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THIRD AMENDMENT
TO
CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this "Third Amendment"), dated as
of December 18, 1996, is among Michigan National Bank, a national banking
association, and the other banking institutions listed on Exhibit A
attached hereto and who appear as signatories to this Third Amendment (each
a "Bank" and collectively the "Banks"), Michigan National Bank, as agent
("Agent"), and ▇▇▇▇▇▇▇ Industries, Inc., a Delaware corporation
("Borrower").
Recitals
The Agent, the Borrower and some of the Banks executed a certain Credit
Agreement (the "Credit Agreement") dated as of June 1, 1994, providing for,
among other things, the establishment by the Banks for the benefit of the
Borrower of a line of credit in the amount of $30,000,000. The Credit
Agreement was amended by a First Amendment to Credit Agreement, dated as of
December 14, 1994, and by a Second Amendment to Credit Agreement, dated as
of June 1, 1995 (the Credit Agreement, as so amended, the "Amended Credit
Agreement").
The Borrower has now requested the Banks to consider certain amendments to
the Amended Credit Agreement, including an increase in the aggregate
principal amount of the loans that can be outstanding at any one time to
$100,000,000.00, as well as certain changes in the identity of the banks
that are to be parties to the Credit Agreement, and the Banks have
consented to such amendments as set forth herein upon the terms and
conditions set forth herein.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Amended Credit Agreement.
NOW, THEREFORE, the parties hereto agree that the Amended Credit Agreement
shall be amended, effective (unless otherwise specified herein) on and as
of December 18, 1996, as follows:
1. The definition of the term "Agent's Counsel" in Section 1, shall
be amended to read in its entirety, as follows: "Agent's Counsel" means
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
2. The definition of the term "Borrower's Address" in Section 1,
shall be amended to read in its entirety, as follows: "Borrower's Address"
means ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇."
3. CD Advances shall no longer be available and, accordingly, all
references to "CD Advance," " CD Rate" and "Certificate of Deposit Rate"
are hereby deleted from whereever they appear in the Amended Agreement.
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4. The definition of the term "Line of Credit Maturity" in Section 1
shall be amended in its entirety to read as follows:
"Line of Credit Maturity" means December 15, 1999; provided that if
Borrower delivers to Agent, on or before September 15, 1997, and each
anniversary thereof, Borrower's written request to extend the next
December 15 maturity date for the Line of Credit, then the Line of
Credit Maturity Date may be extended by written consent of the Requisite
Banks, in their sole discretion, for the twelve month period succeeding
the existing Line of Credit Maturity, subject to all of the terms and
conditions of this Agreement, as the same may be supplemented or
amended.
5. The definition of the term "Ratable Share" in Section 1, shall be
amended to read in its entirety, as follows:
"Ratable Share" means for each Bank the percentage shown on Exhibit A of
the Third Amendment, which as to aggregate Advances of the Loan will be
limited to the maximum U.S. dollar amount shown on said Exhibit A."
6. Section 2.1 shall be amended by substituting for the amount
"$50,000,000" at the beginning of the sixth line thereof the amount
"$100,000,000".
7. Sections 2.2.1 and 2.2.2 shall be amended in their entirety to
read as follows:
2.2.1 Borrower may select from one of the following interest rate
options when requesting an Advance:
(i) The Prime Rate, less .50%; or
(ii) LIBOR, plus 0.27%; or
(iii) The Federal Funds Rate, plus 0.65%.
2.2.2 Each Advance using the interest rate options set forth in
subsection 2.2.1(ii) will be for a specified time period (each an
"Interest Period") of one (1) month, two (2) months, three (3) months,
or six (6) months, in each instance with a specified due date not
later than the Line of Credit Maturity, on which date all outstanding
principal and interest related to the Advance will be repaid in full
to Agent. Advances may be obtained under the Line of Credit until the
Line of Credit Maturity, at which time all principal and interest
outstanding on the Line of Credit will be immediately due and payable
by Borrower to Agent.
8. Section 2.4 shall be amended by substituting for the term "fifteen
one-hundredths of 1% (0.15%)" at the beginning of the fifth line thereof
the term "eleven one-hundredths of 1% (0.11%)".
9. Section 2.5 shall be amended in its entirety to read as follows:
2.5 Use of Proceeds. The proceeds of the Line of Credit Loan will be
used by Borrower (i) to finance acquisitions (iii) for letters of
credit and (iii) for general corporate purposes.
10. Section 2.7 shall be amended by substituting for the term
"$50,000,000" in the two places in which it appears the term
"$100,000,000."
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11. Section 3.6.7(a) shall be amended by substituting for the term
"eight-tenths of one percent (0.8%)" in the sixteenth line thereof the term
"four hundred eighty-five one-thousandths of 1% (0.485%)" and by adding the
following clause to the end of the first sentence thereof: "provided,
however, that the aggregate face amount of the Letters of Credit
outstanding hereunder at any one time shall not exceed $15,000,000."
12. A new Section 5.3.14 shall be added at the end of Section 5.3,
reading in its entirety as follows:
5.3.14 Not less than 30 days prior to the consummation of any proposed
acquisition which, when aggregated with all other acquisitions
consummated directly or indirectly by the Borrower after December 18,
1996, will result in a cumulative increase in the Borrower's
Indebtedness as a result of all such acquisitions to be $25,000,000 or
more, a proforma management compliance certificate certifying that all
covenants set forth in Sections 5 and 6 hereof will be complied with
as of the date of such acquisition(s).
13. Section 5.4.1 shall be amended in its entirety to read as
follows:
Borrower will maintain a minimum Tangible Net Worth of Two Hundred
Twenty-Six Million ($226,000,000) Dollars, to be adjusted upward at
the end of each fiscal quarter commencing December 28, 1996, by
twenty-five percent (25%) of net income after taxes and before
dividends for such quarter. Once adjusted upward, the Tangible Net
Worth requirement set forth herein will not decrease.
14. Section 5.9 shall be amended in its entirety to read as follows:
5.9 Payment of Indebtedness. Borrower and each of its wholly- owned
Subsidiaries (except Mining Remedial Recovery Corporation and its
subsidiaries and inter-company indebtedness between Borrower and its
wholly owned subsidiary, Alaska Gold Company, Inc.) will pay all of
its Indebtedness, promptly when due in accordance with the terms of
such Indebtedness, except to the extent that failure to pay such
Indebtedness would not constitute an Event of Default under Section
7.1.4 hereof, and except to the extent a good faith basis exists for
delay or non-payment thereof and Borrower or Subsidiary, as the case
may be, is contesting in good faith any claim for payment thereof.
15. A new Section 5.12 shall be added at the end of Section 5,
reading in its entirety as follows:
5.12 Within 60 days after the formation of any new Brass Subsidiary,
Borrower shall cause such subsidiary to execute and deliver to the
Agent sufficient copies of a guaranty, substantially in the form
attached to the Third Amendment as Exhibit 3.5.1(b), together with
certified copies of such subsidiary's organizational documents,
including resolutions authorizing the execution and delivery of such
guaranty, and together with an opinion of counsel for such subsidiary
in form and substance satisfactory to the Agent and its counsel.
16. Schedules 1.1 and 8.2.3 shall be amended in their entirety to
read as Schedules 1.1 and 8.2.3, respectively, attached to this Third
Amendment.
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17. The parties acknowledge and agree that on and as of the date of
this Third Amendment NBD Bank ("NBD") is selling and assigning to The First
National Bank of Chicago ("FNBC"), and FNBC is purchasing and taking from
NBD, all Obligations held by and owed to NBD under the Amended Credit
Agreement. On and after the date of this Third Amendment: (a) FNBC shall
have all of the rights and obligations of a Bank under the Amended Credit
Agreement and the other Loan Documents, (b) FNBC shall assume the Ratable
Share previously held by NBD and agrees to the Ratable Share as set forth
on Exhibit A attached to this Third Amendment, and (c) NBD shall cease to
be a "Bank" under the Amended Credit Agreement and shall have no rights or
corresponding obligations under the Amended Credit Agreement and the other
Loan Documents.
18. The parties acknowledge and agree that Mercantile Bank of Kansas
City ("MBKC") has sold and assigned to Mercantile Bank National Association
("MBNA"), and MBNA has purchased and taken from MBKC, all Obligations held
by and owed to MBKC under the Amended Credit Agreement. On and after the
date of this Third Amendment: (a) MBNA shall have all of the rights and
obligations of a Bank under the Amended Credit Agreement and the other Loan
Documents, (b) MBNA shall assume the Ratable Share previously held by MBKC
and agrees to the Ratable Share as set forth on Exhibit A attached to this
Third Amendment, and (c) MBKC shall cease to be a "Bank" under the Amended
Credit Agreement and shall have no rights or corresponding obligations
under the Amended Credit Agreement and the other Loan Documents.
19. The parties acknowledge and agree that on and as of the date of
this Third Amendment LaSalle National Bank ("LNB") and First Bank National
Association ("FBNA") are withdrawing as lenders under the Amended Credit
Agreement. Accordingly, from and after the date of this Third Amendment
LNB and FBNA shall each cease to be a "Bank" under the Amended Credit
Agreement and shall have no rights or corresponding obligations under the
Amended Credit Agreement and the other Loan Documents.
20. The parties acknowledge and agree that Bank IV Kansas, N.A.
("Bank IV") has been merged into Boatmen's National Bank (formerly,
Boatmen's First National Bank of Kansas City; "Boatmen's") and,
accordingly, that Boatmen's has assumed all of the rights and corresponding
obligations of Bank IV under the Amended Credit Agreement and the other
Loan Documents and the Ratable Share previously held by Bank IV.
21. The terms and provisions of the Form of Request for Advance
attached to the Amended Credit Agreement as Exhibit 2.2.3, the Form of Line
of Credit Note attached to the Amended Credit Agreement as Exhibit 2.3 and
the Form of Brass Guaranties attached to the Amended Credit Agreement as
Exhibit 3.5.1 shall be revised as necessary to conform to the provisions of
this Third Amendment. The Borrower shall execute new Notes and shall cause
the Brass Subsidiaries to execute new or amended Brass Guaranties which
conform to the provisions of this Third Amendment, such execution (and
delivery of such Notes and Brass Guaranties to the Agent) being a condition
to the effectiveness of this Third Amendment.
22. Except as herein provided, the Amended Credit Agreement shall
remain in full force and effect, including the provisions of Section 9
thereof which are herein incorporated by this reference.
23. The Borrower hereby reaffirms the representations and warranties
set forth in Section 4 of the Amended Credit Agreement and certifies that
no Event of Default has occurred or is existing under the Amended Credit
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed and delivered as of the date first hereinabove set
forth.
"BORROWER"
▇▇▇▇▇▇▇ INDUSTRIES, INC.
WITNESS:
_____________________ By:_________________________
_____________________ Its: Executive Vice President
"BANKS"
MICHIGAN NATIONAL BANK
WITNESS:
_____________________ By:_________________________
_____________________ Its: Senior Relationship
Manager
BOATMEN'S NATIONAL BANK
_____________________ By:_________________________
_____________________ Its:
THE FIRST NATIONAL BANK
OF CHICAGO
_____________________ By:_________________________
_____________________ Its:
MERCANTILE BANK NATIONAL
ASSOCIATION
_____________________ By:_________________________
_____________________ Its:
KEY BANK NATIONAL ASSOCIATION
(formerly known as Society
National Bank)
_____________________ By:_________________________
_____________________ Its:
"AGENT"
MICHIGAN NATIONAL BANK
_____________________ By:_________________________
_____________________ Its:
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EXHIBIT A
THE BANKS AND THEIR COMMITMENTS AND RATABLE SHARES
Name of Bank Commitment Ratable Share
Michigan National Bank $25,000,000 25%
Boatmen's National Bank $18,750,000 18.75%
The First National Bank of Chicago $18,750,000 18.75%
Mercantile Bank National Association $18,750,000 18.75%
Key Bank National Association $18,750,000 18.75%
TOTAL $100,000,000 100%
