THIRD AMENDMENT AGREEMENT
This Third Amendment Agreement (this "Amendment") is made as of the
14th day of November, 2001, by and among PARK-OHIO INDUSTRIES, INC., an Ohio
corporation ("Borrower"), the banking institutions listed on SCHEDULE 1 to the
Credit Agreement, as hereinafter defined ("Banks"), KEYBANK NATIONAL
ASSOCIATION, as administrative agent for the Banks ("Agent"), and THE HUNTINGTON
NATIONAL BANK, as co-agent for the Banks ("Co-Agent").
WHEREAS, Borrower, Agent and the Banks are parties to a certain Credit
and Security Agreement, dated as of December 21, 2000, as amended and as the
same may from time to time be further amended, restated or otherwise modified,
which provides, among other things, for loans and letters of credit aggregating
One Hundred Eighty Million Dollars ($180,000,000), all upon certain terms and
conditions stated therein (the "Credit Agreement");
WHEREAS, Borrower, Agent and the Banks desire to amend the Credit
Agreement to modify certain provisions thereof; and
WHEREAS, each capitalized term used herein shall be defined in
accordance with the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other valuable considerations, Borrower,
Agent and the Banks hereby agree as follows:
1. AMENDMENTS TO DEFINITIONS. Article I of the Credit Agreement is
hereby amended to delete the definitions of "Applicable Commitment Fee Rate",
"Applicable Margin", "Commitment", "Guarantor of Payment", "Material Adverse
Effect", "Permitted Foreign Subsidiary Investments and Loans" and "Revolving
Credit Commitment" in their entirety and to substitute in place thereof,
respectively, the following:
"Applicable Commitment Fee Rate" shall mean:
(a) for any date prior to November 14, 2001, the Applicable
Commitment Fee Rate in effect prior to November 14, 2001;
(b) from November 14, 2001 through April 30, 2002, fifty (50)
basis points; and
(c) commencing with the financial statements for the fiscal
quarter ending December 31, 2001, the number of basis points set forth
in the following matrix, based upon the result of the computation of
the Senior Debt Coverage Ratio, shall be used to establish the number
of basis points that will go into effect
on May 1, 2002 and thereafter:
------------------------------------------- ----------------------------------
SENIOR DEBT APPLICABLE
COVERAGE RATIO COMMITMENT FEE RATE
------------------------------------------- ----------------------------------
Greater than or equal to 2.25 to 1.00 50 basis points
------------------------------------------- ----------------------------------
Less than 2.25 to 1.00 25 basis points
------------------------------------------- ----------------------------------
Changes to the Applicable Commitment Fee Rate shall be effective on the
first day of the month following the date upon which Agent received,
or, if earlier, should have received, pursuant to Section 5.3(a) and
(b) hereof, the financial statements of Borrower. The above matrix does
not modify or waive, in any respect, the requirements of Section 5.7
hereof, the rights of the Banks to charge the Default Rate, or the
rights and remedies of Agent and the Banks pursuant to Articles VIII
and IX hereof.
"Applicable Margin" shall mean:
(a) for any date prior to November 14, 2001, the Applicable
Margin in effect prior to November 14, 2001;
(b) from November 14, 2001 through April 30, 2002, one hundred
(100) basis points for each Base Interest Segment (LIBOR Interest
Segments shall be unavailable), with the understanding that the
interest rate for all Loans shall be a rate per annum equal to one
hundred (100) basis points in excess of the Base Rate from time to time
in effect; and
(c) commencing with the financial statements for the fiscal
quarter ending December 31, 2001, the number of basis points (for each
Base Interest Segment or LIBOR Interest Segment, as appropriate) set
forth in the following matrix, based upon the result of the computation
of the Senior Debt Coverage Ratio, shall be used to establish the
number of basis points that will go into effect on May 1, 2002 and
thereafter:
-------------------------------- -------------------------------- --------------------------------
SENIOR DEBT APPLICABLE BASIS POINTS APPLICABLE BASIS POINTS
COVERAGE RATIO FOR EACH BASE FOR EACH LIBOR
INTEREST SEGMENT INTEREST SEGMENT
-------------------------------- -------------------------------- --------------------------------
Greater than or equal to 2.75 100 basis points LIBOR Interest Segment
to 1.00 Not Available
-------------------------------- -------------------------------- --------------------------------
Greater than or equal to 2.50 150 basis points 350 basis points
to 1.00, but less than 2.75 to
1.00
-------------------------------- -------------------------------- --------------------------------
2
-------------------------------- -------------------------------- --------------------------------
Greater than or equal to 2.25 125 basis points 325 basis points
to 1.00, but less than 2.50 to
1.00
-------------------------------- -------------------------------- --------------------------------
Greater than or equal to 2.00
to 1.00, but less than 2.25 to 100 basis points 300 basis points
1.00
-------------------------------- -------------------------------- --------------------------------
Less than 2.00 to 1.00 50 basis points 275 basis points
-------------------------------- -------------------------------- --------------------------------
Changes to the Applicable Margin shall be effective on the first day of
the month following the date upon which Agent received, or, if earlier,
should have received, pursuant to Section 5.3(a) and (b) hereof, the
financial statements of Borrower. The above matrix does not modify or
waive, in any respect, the requirements of Section 5.7 hereof, the
rights of the Banks to charge the Default Rate, or the rights and
remedies of Agent and the Banks pursuant to Articles VIII and IX
hereof.
"Commitment" shall mean the obligation hereunder of each Bank
to make Loans and participate in the issuance of Letters of Credit
pursuant to the Revolving Credit Commitment up to the Maximum Amount
for such Bank (or such lesser amount as shall be determined pursuant to
Section 2.5(c) hereof).
"Guarantor of Payment" shall mean any one of the Companies
listed on SCHEDULE 2 hereto, which Companies are each executing and
delivering a Guaranty of Payment, or any other Person that shall
execute and deliver a Guaranty of Payment to Agent, for the benefit of
the Banks, subsequent to the Closing Date; provided, however, that all
references to Guarantor of Payment in Article V and Section 2.1B hereof
shall be deemed to exclude Parent.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, operations, property, condition (financial or
otherwise) or prospects of Borrower, (b) the business, operations,
property, condition (financial or otherwise) or prospects of Parent, or
(c) the business, operations, property, condition (financial or
otherwise) or prospects of Borrower and its Subsidiaries taken as a
whole.
"Permitted Foreign Subsidiary Investments and Loans" shall
mean (a) the investments by Borrower or a Domestic Subsidiary in
Foreign Subsidiaries existing as of the Closing Date, as set forth on
SCHEDULE 5.11(B) hereto; (b) loans and investments by Borrower or a
Domestic Subsidiary to or in a Foreign Subsidiary (other than XX
Xxxxxxx) in the aggregate amount for all such loans and investments of
Fifteen Million Dollars ($15,000,000); and (c) unsecured Indebtedness
of XX Xxxxxxx to any Person (other than a Company), so long as the
aggregate amount of all such Indebtedness of XX Xxxxxxx shall not
exceed Seven Million Dollars ($7,000,000) at any time.
"Revolving Credit Commitment" shall mean the obligation
hereunder of the Banks, during the Commitment Period, to make Revolving
Loans and to
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participate in the issuance of Letters of Credit, up to an aggregate
principal amount outstanding at any time equal to the lesser of (a) the
Total Commitment Amount or (b) the Maximum Revolving Amount.
2. AMENDMENTS TO ADD NEW DEFINITIONS. Article I of the Credit Agreement
is hereby amended to add the following new definitions thereto:
"Additional Amount" shall mean (a) an amount determined by
Agent on the Adjustment Date (so long as Agent and the Banks shall have
received the results of the Fixed Asset Appraisal) equal to (i) (A) the
Revolving Credit Exposure as determined by Agent at 9:00 A.M.
(Cleveland, Ohio time) on the Adjustment Date, or, if less, the amount
of Revolving Credit Exposure that would cause Borrower to have a ratio
of Consolidated Senior Funded Indebtedness (as determined at 9:00 A.M.
(Cleveland, Ohio time) on the Adjustment Date) to Consolidated EBITDA
(as determined on the Adjustment Date for the most recently completed
four fiscal quarters of Borrower) of no greater than 3.40 to 1.00 (the
"Adjustment Date Credit Exposure"), plus (B) an amount equal to ten
percent (10%) of the Adjustment Date Credit Exposure, minus (ii) the
Borrowing Base, as calculated on the Adjustment Date, or (b) such
greater amount as shall be agreed to by Agent and the Required Banks
based upon the results of the Fixed Asset Appraisal.
"Adjustment Date" shall mean the later of (a) January 15,
2002, or (b) fourteen (14) days after the date of issuance of the Asset
Based Lending Examination.
"Asset Based Lending Examination" shall mean a comprehensive
asset based lending field examination conducted by Agent (or its
affiliates or representatives, as the case may be) of the inventory,
accounts receivable and other personal property of the Companies.
"Availability" shall mean, at any time, an amount equal to the
difference between the Revolving Credit Commitment, and the Revolving
Credit Exposure.
"Borrowing Base" shall mean, at any date, an amount not in
excess of the sum of (a) eighty percent (80%) of the amount due and
owing on Eligible Accounts Receivable, plus (b) the lesser of (i) fifty
percent (50%) of the aggregate of the cost or market value (whichever
is lower) of Eligible Inventory or (ii) Eighty-Five Million Dollars
($85,000,000); provided, however, that the foregoing advance rates (A)
shall be subject to such eligibility requirements and reserves as Agent
and the Required Banks, in their reasonable judgment, shall deem
necessary or appropriate based upon the results of the Asset Based
Lending Examination, and (B) shall at all times be subject to
modification or reduction in the reasonable discretion of Agent and the
Required Banks.
"Domestic Guarantor of Payment" shall mean a Guarantor of
Payment that shall be a Domestic Subsidiary of Borrower.
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"Eligible Account Receivable" shall mean an Account of
Borrower or any Domestic Guarantor of Payment to the extent arising out
of completed sales by Borrower or any Domestic Guarantor of Payment in
accordance with the terms and conditions of all purchase orders,
contracts and other documents relating thereto, which, at all times
until it is collected in full, continuously meets the following
requirements: (a) arose in the ordinary course of business of Borrower
or such Domestic Guarantor of Payment from the performance (fully
completed) of services or bona fide sale of goods that have been
shipped to the Account Debtor, and not more than 90 days from the due
date as specified in the invoice relating to such account receivable
have elapsed with respect to such account receivable; (b) has not been
determined by Agent, in its sole discretion, to be unsatisfactory in
any respect; and (c) is an Account in which Agent, for the benefit of
the Banks, has a valid and enforceable first security interest.
"Eligible Inventory" shall mean all Inventory of Borrower or a
Domestic Guarantor of Payment in which Agent, for the benefit of the
Banks, has a valid and enforceable first security interest, except
Inventory that is (a) located outside of the United States, (b) in the
possession of a bailee or a third party, (c) damaged, defective, or
obsolete, (d) held by any Person on consignment, or (e) determined by
Agent, in its sole discretion, to be unsatisfactory in any respect.
"Fixed Asset Appraisal" shall mean appraisals, conducted by
such firms or consultants as are reasonably acceptable to Agent and the
Required Banks, in their sole discretion, of the real property,
machinery, equipment and other fixed assets of the Companies, which
appraisals shall be in form, detail and substance satisfactory to Agent
and the Required Banks.
"Formula Borrowing Base Certificate" shall mean a Formula
Borrowing Base Certificate in the form of EXHIBIT H hereto.
"Indenture Certificate" shall mean a certificate as described
in Section 2.8(b)(ii) hereof, in the form of the attached EXHIBIT G-1.
"Government Account Receivable" shall mean any Account that
arises out of contracts with or orders from the United States or any of
its departments, agencies or instrumentalities.
"Maximum Revolving Amount" shall mean (a) for the period from
November 14, 2001 through the day before the Adjustment Date, One
Hundred Sixty Million Dollars ($160,000,000), and (b) on the Adjustment
Date and thereafter, an amount equal to the sum of (i) the Borrowing
Base plus (ii) the Additional Amount; or, in the case of both (a) and
(b), such lesser amount as shall be determined pursuant to Section
2.5(c) hereof.
"Monthly Indenture Certificate" shall mean a certificate as
described in Section 2.8(b)(iii) hereof, in the form of the attached
EXHIBIT G-2.
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"Senior Debt Coverage Condition" shall exist at any time that
the Senior Debt Coverage Ratio shall be equal to or greater than 2.75
to 1.00.
3. AMENDMENTS TO ARTICLE II. Article II of the Credit Agreement is
hereby deleted with the following being inserted in place thereof:
SECTION 2.1. AMOUNT AND NATURE OF CREDIT. Subject to the terms
and conditions of this Agreement, each Bank shall participate, to the
extent hereinafter provided, in making Revolving Loans to Borrower, and
issuing Letters of Credit at the request of Borrower, in such aggregate
amount as Borrower shall request pursuant to the Commitment; provided,
however, that in no event shall the aggregate principal amount of all
Revolving Loans and Letters of Credit outstanding under this Agreement
be in excess of the Total Commitment Amount.
Each Bank, for itself and not one for any other, agrees to
participate in Loans made and Letters of Credit issued hereunder during
the Commitment Period on such basis that (a) immediately after the
completion of any borrowing by Borrower or issuance of a Letter of
Credit, the aggregate principal amount then outstanding on the Note
issued to such Bank, when combined with such Bank's pro rata share of
the Letter of Credit Exposure shall not be in excess of the Maximum
Amount for such Bank, and (b) such aggregate principal amount
outstanding on the Note issued to such Bank shall represent that
percentage of the aggregate principal amount then outstanding on all
Notes (including the Note held by such Bank) that is such Bank's
Commitment Percentage.
Each borrowing from the Banks hereunder shall be made pro rata
according to the respective Commitment Percentages of the Banks. The
Loans may be made as Revolving Loans, and Letters of Credit may be
issued, as follows:
A. Revolving Loans.
Subject to the terms and conditions of this Agreement, during
the Commitment Period, the Banks shall make a Revolving Loan or
Revolving Loans to Borrower in such amount or amounts as Borrower may
from time to time request, but not exceeding in aggregate principal
amount at any time outstanding hereunder the amount of the Revolving
Credit Commitment, when such Revolving Loans are combined with the
Revolving Credit Exposure.
Each Revolving Loan shall mature on the last day of the
Commitment Period. Each Revolving Loan shall bear interest at a Base
Rate Option or one or more LIBOR Rate Options as selected by Borrower
in accordance with the terms and conditions set forth herein; provided,
however, that notwithstanding anything herein to the contrary, at any
time that the Senior Debt Coverage Condition shall exist, Borrower
shall not select a LIBOR Rate Option with respect to any Revolving
Loan.
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With respect to the Base Interest Segment of each Revolving
Loan, Borrower shall pay interest on the unpaid principal amount
thereof outstanding from time to time from the date thereof until paid,
commencing December 31, 2000, and on the last day of each succeeding
March, June, September and December thereafter and at the maturity
thereof, at the Derived Base Rate from time to time in effect.
With respect to each LIBOR Interest Segment of each Revolving
Loan, Borrower shall pay interest on the unpaid principal amount
thereof outstanding from time to time, from the first day of the
Interest Period applicable thereto through the last day of the Interest
Period applicable thereto. Interest on each such LIBOR Interest Segment
shall be at the Derived LIBOR Rate, as calculated on the first day of
the Interest Period applicable thereto (fixed for such Interest Period
with respect to the LIBOR Rate, but subject to changes in the
Applicable Margin), and shall be payable on the Interest Adjustment
Date with respect to such Interest Period (provided that if an Interest
Period shall exceed three months, the interest must be paid every three
months, commencing three months from the beginning of such Interest
Period).
At the request of Borrower to Agent, subject to the notice and
other provisions of Section 2.2 hereof, the Banks shall change all or
any part of the Base Interest Segment of any Revolving Loan to a LIBOR
Rate Option at any time, and shall change any LIBOR Interest Segment of
any Revolving Loan to a Base Rate Option on the Interest Adjustment
Date applicable to such LIBOR Interest Segment; provided, however,
that, notwithstanding the foregoing, at any time that the Senior Debt
Coverage Condition shall exist (a) Borrower shall not be permitted to
change any part of the Base Interest Segment of any Revolving Loan to a
LIBOR Rate Option, and (b) at the end of the Interest Adjustment Date
applicable to each LIBOR Interest Segment of any Revolving Loan,
Borrower shall either repay such LIBOR Interest Segment or change such
LIBOR Interest Segment to a Base Rate Option.
The obligation of Borrower to repay the Revolving Loans made
by each Bank and to pay interest thereon shall be evidenced by a
Revolving Credit Note of Borrower in the form of EXHIBIT A hereto,
payable to the order of such Bank in the principal amount of its
Commitment, or, if less, the aggregate unpaid principal amount of
Revolving Loans made by such Bank. Subject to the provisions of this
Agreement, Borrower shall be entitled under this Section 2.1A to borrow
funds, repay the same in whole or in part and re-borrow hereunder at
any time and from time to time during the Commitment Period.
B. Letters of Credit.
Subject to the terms and conditions of this Agreement, during
the Commitment Period, Agent shall, in the name of KeyBank National
Association,
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but only as Agent for the Banks, issue such Letters of Credit for the
account of Borrower or any Guarantor of Payment (other than Parent), as
Borrower may from time to time request. Borrower shall not request any
Letter of Credit (and Agent shall not be obligated to issue any Letter
of Credit) if, after giving effect thereto, (a) the Letter of Credit
Exposure would exceed the Letter of Credit Commitment or (b) the
Revolving Credit Exposure would exceed the amount of the Revolving
Credit Commitment. The issuance of each Letter of Credit shall confer
upon each Bank the benefits and liabilities of a participation
consisting of an undivided pro rata interest in the Letter of Credit to
the extent of such Bank's Commitment Percentage.
Each request for a Letter of Credit shall be delivered to
Agent not later than 11:00 A.M. (Cleveland, Ohio time) three Business
Days prior to the day upon which the Letter of Credit is to be issued.
Each such request shall be in a form acceptable to Agent and specify
the face amount thereof, whether such Letter of Credit is a commercial
documentary or a standby Letter of Credit, the account party, the
beneficiary, the intended date of issuance, the expiry date thereof,
and the nature of the transaction to be supported thereby. Concurrently
with each such request, Borrower, and any Guarantor of Payment for
whose benefit the Letter of Credit is to be issued, shall executed and
deliver to Agent an appropriate application and agreement, being in the
standard form of Agent for such letters of credit, as amended to
conform to the provisions of this Agreement if required by Agent. Agent
shall give each Bank notice of each such request for a Letter of
Credit.
In respect of each Letter of Credit that shall be a commercial
documentary letter of credit and the drafts thereunder, whether issued
for the account of Borrower or a Guarantor of Payment, Borrower agrees
(i) to pay to Agent, for the pro rata benefit of the Banks, a
non-refundable commission based upon the face amount of the Letter of
Credit, which shall be paid on the date that any draw shall be made on
a Letter of Credit, at the rate of one and one-fourth percent (1 1/4%)
per annum times the face amount of the Letter of Credit; (ii) to pay to
Agent, for its sole account, an additional Letter of Credit fee, which
shall be paid on each date that such Letter shall be issued or renewed
at the rate of one-eighth percent (1/8 of 1%) of the face amount of
such Letter of Credit; and (iii) to pay to Agent for its sole account,
such other issuance, amendment, negotiation, draw, acceptance, telex,
courier, postage and similar transactional fees as shall be generally
charged by Agent under its fee schedule as in effect from time to time.
In respect of each Letter of Credit that shall be a standby
letter of credit and the drafts thereunder, if any, whether issued for
the account of Borrower or a Guarantor of Payment, Borrower agrees (i)
to pay to Agent, for the pro rata benefit of the Banks, a
non-refundable commission based upon the face amount of the Letter of
Credit, which shall be paid quarterly in arrears, on the last day of
each succeeding March, June, September and December of each year and at
the expiration of such Letter of Credit, at the rate of one and
one-fourth percent (1
8
1/4%) per annum times the face amount of the Letter of Credit; (ii) to
pay to Agent, for its sole account, an additional Letter of Credit fee,
which shall be paid on each date that such Letter of Credit shall be
issued or renewed at the rate of one-eighth percent (1/8 of 1%) of the
face amount of such Letter of Credit; and (iii) to pay to Agent for its
sole account, such other issuance, amendment, negotiation, draw,
acceptance, telex, courier, postage and similar transactional fees as
shall be generally charged by Agent under its fee schedule as in effect
from time to time.
SECTION 2.2. CONDITIONS TO LOANS AND CHANGES IN INTEREST RATE.
The obligation of the Banks to make a Loan, change the interest rate
applicable to any portion of the outstanding principal balance of such
Loan and of Agent to issue any Letter of Credit shall be conditioned,
in the case of each borrowing, each change of interest rate hereunder
and each issuance of a Letter of Credit, upon:
(a) all conditions precedent as listed in Article IV hereof
shall have been satisfied on or before the Closing Date;
(b) with respect to a request for a Revolving Loan to be
borrowed at a Base Rate Option, receipt by Agent of a Notice With
Respect to Loan by 11:00 A.M. (Cleveland, Ohio time) on the proposed
date of borrowing, and, with respect to a request for a Revolving Loan
to be borrowed at one or more LIBOR Rate Options, by 11:00 A.M.
(Cleveland, Ohio time) three Business Days prior to the proposed date
of borrowing. Such Notice With Respect to Loan shall be signed by a
Financial Officer of Borrower, except that, with respect to a notice
requesting Loans in an aggregate amount of less than Five Million
Dollars ($5,000,000), such Notice With Respect to Loan may be signed by
Xxxxx Xxxxxxxxx, or such other agent of Borrower who may be authorized
by Borrower in a writing delivered to Administrative Agent. Agent shall
notify each Bank of the date, amount and initial Interest Period (if
applicable) promptly upon the receipt of such Notice With Respect to
Loan, and, in any event, by 2:00 P.M. (Cleveland, Ohio time) on the
date such Notice With Respect to Loan shall be received. On the date
such Loan is to be made, each Bank shall provide Agent, not later than
3:00 P.M. (Cleveland, Ohio time), with the amount in federal or other
immediately available funds, required of it, and, upon receipt by Agent
of such funds from all of the Banks, Agent shall, by 5:00 P.M.
(Cleveland, Ohio time) remit the proceeds of such Loan to Borrower. If
Agent shall elect to advance the proceeds of such Loan prior to
receiving funds from any Bank, Agent shall have the right, upon prior
notice to Borrower, to debit any account of Borrower or otherwise
receive from Borrower, on demand, such amount, in the event that such
Bank shall fail to reimburse Agent. Agent shall also have the right to
receive interest from such Bank at the Federal Funds Rate in the event
that such Bank shall fail to provide its portion of the Loan on the
date requested and Agent shall elect to provide such funds;
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(c) with respect to a request for a change in or continuation
of an interest rate option relating to any outstanding Revolving Loan,
receipt by Agent of a Notice With Respect to Loan by (i) 11:00 A.M.
(Cleveland, Ohio time) on the proposed date that any Base Rate Option
is to become effective, and, (ii) 11:00 A.M. (Cleveland, Ohio time)
three Business Days prior to the proposed date that any LIBOR Rate
Option is to become effective. Such Notice With Respect to Loan shall
be signed by a Financial Officer of Borrower, except that, with respect
to a notice requesting a change in or continuation of an interest
option relating to outstanding Revolving Loans the aggregate principal
amount of which shall be less than Five Million Dollars ($5,000,000),
such Notice With Respect to Loan may be signed by Xxxxx Xxxxxxxxx, or
such other agent of Borrower who may be authorized by Borrower in a
writing delivered to Administrative Agent. Agent shall notify each Bank
of the date, amount and Interest Period (if applicable) promptly upon
the receipt of any such Notice With Respect to Loan, and, in any event,
by 2:00 P.M. (Cleveland, Ohio time) on the date such Notice With
Respect to Loan shall be received;
(d) with respect to a request for a Revolving Loan or change
in or continuation of an interest rate option, (i) each Base Rate
Segment shall be in an amount of not less than Five Hundred Thousand
Dollars ($500,000), increased by increments of One Hundred Thousand
Dollars ($100,000), and (ii) each LIBOR Interest Segment shall be in an
amount of not less than Five Million Dollars ($5,000,000), increased by
increments of One Million Dollars ($1,000,000);
(e) the fact that no Default or Event of Default shall then
exist;
(f) the fact that each of the representations and warranties
contained in Article VII hereof shall be true and correct in all
material respects, except to the extent that any thereof expressly
relate to an earlier date; and
(g) with respect to Letters of Credit, satisfaction of the
notice provisions set forth in Section 2.1B hereof.
At no time shall Borrower have selected more than ten
different Interest Periods for LIBOR Rate Options, and, if any Base
Rate Option has been selected, then Borrower shall not have selected
more than nine different Interest Periods.
Each request by Borrower for the making of a Loan or for the
issuance of a Letter of Credit, or for the change in or continuation
of, an interest rate option, shall be deemed to be a representation and
warranty by Borrower, as of the date of such request, as to the facts
specified in (e) and (f) above.
Each notice of a selection or continuation of, or change to, a
LIBOR Rate Option shall be irrevocable and binding on Borrower and
Borrower shall indemnify Agent and the Banks against any loss or
expense incurred by Agent or the Banks as a result of any failure by
Borrower to consummate such transaction
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including, without limitation, any loss (including loss of anticipated
profits) or expense incurred by reason of liquidation or re-employment
of deposits or other funds acquired by the Banks to fund any LIBOR
Interest Segment. A certificate as to the amount of such loss or
expense submitted by the Banks to Borrower shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.3. PAYMENT ON NOTES. All payments of principal,
interest and commitment and other fees shall be made to Agent in
immediately available funds for the account of the Banks. Agent, on the
same Business Day, shall distribute to each Bank its ratable share of
the amount of principal, interest, and commitment and other fees
received by it for the account of such Bank. Each Bank shall record (a)
any principal, interest or other payment, and (b) the principal amount
of each Revolving Loan, and the amount of each Base Interest Segment
and LIBOR Interest Segments applicable thereto, and all prepayments
thereof and the applicable dates with respect thereto, by such method
as such Bank may generally employ; provided, however, that failure to
make any such entry shall in no way detract from Borrower's obligations
under each Note. The aggregate unpaid amount of Loans set forth on the
records of Agent shall be rebuttably presumptive evidence of the
principal and interest owing and unpaid on each Note. Whenever any
payment to be made hereunder, including, without limitation, any
payment to be made on any Note, shall be stated to be due on a day that
shall not be a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall in each case
be included in the computation of the interest payable on such Note;
provided, however, that, with respect to any LIBOR Interest Segment, if
the next succeeding Business Day shall fall in the succeeding calendar
month, such payment shall be made on the preceding Business Day and the
relevant Interest Period shall be adjusted accordingly.
SECTION 2.4. PREPAYMENT. Borrower shall have the right at any
time or from time to time to prepay, on a pro rata basis for all of the
Banks, all or any part of the principal amount of the Revolving Loans
then outstanding, as designated by Borrower, plus interest accrued on
the amount so prepaid to the date of such prepayment. With respect to a
prepayment of any Base Rate Interest Segment, Borrower shall have
delivered to Agent a Notice With Respect to Loan by not later than
11:00 A.M. (Cleveland, Ohio time) on the Business Day such prepayment
is to be made and, with respect to a prepayment of any LIBOR Interest
Segment, Borrower shall have delivered to Agent a Notice With Respect
to Loan by not later than 1:00 P.M. (Cleveland, Ohio time) three
Business Days before the Business Day on which such prepayment is to be
made. Prepayment of a Base Interest Segment shall be without any
premium or penalty, other than any prepayment fees, penalties or other
charges that may be contained in any Hedge Agreement.
In the case of any change of a LIBOR Interest Segment to a
Base Rate Option or different LIBOR Rate Option, or of prepayment of
any amount of any
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LIBOR Interest Segment, prior to the last day of the Interest Period
applicable thereto (a "Revision To Interest Period"), Borrower agrees
that if the reinvestment rate, as quoted by the money desk of Agent
("Reinvestment Rate"), shall be lower than the LIBOR Rate applicable to
the LIBOR Interest Segment that is intended to have a Revision To
Interest Period (hereinafter, "Last LIBOR"), then Borrower shall, upon
written notice by Agent, promptly pay to Agent, for the benefit of the
Banks, in immediately available funds, a LIBOR breakage fee equal to
the product of (a) a rate that shall be equal to the difference between
the Last LIBOR and the Reinvestment Rate, times (b) the principal
amount of the LIBOR Interest Segment that is to have a Revision To
Interest Period, times (c) (i) the number of days remaining in the
Interest Period of the LIBOR Interest Segment that is to have a
Revision To Interest Period divided by (ii) three hundred sixty (360).
In addition, Borrower shall immediately pay directly to Agent, for the
account of the Banks, the amount of any additional costs or expenses
(including, without limitation, cost of telex, wires, or cables)
incurred by Agent or the Banks in connection with such Revision To
Interest Period, upon Borrower's receipt of a written statement from
Agent. Each such change of a LIBOR Interest Segment to a Base Rate
Option or a different LIBOR Rate option, or of prepayment of any amount
of any LIBOR Interest Segment shall be in the aggregate principal sum
of not less than Five Million Dollars ($5,000,000), except in the case
of a mandatory prepayment pursuant to Section 2.7 or Article III
hereof.
SECTION 2.5. COMMITMENT AND OTHER FEES; REDUCTION OF
COMMITMENT.
(a) Borrower shall pay to Agent, for the ratable account of
the Banks, as a consideration for the Commitment hereunder, a
commitment fee from the Closing Date to and including the last day of
the Commitment Period, payable quarterly, equal to (i) the Applicable
Commitment Fee Rate in effect on the payment date, times (ii) (A) the
average daily Total Commitment Amount in effect during such quarter,
less (B) the average daily Revolving Credit Exposure during such
quarter. The commitment fee shall be payable, in arrears, on December
31, 2000, and on the last day of each March, June, September and
December thereafter, and on the last day of the Commitment Period.
(b) Borrower shall pay to Agent, for its sole benefit, all
fees set forth in the Administrative Agent Fee Letter.
(c) Borrower may at any time or from time to time permanently
reduce in whole or ratably in part the Total Commitment Amount to an
amount not less than the Revolving Credit Exposure then outstanding, by
giving not fewer than three Business Days' notice of such reduction,
provided that any such partial reduction shall be in an aggregate
amount, for all of the Banks, of not less than Five Million Dollars
($5,000,000) or any multiple thereof. Agent shall promptly notify each
Bank of the date of each such reduction and such Bank's proportionate
share thereof. After each such reduction, the commitment fees
12
payable hereunder shall be calculated upon the Total Commitment Amount
as so reduced. If Borrower reduces in whole the Commitments of the
Banks, on the effective date of such reduction (Borrower having prepaid
in full the unpaid principal balance, if any, of the Notes, together
with all interest and commitment and other fees accrued and unpaid),
and provided that no Letter of Credit Exposure shall exist, all of the
Notes shall be delivered to Agent marked "Canceled" and Agent shall
redeliver such Notes to Borrower. Any partial reduction in the Total
Commitment Amount shall be effective during the remainder of the
Commitment Period.
SECTION 2.6. COMPUTATION OF INTEREST AND FEES; DEFAULT RATE.
Interest on Loans, Related Expenses and commitment and other fees and
charges hereunder shall be computed on the basis of a year having three
hundred sixty (360) days and calculated for the actual number of days
elapsed. Anything herein to the contrary notwithstanding, if an Event
of Default shall occur hereunder, at the option of the Required Banks,
(a) the principal of each Note and the unpaid interest thereon shall
bear interest, until paid, at the Default Rate; and (b) the fee for the
aggregate undrawn face amount of all issued and outstanding Letters of
Credit shall be increased to three percent (3%) in excess of the then
applicable fee from time to time in effect pursuant to Section 2.1B
hereof. In no event shall the rate of interest hereunder exceed the
maximum rate allowable by law.
SECTION 2.7. MANDATORY PAYMENT.
If, at any time, the Revolving Credit Exposure shall exceed
either (a) the amount of the Revolving Credit Commitment or (b) the
maximum amount of the Revolving Credit Commitment available pursuant to
Section 2.8(b)(i) hereof, Borrower shall, as promptly as practicable,
but in no event later than the next Business Day, prepay an aggregate
principal amount of the Loans sufficient to bring the Revolving Credit
Exposure within the lesser of (i) the amount of the Revolving Credit
Commitment, or (ii) the maximum amount of the Revolving Credit
Commitment available pursuant to Section 2.8(b)(i) hereof. Any
prepayment of a LIBOR Interest Segment pursuant to this Section 2.7
shall be subject to the prepayment fees set forth in Section 2.4
hereof.
SECTION 2.8. FIXED CHARGE COVERAGE RATIO CONDITION.
(a) Borrower shall (i) provide immediate written notice to
Agent and the Banks at any time that the Fixed Charge Coverage Ratio
Condition exists or, within the next three months, is likely to exist,
and, during any Fixed Charge Condition Period, Borrower shall not
request any Loan or Letter of Credit, and the Banks shall not be
obligated to make any Loan and Agent shall not be obligated to issue
any Letter of Credit on behalf of the Banks, unless (A) Borrower shall
have complied with the requirements of subparts (b), (c) and (d) below,
(B) the
13
proceeds of such Loan or the purpose of the Letter of Credit
transaction shall constitute Permitted Indebtedness (as defined in the
Indenture), and (C) upon request of Agent, Borrower shall provide to
the Banks such evidence of use of proceeds of the Loans or the purpose
of such Letter of Credit transaction and such opinion of counsel with
respect to the Indenture, as Agent may from time to time require in its
sole discretion, and (ii) on the first Business Day of each week,
commencing on the Monday after the Closing Date, furnish to Agent, a
Weekly Compliance Certification, certified by a Financial Officer of
Borrower.
(b) During any Fixed Charge Condition Period, in addition to
the requirements set forth in this Article 2 or elsewhere in this
Agreement, Borrower shall not request any Loan or Letter of Credit, and
the Banks shall not be obligated to make any Loan and Agent shall not
be obligated to issue any Letter of Credit, unless:
(i) after giving effect to the making of such Loan or the
issuance of such Letter of Credit, the Revolving
Credit Exposure on such date (minus the Certified
Acquisition Amount) shall be less than an amount
equal to the greater of (A) Fifty Million Dollars
($50,000,000), or (B) the sum of (1) forty-five
percent (45%) of the book value of accounts
receivable of Borrower and its Subsidiaries and (2)
twenty-five percent (25%) of the book value of the
inventory of Borrower and its Subsidiaries;
(ii) concurrently with the request for any Loan or Letter
of Credit, and in addition to the requirements set
forth in Section 2.2 hereof, Borrower shall have
submitted to Agent an Indenture Certificate certified
by a Financial Officer of Borrower, in the form of
EXHIBIT G-1 hereto and otherwise in form and
substance satisfactory to Agent and the Banks,
certifying that both the book value and the actual
value of accounts receivable and inventory of
Borrower and its Subsidiaries are no less than (A)
One Hundred Million Dollars ($100,000,000) (or such
lesser amount as Borrower, Agent and the Required
Banks may agree to in writing), with respect to
accounts receivable, and (B) One Hundred Sixty
Million Dollars ($160,000,000) (or such lesser amount
as Borrower, Agent and the Required Banks may agree
to in writing), with respect to inventory;
(iii) on the fifteenth day of each month, commencing on
March 15, 2001, Borrower shall have provided to Agent
and the Banks a Monthly Indenture Certificate
certified by a Financial Officer of Borrower, in the
form of EXHIBIT G-2 hereto and otherwise in form and
substance satisfactory to Agent and the Banks,
certifying as to the specific value of accounts
receivable and inventory of Borrower and its
Subsidiaries on such date; and
14
(iv) Borrower shall have provided such evidence as Agent
may require with respect to the actual use of the
proceeds of any Loan or Letter of Credit, certified
by a Financial Officer of Borrower and otherwise in
form and substance satisfactory to Agent and the
Banks.
(c) During the Fixed Charge Condition Period, and
notwithstanding anything in this Agreement to the contrary:
(i) neither Borrower nor any of its Subsidiaries
shall make, or commit to make, any Acquisition;
(ii) the use of proceeds of any Loan or Letter of
Credit by Borrower and its Subsidiaries shall be solely for
working capital purposes of Borrower and its Subsidiaries;
provided, however, that the use of proceeds of any Loan by
Borrower and its Subsidiaries may be for capital expenditures
of Borrower and its Subsidiaries so long as:
(1) any such Loan shall constitute Permitted
Indebtedness (as defined in the Indenture) pursuant
to subpart (iv) of the definition of Permitted
Indebtedness set forth in the Indenture;
(2) the aggregate principal amount of all
such Loans the proceeds of which are used for capital
expenditures in accordance with this subpart shall
not exceed (when combined with all other loans and
capitalized leases used to finance capital
expenditures, so long as such other loans and capital
leases are permitted pursuant to Section 5.8(c)
hereof) at any time the lesser of (y) five percent
(5%) of the tangible Consolidated total assets of
Borrower or (z) Eighteen Million Five Hundred
Thousand Dollars ($18,500,000);
(3) without the prior written consent of
Agent and the Required Banks, Borrower and its
Subsidiaries shall not make or commit to make
Consolidated Capital Expenditures in excess of the
amount of (y) Eighteen Million Five Hundred Thousand
Dollars ($18,500,000) during the 2001 fiscal year of
Borrower and (z) thereafter such amounts as Borrower,
Agent and the Required Banks may agree to in writing
(provided that such amount shall be zero until such
agreement shall be reached); provided, however, that,
the aggregate amount of capital expenditures made by
Borrower to replace the fixed assets lost due to the
fire at the Cicero, Illinois rubber plant shall be
excluded from the limitations set forth in this
subpart so long as such capital expenditures shall be
made solely with and directly from the insurance
proceeds
15
received as reimbursement for the loss of fixed
assets due to such fire;
(4) with respect to the capital asset being
purchased with the proceeds of such Loan, within five
(5) Business Days after the purchase of such asset,
the appropriate Company shall have executed and
delivered to Agent, for the benefit of the Banks,
such security agreements, UCC financing statements
and other documents as Agent, in its discretion,
shall require so that Agent shall have, for the
benefit of the Banks, a first priority security
interest and Lien on such asset;
(iii) neither Borrower nor any of its Subsidiaries
shall make any loan or advance to any Subsidiary of Borrower
unless such Subsidiary shall be a Wholly-Owned Subsidiary of
Borrower and no Subsidiary of Borrower that shall not be a
Wholly Owned Subsidiary of Borrower shall make a loan or
advance to Borrower or any of its Subsidiaries; provided,
however, that, during the Fixed Charge Condition Period,
Borrower may make loans or advances to PMC-Colinet, Inc. and
PMC-Colinet, Inc. may make loans or advances to Borrower so
long as (A) the aggregate amount of all such loans and
advances shall not exceed One Million Dollars ($1,000,000) at
any time and (B) each such loan or advance shall constitute
Permitted Indebtedness (as defined in the Indenture); and
(iv) neither Borrower nor any of its Subsidiaries
shall incur any Indebtedness during the Fixed Charge Condition
Period other than (A) Indebtedness incurred under this
Agreement or the Secured Debt, (B) loans or capital leases
made in accordance with subpart (c)(ii) above and Section
5.8(c) hereof, (C) unsecured Indebtedness incurred by XX
Xxxxxxx under its existing line of credit so long as (1) the
aggregate principal amount of all such Indebtedness incurred
during the Fixed Charge Condition Period shall not exceed One
Million Dollars ($1,000,000), and (2) such Indebtedness shall
constitute Permitted Indebtedness (as defined in the
Indenture).
(d) Notwithstanding anything in this Section 2.8 or elsewhere
in this Agreement to the contrary, if, at any time, Agent, in its sole
discretion, shall be unable to agree with Borrower that any Loan made
or Letter of Credit issued, or requested to be made or issued, during
the Fixed Charge Condition Period constitutes Permitted Indebtedness
(as defined in the Indenture), then the Banks shall not be obligated to
make any Loan and Agent shall not be obligated to issue any Letter of
Credit until such time as any uncertainty is resolved in a manner
reasonably satisfactory to Agent.
SECTION 2.9. EXTENSION OF COMMITMENT. Contemporaneously with
the delivery of the financial statements required
16
pursuant to Section 5.3(b) hereof (beginning with the financial
statements for Borrower's fiscal year ending December 31, 2001),
Borrower may deliver a Request for Extension, requesting that the Banks
extend the maturity of the Commitment for an additional year. Each such
extension shall require the unanimous written consent of all of the
Banks and shall be upon such terms and conditions as may be agreed to
by Agent, Borrower and the Banks. Borrower shall pay any attorneys'
fees or other expenses of Agent in connection with the documentation of
any such extension, as well as such other fees as may be agreed upon
between Borrower and Agent.
4. AMENDMENT TO FINANCIAL STATEMENTS COVENANT. Section 5.3 of
the Credit Agreement is hereby amended to add the following new
subsections (i) and (j) thereto:
(i) within thirty (30) days after the end of each month,
monthly financial statements for such month containing such information
as Agent and the Banks shall request, including, but not limited to,
balance sheets, an income statement and an accounts aging and inventory
report, all to be in form and detail satisfactory to Agent and the
Banks; and
(j) within (30) days after the end of each month, and at such
other times as Agent may request, a Formula Borrowing Base Certificate,
in form and detail satisfactory to Agent and the Banks and signed by a
Financial Officer of Borrower; provided, however, that, if at any time
the Availability shall be less than Ten Million Dollars ($10,000,000),
then, Borrower shall immediately deliver a Formula Borrowing Base
Certificate and, so long as such Availability shall be less than Ten
Million Dollars ($10,000,000), Borrower shall deliver a Formula
Borrowing Base Certificate within five days after the end of each week.
5. AMENDMENT TO FINANCIAL COVENANTS SECTION. Section 5.7 of
the Credit Agreement is hereby amended to delete subsections (a), (b),
(c) and (d) therefrom and to insert in place thereof, respectively, the
following:
(a) INTEREST COVERAGE RATIO. Borrower shall not suffer or
permit, at any time, for the most recently completed four fiscal
quarters of Borrower, the ratio of (i) Consolidated Pro-Forma EBIT to
(ii) Consolidated Pro-Forma Interest Expense to be less than (A) 1.60
to 1.00 on the Closing Date through December 31, 2000, (B) 1.40 to 1.00
on January 1, 2001 through March 31, 2001, (C) 1.20 to 1.00 on April 1,
2001 through June 30, 2001, and (D) 1.20 to 1.00 on December 31, 2002
and thereafter.
(b) SENIOR DEBT COVERAGE RATIO. Borrower shall not suffer or
permit, at any time, for the most recently completed four fiscal
quarters of Borrower, the Senior Debt Coverage Ratio to exceed (i) 2.85
to 1.00 from the Closing Date through June 30, 2001, (ii) 3.40 to 1.00
on July 1, 2001 through Xxxxx 00, 0000, (xxx) 3.20 to 1.00 on April 1,
2002 through June 30, 2002, and (iv) 2.85 to 1.00 on July 1, 2002 and
thereafter.
17
(c) LEVERAGE RATIO. Borrower shall not suffer or permit, at
any time, for the most recently completed four fiscal quarters of
Borrower, the Leverage Ratio to exceed (i) 4.80 to 1.00 on the Closing
Date through December 31, 2000, (ii) 5.25 to 1.00 on January 1, 2001
through Xxxxx 00, 0000, (xxx) 6.00 to 1.00 on April 1, 2001 through
June 30, 2001, and (iv) 6.00 to 1.00 on December 31, 2002 and
thereafter.
(d) CASH-FLOW COVERAGE RATIO. Borrower shall not suffer or
permit, at any time, for the most recently completed four fiscal
quarters of Borrower, the Cash-Flow Coverage Ratio to be less than (i)
1.25 to 1.00 on the Closing Date through December 31, 2000, (ii) 1.20
to 1.00 on January 1, 2001 through June 30, 2001, (iii) 1.00 to 1.00 on
July 1, 2001 through March 31, 2002, (iv) 1.10 to 1.00 on April 1, 2002
through June 30, 2002, and (v) 1.20 to 1.00 on July 1, 2002 and
thereafter.
6. AMENDMENT TO BORROWING COVENANT. Section 5.8 of the Credit Agreement
is hereby amended to delete subsection (j) therefrom and to insert in place
thereof the following:
(j) Indebtedness of Borrower or a Guarantor of Payment in
connection with any letter of credit issued for the account of Borrower
or such Guarantor of Payment on or before November 14, 2001, so long as
(i) the aggregate amount of all such Indebtedness of Borrower and all
Guarantors of Payment in connection with all such letters of credit
shall not exceed Five Million Dollars ($5,000,000) at any time, and
(ii) any such letter of credit shall not be renewed or extended upon
the expiration thereof;
7. AMENDMENTS TO INVESTMENTS AND LOANS COVENANT. Section 5.11(b) of the
Credit Agreement is hereby amended to delete subpart (F) therefrom and to insert
in place thereof, respectively, the following:
(F) investments in any Person that is not Parent, a Sister
Company or Borrower in the aggregate amount of One Million Dollars
($1,000,000); or
Section 5.11 of the Credit Agreement is hereby amended to
delete subsections (c) and (d) therefrom and to insert in place thereof,
respectively, the following:
(c) Parent shall not (i) make or hold any investment in any
stocks, bonds or securities of any kind in any Person that is not
Borrower or a Guarantor of Payment, (ii) make or keep outstanding any
advance or loan to any Person that is not Borrower or a Guarantor of
Payment, or (iii) be or become a Guarantor of any kind, except
guaranties securing only Indebtedness of Borrower and its Subsidiaries
incurred or permitted pursuant to this Agreement; provided that this
Section shall not apply to (A) any investments or loans of Parent made
on or before November 14, 2001, in the aggregate amount of One Million
Five Hundred Thousand Dollars ($1,500,000), or (B) the holding of any
stock of any Sister
18
Company that shall have been created or acquired on of before November
14, 2001.
(d) Anything herein to the contrary notwithstanding, in no
event shall Parent, Borrower or any Subsidiary of Borrower become a
Guarantor of all or any part of the Indebtedness incurred in connection
with the Senior Subordinated Notes.
8. AMENDMENTS TO RESTRICTED PAYMENTS COVENANT. Section 5.20 of the
Credit Agreement is hereby amended to delete subsections (c) and (d) therefrom
and to insert in place thereof, respectively, the following:
(c) if no Default or Event of Default shall then exist or
immediately thereafter shall begin to exist, Parent may make Capital
Distributions to the shareholders of Parent on or before November 14,
2001; and
(d) Parent may make a Repurchase on or before November 14,
2001, if (i) no Default or Event of Default shall then exist or
immediately thereafter shall begin to exist; (ii) Borrower shall have
provided to Agent and the Banks, as early as possible and, in any
event, not fewer than five days prior to the date of such Repurchase,
(A) written notice of such Repurchase, and (B) a projected Consolidated
financial statement of Borrower accompanied by a certificate of a
Financial Officer of Borrower showing projected compliance with Section
5.7 hereof as of the end of the fiscal quarter in which such Repurchase
is to occur; and (iii) the amount of consideration to be paid for any
Repurchase would not cause the aggregate amount of consideration paid
for all Repurchases prior to payment in full of the Debt and
termination of this Agreement to exceed Fifteen Million Dollars
($15,000,000).
9. AMENDMENT TO ADD NEW COVENANTS. Article V of the Credit Agreement is
hereby amended to add the following new Sections 5.25 and 5.26 thereto:
SECTION 5.25. APPRAISALS. On November 15, 2001, the Asset
Based Lending Examination and Fixed Asset Appraisal shall have been
commenced, the costs of which shall be paid by Borrower.
SECTION 5.26. QUARTERLY BANK MEETINGS. Borrower shall cause a
Financial Officer of Borrower to participate (whether in person or by
teleconference or by such other means acceptable to Agent) at least
once per fiscal quarter of Borrower in a meeting with Agent and the
Banks to discuss, among other things, the financial statements of
Borrower delivered to the Banks pursuant to Section 5.3(a) and (b)
hereof (as applicable) and, when applicable, the pro-forma projections
of Borrower delivered to the Banks pursuant to Section 5.3 (e) hereof,
which meeting shall be scheduled on a Business Day and at such time
during regular business hours as selected by Agent.
10. AMENDMENTS TO SCHEDULES. The Credit Agreement is hereby amended to:
19
(a) delete SCHEDULE 3 (Real Property Locations) therefrom and to insert
in place thereof a new SCHEDULE 3 in the form of SCHEDULE 3 attached hereto;
(b) delete EXHIBIT G-1 (now called "Indenture Certificate") and EXHIBIT
G-2 (now called "Monthly Indenture Certificate") therefrom and to insert in
place thereof a new EXHIBIT G-1 and EXHIBIT G-2 in the form of EXHIBIT G-1 and
EXHIBIT G-2, respectively, hereto; and
(c) add EXHIBIT H (Formula Borrowing Base Certificate) thereto in the
form of EXHIBIT H hereto.
11. AGREEMENT REGARDING LANDLORD'S WAIVERS. Notwithstanding anything in
the Credit Agreement to the contrary, on or before December 15, 2001, a
landlord's waiver, in form and substance satisfactory to Agent, for each leased
location of Borrower or any of its Subsidiaries for which Agent shall not
previously have received a landlord's waiver acceptable to Agent.
12. CLOSING DELIVERIES. Concurrently with the execution of this
Amendment, Borrower shall:
(a) cause each Guarantor of Payment to consent and agree to and
acknowledge the terms of this Amendment;
(b) cause Parent to execute and deliver to Agent a Guaranty of Payment,
Security Agreement, Intellectual Property Collateral Assignment Agreement and
Pledge Agreement, each in form and substance satisfactory to Agent and dated as
of the date hereof;
(c) pay to Agent, for the pro rata benefit of the Banks, an amendment
fee of Three Hundred Twenty Thousand Dollars ($320,000); and
(d) pay all legal fees and expenses of Agent in connection with this
Amendment and the Loan Documents.
13. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Agent and the Banks that (a) Borrower has the legal power and
authority to execute and deliver this Amendment, (b) the officers executing this
Amendment have been duly authorized to execute and deliver the same and bind
Borrower with respect to the provisions hereof, (c) the execution and delivery
hereof by Borrower and the performance and observance by Borrower of the
provisions hereof do not violate or conflict with the organizational agreements
of Borrower or any law applicable to Borrower or result in a breach of any
provision of or constitute a default under any other agreement, instrument or
document binding upon or enforceable against Borrower, (d) no Default or Event
of Default exists under the Credit Agreement, nor will any occur immediately
after the execution and delivery of this Amendment or by the performance or
observance of any provision hereof, (e) Borrower is not aware of any claim or
offset against, or defense or counterclaim to, any of Borrower's obligations or
liabilities under the Credit Agreement or any Related Writing and (f) this
Amendment constitutes a valid
20
and binding obligation of Borrower in every respect, enforceable in accordance
with its terms.
14. WAIVER. Borrower, by signing below, hereby waives and releases
Agent and each of the Banks and their respective directors, officers, employees,
attorneys, affiliates and subsidiaries from any and all claims, offsets,
defenses and counterclaims of which Borrower is aware, such waiver and release
being with full knowledge and understanding of the circumstances and effect
thereof and after having consulted legal counsel with respect thereto.
15. REFERENCES TO CREDIT AGREEMENT. Each reference that is made in the
Credit Agreement or any Related Writing to the Credit Agreement shall hereafter
be construed as a reference to the Credit Agreement as amended hereby. Except as
herein otherwise specifically provided, all provisions of the Credit Agreement
shall remain in full force and effect and be unaffected hereby. This Amendment
is a Related Writing as defined in the Credit Agreement.
16. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
17. GOVERNING LAW. The rights and obligations of all parties hereto
shall be governed by the laws of the State of Ohio, without regard to principles
of conflicts of laws.
[Remainder of page intentionally left blank.]
21
18. JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS HEREBY
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR
ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT'S OR ANY BANK'S ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG BORROWER,
AGENT AND THE BANKS, OR ANY THEREOF.
PARK-OHIO INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxx, Secretary
KEYBANK NATIONAL ASSOCIATION,
as Agent and as a Bank
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxx, Vice President and
Senior Banker
THE HUNTINGTON NATIONAL BANK,
as Co-Agent and as a Bank
By: /s/ Xxxx X. Xxxxx
---------------------------------------------
Name: Xxxx X. Xxxxx
-------------------------------------------
Title: Assistant Vice President
------------------------------------------
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxxx
-------------------------------------------
Title: Vice President
------------------------------------------
FIFTH THIRD BANK, NORTHEASTERN
OHIO
By: /s/ X. X. Xxxxxxx
---------------------------------------------
Name: Xxx X. Xxxxxxx
-------------------------------------------
Title: Vice President
------------------------------------------
Signature Page 1 of 1 to
Third Amendment
GUARANTOR ACKNOWLEDGMENT
------------------------
The undersigned consents and agrees to and acknowledges the terms of
the foregoing Third Amendment Agreement. Each of the undersigned further agrees
that the obligations of the undersigned pursuant to the Guaranty of Payment
executed by the undersigned shall remain in full force and effect and be
unaffected hereby.
The undersigned hereby waives and releases Bank and Bank's directors,
officers, employees, attorneys, affiliates and subsidiaries from any and all
claims, offsets, defenses and counterclaims of which the undersigned is aware,
such waiver and release being with full knowledge and understanding of the
circumstances and effect thereof and after having consulted legal counsel with
respect thereto.
JURY TRIAL WAIVER. BORROWER, AGENT, EACH BANK AND EACH GUARANTOR HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT, THE BANKS OR THE
GUARANTORS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS
WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT'S OR ANY
BANK'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR
COGNOVIT PROVISION CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT AMONG BORROWER, AGENT, THE BANKS AND THE GUARANTORS, OR ANY THEREOF.
ATBD, INC. PARK AVENUE TRAVEL LTD.
CASTLE RUBBER COMPANY PARK-OHIO STRUCTURAL HARDWARE LLC
CICERO FLEXIBLE PRODUCTS, INC. PHARMACEUTICAL LOGISTICS, INC.
DONEGAL BAY LTD. PHARMACY WHOLESALE LOGISTICS, INC.
GENERAL ALUMINUM MFG. COMPANY PMC-COLINET, INC.PMC INDUSTRIES CORP.
ILS TECHNOLOGY, INC. PRECISION MACHINING CONNECTION LLC
INTEGRATED HOLDING COMPANY RB&W MANUFACTURING LLC
INTEGRATED LOGISTICS SOLUTIONS, INC. THE AJAX MANUFACTURING COMPANY
INTEGRATED LOGISTICS SOLUTIONS LLC (for itself THE METALLOY CORPORATION
and as successor by merger to Columbia Nut & Bolt LLC, TOCCO, INC.
GIS Industries, Inc. and Industrial Fasteners LLC) TRICKERATION, INC.
INTEGRATED LOGISTICS HOLDING COMPANY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------------- ---------------------------------------------------
Xxxxxx X. Xxxxxx, Secretary of each of the foregoing companies Xxxxxx X. Xxxxxx, Secretary of each of the foregoing
companies
SCHEDULE 3
(Real Property Locations)
Castle Rubber Company The Metalloy Corporation
0000 Xxxxxxxx Xxxxxx 000 X. Xxxx Xxxxxx
Xxxx Xxxxxx, XX 00000 Xxxxxx, XX 00000
General Aluminum Mfg. Company The Metalloy Corporation
0000 Xxxxxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxx, XX 00000
Park-Ohio Industries, Inc. The Metalloy Corporation
00000 Xxxxx Xxxxx 00 X. 000-000 X. Xxxx Xxxxxx
Xxxxxxxxxx, XX 4409 Xxxxxx, XX 00000
Park-Ohio Industries, Inc. The Metalloy Corporation
0000 Xxxxxxx Xxxxxx 0000 Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000 Xxxxxx, XX 00000
Park-Ohio Industries, Inc. The Metalloy Corporation
000 Xxxx 00xx Xxxxxx 0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Pharmacy Wholesale Logistics, Inc. The Metalloy Corporation
00000 Xxxxxxx Xxxxxx Xxxxxx Xxx Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000 000 XXX Xxxxxxxxx
Xxxxxxx, XX 00000
Precision Machining Connection LLC TOCCO, Inc.
00000 Xxxxxxxx Xxxxxxxxx 0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000 Xxxx, XX 00000
RB&W Manufacturing LLC TOCCO, Inc.
000 Xxxxxx Xxxx 00000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000 Xxxxxxx Xxxxxxx, XX 00000
RB&W Manufacturing LLC TOCCO, Inc.
0000 Xxxxxxx Xxxxxx 0000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
RB&W Manufacturing LLC P-O Realty LLC
000 Xxxxxxx Xxx Xxxx 0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxx, Xxxx 00000
EXHIBIT G-1
INDENTURE CERTIFICATE
[Date]_______________________, 20____
KeyBank National Association, as Agent
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: ________________
Ladies and Gentlemen:
The undersigned, a duly elected Financial Officer, as defined in the
Credit and Security Agreement (as hereinafter defined), or otherwise duly
authorized employee of PARK-OHIO INDUSTRIES, INC. ("Borrower"), refers to the
Credit and Security Agreement, dated as of December 21, 2000 (as amended and as
the same may from time to time be further amended, restated or otherwise
modified, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among Borrower, the Banks, KeyBank National Association, as
Agent, and The Huntington National Bank, as Co-Agent.
Concurrently herewith, Borrower has submitted a Notice With Respect to
Loan pursuant to which Borrower has requested a Loan under the Credit Agreement.
Pursuant to Section 2.8(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that on the proposed date of the Loan both prior to and after
giving effect thereto:
(a) the aggregate principal amount of all Loans outstanding on
such date (minus the Certified Acquisition Amount) is less
than an amount equal to the greater of (i) Fifty Million
Dollars ($50,000,000), or (ii) the sum of (A) forty-five
percent (45%) of the book value of accounts receivable of
Borrower and its Subsidiaries and (B) twenty-five percent
(25%) of the book value of the inventory of Borrower and its
Subsidiaries;
(b) the book value of accounts receivable and inventory of
Borrower and its Subsidiaries are no less than (i) One Hundred
Million Dollars ($100,000,000), with respect to accounts
receivable, and (ii) One Hundred Sixty Million Dollars
($160,000,000), with respect to inventory; and
(c) set forth on SCHEDULE 1 hereto are calculations confirming the
amounts and values set forth in subparts (a) and (b) above.
(d) the use of the proceeds of the Loan are for (Check One):
_____ working capital purposes only; or
_____ are for the purchase of capital assets and the
requirements of Section
2.8(c)(ii) of the Credit Agreement have been met (and
set forth on SCHEDULE 1 hereto are calculations
confirming the amounts and values required to be
confirmed pursuant to such Section 2.8(c)(ii));
(e) under the undersigned's supervision, a review of the terms and
conditions of the Indenture has been made and, based on such
review, as of the date hereof, there is no Default (as defined
in the Indenture) or Event of Default (as defined in the
Indenture) that exists;
(e) the representations and warranties contained in each Loan
Document are correct as of the date hereof;
(f) no event has occurred and is continuing that constitutes a
Default or Event of Default; and
(g) the conditions set forth in Section 2.2, Section 2.8 and
Article IV of the Credit Agreement have been satisfied.
Very truly yours,
PARK-OHIO INDUSTRIES, INC.
By:
--------------------------------
Name:
------------------------------
Title:
Schedule 1 to
Indenture Certificate
--------------------------------------------------------------------------------------------------------------------
I. FOR ALL LOANS
A. Book Value of Accounts Receivable Greater than (no $__________________(1)
less than $100,000,000)
B. Book Value of Inventory (no less than $160,000,000) $__________________(2)
C. 45% of Book Value of Accounts Receivable
$___________________
D. 25% of Book Value of Inventory
$___________________
E. Total of C + D
$___________________
F. (1) Aggregate amount of Loans outstanding
$___________________
(2) Minus Certified Acquisition Amount
$___________________
Total of (1) minus (2)
$___________________
G. Total of E minus F (availability)
$___________________
H. Amount of requested Loan
$___________________
I. Total of G minus H
$___________________
--------------------------------------------------------- ----------------------------- ------------------------------
II. FOR LOANS FOR CAPITAL EXPENDITURES
A. Aggregate amount of capital expenditures made $___________________
since January 1, 2001(3)
B. Aggregate amount of loans and capital leases $___________________
the proceeds of which have been used for capital
expenditures
C. Amount of requested Loan $___________________
D. Total of B + C(4) $___________________
--------------------------------------------------------- ----------------------------- ------------------------------
1 An entry of "No less than $100,000,000" is sufficiently specific for this
Certificate.
2 An entry of "No less than $160,000,000" is sufficiently specific
for this Certificate.
3 Must be less than $18,500,000
4 Must be less than the lesser of (a) five percent (5%) of the tangible
consolidated total assets or (b) $18,500,000
EXHIBIT G-2
MONTHLY INDENTURE CERTIFICATE
[Date]_______________________, 20____
KeyBank National Association, as Agent
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: ________________
Ladies and Gentlemen:
The undersigned, a duly elected Financial Officer, as defined in the
Credit and Security Agreement (as hereinafter defined) of PARK-OHIO INDUSTRIES,
INC. ("Borrower"), refers to the Credit and Security Agreement, dated as of
December 21, 2000 (as amended and as the same may from time to time be further
amended, restated or otherwise modified, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among Borrower, the
Banks, KeyBank National Association, as Agent, and The Huntington National Bank,
as Co-Agent.
Pursuant to Section 2.8(b)(iii) of the Credit Agreement, the
undersigned hereby certifies that, as of the date hereof:
(a) the book value of accounts receivable of Borrower and its
Subsidiaries is $___________________;
(b) the book value of the inventory of Borrower and its Subsidiaries is
$________________;
(c) under the undersigned's supervision, a review of the terms and
conditions of the Indenture and based on such review, as of the date hereof,
there is no Default (as defined in the Indenture) or Event of Default (as
defined in the Indenture) that exists;
(d) the representations and warranties contained in each Loan Document
are correct as of the date hereof;
(e) no event has occurred and is continuing that constitutes a Default
or Event of Default; and
(f) the conditions set forth in Section 2.2, Section 2.8 and Article IV
of the Credit Agreement have been satisfied.
Very truly yours,
PARK-OHIO INDUSTRIES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
EXHIBIT H
FORMULA BORROWING BASE CERTIFICATE
Computed as of: ____________________________
(required at each month-end)
I, the undersigned, the Chief Financial Officer of Park-Ohio
Industries, Inc. ("Borrower"), does hereby certify, pursuant to the Credit and
Security Agreement dated as of December 21, 2000, among Borrower, the banks
named therein ("Banks") and KeyBank National Association, as agent for the Banks
("Agent"), that the following computations have been made in accordance with the
provisions of the Credit Agreement and are true and correct:
(A) Accounts Receivable:
(1) Total Accounts Receivable $______________________
(2) Less: A/R greater than 90 days Past Due Date $______________________
(3) Eligible Accounts Receivable $_______________________
(4) Advance Rate 80%
(5) QUALIFIED ACCOUNTS RECEIVABLE [#3 x #4] $_______________________
(B) Inventory:
(1) Total Inventory $_______________________
(2) Advance Rate 50%
(3) Discounted Inventory [#1 x #2] $_______________________
(4) QUALIFIED INVENTORY
[The lesser of $85MM or #3] $_______________________
(C) Combined QUALIFIED ACCOUNTS
RECEIVABLE & QUALIFIED INVENTORY $_______________________
(D) Total Revolving Credit Facility Outstandings $_______________________
(E) Borrowing Base Over/(Under) [C - D] $_______________________
PARK-OHIO INDUSTRIES, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
