Hastings Manufacturing Company, Exhibit 4(b) to Form 10-Q 3rd Quarter 1999 EXHIBIT 4(b) FIRST AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT THIS FIRST AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT, dated as of November 11, 1999 (this...

	
		
		Hastings Manufacturing Company, Exhibit 4(b) to Form 10-Q 3rd Quarter 1999
		
		
		
		
	
	


EXHIBIT 4(b)

FIRST AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED LETTER AGREEMENT, dated
as of November 11, 1999 (this "Amendment"), is between HASTINGS MANUFACTURING
COMPANY, a Michigan corporation (the "Company"), and BANK ONE, MICHIGAN,
a Michigan banking corporation, formerly known as NBD Bank (the "Bank").

RECITALS

        A.         The Company and the Bank are parties to an amended and restated letter
agreement dated as of August 28, 1998 (as amended, the "Letter Agreement")
pursuant to which the Bank agreed, subject to the terms and conditions
thereof, to extend credit to the Company in a term loan in a maximum principal
amount of $6,600,000 and a $3,000,000 Credit Authorization.
        B.         The parties now desire to amend certain terms and provisions of the
Letter Agreement as set forth herein.

TERMS

        In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:

 
ARTICLE I.    AMENDMENTS.    Upon fulfillment of the conditions set
forth in Article III hereof, the Letter Agreement shall be amended as follows:
        1.1         Section 10(a) of the Letter Agreement shall be amended and restated
as follows:
                (a)         Funded Debt Ratio. Permit or suffer the Funded Debt Ratio
of the Company and its Subsidiaries to be greater than: (i) 2.80 to 1.00
at any time from and including the date hereof to December 30, 1998 or
(ii) 2.50 to 1.00 from and including December 31, 1998 to December 30,
1999, or (iii) 2.75 to 1.00 from and including December 31, 1999 to March
30, 2000, or (iv) 2.50 to 1.00 from and including March 31, 2000 until
September 29, 2000, or (v) 2.25 to 1.00 from and including September 30,
2000 to December 30, 2000, or (vi) 2.00 to 1.00 from and including December
31, 2000 and thereafter.
        1.2         Section 10(b) of the Letter Agreement shall be amended and restated
as follows:
                (b)         Debt Service Coverage Ratio.   Permit or suffer the Debt Service
Coverage Ratio of the Company and its Subsidiaries to be less than (i)
0.9 to 1.0 until Xxxxx 00, 0000, (xx) 1.00 to 1.00 from and including March
31, 1999 to June 29, 2000, (iii) 1.10 to 1.00 from and including June 30,
2000 to December 30, 2000, and (iv) 1.20 to 1.00 from and including December
31, 2000 and thereafter.








        1.3         Section 10(c ) of the Letter Agreement shall be amended and restated
as follows:
                (c)         Total Liabilities to Tangible Net Worth.   Permit or suffer
the ratio of the consolidated Total Liabilities of the Company and its
Subsidiaries to the consolidated Tangible Net Worth of the Company and
its Subsidiaries to be greater than (i) 2.00 to 1.00 to and including December
30, 2000, and (ii) 1.75 to 1.00 on December 31, 2000 and thereafter.
        1.4         Section 10(i) of the Letter Agreement is modified to replace clause
(ii) as follows:
                "(ii) investments in and advances to Casite Intraco LLC in an amount
not to exceed $75,000, and (iii) other amounts which do not exceed, in
the aggregate, $1,000,000."

 
ARTICLE II.   REPRESENTATIONS.   The Company represents and warrants
to the Bank that:
        2.1         The execution, delivery and performance of this Amendment are within
its powers, have been duly authorized and are not in contravention with
any law, of the terms of its Articles of Incorporation or By-laws, or any
material undertaking to which it is a party or by which it is bound.
        2.2         This Amendment is the legal, valid and binding obligations of the
Company enforceable against it in accordance with the respective terms
hereof.
        2.3         After giving effect to the amendments herein contained, the representations
and warranties contained in Section 11 of the Letter Agreement are true
on and as of the date hereof with the same force and effect as if made
on and as of the date hereof, provided, that, the representations
and warranties contained in Section 11(f) of the Letter Agreement shall
be deemed to have been made with respect to the financial statements most
recently delivered pursuant to Section 9(d) of the Letter Agreement.
        2.4         Upon the effectiveness of Article IV of this Amendment, no Event
of Default or event or condition which, with notice or lapse of time or
both could become such an Event of Default exists or has occurred and is
continuing on the date hereof.

 
ARTICLE III.   CONDITIONS OF EFFECTIVENESS.   This Amendment shall
not become effective until each of the following has been satisfied:
        3.1         Copies of resolutions adopted by the Board of Directors of the Company,
certified by an officer of the Company, as being true and correct and in
full force and effect without amendment as of the date hereof, authorizing
the Company to enter into this Amendment and any other documents or agreements
executed pursuant hereto, if any, shall have been delivered to the Bank.



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        3.2         This Amendment shall be signed by the Company and the Bank.
        3.3         Such other documents and agreements requested by the Bank.

 
ARTICLE IV.   WAIVER AND CONSENT.
        Subject to the satisfaction of the conditions in Article III:
        4.1         The Company has notified the Bank that circumstances exist which
constitute a default under Section 10( b) of the Letter Agreement as of
September 30, 1999. The Bank hereby waives the right to declare any Event
of Default arising under Section 10(b) of the Letter Agreement, as a result
(and solely as a result) of such default, through the period ending September
30, 1999. Such waiver shall be strictly limited to such default and such
time periods and nothing herein shall be construed as a waiver of or limitation
on any rights of the Bank under the Letter Agreement to declare an Event
of Default and to exercise the remedies provided to the Bank thereunder
in any other circumstances.
        4.2         The Company has notified the Bank that it has entered into a 50/50
Joint Venture with Intraco Corp. named "Casite Intraco LLC". The Company
has also notified the Bank that it has assigned the "Casite" trade name
to Casite Intraco LLC. The Bank hereby consents to the creation of Casite
Intraco LLC and to the Company's assignment of the "Casite" trade name
to Casite Intraco LLC. The Bank also waives the right to declare any Event
of Default arising under Section 10(f), Section 10(g) and Section 10(i)
of the Letter Agreement relating to the creation of Casite Intraco LLC
and the assignment of the "Casite" trade name, as a result (and solely
as a result) of such default. Such waiver shall be strictly limited to
such default and nothing herein shall be construed as a waiver of or limitation
on any rights of the Bank under the Letter Agreement to declare an Event
of Default and to exercise the remedies provided to the Bank thereunder
in any other circumstances.

 
ARTICLE V.   MISCELLANEOUS.
        5.1         References in the Letter Agreement to "this Agreement" and references
in any note, certificate, instrument or other document to the "Letter Agreement"
or "Authorization Agreement" shall be deemed to be references to the Letter
Agreement as amended hereby and as further amended from time to time.
        5.2         The Company agrees to pay and to save the Bank harmless for the
payment of all costs and expenses arising in connection with this Amendment,
including the reasonable fees of counsel to the Bank in connection with
preparing this Amendment and the related documents.
        5.3         The Company acknowledges and agrees that the Bank has fully performed
all of its obligations under all documents executed in connection with
the Letter Agreement and all actions taken by the Bank is reasonable and
appropriate under the circumstances and within its rights under the


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Letter
Agreement and all other documents executed in connection therewith and
otherwise available. The Company represents and warrants that it is not
aware of any claims or causes of action against the Bank, or any of its
successors or assigns. Notwithstanding this representation and as further
consideration for the agreements and understandings herein, the Company
and its heirs, successors and assigns, hereby release the Bank and its
heirs, successors and assigns from any liability, claim, right or cause
of action which 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 to any agreements or transactions between the Bank and the Company
or to any acts or omissions of the Bank in connection therewith or otherwise.
        5.4         Except as expressly amended hereby, the Company agrees that the
Letter Agreement, the promissory note and all other documents and agreements
executed by the Company in connection with the Letter Agreement in favor
of the Bank are ratified and confirmed and shall remain in full force and
effect and that it has no set off, counterclaim or defense with respect
to any of the foregoing. Terms used but not defined herein shall have the
respective meanings ascribed thereto in the Letter Agreement.
        5.5         This Amendment shall be governed by and construed in accordance
with the laws of the State of Michigan.
        5.6         This Amendment may be signed upon any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
        IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of the date first above written.

 
HASTINGS MANUFACTURING COMPANY

 
By: /s/ Xxxxxx X. Xxxxxxxxx
     Its:  Vice President-Finance
 

 
BANK ONE, MICHIGAN

 
By: Xxxxxx X. Xxxx
     Its: Managing Director