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Exhibit 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered
into as of January 31, 1997, by and among SHILOH INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), the financial institutions named below (the
"Banks"), and KEYBANK NATIONAL ASSOCIATION (SUCCESSOR BY MERGER TO SOCIETY
NATIONAL BANK), a national banking association, as agent for the Banks (the
"Agent").
RECITALS:
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A. The Borrower, the Banks and the Agent are the parties to that
certain Credit Agreement dated as of April 16, 1996 (together with all Exhibits
and Schedules thereto, the "Credit Agreement"), pursuant to which the Banks have
agreed, subject to certain conditions, to advance to the Borrower certain Loans
(as this and other capitalized terms not otherwise defined herein are defined in
the Credit Agreement).
B. The Borrower, the Banks and the Agent desire to modify certain
provisions of the Credit Agreement as hereinafter provided.
AGREEMENTS:
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NOW, THEREFORE, in consideration of the foregoing Recitals and
other good and valuable consideration, the Borrower and the Banks hereby agree
as follows:
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1. AMENDMENT OF CREDIT AGREEMENT.
a. Annex A to the Credit Agreement is hereby deleted in its
entirety and replaced with Exhibit A hereto.
b. The definition of the term "Commitment Period" in Section 1.1
of the Credit Agreement is hereby amended by the deletion thereof in its
entirety and the substitution therefor of:
"Commitment Period" shall mean the period from the date
hereof to February 28, 2001, as such date may be extended
pursuant to Section 2.6 hereof."
c. The definition of the term "Total Commitment Amount" in Section
1.1 of the Credit Agreement is hereby amended by the deletion thereof in its
entirety and the substitution therefor of:
"Total Commitment Amount" shall mean the amount of Seventy Million
Dollars ($70,000,000).
d. Section 2.7 of the Credit Agreement is hereby amended by the
deletion in its entirety of the proviso from the first sentence thereof and the
substitution therefor of:
"provided, however, that the aggregate face amount of all Letters
of Credit outstanding at any time shall not exceed the amount of
Fifteen Million Dollars ($15,000,000) MINUS the face amount of
that certain Irrevocable Letter of Credit No. S95/93202, dated
March 8, 1995, issued by Society National Bank (predecessor to
KeyBank National Association), in favor of Valley City Steel
Company and any subsequent letters of credit issued to such
beneficiary in replacement thereof or substitution therefor (the
"Valley City LC") The Valley City LC shall be deemed to be a
Letter of Credit for all purposes of this credit agreement.
Notwithstanding anything to the contrary contained herein, in no
event shall the maturity date of any Letter of Credit be later
than the date which is fifteen (15) days prior to the last day of
the Commitment Period."
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e. Section 5.10 of the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of:
"Borrower shall maintain at all times a ratio of (a)(i)
Consolidated Net Earnings (including the gain on any sale of
capitalized assets to which the Majority Banks have given their
prior written consent) plus (ii) all taxes on Consolidated Net
Earnings or based on Consolidated Net Earnings, including deferred
taxes, plus (iii) all interest on all Borrowed Debtof the
Companies (including Subordinated indebtedness) accrued during the
time period in question to (b) all interest on all Borrowed Debt
of the Companies (including Subordinated indebtedness) accrued
during the time period in question, of no less than 3.0 to 1.0,
based upon the Borrower's financial statements for the most recent
fiscal quarter and the previous three fiscal quarters."
f. Section 5.11 of the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of:
"The Borrower will not suffer or permit its Consolidated Tangible
Net Worth at any time to fall below the current minimum amount
required, which current minimum amount required shall be One
Hundred and Ten Million Dollars ($110,000,000) until November 1,
1997, when it shall be increased by an amount equal to fifty
percent (50%) of its positive Consolidated Net Earnings during its
1997 fiscal year, and shall be increased on each October 31
thereafter by an amount equal to fifty percent (50%) of its
positive Consolidated Net Earnings during such fiscal year. Such
current minimum amount required shall be further increased by an
amount equal to one hundred percent (100%) of the net proceeds to
the Borrower from any equity offering by the undersigned, as of
the date any such proceeds are received by the Borrower."
g. Section 5.15 of the Credit Agreement is hereby amended by the
deletion of the word "or", and the substitution therefor of a comma, immediately
prior to clause (ix) thereof and the addition of the following at the conclusion
thereof:
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", or (x) any lien securing obligations of one or more of the
Companies under any capitalized lease if and to the extent that
the aggregate principal amount outstanding under all such
capitalized leases does not exceed Twenty Million Dollars
($20,000,000) at any time"
h. Section 5.16 of the Credit Agreement is hereby amended by the
deletion of the word "or", and the substitution therefor of a comma, immediately
prior to clause (iv) thereof and the addition of the following at the conclusion
thereof:
", or (v) any indebtedness in respect of capitalized leases if and
to the extent that the aggregate principal amount outstanding
under all such capitalized leases does not exceed Twenty Million
Dollars ($20,000,000) at any time"
i. Exhibit A to the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of the form of
promissory note attached as Exhibit B hereto.
j. Schedule 5.16 to the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitiution therefor of the Schedule
attached as Exhibit C hereto.
2. EFFECTIVE DATE; CONDITIONS PRECEDENT. The modifications to the
Credit Agreement set forth in Section 1, above, shall be effective on January
31, 1997, or such later date as is mutually acceptable to the Agent, the Banks
and the Borrower (the "Effective Date"), provided that such effectiveness shall
be subject to the satisfaction by the Borrower of each of the following
conditions precedent:
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a. On the Effective Date, (i) after giving effect to the
modifications effected hereby, there shall exist no Possible Default or Event of
Default, and (ii) the representations and warranties of the Borrower under the
Credit Agreement shall be true and correct in all material respects.
b. The Borrower shall have executed and delivered to each Bank an
amended and restated Revolving Credit Note in the form of Exhibit B hereto.
c. Each Subsidiary of the Borrower shall have executed and
delivered to the Agent a Confirmation of Guaranty in the form
of Exhibit D hereto.
d. The Borrower shall have delivered to the Agent a favorable
opinion of Borrower's counsel in form and substance reasonably satisfactory
to the Agent.
e. The Borrower shall have delivered to the Agent certified copies
of the resolutions of the respective Boards of Directors of the Borrower and
each Subsidiary evidencing approval of this Amendment and the execution and
delivery of the Notes or Confirmations, as the case may be, as provided for
herein.
3. NO OTHER MODIFICATIONS. Except as expressly modified herein,
all of the provisions of the Credit Agreement and the other Related Writings
remain unmodified and in full force and
effect.
4. BINDING EFFECT. This First Amendment shall bind and inure to
the benefit of the Borrower, the Banks, the Agent and their respective
successors and assigns.
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IN WITNESS WHEREOF, the Borrower and the Banks have hereunto set
their hands on and as of the date first above written.
KEYBANK NATIONAL ASSOCIATION SHILOH INDUSTRIES, INC.
(successor by merger to
Society National Bank),
individually and as Agent
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Title: Vice President Title: President
NBD BANK NATIONAL CITY BANK
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Title: Vice President Title: Vice President and Senior
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Lending Officer
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EXHIBIT A
ANNEX A
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Banking Institutions Party to the Credit Agreement dated as of April 16, 1996,
as amended as of January 31, 1997, with Shiloh Industries, Inc.
Commitments and Percentages
NAME OF BANK COMMITMENT RATABLE PORTION
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(in dollars) (percentage)
KeyBank National Association $35,000,000 50.00%
NBD Bank $17,500,000 25.00%
National City Bank $17,500,000 25.00%
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Total Commitment Amount $70,000,000 100.00%
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EXHIBIT B
REVOLVING CREDIT NOTE
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$_____________
Cleveland, Ohio
April 16, 1996
Amended and Restated
As of January __, 1997
FOR VALUE RECEIVED, the undersigned SHILOH INDUSTRIES, INC. (the "Borrower")
promises to pay on the last day of the Commitment Period, to the order of
_________________________ (the "Bank"), at __________________, the principal sum
of _________ MILLION DOLLARS ($__,000,000) or the aggregate unpaid principal
amount of all loans evidenced by this Note made by the Bank to the Borrower
pursuant to paragraph (a) of Section 2.1 of the Credit Agreement (as hereinafter
defined), whichever is less, in lawful money of the United States of America.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in that certain Credit Agreement, dated as of
the 16th day of April, 1996, as amended as of the date hereof, (as the same may
from time to time be amended, supplemented, restated or otherwise modified, the
"Credit Agreement")among the Borrower, the Bank and certain other parties
thereto, and KeyBank National Association (successor by merger to Society
National Bank), as Agent for the Bank and such other banks.
The Borrower promises to pay interest on the unpaid principal amount of each
Loan evidenced hereby from the date of such Loan until principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement. The Borrower promises to pay on demand interest on any
overdue principal and, to the extent permitted by law, overdue interest from
their due dates at the rate or rates set forth in the Credit Agreement.
The portions of the principal sum hereof from time to time representing Prime
Rate Loans and LIBOR Loans, and payments of principal of any thereof, will be
shown on a ledger or other record of the Bank or by such other method as such
Bank may generally employ; PROVIDED, however, that failure to make any such
entry or any error in such entries shall in no way detract from the Borrower's
obligations under this Note.
This Note is one of the Notes referred to in the Credit Agreement. Reference is
made to the Credit Agreement for a description of the right of the undersigned
to anticipate payments hereof, the right of the holder hereof to declare this
Note due prior to its stated maturity, and other terms and conditions upon which
this Note is issued.
Page 1 of 2 Pages
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This Note evidences the indebtedness of the undersigned to the holder hereof
previously evidenced by, and amends and restates in its entirety, the Revolving
Credit Note dated April 16, 1996 in the face amount of $__,000,000 (the "Prior
Note"), provided that this Note shall not be construed to evidence a payment and
readvance of such indebtedness, it being the intention of the undersigned and,
by his acceptance hereof, the holder hereof that this Note evidences the same
indebtedness. Without limiting the generality of the foregoing sentence, in
addition to the up to $__,000,000 of principal evidenced by the Prior Note, this
Note also evidences any and all accrued and unpaid interest under the Prior Note
not heretofore paid, all of which interest accrued and unpaid under the Prior
Note shall be due and payable together with the first installment of interest
due under this Note.
The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver in that or
any subsequent instance.
The undersigned authorizes any attorney-at-law at any time or times after the
maturity hereof to appear in any local, state or federal court of record in the
United States of America to waive the issuance and service of process, to admit
the maturity of this Note and the nonpayment thereof when due, to confess
judgment against the undersigned in favor of the holder of this Note for the
amount then appearing due, together with interest and cost of suit, and
thereupon to release all errors and to waive all rights of appeal and stay of
execution. The foregoing warrant of attorney shall survive any judgment, and if
any judgment be vacated for any reason, the holder hereof nevertheless may
thereafter use the foregoing warrant of attorney to obtain an additional
judgment or judgments against the undersigned.
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"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURN GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR
ANY OTHER CAUSE."
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SHILOH INDUSTRIES, INC.
By:
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Its:
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EXHIBIT C
SCHEDULE 5.16
(to come from Shiloh -- will
increase the Richland County Bank line
of credit to $4 million)
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EXHIBIT D
January __, 1997
KeyBank National Association, individually
and as Agent
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Re: Shiloh Industries, Inc. ("the Borrower") -
Credit Agreement dated April 16, 1996, as
amended January __, 1997 ("the Credit Agreement")
Ladies and Gentlemen:
The undersigned is the Guarantor under a Guaranty of Payment of Debt in
favor of the Banks (as this and all other terms are defined in the Credit
Agreement) dated April 16, 1996 (the "Guaranty").
The undersigned confirms that it is aware that the Agent, the Banks and
the Borrower have entered into a First Amendment to the Credit Agreement dated
of even date herewith ("the Amendment"), which the undersigned has read and
hereby approves; that, INTER ALIA, the Amendment provides for (i) an increase in
the Total Commitment Amount, (ii) an increase in the aggregate principal amount
of permitted Letters of Credit, (iii) an increase in the Borrower's required
Tangible Net Worth, and (iv) the ability of the Borrower to incur certain liens
securing capitalized leases and to incur certain additional indebtedness; that
such Total Commitment Amount, as increased by the Amendment, continues to be
Debt of the Obligor (as such terms are defined in the Guaranty) guaranteed by
the undersigned pursuant to the provisions of the Guaranty; and that the
Amendment affects no obligation, liability or agreement of the undersigned under
the Guaranty (except to the extent that the Amendment has the effect, inter
alia, of increasing the principal amount of the Debt of the Obligor), which
remains unmodified and in full force and effect.
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WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
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[SUBSIDIARY]
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Name:
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Title:
