EXHIBIT 10.33
BANK OF MONTREAL FIRSTBANK OVERDRAFT LENDING AGREEMENT
To: Bank of Montreal
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Commercial Banking Unit
Mississauga Main Branch
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Branch of Account Date
Xxx Xxxxxx Xxxxx Xxxxxxx, Xxxxxxxxxxx, Xxxxxxx June 12, 1996
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The undersigned hereby requests the Bank of Montreal (the "Bank") to
provide a credit facility to the undersigned, subject to the following terms and
conditions:
1. DEFINED TERMS
In this Agreement, unless the subject matter or context otherwise require:
1.01 "ACCOUNT" shall mean Account No. 0000000-3858 at the branch designated
above.
1.02 "LOAN" shall mean at any time the aggregate of all amounts debited to the
Account (including without limitation cheques, transfers, withdrawals,
interest, costs, charges and fees) in excess of the aggregate of all
amounts credited to the Account.
1.03 "LOAN LIMIT" shall mean THREE MILLION-----------------------------------
---------------------------------------------------- Canadian Dollars
($3,000,000.00) or such lesser amount as may be calculated by the Bank from
time to time under the Lending Margin Calculation, if any, set out in the
Addendum hereto.
1.04 "LOAN RATE" shall mean a rate equal to the Bank's Prime Rate plus six per
cent (6.0%) per annum.
1.05 "PRIME RATE" shall mean the floating annual rate of interest established
from time to time by the Bank as the base rate it will use to determine the
rate of interest payable to the Bank by borrowers from the Bank in Canadian
dollars in Canada and designated by the Bank as its Prime Rate. The Prime
Rate on the date hereof is six and one-half per cent (6.5%) per annum.
1.06 "OVERDRAFT RATE" shall mean the annual rate of interest established from
time to time by the Bank as the interest rate it will use to calculate the
interest payable on overdrawn accounts and designated by the Bank as the
"Overdraft Rate on the date hereof is twenty-one per cent (21.0%) per
annum.
2. ACCOUNT
2.01 The undersigned may from time to time draw cheques on the Account, subject
to the terms hereof.
2.02 The undersigned shall not at any time permit the Loan to exceed the Loan
Limit and shall use the Account for business purposes only.
2.03 The Bank is authorized to debit the Account for all fees and interest
required hereunder and for all costs, charges and expenses referred to in
paragraph 6.01 and in any other Agreement(s) the undersigned has entered
into with the Bank.
3. LOAN INTEREST
3.01 The undersigned shall, both before and after demand or judgment, pay
interest at the Loan Rate on the daily closing balance of the Loan up to
the Loan Limit, such interest to be calculated and payable monthly on the
last day of each month.
3.02 The undersigned shall, both before and after demand or judgment, pay
interest at the Overdraft Rate on the amount of any daily closing balance
of the Loan in excess of the Loan Limit, such interest to be calculated and
payable monthly on the last day of each month, but nothing herein shall
oblige the Bank to permit the Loan to exceed the Loan Limit.
4. DEMAND AND TERMINATION
4.01 The undersigned shall pay the Loan to the Bank ON DEMAND. The Bank may at
any time terminate the credit facility provided hereunder and demand
payment of the Loan by notice as herein provided.
4.02 THE BANK MAY REFUSE TO HONOR ANY CHEQUE OR PERMIT ANY TRANSFER OR
WITHDRAWAL FROM THE ACCOUNT UPON (A) FAILURE OF THE UNDERSIGNED TO PERFORM
OR SATISFY ANY TERM OR CONDITION HEREOF, (B) ANY DEFAULT BY THE UNDERSIGNED
IN THE PERFORMANCE OF ANY OBLIGATION OF THE UNDERSIGNED TO THE BANK WHETHER
CONTAINED HEREIN OR OTHERWISE, OR (C) ANY DEMAND FOR PAYMENT OF THE LOAN,
WHETHER OR NOT ANY TIME PERIOD HAS LAPSED AFTER THE TIME OF THE DEMAND.
5. DOCUMENTATION
5.01 The undersigned shall deliver to the Bank from time to time, promptly on
request, in form and substance satisfactory to the Bank:
(a) a promissory note or other acknowledgment of debt evidencing the Loan;
(b) any security required by the Bank; and
(c) all other documents and information required by the Bank including, if
applicable, all documentation and information listed in the Addendum.
5.02 Any promissory note or security document delivered hereunder shall be held
as additional security for the indebtedness of the undersigned for the
Loan, and not in substitution or in satisfaction thereof.
5.03 The Bank's statement for the Account at any time shall constitute prima
facie evidence of the Loan.
6. COSTS
6.01 The undersigned shall pay all reasonable costs, charges and expenses
incurred by the Bank in the preparation or enforcement of this Agreement or
any security required hereunder.
7. NOTICES
7.01 The Bank shall not be required to notify the undersigned of changes to the
Prime Rate or the Overdraft Rate or in the Bank's Calculations of the
Lending Margin Calculation, if any.
7.02 Any request for any document or information, notice of termination, demand
for payment or other notice to be sent by the Bank to the undersigned in
connection with this Agreement or the Account may be delivered to the
undersigned (or any one of them, if more than one), or mailed by prepaid
ordinary mail to the undersigned (or any one of them, if more than one) at
the last known address for the undersigned (or any one of them, if more
than one) in the Bank's records, and the undersigned shall be deemed to
have received such request or notice on the date of delivery, if delivered,
and four (4) days after mailing, if mailed.
8. GENERAL
8.01 The provisions of the Addendum, if any, shall be incorporated into this
Agreement and form part hereof.
8.02 This Agreement shall be binding upon the undersigned and the respective
executors, administrator, successors and assigns of the undersigned, but
the undersigned shall not assign any of the rights or obligations of the
undersigned hereunder without the prior written consent of the Bank.
8.03 The failure of either the undersigned or the Bank to require performance by
the other of any provision hereof shall in no way affect the right
thereafter to enforce such provision; nor shall the waiver by either party
of any breach of any covenant, condition or proviso of this Agreement or
any other agreement between the Bank and the undersigned be taken or held
to be a waiver of any further breach of the same covenant, condition or
proviso.
8.04 This Agreement shall be in addition to and not in substitution for any
other agreement between the undersigned and the Bank, with the exception of
all previous FirstBank Overdraft Lending Agreements which this document
supersedes.
8.05 The undersigned will execute the Bank's standard form of Operation of
Account Agreement or appropriate form of current account authority.
Without limiting the generality of the foregoing, the undersigned agrees
that the
balance shown in any statement of the account provided to the
undersigned shall be deemed to be a correct and accurate statement of the
Loan as at the date of the statement, unless the undersigned has notified
the Bank of errors, irregularities or omissions within the thirty day
period specified in the Operation of Account Agreement or current account
authority.
8.06 Time shall be of the essence of this Agreement.
8.07 If more than one person signs this Agreement, the obligations of the
undersigned are joint and several and the Bank is authorized to honour any
cheque drawn on the Account or pay any withdrawal from the Account to
create or increase the Loan if any such cheque or withdrawal request is
signed by one of the undersigned.
8.08 It is the express wish of the parties that this Agreement and any related
documents be drawn up and executed in English. Les parties conviennent que
la presente convention et tous les documents s'y rattachant soient rediges
et signes en anglais. [Applicable to Province of Quebec only]
Per:
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(To be signed by Account Holder(s), or by authorized signing officer(s) in the
case of corporations, societies, lodges, etc. In the case of corporations affix
seat where applicable. Please type name of signatories below signature(s).)
ADDENDUM
TO THE FIRSTBANK OVERDRAFT LENDING AGREEMENT
LENDING MARGIN CALCULATION
The following Lending Margin Calculation is applicable to the attached
FirstBank Overdraft Lending Agreement. The calculation and the amount of the
Lending Margin Calculation is in the sole and complete discretion of the Bank,
and in cases of dispute, the Lending Margin Calculation calculated by the Bank
shall prevail.
The Lending Margin Calculation shall be an amount equal to:
As per attached Schedule
DOCUMENTATION
As per attached Schedule
ADDENDUM TO THE FIRSTBANK
OVERDRAFT LENDING AGREEMENT (CONTINUED)
SENIOR DEBT
The Loan made pursuant to this FirstBank Overdraft Lending Agreement and all
other indebtedness arising hereunder or in connection herewith constitute
"Senior Debt" as defined under Aftermarket Technology Corp.'s Senior
Subordinated Note Indentures dated as of August 2, 1994 and dated as of June 1,
1995.
MARGIN: Maximum advances under Facility 1 (to be used in any combination by
either borrower) will be governed by the following margin requirement
and are not to exceed:
75% of the aggregate value of the Bank's estimated worth of eligible,
good quality accounts receivable from both Borrowers, domiciled in
Canada, subject to exclusions listed below.
plus
50% against the Bank's valuation of assigned aggregate inventory
from both Borrowers, which is free and clear.
Inventory margin value to be less than or equal to 50% of total margin
value.
ACCOUNTS RECEIVABLE EXCLUSIONS:
All Accounts Receivable 91 days or older, related company accounts,
foreign accounts, all holdbacks, contra accounts, accounts in dispute
and/or any other accounts considered unacceptable by the Bank;
A/R from any one entity not to exceed 25% of total A/R of that
Borrower. Exceptions must receive prior Bank approval.
PRICING: IF INTEREST IS PAID MONTHLY.
FCMA: Bank of Montreal Prime Lending Rate + 1/4% calculated and
payable monthly in arrears.
IF INTEREST IS PAID QUARTERLY.
FCMA: Bank of Montreal Prime Lending Rate + 1/2% calculated and
payable quarterly in arrears.
IN THE EVENT THAT ATC'S D/EQUITY IS less than OR equal to TO 1.25:1
THEN:
IF INTEREST IS PAID MONTHLY.
FCMA: Bank of Montreal Prime Lending Rate calculated and payable
monthly in arrears.
IF INTEREST IS PAID QUARTERLY.
FCMA: Bank of Montreal Prime Lending Rate + 1/4% calculated and
payable quarterly in arrears.
C/L/Cs
and LGs: Commission rate of 0.1% per month or part thereof, collected
quarterly in advance, non-refundable. $50 minimum charge per
quarter, if utilized.
FEES: Monthly loan administration fee is waived for the duration of the
Banking Services contract. Extension of waiver will be considered at
time of contract renewal.
Fixed Monthly Fees: (2 year contract - Waived for first 3 months)
Mascot $325.00 CDN Acct only.
King-O-Matic $340.00 CDN Acct; $35.00 US Acct.
Mascot Truck Parts Inc. and/or
King-O-Matic Industries Ltd.
Commitment Letter
BANKING
SERVICES: Each Borrower will maintain their bank accounts solely with bank
of Montreal, at its Mississauga Main Office, and further, the
Bank shall provide all auxiliary non-credit, treasury, trade
finance and cash management services to the borrower with ADP
to provide payroll services.
EXPENSES: All legal and other direct out of pocket costs incurred with
respect to due diligence and preparation of loan documents shall
be for the account of each Borrower. Each Borrower agrees to
guarantee payment of all such legal fees and other direct out of
pocket costs.
FEES: Application fee of $5000.00 fully refundable at drawdown.
REPORTING
REQUIREMENTS: The following reports/certificates, from each Borrower, are
proposed to assist the Bank in monitoring financial trends:
Monthly: Monthly, aged list of Accounts Receivables, Accounts payable,
and listing of inventory, of each Borrower, to be received within
30 days following each month end;
Quarterly: Quarterly management prepared financial statements of each
Borrower, complete with fiscal year to date totals, to be
received by the Bank within 45 days after each fiscal quarter
end;
Affidavit on ATC letterhead, signed by a duly authorized officer,
confirming compliance to all existing financial covenants, with
all lenders.
Form 10-Q from Aftermarket Technology Corp. ("ATC") within 45
days of each fiscal quarter end.
Annually: Management prepared financial statements of each Borrower, within
90 days of fiscal year end.
Form 10-K from ATC within 90 days of fiscal year end.
Annual business plan of each Borrower and ATC for next fiscal
year.
COVENANTS: Standard legal and keep-well covenants are to be included in
security documentation as prescribed by the Bank's solicitors.
The following additional covenants are proposed:
Each Borrower shall not, without the prior written consent
of the Bank;
(a) merge or amalgamate with any other corporation.
(b) change ownership.
(c) incur/issue any additional debt or provide guarantees of any
kind except as in the normal course of business, without
the Bank's prior approval.
The Borrower, on a combined basis, shall at all times maintain
the following financial covenant which will be tested on an
annual basis based on management prepared year end financial
statements.
Mascot Truck Parts Inc. and/or
King-O-Matic Industries Ltd.
Commitment Letter
Maintain the total debt to tangible net worth ratio ("D:TNW
ratio") less than 2.0:1.
CROSS DEFAULT: ATC agrees that default in any of its loans or a breach in any of
its existing financial covenants will constitute default of
our loan agreement.
Evidence of compliance will be in the form of a certificate,
on company letterhead, outlining the calculation of said
covenants, duly executed by an authorized signing officer.
DEFINITIONS: All definitions are in accordance with Canadian GAAP with
specific inclusions/exclusions as indicated below:
Debt: All Liabilities less all Deferred Taxes, and any senior
subordinated notes;
TNW: The Shareholders Equity account,
plus
any senior subordinated notes
less
the sum of deferred charges, goodwill, other intangibles (i.e.,
Leasehold improvements) and any loans, advances and any other
receivables due from any shareholder, employee, associated or
affiliated company;
FOR THE ATC D/EQUITY PRICING ISSUE:
Debt: All Liabilities as shown on Balance Sheet.
Equity: Total Stockholders Equity.
SCHEDULE OF SECURITY:
TO BE OBTAINED FROM MASCOT TRUCK PARTS INC.:
LF32 GENERAL ASSIGNMENT OF BOOK DEBTS, ETC. (P.P.S.A.)
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ENABLING RESOLUTION DATED:
DESCRIPTION OF SECURITY:
First charge over Accounts Receivable
SECTION 427 SECURITY
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DESCRIPTION OF SECURITY:
First charge over Inventory
LF 44 GUARANTEE FOR INDEBTEDNESS OF A CORPORATION
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IN THE AMOUNT OF: $3,100M
IN FAVOUR OF: Aftermarket Technology Corp.
Complete with Enabling Resolution & Solvency Certificate.
ASSIGNMENT OF FIRE INSURANCE-POLICY
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POLICY ISSUED BY:
EXPIRY DATE:
LOSS PAYABLE TO: B of M 1st loss payee
TO BE OBTAINED FROM KING-O-MATIC INDUSTRIES INC.:
LF32 GENERAL ASSIGNMENT OF BOOK DEBTS, ETC, (P.P.S.A.)
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ENABLING RESOLUTION DATED:
DESCRIPTION OF SECURITY:
First charge over Accounts Receivable
SECTION 427 SECURITY
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DESCRIPTION OF SECURITY:
First charge over Inventory
LF 44 GUARANTEE FOR INDEBTEDNESS OF A CORPORATION
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IN THE AMOUNT OF: $3,100M
IN FAVOUR OF: Aftermarket Technology Corp.
Complete with Enabling Resolution & Solvency Certificate.
ASSIGNMENT OF FIRE INSURANCE POLICY
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POLICY ISSUED BY:
EXPIRY DATE:
LOSS PAYABLE TO: B of M 1st loss payee
LF320 FIRSTBANK LENDING AGREEMENT
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DATED:
ACCOUNT NUMBER:
LOAN LIMIT: $3,000,000.00
SIGNED: Jointly by Mascot and King-O-Matic
TO BE OBTAINED FROM AFTERMARKET TECHNOLOGY CORP.:
GUARANTEE FOR INDEBTEDNESS OF A CORPORATION
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Bank's Standard Form for Foreign Guarantees supported by:
Corporate Documentation, resolutions etc as required
IN THE AMOUNT OF: $3,100M
IN FAVOUR OF: Mascot Truck Parts Inc. and King-O-Matic Industries Ltd.
OTHER SECURITY ITEMS:
INTERBANK AGREEMENT FROM CHEMICAL BANK:
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SOLICITORS LETTER OF OPINION: from Bank solicitor as to the validity and
----------------------------- enforceability of our security.
ENVIRONMENTAL CHECKLIST from each of the Borrowers.
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LA961910.210/4+
Mascot Truck Parts Inc. and/or
King-O-Matic Industries Ltd.
Commitment Letter
