TWELFTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT,
AMENDMENT AGREEMENT, AMENDED AND RESTATED PLEDGE
AGREEMENT AND SECURITY AGREEMENT
This Twelfth Amendment to Amended and Restated Credit Agreement,
Amendment Agreement, Amended and Restated Pledge Agreement and Security
Agreement (this "Amendment") is entered into as of July 8, 2002 between Bank
One, NA, with its main office in Chicago, Illinois (successor by merger to Bank
One, Michigan) ("Bank One"), PNC Bank, National Association (collectively with
Bank One, the "Banks"), with Bank One as agent for the Banks (the "Agent"),
Owosso Corporation ("Owosso"), Motor Products-Ohio Corporation ("Motor Products
Ohio"), Motor Products-Owosso Corporation ("Motor Products Owosso", and
collectively with Motor Products Ohio, the "Motor Products Companies"), Ahab
Investment Company, DWZM, Inc., SMX Liquidation Corp., Inc., f/k/a Snowmax
Incorporated, GBMC, Inc., Stature Electric, Inc., Owosso Motor Group, Inc., AAC
Liquidation Corp., Inc., f/k/a Astro Air Coils, Inc. and Owosso-Delaware, Inc.
and f/k/a Xxxxxx Company (collectively, the "Borrowers").
RECITALS
This Amendment is based on the following recitals ("Recitals"), which
are incorporated into and made a part of this Amendment:
1. The Banks and the Borrowers are parties to an Amended and Restated
Credit Agreement dated as of January 22, 1999, as amended by a First Amendment
to Amended and Restated Credit Agreement dated as of June 14, 2000, a Second
Amendment to Amended and Restated Credit Agreement dated as of September 28,
2000, a Third Amendment to Amended and Restated Credit Agreement, Revolving
Credit Note, Amended and Restated Pledge Agreement and Security Agreement dated
effective as of October 29, 2000, a Fourth Amendment to Amended and Restated
Credit Agreement, Revolving Credit Notes and Security Agreement dated as of
November 30, 2000, a Fifth Amendment to Amended and Restated Credit Agreement,
Revolving Credit Notes, Amended and Restated Pledge Agreement and Security
Agreement dated January 24, 2001, an Amendment Agreement dated February 12, 2001
(the "Amendment Agreement"), a Seventh Amendment to Amended and Restated Credit
Agreement dated as of May 9, 2001, an Eighth Amendment to Amended and Restated
Credit Agreement and Amendment Agreement dated as of July 31, 2001, a Ninth
Amendment to Amended and Restated Credit Agreement and Amendment Agreement dated
January 7, 2002, a Tenth Amendment to Amended and Restated Credit Agreement and
Amendment Agreement dated February 7, 2002 and an Eleventh Amendment to Amended
and Restated Credit Agreement and Amendment Agreement dated May 16, 2002 (as
amended, the "Loan Agreement") and two Revolving Credit Notes dated May 16, 2002
each running in favor of one of the Banks (the "Notes") as well as various other
documents executed previously, simultaneously therewith or subsequently (all of
the foregoing, including the Loan Agreement, are collectively referred to as the
"Loan Documents").
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2. Under the terms of the Loan Agreement, the Borrowers were obligated
to permanently reduce the Commitments by $9,000,000 on or before July 1, 2002.
The Borrowers indicated to the Banks that they intended to use the proceeds of a
proposed sale of the stock of the Motor Products Entities to Hathaway Motion
Control Corporation ("Hathaway") to reduce the Commitments.
3. Owosso has in fact decided to sell all of the stock of the Motor
Products Entities and together with Hathaway and the Motor Products Entities has
entered into a Stock Purchase Agreement dated July 8, 2002 (the "Stock Purchase
Agreement"). However, Owosso has indicated that Hathaway needs additional time
to close the sale of certain of its assets to obtain the funds necessary to pay
the purchase price required by the Stock Purchase Agreement. Notwithstanding
anything in the Stock Purchase Agreement to the contrary, Owosso has represented
to the Banks that the sale contemplated by the Stock Purchase Agreement will
close by July 31, 2002, allowing the Borrowers to permanently reduce the
Commitments in the required amount by that date.
4. In order to allow the additional time needed to close the sale
contemplated by the Stock Purchase Agreement, thereby providing the Borrowers
with the funds needed to pay down the Commitments as required by the Loan
Agreement, the Borrowers have requested and, subject to the terms hereof, the
Banks have agreed to amend the Loan Agreement and the Amendment Agreement.
AGREEMENT
Based on the foregoing Recitals (which are incorporated herein as
representations, warranties, acknowledgments and agreements of the
parties, as the case may be) and for other good and valuable
consideration, the receipt and adequacy of which is mutually acknowledged
by the parties hereto, the Borrowers and the Banks agree as follows:
A. Section 2.2(d) of the Loan Agreement is amended to change the
reference to "July 1, 2002" to instead read "August 1, 2002".
B. Notwithstanding anything to the contrary in the Amendment Agreement
or the other Loan Documents, following the occurrence of an Event of Default
under the Amendment Agreement or any of the other Loan Documents (other than the
Specified Defaults and the Additional Defaults), the Obligations will accrue
interest at a rate that is 3% per annum more than the otherwise applicable
interest rate (but in no event higher than the highest rate permitted under
applicable law). The fact that the Banks are entitled to receive a higher rate
of interest upon the occurrence of an Event of Default is to compensate the
Banks for increased administrative and monitoring costs and does not waive or
modify any or their rights and remedies in connection with the occurrence of an
Event of Default.
C. Pursuant to the terms of the Stock Purchase Agreement and the Escrow
Agreement dated as of July 8, 2002 between Owosso, Hathaway Motion Control
Corporation ("Hathaway") and Bank One Trust Company, National Association ("Bank
One Trust"), Hathaway paid a $2,000,000 deposit to be held in escrow by Bank One
Trust (the "Deposit"). The Borrowers acknowledge and agree that, should the sale
contemplated by the Stock Purchase Agreement not close, Owosso may be entitled
to receive all or a portion of the Deposit, with any such amounts being paid to
Bank One for the account of Owosso in accordance with the terms of the Stock
Purchase Agreement. The Borrowers agree that any amounts paid to Bank One with
respect to the Deposit should be received by Bank One in its capacity as the
Agent and will be applied to permanently reduce the Commitments proportionally.
The Borrowers agree to execute any and all documents, including without
limitation amendments to the Amendment Agreement and Loan Agreement and amended
and restated promissory notes, that the Banks may deem necessary to reflect such
a permanent reduction of the Commitments.
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D. The Borrowers further acknowledge and agree that, absent execution
of this Amendment, their failure to permanently reduce the Commitments by July
1, 2002 by an additional $9,000,000 would have constituted an Event of Default
under the Amendment Agreement and the Loan Documents which would have terminated
the Forbearance Period and entitled the Agent, on behalf of the Banks, to
exercise its rights and remedies at its discretion. The Borrowers acknowledge
and agree that the agreement of the Agent and the Banks to enter into this
Amendment shall not be deemed to constitute a consent to or agreement to forbear
with respect to any future Events of Default under the Amendment Agreement or
the Loan Documents, nor have the Agent and the Banks indicated that they will
consent or continue to forbear if the Borrowers are unable to permanently reduce
the Commitments by the additional $9,000,000 by August 1, 2002, whether or not
sure failure is due to the failure of Hathaway to close the transaction
contemplated by the Stock Purchase Agreement.
E. From and after the date of this Amendment, references in the Loan
Documents (i) to the Loan Agreement and the Amendment Agreement are to be
treated as referring to the Loan Agreement and the Amendment Agreement as
amended by this Amendment, and (ii) to "obligations", "Obligations" and
"liabilities" are to be treated as referring to all indebtedness and obligations
referred to in this Amendment or the Loan Documents.
F. Subsequent to execution and delivery of this Amendment, Borrowers
must cause to be executed and delivered to the Banks such financing statements,
resolutions and other agreements that the Banks may reasonably require to
effectuate the transactions contemplated by this Amendment. Borrowers must pay
all costs and expenses (including reasonable attorneys' fees) incurred by the
Banks in connection with this Amendment.
G. Each Borrower expressly acknowledges and agrees that (i) each
Borrower, jointly, jointly and severally, and severally remains liable for any
and all obligations and indebtedness under the Loan Documents other than
obligations and indebtedness under the Reimbursement Agreement and (ii) except
to the extent heretofore released, all collateral security and security
interests, liens, pledges, and mortgages heretofore or hereafter granted the
Banks including, without limitation, such collateral, security interests, liens,
pledges, and mortgages granted under the Loan Documents, extend to and cover all
of each Borrower's obligations to the Banks, now existing or hereafter arising
including, without limitation, those arising in connection with this Amendment
and under all guaranty agreements now or in the future given by any Borrower in
either Bank's favor, each Borrower's present and future obligations to the Banks
under foreign exchange contracts, derivatives or hedging transactions, including
but not limited to interest rate, commodity, currency, or credit swaps or
options that may be provided from time to time by the Banks to the Borrowers,
all of which security interests, liens, pledges, and mortgages are ratified,
reaffirmed, confirmed and approved.
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H. Each Borrower represents and warrants to the Banks that:
(1) (a) The execution, delivery and performance of this Amendment
by the Borrowers and all agreements and documents delivered by
Borrowers in connection with this Amendment have been duly authorized
by all necessary corporate or other organizational action and does not
and will not require any consent or approval of its stockholders or
members, violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently
in effect having applicability to it or of its articles of
incorporation, articles of organization, or bylaws, or result in a
breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which
any Borrower is a party or by which it or its properties may be bound
or affected.
(b) No authorization, consent, approval, license, exemption
of or filing a registration with any court or governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary to the valid
execution, delivery or performance by Borrowers of this Amendment
and all agreements and documents delivered in connection with
this Amendment.
(c) This Amendment and all agreements and documents
delivered by Borrowers in connection with this Amendment are the
legal, valid and binding obligations of each Borrower enforceable
against it in accordance with the terms thereof.
(2) After giving effect to the amendments contained in this
Amendment, all of the representations and warranties contained in the
Loan Documents are true and correct in all material respects on and as
of the date hereof with the same force and effect as if made on and as
of the date hereof.
(3) Each Borrower's interim financial statements furnished to the
Banks, which have been provided through June 23, 2002, fairly present
such Borrower's financial condition as at such dates and the results
of such Borrower's operations for the periods indicated. The
Borrowers' consolidated financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, and since the date of the last such financial
statement there has been no material adverse change in such financial
condition.
I. The terms and provisions of this Amendment amend, add to and
constitute a part of the Loan Agreement, the Amendment Agreement and the other
Loan Documents. Except as expressly modified and amended by the terms of this
Amendment, all of the other terms and conditions of the Loan Agreement, the
Amendment Agreement and the other Loan Documents remain in full force and effect
and are ratified, reaffirmed, confirmed, and approved.
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J. If there is an express conflict between the terms of this Amendment
and the terms of the Loan Agreement or the other Loan Documents, the terms of
this Amendment govern and control.
K. This Amendment may be executed in any number of counterparts with
the same effect as if all signatories had signed the same document. All
counterparts must be construed together to constitute one instrument.
L. WAIVER OF JURY TRIAL.
BORROWERS AND BANKS EACH ACKNOWLEDGE THAT THE RIGHT TO A TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THE RIGHT MAY BE WAIVED. BORROWERS AND
BANKS EACH KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND WITHOUT COERCION, WAIVE ALL
RIGHTS TO TRIAL BY JURY OF ALL DISPUTES BETWEEN THEM. NEITHER OF THE BANKS NOR
ANY BORROWER SHALL BE DEEMED TO HAVE GIVEN UP THIS WAIVER OF JURY TRIAL UNLESS
THE PARTY CLAIMING THAT THIS WAIVER HAS BEEN RELINQUISHED HAS A WRITTEN
INSTRUMENT SIGNED BY THE OTHER PARTY STATING THAT THIS WAIVER HAS BEEN GIVEN UP.
M. RELEASE. AS OF THE DATE HEREOF EACH OF THE BORROWERS REPRESENTS AND
WARRANTS THAT THEY ARE AWARE OF, AND POSSESS, NO CLAIMS OR CAUSES OF ACTION
AGAINST EITHER OF THE BANKS OR THE AGENT. NOTWITHSTANDING THIS REPRESENTATION
AND AS FURTHER CONSIDERATION FOR THE AGREEMENTS AND UNDERSTANDINGS HEREIN, EACH
OF THE BORROWERS INDIVIDUALLY, JOINTLY, SEVERALLY, AND JOINTLY AND SEVERALLY, IN
EVERY CAPACITY, INCLUDING BUT NOT LIMITED TO, AS SHAREHOLDERS, OFFICERS,
PARTNERS, DIRECTORS, INVESTORS, OR CREDITORS OF ANY ONE OR MORE OF THE
BORROWERS, EACH OF ITS EMPLOYEES, AGENTS, EXECUTORS, SUCCESSORS AND ASSIGNS,
HEREBY RELEASES EACH OF THE BANKS AND THE AGENT, THEIR OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS
FROM ANY LIABILITY, CLAIM, RIGHT OR CAUSE OF ACTION THAT 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. BY WAY OF EXAMPLE AND NOT
LIMITATION, THE FORGOING INCLUDES ANY CLAIMS IN ANY WAY RELATED TO ACTIONS TAKEN
OR OMITTED TO BE TAKEN BY EITHER OF THE BANKS OR THE AGENT UNDER THE LOAN
DOCUMENTS, THE BUSINESS RELATIONSHIP WITH EITHER OF THE BANKS OR THE AGENT AND
ALL OTHER OBLIGATIONS OF ANY NATURE OR KIND OF ANY ONE OR MORE OF THE BORROWERS,
ANY ORAL AGREEMENTS OR UNDERSTANDINGS (ACTUAL OR ALLEGED), ANY BANKING
RELATIONSHIPS THAT ANY ONE OR MORE OF THE BORROWERS HAS OR MAY HAVE HAD WITH
EITHER OF THE BANKS AT ANY TIME AND FOR ANY REASON INCLUDING, BUT NOT LIMITED
TO, DEMAND DEPOSIT ACCOUNTS, OR OTHERWISE, BUT DOES NOT INCLUDE THE PARTIES'
FUTURE RIGHTS TO RECEIVE LOANS UNDER THE TERMS OF THE LOAN DOCUMENTS, AS AMENDED
BY THIS AGREEMENT, OR AS TO AMOUNTS ON DEPOSIT WITH EITHER OF THE BANKS OR STOCK
CERTIFICATES PLEDGED TO AND HELD BY EITHER OF THE BANKS AS COLLATERAL FOR THE
OBLIGATIONS.
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XXXX XXX, XXXXXXXX, f/k/a PNC BANK, NATIONAL
NBD BANK, individually and as Agent ASSOCIATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------- -------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President Title: Vice President
OWOSSO CORPORATION AHAB INVESTMENT COMPANY
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: President
DWZM, INC. SMX LIQUIDATION CORP., INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: President
GBMC, INC. STATURE ELECTRIC, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: Vice-President
[Signatures continued on following page]
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[Signatures continued from previous page]
OWOSSO MOTOR GROUP, INC. AAC LIQUIDATION CORP., INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: President Title: President
OWOSSO-DELAWARE, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
MOTOR PRODUCTS-OWOSSO MOTOR PRODUCTS-OHIO
CORPORATION CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------- -------------------------
Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice-President Title: Vice-President
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