EXHIBIT 10.42.6
Third Amendment to Amended and Restated Note Agreement
dated July 31, 1995
between the Registrant and Principal Mutual Life Insurance Company
THIRD AMENDMENT TO AMENDED AND RESTATED NOTE AGREEMENT
THIS AMENDMENT ("Amendment") effective as of July 31, 1995 is entered into
between Hurco Companies, Inc., an Indiana corporation (the "Company"), and
Principal Mutual Life Insurance Company (the "Purchaser").
WITNESSETH:
The Company and the Purchaser have entered into that certain Hurco
Companies, Inc. Amended and Restated Note Agreement dated as of March 24, 1994,
as amended by that certain (1) Amendment and Notes Modification Agreement dated
as of January 31, 1995 and (2) Amendment dated May 31, 1995 (as so amended the
"Note Agreement"). The Company and the Purchaser agree to amend the Note
Agreement on the terms and conditions hereinafter set forth. Terms defined in
the Note Agreement which are used herein shall have the same meaning set forth
in the Note Agreement unless otherwise specified herein.
1. AMENDMENT. Effective as of July 31, 1995 and subject to the conditions
precedent set forth in paragraph 2 hereof, the Note Agreement is hereby
amended as follows:
1.1. In SECTION 7.1, the word "and" before "April 30, 1996" is deleted and
replaced by ",", the words "July 31, 1996 and October 31, 1996" are added
after "April 30, 1996", and the following fiscal periods and amounts are
added under the headings "FISCAL QUARTER ENDED" and "MINIMUM CONSOLIDATED
ADJUSTED NET WORTH":
MINIMUM CONSOLIDATED
FISCAL QUARTER ENDED ADJUSTED NET WORTH
July 31, 1996 $6,500,000
October 31, 1996 $7,000,000
For the fiscal quarters ending on July 31, 1996 and October 31, 1996, the
above-stated Minimum Consolidated Adjusted Net Worth amounts shall not be
adjusted by 50% of the cumulative net income.
1.2 In SECTION 7.2, the date "May 1, 1996" in the fifth line is replaced by
the date "November 1, 1996",, and the following fiscal periods and amounts
are added under the headings "FISCAL QUARTER ENDED" and "MINIMUM CURRENT
ASSETS":
FISCAL QUARTER ENDED MINIMUM CURRENT ASSETS
July 31, 1996 $40,000,000
October 31, 1996 $40,000,000
1.3 In SECTION 7.3, the following fiscal periods and percentages are added
under the headings "FISCAL QUARTER ENDED" and "PERCENTAGE":
FISCAL QUARTER ENDED PERCENTAGE
July 31, 1996 82%
October 31, 1996 80%
1.4 In SECTION 7.4, the following fiscal period and amount are added under
the headings "FISCAL PERIOD" and "MAXIMUM LOANS, ETC.":
FISCAL PERIOD MAXIMUM LOANS, ETC.
Fiscal Year Ending
October 31, 1996 $1,500,000
Under the same headings, delete (1) "Fiscal Quarter Ending
January 31, 1996" and "$375,000 and (2) "Fiscal Quarter
Ending April 30, 1996" and "$375,000."
1.5 In SECTION 7.5, the following fiscal period and ratio are added under
the headings "FISCAL QUARTER ENDED" and "RATIO":
FISCAL QUARTER ENDED RATIO
July 31, 1996 1.0 to 1.0
October 31, 1996 1.25 to 1.0
1.6 Amend and restate SECTION 7.16 as follows: "The Company will not permit
the ratio of Consolidated Total Indebtedness, as reflected on the Company's
consolidated balance sheet, to Consolidated Adjusted Net Worth to exceed at
any time (i) from the Closing Date through and including October 31, 1994,
9.5 to 1.0 and (ii) from November 1, 1994 through July 30, 1996, 10.5 to
1.0 and (iii) from July 31, 1996 through October 30, 1996, 4.5 to 1.0 and
(iv) on October 31, 1996 and thereafter, 4.0 to 1.0."
1.7 Add Section 6.16 as follows: "6.16 Equity Infusion. The Company agrees
that if there is any capital contribution or cash infused by shareholders
or third parties to the Company ("Equity Infusion"), then the Minimum
Consolidated Adjusted Net Worth Amounts in paragraph 7.1, for the fiscal
quarters ended July 31, 1996 and October 31, 1996, will be immediately and
automatically increased by 85% of the value of the Equity Infusion, but
only for the period of time commencing on the date of the Equity Infusion
through the fiscal quarter ended October 31, 1996. Also, if the Equity
Infusion equals or exceeds $3,000,000 in value, then (1) the percentages
set forth in paragraph 7.3 for the fiscal quarters ended July 31, 1996 and
October 31, 1996 will immediately and automatically reduce to 78%, but only
for the period of time commencing on the date of the Equity Infusion
through the fiscal quarter ended October 31, 1996 and (2) the leverage
ratios in paragraph 7.16 applicable to the fiscal quarters ended July 31,
1996 and October 31, 1996 will immediately and automatically change to 3.55
to 1.0, but only for the period of time commencing on the date of the
Equity Infusion through the fiscal quarter ended October 31, 1996. Default
in the performance of this paragraph 6.16 shall create an Event of Default
under paragraph 8.1(d).
1.8. Amend and restate in its entirety Section 6.14 to read as follows:
"6.14. MOST FAVORED LENDER. In the event that the Company shall enter
into any modification of the NBD Agreement or any other contract or
agreement pursuant to which the Company shall have available to it a
credit facility (a "Credit Agreement"), which increases the fees,
expenses, interest rate spreads over prime rate, LIBOR rate or any
other such base rate or any other charges which are or may be payable
to a Bank pursuant to a Credit Agreement (but excluding reimbursements
for actual out-of-pocket expenses of the Bank or its counsel and
excluding reasonable commitment fees to obtain, increase or extend or
renew a credit facility, including lines of credit and term loan
facilities, default rate interest and reasonable fees and expenses or
costs actually incurred for collection arising out of default under
any Credit Agreement and excluding any increase in interest rate,
charges, fees or expenses under the NBD Agreement, pursuant to Section
7.1(i) thereof, due to an increase in the interest rates on the Notes
or the fees payable under this Agreement) over the interest rate
spreads, fees, charges and expenses provided for the NBD Agreement or
such other Credit Agreement, as applicable, then, effective as of the
date of such increase, the amount of the increase in the interest rate
spread (i.e., the number of basis points added to the interest rate
spread), if any, shall be added to the interest rate payable to the
Purchaser under the Notes, and as and when the amount representing the
increase of fees, expenses and/or charges, if any, becomes due and
payable under the Credit Agreement, the Company shall pay to the
Purchaser a comparable amount as a fee. In no event will the fee
payable to the Purchaser pursuant to the foregoing exceed the amount
of the corresponding increase in fee, charge or expense payable under
the modified Credit Agreement. Failure of the Company to make the
payments which become due and payable under this Section 6.14 shall
constitute an Event of Default under Section 8.1(a). Upon any increase
in the interest rate to be charges under the Notes pursuant to the
terms of this Section 6.14, the Company shall execute such amendments
to the Notes and this Agreement as the Purchaser reasonably may
request to confirm and evidence the increase in the interest rate.
The Company also covenants and agrees to provide to Purchaser, as and
when furnished to NBD Bank or any replacement lender, all written
reports, business reports and other financial reports and projections
furnished by the Company to NBD Bank or such replacement lender,
whether pursuant to the terms of the NBD Agreement or otherwise."
1.9 The Company agrees to immediately and automatically grant Purchaser the
same loan covenants, and terms as it grants NBD Bank NA or any replacement
lender, if such covenants and terms are difference in kind or more
restrictive (on the Company) than the Purchaser's existing covenants or
terms. If the Company defaults in the performance of such new covenants or
terms, an Event of Default shall arise under paragraph 8.1(d). This
covenant applies only to the fiscal quarters ended July 31, 1996 and
October 31, 1996.
2. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
latest to occur of the date (i) the Company shall have delivered to the
Purchaser reaffirmations of each of the Subsidiary Guaranties and the
Autocon Guaranty executed in favor of Purchaser, (ii) the Company and NBD
execute and deliver amendments to the NBD Agreement and the NBD Term Loan
in the form of EXHIBIT A attached hereto, (iii) the Purchaser and NBD
execute and deliver an amendment to the Intercreditor Agreement in the form
of EXHIBIT B attached hereto (the "Intercreditor Amendments"), and (iv) the
Company shall have paid to the Collateral Agent a $25,000 amendment fee.
3. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Purchaser that (i) this Amendment constitutes a legal,
valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, and (ii) that no event has occurred and no
condition exists which constitutes an "Event of Default" (as defined in the
Note Agreement) or with the lapse of time or the giving of notice or both,
would become an Event of Default.
4. COSTS AND EXPENSES. In accordance with Section 11.1 of the Note
Agreement, the Company acknowledges that it is liable to pay all reasonable
expenses of Purchaser, including, without limitation, reasonable charges
and disbursements of special counsel, incurred in connection with the
preparation, execution and delivery of this Amendment.
5. RATIFICATION. Except as specifically amended or modified above, the Note
Agreement and each of the Notes shall remain in full force and effect and
are hereby ratified and confirmed. The execution, delivery and
effectiveness of this Amendment shall neither operate as a waiver of any
right, power or remedy of the Purchaser under the Note Agreement or the
Notes nor operate a waiver of the provisions of the Note Agreement or the
Notes except as specifically set forth herein.
IN WITNESS WHEREOF, the Company and the purchaser have caused this
Amendment to be executed and delivered by their respective officer or officers
thereunto duly authorized.
HURCO COMPANIES, INC.
By: /s/ Xxxxx X. Xxxx
Title: Senior Vice President and
Chief Financial Officer
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
Its: Second Vice President-
Securities Investment
By: /s/ Xxxx Xxxxxxx
Its: Counsel
