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Exhibit 10(a)
FIRST AMENDMENT
TO
REVOLVING CREDIT LOAN AGREEMENT
Dated as of December 22, 1997
By and Between
AUTOCAM CORPORATION
and
COMERICA BANK
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FIRST AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT (thereinafter
referred to as the "First Amendment"), made and delivered as of the 22nd day of
December, 1997, by and between AUTOCAM CORPORATION, a Michigan corporation (the
"Borrower"), whose address is 0000 Xxxx Xxxxx, X.X., Xxxxxxxx, Xxxxxxxx 00000,
and COMERICA BANK, a Michigan banking corporation, whose address is 0000 Xxxxxx
Xxxxxx Xxxxx Building, 99 Monroe, N.W., Grand Rapids, Michigan (hereinafter
referred to as the "Bank").
WHEREAS, the Bank and the Borrower entered into a certain Revolving Credit
Loan Agreement dated as of June 27, 1997 (the "Agreement"); and
WHEREAS, the Borrower has entered into an agreement to purchase fifty-one
percent (51%) of the stock of Qualipart/Target, a Brazilian corporation ("Q/T")
(the "Stock Purchase"); and
WHEREAS, the Bank has agreed to provide Borrower with a term loan in the
amount of up to Five Million Two Hundred Thousand Dollars ($5,200,000) (the
"Q/T" Term Loan") to finance the Stock Purchase; and
WHEREAS, Borrower has entered into a loan agreement with the Michigan
Strategic Fund (the "Issuer") to borrow Nine Million Dollars ($9,000,000) to
finance the acquisition, construction and equipping of a manufacturing facility
in Marshall, Michigan (the "Project"), pursuant to a Loan Agreement dated as of
December 1, 1997 (the "Loan Agreement"); and
WHEREAS, the Issuer is issuing its Variable Rate Demand Limited Obligation
Revenue Bonds, Series 1997 (Autocam Corporation Project) (the "Bonds") pursuant
to a Trust Indenture dated as of December 1, 1997 (the "Indenture"), between the
Issuer and Norwest Bank Wisconsin, N.A. (the "Trustee"); and
WHEREAS, to induce the Bond Purchasers to purchase the Bonds and as
security for the payment of the Bonds, the Bank has agreed to issue its
irrevocable Letter of Credit in the initial stated amount of $9,138,082.19 (the
"Letter of Credit") in favor of the Trustee pursuant to a Reimbursement
Agreement dated as of December 1, 1997 (the "Reimbursement Agreement"); and
WHEREAS, the Borrower and the Bank agree to amend the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and subject to the conditions hereinafter set forth, Borrower
and the Bank hereby agree as follows:
ARTICLE 1
AMENDMENTS TO AGREEMENT
1.1 The definitions of "Commitments," "Funded Debt Leverage Ratio," "Loan,"
"Maturity Date," "Notes" and "Revolving Credit Commitment Amount" as stated in
Section 1.1 of the Agreement are deleted in their entirety and the following
substituted therefor:
"Commitments" shall mean the Bank's commitments to make loans as set forth
herein. For purposes of this Agreement, Commitments may be classified as
Revolving Credit Commitments, Term Loan Commitments, Equipment Loan Commitments
or Q/T Term Loan Commitments.
"Funded Debt Leverage Ratio" shall mean the ratio of: (a) the Company's
Funded Debt, less (b) the sum of (i) cash plus (ii) marketable securities held
by the Company; to the Company's EBITDA. For purposes of this Agreement, the
Funded Debt Leverage Ratio shall be calculated at the end of each quarter of the
Company's fiscal year commencing December 31, 1997, using the previous four (4)
quarters.
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"Loan" shall mean the Revolving Credit Loan, the Term Loan, the Equipment
Loan, any Equipment Term Loan, and the Q/T Term Loan. Subject to the terms and
conditions contained herein, such Loans may also be designated as a Prime Rate
Loan, a Eurodollar Rate Loan or a Quoted Rate Loan, which are referred to herein
as "types" of Loans.
"Maturity Date" shall mean the earlier to occur of the date on which any
Loan is accelerated pursuant to Section 9.2 or (i) with respect to the Term
Loan, October 1, 2003; (ii) with respect to any Equipment Term Loan, the date
that is not more than six (6) years after the first Equipment Loan relating to
such Equipment Term Loan was made; and (iii) with respect to the Q/T Term Loan,
January 1, 2003.
"Notes" shall mean the Revolving Credit Note, the Term Note, the Equipment
Note, any Equipment Term Note and the Q/T Term Note; and "Note" shall mean any
one of them.
"Revolving Credit Commitment Amount" shall mean, as of any applicable date
of determination, Thirteen Million Five Hundred Thousand Dollars ($13,500,000)
(or such lesser amount to which the Revolving Credit Commitment Amount may be
reduced by the Borrower from time to time under Section 2.6.1 of this
Agreement). Within the Revolving Credit Commitment Amount, Twelve Million
Dollars ($12,000,000) is available to the Company for general corporate purposes
and One Million Five Hundred Thousand Dollars ($1,500,000) is reserved
exclusively to facilitate foreign exchange transactions. Within the Twelve
Million Dollars ($12,000,000) (less the amount of the Bond Reserve) available
for general corporate purposes, up to Five Hundred Thousand Dollars ($500,000)
is reserved for the issuance of a letter of credit. The amount of any letters of
credit issued by the Bank on behalf of the Company reduces the amount available
to be advanced under the Revolving Credit Commitment.
1.2 The following definitions are hereby added to Section 1.1 of the
Agreement:
"Bond Reserve" shall mean a reduction in the amount available to be
advanced under the Revolving Credit Commitment calculated as follows: On each
March 1, June 1 and September 1 (each a "Reserve Determination Date"), an amount
equal to twenty-five percent (25%) of the principal amount of the Bonds to be
redeemed under the Redemption Notice (as defined in the Reimbursement Agreement)
then in effect shall be determined (the "Quarterly Reserve"). The Bank shall
then reduce the amount available to be advanced by the Quarterly Reserve; the
total Bond Reserve shall be the sum of all of the Quarterly Reserves during the
year; upon reimbursement to the Bank by the Company, the Bond Reserve shall be
eliminated until the next Reserve Determination Date.
"Pledge Agreement" shall mean a pledge agreement in the form and content
satisfactory to the Bank pursuant to which the Company will pledge to the Bank
all of the issued and outstanding capital stock of Q/T owned by the Company to
the Bank as security for the Indebtedness.
"Q/T Term Loan Commitment Amount" shall mean Five Million Two Hundred
Thousand Dollars ($5,200,000).
"Q/T Term Loan" shall mean any Borrowing under Section 2.3 of the
Agreement, evidenced by the Q/T Term Note and made pursuant to Section 2.1.4.
"Q/T Term Note" shall mean any promissory note of the Company evidencing
the Q/T Term Loan, in the form of Exhibit A to the First Amendment, as it may be
amended or modified from time to time, together with any promissory note or
notes in exchange or replacement therefor.
"Subordinated Debt" shall mean indebtedness of the Company to third parties
which has been subordinated to the Indebtedness pursuant to a subordination
agreement in form and content satisfactory to the Bank.
"Subordination Agreement" shall mean a subordination agreement in the form
and content satisfactory to the Bank making all present and future indebtedness
of the Company to Propart Corporation relating to the Stock Purchase subordinate
to the Indebtedness.
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"Tangible Effective Net Worth" shall mean, as of any applicable date of
determination, Tangible Net Worth plus Subordinated Debt.
1.3 The definitions of "Guarantor Mortgage," "Guarantor Premises,"
"Mortgage Commitment," "Mortgage Loan," and "Mortgage Note" are hereby deleted
from the Agreement.
1.4 Section 2.1.4 of the Agreement is deleted in its entirety and the
following Section 2.1.4 is substituted therefor:
2.1.4 Q/T Term Loan Commitment. Upon satisfaction of the conditions
contained in Sections 3.1, 3.2 and 3.4 of the Agreement, at any time prior to
February 1, 1998, the Bank agrees, subject to the terms and conditions of the
Agreement, to make the Q/T Term Loan to the Company, in such amounts as the
Company requests pursuant to Section 2.3, in an amount not to exceed the Q/T
Term Loan Commitment Amount.
1.5 Section 2.2.4 of the Agreement is deleted in its entirety and the
following Section 2.2.4 is substituted therefor:
2.2.4 Q/T Term Note. The Q/T Term Loan shall be evidenced by the Q/T
Term Note payable to the order of the Bank in an amount equal to the Q/T Term
Loan.
1.6 Section 2.4.3 of the Agreement is deleted in its entirety and the
following Section 2.4.3 is substituted therefor:
2.4.3 Quoted Rate Borrowings. All Quoted Rate Borrowings shall be for
the entire outstanding principal amount of the Term Loan, the Q/T Term Loan or
each Equipment Term Loan.
1.7 Section 2.5.2 of the Agreement is deleted in its entirety and the
following Section 2.5.2 is substituted therefor:
2.5.2 Maturity Date. The outstanding principal balance (together with
accrued interest thereon) of the Term Loan, the Q/T Term Loan and any Equipment
Term Loans shall be due and payable on the respective Maturity Date.
1.8 Section 2.6.4 of the Agreement is deleted in its entirety and the
following Section 2.6.4 is substituted therefor:
2.6.4 Q/T Term Loan Commitment. Effective January 31, 1998, the Q/T
Term Loan Commitment shall be terminated if Borrower has not completed the Stock
Purchase.
1.9 Section 2.8.2 of the Agreement is deleted in its entirety and the
following Section 2.8.2 is substituted therefor:
2.8.2 Quoted Rate Election.
(a) Term Loan. The Company may elect to have the entire
outstanding principal balance of the Term Loan bear interest at a Quoted Rate
for the Applicable Interest Period by delivering to the Bank an appropriate
Notice of Borrowing confirming the Quoted Rate as provided in Section 2.3 of the
Agreement.
(b) Q/T Term Loan. The Company may elect to have the entire
outstanding principal balance of the Q/T Term Loan bear interest at a Quoted
Rate for the Applicable Interest Period by delivery to the Bank an appropriate
Notice of Borrowing confirming the Quoted Rate as provided in Section 2.3 of the
Agreement.
(c) Equipment Term Loan. The Company may elect to have the entire
principal balance of any Equipment Term Loan as of a Conversion Date bear
interest at a Quoted Rate for the Applicable Interest Period by delivering to
the Bank an appropriate Notice of Borrowing confirming the Quoted Rate as
provided in Section 2.3 of the Agreement.
1.10 Section 3.4 of the Agreement is deleted in its entirety and the
following Section 3.4 is substituted therefor:
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3.4 Additional Conditions for the Q/T Term Loan. in to the requirements
set forth in Article III, the obligation of the Bank to make the Q/T Term Loan
is subject to receipt by the Bank of the following documents and completion of
the following matters, in form and substance satisfactory to the Bank:
3.4.1 Documents Executed and Filed. The Company shall have executed (or
caused to be executed) and delivered to the Bank the following:
(i) the Q/T Term Note; and
(ii) either: (a) the Stock Pledge, or (b) the Subordination
Agreement.
3.4.2 Stock Purchase Complete. The Stock Purchase shall have been
completed on terms and conditions acceptable to the Bank and the Bank shall have
been provided with a complete copy of the documentation related to the Stock
Purchase.
1.11 Section 4.1.4 of the Agreement is deleted in its entirety and the
following Section 4.1.4 is substituted therefor:
4.1.4 Q/T Term Loan. The Company shall pay to the Bank the principal
amount of the Q/T Term Loan, unless accelerated pursuant to the terms of this
Agreement, in not more than sixty (60) equal installments on the first day of
each consecutive calendar month, beginning no later than March 1, 1998. All
outstanding principal and accrued interest shall be due and payable on the
Maturity Date.
1.12 Section 7.5 of the Agreement is deleted in its entirety and the
following Section 7.,5 is substituted therefor:
7.5 Maintain Tangible Net Worth. On a consolidated basis, maintain a
Tangible Net Worth for it of not less than Twenty-six Million Dollars
($26,000,000).
ARTICLE 2
TERM LOAN/MORTGAGE LOAN
2.1 Term Loan. By September 30, 1997, the Company provided the Bank with an
acceptable appraisal as requested in Section 2.6.2 of the Agreement. Therefore,
there was no reduction in the Term Loan under Section 2.6.2.
2.1 Mortgage Loan. The Company elected not to take any disbursement of the
Mortgage Loan. Therefore, the Mortgage Loan Commitment terminated September 30,
1997, and no Mortgage Loan was made.
ARTICLE 3
OTHER TERMS
Except as specifically amended above, all of the terms and conditions of
the Agreement shall remain in full force and effect.
ARTICLE 4
CONDITIONS
The obligations of the Bank under this First Amendment are subject to the
occurrence, prior to or simultaneously with the first borrowing hereunder, of
each of the following conditions, any or all of which may be waived in whole or
in part by the Bank in writing.
4.1 Documents Executed. The Borrower shall have executed and delivered to
the Bank this First Amendment, the Q/T Term Note, the Stock Pledge Agreement,
the Subordination Agreement, and an affirmation of the Guaranty in the form of
Exhibit B to this First Amendment.
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4.2 Preparation Fees. The Company agrees to pay to the Bank the amount of
the expenses (including without limit reasonable attorneys' fees and
disbursements) incurred by the Bank from time to time in connection with the
preparation of this First Amendment and related instruments.
4.3 Approval of Bank Counsel. All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this First
Amendment or incidental thereto and all other related legal matters shall have
been satisfactory to and approved by Miller, Canfield, Paddock and Stone,
counsel to the Bank, and said counsel shall have been furnished with such
certified copies of actions and proceedings and such other instruments and
documents as they shall have reasonably requested.
ARTICLE
5MISCELLANEOUS
5.1 Successors. The First Amendment shall be binding upon the parties
hereto and their respective successors, assigns, heirs, executors and
administrators.
5.2 Governing Law. This First Amendment will be governed by and construed
in accordance with the internal laws of Michigan. The parties hereto select the
state and federal court of appropriate jurisdiction in Michigan as the sole
proper forums having jurisdiction over all disputes arising from or in
connection herewith. The parties hereto consent to be subject to jurisdiction of
the courts of Michigan with respect to any such dispute.
5.3 Severability. If any part of this First Amendment is declared invalid
or unenforceable, such provision may be changed to the extent reasonably
necessary to make the provision, as changed, legal, valid and binding. If any
provision hereof is declared invalid or unenforceable in its entirety, the other
provisions hereof will not be affected, but will remain in full force and
effect.
5.4 Counterparts. This First Amendment may be signed in counterparts, all
of which together will be deemed an original.
5.5 Entire Agreement; Amendment. This First Amendment and the agreements
referred to herein constitute the entire agreement of the parties hereto with
respect to the subject matter hereof. This First Amendment may be amended only
by a written instrument executed by all parties hereto.
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IN WITNESS WHEREOF, the parties have executed this First Amendment as of
the date set forth in the introductory paragraph of this First Amendment.
BANK:
COMERICA BANK
By:
--------------------------------
Its:
-------------------------------
BORROWER:
AUTOCAM CORPORATION
By:
--------------------------------
Its:
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EXHIBIT A
Q/T TERM NOTE
$5,200,000.00 December 22, 1997
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
COMERICA BANK (the "Bank") at any office of the Bank, the principal sum of Five
Million Two Hundred Thousand and 00/100 Dollars ($5,200,000.00) in consecutive
monthly installments as provided in that certain Revolving Credit Loan Agreement
dated June 27, 1997 (the "Loan Agreement"), which Loan Agreement, as it may be
amended from time to time, is by this reference incorporated herein and made a
part hereof, beginning February 1, 1998, and on the first day of each month
thereafter, with all outstanding principal and accrued but unpaid interest due
and payable on January 1, 2003.
The unpaid principal amount of this Note shall bear interest at the rate
provided in the Loan Agreement.
This Note is the Q/T Term Note referred to in the First Amendment to Loan
Agreement.
This Note is secured as described in the Loan Agreement, to which reference
is made for, among other things, the conditions under which this Note may be
accelerated. The Bank is hereby granted a security interest in all property of
the undersigned at any time in the possession of the Bank or any Affiliate (as
defined in the Agreement) of the Bank (or as to which the Bank or any Affiliate
of the Bank at any time controls possession by documents or otherwise) and in
all balances of deposit or other accounts (including without limit an account
evidenced by a certificate of deposit) of the undersigned from time to time with
the Bank or any Affiliate of the Bank.
If an Event of Default (as defined in the Loan Agreement) occurs and is not
cured within the time, if any, provided for by the Loan Agreement, the Bank may
exercise any one or more of the rights and remedies granted by the Loan
Agreement or any document contemplated thereby or given to a secured party under
applicable law, including without limit the right to accelerate this Note and
any other Indebtedness (as defined in the Loan Agreement), and may set off
against the principal of and interest on this Note or against any other
Indebtedness (i) any amount owing by the Bank to the undersigned, (ii) any
property of the undersigned at any time in the possession of the Bank or any
Affiliate of the Bank and (iii) any amount in any deposit or other account
(including without limit an account evidenced by a certificate of deposit) of
the undersigned with the Bank or any Affiliate of the Bank.
The undersigned and all accommodation parties, guarantors and endorsers (i)
waive presentment, demand, protest and notice of dishonor, (ii) agree that no
extension or indulgence to the undersigned or release or non-enforcement of any
security, whether with or without notice, shall affect the obligations of any
accommodation party, guarantor or endorser, and (iii) agree to reimburse the
holder of this Note for any and all costs and expenses incurred in collecting or
attempting to collect any and all principal and interest under this Note
(including, but not limited to, court costs and reasonable attorney fees,
whether in-house or outside counsel is used and whether such costs and expenses
are incurred al or informal collection actions, federal bankruptcy proceedings,
appellate proceedings, probate proceedings, or otherwise). This Note shall be
governed by and construed in accordance with the laws of the State of Michigan.
To the extent not defined in this Note, capitalized terms used herein shall
have the meanings assigned to them in the Loan Agreement.
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IN WITNESS WHEREOF, the undersigned has executed this Note as of the 22nd
day of December, 1997.
AUTOCAM CORPORATION
By
--------------------------------
Its
--------------------------------
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EXHIBIT B
AFFIRMATION OF GUARANTY
The undersigned hereby ratify and confirm their prior Guaranty in favor of
Comerica Bank (the "Bank"), dated June 27, 1997 (the "Guaranty"), whereunder
they guaranteed the indebtedness of Autocam Corporation, a Michigan corporation,
of 0000 Xxxx Xxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000 (the "Borrower") in
accordance with the terms contained in said Guaranty, and represent and warrant
to the Bank that said Guaranty remains in full force and effect, is valid and
binding in accordance with its terms, that they have no defenses to the
enforceability thereof and that said Guaranty runs in favor of the Bank. The
undersigned acknowledge and agree that the Borrower is incurring additional
indebtedness from the Bank, including indebtedness and obligations pursuant to a
Reimbursement Agreement dated as of December 1, 1997, relating to The Michigan
Strategic Fund Variable Rate Demand Limited Obligation Revenue Bonds (Autocam
Corporation Project), Series 1997, and the Q/T Term Loan in the amount of Five
Million Two Hundred Thousand Dollars ($5,200,000). The undersigned have obtained
such information as they desire as to the affairs of the Borrower and understand
that the Bank has no duty or obligation, now or in the future, to supply them
with any information whatsoever concerning the Borrower. The undersigned
furthermore understand and agree that the giving of this affirmation at this
time does not create an obligation on the Bank to obtain an affirmation in the
future or affect the terms of the Guaranty as expressed therein, and that the
failure of the Bank to obtain such an affirmation in the future shall not at any
time affect the validity of the Guaranty. The failure of the Bank to obtain an
affirmation from any other guarantor of the Borrower shall not at any time
affect the validity of the Guaranty.
Dated: December 22, 1997.
AUTOCAM PAX, INC. AUTOCAM SOUTH CAROLINA, INC.
By By
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Its Its
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AUTOCAM LASER TECHNOLOGIES, INC. AUTOCAM ACQUISITION, INC.
By By
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Its Its
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