FOURTEENTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT AND
AMENDMENT AGREEMENT
This Fourteenth Amendment to Amended and Restated Credit Agreement and
Amendment Agreement (this "Amendment") is entered into effective as of September
30, 2002 between Bank One, NA (successor by merger to Bank One, Michigan), with
its main office in Chicago, Illinois ("Bank One"), PNC Bank, National
Association (collectively with Bank One, the "Banks"), with Bank One as agent
for the Banks (the "Agent"), Owosso Corporation, Ahab Investment Company, DWZM,
Inc., SMX Liquidation Corp., Inc., f/k/a Snowmax Incorporated, 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
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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, an Eleventh Amendment to Amended and
Restated Credit Agreement and Amendment Agreement dated May 16, 2002, a Twelfth
Amendment to Amended and Restated Credit Agreement and Amendment Agreement as of
July 8, 2002 and a Thirteenth Amendment to Amended and Restated Credit
Agreement, Amendment Agreement, Amended and Restated Pledge Agreement and
Security Agreement dated July 30, 2002 (as amended, the "Loan Agreement") and
two Revolving Credit Notes dated on or about July 31, 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").
2. Pursuant to the terms of the Loan Agreement, and at the request of
the Borrowers, the Banks made available a letter of credit in the face amount of
$1,200,000 for the benefit of The Travelers Indemnity Company (the "Travelers
Workers Comp Letter of Credit") and a letter of credit in the face amount of
$400,000 for the benefit of Liberty Mutual (the "Liberty Mutual Workers Comp
Letter of Credit", and collectively with the Travelers Workers Comp Letter of
Credit, the "Workers Comp Letters of Credit"), both to allow the Borrowers to
obtain workers' compensation insurance. The Travelers Workers Comp Letter of
Credit currently expires on December 31, 2002, and Travelers must be notified by
September 30, 2002 whether the expiry date will be extended. The Liberty Mutual
Workers Comp Letter of Credit currently expires on December 31, 2002 and Liberty
Mutual must be notified by October 17, 2002 whether the expiry date will be
extended. The Borrowers have represented to the Banks that if the expiry dates
of the Workers Comp Letters of Credit are not extended the beneficiaries will
present the Workers Comp Letters of Credit for full payment.
3. Pursuant to the terms of various documents and agreements, and at
the request of the Borrowers, PNC also made available a letter of credit in the
face amount of $191,000 for the benefit of Triad Realty (the "PNC Letter of
Credit"), the expiry date of which was previously extended at the request of the
Borrowers and Triad Realty until September 30, 2003.
4. The Borrowers acknowledge that both the Forbearance Period and the
line of credit provided for under the Loan Agreement (the "Line of Credit")
terminate by their terms on December 31, 2002 (absent prior termination in
accordance with the terms of the Loan Documents). The Borrowers further
acknowledge that the Banks have not made any decisions about whether they will
be willing to extend the Forbearance Agreement or the Line of Credit beyond
December 31, 2002, the requirements of any proposed extension or whether they
will otherwise elect to exercise their rights or remedies on or before December
31. Nevertheless, the Borrowers have requested that the Banks agree to extend
the expiry dates of the Workers Comp Letters of Credit through March 31, 2003,
and previously requested that PNC agree to extend the expiry date of the PNC
Letter of Credit through September 30, 2003, to prevent draws while the Banks
and the Borrowers discuss the future of their lending relationship.
5. Additionally, at the time of execution of the Thirteenth Amendment
to Amended and Restated Credit Agreement, Amendment Agreement, Amended and
Restated Pledge Agreement and Security Agreement dated July 30, 2002, the
Borrowers indicated to the Agent and the Banks that, due to their sale of the
stock of Motor Products-Ohio Corporation and Motor Products-Owosso Corporation
they would not be able to meet the financial covenants set forth in Section 7(f)
of the Amendment Agreement. The Banks agreed to work with the Borrowers to
attempt to reset financial covenants to appropriate levels following the sales
and, based on information and projections provided by the Borrowers and
subsequent negotiations, the Borrowers and the Banks have agreed to a new
financial covenant to measure financial performance for the period September 1,
2002 through December 31, 2002.
6. The Banks have agreed to amend the Loan Agreement to provide for an
extension of the expiry dates of the Workers Comp Letters of Credit and the PNC
Letter of Credit and amendment of the financial covenants, subject to the terms
and conditions set forth herein.
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AGREEMENT
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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, Borrowers and
Banks agree as follows:
A. The Loan Agreement and the Amendment Agreement are amended as
follows:
(1) Notwithstanding anything to the contrary in the terms of
the Loan Agreement, the stated expiry dates of the Workers Comp Letters
of Credit only may be no later than March 31, 2003 and of the PNC
Letter of Credit only may be no later than September 30, 2003. Each of
the Workers Comp Letters of Credit and the PNC Letter of Credit will
continue to be a "Letter of Credit", as that term is defined and used
in the Loan Agreement, for all purposes, and the Borrowers have all
obligations, and the Banks all rights and remedies, with respect
thereto provided for in the Loan Agreement and the other Loan Documents
and any related applications or reimbursement agreements.
(2) Upon the occurrence of an Event of Default under the Loan
Agreement or the Amendment Agreement, or if the Borrowers and the Banks
have not executed an agreement providing for an extension of the
Forbearance Period and the maturity of the Line of Credit on or before
December 26, 2002, the Agent at its sole discretion may make an advance
under the Line of Credit equal to the face amount of any outstanding
Letter of Credit (including without limitation the Workers Comp Letters
of Credit and the PNC Letter of Credit) and hold any amount so advanced
as cash collateral security for the Borrowers' obligations to the Agent
and the Banks with respect to such Letter of Credit. Any amounts so
held will be deposited into a segregated interest bearing account at
Bank One in the name of the Agent in such capacity and the Agent in
such capacity shall be granted a lien and security interest in the
amounts deposited therein to secure all of the Obligations, provided,
however, that interest on such account will accrue for the benefit of
the Borrowers.
(3) Section 7(f) of the Amendment Agreement is amended to
delete the existing financial covenants for September, October,
November and December, 2002 only in their entireties and to add the
following new financial covenant: "Borrowers' consolidated EBITDA on a
cumulative basis for the period commencing September 1, 2002 shall not
be less than the following amounts at the following dates: September
30, 2002: $103,500.00; October 31, 2002: $265,500.00; November 30,
2002: $364,500.00; and December 31. 2002: $479,700.00."
B. Borrowers acknowledge and agree that nothing in this Amendment
constitutes an agreement on the part of the Banks or the Agent to extend either
the Forbearance Period or the Line of Credit beyond December 31, 2002 nor are
the Banks or the Agent obligated to either extend the Forbearance Period or the
Line of Credit or further extend the expiry date of any of the Workers Comp
Letters of Credit or the PNC Letter of Credit (or extend the expiry date of any
other Letter of Credit). The Agent and the Banks reserve all of their rights and
remedies under the Loan Agreement, the Amendment Agreement and the other Loan
Documents.
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C. 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.
D. 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.
E. 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 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.
F. 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.
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(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 August, 2002, fairly
present such Borrower's financial condition as of 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.
(4) GBMC, Inc., a Borrower under the Loan Agreement, has
dissolved without any assets or liabilities and has therefore been
removed as a Borrower from this Amendment.
G. 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.
H. 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.
I. 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.
J. 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.
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K. 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 BORROWERS'
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.
BANK ONE, NA (successor by merger to PNC BANK, NATIONAL ASSOCIATION
Bank One, Michigan), individually and as Agent
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 & CEO Title: President
[Signatures continued on following page]
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[Signatures continued from previous page]
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: Vice-President
OWOSSO-DELAWARE, 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
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: Vice-President Title: Vice-President
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