FIFTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
("Amendment") has been executed as of the 31st day of December, 1997 (the
"Execution Date") by STARCRAFT CORPORATION, an Indiana corporation formerly
named Starcraft Automotive Corporation (the "Parent"), STARCRAFT AUTOMOTIVE
GROUP, INC., an Indiana corporation ("Starcraft"), IMPERIAL AUTOMOTIVE GROUP,
INC., an Indiana corporation ("Imperial"), and BANK ONE, INDIANA, NATIONAL
ASSOCIATION, a national banking association formerly named Bank One,
Indianapolis, National Association (the "Bank").
1. The Parent, Starcraft, Imperial and the Bank are parties to an
Amended and Restated Credit Agreement, dated November 30, 1994 with effect as of
December 1, 1994, as amended by a First Amendment to Amended and Restated Credit
Agreement, dated with an effective date as of March 1, 1995, a Second Amendment
to Amended and Restated Credit Agreement, dated with an effective date as of
January 31, 1996, a Third Amendment to Amended and Restated Credit Agreement,
dated with an effective date as of January 31, 1997, and a Fourth Amendment to
Amended and Restated Credit Agreement with an effective date as of June 29, 1997
( such Amended and Restated Credit Agreement, as so amended to date, being
referred to in this Amendment as the "Existing Agreement").
2. The Companies have requested the Bank to amend the Existing
Agreement, effective as of the Execution Date, as herein provided. The Bank has
agreed to amend the Existing Agreement as set forth in this Amendment and
subject to the terms and conditions of this Amendment.
Agreement
NOW, THEREFORE, in consideration of the Recitals and for other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
each of the parties to this Amendment, it is agreed as follows:
1. Definitions. Terms which are defined in the Existing Agreement shall
have the same meanings in this Amendment as are ascribed to them in the Existing
Agreement, as amended hereby, excepting only those terms which are expressly
defined in this Amendment, which shall have the meanings ascribed to them in
this Amendment.
2. Amendments to Existing Credit Agreement.
(a) Amendments to Definitions. Each of the following definitions which
are set forth in Section I of the Existing Agreement are amended and restated in
their respective entireties as of the Execution Date to read as follows:
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Applicable Spread. "Applicable Spread" means the percentage per annum
to be taken into account in determining any Prime-based Rate at which interest
will accrue on the Revolving Loan as provided in this Agreement, which
percentage per annum shall be 1.00%.
Bank. "Bank" means Bank One, Indiana, National Association, a national
banking association formerly named Bank One, Indianapolis, National Association.
(b) New Definitions. Section I of the Existing Agreement is amended as
of the Execution Date by adding thereto the following new definitions:
Borrowing Base. "Borrowing Base" means, at any date a determination
thereof is to be made, an amount equal to the sum of: (a) the Equipment
Collateral Value; (b) the Inventory Collateral Value; (c) Eighty Percent of the
value of the Eligible Accounts; (d) the Real Estate Collateral Value; and (e)
solely for the period from the Fifth Amendment Execution Date to February 10,
1998, the sum of $800,000.
Borrowing Base Certificate. "Borrowing Base Certificate" means a
certificate signed by the President or Senior Vice President-Finance of the
Parent certifying the amount of the Borrowing Base and the Maximum Loan
Availability as of a stated date and in such form and showing such detail as the
Bank reasonably may require from time to time.
Consolidated Tangible Net Worth. "Consolidated Tangible Net Worth"
means the shareholders' equity of the Parent and its Subsidiaries, determined on
a consolidated basis, less any allowance for goodwill, patents, trademarks,
trade secrets and any other assets which would be classified as intangible
assets under generally accepted accounting principles.
Eligible Accounts. "Eligible Accounts" means all accounts receivable of
the Parent and its Subsidiaries on a consolidated basis for which the Parent or
one of the Subsidiaries shall have furnished to the Bank information adequate
for purposes of identification at times and in form and substance as may be
reasonably requested by the Bank; provided, however, an that account receivable
shall not constitute an Eligible Account if it: (a) by its terms is not payable
within thirty (30) days after the date of the applicable invoice or it remains
unpaid ninety (90) days after the original date of the applicable invoice; (b)
is an account receivable with respect to which the account receivable debtor is
the subject of a bankruptcy or similar insolvency proceeding or has made an
assignment for the benefit of creditors or whose assets have been conveyed to a
receiver or trustee, except and to the extent the Bank otherwise agrees in
writing; (c) is an account receivable which is not invoiced (and dated as of the
date of such invoice) and sent to the account receivable debtor within the
ordinary course of the business of the Parent or its Subsidiary, as applicable,
and in accordance with customary billing practices after delivery of the
underlying goods to or performance of the underlying services for the accounts
receivable debtor; (d) is an account receivable arising with respect to goods
which have not been shipped or arising with respect to services which have not
been fully performed; (e) is an account receivable with respect to which the
account receivable debtor's obligation to pay the account receivable is
conditional upon the account receivable debtor's approval or is otherwise
subject to any
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repurchase obligation or return right, as with sales made on a xxxx-and-hold,
guaranteed sale, sale- and-return, sale on approval or consignment basis; (f) is
an account receivable in which the Bank does not have a first priority,
perfected security interest; (g) is an account receivable due from any of the
Companies or any Subsidiary or Affiliate thereof or which is due solely from an
accounts receivable debtor which is a United States federal governmental entity
or agency, except and to the extent the Bank otherwise agrees in writing; or (h)
is an account receivable evidenced by an instrument (as defined in Article 9 of
the Indiana Uniform Commercial Code) not in the possession of the Bank. At any
time more than ten percent (10%) of the aggregate amount of accounts receivable
due from an accounts receivable debtor remain unpaid more than ninety (90) days
after the date(s) of the original invoice(s) evidencing such accounts
receivable, no accounts receivable due the Parent and its Subsidiaries on a
consolidated basis from that accounts receivable debtor shall constitute an
Eligible Account unless the Bank, shall otherwise agree by written notice that
such accounts receivable constitute Eligible Accounts.
Equipment. "Equipment" shall have the meaning ascribed to such term in
Article 9 of the Indiana Uniform Commercial Code, but shall exclude fixtures and
shall exclude any property with respect to which the Parent or any of its
Subsidiaries is a lessee, whether under a true lease or a capital lease.
Equipment Collateral Value. "Equipment Collateral Value" means, at any
date a determination thereof is to be made, an amount equal to Fifty Percent
(50%) of the book value, net of depreciation, all as determined in accordance
with generally accepted accounting principles, of the Equipment owned at such
date by the Parent or any of its Subsidiaries and in which the Bank has a
first-priority, perfected security interest (collectively, the "Eligible
Equipment"); provided, however, that from and after the date on which the Bank
receives a orderly liquidation value appraisal of the Eligible Equipment
obtained pursuant to Section 2.a(v)(3) (the "Equipment Appraisal"), it shall be
an amount equal to Eighty Percent (80%) of the orderly liquidation value of the
Eligible Equipment owned on such date, as established by the Equipment
Appraisal, less the total amount of depreciation on such Eligible Equipment
which in accordance with generally accepted accounting principles has been
expensed by the Parent and its Subsidiaries, on a consolidated basis, since the
date of such liquidation value appraisal.
Fifth Amendment. "Fifth Amendment" means the Fifth Amendment to Amended
and Restated Credit Agreement, dated as of the Fifth Amendment Execution Date,
executed by the Bank, Parent, Starcraft and Imperial.
Fifth Amendment Execution Date. "Fifth Amendment Execution Date" shall
mean as of December 31, 1997.
FIRREA Appraisals. "FIRREA Appraisals" means appraisals of the fair
market value of the Real Estate by a qualified, independent appraiser selected
and engaged by the Bank and which fully conforms to the requirements of 12
U.S.C. ss. 3338 and implementing regulations applicable to national banks.
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Intercompany Debt. "Intercompany Debt" shall mean all indebtedness
owing to the Parent by each Subsidiary of the Parent, including loans or other
advances of credit, which would be eliminated as an asset of the Parent or a
liability of the obligor-Subsidiary on a consolidated balance sheet of the
Parent and its Subsidiaries prepared in accordance with generally accepted
accounting principles.
Inventory Collateral Value. "Inventory Collateral Value" means, at any
date a determination thereof is to be made, an amount equal to the sum of: (a)
twenty five percent (25%) of the book value of the raw materials inventory (all
as determined and classified in accordance with generally accepted accounting
principles) owned by the Parent or one of its Subsidiaries at such date and in
which the Bank has a first-priority, perfected security interest; and (b)
seventy-five percent (75%) of the book value of finished goods inventory (all as
determined and classified in accordance with generally accepted accounting
principles) owned by the Parent or one of its Subsidiaries at such date and in
which the Bank has a first-priority, perfected security interest. (Work in
process inventories, as determined in accordance with generally accepted
accounting principles, are not included in the calculation of the Inventory
Collateral Value).
Maximum Loan Availability. "Maximum Loan Availability" means, at any
date a determination thereof is to be made, the lesser of: (a) the Maximum
Revolver Commitment at that date; and (b) the amount of the Borrowing Base at
that date.
Maximum Revolver Commitment. "Maximum Revolver Commitment" means, at
any date a determination thereof is to be made, $15,000,000, less (a) from and
after March 31, 1998, $3,000,000; and less (b) from and after February 10, 1998
and so long as the Bank has not canceled its New Facility Commitment, an
additional $5,500,000; and less (c) from and after June 30, 1998, an additional
$2,000,000; and less (e) such reduction as may be required by Section 3 of the
Fifth Amendment.
Mortgages. "Mortgages" shall mean the real estate mortgages executed
and delivered to the Bank by Starcraft in accordance with the requirements of
the Fifth Amendment, as each of such real estate mortgages may be amended,
modified, supplemented and/or restated from time to time and at any time.
National. "National" means National Mobility Corporation, an Indiana
corporation and a wholly-owned Subsidiary of the Parent.
New Facility Commitment. "New Facility Commitment" means that
commitment, dated as of the Execution Date, issued by the Bank to the Parent and
Starcraft to amend, effective as of February 10, 1998, this Agreement to include
a separate revolving loan and standby letter of credit facility extended by the
Bank to Starcraft in the maximum principal amount of $5,500,000 (the "Starcraft
Revolver") with the maximum aggregate principal amount which may be outstanding
at anytime on the Revolving Loan and the Starcraft Revolver to be the
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lesser of the Maximum Loan Availability plus $5,500,000 and the Borrowing Base,
and with its scheduled maturity date being the Revolving Loan Maturity Date.
Parent Pledge Agreement. "Parent Pledge Agreement" means the Pledge
Agreement executed and delivered to the Bank by the Parent in accordance with
the requirements of the Fifth Amendment, as such Pledge Agreement may be
amended, modified, supplemented and/or restated from time to time and at any
time.
Real Estate. "Real Estate" shall mean the real estate, improvements and
other property identified as the "Mortgaged Property" in the Mortgages.
Real Estate Collateral Value. "Real Estate Collateral Value" means, at
any date a determination thereof is to be made: (a) prior to receipt by the Bank
of the FIRREA Appraisals, an amount equal to seventy percent (70%) of the book
value of the Real Estate which at such date is covered by and subject to a
mortgage lien granted under one of the Mortgages (the "Eligible Real Estate"),
net of depreciation, all as determined in accordance with the generally accepted
accounting principles; and (b) at any time subsequent to receipt by the Bank the
FIRREA Appraisals, an amount equal to Eighty percent (80%) of the amount equal
to the fair market value of the Eligible Real Estate, net of (i) the outstanding
amount of any indebtedness secured by a lien against the Eligible Real Estate or
any part thereof in favor of any person other than the Bank, whether or not
prior to the lien of any of the Mortgages; and (ii) any delinquent real estate
taxes, and all interest and penalties payable by reason of such delinquency,
which are a lien on any of the Eligible Real Estate.
Subsidiary Liens. "Subsidiary Liens" shall have the meaning ascribed to
such term in Section 4.k.
Title Policies, "Title Policies" shall have the meaning ascribed to
such term in Section 3B.
(c) Amendment to Section 2.a. Effective as of the Execution Date,
Section 2.a of the Existing Agreement is amended and restated in its entirety to
read as follows:
"(a) The Revolving Loan. Subject to all of the terms and conditions
of this Agreement, the Bank will make the Revolving Loan
described in this Section 2.a to the Parent on the following
terms and subject to the following conditions:
(i) The Commitment--Use of Proceeds. From the Fifth
Amendment Execution Date and until the Revolving Loan
Maturity Date, the Bank agrees to make Advances
(collectively, the "Revolving Loan") under a
revolving line of credit from time to time to the
Parent of principal amounts not exceeding in the
aggregate at any time outstanding the Maximum Loan
Availability, provided that all
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of the conditions of lending stated in Section 6 of
this Agreement as being applicable to the Revolving
Loan have been fulfilled at the time of each Advance.
Proceeds of the Revolving Loan may be used by the
Parent only to fund working capital requirements of
the Parent and its Subsidiaries. The Revolving Loan
under this Agreement is a continuation of the
Revolving Loan (as such term is defined in this
Agreement immediately prior to the Fifth Amendment)
and the Parent affirms, acknowledges and agrees that
the unpaid principal balance of the Revolving Loan as
of the Execution Date (not including the face amount
of the outstanding $3,000,000 Standby Letter of
Credit in the face amount of $3,000,000 issued to
GMODC-Letter of Credit No. STI 07408) is
$9,900,000.
(ii) Method of Borrowing. The obligation of the Parent to
pay the Revolving Loan shall be evidenced by a
promissory note executed by the Parent to the Bank in
the form attached as Exhibit A to the Third Amendment
(as the same may be amended, modified, extended,
renewed and/or restated or replaced from time to time
and at any time, being referred to in this Agreement
as the "Revolving Note"). So long as no Event of
Default or Unmatured Event of Default shall have
occurred and be continuing and until the Revolving
Loan Maturity Date, the Parent may borrow, pay and
reborrow under the Revolving Note on any Banking Day,
provided that no borrowing may cause the principal
balance of the Revolving Loan to exceed the Maximum
Loan Availability or may result in an Event of
Default or an Unmatured Event of Default. Each
Advance under the Revolving Loan shall be conditioned
upon receipt by the Bank from the Parent of an
Application for Revolving Loan Advance, a Borrowing
Base Certificate and an Officer's Certificate,
provided that the Bank may, at its discretion, make a
disbursement upon the oral request of the Parent made
by an Authorized Officer, or upon a request
transmitted to the Bank by telephone facsimile
("fax") machine, or by any other form of written
electronic communication (all such requests for
Advances being hereafter referred to as "informal
requests"). In so doing, the Bank may rely on any
informal request which shall have been received by it
in good faith from an individual reasonably believed
to be an Authorized Officer. Each informal request
shall be promptly confirmed by a duly executed
Application for Revolving Loan Advance, Borrowing
Base Certificate (if the Borrowing Base Certificate
most recently submitted reports a Borrowing Base
which is greater than would be reported on the date
of the Application) and Officer's Certificate if the
Bank so requires and
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shall in and of itself constitute the representation
of the Parent that no Event of Default or Unmatured
Event of Default has occurred and is continuing or
would result from the making of the requested Advance
and that the making of the requested Advance shall
not cause the principal balance of the Revolving Loan
to exceed the Maximum Loan Availability at the date
such Advance is made. All borrowings and reborrowings
and all payments shall be in amounts of not less than
Fifty Thousand Dollars ($50,000), except for
repayment of the entire principal balance of the
Revolving Loan. Upon receipt of an Application for
Revolving Loan Advance, or at the Bank's discretion
upon receipt of an informal request for an Advance
and upon compliance with any other conditions of
lending stated in Section 6 of this Agreement
applicable to the Revolving Loan, the Bank shall
disburse the amount of the requested Advance to the
Parent. All Advances by the Bank and payments by the
Parent with respect to the Revolving Loan shall be
recorded by the Bank on its books and records, and
the principal amount outstanding from time to time,
plus interest payable thereon, shall be determined by
reference to the books and records of the Bank. The
Bank's books and records shall be presumed prima
facie to be correct as to such matters.
(iii) Interest on the Revolving Loan. The principal amount
of the Revolving Loan outstanding from time to time
shall bear interest until maturity of the Revolving
Note (whether by acceleration or passage of time) at
a rate per annum equal to the Prime Rate plus the
Applicable Spread. After maturity, whether on the
Revolving Loan Maturity Date or on account of
acceleration upon the occurrence of an Event of
Default, and until paid in full, the unpaid principal
balance of the Revolving Loan shall bear interest at
a per annum rate equal to the Prime Rate plus the
Applicable Spread plus three percent (3%) per annum.
Accrued interest on the Revolving Loan shall be due
and payable monthly on the first Banking Day of each
month prior to maturity. After maturity, interest on
the Revolving Loan shall be due and payable as
accrued and without demand.
(iv) Extensions of Revolving Loan Maturity Date. The Bank
may, upon the request of the Parent, but at the
Bank's sole discretion, extend the Revolving Loan
Maturity Date from time to time to such date or dates
as the Bank may elect by notice in writing to the
Parent, and upon any such extension and upon
execution and delivery by the Parent of a Revolving
Note reflecting the extended Revolving Loan Maturity
Date, the date to which the Commitment
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is then extended will become the "Revolving Loan
Maturity Date" for purposes of this Agreement.
(v) Mandatory Repayments of Principal. At any time the
principal balance of the Revolving Loan exceeds the
Maximum Loan Availability, as determined on the basis
of the most recent Borrowing Base Certificate
furnished by the Parent or as determined by the Bank
upon an inspection of the financial reports or books
and records of the Parent and its Subsidiaries, and
as reduced pursuant to the terms of Section 2.1(vi)
below, the Parent shall immediately repay such excess
principal amount. Such repayment shall be due and
payable without demand. If an Event of Default or an
Unmatured Event of Default has occurred and is
continuing and the Bank shall have notified the
Parent of its election to terminate the Commitment,
then the Commitment shall automatically reduce to $0
without any further action on the part of or the
giving of further notice to the Parent.
(vi) Standby Letters of Credit. At any time prior to
February 10, 1998, that the Parent is entitled to an
Advance under the Revolving Loan, the Bank shall,
upon the application of the Parent, issue for the
account of the Parent, a standby letter of credit
(each a "Standby Letter of Credit") in an amount not
in excess of the maximum Advance that the Parent
would then be entitled to obtain under the Revolving
Loan, provided that (A) the total amount of Standby
Letters of Credit which are outstanding at any time
shall not exceed $3,000,000, (B) the issuance of any
Standby Letter of Credit with a maturity date beyond
the Revolving Loan Maturity Date shall be entirely at
the discretion of the Bank, (C) the form of the
requested Standby Letter of Credit shall be
satisfactory to the Bank in the reasonable exercise
of the Bank's discretion, and (D) the Parent shall
have executed an application and reimbursement
agreement for the Standby Letter of Credit (a
"Reimbursement Agreement") in the Bank's standard
form. Any standby letters of credit which have been
issued by the Bank for the account of the Parent
under the Prior Agreement shall automatically be
deemed to be Standby Letters of Credit for all
purposes of this Agreement. Provided that the Parent
is the account party and executes the Reimbursement
Agreement in favor of the Bank, Standby Letters of
Credit may be issued at the request of the Parent on
behalf of the Parent or any of its Subsidiaries.
While any Standby Letter of Credit is outstanding,
the Maximum Loan Availability shall be reduced by the
maximum amount available to be drawn under such
Standby Letter of Credit. The Parent shall pay the
Bank a
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commission for each Standby Letter of Credit issued
calculated at the rate of one percent (1%) per annum
of the maximum amount available to be drawn under the
Standby Letter of Credit. Such commissions shall be
calculated on the basis of a 360 day year and the
actual number of days in the period during which the
Standby Letter of Credit will be outstanding. The
Parent shall pay the Bank's standard transaction fees
with respect to any transactions occurring on account
of any Standby Letter of Credit. Commissions shall be
payable when the related Standby Letters of Credit
are issued and transaction fees shall be payable upon
completion of the transaction as to which they are
charged. All such commissions and fees may be debited
by the Bank to any deposit account of the Parent
carried with the Bank without further authority, and
in any event, shall be paid by the Parent within ten
(10) days following billing."
(d) Deletion of Certain Definitions. Effective as of the Execution
Date, the definitions in Section 1 of the Existing Agreement of each of the
following terms are deleted in their entirety: "LIBOR-based Rate and London
Interbank Offered Rate"; "Optional Rate"; "Reinvestment Rate"; and "EBITDA".
(e) Deletion of Section 2.b(i) and Amendment of Section 3.l. (1)
Effective as of the Execution Date, Section 2.b(i) of the Existing Agreement is
deleted and the following is inserted in its place: "(i) This subsection
intentionally omitted." (2) Effective as of the Effective Date, Section 3.l of
the Existing Agreement is amended and restated in its entirety to read as
follows: "l. Subsidiaries. The Parent has no Subsidiaries, other than Imperial,
Starcraft, Starcraft Southwest and National."
(f) Amendment to Section 3B. Effective as of the Execution Date,
Section 3B of the Existing Agreement is amended by adding to the end thereof the
following additional text:
"In addition, the obligations of Starcraft under its Guaranty Agreement
shall be secured by mortgage liens in favor of the Bank on the Real
Estate, which mortgage liens shall be granted and created by the
Mortgages and which mortgage liens shall be first and prior liens on
the Real Estate subject only to the prior lien of real estate taxes
which are not yet due and payable and subject only to any mortgage
granted to the Bank by Starcraft to secure the Starcraft Revolver and
any letter of credit obligations for letters of credit issued by the
Bank for Starcraft, as account party. At the Parent's expense the Bank
shall be provided , within 60 days after the Fifth Amendment Execution
Date, with a standard ALTA Loan Policy of Title Insurance (1992
Revision) issued in favor of the Bank by a national title insurance
company acceptable to the Bank which insures the Mortgages as first and
prior mortgage liens, with coverages for each of the
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Mortgages in amounts acceptable to the Bank and with no standard or
special exceptions other than for Permitted Liens (as such term is
defined in the Mortgages) and with each of the following endorsements:
Access Endorsement, Usury Endorsement, a Form 8.1 Environmental
Endorsement, an ALTA form of Comprehensive Endorsement, a Future
Advances Endorsement, and a Form 3.0 Zoning Endorsement, all of which
endorsements shall be in form and substance as may be required by the
Bank (the "Title Policies"). In addition, the Parent shall further
secure payment of the Parent's Obligations by pledging to the Bank and
granting to the Bank a security interest in all of the issued and
outstanding capital stock of the Subsidiaries of the Parent, which
pledge and security interest shall be granted pursuant to the Parent
Pledge Agreement. To further perfect the security interest of the Bank
therein, the Parent shall assign of record to the Bank all financing
statements filed by it to perfect the Subsidiary Liens.
(g) Amendment of Section 4.g. Effective as of the Execution Date,
Section 4.g of the Existing Agreement is amended and restated to read in its
entirety as follows:
"(g) Consolidated Tangible Net Worth. The Parent and its
Subsidiaries shall maintain a Consolidated Tangible Net Worth in an
amount which is not less than the amounts shown in the following table
as at and during each of the dates and periods indicated:
Minimum Consolidated
Period Tangible Net Worth
At December 31, 1997 $6,700,000
From January 1, 1998 to
June 27, 1998 $6,100,000
From June 28, 1998 to
September 27, 1998 $7,250,000
From September 28, 1998 to
December 30, 1998 and
thereafter $7,600,000
(h) Amendment of Section 4.b. Effective as of the Execution Date,
Section 4.b of the Existing Agreement is amended by adding thereto at the close
of such Section new subsections (viii) and (ix) which read as follows:
"(viii) Monthly Collateral Reports/Misc. As soon as available and in
any event within 30 days after the end of each month : (1)
detailed consolidating reports of the accounts receivable,
accounts payable and inventory of each
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of the Parent, Starcraft, Imperial and National, with agings
for the accounts receivable and accounts payable and in such
detail as the Bank may reasonably request from time to time.;
and (2) a detailed line by line report which shows variations
in performance and results with respect to both the
consolidated and consolidating financial statements for that
month from the pro forma performance and balance sheet
projections for that month and year to date provided to the
Bank."
(ix) Borrowing Base Certificate. Within ten (10) calendar
days after the close of each calendar month, a
Borrowing Base Certificate as at such close."
(i) New Section 4.k. Effective as of the Execution Date,
Section 4 of the Existing Agreement is amended by adding at the end
thereof a new subsection k which reads as follows:
"k. Security for Intercompany Debt. On or before February 10,
1998, the Parent shall obtain from each of its Subsidiaries as
security for payment of all Intercompany Debt of each such
Subsidiary which is from time to time owed to the Parent a
perfected security interest (which shall be expressly junior
and subordinate to all liens and security interests now of
hereafter held by the Bank in or with respect to any of the
assets of any of the Subsidiaries) in all accounts receivable,
inventory, equipment and general intangibles, now existing or
hereafter arising, and all proceeds thereof, of each such
Subsidiary, which security interests shall be obtained
pursuant to security agreements executed by each Subsidiary in
form and substance reasonably satisfactory to the Bank "
(j) Amendment of Section 11. Effective as of the Execution
Date, Section 11 of the Existing Agreement is amended and restated in
its entirety to read as follows:
"Section 11. Costs, Expenses and Taxes. The Companies
jointly and severally agree to pay (without duplication), all
of the following fees, costs and expenses incurred by the
Bank: (i) all reasonable costs and expenses incurred in
connection with the negotiation, preparation, execution,
closing and delivery of the Fifth Amendment and any and all
other documents furnished pursuant thereto or in connection
therewith, including the New Facility Commitment, and in the
perfection of liens or security interests which may be granted
under the Credit Documents, including without limitation the
reasonable fees and out-of-pocket expenses of Xxxxx & Xxxxxxx,
special counsel to the Bank; (ii) all reasonable costs and
expenses in connection with the negotiation, preparation,
execution and delivery of any amendments or modifications of
(or supplements to) any of the Credit Documents and any and
all other documents furnished pursuant thereto or in
connection therewith, and all investigation of and due
diligence regarding the Companies, including without
limitation the reasonable fees and out-of-pocket
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expenses of counsel retained by the Bank relative thereto, as
well as the reasonable fees and out-of-pocket expenses of
other outside experts reasonably retained by the Bank in
connection with the foregoing; (iii) all search fees,
appraisal fees and expenses, title insurance policy fees,
survey costs, filing service fees, costs and expenses and
filing and recording fees and taxes (including UCC, tax and
judgment lien searches to be obtained by the Bank) which may
be incurred from time to time by the Bank; and (iv) all costs
and expenses (including, without limitation, all reasonable
attorneys' fees and expenses incurred by the Bank) incurred at
any time an Unmatured Event of Default or Event of Default has
occurred and remains unremedied or incurred in connection with
the enforcement of this Agreement, or all or any of the other
Credit Documents or any other agreement furnished pursuant
hereto or thereto or in connection herewith or therewith. In
addition, the Companies agree jointly and severally to pay any
and all stamp, transfer, excise and other similar taxes
payable or determined to be payable in connection with the
execution and delivery of this Agreement, or any of the other
Credit Documents or the issuance of the Revolving Note or the
making of the Revolving Loan, and agree to save and hold the
Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying, or omission
to pay, such taxes. Any portion of the foregoing fees, costs
and expenses which remains unpaid following the Bank's
statement and request for payment thereof shall bear interest
from the date of such statement and request to the date of
payment at a per annum rate equal to the Prime Rate plus the
Applicable Spread."
(k) Amendment of Section 2.b(iii). Effective as of the
Execution Date, Section 2.b of the Existing Agreement is amended and
restated in its entirety to read as follows:
"(iii). Manner of Payment-Application. All payments of
principal and interest on the Loan shall be payable
at the principal office of the Bank in Indianapolis,
Indiana, in funds available for the Bank's immediate
use in that city and no payment will be considered to
have been made until received in such funds. Unless
otherwise agreed to, in writing, or otherwise
required by applicable law, payments will be applied
first to accrued, unpaid interest, then to principal,
and any remaining amount to any unpaid collection
costs, late charges and other charges, provided,
however, upon delinquency or other default, the Bank
reserves the right to apply payments among principal,
interest, late charges, collection costs and other
charges at its discretion. All prepayments shall be
applied to the Obligations in such order and manner
as the Bank may from time to time determine in its
sole discretion."
(l) Amendment of Section 6. Effective as of the Execution
Date, Section 6 of the Existing Agreement is amended by adding to the
close thereof the following subsection d:
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"d. Appraisals. The Parent and Starcraft at the Parent's
expense shall cause to be prepared delivered to the
Bank within seventy-five (75) days after the Fifth
Amendment Execution Date: (a) FIRREA Appraisals of
the Real Estate, which appraisals shall be by
qualified appraisers satisfactory to and engaged the
Bank and addressed to the Bank as the recipient
thereof; and (b) unless Parent by a writing
acceptable to the Bank elects to eliminate the
Equipment Collateral Value from the Borrowing Base,
an appraisal of the orderly liquidation value of the
Eligible Equipment, which appraisal shall be by a
qualified appraiser satisfactory to the Bank and
addressed to the Bank as the recipient thereof."
Further, effective as of the Execution Date, Section 6.c(ii) of the Existing
Agreement is amended and restated in its entirety to read as follows: "(ii) An
Officer's Certificate and a Borrowing Base Certificate."
(m) Addition of New Sections 17 and 18. Effective as of the
Execution Date the Existing Agreement is amended by adding thereto new Sections
17 and 18, reading as follows:
"Section 17. Waiver of Jury Trial. THE BANK AND THE COMPANIES
EACH IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO TRIAL
BY JURY OF ANY DISPUTE OR CLAIM, WHETHER BASED UPON CONTRACT
OR ALLEGED WRONGFUL ACT OR OMISSION, WHICH DISPUTE OR CLAIM
ARISES OUT OF, OR IS INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THE COMPANIES AND THE BANK BY THIS OR ANY
OTHER CREDIT DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT
TO THE BANK TO ENTER INTO THIS AGREEMENT.
Section 18. Arbitration. The Bank and each of the Companies
agree that upon the written demand of any party, whether made
before or after the institution of any legal proceedings, but
prior to the rendering of any judgment in that proceeding, all
disputes, claims and controversies between them, whether
individual, joint, or class in nature, arising from this
Agreement or otherwise, including without limitation contract
and tort disputes, shall be arbitrated pursuant to the
Commercial Rules of the American Arbitration Association, upon
request of either party. No act to take or dispose of any
collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This
arbitration provision shall not limit the right of any party
during any dispute to seek, use, and employ ancillary or
preliminary remedies, judicial or otherwise , for the purposes
of realizing upon, preserving, protecting, foreclosing or
proceeding under forcible entry and detainer for possession of
any real or personal property, and any such action shall not
be deemed an election of remedies. This includes, without
limitation; obtaining injunctive relief or a temporary
restraining order;
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invoking a power of sale under any deed of trust or mortgage;
obtaining a writ of attachment or imposition of a receiver; or
exercising any rights relating to personal property, including
taking or disposing of such property with or without judicial
process pursuant to Article 9 of the Uniform Commercial Code.
Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of any act, or exercise of any
right, concerning any collateral, including any claim to
rescind, reform, or otherwise modify any agreement relating
the collateral, shall also be arbitrated, provided, however,
that no arbitrator shall have the right or the power to enjoin
or restrain any act of any party. Judgment upon any award
rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Agreement shall preclude any
party from seeking equitable relief from a court of competent
jurisdiction. The statute of limitations, estoppel, waiver,
laches and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable
in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of any
action for these purposes. The Federal Arbitration Act shall
apply to the construction, interpretation, and enforcement of
this arbitration provision."
(n) Amendment of Section 7. Effective as of the Execution
Date, Section 7 of the Existing Agreement is amended by adding to the
end thereof a new subsection h reading as follows:
"h. Noncompliance with Covenants in Fifth Amendment. Failure by
the Parent to comply with or perform any covenant stated in
Section 3 of the Fifth Amendment or any warranty or
representation made by any of the Companies in the Fifth
Amendment proving to have been false or misleading in any
material respect when made."
3. Special Covenant Regarding National. In order to obtain access to
financing and working capital required to support projected, substantial growth
in National's business and working capital requirements and to qualify the
assets associated with that business for inclusion in the Borrowing Base, the
Parent has confirmed and acknowledged to the Bank that it intends to merge
National and Starcraft, with Starcraft being the surviving corporation, by an
Agreement and Plan of Merger which will be closed and consummated by not later
than February 10, 1998. In the event for any reason this merger is not completed
by that date, then the Maximum Revolver Commitment (as it otherwise exists and
is calculated from time to time under the Agreement) automatically shall be
reduced on that date, and continue to be reduced thereafter until such merger
may be completed, by $750,000.
4. Amendments to Other Credit Documents. Effective as of the Execution
Date, each of the Parent Credit Documents is amended as follows: Each reference
in any of such Credit Documents to the term "Credit Agreement" shall be to the
Existing Agreement, as amended by this Amendment, and as the same may have been
or hereafter may be amended, modified, supplemented and/or restated from time to
time and at any time.
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5. Representations and Warranties. The Companies each represent and
warrant to the Bank that:
(a)(i) The execution, delivery and performance of this Amendment and
all agreements and documents delivered pursuant hereto by it has been duly
authorized by all necessary action (whether corporate, partnership or otherwise)
and does not and will not violate any provision of any law, rule, regulation,
order, judgment, injunction, or aware presently in effect applying to it, or of
its articles of incorporation, by-laws, articles of organization or operating
agreement (as applicable) or result in a breach of or constitute a default under
any material agreement, lease or instrument to which it is a party or by which
it or its properties may be bound or affected; (ii) no authorization, consent,
approval, license, exemption or filing of a registration with any court or
governmental department, agency or instrumentality is or will be necessary to
the valid execution, delivery or performance by it of this Amendment and all
agreements and documents delivered pursuant hereto; and (iii) this Amendment and
all agreements and documents delivered pursuant hereto by it are its legal,
valid and binding obligations and enforceable against it in accordance with the
terms thereof.
(b) After giving effect to the amendments contained in this Amendment,
the representations and warranties of it contained in Section 3 of the Existing
Agreement are true and correct on and as of the Execution Date with the same
force and effect as if made on and as of the Execution Date, except that the
representation in Section 3.d of the Existing Agreement shall be deemed to refer
to the financial statements of the Parent and its Subsidiaries most recently
delivered to the Bank prior to the Execution Date.
(c) No Event of Default or Unmatured Event of Default has occurred and
is continuing or will exist under the Agreement as of the Execution Date.
6. Conditions. The obligation of the Bank to execute and to perform
this Amendment shall be subject to full satisfaction of the following conditions
precedent:
(a) Copies, certified as of the Execution Date, of such corporate
documents of the Parent and its Subsidiaries as the Bank may request, including
articles of incorporation, by-laws, articles of organization, operating
agreement (or certifying as to the continued accuracy of the articles of
incorporation and by-laws previously delivered to the Bank), and incumbency
certificates, and such documents evidencing necessary corporate and partnership
action by the Companies with respect to this Amendment and all other agreements
or documents delivered pursuant hereto as the Bank may request.
(b) This Amendment shall have been duly executed by each of the
Companies.
(c) The Bank shall have received the following instruments and
documents, duly executed and delivered to the Bank:
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(i) a Pledge Agreement, in form and substance the same as
attached hereto as Exhibit A, and all documents
required thereby, all duly executed by the Parent;
(ii) Real estate mortgages, duly executed and acknowledged
by Starcraft, in form and substance the same as
attached to this Amendment as Exhibit " B-1" and
"B-2" (the "Mortgages").
(iii) such UCC-1 financing statements and other documents
as the Bank may reasonably request to fully perfect
the security interests granted under the Security
Agreements.
(d) The Company shall have paid all costs and expenses incurred by the
Bank in connection with the negotiation, preparation and closing of this
Amendment and the other documents and agreements delivered pursuant hereto or in
connection herewith, including the reasonable fees and out-of-pocket expenses of
Messrs. Xxxxx & Xxxxxxx, special counsel to the Bank, which shall not exceed
$7,000.00.
(e) The Bank shall have received such additional agreements, documents
and certifications, fully executed by the Company as may be reasonably requested
by the Bank, including amendments to collateral documents.
7. Guarantor Consent and Affirmation. Each of the Companies in their
respective capacities as guarantors under the Guaranty Agreements, by their
execution of this Amendment, expressly consent to the execution, delivery and
performance by the other Companies and the Bank of this Amendment and each of
the other documents, instruments and agreements to be executed pursuant hereto,
and agrees that neither the provisions of this Amendment nor any action taken or
not taken in accordance with the terms of this Amendment shall constitute a
termination, extinguishment, release or discharge of any of their respective
guaranty obligations or provide a defense, set off, or counter claim to any of
them with respect to any of their respective obligations under any of the
Guaranty Agreements or other Credit Documents. Each of the Companies affirms to
the Bank that its Guaranty Agreements remain in full force and effect, are valid
and binding obligations of it, and continue to secure the Obligations the
payment of which is guaranteed by it thereunder.
8. Binding on Successors And Assigns. All of the terms and provisions
of this Amendment shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives.
9. Governing Law/Entire Agreement/Survival. This Amendment is a
contract made under, and shall be governed by an construed in accordance with,
the laws of the State of Indiana applicable to contracts made and to be
performed entirely with such state and without giving effect to the choice of
law principals of such state. This Amendment constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
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matter hereof, and supersedes all prior agreements and understandings,
commitments, inducements or conditions, whether expressed or implied, oral or
written. All covenants, agreements, undertakings, representations and warranties
made in this Amendment shall survive the execution and delivery of this
Amendment, and shall not be affected by any investigation made by any party.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the Execution Date.
BANK ONE, INDIANA,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Xxxxxxx X. Xxxxx,
Senior Vice President
(the "Bank")
STARCRAFT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxxxx, President
---------------------------------------
(the "Parent")
STARCRAFT AUTOMOTIVE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxxxx, President
---------------------------------------
("Starcraft")
IMPERIAL AUTOMOTIVE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxxxx, President
---------------------------------------
("Imperial")
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