1
EXHIBIT 10.1
THIRD AMENDMENT TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT ("Third Amendment") dated as
of June 19, 1998 is by and among XXXXXXX PIANO & ORGAN COMPANY, a Delaware
corporation, (hereinafter, together with its successors in title and assigns
called "Borrower" or "Xxxxxxx"), THE FIFTH THIRD BANK, an Ohio banking
corporation, as Agent (in such capacity, the "Agent"), THE FIFTH THIRD BANK
("Fifth Third"), as a Lender, and NBD BANK, N.A., a national banking
association, ("NBD") as a Lender, (Fifth Third and NBD are hereinafter
collectively the "Lenders" and each individually a "Lender").
PRELIMINARY STATEMENT
WHEREAS, Borrower, Agent and Lenders have entered into a Credit
Agreement dated as of October 16, 1997, as amended by a First Amendment dated as
of October 16, 1997 and a Second Amendment dated as of April 27, 1998 (the
"Credit Agreement"); and
WHEREAS, Borrower have requested Agent and Lenders to make additional
credit in the amount of $4,000,000 available to Borrower and to make various
other revisions to the Credit Agreement as set forth herein; and
WHEREAS, Borrower, Agent and Lenders now wish to amend the Credit
Agreement in accordance with the terms and provisions hereof;
NOW, THEREFORE, the parties hereto agree to supplement and amend the
Credit Agreement upon such terms and conditions as follows:
1. Capitalized Terms. All capitalized terms used herein shall
have the meanings assigned to them in the Credit Agreement unless the context
hereof requires otherwise. Any definitions as capitalized terms set forth herein
shall be deemed incorporated into the Credit Agreement as amended by this Third
Amendment.
2. Exhibits. Exhibit D to the Credit Agreement Form of Revolving
Promissory Note, is hereby amended in its entirety by Exhibit D to this Third
Amendment.
3. Total Credit Facility. Section 3.1 of the Credit Agreement is
hereby amended to in its entirety to read as follows:
"Section 3.1. Total Credit Facility. In consideration of
Xxxxxxx'x payment and performance of its Obligations and subject to the
terms and conditions contained in this Credit Agreement, the Lenders
agree to provide, and Xxxxxxx agrees to accept, until January 31, 1999,
an aggregate credit facility of up to Forty-Four Million and
THIRD AMENDMENT TO CREDIT AGREEMENT - Xxxxxxx Piano & Organ Company
2
- 2 -
00/100 Dollars ($44,000,000.00), and thereafter an aggregate credit
facility of up to Forty Million and 00/100 Dollars ($40,000,000.00)
(the "Total Credit"), subject to the terms and conditions hereof (the
"Credit Facility"). No Loans need be made by the Lenders if Xxxxxxx is
in Default or if there exists any Unmatured Default. This is an
agreement regarding the extension of credit, and not the provision of
goods or services."
4. Fees. Section 3.5(b)(iii) of the Credit Agreement is hereby
amended to in its entirety to read as follows:
"(iii) an annual facility fee of Fifty-Five Thousand
and 00/100 Dollars ($55,000.00) to be paid at the end of the
first Loan Year; and"
5. Financial Covenants. (a) Section 10.3(a)(iii) of the Credit
Agreement is hereby amended to in its entirety to read as follows:
"(iii) a ratio of Current Tangible Assets to current
liabilities of not less than One and Three Tenths to One (1.3
to 1), provided however for the calculation of current
liabilities for this Section 10.3(a)(iii) only, current
liabilities shall be exclusive of up to $4,000,000 of
Xxxxxxx'x Indebtedness to the Lenders in excess of $40,000,000
under the Loans;"
6. Reaffirmation of Covenants, Warranties and Representations.
Borrower hereby agrees and covenants that all representations and warranties in
the Credit Agreement, including without limitation all of those warranties and
representations set forth in Article 9, are true and accurate as of the date
hereof. Borrower further reaffirms all covenants in the Credit Agreement, and
reaffirm each of the affirmative covenants set forth in Section 10.1, the
negative covenants set forth in Section 10.2 and the financial covenants set
forth in Section 10.3 thereof, as if fully set forth herein, except to the
extent modified by this Third Amendment.
7. Conditions Precedent to Closing of Third Amendment. On or
prior to the closing of the Third Amendment (hereinafter the "Third Amendment
Closing Date"), each of the following conditions precedent shall have been
satisfied:
(a) Proof of Corporate Authority. Agent shall have received
from Borrower copies, certified by a duly authorized officer to be true
and complete on and as of the Third Amendment Closing Date, of records
of all action taken by Borrower to authorize (i) the execution and
delivery of this Third Amendment and all other certificates, documents
and instruments to which it is or is to become a party as contemplated
or required by this Third Amendment, and (ii) its performance of all of
its obligations under each of such documents.
THIRD AMENDMENT TO CREDIT AGREEMENT - Xxxxxxx Piano & Organ Company
3
-3-
(b) Documents. Each of the documents to be executed and
delivered at the Third Amendment Closing and all other certificates,
documents and instruments to be executed in connection herewith shall
have been duly and properly authorized, executed and delivered by
Borrower and shall be in full force and effect on and as of the Third
Amendment Closing Date.
(c) Legality of Transactions. No change in applicable law
shall have occurred as a consequence of which it shall have become and
continue to be unlawful (i) for Agent and each Lender to perform any of
its agreements or obligations under any of the Loan Documents, or (ii)
for Borrower to perform any of its agreements or obligations under any
of the Loan Documents.
(d) Performance, Etc. Except as set forth herein, Borrower
shall have duly and properly performed, complied with and observed each
of its covenants, agreements and obligations contained in each of the
Loan Documents. Except as set forth herein, no event shall have
occurred on or prior to the Third Amendment Closing Date, and no
condition shall exist on the Third Amendment Closing Date, which
constitutes a Default or an Event of Default.
(e) Proceedings and Documents. All corporate, governmental and
other proceedings in connection with the transactions contemplated on
the Third Amendment Closing Date, each of the other Loan Documents and
all instruments and documents incidental thereto shall be in form and
substance reasonably satisfactory to Agent.
(f) Changes; None Adverse. Since the date of the most recent
balance sheets of Borrower delivered to Agent, no changes shall have
occurred in the assets, liabilities, financial condition, business,
operations or prospects of Borrower which, individually or in the
aggregate, are material to Borrower, and Agent shall have completed
such review of the status of all current and pending legal issues as
Agent shall deem necessary or appropriate.
8. Miscellaneous. (a) Borrower shall reimburse Agent for all fees
and disbursements of legal counsel to Agent which shall have been incurred by
Agent in connection with the preparation, negotiation, review, execution and
delivery of this Third Amendment and the handling of any other matters
incidental hereto.
(b) All of the terms, conditions and provisions of the
Agreement not herein modified shall remain in full force and effect. In the
event a term, condition or provision of the Agreement conflicts with a term,
condition or provision of this Third Amendment, the latter shall govern.
(c) This Third Amendment shall be governed by and shall
be construed and interpreted in accordance with the laws of the State of Ohio.
THIRD AMENDMENT TO CREDIT AGREEMENT - Xxxxxxx Piano & Organ Company
4
(d) This Third Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
(e) This Third Amendment may be executed in several
counterparts, each of which shall constitute an original, but all which together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Third Amendment has been duly executed and
delivered by or on behalf of each of the parties as of the day and in the year
first above written.
XXXXXXX PIANO & ORGAN COMPANY,
Borrower
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
THE FIFTH THIRD BANK, Agent
By: /s/ XXXXXX X. XXXX
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
THE FIFTH THIRD BANK, Lender
By: /s/ XXXXXX X. XXXX
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
NBD BANK, N. A., Lender
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: First Vice President
THIRD AMENDMENT TO CREDIT AGREEMENT - Xxxxxxx Piano & Organ Company
5
EXHIBIT D
FORM OF SECOND AMENDED AND RESTATED REVOLVING PROMISSORY NOTE(1)
[$22,000,000.00] Cincinnati, Ohio
[June, ___, 1998]
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE ("Note") is made
and entered into as of the date hereof by XXXXXXX PIANO & ORGAN COMPANY, a
Delaware corporation, (the "Borrower") to the order of [THE FIFTH THIRD BANK/NBD
BANK, N.A.] (hereinafter, together with its permitted successors and assigns,
called "Bank").
This Note has been executed and delivered pursuant to a certain Credit
Agreement dated as of October 16, 1997, as amended by First Amendment to Credit
Agreement dated October 16, 1997 and Second Amendment to Credit Agreement dated
as of April, 27, 1998, and a Third Amendment dated as of June 19, 1998 by and
among Borrower, The Fifth Third Bank, an Ohio banking corporation, as "Agent",
and the Banks listed therein (collectively, and as the same may be further
amended, modified or restated, the "Credit Agreement"), and is subject to the
terms and conditions of the Credit Agreement, including without limitation,
acceleration upon the terms provided therein. All capitalized terms used herein
shall have the meanings assigned to them in the Credit Agreement unless the
context hereof requires otherwise.
Borrower, for value received, promises to pay to the order of Bank, at
Agent's Head Office, for the account of Bank in accordance with the Credit
Agreement, the principal sum of TWENTY-TWO MILLION AND 00/100 DOLLARS
($22,000,000.00) until January 31, 1999, and thereafter TWENTY MILLION AND
00/100 DOLLARS ($20,000,000.00) (the "Credit Commitment") or so much thereof as
is loaned by Bank pursuant to the provisions hereof and the terms and provisions
of the Credit Agreement, together with interest on the unpaid principal amount
as defined, determined and adjusted pursuant to the Credit Agreement ("Interest
Rate"). Interest shall be due and payable monthly in arrears on the first day of
each month. All interest under this Note shall be computed on the basis of the
actual number of days elapsed over an assumed year consisting of three hundred
sixty (360) days. Principal and all remaining accrued interest shall be due and
payable on or before October 1, 2000, or as otherwise provided in the Credit
Agreement.
--------------------
1 This Second Amended and Restated Revolving Promissory Note is
issued upon surrender of and in exchange for an Amended and Restated Revolving
Promissory Note dated April 27, 1998, in the original principal amount of
$21,900,000.00 having a maturity date of October 1, 2002. The issuance of this
Second Amended and Restated Revolving Promissory Note is to reflect the various
amendments that have been made to the terms of the Credit Agreement, including
but not limited to Lender replacing the Amended and Restated Revolving
Promissory Note, and Lender extending to Borrowers, as hereinafter defined,
additional funds under the Revolving Promissory Loan. This Second Amended and
Restated Revolving Promissory Note shall not be construed as a novation or be
construed in any manner as an extinguishment of the obligations arising under
the Amended and Restated Revolving Promissory Note, or to affect the priority of
the security interest granted in connection with any promissory notes executed
pursuant to the Credit Agreement as defined herein.
SECOND AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
6
- 2 -
This Note is subject to mandatory prepayment upon the terms and
conditions set forth in the Credit Agreement. This Note may be prepaid in whole
or in part as set forth in the Credit Agreement.
If this Note is accelerated pursuant to the Credit Agreement or if a
Default or an Event of Default with respect to any monetary payment under the
Credit Agreement shall have occurred and during the period in which such Default
or Event of Default is continuing, the outstanding principal and all accrued
interest as well as any other Obligations due Bank or Agent under any Loan
Document shall bear interest at three percent (3%) above the Interest Rate.
Subject to the terms and conditions of the Credit Agreement and until
the earlier of October 1, 2000 or the earlier termination of the Credit
Agreement in accordance with its terms, Borrower may borrow, repay and reborrow
from Bank and Bank hereby agrees to lend and relend to Borrower such amounts not
to exceed Bank's Participation Percentage of the Total Credit as the Borrower
may from time to time request.
The Borrower hereby: (i) waives presentment, demand, notice of demand,
protest, notice of protest, notice of presentment and notice of nonpayment and
any other notice required to be given by law, except as otherwise specifically
provided in the Credit Agreement, in connection with the delivery, acceptance,
performance, default or enforcement of this Note, of any indorsement or guaranty
of this Note; and (ii) consents to any and all delays, extensions, renewals or
other modifications of this Note or waivers of any term hereof or the failure to
act on the part of Agent or Bank or any indulgence shown by Agent or Bank, from
time to time and in one or more instances, (without notice to or further assent
from Borrower) and agrees that no such action, failure to act or failure to
exercise any right or remedy, on the part of Agent or Bank shall in any way
affect or impair the obligations of Borrower or be construed as a waiver by Bank
of, or otherwise affect, any of Bank's rights under this Note, or under any
indorsement or guaranty of this Note. Subject to the terms of the Credit
Agreement, Borrower further agrees to reimburse Agent and Bank for all advances,
charges, costs and expenses, including reasonable attorney's fees, incurred or
paid in exercising any right, power or remedy conferred by this Note, or in the
enforcement thereof.
Anything herein to the contrary notwithstanding the obligations of
Borrower under this Note, the Credit Agreement or any other Loan Documents shall
be subject to the limitation that payments of interest shall not be required to
the extent that receipt of any such payment by any Bank would be contrary to the
provisions of law applicable to such Bank limiting the maximum rate of interest
that may be charged or collected by the Bank. Without limiting the generality of
the foregoing, all calculations of the rate of interest contracted for, charged
or received under this Note which are made for the purposes of determining
whether such rate of interest exceeds the maximum rate of interest permitted by
applicable law shall be made, to the extent permitted by applicable law, by
amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of this Note, all interest at any time contracted for,
charged or received in connection with the indebtedness evidenced by this Note,
and then to the extent that any excess remains, all such excess shall be
SECOND AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
7
- 3 -
automatically credited against and in reduction of the principal balance, and
any portion of said excess which exceeds the principal balance shall be paid by
Bank to Borrower, it being the intent of the parties hereto that under no
circumstances shall Borrower be required to pay any interest in excess of the
highest rate permissible under applicable law.
The provisions of this note shall be governed by and interpreted in
accordance with the laws of Ohio.
The undersigned hereby designates all courts of record sitting in
Cincinnati, Ohio and having jurisdiction over the subject matter, state and
federal, as forums where any action, suit or proceeding in respect of or arising
from or out of this Note, its making, validity or performance, may be prosecuted
as to all parties, their successors and assigns, and by the foregoing
designation the undersigned consents to the jurisdiction and venue of such
courts.
TIME IS OF THE ESSENCE IN THE PERFORMANCE OF THE OBLIGATIONS OF THIS
NOTE.
IN WITNESS WHEREOF, the undersigned has executed this Revolving Credit
Note as of the day and year set forth above.
XXXXXXX PIANO & ORGAN
COMPANY,
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SECOND AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
