THIRD AMENDMENT AND WAIVER DATED AS OF OCTOBER 15, 1999
TO CREDIT AGREEMENT DATED AS OF FEBRUARY 1, 1999
This Third Amendment and Waiver (this "Amendment"), dated as
of October 21, 1999, is made by and among ALLIED PRODUCTS CORPORATION, a
Delaware corporation (the "Company"), the financial institutions parties hereto
(the "Banks"), and Bank of America, N.A. (formerly known as Bank of America
National Trust and Savings Association), as agent for the Banks (in such
capacity, the "Agent"). Terms defined in the Credit Agreement (as hereinafter
defined) shall have the same respective meanings when used herein and the
provisions of Section 13 of the Credit Agreement shall apply to this Amendment.
W I T N E S S E T H:
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WHEREAS, the parties hereto are parties to that certain Second
Amended and Restated Credit Agreement, dated as of February 1, 1999 (as amended
or modified and in effect on the date hereof, the "Credit Agreement") which
provides, subject to the terms thereof, for the Banks to extend credit to the
Company (in the form of Revolving Loans or Letters of Credit) through November
29, 1999;
WHEREAS, pursuant to that certain letter agreement ("Xxxx Hog
Letter of Intent") dated July 15, 1999 among the Company, CC Industries, Inc.
and Xxxxx Crown and Company, the parties thereto agreed, subject to reaching a
definitive agreement ("Definitive Agreement"), to form a joint venture that
would own and operate the Xxxx Hog and Great Bend Manufacturing Company
divisions (collectively "Divisions") of the Company through a newly formed
Delaware limited liability company ("Newco" and sometimes also called "Xxxx Hog,
L.L.C.");
WHEREAS, on or about October 21, 1999 the Company, Xxxx Hog,
L.L.C. and Xxxx Hog Investors, L.L.C., a Delaware limited liability company
("Crown") entered into the Definitive Agreement entitled Limited Liability
Company Interest Purchase and Asset Contribution Agreement dated as of October
21, 1999 (the "Purchase Agreement"), which provides, among other things, for the
Company to (i) form Newco and initially own 100% of the membership interests
therein (the "Newco Formation"), (ii) contribute to Newco assets (the "Purchased
Assets") representing substantially all of the assets (other than Excluded
Assets as defined in the Purchase Agreement) of the Divisions, subject to
various Assumed Liabilities (as defined in the Purchase Agreement) and further
subject to various Permitted Exceptions (as defined therein), including the
liens of the Agent pursuant to the Collateral Documents (the "Newco
Contribution"), (iii) on or before December 31, 1999, sell to Crown 80.1% of the
limited liability interests in Newco (the "Crown Interests") for a cash purchase
price of approximately $120,000,000, subject to adjustment as provided in the
Purchase Agreement (such sale being herein called the "Newco Sale"), and (iv)
the Company and Crown to enter into a Limited Liability Company Agreement (the
"Newco Operating Agreement, and together with the Newco Formation, the Newco
Contribution, and the Newco Sale, collectively, the "Newco Transactions");
WHEREAS, the Company has requested that the Banks (i) amend
the Credit Agreement so as to, among other things, extend the Revolving
Termination Date to December 31, 1999, (ii) consent to the Newco Transactions,
(iii) waive the Company's non-compliance as of certain dates with the cash flow
and fixed charge covenants, and (iv) agree to certain other modifications to the
Credit Agreement as described herein; and
WHEREAS, the Banks and the Agent are willing to so consent and
to so amend and modify the Credit Agreement, subject to the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration (the
receipt, adequacy and sufficiency of which are hereby acknowledged), the parties
hereto, intending legally to be bound, hereby agree as follows:
I. AMENDMENT
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The Credit Agreement is hereby amended as follows:
1.1 Commitment. Section 1.1.3 of the Credit Agreement is
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amended so that the table therein shall read in its entirety:
DATE OR PERIOD AMOUNT
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February 1, 1999 through March 31, 1999 $140,000,000
April 1, 1999 through December 30, 1999 $135,000,000
December 31, 1999 Zero
1.2 Operating Cash Flow. Section 10.5.2 of the Credit
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Agreement is amended to read in its entirety as follows:
SECTION 10.5.2 Minimum Consolidated Operating Cash
Flow. As of the end of any calendar month, not permit its
Consolidated Operating Cash Flow (measured monthly on a
cumulative basis for the related calendar year), to be less
than the amount applicable to such calendar month as follows:
Calendar Month Ending Amount
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August 31, 1999 $ 518,000
September 30, 1999 $ 3,284,000
October 31, 1999 $ 1,621,000
November 30, 1999 $ 2,589,000
1.3 Newco. Section 10.22 is amended by adding thereto
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Section 10.22(c) as follows:
(c) Without limitation of the foregoing, the Company
agrees that it will (i) execute and deliver to the Agent the
Company Pledge Agreement and (ii) cause Newco to execute and
deliver to the Agent the Newco Security Agreement, and the
Newco Guaranty, in each case accompanied by such supporting
documents as the Agent shall require.
1.4 Borrowing Base Overadvance. Section 13 of the Credit
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Agreement is amended by adding the following at the bottom of the table
in the definition of Borrowing Base Overadvance:
December 1999 $60,754,000
1.5 Extension of Revolving Termination Date. Section 13 of the
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Credit Agreement is further amended so that the definition of Revolving
Termination Date shall read in its entirety as follows:
Revolving Termination Date shall mean December 31,1999.
1.6 Collateral Documents. Section 13 of the Credit Agreement
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is further amended by adding thereto the following definitions:
Company Collateral Documents shall mean all Collateral
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Documents to which the Company is a party or signatory.
Company Pledge Agreement shall mean the Pledge
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Agreement of the Company, substantially in the form of Exhibit F, as
the same may be amended or modified from time to time.
Company Pledge Agreement (Deposit Accounts) shall
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mean the Pledge Agreement (Deposit Accounts) dated as of May 12,1999
of the Company, a copy of which is attached in the form of Exhibit G,
as the same may be amended or modified from time to time
Company Security Agreement shall mean the Security
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Agreement dated as of May 12, 1999 of the Company, a copy of which
is attached in the form of Exhibit H, as the same may beamended or
modified from time to time.
Newco shall mean Xxxx Hog L.L.C.
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Newco Collateral Documents shall mean all Collateral
--------------------------
Documents to which Newco is a party or signatory.
Newco Guaranty shall mean the Guaranty Agreement of
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Newco, substantially in the form of Exhibit I, as the same may be
amended or modified from time to time.
Newco Security Agreement shall mean a Security
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Agreement of Newco, substantially in the form of Exhibit J, as the
same may be amended or modified from time to time.
1.7 Loan Documents. Section 13 of the Credit Agreement is
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further amended by adding the following at the end ofthe definition
of Loan Documents:
The term "Loan Documents" includes, without limitation,
all Collateral Documents.
1.8 Subsidiary Definition. Section 13 of the Credit Agreement
----------------------
is further amended by adding the following at the end of the
definition of Subsidiary:
The term "Subsidiary" includes, without limitation, Xxxx Hog,
L.L.C.
1.9 Exhibits. The Credit Agreement is further amended by
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adding thereto Exhibits F, G, H, I, J and K in the forms attached
hereto.
II. CONSENTS AND RELEASES
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2.1 Consent to Newco Formation. Notwithstanding Sections 10.14
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of the Credit Agreement, the Banks hereby consent to the Newco Formation, such
consent being subject to the conditions specified in Section 4.2 of this
Amendment.
2.2 Consent to Newco Contribution. Notwithstanding Section
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10.14 of the Credit Agreement, the Banks hereby consent to the Newco
Contribution, such consent being subject to (i) the conditions specified in
Section 4.2 of this Amendment, (ii) the condition that the Newco Contribution
shall not occur until immediately prior to the consummation of the Newco Sale,
and (iii) the condition that until the release by the Agent pursuant to Section
2.5 of this Amendment, the Agent shall continue to have a first perfected
security interest in all of the assets of Newco (other than real estate
interests which are not fixtures).
2.3 Consent to Newco Sale. Notwithstanding Section 10.13 of
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the Credit Agreement, the Banks hereby consent to the Newco Sale, subject to (i)
the receipt by the Agent of immediately available funds (not to be less than
$118,000,000) representing the Net Sale Proceeds of the Xxxx Hog Purchase Price
and (ii) the application thereof to the payment or prepayment of the Liabilities
pursuant to Section 6.3 of the Credit Agreement.
2.4.Consent to Newco Operating Agreement. Notwithstanding
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Sections 10.13 and 10.14 of the Credit Agreement, the Banks hereby consent to
the execution by the Company and Newco of the Purchase Agreement and the Newco
Operating Agreement.
2.5 Releases. Concurrently with the receipt by the Agent of
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immediately available funds (not to be less than $118,000,000) representing the
Net Sale Proceeds of the Xxxx Hog Purchase Price, the Agent shall (and the Banks
hereby direct the Agent to), (i) release the security interest of the Agent in
the assets of Newco and in the assets of the Company representing the Crown
Interests, and (ii) release the Newco Guaranty, all pursuant to a Release to be
executed by the Agent substantially in the form of Exhibit K hereto (it being
understood, however, that the Agent shall retain its security interest in all of
the assets of the Company not hereinabove specifically released).
III. WAIVER
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3.1 Waiver. The Banks hereby waive (i) noncompliance by the
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Company as of August 31, 1999 and September 30, 1999 with the minimum
consolidated operating cash flow provision of Section 10.5.2 of the Credit
Agreement, and (ii) noncompliance by the Company for the Fiscal Quarter ended
September 30, 1999 with the fixed charge coverage provision of Section 10.7 of
the Credit Agreement.
3.2 Limitation on Waiver. Except as specifically set forth in
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Section 3.1 hereof, the foregoing waiver is specific in time and in intent and
does not constitute, nor shall it be construed as, a waiver of any other right,
power or privilege under the Credit Agreement, or under any agreement, contract,
indenture, document or other instrument mentioned in the Credit Agreement; nor
does the foregoing waiver preclude other or further exercise of any right, power
or privilege under this Amendment or the exercise of any other right, power or
privilege, nor shall the waiver of any right, power, privilege or default
hereunder, or under any agreement, contract, indenture, document, or instrument
mentioned in the Credit Agreement, constitute a waiver of any other default of
the same or of any other term or provision.
IV. GENERAL
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4.1 Representations. The Company hereby represents and
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warrants to the Banks and the Agent that:
(a) The Company is a corporation duly existing and in good
standing under the laws of Delaware.
(b) Newco is a limited liability company duly existing and in
good standing under the laws of Delaware.
(c) The execution, delivery and performance by the Company of
this Amendment and the Company Collateral Documents are within the
Company's power and authority, have been duly authorized by all
necessary corporate action, have received all necessary consents and
approvals (if any shall be required), and do not and will not
contravene or conflict with any provision of law or of the Certificate
of Incorporation or By-laws of the Company or its Subsidiaries, or of
any other agreement binding upon the Company or its Subsidiaries or
their respective property.
(d) The execution, delivery and performance by Newco of the
Newco Collateral Documents are within Newco's power and authority, have
been duly authorized by all necessary action, have received all
necessary consents and approvals (if any shall be required), and do not
and will not contravene or conflict with any provision of law or of the
articles of organization or operating agreement of Newco, or of any
other agreement binding upon Newco or its property.
(e) This Amendment and the Company Collateral Documents
constitute the legal, valid, and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
(f) The Newco Collateral Documents constitute the legal,
valid, and binding obligations of Newco, enforceable against Newco in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
(g) As security for the Liabilities, the Agent has (or in the
case of Newco will have immediately following the Newco Formation) a
valid first priority perfected security interest in all assets of the
Company and Newco (other than real estate interests which do not
constitute fixtures).
(h) Except for any Event of Default or Unmatured Event of
Default which will be cured by this Amendment becoming effective, no
Event of Default or Unmatured Event of Default has occurred and is
continuing or will result from this Amendment.
(i) The Company has furnished to the Banks a true and correct
copy of the Purchase Agreement (including attachments thereto).
4.2 Conditions Precedent to Effectiveness. This Amendment
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shall become effective as of October 21, 1999 (the "Effective Date"), subject,
however, to the receipt by the Agent of the following, each appropriately
completed and duly executed as required and otherwise in form and substance
reasonably satisfactory to the Agent:
(a) counterparts of this Amendment, executed by the Company
and the Banks.
(b) the Newco Security Agreement, executed by Newco;
(c) the Newco Guaranty, executed by Newco;
(d) the Company Pledge Agreement, executed by the Company,
together with (i) all certificates and instruments representing the
entire membership interest of the Company in Newco, and (ii) the
agreement of Newco that it will comply with instructions originated by
the Agent without further consent of the Company;
(e) certified copies of resolutions of the Board of Directors
of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Amendment;
(f) certified copies of the articles of organization and the
operating agreement of Newco as in effect on the Effective Date,
certified by an authorized person as of the Effective Date;
(g) a good standing certificate for Newco from the Secretary
of State of the State of Delaware (or similar, applicable Governmental
Authority) as of a recent date;
(h) an opinion of Xxxxxxx, Carton and Xxxxxxx, counsel to the
Company and Newco, substantially in the form of Exhibit I attached
hereto;
(i) an opinion of Xxxx Xxxxxxxxx, counsel to the Company and
Newco substantially in the form of Exhibit II hereto;
(j) acknowledgment copies of all UCC-l financing statements
filed, registered or recorded to perfect the security interests of the
Agent, or other evidence satisfactory to the Agent that there has been
filed, registered or recorded all financing statements and other
filings, registrations and recordings necessary and advisable to
perfect the Liens of the Agent in accordance with applicable law;
(k) written advice relating to such Lien and judgment searches
as the Agent shall have requested, and such termination statements or
other documents as may be necessary to confirm that the Collateral
furnished by Newco is subject to no other Liens in favor of any Persons
(other than Permitted Liens);
(l) evidence of the payment of all legal fees and expenses of
the Agent heretofore billed to the Company;
(m) A certificate of the President or a Vice-President of the
Company to the effect that (i) all necessary consents or approvals with
respect to this Amendment have been obtained; and (ii) attached thereto
is a true and correct copy of the Purchase Agreement;
(n) A certificate of the Secretary or Assistant Secretary of
the Company, certifying the name(s) of the officer(s) of the Company
authorized to sign this Amendment and the documents related hereto on
behalf of the Company; and
(o) Such other instruments, agreements and documents as the
Agent may reasonably request, in each case duly executed as required
and otherwise in form and substance satisfactory to the Banks.
4.3 Documents Remain in Effect. Except as amended or modified
--------------------------
by this Amendment, the Credit Agreement remains in full force and effect and the
Company confirms that its representations, warranties, agreements and covenants
contained in, and obligations and liabilities under, the Credit Agreement and
each of the other Loan Documents are true and correct in all material respects
as if made on the date hereof, except where such representation, warranty,
agreement or covenant speaks as of a specified date. References to the Credit
Agreement in any other document shall be deemed to include a reference to the
Credit Agreement as amended or modified hereby, whether or not reference is made
to this Amendment.
4.4 Expenses. The Company covenants to pay to or reimburse the
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Agent, upon demand, for all costs and expenses (including legal expenses) in
connection with the development, preparation, negotiation, execution and
delivery of this Amendment and the Loan Documents.
4.5 Miscellaneous.
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(a) Section headings used in this Amendment are for
convenience of reference only, and shall not affect the construction of this
Amendment.
(b) This Amendment shall be a contract made under and governed
by the internal laws of the State of Illinois, without giving effect to
principles of conflicts of laws.
(c) All obligations of the Company and rights of the Banks and
the Agent, that are expressed herein, shall be in addition to and not in
limitation of those provided by applicable law.
(d) Whenever possible, each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law;
but if any provision of this Amendment shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Amendment.
(e) The Company acknowledges and agrees that the execution and
delivery by the Agent and the Banks of this Amendment shall not be deemed (i) to
create a course of dealing or otherwise obligate the Agent or the Banks to
forbear or execute similar amendments under the same or similar circumstances in
the future, or (ii) to amend, relinquish or impair any right of the Agent or the
Banks to receive any indemnity or similar payment from any Person or entity as a
result of any matter arising from or relating to this Amendment.
(f) This Amendment shall be binding upon and inure to the
benefit of the parties and thereto and their respective successors and assigns.
No third party beneficiaries are intended in connection with this Amendment.
(g) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Agent of a facsimile transmitted document purportedly
bearing the signature of a Bank or the Company shall bind such Bank or the
Company, respectively, with the same force and effect as the delivery of a hard
copy original. Any failure by the Agent to receive the hard copy executed
original of such document shall not diminish the binding effect of receipt of
the facsimile transmitted executed original of such document of the party whose
hard copy page was not received by the Agent.
(h) This Amendment, together with the Credit Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto. This Amendment may not be
amended except in accordance with the provisions of Section 15.1 of the Credit
Agreement.
* * *
IN WITNESS WHEREOF, the parties hereto have caused the
execution and delivery hereof by their respective representatives thereunto duly
authorized as of the date first herein appearing.
ALLIED PRODUCTS CORPORATION, a
Delaware corporation
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. xxxxxxxxx
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Title: Vice President
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BANK OF AMERICA , N.A. (formerly
known as Bank of America National Trust
and Savings Association), as Agent
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Vice President
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BANK OF AMERICA , N.A. (formerly known
as Bank of America National Trust and
Savings Association), in its individual
corporate capacity
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
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Title: Vice President
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LASALLE NATIONAL BANK
By: /s/ Xxxx Xxx Xxxxxxxx
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Name: Xxxx Xxx Xxxxxxxx
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Title: First Vice President
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