Execution Copy
(revised 6/15/00)
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of June 14, 2000 (this "Amendment"), is by and among OWOSSO CORPORATION, a
Pennsylvania corporation ("Owosso"), AHAB INVESTMENT COMPANY, a Delaware
corporation ("Ahab"), DWZM, INC., a Pennsylvania corporation, formerly known as
DewEze Manufacturing, Inc. ("DWZM"), THE LANDOVER COMPANY, a Pennsylvania
corporation, and the survivor of the merger with Xxxxxx Industries Group, Inc.,
a Washington 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"), GBMC, INC., a Kansas corporation, formerly known as
Great Bend Manufacturing Company, Inc. ("GBMC"), STATURE ELECTRIC, INC., a New
York corporation ("Stature"), OWOSSO MOTOR GROUP, INC., a Pennsylvania
corporation ("Motor Group"), ASTRO AIR COILS, INC., a Delaware corporation
formerly known as Astro Air Acquisition Corporation ("Astro Air"), X. X. XXXXXX,
INC., a Delaware corporation, and the survivor of the merger with Xxxxxx
Company, a Delaware corporation ("Xxxxxx"), and AHAB INTERNATIONAL INVESTMENT
CO., a Delaware corporation formerly known as Astro Air UK Holdings, Inc. ("Ahab
International" and, together with Owosso, Ahab, DWZM, Landover, Motor Products,
Snowmax, Sooner, Motor Products-Ohio, GBMC, Stature, Motor Group, Astro Air and
Xxxxxx collectively, the "Borrowers" and, individually, a "Borrower"), BANK ONE,
MICHIGAN, a Michigan banking corporation formerly known as NBD Bank and before
that as NBD Bank, N.A. ("Bank One"), PNC BANK, NATIONAL ASSOCIATION, a national
banking association ("PNC" and, together with Bank One, collectively, the
"Banks" and, individually, a "Bank"), and BANK ONE, MICHIGAN, as agent (in such
capacity, the "Agent") for the Banks.
INTRODUCTION
A. The Borrowers, the Banks and the Agent have entered into the Amended
and Restated Credit Agreement, dated as of January 22, 1999, as amended or
modified from time to time (the "Credit Agreement").
B. The Borrowers, the Banks and the Agent now desire to amend the
Credit Agreement on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:
ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT
Upon the date that the conditions precedent set forth in Article 2 of
this Amendment are satisfied, which date (the "Amendment Date") shall be
determined by the Agent in its sole discretion, the Credit Agreement hereby is
amended as follows, with such amendments set forth in Sections 1.1 through 1.5
below deemed retroactively effective as of April 30, 2000 and such amendment set
forth in Section 1.6 below deemed effective as of the Amendment Date:
1.1 The following definitions of the terms "Acquisition" and
"Disposition", respectively are added to Section 1.1 of the Credit Agreement in
alphabetical order:
"Acquisition" shall mean any transaction, or any series of related
transactions, by which any of the Borrowers or any of their respective
Subsidiaries (a) acquires any going business or all or substantially
all of the assets of any firm, corporation, partnership or limited
liability company, or division or business unit thereof, whether
through purchase of assets, merger, consolidation or otherwise or (b)
directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary
voting power for the election of directors (other than securities
having such power only by reason of the happening of a contingency) or
a majority (by percentage or voting power) of the outstanding ownership
interests of a partnership or limited liability company.
"Disposition" shall mean any transaction, or any series of related
transactions, by which any of the Borrowers or any of their respective
Subsidiaries (a) sells, leases, licenses, transfers, assigns or
otherwise disposes of any going business or all or substantially all of
the assets of any of them or (b) sells, transfers, assigns or otherwise
disposes of, directly or indirectly (in one transaction or as the most
recent transaction in a series of transactions), a majority (in number
of votes) of the securities of any of its Subsidiaries which have
ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of any of its Subsidiaries that is a
partnership or limited liability company.
1.2 The definition of the term "EBIT" set forth in Section 1.1 of the
Credit Agreement is amended and restated in full as follows:
"EBIT" of any person shall mean, for any period, the after-tax net
income of such person for such period (exclusive of any non-recurring
gains or losses for such person's fiscal year 1998, and any tax effects
thereof, and exclusive of the following nonrecurring items as so
identified on the financial statements of the Borrowers delivered to
the Banks for the fiscal quarter ended January 31, 2000: Power Gear
warranty in the amount of $275,000, Xxxxxx warranty in the amount of
$170,000, E & J bankruptcy in the amount of $130,000, Workers'
Compensation reserve in the amount of $500,000 and Snowmax warranty in
the amount of $500,000, and any tax effects thereof) plus, to the
extent deducted in determining such after-tax net income for such
period, (a) Interest Charges of such person for such period, and (b)
income and other taxes determined by reference to profits of such
person for such period. No exclusion of any gains or losses from the
calculation of EBIT for any period shall allow deferral of those items
to any subsequent period.
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1.3 The following sentence is added to the end of Section 1.2 of the
Credit Agreement:
Notwithstanding anything in this Agreement, in any financial
statements of the Borrowers or in generally accepted accounting
principles to the contrary, for purposes of calculating and determining
compliance with the financial covenants in Section 5.2 and determining
the Applicable Margin, including defined terms used therein, any
Acquisition or Disposition by the Borrowers or any of their respective
Subsidiaries, including any related financing transactions, during the
period for which such financial covenants and the Applicable Margin
were calculated shall be deemed to have occurred on the first day of
the relevant period for which such financial covenants and the
Applicable Margin were calculated on a pro forma basis acceptable to
the Required Bank. Nothing in this Section 1.2 shall limit or otherwise
affect the requirements of Sections 5.2(g) and 5.2(h).
1.4 Section 2.2(b) of the Credit Agreement is amended and restated in
full as follows:
(b) In addition, the commitment amounts for the Banks automatically
shall reduce (i) in the aggregate amount of $2,500,000 on December 31,
1999, (ii) in the additional aggregate amount of $2,500,000 on December
31, 2000, (iii) in the additional aggregate amount of $2,500,000 on the
Amendment Date (as defined in the First Amendment to this Agreement)
and (iv) in the additional aggregate amount of $2,500,000 on December
31, 2001. Notwithstanding anything herein to the contrary, any such
reduction shall not occur if all the Banks agree in writing with
respect to such reduction in their sole discretion.
1.5 Section 5.2(b) of the Credit Agreement is amended and restated in
full as follows:
(b) Total Debt to EBITDA. Permit or suffer the ratio of
Consolidated Total Debt of the Borrowers and their Subsidiaries as of
the end of any fiscal quarter of the Borrowers to Consolidated EBITDA
of the Borrowers and their Subsidiaries for the period of four fiscal
quarters of the Borrowers then ending to be greater than (i) 3.50 to
1.00 from and including the last day of the Borrowers' fiscal year
ending on or about October 31, 1999 to and including the day
immediately preceding the last day of the Borrowers' fiscal quarter
ending on or about Xxxxx 00, 0000, (xx) 3.75 to 1.00 from and including
the last day of the Borrowers' fiscal quarter ending on or about April
30, 2000 to and including the day immediately preceding the last day of
the Borrowers' fiscal year ending on or about October 31, 2000, (iii)
3.50 to 1.00 from and including the last day of the Borrowers' fiscal
year ending on or about October 31, 2000 to and including the day
immediately preceding the last day of the Borrowers' fiscal quarter
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ending on or about January 31, 2001, (iv) 3.25 to 1.00 from and
including the last day of the Borrowers' fiscal quarter ending on or
about January 31, 2001 to and including the day immediately preceding
the last day of the Borrowers' fiscal year ending on or about October
31, 2001, and (v) 3.00 to 1.00 from and including the last day of the
Borrowers' fiscal year ending on or about October 31, 2001 and
thereafter.
1.6 New Section 5.2(o) of the Credit Agreement is added as follows:
(o) Dividends and Other Restricted Payments. Make, pay, declare or
authorize any dividend, payment or other distribution in respect of any
class of its common stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other
acquisition, directly or indirectly, of any shares of its common stock
other than such dividends, payments or other distributions to the
extent payable solely in shares of the capital stock of Owosso or to
the extent payable to Owosso by a wholly-owned Subsidiary of Owosso,
provided, however, that, if no Default or Event of Default shall exist
or shall have occurred and be continuing and no Default or Event of
Default under any other provision of this Agreement would result
therefrom, Owosso may make, pay, declare or authorize dividends,
payments and other such distributions in respect of its common stock,
during the period of 30 days immediately following the end of its
fiscal quarter ending on or about July 31, 2000, which, in the
aggregate, do not exceed $355,000. For purposes of this Section 5.2(o),
(i) "capital stock" shall include capital stock (including common and
preferred stock) and any securities exchangeable for or convertible
into capital stock and any warrants, rights or other options to
purchase or otherwise acquire capital stock or such securities, and
(ii) "common stock" shall include common stock and any securities
exchangeable for or convertible into common stock and any warrants,
rights or other options to purchase or otherwise acquire common stock
or such securities.
ARTICLE 2. CONDITIONS PRECEDENT TO AMENDMENTS
As conditions precedent to the effectiveness of the amendments to the
Credit Agreement set forth in Article 1 of this Amendment, the Agent shall
receive the following documents and the following matters shall be completed,
all in form and substance satisfactory to the Agent:
2.1 This Amendment duly executed on behalf of the Borrowers and the
Banks.
2.2 Payment to the Agent for the pro rata account of the Banks of a fee
for this Amendment in the amount of $50,000 in immediately available funds,
which fee shall be deemed earned upon receipt and shall not be refundable.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment, each
Borrower represents and warrants that:
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3.1 The execution, delivery and performance by the Borrower of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Borrower's
charter or by-laws, or of any contract or undertaking to which the Borrower is a
party or by which the Borrower or its property is or may be bound or affected.
3.2 This Amendment is a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.
3.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor or stockholder of
the Borrower, is required on the part of the Borrower in connection with the
execution, delivery and performance of this Amendment or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Amendment.
3.4 After giving effect to the amendments contained in Article 1 of
this Amendment, the representations and warranties contained in Article IV of
the Credit Agreement and the representations and warranties contained in the
Security Documents 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, and no Event of Default or
Default has occurred and is continuing.
ARTICLE 4. MISCELLANEOUS
4.1 If the Borrowers shall fail to perform or observe any term,
covenant or agreement in this Amendment, or any representation or warranty made
by the Borrowers 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 in any Security Document or
any other document, instrument or certificate referred to in the Credit
Agreement or delivered in connection therewith or pursuant thereto, hereafter
shall be deemed references to the Credit Agreement, as amended hereby.
4.3 The Security Documents, any and all certificates or financing
statements executed pursuant to the Credit Agreement or in connection therewith
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 herein 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 The Borrowers jointly and severally agree to pay the reasonable
fees and expenses of Xxxxxxxxx Xxxxxx PLLC, 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 Bank as to its rights and responsibilities
with respect thereto.
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4.7 This Amendment may be executed upon any number of counterparts with
the same effect as if the signatures thereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first-above written.
OWOSSO CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxxx, Xx.
President and CEO
DWZM, INC. and GBMC, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxxx, Xx.
The President of each company
THE LANDOVER COMPANY,
MOTOR PRODUCTS-
OWOSSO CORPORATION,
SNOWMAX, INCORPORATED,
MOTOR PRODUCTS -
OHIO CORPORATION, STATURE
ELECTRIC, INC., OWOSSO
MOTOR GROUP, INC., ASTRO
AIR COILS, INC., SOONER
TRAILER MANUFACTURING
CO. and X.X. XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxxx, Xx.
A Vice President of each company
AHAB INVESTMENT COMPANY
and AHAB INTERNATIONAL
INVESTMENT CO.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxxx, Xx.
The President of each company
BANK ONE, MICHIGAN,
individually and as Agent
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
--------------------------
Title: First Vice President
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PNC BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
--------------------------
Title: Assistant Vice President
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