EXHIBIT 4
FOURTH AMENDMENT TO LETTER AGREEMENT
THIS FOURTH AMENDMENT TO LETTER AGREEMENT, dated as of May 31, 1997
(this "Amendment"), is between HASTINGS MANUFACTURING COMPANY, a Michigan
corporation (the "Company"), and NBD BANK, a Michigan banking corporation,
formerly known as NBD Bank, N.A. (the "Bank").
RECITALS
A. The Company and the Bank are parties to a letter agreement dated
May 31, 1994, as amended by a First Amendment to Letter Agreement dated as
of May 2, 1995, by a Second Amendment to Letter Agreement dated as of
September 30, 1995 and by a Third Amendment to Letter Agreement dated as of
May 31, 1996 (as amended, the "Letter Agreement"), pursuant to which the
Bank agreed, subject to the terms and conditions thereof, to extend credit
to the Company in a maximum principal amount of $4,000,000.
B. The Company has requested that the Bank amend the Letter
Agreement as set forth herein to provide, among other things, for the
extension of the Termination Date (as defined in the Letter Agreement) from
May 31, 1997 to May 31, 1998, for the amendment of certain covenants and
for certain other changes as more particularly described herein.
C. The parties now desire to amend certain terms and provisions of
the Letter Agreement as set forth herein.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Letter Agreement shall be amended as follows:
1.1 The reference to "May 31, 1997" in the definition of "Termination
Date" in Section 1 of the Letter Agreement shall be deemed to refer to "May
31, 1998".
1.2 The reference to "May 31, 1997" in Section 2 of the Letter
Agreement shall be deemed to refer to "May 31, 1998".
1.3 Section 10(a) of the Letter Agreement shall be deemed deleted in
its entirety and replaced with the following language:
"(a) CURRENT RATIO. Permit or suffer the
ratio of consolidated Current Assets of the Company and
its Subsidiaries to consolidated Current Liabilities of
the Company and its Subsidiaries to be less than 1.75
to 1.00 at any time."
1.4 Section 10(b) of the Letter Agreement shall be deemed deleted in
its entirety and replaced with the following language:
"(b) TANGIBLE NET WORTH. Permit or suffer
the consolidated Tangible Net Worth of the Company and
its Subsidiaries to be less than the sum of (i)
$16,500,000 at any time plus (ii) beginning July 1,
1997, an amount equal to 50% of consolidated Cumulative
Net Income of the Company and its Subsidiaries."
1.5 Section 10(c) of the Letter Agreement shall be deemed deleted in
its entirety and replaced with the following language:
"(c) TOTAL LIABILITIES TO TANGIBLE NET WORTH.
Permit or suffer the ratio of the consolidated Total
Liabilities of the Company and its Subsidiaries to the
consolidated Tangible Net Worth of the Company and its
Subsidiaries to be greater than 2.20 to 1.00 at any
time."
1.6 Exhibit A to the Letter Agreement is hereby deleted in its
entirety and Exhibit A attached hereto is hereby substituted in place of
Exhibit A thereof.
ARTICLE II. REPRESENTATIONS. The Company represents and warrants to the
Bank that:
2.1 The execution, delivery and performance of this Amendment are
within its powers, have been duly authorized and are not in contravention
with any law, of the terms of its Articles of Incorporation or By-laws, or
any material undertaking to which it is a party or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligations of the
Company enforceable against it in accordance with the respective terms
hereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Section 11 of the Letter
Agreement are true on and as of the date hereof with the same force and
effect as if made on and as of the date hereof, PROVIDED, THAT, the
representations and warranties contained in Section 11(f) of the Letter
Agreement shall be deemed to have been made with respect to the financial
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statements most recently delivered pursuant to Section 9(d) of the Letter
Agreement.
2.4 After giving effect to the amendments contained in Article 1
hereof, the representations and warranties contained in Section 11 of the
Letter Agreement are true and correct on and as of the date hereof with the
same force and effect as if made on and as of the date hereof, and no Event
of Default or event or condition which, with notice or lapse of time or
both could become such an Event of Default shall have occurred and be
continuing or will exist under the Letter Agreement as of the effective
date hereof.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not become
effective until each of the following has been satisfied:
3.1 Copies of resolutions adopted by the Board of Directors of the
Company, certified by an officer of the Company, as being true and correct
and in full force and effect without amendment as of the date hereof,
authorizing the Company to enter into this Amendment and any other
documents or agreements executed pursuant hereto, if any, shall have been
delivered to the Bank.
3.2 This Amendment shall be signed by the Company and the Bank.
3.3 The Company shall deliver a duly executed copy of a new
promissory note in the principal amount of $4,000,000 in the form of
Exhibit A attached hereto.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Letter Agreement to "this Agreement" and
references in any note, certificate, instrument or other document to the
"Letter Agreement" or "Authorization Agreement" shall be deemed to be
references to the Letter Agreement as amended hereby and as further amended
from time to time.
4.2 The Company agrees to pay and to save the Bank harmless for the
payment of all costs and expenses arising in connection with this
Amendment, including the reasonable fees of counsel to the Bank in
connection with preparing this Amendment and the related documents.
4.3 The Company acknowledges and agrees that the Bank has fully
performed all of its obligations under all documents executed in
connection with the Letter Agreement and all actions taken by the Bank is
reasonable and appropriate under the circumstances and within its rights
under the Letter Agreement and all other documents executed in connection
therewith and otherwise available. The Company represents and warrants
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that it is not aware of any claims or causes of action against the Bank, or
any of its successors or assigns. Notwithstanding this representation and
as further consideration for the agreements and understandings herein, the
Company and its heirs, successors and assigns, hereby release the Bank and
its heirs, successors and assigns from any liability, claim, right or cause
of action which now exists or hereafter arises, whether known or unknown,
arising from or in any way related to facts in existence as of the date
hereof to any agreements or transactions between the Bank and the Company
or to any acts or omissions of the Bank in connection therewith or
otherwise.
4.4 Except as expressly amended hereby, the Company agrees that the
Letter Agreement, the promissory note and all other documents and
agreements executed by the Company in connection with the Letter Agreement
in favor of the Bank are ratified and confirmed and shall remain in full
force and effect and that it has no set off, counterclaim or defense with
respect to any of the foregoing. Terms used but not defined herein shall
have the respective meanings ascribed thereto in the Letter Agreement.
4.5 This Amendment shall be governed by and construed in accordance
with the laws of the State of Michigan, without giving effect to choice of
law principles of such State.
4.6 This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties signing this Amendment have caused
this Amendment to be executed and delivered as of the date first above
written.
HASTINGS MANUFACTURING COMPANY
By: /S/XXXXXX X. XXXXXXXXX
Xxxxxx X. Xxxxxxxxx
Its: Vice President - Finance
NBD BANK
By: /S/XXXXXX X. XXXX
Xxxxxx X. Xxxx
Its: Vice President
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MASTER PROMISSORY NOTE
$4,000,000.00 Detroit, Michigan
May 31, 1997
For value received, and in any event no later than May 31, 1998,
HASTINGS MANUFACTURING COMPANY (the "Borrower") promises to pay to the
order of NBD BANK (the "Bank"), at the Bank's principal office in the State
of Michigan, in lawful money of the United States of America and in
immediately available funds, the principal sum of Four Million and 00/100
Dollars ($4,000,000.00), or such lesser amount as is indicated on the
Bank's records, together with interest computed on the balance from time to
time unpaid on the basis of the actual number of days elapsed in a year of
360 days at the rate(s) per annum determined from time to time pursuant to
the "Letter Agreement", as defined below, and reflected on the Bank's
records, which interest shall be payable in accordance with the terms set
forth in the Letter Agreement, and to pay interest on overdue principal
from the date of demand or default until paid at the Overdue Rate (as
defined in the Letter Agreement).
In no event shall the interest rate exceed the maximum rate
allowed by law. Any interest which would for any reason be deemed unlawful
under applicable law shall be applied to principal.
WAIVER: The Borrower and each endorser of this note and any
other party liable for the debt evidenced by this note severally waives
demand, presentment, notice of dishonor and protest of this note, and
consents to any extension or postponement of time of its payment without
limit as to number or period, to the addition of any party, and to the
release, discharge, or suspension of any rights and remedies against any
person who may be liable for the payment of this note. No delay on the
part of the holder in the exercise of any right or remedy shall operate as
a waiver. No single or partial exercise by the holder of any right or
remedy shall preclude any future exercise of that right or remedy or the
exercise of any other right or remedy. No waiver or indulgence by the
holder of any default shall be effective unless it is in writing and signed
by the holder, nor shall a waiver on one occasion be construed as a bar to
or waiver of any right on any future occasion.
This note is issued in substitution for and replacement of, but
not in satisfaction of, a Master Promissory Note dated May 31, 1996 in the
maximum principal amount of $4,000,000 and evidences a debt under the terms
of a certain letter agreement between the Bank and the Borrower dated May
31, 1994, as amended by a First Amendment to Letter Agreement dated as of
May 2 1995, by a Second Amendment to Letter Agreement dated as of September
30, 1995, by a Third Amendment to Letter Agreement dated as of May 31,
1996, and by a Fourth Amendment to Letter Agreement dated as of May 31,
1997, and as further amended from time to time (the "Letter Agreement"),
which is incorporated by reference for additional terms and conditions,
including default and acceleration provisions.
WAIVER OF JURY TRIAL: The Bank and the Borrower, after consulting
or having had the opportunity to consult with counsel, knowingly,
voluntarily and intentionally waive any right either of them may have to a
trial by jury in any litigation based upon or arising out of this note, or
any related instrument or agreement or any of the transactions
contemplated by this note, or any course of conduct, dealing, statements
(whether oral or written), or actions of either of them. Neither the Bank
nor the Borrower shall seek to consolidate, by counterclaim or otherwise,
any such action in which a jury trial has been waived with any other action
in which a jury trial cannot be or has not been waived. These provisions
shall not be deemed to have been modified in any respect or relinquished by
either the Bank or the Borrower except by a written instrument executed by
both of them.
Address:
HASTINGS MANUFACTURING COMPANY
000 Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer By: /S/XXXXXX X. XXXXXXXXX
Xxxxxx X. Xxxxxxxxx
Its: Vice President-Finance
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