EXHIBIT No. 10.63
CREDIT AGREEMENT AMENDMENT
SIXTH AMENDMENT TO CREDIT AGREEMENT
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THIS SIXTH AMENDMENT TO CREDIT AGREEMENT, dated as of December
4, 1996 (this "Amendment"), is by and among OWOSSO CORPORATION, a Pennsylvania
corporation ("Owosso"), AHAB INVESTMENT COMPANY, a Delaware corporation
("Ahab"), XXXXXX COMPANY, a Delaware corporation ("Xxxxxx"), DEWEZE
MANUFACTURING, INC., a Pennsylvania corporation ("DewEze"), THE LANDOVER
COMPANY, a Pennsylvania corporation ("Landover"), MOTOR PRODUCTS-OWOSSO
CORPORATION, a Delaware corporation ("Motor Products"), SNOWMAX, INCORPORATED, a
Pennsylvania corporation ("Snowmax"), SOONER TRAILER MANUFACTURING CO., a
Delaware corporation ("Sooner"), MOTOR PRODUCTS-OHIO CORPORATION, a Delaware
corporation ("Motor Products-Ohio"), GREAT BEND MANUFACTURING COMPANY, INC., a
Kansas corporation, STATURE ELECTRIC, INC., a New York corporation ("Stature"
and, together with Owosso, Ahab, Xxxxxx, DewEze, Landover, Motor Products,
Snowmax, Sooner, Motor Products-Ohio and Great Bend, collectively the "Existing
Borrowers" and individually an "Existing Borrower"), OWOSSO MOTOR GROUP, INC., a
Pennsylvania corporation ("Motor Group"), and XXXXXX INDUSTRIES, INC., a
Washington corporation ("Xxxxxx" and, together with Motor Group, collectively
the "New Borrowers" and individually a "New Borrower"), NBD BANK, a Michigan
banking corporation formerly known as NBD Bank, N.A. ("NBD"), PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC" and, together with NBD,
collectively the "Banks" and individually a "Bank"), and NBD BANK, as agent (in
such capacity, the "Agent") for the Banks.
INTRODUCTION
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A. The Existing Borrowers, the Banks and the Agent are parties
to the Credit Agreement, dated as of October 31, 1994, as amended by the First
Amendment to Credit Agreement, dated as of August 1, 1995, the Second Amendment
to Credit Agreement, dated as of September 1, 1995, the Third Amendment to
Credit Agreement, dated as of October 31, 1995, and the Fourth Amendment to
Credit Agreement, dated as of March 8, 1996, and the Fifth Amendment to Credit
Agreement, dated as of May 31, 1996 (the "Credit Agreement"), pursuant to which
the Banks provide to the Existing Borrowers, on a joint and several liability
basis, a revolving credit facility in the aggregate principal amount of
$55,000,000.
B. The Borrowers now desire that (1) each of the New Borrowers
becomes a party to the Credit Agreement, in the same capacity as each of the
Existing Borrowers, with all rights of the Existing Borrowers thereunder and
joint and several liability for all indebtedness, obligations and liabilities of
each Borrower thereunder, and (2) certain covenants of the Borrowers under the
Credit Agreement be modified, and the Banks and the Agent are willing to so
amend the Credit Agreement on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual agreements
herein and in the Credit Agreement contained, the parties hereto agree as
follows:
ARTICLE I. CREDIT AGREEMENT AMENDMENTS
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Effective upon the date (the "Amendment Date") that the
condition precedent set forth in Article 2 of this Amendment is satisfied, the
Credit Agreement hereby is amended, retroactive as of October 31, 1996, as
follows:
1.1 In each instance where the word "Borrowers" or "Borrower"
appears in the Credit Agreement, such word shall include, either collectively or
individually, as the case may be, each of the Existing Borrowers and the New
Borrowers, as if each of the New Borrowers were an original party to the Credit
Agreement.
1.2 Section 5.2(a) is amended to read in full as follows:
(a) Net Worth. Permit or suffer the Consolidated Net
Worth of the Borrowers and their Subsidiaries to be less than
(i) at any time during the period prior to the start of the
first fiscal year of the Borrowers beginning after the IPO,
the greater of (A) $20,000,000 and (B) 90% of the Consolidated
Net Worth of the Borrowers and their Subsidiaries immediately
following the completion of the IPO, (ii) at any time after
the start of the first fiscal year of the Borrowers beginning
after the IPO but prior to the end of such fiscal year, 90% of
the Consolidated Net Worth of the Borrowers and their
Subsidiaries immediately prior to the start of such first
fiscal year, and (iii) except as provided below, at the end of
the first fiscal year of the Borrowers following the IPO or at
any time thereafter, the greater of (A) 90% of the highest
previous fiscal year-end Consolidated Net Worth of the
Borrowers and their Subsidiaries and (B) the sum of $2,000,000
plus the Consolidated Net Worth of the Borrowers and their
Subsidiaries as of the last fiscal year-end of the Borrowers;
provided that (1) at the end of the Borrowers' fiscal year
ending on or about October 31, 1996 and at any time thereafter
prior to the end of the Borrowers' fiscal year ending on or
about October 31, 1997, the Borrowers shall not permit or
suffer the Consolidated Net Worth of the Borrowers and their
Subsidiaries to be less than 90% of the highest previous
fiscal year-end Consolidated Net Worth of the Borrowers and
their Subsidiaries and (2) at the end of the Borrowers' fiscal
year ending on or about October 31, 1997 and at any time
thereafter prior to the end of the Borrowers' fiscal year
ending on or about October 31, 1998, the requirement of this
Section 5.2(a) shall be determined as if the figure
"$2,000,000" in clause (iii)(B) above were "$1,000,000"
instead.
1.3 Section 5.2(b) is amended to read in full as follows:
(b) Total Debt to EBITDA. Permit or suffer the ratio
of Consolidated Total Debt of the Borrowers and their
Subsidiaries to Consolidated EBITDA of the Borrowers and their
Subsidiaries to be greater than (i) 4.50 to 1.00 as of the
last day of either of the Borrowers' fiscal quarters ending on
or about October 31, 1996 or January 31,1997, (ii) 4.25 to
1.00 as of the last day of the Borrowers' fiscal quarter
ending on or about April 30, 1997, or (iii) 4.00 to 1.00 as of
the end of any of the Borrowers' fiscal quarters ending at any
time thereafter. For purposes of determining from time to time
the Borrowers' compliance with this subsection, each Person
that is a Borrower or a Subsidiary of a Borrower at the time
of such determination shall be deemed to have been a Borrower
or a Subsidiary of a Borrower, as the case may be, for the
entire period relevant to such determination (i.e., in each
case, the period of four fiscal quarters of the Borrowers then
ended) and each Person that was a Borrower or Subsidiary of a
Borrower at any time during such relevant period, but is no
longer a Borrower or Subsidiary of a Borrower, as the case may
be, at the time of such determination, shall be deemed not to
have been a Borrower or a Subsidiary of a Borrower, as the
case may be, at any time during such period.
1.4 Section 5.2(c) is amended to read in full as follows:
(c) Fixed Charges Coverage. Permit or suffer the
ratio of Consolidated Fixed Charges Coverage Availability of
the Borrowers and their Subsidiaries to Consolidated Fixed
Charges of the Borrowers and their Subsidiaries to be less
than (i) 1.40 to 1.00 as of the end of either of the
Borrowers' fiscal quarters ending on or about October 31, 1996
or January 31, 1997, (ii) 1.65 to 1.00 as of the end of the
Borrowers' fiscal quarter ending on or about Xxxxx 00, 0000,
(xxx) 1.75 to 1.00 as of the end of the Borrowers' fiscal
quarter ending on or about July 31, 1997, (iv) 2.25 to 1.00 as
of the end of either of the Borrowers' fiscal quarters ending
on or about October 31, 1997 and January 31, 1998, (v) 2.50 to
1.00 as of the end of the Borrowers' fiscal quarter ending on
or about April 30, 1998, (vi) 2.75 to 1.00 as of the end of
the Borrowers' fiscal quarter ending on or about July 31,
1998, or (vii) 3.00 to 1.00 as of the end of any of the
Borrowers' fiscal quarters ending at any time thereafter; such
ratio to be determined as of the last day of each fiscal
quarter of the Borrowers for the period of four fiscal
quarters of the Borrowers
then ended. For purposes of determining from time to time the
Borrowers' compliance with this subsection, each Person that
is a Borrower or a Subsidiary of a Borrower at the time of
such determination shall be deemed to have been a Borrower or
a Subsidiary of a Borrower, as the case may be, for the entire
period relevant to such determination (i.e., in each case, the
period of four fiscal quarters of the Borrowers then ended)
and each Person that was a Borrower or Subsidiary of a
Borrower at any time during such relevant period, but is no
longer a Borrower or Subsidiary of a Borrower, as the case may
be, at the time of such determination, shall be deemed not to
have been a Borrower or a Subsidiary of a Borrower, as the
case may be, at any time during such period.
1.5 Section 5.2(d) is amended to read in full as follows:
(d) Ratio of Senior Debt to Tangible Capital Funds
with Minimum Tangible Capital Funds and Tangible Net Worth.
Permit or suffer both of either (i) and (ii) below or (i) and
(iii) below to occur at any time:
(i) the ratio of (A) Consolidated Senior
Debt of the Borrowers and their Subsidiaries to (B)
Consolidated Tangible Capital Funds of the Borrowers and their
Subsidiaries to exceed (1) at the end of the Borrowers' fiscal
quarter ending on or about October 31, 1996, 6.00 to 1.00, (2)
at the end of the Borrowers' fiscal quarter ending on or about
January 31, 1997, 7.00 to 1.00, (3) at the end of the
Borrowers' fiscal quarter ending on or about April 30, 1997,
6.25 to 1.00, (4) at the end of the Borrowers' fiscal quarter
ending on or about July 31, 1997, 5.50 to 1.00, (5) at the end
of each of the Borrowers' fiscal quarters ending on or about
October 31, 1997 and January 31, 1998, 4.50 to 1.00, (6) at
the end of the Borrowers' fiscal quarter ending on or about
April 30, 1998, 4.25 to 1.00, (7) at the end of the Borrowers'
fiscal quarter ending on or about July 31, 1998, 3.75 to 1.00,
and (8) at the end of the Borrowers' fiscal quarter ending on
or about October 31, 1998 or at the end of any fiscal quarter
thereafter, 3.00 to 1.00.
(ii) the Consolidated Tangible Capital Funds of the
Borrowers and their Subsidiaries to be less than the sum of
(A) $15,000,000 plus (B) 50% of the Consolidated Cumulative
Net Income of the Borrowers and their Subsidiaries for the
period from the completion of the IPO through the end of the
latest fiscal quarter of the Borrowers prior to the date of
determination.
(iii) the Consolidated Tangible Net Worth of the
Borrowers and their Subsidiaries to be less than (i) as of the
end of any fiscal year of the Borrowers commencing with the
Borrowers' fiscal year ending in 1994, the sum of (A)
$7,500,000 plus (B) an amount equal to 50% of the Consolidated
Cumulative Net Income of the Borrowers and their Subsidiaries
for each fiscal year of the Borrowers ending in 1996 and
thereafter.
1.6 Exhibit A attached to the Credit Agreement is deleted in
its entirety and Exhibit A attached to this Amendment is substituted in place
thereof. The Borrowers shall execute and deliver to the Banks replacement
Revolving Credit Notes in the face amount of each Bank's Commitment Amount
substantially in the form of Exhibit A attached to this Amendment (together the
"Replacement Revolving Credit Notes" and individually a "Replacement Revolving
Credit Note") to be exchanged for the Revolving Credit Notes previously issued
by the Existing Borrowers to the Banks under the Credit Agreement (together the
"Existing Revolving Credit Notes" and individually an "Existing Revolving Credit
Note"). On the Amendment Date, the principal balance of each Bank's Existing
Revolving Credit Note, as well as all other information which has been endorsed
on the schedule attached to such Existing Revolving Credit Note or elsewhere on
the books and records of such Bank with respect to such Existing Revolving
Credit Note, shall be endorsed on the schedule attached to such Bank's
Replacement Revolving Credit Note or elsewhere on the books and records of such
Bank with respect to such Bank's Replacement Revolving Credit Note. The
execution and delivery by the Borrowers of the Replacement Revolving Credit
Notes shall not in any circumstances be deemed a novation or to have terminated,
extinguished or discharged the indebtedness evidenced by the Existing Revolving
Credit Notes, all of which indebtedness shall continue under and be evidenced
and governed by the Replacement Revolving Credit Notes and the Credit Agreement,
as amended.
1.7 Exhibits B and C attached to the Credit Agreement are
deleted in their entirety, and Exhibits B and C, respectively, attached to this
Amendment are substituted in place thereof.
1.8 Schedule 4.4 attached to the Credit Agreement is deleted
in its entirety and Schedule 4.4 attached to this Amendment is substituted in
place thereof.
ARTICLE 2. CONDITIONS PRECEDENT TO AMENDMENTS
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As conditions precedent to the effectiveness of the amendments
to the Credit Agreement set forth in Article 1 of this Amendment, the Banks
shall receive the following documents and the following matters shall be
completed, all in form and substance satisfactory to the Agent:
2.1 The Replacement Revolving Credit Notes duly completed and
executed on behalf of each Borrower for the Banks. Upon receipt of its
Replacement Revolving Credit Note, each Bank shall promptly return to the
Borrowers such Bank's Existing Revolving Credit Note.
2.2 Certified copies of such corporate and charter documents
of each Borrower, incumbency certificates, and such documents evidencing
necessary corporate action of each Borrower with respect to this Amendment, the
Replacement Revolving Credit Notes and the transactions contemplated hereby, as
the Agent may reasonably request.
2.3 The favorable written opinion of counsel to the Borrowers
in form and substance satisfactory to the Agent, with respect to such matters as
the Agent may reasonably request.
2.4 The Borrowers shall have paid to the Banks a fee for this
Amendment in the amount of $35,000. Such fee shall be shared between the Banks
as follows: $22,272.25 for NBD and $12,727.75 for PNC.
2.5 Such other documents and agreements reasonably requested
by the Agent.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
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In order to induce the Banks to enter into this Amendment,
each Borrower represents and warrants that:
3.1 The execution, delivery and performance by the Borrowers
of this Amendment and the Replacement Revolving Credit Notes have been duly
authorized by all necessary corporate action and do not and will not (a) require
any consent or approval of the stockholders of any Borrower, (b) violate any
provisions of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to any
Borrower or of the Articles of Incorporation or By-Laws of any Borrower, or (c)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which any
Borrower is a party or by which any Borrower or its properties may be bound or
affected.
3.2 No authorization, consent, approval, license, exemption of
or filing, declaration or registration with any governmental authority or any
non-governmental person or entity, including without limitation any creditor or
stockholder of any Borrower, is required on the part of any Borrower in
connection with the execution, delivery and performance of this Amendment, the
Replacement Revolving Credit Notes or the transactions contemplated hereby or as
a condition to the legality, validity or enforceability of this Amendment or the
Replacement Revolving Credit Notes.
3.3 This Amendment is, and the Replacement Revolving Credit
Notes when
delivered hereunder will be, legal, valid and binding obligations of the
Borrowers enforceable against the Borrowers in accordance with their terms.
3.4 After giving effect to the amendments contained in Article
1 of this Amendment and to Section 4.2 of this Amendment, the representations
and warranties contained in Article IV of the Credit 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 none of the New Borrowers, Stature, Motor
Products-Ohio or Great Bend shall be deemed a "Borrower" with respect to, but
only with respect to, such representations and warranties regarding historical
matters not involving such Borrower.
ARTICLE 4. MISCELLANEOUS
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4.1 If any Borrower shall fail to perform or observe any term,
covenant or agreement in this Amendment, or any representation or warranty made
by any Borrower in this Amendment shall prove to have been incorrect in any
material respect when made, such occurrence shall be deemed to constitute an
Event of Default.
4.2 All references to the Credit Agreement or the Existing
Revolving Credit Notes in any agreement, certificate or instrument referred to
in the Credit Agreement, or delivered pursuant thereto or in connection
therewith or in any other document, hereafter shall be deemed references to the
Credit Agreement, as amended hereby, and the Replacement Revolving Credit Notes,
respectively.
4.3 All agreements, certificates and instruments executed
pursuant to the Credit Agreement or in connection therewith (other than the
Existing Revolving Credit Notes) and, subject to the amendments herein provided,
the Credit Agreement, shall in all respects continue in full force and effect
and are hereby ratified and confirmed.
4.4 Capitalized terms used but not defined in this Amendment
shall have the respective meanings ascribed thereto in the Credit Agreement.
4.5 This Amendment shall be governed by and construed in
accordance with the laws of the State of Michigan.
4.6 This Amendment may be signed upon any number of
counterparts with the same effect as if the signatures thereto were upon the
same instrument.
4.7 The Borrowers jointly and severally agree to pay the
reasonable fees and expenses of Dickinson, Wright, Moon, Van Dusen & Xxxxxxx,
counsel for the Agent, in connection with the negotiation and preparation of
this Amendment and the documents referred to herein and the consummation of the
transactions contemplated hereby, and in connection with advising the Agent as
to its rights and responsibilities with respect thereto.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed and delivered as of the date first above written.
BORROWERS: OWOSSO CORPORATION
By: /s/ Xxxx X. Xxxx Xx.
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Its: SVP Finance & CFO
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AHAB INVESTMENT COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Its: Vice President
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XXXXXX COMPANY
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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DEWEZE MANUFACTURING, INC.
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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THE LANDOVER COMPANY
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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MOTOR PRODUCTS-OWOSSO
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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GREAT BEND MANUFACTURING
COMPANY, INC.
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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SNOWMAX, INCORPORATED
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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SOONER TRAILER MANUFACTURING
CO.
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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MOTOR PRODUCTS-OHIO
CORPORATION
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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STATURE ELECTRIC, INC.
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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OWOSSO MOTOR GROUP, INC.
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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XXXXXX INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxx Xx.
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Its: Treasurer
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Agent and Banks: NBD BANK, as Agent and as a Bank
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Vice President
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxx Xxxxxx
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Its: Vice President
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