credit Loan Margin,” and in the
case of the Additional Term Loans, the applicable “LIBOR
Margin” as provided in the definition of
“Applicable
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Additional Term Loan
Margin.”
Section 1.14
Section 3.01(h) of the Credit Agreement is hereby amended
and restated to provide as follows:
“(h) No Loan may be
funded, converted to or continued as a LIBOR Loan if the Interest
Period would extend beyond the Revolving Credit Commitment
Termination Date, with respect to Revolving Credit Loans or the
Additional Term Loan Maturity Date, with respect to the Additional
Term Loan.”
Section 1.15.
Section 3.02 of the Credit Agreement is hereby amended by
amending and restating the first sentence thereof to provide as
follows:
“The proceeds of the Revolving
Credit Loans shall be used by the Co-Borrowers for general
corporate purposes, to finance ongoing working capital
requirements, to refinance a portion of the Existing Indebtedness
and to refinance a portion of term loan Indebtedness owing to the
Lenders as of the Amendment No. 18 Effective
Date.”
and to add the following sentence at the end
thereof:
“The proceeds of the
Additional Term Loan shall be used by the Company solely to
refinance a portion of the term loan Indebtedness owing to the
Lenders as of the Amendment No. 18 Effective
Date.”
Schedule
1.16. The fourth sentence of
Section 3.03(a) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
“Partial prepayments of any
Additional Term Loan pursuant to this
