AMENDMENT NO. 15
TO THE LOAN AND SECURITY AGREEMENT
BETWEEN XXXX VALVE COMPANY, INC.
AND LASALLE BUSINESS CREDIT, INC.
This Amendment No. 15 dated as of August 5 , 1995
("Amendment") to the Loan Agreement (defined below) is entered into
by and between Xxxx Valve Company, Inc. ("Borrower") and LaSalle
Business Credit, Inc. ("LaSalle") (formerly known as StanChart
Business Credit, Inc.).
W I T N E S S E T H
WHEREAS, the Borrower and LaSalle are parties to a Loan and
Security Agreement originally dated as of January 30, 1987, as
previously amended by amendments through Amendment No. 5 and
Restatement of Loan and Security Agreement, dated as of September
27, 1991, by Amendment No. 6, dated as of April 8, 1994, by
Amendment No. 7, dated as of September 27, 1994, by Amendment No.
8, dated as of December 16, 1994, by Amendment No. 9, dated as of
January 25, 1995, by Amendment No. 10, dated as of February 27,
1995, by Amendment No. 11, dated as of March 27, 1995, by Amendment
No. 12, dated as of April 27, 1995, by Amendment No. 13, dated as
of June 27, 1995 and by Amendment Xx. 00, xxxxx xx xx Xxxx 00, 0000
(xx amended heretofore and hereafter, the "Loan Agreement") under
which the Initial Term shall expire on August 27, 1995;
WHEREAS, Borrower has requested that LaSalle extend the
Expiration Date of the initial term of the Loan Agreement from
August 27, 1995 through December 31, 1996 and make certain other
amendments in connection therewith;
WHEREAS, Borrower has represented to LaSalle that Borrower's
request for LaSalle's agreement to such extension is conditioned on
the revision of the dates and amounts for payment of certain
required (mandatory) principal prepayments due from Borrower to the
Term Lender under the terms of the Term Notes (and pursuant to the
Note Agreement, dated as of August 15, 1991, as amended, under
which the Term Notes have been issued);
WHEREAS, the Term Lender has agreed to revise and extend the
due dates of such required (mandatory) prepayments as requested by
Borrower;
WHEREAS, Borrower has acknowledged that its payment of any
part of such extended and revised required (mandatory) prepayments
to the Term Lender prior to the due dates thereof would constitute
an Event of Default under the Loan Agreement;
WHEREAS, Borrower has requested that LaSalle institute a
sub-facility allowing for the issuance of letters of credit;
WHEREAS, LaSalle has agreed to such amendments to the Loan
Agreement, on the terms and conditions set forth in this Amendment,
subject to the satisfaction by Borrower as required hereunder of
certain preconditions to such waivers and to effectiveness of such
amendments as set forth below;
WHEREAS, terms, unless otherwise defined herein, are used
herein with the meanings assigned to them in the Loan Agreement;
NOW, THEREFORE, in consideration of the mutual promiseS and
agreements of the parties hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION I - AMENDMENTS.
Upon fulfillment of the conditions to effectiveness under
Section III of this Amendment, the Loan Agreement shall be, and is
hereby, amended to be and read as follows:
A. Section 1.26 of the Loan Agreement, the definition of
"Expiration Date", shall be amended to read as follows:
"1.26 The term 'Expiration Date' shall mean December 31, 1996
or such later date as may be agreed by LaSalle and Borrower
pursuant to Section 3.1 hereof."
B. New Sections 1.36A, 1.36B, 1.36C and 1.36D are hereby
inserted after Section 1.36 of the Loan Agreement to read as
follows:
" 'L/C Bank' shall mean LaSalle National Bank or any other
bank which issues Letters of Credit, as consented to by LaSalle in
LaSalle's discretion, which consent shall not be unreasonably
withheld.
'L/C Guaranty' shall mean each and any agreement or
arrangement between LaSalle and the L/C Bank indemnifying L/C Bank
in connection with the Letters of Credit.
'L/C Reserve' shall mean the aggregate face value of all
Letters of Credit issued by L/C Bank at the request of and for the
account of Borrower.
'Letters of Credit' shall mean any stand-by Letters of Credit
which are now or hereafter at any time issued by L/C Bank at the
request of and for the account of Borrower, pursuant to the terms
of this Agreement, and which have not expired or been cancelled or
terminated, including without limitation all Letters of Credit
guaranteed or for which LaSalle shall have any obligation under the
terms of the L/C Guaranty."
C. 1.58 The term "Senior Note" shall mean the Senior
Subordinated Promissory Note, dated March 29, 1993, made by the
borrower to THV Acquisition Corp. in the original principal amount
of $500,000, as amended and restated in the form set forth in
Exhibit A hereto.
D. Section 2.1 is hereby amended by the addition thereto in
the eleventh line thereof, immediately before the current provison
therein, of the phrase "less the L/C Reserve; . . . . ."
E. Section 2.1 of the Loan Agreement is hereby amended by the
addition thereto of the following paragraph at the end thereof:
"Subject to the terms and provisions of this Agreement and
provided that no Event of Default has occurred, LaSalle may, at
Borrower's request and for the account of Borrower, guaranty the
payment of, or otherwise indemnify the L/C Bank for, Borrower's
reimbursement obligations with respect to, one or more Letters of
Credit pursuant to the L/C Guaranty; provided that the aggregate
outstanding face amount of the Letters of Credit shall not at any
time exceed the lesser of (a) $200,000 and (b) the amount which is
available for borrowing as Loans at such time as provided in the
first paragraph of Section 2.1 above. The Letters of Credit shall
be for purposes of supporting performance bonds on orders given to
Borrower and shall be in form and substance satisfactory to
LaSalle. Borrower shall reimburse LaSalle, immediately upon demand,
in the amount of any payments made by LaSalle to any Person with
respect to the Letters of Credit or L/C Guaranty, and until LaSalle
shall have been so reimbursed by Borrower, such payments by LaSalle
shall be deemed to be Loans. In connection with the Letters of
Credit and L/C Guaranty, Borrower hereby indemnifies LaSalle for
any payments made by LaSalle with respect to the Letters of Credit
or L/C Guaranty and for any taxes (other than income taxes),
levies, deductions, charges and costs and expenses incurred by
LaSalle with respect to the Letters of Credit or the L/C Guaranty.
No letter of Credit shall have an expiration date after the end of
the Initial Term or any extension term of this Agreement unless so
agreed by LaSalle, and if any such Letter of Credit shall not have
expired upon the end of the Initial Term of any extension term of
this Agreement or any earlier termination, Borrower shall deposit
into a cash collateral account at a bank satisfactory to LaSalle an
amount equal to the face amount of any Letters of Credit having an
expiration date after the end of the Initial Term or any extension
term of this Agreement, which account shall be in the name of
LaSalle or LaSalle will have a first perfected security interest
therein for purposes of reimbursing LaSalle for any payments made
by LaSalle with respect to the Letters of Credit or the L/C
Guaranty. Borrower shall pay to LaSalle a Letter of Credit fee with
respect to the face amount of each Letter of Credit issued, which
fee shall be in an amount equal to 28 per annum, payable monthly in
arrears on the first day of each month after issuance. In addition,
Borrower shall pay to LaSalle all expenses incurred by LaSalle and
the L/C Bank in connection with the issuance, amendment, payment
and negotiation of any Letter of Credit, payable on the date
incurred by LaSalle or the L/C Bank, including, without limitation,
all the standard costs, fees and expenses charged by the L/C Bank
or other issuer of a Letter of Credit."
F. The first paragraph of Section 3.1 of the Loan Agreement
shall be amended to read as follows:
"3.1 This Agreement shall have a term (the 'Initial Term)
commencing on the Effective Date and expiring on the Expiration
Date of December 31, 1996. As of December 31, 1996 or any other
scheduled Expiration Date, the then scheduled Expiration Date may
be extended for a period of one (1) year or less only upon mutual
written consent of Borrower and LaSalle."
G. Section 6.3(o) is hereby amended by substitution for the
clause specifying permissible management fees beginning in line 9
thereof and currently ending with the date September 30, 1994 in
line 13 hereof (but not amending the proviso beginning thereafter)
of the following:
"and Borrower may pay management, consulting, or similar fees
to Transtech not to exceed $75,000 during any fiscal quarter ending
after September 30, 1991 and on or before December 31, 1994, and
$100,000 during any fiscal quarter ending on or after March 31,
1995 and on or prior to the Expiration Date."
H. Section 6.3(q) of the Loan Agreement is hereby amended by
the addition at the end of said Section 6.3(q) of the following
sentence:
"Notwithstanding the foregoing, the base salary of the
Chairman of the Board of Directors, Xxxxxx Xxxxx, for the
Borrower's fiscal year ending December 31, 1995 may be increased to
115% of such base compensation paid for the Borrower's fiscal year
ended December 31, 1994 without such excess causing Borrower to
violate any other provision of this Section 6.2(q)."
I. Section 6.13 is hereby amended to read in its entirety as
follows:
"6.13 Effective as of January 1, 1995, Borrower shall maintain
at all times Adjusted Net Worth in an amount of not less than Four
Million Five Hundred Seventy Thousand Four Hundred Dollars
($4,570,400.00). The minimum Adjusted Net Worth provided for herein
shall be increased, effective as of the beginning of each fiscal
year of Borrower, by an amount equal to eighty percent (80%) of
Borrower's after tax profit for the fiscal year just ended and
shall be decreased by dividends paid to the extent permitted under
Section 6.3(n)."
J. Section 6.17 is hereby amended by deletion of the
parenthetical phrase "(if this Agreement should be extended
hereafter by mutual agreement of Borrower and LaSalle at LaSalle's
discretion)" after the phrase "Each fiscal quarter thereafter" from
the provision in Section 6.17 setting the minimum EBITDA at
$700,000 per each fiscal quarter of the Borrower thereunder.
K. Section 14 (ii) of the Loan Agreement shall be amended by
substitution of the amount of "$500" therein as the amount of
reimbursements to LaSalle for audit charges per person day for the
current amount of "$450" therein, but said Section 14 shall
otherwise not be amended.
SECTION II - RENEWAL FEE.
Borrower shall pay to LaSalle a renewal fee in the amount of
$8,000, which shall be earned and payable on the date hereof.
SECTION III - CONDITIONS OF EFFECTIVENESS OF THIS AMENDMENT.
This Amendment shall not be effective unless and until:
(a) execution of this Amendment by the parties listed as
signatories below;
(b) execution and delivery of a Company General Certificate
for Borrower, including as Exhibits Borrower's current Certificate
of Incorporation and current By-laws (or statements that they have
not been changed since the date of the last Company General
Certificate delivered to LaSalle by Borrower), resolutions of
Borrower's Board of Directors adopting this Amendment and related
instruments and documents and relevant good standing certificates;
(c) delivery of a Reaffirmation of the Amended and Restated
Guaranty of HVHC, Inc.;
(d) delivery to LaSalle of an executed copy of an agreement
between the Term Lender and Borrower revising the amount and
extending the due dates of certain required (mandatory) prepayments
due by Borrower to the Term Lender as set forth on Exhibit B
hereto, consenting to the extension by LaSalle of the expiration
date of the Loan Agreement, and to the extension of the due date of
Borrower's principal and other obligations pursuant to such
extension of the expiration date, from August 27, 1995 to December
31, 1996, amending the reference to August 3, 1995 to January 3,
1997 under Section 2.4 of the Note Agreement, and otherwise in form
and substance satisfactory to LaSalle;
(e) delivery to LaSalle of an amended and restated
Subordinated Note in form and substance satisfactory to LaSalle,
such Subordinated Note to provide that no payments of principal or
interest may be made thereon prior to December 31, 1996, except
that prepayments of principal may be made at the time payments are
permitted to be made and are made to the Term Lender as set forth
on Exhibit B hereto, in the proportions for each payment as a
percentage of the then principal face amount of such Note which are
the same as the proportions that each of such permitted payments to
the Term Lender are as a percentage to the total principal amount
then due to the Term Lender; and
(f) delivery of any other agreements, consents, filings or
other documents relating to the Loan Agreement and documents
delivered thereunder which are reasonably requested by LaSalle in
relation to this Amendment.
SECTION IV - GENERAL.
(a) Except as herein amended or modified, the Loan Agreement,
as previously amended, shall remain unchanged and in full force and
effect and is hereby ratified, approved, and confirmed in all
respects.
(b) After the date hereof all references in the Loan Agreement
to "Agreement", "hereof", or the like shall refer to the Loan
Agreement as herein amended or modified.
(c) Borrowers agree to furnish to LaSalle upon request, such
resolutions, opinions, certificates, documents and assurances which
LaSalle may request in connection with this Amendment.
(d) This Amendment shall be binding upon Borrowers and LaSalle
and their respective successors and assigns, and shall inure to the
benefit of LaSalle and Borrowers and their respective successors
and assigns.
(e) This Amendment may be executed in any number of
counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same Amendment.
(f) This Amendment shall be governed by and construed in
accordance with the laws of the State of Illinois.
Dated as of the date and year first above written.
XXXX VALVE COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx
Title: Chairman
LASALLE BUSINESS CREDIT, INC.
By:
Title:
