EXHIBIT 4(G)
THIRD AMENDMENT TO LETTER AGREEMENT
THIS THIRD AMENDMENT TO LETTER AGREEMENT, dated as of May 31,
1996 (this "Amendment"), is between HASTINGS MANUFACTURING COMPANY, a
Michigan corporation (the "Company"), and NBD BANK, a Michigan banking
corporation, formerly known as NBD Bank, N.A. (the "Bank").
RECITALS
A. The Company and the Bank are parties to a letter agreement
dated May 31, 1994, as amended by a First Amendment to Letter
Agreement dated as of May 2, 1995 and by a Second Amendment to Letter
Agreement dated as of September 30, 1995 (as amended, the "Letter
Agreement"), pursuant to which the Bank agreed, subject to the terms
and conditions thereof, to extend credit to the Company in a maximum
principal amount of $4,000,000.
B. The Company has requested that the Bank amend the Letter
Agreement as set forth herein to provide, among other things, for the
extension of the Termination Date (as defined in the Letter Agreement)
from May 31, 1996 to May 31, 1997, for the amendment of certain
covenants and for certain other changes as more particularly describe
herein.
C. The parties now desire to amend certain terms and provisions
of the Letter Agreement as set forth herein.
TERMS
In consideration of the premises and of the mutual agreements
herein contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth
in Article III hereof, the Letter Agreement shall be amended as
follows:
1.1 The reference to "May 31, 1996" in the definition of
"Termination Date" in Section 1 of the Letter Agreement shall be
deemed to refer to "May 31, 1997".
1.2 The reference to "May 31, 1996" in Section 2 of the Letter
Agreement shall be deemed to refer to "May 31, 1997".
1.3 Section 10(b) of the Letter Agreement shall be deemed
deleted in its entirety and replaced with the following language:
"(b) TANGIBLE NET WORTH. Permit or suffer
the consolidated Tangible Net Worth of the Company
and its Subsidiaries to be less than the sum of
(i) $17,500,000 at any time plus (ii) beginning
July 1, 1996, an amount equal to 50% of
consolidated Cumulative Net Income of the Company
and its Subsidiaries."
1.4 The reference to "1.40 to 1.00" in Section 10(c) of the
Letter Agreement shall be deemed to refer to "2.00 to 1.00".
1.5 Exhibit A to the Letter Agreement is hereby deleted in its
entirety and Exhibit A attached hereto is hereby substituted in place
of Exhibit A thereof.
ARTICLE II. REPRESENTATIONS. The Company represents and warrants to
the Bank that:
2.1 The execution, delivery and performance of this Amendment
are within its powers, have been duly authorized and are not in
contravention with any law, of the terms of its Articles of
Incorporation or By-laws, or any material undertaking to which it is a
party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligations
of the Company enforceable against it in accordance with the
respective terms hereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Section 11 of the Letter
Agreement are true on and as of the date hereof with the same force
and effect as if made on and as of the date hereof, PROVIDED, THAT,
the representations and warranties contained in Section 11(f) of the
Letter Agreement shall be deemed to have been made with respect to the
financial statements most recently delivered pursuant to Section 9(d)
of the Letter Agreement.
2.4 After giving effect to the amendments contained in Article I
hereof, the representations and warranties contained in Section 11 of
the Letter Agreement are true and correct on and as of the date hereof
with the same force and effect as if made on and as of the date
hereof, and no Default or Event of Default shall have occurred and be
continuing or will exist under the Letter Agreement as of the
effective date hereof.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not
become effective until each of the following has been satisfied:
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3.1 Copies of resolutions adopted by the Board of Directors of
the Company, certified by an officer of the Company, as being true and
correct and in full force and effect without amendment as of the date
hereof, authorizing the Company to enter into this Amendment and any
other documents or agreements executed pursuant hereto, if any, shall
have been delivered to the Bank.
3.2 This Amendment shall be signed by the Company and the Bank.
3.3 The Company shall deliver a duly executed copy of a new
promissory note in the principal amount of $4,000,000 in the form of
Exhibit A attached hereto.
ARTICLE IV. WAIVERS.
The Bank hereby waives the right to declare any Default or Event
of Default arising under Section 10(b) or Section 10(c) of the Letter
Agreement as a result (and solely as a result) of the breach of any of
such Sections by the Company through the period ending March 30, 1996.
Such waiver shall be strictly limited to such breach or breaches and
nothing herein shall be construed as a waiver or limitation on any
rights of the Bank under the Letter Agreement to declare a Default or
an Event of Default and to exercise the remedies provided for in
Section 13 of the Letter Agreement in any other circumstance.
ARTICLE V. MISCELLANEOUS.
5.1 References in the Letter Agreement to "this Agreement" and
references in any note, certificate, instrument or other document to
the "Letter Agreement" or "Authorization Agreement" shall be deemed to
be references to the Letter Agreement as amended hereby and as further
amended from time to time.
5.2 The Company agrees to pay and to save the Bank harmless for
the payment of all costs and expenses arising in connection with this
Amendment, including the reasonable fees of counsel to the Bank in
connection with preparing this Amendment and the related documents.
5.3 The Company acknowledges and agrees that the Bank has fully
performed all of its obligations under all documents executed in
connection with the Letter Agreement and all actions taken by the Bank
is reasonable and appropriate under the circumstances and within its
rights under the Letter Agreement and all other documents executed in
connection therewith and otherwise available. The Company represents
and warrants that it is not aware of any claims or causes of action
against the Bank, or any of its successors or assigns.
Notwithstanding this representation and as further consideration for
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the agreements and understandings herein, the Company and its heirs,
successors and assigns, hereby release the Bank and its heirs,
successors and assigns from any liability, claim, right or cause of
action which now exists or hereafter arises, whether known or unknown,
arising from or in any way related to facts in existence as of the
date hereof to any agreements or transactions between the Bank and the
Company or to any acts or omissions of the Bank in connection
therewith or otherwise.
5.4 Except as expressly amended hereby, the Company agrees that
the Letter Agreement, the promissory note and all other documents and
agreements executed by the Company in connection with the Letter
Agreement in favor of the Bank are ratified and confirmed and shall
remain in full force and effect and that it has no set off,
counterclaim or defense with respect to any of the foregoing. Terms
used but not defined herein shall have the respective meanings
ascribed thereto in the Letter Agreement.
5.5 This Amendment shall be governed by and construed in
accordance with the laws of the State of Michigan.
5.6 This Amendment may be signed upon any number of counterparts
with the same effect as if the signatures thereto and hereto were upon
the same instrument.
IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of the date
first above written.
HASTINGS MANUFACTURING COMPANY
By: /S/ XXXXXX X. XXXXXXXXX
Its: VP - FINANCE
NBD BANK
By: /S/ XXXXXX X. XXXX
Its: VICE PRESIDENT
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