EXHIBIT 4(g)
SECOND AMENDMENT TO LETTER AGREEMENT
THIS SECOND AMENDMENT TO LETTER AGREEMENT, dated as of September 30,
1995 (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 (as amended, the "Letter Agreement"), pursuant to which the
Bank agreed, subject to the terms and conditions thereof, to extend a line
of credit to the Company in a maximum principal amount of $8,000,000.
B. The parties now desire to reduce such line of credit to
$4,000,000, and 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 "$8,000,000 Credit Authorization" in the heading
of the Letter Agreement shall be deemed a reference to "$4,000,000 Credit
Authorization".
1.2 A new definition of "Default" shall be added in alphabetical
order to Section 1 of the Letter Agreement to read as follows:
"DEFAULT shall mean any event or condition which
might become an Event of Default with notice or lapse
of time or both."
1.3 The definition of "Letter of Credit" in Section 1 of the Letter
Agreement shall be amended by deleting the reference to "six months after
the date of issuance thereof in the case of commercial letters of credit"
and inserting "nine months after the date of issuance thereof in the case
of commercial letters of credit" in place thereof.
1.4 The definition of "Maximum Amount" in Section 1 of the Letter
Agreement shall be amended by deleting the reference to "(a) $8,000,000 at
any time during the period from and including the date hereof to but
excluding May 31, 1995 and (b) $6,000,000 on May 31, 1995 until the
Termination Date, as such amounts may be amended from time to time" and
inserting "$4,000,000, as such amount may be amended from time to
time" in place thereof.
1.5 The reference to "July 31, 1995" in the definition of
"Termination Date" in Section 1 of the Letter Agreement shall be deemed to
refer to "May 31, 1996".
1.6 The reference to "July 31, 1995" in Section 2 of the Letter
Agreement shall be deemed to refer to "May 31, 1996".
1.7 The penultimate sentence in Section 2 of the Letter Agreement
shall be deleted and the following sentence shall be added in place
thereof: "All Negotiated Rate Loans shall be in the minimum amount of
$500,000 and in integral multiples of $100,000, and all Floating Rate Loans
shall be in the minimum amount of $50,000 and in integral multiples
thereof.
1.8 Section 4 of the Letter Agreement entitled "Compensating
Balances" shall be deemed deleted in its entirety and a new Section 4
entitled "Commitment Fee" shall be added in place thereof as follows:
"4. COMMITMENT FEE. The Company agrees to pay to
the Bank a commitment fee on the daily average unused
amount of the Maximum Amount for the period from
September 30, 1995 to but excluding the Termination
Date, at a rate equal to one-quarter of one percent
(1/4 of I%) per annum. Accrued commitment fees shall
be payable quarterly in arrears on the last Business
Day of each March, June, September and December,
commencing on the first such Business Day occurring
after the date of this Amendment, and on the
Termination Date."
1.9 Section 10(a) of the Letter Agreement shall be deemed deleted in
its entirety and replaced with the following language:
"(a) WORKING CAPITAL. Permit or suffer the
consolidated Working Capital of the Company and its
Subsidiaries to be less than $11,000,000 at any time."
1.10 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) $18,500,000 at
any time plus (ii) beginning January 1, 1996, an amount
equal to 50% of consolidated Cumulative Net Income of the
Company and its Subsidiaries."
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1.11 The reference to "1.85 to l.00" in Section 10(c) of the Letter
Agreement shall be deemed to refer to "1.40 to 1.00".
1.12 The reference is Section 10(h) of the Letter Agreement to "do not
exceed fifty percent (50%) of the consolidated Cumulative Net Income of the
Company and its Subsidiaries, beginning January 1, 1994" shall be deemed
deleted and replaced with the following language:
"do not exceed the sum of (i) $2,500,000 at any
time plus (ii) beginning January 1, 1996, fifty percent
(50%) of the consolidated Cumulative Net Income of the
Company and its Subsidiaries."
1.13 A new Section 10(k) shall be added to the Letter Agreement to
read as follows:
"(k) NEGATIVE PLEDGE LIMITATION. Enter into any
agreement with any person other than the Bank pursuant
hereto which prohibits or limits the ability of the
Company or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its assets,
rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter
acquired.
1.14 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
statements most recently delivered pursuant to Section 9(d) of the Letter
Agreement.
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2.4 No Event of Default or event or condition which, with notice or
lapse of time or both could become such an Event of Default exists or has
occurred and is continuing on the 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 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.
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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.
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
/s/ XXX XXXXXXXXX
Xxx Xxxxxxxxx
Its Treasurer
NBD BANK
/s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx
Its Second Vice President
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