SECOND AMENDMENT AND WAIVER DATED AS OF JULY 31, 1999
TO CREDIT AGREEMENT DATED AS OF FEBRUARY 1, 1999
This Second Amendment and Waiver (this "Amendment"), dated as
of July 31, 1999, is made by and among ALLIED PRODUCTS CORPORATION, a Delaware
corporation (the "Company"), the financial institutions party hereto (the
"Banks"), and Bank of America, N.A. (formerly known as Bank of America National
Trust and Savings Association), as agent for the Banks (in such capacity, the
"Agent"). Terms defined in the Credit Agreement shall have the same respective
meanings when used herein and the provisions of Section 13 of the Credit
Agreement shall apply, mutatis mutandis, to this Amendment.
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain Second
Amended and Restated Credit Agreement, dated as of February 1, 1999 (as amended
or modified and in effect on the date hereof, the "Credit Agreement");
WHEREAS, the Company has requested that the Banks and the
Agent agree to amend or modify the Credit Agreement as described herein; and
WHEREAS, the Banks and the Agent are willing to amend and
modify the Credit Agreement on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration (the
receipt, adequacy and sufficiency of which is hereby acknowledged), the parties
hereto, intending legally to be bound, hereby agree as follows:
I. AMENDMENT
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1. Amendments. Subject to the satisfaction of the
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conditions precedent set forth in Section 3.2 below, the Credit Agreement is
hereby amended as follows:
Section 1.1.3(a) of the Credit Agreement is amended to read in
its entirety as follows:
SECTION 1.1.3 Commitment Limits. Notwithstanding any
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other provision of this Agreement (a) the aggregate principal
amount of the Revolving Loans which all Banks are committed to
lend to the Company together with the Stated Amount of all
Letters of Credit then outstanding shall not at any one time
exceed the lesser of (i) the Borrowing Base or (ii) the
following amounts (less in each case any reductions made
pursuant to Section 6.1 or Section 6.3) as at or during the
following dates or periods:
DATE OR PERIOD AMOUNT
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February 1, 1999 through March 31, 1999 $140,000,000
April 1, 1999 through November 29, 1999 $135,000,000
November 30, 0000 Xxxx
Xxxxxxx 6.3(b) of the Credit Agreement is amended by adding at
the end of such Section the following:
Without limitation of the foregoing, the Company
agrees that concurrent with any sale by the Company (directly
or indirectly) of any interest in any of the assets comprising
the Xxxx Hog and/or Great Bend Manufacturing Divisions of the
Company (whether pursuant to the Xxxx Bog Letter of Intent or
otherwise) the Company shall apply the Net Sale Proceeds
thereof to the mandatory prepayment of all Liabilities
whereupon the Commitments shall automatically be reduced by
the amount of such prepayment (it being understood, however,
that no such sale may be made without the written consent of
the Banks).
Section 10.3 of the Credit Agreement is amended to read in its
entirety as follows:
SECTION 10.3 Insurance. Maintain, and cause each
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Subsidiary to maintain, such insurance as may be required by
law and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by
companies similarly situated. Without limitation of the
foregoing:
(a) All policies of insurance (i) shall name the
Agent as loss payee, and as additional insured, as its
interests may appear, (ii) shall be maintained without cost to
the Agent or any Bank, (iii) shall provide that the Agent
shall receive at least 30 days' prior written notice of any
reduction, modification or cancellation (including without
limitation cancellation due to non-payment of premium), and
(iv) shall be reasonably satisfactory in form and substance to
the Agent.
(b) Upon request of the Agent, the Company shall
furnish to the Agent, at reasonable intervals (but not more
than once per calendar year) a certificate of its Chief
Accounting Officer (and, if requested by any Bank, any
insurance broker of the Company) setting forth the nature and
extent of all insurance maintained by the Company in
accordance with this Agreement or any Collateral Documents
(and which, in the case of a certificate of a broker, were
placed through such broker).
(c) If any of the Collateral shall be damaged or
destroyed, in whole or in part, by fire or other casualty, the
Company shall give, or cause to be given, notice thereof to
the Agent, promptly upon the Company's actual knowledge
thereof. All insurance proceeds shall be paid to the Agent for
application to the Liabilities, provided, however, that upon
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request of the Company, so long as no Event of Default exists,
the Agent shall permit such proceeds to be applied to the
repair and/or restoration of the Collateral. The Company shall
periodically provide the Agent with such assurances as the
Agent shall reasonably request to evidence compliance by the
Company with the foregoing.
Section 10.5.2 of the Credit Agreement is amended to read in
its entirety as follows:
SECTION 10.5.2 Minimum Consolidated Operating Cash
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Flow. As of the end of any calendar month, not permit its
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Consolidated Operating Cash Flow (measured monthly on a
cumulative basis for the related calendar year), to be less
than the amount applicable to such calendar month as follows:
Calendar Month Ending Amount
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August 31, 1999 $ 518,000
September 30, 1999 $ 3,284,000
October 31, 1999 $ 4,649,000
Section 10 of the Credit Agreement is further amended by
adding Section 10.23 as follows:
SECTION 10.23. Transfer of Assets Pursuant to the
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Xxxx Hog Letter of Intent. Without the written consent of the
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Banks, not transfer or contribute any assets to any other
person or entity pursuant to the Xxxx Hog Letter of Intent or
the Xxxx Hog Definitive Agreement.
Section 12 of the Credit Agreement is amended by adding
thereto Sections 12.1.10 and 12.1.11 as follows:
SECTION 12.1.10 Xxxx Hog Letter of Intent. (i) The
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Xxxx Hog Letter of Intent or the Xxxx Hog Definitive Agreement
shall cease to provide for the Company to receive on or before
November 30, 1999, in cash, the Xxxx Hog Purchase Price or
(ii) the Xxxx Hog Letter of Intent or the Xxxx Hog Definitive
Agreement shall be terminated or shall otherwise cease to be
in full force and effect (except to the extent that the Xxxx
Hog Definitive Agreement replaces the Xxxx Hog Letter of
Intent), or (iii) any event shall occur which materially
adversely affects the receipt by the Company in cash of the
Xxxx Hog Purchase Price on or before November 30, 1999.
SECTION 12.1.11 Security. (i) any representation or
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warranty made by the Company in any Collateral Document is
breached or is false or misleading in any material respect; or
(ii) the Company shall fail to comply with or to perform any
provision of any Collateral Document and such failure shall
continue for 15 days after notice thereof to the Company from
the Agent, any Bank, or the holder of any Revolving Note; or
(iii) any security interest purported to be created by any
Collateral Document shall cease to be, or shall be asserted by
the Company not to be, a valid, perfected, first priority
(except as otherwise expressly provided in this Agreement or
such Collateral Document) security interest in any material
portion of the assets or properties covered thereby.
Section 13 of the Credit Agreement is amended so that the
definition of Borrowing Base Overadvance shall read in its entirety as
follows:
Borrowing Base Overadvance shall for each month set
forth below mean an amount as follows:
Month Overadvance Amount
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January 1999 $40,000,000
February 1999 $40,000,000
March 1999 $40,000,000
April 1999 $40,000,000
May 1999 $46,700,000
June 1999 $47,600,000
July 1999 $52,114,000
August 1999 $54,734,000
September 1999 $50,494,000
October 1999 $60,754,000
November 1999 $60,754,000
Section 13 of the Credit Agreement (the definition of
Collateral Documents) is amended by adding thereto the following:
Without limitation of the foregoing, the Security Agreement
dated as of May 12, 1999 of the Company in favor of the Agent
and the Banks shall constitute a Collateral Document and a
Loan Document hereunder.
Section 13 of the Credit Agreement is amended so that the
definition of "Margin" shall read in its entirety as follows:
Margin shall mean (i) in the case of Eurodollar Loans
(and Letters of Credit) a rate equal to 3.5% per annum through
July 31, 1999 and 4% per annum thereafter and (ii) in the case
of Floating Rate Loans, a rate equal to 2% per annum through
July 31, 1999 and 2.5% per annum thereafter.
Section 13 of the Credit Agreement is further amended by
adding thereto a definition of "Xxxx Hog Definitive Agreement" and
"Xxxx Hog Letter of Intent" as follows:
Xxxx Hog Definitive Agreement means any definitive
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agreement which is executed pursuant to the Xxxx Hog Letter of
Intent.
Xxxx Hog Letter of Intent shall mean the letter
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agreement dated July 15, 1999 among the Company, CC
Industries, Inc. and Xxxxx Crown and Company.
Xxxx Hog Purchase Price shall mean (i) the purchase
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price of $120,710,700 for approximately an 80.1% interest in
the assets comprising the Xxxx Hog and Great Bend Divisions of
the Company pursuant to the Bank Hog Letter of Intent (the
"Original Purchase Price") or (ii) such other purchase price
as may be agreed to by the Company pursuant to the Xxxx Hog
Letter of Intent or the Xxxx Hog Definitive Agreement,
provided that such other purchase price shall not be
materially less than the Original Purchase Price.
Section 13 of the Credit Agreement is amended so that the
definition of "Revolving Termination Date" shall read in its entirety
as follows:
Revolving Termination Date shall mean November 30,
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1999.
Section 13 of the Credit Agreement is amended so that the
definition of Subsidiary shall read in its entirety as follows.
"Subsidiary" shall mean, with respect to any person
(herein referred to as the "parent") any corporation,
partnership, association or other business entity (a) of which
securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests
are, at the time any determination is being made, owned,
controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled by the parent or
one or more subsidiaries of the parent or by the parent and
one or more subsidiaries of the parent. For purposes hereof,
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the
management or policies of a person, whether through the
ownership of voting securities, by contract or otherwise, and
the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
II. WAIVER
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2.1 Waiver. The Banks hereby waive noncompliance by the
Company as of June 30, 1999 with the minimum consolidated operating
consolidating cash flow provision of Section 10.5.2.
2.2 Limitation on Waiver. Except as specifically set forth in
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Section 2.1, the foregoing waiver is specific in time and in intent and does not
constitute, nor shall it be construed as, a waiver of any other right, power or
privilege under the Credit Agreement, or under any agreement, contract,
indenture, document or other instrument mentioned in the Credit Agreement; nor
does the foregoing waiver preclude other or further exercise hereof or the
exercise of any other right, power or privilege, nor shall the waiver of any
right, power, privilege or default hereunder, or under any agreement, contract,
indenture, document, or instrument mentioned in the Credit Agreement, constitute
a waiver of any other default of the same or of any other term or provision.
III. GENERAL
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3.1 Representations. The Company hereby represents and
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warrants to the Banks and the Agent that:
(a) The execution, delivery and performance of this Amendment
are within the Company's corporate authority, have been duly authorized
by all necessary corporate action, have received all necessary consents
and approvals (if any shall be required), and do not and will not
contravene or conflict with any provision of law or of the Certificate
of Incorporation or By-laws of the Company or its Subsidiaries, or of
any other agreement binding upon the Company or its Subsidiaries or
their respective property.
(b) This Amendment constitutes the legal, valid, and binding
obligations of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
(c) Except for any Event of Default or Unmatured Event of
Default which will be cured by this Amendment becoming effective, no
Event of Default or Unmatured Event of Default has occurred and is
continuing or will result from this Amendment.
(d) The Company has furnished to the Banks a true and correct
copy of the Xxxx Hog Letter of Intent.
(e) Pursuant to Section 5(b) of the Security Agreement, the
Company is using its bests efforts to obtain from each person from whom
the Company leases any warehouse space or premises in or on which any
Collateral is located, a consent in form and substance satisfactory to
the Agent.
(f) The Company has no fixtures in any county except Xxxx
County, Illinois; Xxxxxx County, Kansas; Lake County, Indiana; and
Dallas County, Alabama.
3.2 Conditions Precedent to Effectiveness. This Amendment
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shall become effective as of July 31, 1999 (the "Effective Date"), subject,
however, to the receipt by the Agent of all fees and expenses previously billed
to the Company in respect of the Credit Agreement as amended hereby, together
with each of the following, each appropriately completed and duly executed as
required and otherwise in form and substance reasonably satisfactory to the
Agent:
(a) counterparts of this Amendment, executed by the Company
and the Banks.
(b) Certified copies of resolutions of the Board of Directors
of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Amendment;
(c) A certificate of the President or a Vice-President of the
Company to the effect that (i) all necessary consents or approvals with
respect to this Amendment have been obtained; and (ii) attached thereto
is a true and correct copy of the Xxxx Hog Letter of Intent;
(d) A certificate of the Secretary or Assistant Secretary of
the Company, certifying the name(s) of the officer(s) of the Company
authorized to sign this Amendment and the documents related hereto on
behalf of the Company;
(e) An opinion of Xxxx Xxxxxxxxx covering those matters set
forth in Section 3.1(a) and 3.1(b) and such other legal matters as the
Agent or its counsel may request; and
(f) Such other instruments, agreements and documents as the
Agent may reasonably request, in each case duly executed as required
and otherwise in form and substance satisfactory to the Banks.
3.3 Documents Remain in Effect. Except as amended or modified
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by this Amendment, the Credit Agreement remains in full force and effect and the
Company confirms that its representations, warranties, agreements and covenants
contained in, and obligations and liabilities under, the Credit Agreement and
each of the other Loan Documents are true and correct in all material respects
as if made on the date hereof, except where such representation, warranty,
agreement or covenant speaks as of a specified date. References to the Credit
Agreement in any other document shall be deemed to include a reference to the
Credit Agreement as amended or modified hereby, whether or not reference is made
to this Amendment.
3.4 Expenses. The Company covenants to pay to or reimburse the
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Agent, upon demand, for all costs and expenses (including legal expenses) in
connection with the development, preparation, negotiation, execution and
delivery of this Amendment and the Loan Documents.
3.5 Miscellaneous.
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(a) Section headings used in this Amendment are for
convenience of reference only, and shall not affect the construction of this
Amendment.
(b) This Amendment shall be a contract made under and governed
by the internal laws of the State of Illinois, without giving effect to
principles of conflicts of laws.
(c) All obligations of the Company and rights of the Banks and
the Agent, that are expressed herein, shall be in addition to and not in
limitation of those provided by applicable law.
(d) Whenever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law;
but if any provision of this Amendment shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Amendment.
(e) The Company acknowledges and agrees that the execution and
delivery by the Agent and the Banks of this Amendment shall not be deemed (i) to
create a course of dealing or otherwise obligate the Agent or the Banks to
forbear or execute similar amendments under the same or similar circumstances in
the future, or (ii) to amend, relinquish or impair any right of the Agent or the
Banks to receive any indemnity or similar payment from any Person or entity as a
result of any matter arising from or relating to this Amendment.
(f) This Amendment shall be binding upon and inure to the
benefit of the parties and thereto and their respective successors and assigns.
No third party beneficiaries are intended in connection with this Amendment.
(g) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Agent of a facsimile transmitted document purportedly
bearing the signature of a Bank or the Company shall bind such Bank or the
Company, respectively, with the same force and effect as the delivery of a hard
copy original. Any failure by the Agent to receive the hard copy executed
original of such document shall not diminish the binding effect of receipt of
the facsimile transmitted executed original of such document of the party whose
hard copy page was not received by the Agent.
(h) This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supercedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 15.1 of the Credit
Agreement.
* * *
IN WITNESS WHEREOF, the parties hereto have caused the
execution and delivery hereof by their respective representatives thereunto duly
authorized as of the date first herein appearing.
ALLIED PRODUCTS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Chairman, CEO, President
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BANK OF AMERICA NATIONAL, N.A.(formerly
known as Bank of America National Trust
and Savings Association), as Agent
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
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Title: Vice President
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BANK OF AMERICA NATIONAL, N.A.(formerly
known as Bank of America National Trust
and Savings Association), in its
individual corporate capacity
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
---------------------------------
Title:
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LASALLE NATIONAL BANK
By: /s/ Xxxx Xxx Xxxxxxxx
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Name: Xxxx Xxx Xxxxxxxx
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Title: Vice President
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