FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (the "AMENDMENT") dated as of
May 12, 1997 among Xxxxxxxx Casting Corporation (the "BORROWER"), the Banks
party hereto, and Xxxxxx Trust and Saving Bank, as Agent;
W I T N E S S E T H:
WHEREAS, the Borrower, Banks and Xxxxxx Trust and Savings Bank, as Agent,
have heretofore executed and delivered a Credit Agreement dated as of May 24,
1996 (the "CREDIT AGREEMENT"); and
WHEREAS, the Borrower has requested that the Banks increase the aggregate
amount of the Commitments from $40,000,000 to $60,000,000, to add Mercantile
Bank (the "NEW BANK") as a Bank thereunder, and to make certain other changes to
the Credit Agreement;
WHEREAS, the parties hereto desire to amend the Credit Agreement as
provided herein;
NOW, THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree that the Credit Agreement shall be
and hereby is amended as follows:
1. Section 1.1 of the Credit Agreement is hereby amended in its entirety
and as so amended shall read as follows:
SECTION 1.1. (a) THE COMMITMENTS. Subject to the
terms and conditions hereof, each Bank, by its acceptance hereof,
severally agrees to make a loan or loans (individually a
"REVOLVING LOAN" and collectively "REVOLVING LOANS") to the
Borrower from time to time on a revolving basis up to the amount
of its commitment set forth on the applicable signature page
hereof or pursuant to Section 11.12 hereof (its "COMMITMENT" and,
cumulatively for all the Banks, the "COMMITMENTS"), subject to
any reductions thereof pursuant to the terms hereof, before the
Termination Date. The sum of the aggregate principal amount of
Revolving Loans, the aggregate undrawn face amount of Letters of
Credit (which, in the case of Letters of Credit payable in an
Alternative Currency, means the U.S. Dollar Equivalent thereof as
determined pursuant to Section 1.2(f) hereof) and the aggregate
unpaid Reimbursement Obligations at any time outstanding shall
not exceed the Commitments in effect at such time. Each
Borrowing of Revolving Loans shall be made ratably from the Banks
in proportion to their respective Percentages. As provided in
Section 1.5(a) hereof, the Borrower may elect that each Borrowing
of Revolving Loans be made available by means of either Domestic
Rate Loans or Eurodollar Loans, which Revolving Loans may be
repaid and the principal amount thereof reborrowed before the
Termination Date, subject to all the terms and conditions hereof.
(b) TERM CREDIT CONVERSION. If the Borrower does not
receive at least $18,000,000 of net proceeds from its sale of
equity (net proceeds for such purposes to mean gross proceeds
less reasonable underwriting discounts and commissions and other
reasonable costs directly incurred and payable as a result
thereof) on or prior to December 31, 1997, then the Borrower
shall on December 31, 1997 convert $10,000,000 of the outstanding
Revolving Loans (or, if less than $10,000,000 in aggregate
principal amount of Revolving Loans are then outstanding, all
Revolving Loans then outstanding) to term loans (such conversion
of Revolving Loans to be made ratably as among the Banks in
accordance with their Commitments) such that each Bank shall be
deemed to have made a term loan to the Borrower (individually,
for each Bank, its "TERM LOAN" and collectively the "TERM LOANS")
in the amount of such Bank's pro rata share of the amount of
Revolving Loans so converted. Concurrently with such conversion
into Term Loans, (i) the proceeds of such Term Loan shall be
applied to reduce the outstanding principal amount of Revolving
Loans and (ii) the Commitments shall be reduced, in each case by
an amount equal to the amount of the Revolving Loans so
converted. Each Term Loan deemed made by a Bank shall be
evidenced by a Term Note of the Borrower (individually a "TERM
NOTE" and collectively the "TERM NOTES") payable to the order of
such Bank in the form (with appropriate insertions) attached
hereto as Exhibit F. Each Term Loan shall mature as to principal
in consecutive quarterly installments equal (except for the final
installment) to one twenty-eighth (1/28th) of the original
principal amount of such Term Loan, commencing on July 30, 1998
and continuing on the last of each and every calendar quarter
thereafter, with the final installment to be in the amount of all
principal not sooner paid and due on July 30, 2004. No amount
repaid or prepaid on any Term Loan may be borrowed again. As
provided in Section 1.5(a) hereof, the Borrower may elect that
each Borrowing of Term Loans be made available by means of either
Domestic Rate Loans or Eurodollar Loans.
2. Section 1.2(a) of the Credit Agreement is hereby amended by deleting
the amount "$15,000,000" appearing in the third line thereof and inserting in
its place the phrase "THE COMMITMENTS AS IN EFFECT FROM TIME TO TIME."
3. Section 1.10(a) of the Credit Agreement is hereby amended in its
entirety and as so amended shall read as follows:
(a) All Revolving Loans made to the Borrower by a Bank
shall be evidenced by a single promissory note of the Borrower
payable to the order of such Bank in the form of Exhibit A hereto
(each a "REVOLVING NOTE" and collectively the "REVOLVING NOTES").
4. Section 2.1 of the Credit Agreement is hereby amended by inserting a
new subsection (c) immediately after subsection (b) as follows:
(c) TERM CREDIT CONVERSION FEE. On the date the Term
Loans are made, if any, the Borrower shall pay to the Agent for
the ratable account of the Banks in accordance with their
Percentages a fee of $75,000.
5. Section 2.3 of the Credit Agreement is hereby amended by (a) deleting
the word "SECOND" appearing in the second line thereof and inserting in its
place the word "THIRD" and (b) inserting at the end thereof the following: "THE
BORROWER MAY ONLY REQUEST TWO EXTENSIONS OF THE TERMINATION DATE PURSUANT TO
THIS SECTION 2.3."
6. Section 4.1 of the Credit Agreement is hereby amended by inserting the
following new definitions in proper alphabetical order:
"CONSOLIDATED EBITA" means, as applied to any Person for any
period, Net Income of such Person, plus all amounts deducted in
arriving at such Net Income in respect of (a) provisions for
taxes imposed on or measured by income or excess profit,
(b) Interest Expense, and (c) amortization of intangibles, all
consolidated in accordance with GAAP, after eliminating any
intercompany items.
"CONSOLIDATED TOTAL LIABILITIES" means, at any time the same
is to be determined, the aggregate of all indebtedness,
obligations, liabilities, reserves and any other items which
would be listed as a liability on a balance sheet of the Borrower
and its Subsidiaries determined on a consolidated basis in
accordance with GAAP but excluding reserves for deferred income
taxes.
"TANGIBLE STOCKHOLDERS' EQUITY" means Stockholders' Equity
minus the aggregate book value of all assets which would be
classified as intangible assets under GAAP.
7. The definitions of "CURRENT MATURITIES", "FIXED CHARGE COVERAGE
RATIO", "FIXED CHARGES", "LOANS", "NOTES", and "TOTAL DEBT" contained in
Section 4.1 of the Credit Agreement are each hereby amended in their entirety
and as so amended shall each read as follows:
"CURRENT MATURITIES" means, as applied to any Person as of any date of
determination, all payments in respect of Funded Debt of such Person and
any other debt for borrowed money of such Person which, as of its date of
issuance, was Funded Debt, that are required to be made within one year.
"FIXED CHARGE COVERAGE RATIO" means, as of any date, the number
obtained by dividing (a) Consolidated EBITA for the period of four
consecutive fiscal quarters of the Borrower ended on or most recently prior
to such date by (b) Consolidated Fixed Charges for such period of four
consecutive fiscal quarters.
"FIXED CHARGES" means, as applied to any Person for any
period, the sum of (a) Interest Expense of such Person for such
period, PLUS (b) the aggregate amount of Current Maturities
required to be made by the Borrower and its Subsidiaries PLUS (c)
15% of the aggregate principal amount of Revolving Loans
outstanding on the last day of such period.
"LOANS" means and includes the Revolving Loans and the Term
Loans, as the context may require, and includes a Domestic Rate
Loan or Eurodollar Loan, each of which is a "type" of Loan
hereunder.
"NOTES" means and includes the Revolving Notes and the Term
Notes, as the context may require.
"TOTAL DEBT" means, as applied to any Person of any date of
determination, the sum of (i) Current Debt of such Person at such
date, (ii) Funded Debt of such Person at such date, (iii) Capital
Lease Obligations of such Person at such date, (iv) all
obligations of such Person contingent or otherwise, in respect of
letters of credit (but only to the extent the same does not
support another obligation of such Person which either is
included in Total Debt or consists of current accounts payable
incurred in the ordinary course of business) and (v) all
Guaranties by such Person of or with respect to obligations of
the character referred to in the definition of Debt.
8. The definition of "TOTAL CAPITALIZATION" contained in Section 4.1 of
the Credit Agreement is hereby amended by deleting the phrase "Consolidated
Funded Debt" appearing in clause (a) thereof and inserting in its place the
phrase "Consolidated Total Debt".
9. Section 7.15 of the Credit Agreement is hereby amended in its entirety
and as so amended shall read as follows:
SECTION 7.15. MAINTENANCE OF CERTAIN FINANCIAL CONDITIONS.
(a) CURRENT RATIO. The Borrower will not on any date
permit the Current Ratio to be less than 1.50.
(b) STOCKHOLDERS' EQUITY. The Borrower will not on
any date permit Stockholders' Equity to be less than the sum of
$70,000,000 PLUS 50% (or 0% in the case of a deficit) of
Consolidated Net Income for each fiscal year ending after
June 30, 1996 PLUS 85% of the proceeds (net of underwriting
discounts and commissions and other reasonable costs associated
therewith) from any sale of equity by the Borrower or any of its
Subsidiaries (other than sales of equity by any Subsidiary to the
Borrower or to a Wholly Owned Subsidiary.
(c) RATIO OF CONSOLIDATED TOTAL DEBT TO TOTAL
CAPITALIZATION. The Borrower will not on any date permit
Consolidated Total Debt to exceed 50% of Total Capitalization.
(d) RATIO OF CONSOLIDATED TOTAL LIABILITIES TO
TANGIBLE STOCKHOLDERS' EQUITY. The Borrower will not on any date
permit Consolidated Total Liabilities to exceed 225% of Tangible
Stockholders' Equity.
(e) FIXED CHARGE COVERAGE RATIO. The Borrower will
not, as of the last day of any fiscal quarter of the Borrower,
permit the Fixed Charge Coverage Ratio to be less than 1.75.
10. Section 7.16 of the Credit Agreement is hereby amended in its entirety
and as so amended shall read as follows:
Section 7.16. [INTENTIONALLY OMITTED].
11. Section 7.18(d) of the Credit Agreement is hereby amended in its
entirety and as so amended shall read as follows:
(d) the Borrower and its Subsidiaries may make and own
Investments in any Subsidiary of the Borrower or in any Person
which simultaneously therewith becomes a Subsidiary provided that
such Person is engaged primarily in the foundry business or in
businesses reasonably related thereto and either (i) at the time
of such acquisition and after giving effect thereto the
Borrower's ratio of Consolidated Total Debt to Total
Capitalization does not exceed 40% (the "40% THRESHOLD") or
(ii) once the 40% Threshold has been exceeded in that fiscal
year, the total aggregate principal amount expended for all
acquisitions thereafter in such fiscal year does not exceed 25%
of the Stockholder's Equity of the Borrower as of the last day of
the immediately preceding fiscal year of the Borrower PLUS 25% of
the net proceeds (net proceeds for such purposes to mean gross
proceeds less reasonable underwriting discounts and commissions
and other reasonable costs directly incurred and payable as a
result thereof) received by the Borrower from the issuance of
additional equity during the fiscal year of the proposed
acquisition; and
12. A new Section 7.24 to the Credit Agreement is hereby added to the
Credit Agreement immediately after Section 7.23 as follows:
Section 7.24. INDEBTEDNESS. The Borrower shall not issue,
incur, assume, create or have outstanding any indebtedness for
borrowed money; PROVIDED, HOWEVER, that the forgoing shall not
restrict nor operate to prevent:
(a) the obligations of the Borrower owing to the Banks
hereunder; and
(b) the obligations of the Borrower under the Note
Agreement dated as of July 29, 1994 between the Borrower and the
purchasers identified therein in an aggregate principal amount
not to exceed $20,000,000.
13. Section 11.11 of the Credit Agreement is hereby amended by inserting
immediately after the word "ASSIGNED" appearing in the thirteenth line thereof
the phrase ", AND PROVIDED, FURTHER, THAT NO SUCH CONSENT OF THE BORROWER SHALL
BE REQUIRED IF SUCH TRANSFER IS MADE TO AN AFFILIATE OF SUCH BANK."
14. The Commitment of each Bank is hereby amended in its entirety to be as
set forth below opposite such Bank's name:
Xxxxxx Trust and Savings Bank: $30,000,000
Commerce Bank: $15,000,000
Mercantile Bank: $15,000,000
15. Notwithstanding the provisions of Section 2.3 of the Credit Agreement,
the Borrower and Banks hereby agree that the Termination Date is hereby extended
to July 29, 2000.
16. Schedule 1 to Exhibit C to the Credit Agreement is hereby amended in
its entirety to read as set forth as Exhibit A to this Amendment.
17. A new EXHIBIT F is hereby added to the Credit Agreement immediately
following EXHIBIT E to the Credit Agreement in the form of EXHIBIT B to this
First Amendment.
18. Schedules 5.2 and 5.13 of the Credit Agreement are hereby amended in
their entirety to read as set forth as Schedules 5.2 and 5.13, respectively,
attached to this Amendment.
19. Upon satisfaction of the conditions precedent contained in Section 19
hereof and the effectiveness of this Amendment, the New Bank shall be a "BANK"
party to the Credit Agreement and shall be entitled to all rights, benefits and
privileges afforded a Bank thereunder and subject to the obligations of a Bank
thereunder to the extent of its Commitment. Concurrently therewith, the New
Bank shall fund its PRO RATA share of outstanding Loans to the Agent in
accordance with Section 1.5 of the Credit Agreement (which amount shall
thereafter be distributed to the other Banks originally making such Loans) so
that after giving effect thereto each Bank, including the New Bank, holds a PRO
RATA share of the outstanding Loans based on the amount of its respective
Commitment. The New Bank hereby acknowledges that it assumes and agrees to be
bound by the terms of the Intercreditor Agreement as if it were an original
signatory thereto. The New Bank specifies as its lending office for Domestic
Rate Loans and Eurodollar Loans, and its address for notices, the offices set
forth beneath its name on the signature page hereof.
20. The Borrower represents and warrants to each Bank and the Agent that
(a) each of the representations and warranties set forth in Section 5 of the
Credit Agreement is true and correct on and as of the date of this Amendment as
if made on and as of the date hereof and as if each reference therein to the
Credit Agreement referred to the Credit Agreement as
amended hereby; (b) no Default and no Event of Default has occurred and is
continuing; and (c) without limiting the effect of the foregoing, the
Borrower's execution, delivery and performance of this Amendment have been
duly authorized, and this Amendment has been executed and delivered by a duly
authorized officer of the Borrower.
21. This Amendment shall become effective on May 14, 1997 upon the
satisfaction of all of the following conditions precedent:
(a) The Borrower, the Banks and the Agent shall have executed and
delivered this Amendment and each Guarantor shall have executed the consent
attached hereto;
(b) The Banks shall have received the written opinion of counsel to
the Borrower in form and substance acceptable to the Banks; and
(c) The Agent shall have received (i) for each Bank such Bank's duly
executed Term Note of the Borrower dated the date hereof and otherwise in
compliance with the terms of the Credit Agreement and (ii) for each Bank a
new Note in the amount of its Commitment as amended hereby.
This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each of which
when so executed shall be an original but all of which shall constitute one and
the same instrument. Except as specifically amended and modified hereby, all of
the terms and conditions of the Credit Agreement and the other Credit Documents
shall remain unchanged and in full force and effect. All references to the
Credit Agreement in any document shall be deemed to be references to the Credit
Agreement as amended hereby. All capitalized terms used herein without
definition shall have the same meaning herein as they have in the Credit
Agreement. This Amendment shall become effective upon execution by the parties
hereto. This Amendment shall be construed and governed by and in accordance
with the internal laws of the State of Illinois.
Dated as of the date first above written.
XXXXXXXX CASTING CORPORATION
By /s/ Xxxxx X. XxXxxxxx
---------------------------------------------
Its Vice President and Treasurer
------------------------------------------
XXXXXX TRUST AND SAVINGS BANK, in its individual
capacity as a Bank and as Agent
By /s/ Xxx X. Xxxxx
---------------------------------------------
Its Vice President
------------------------------------------
COMMERCE BANK, N.A.
By /s/ Xxxxxxx X. Xxxx
---------------------------------------------
Its Vice President
------------------------------------------
MERCANTILE BANK
By /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Its Senior Vice President
------------------------------------------
Address:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Lending Offices:
Domestic Rate Loans:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Eurodollar Loans:
0000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
