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EXHIBIT (b)(3)
FIFTH AMENDMENT AGREEMENT
This Fifth Amendment Agreement is made as of the 23rd day of June,
1997, by and among PARK-OHIO INDUSTRIES, INC., an Ohio corporation ("Borrower"),
KEYBANK NATIONAL ASSOCIATION (successor by merger to Society National Bank), as
Agent ("Agent") and the banking institutions listed on Annex 1 attached hereto
and made a part hereof ("Banks"):
WHEREAS, Borrower, Agent and the Banks are parties to a certain Credit
Agreement dated as of April 11, 1995, as amended and as it may from time to time
be further amended, restated or otherwise modified, which provides, among other
things, for a revolving credit and a term loan aggregating One Hundred
Twenty-Five Million Dollars, all upon certain terms and conditions ("Credit
Agreement");
WHEREAS, Borrower, Agent and the Banks desire to amend the Credit
Agreement to increase the amount of the credit facility to One Hundred Seventy
Five Million Dollars ($175,000,000) and to modify certain other provisions
thereof;
WHEREAS, each term used herein shall be defined in accordance with the
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein and for other valuable considerations, Borrower, Agent and the
Banks agree as follows:
1. Article I of the Credit Agreement is hereby amended to delete the
definitions of "Commitment Period" and "Total Funded Indebtedness" in their
entirety and to insert in place thereof the following:
"Commitment Period" shall mean the period from the Closing
Date to April 11, 2001.
"Total Funded Indebtedness" shall mean all Indebtedness of
Borrower and its Consolidated Subsidiaries, on a consolidated basis,
that is funded, including, but not limited to, current, long-term and
Subordinated Indebtedness, if any.
2. Article I of the Credit Agreement is hereby amended to delete the
definition of "Funded Indebtedness" in its entirety.
3. Article I of the Credit Agreement is hereby amended to add the
following new definition thereto:
"Indebtedness" shall mean, for any Company (a) all obligations
to repay borrowed money, direct or indirect, incurred, assumed, or
guaranteed, (b) all obligations for the deferred purchase price of
capital assets excluding trade payables, (c) all obligations under
conditional sales or other title retention agreements, and (d) all
lease obligations which have been or should be capitalized on the books
of such Company in accordance with
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generally accepted accounting principles not inconsistent with such
Company's present accounting procedures.
4. In the event that Borrower acquires a majority of the outstanding
shares of stock of Arden Industrial Products, Inc., a Minnesota corporation
("Arden"), on or before July 31, 1997, then, as of the date hereof, Section 5.7
of the Credit Agreement is hereby deleted in its entirety with the following
being inserted in place thereof:
SECTION 5.7. WORKING CAPITAL. Borrower will not suffer or
permit the Consolidated Net Current Assets of Borrower and its
Consolidated Subsidiaries at any time to fall below the current minimum
amount required, which current minimum amount required shall be (a) One
Hundred Million Dollars ($100,000,000) on June 30, 1997 through
December 31, 1997, and (b) One Hundred Twenty Million Dollars
($120,000,000) on January 1, 1998 and thereafter, based upon Borrower's
financial statements for the most recent calendar quarter. Borrower and
its Consolidated Subsidiaries will maintain, on a consolidated basis,
at all times a ratio of Current Assets to Current Liabilities of no
less than 2.00 to 1.00, based upon Borrower's financial statements for
the most recent calendar quarter.
5. Section 5.8 of the Credit Agreement is hereby deleted in its
entirety with the following being inserted in place thereof:
SECTION 5.8. CASH-FLOW COVERAGE. Borrower and its Consolidated
Subsidiaries will maintain at all times a ratio of Consolidated
Cash-In-Flow to Consolidated Cash-Out-Flow of no less than the current
minimum ratio required, which current minimum ratio required shall be
(a) .70 to 1.00 on June 30, 1997 through September 29, 1997, (b) .90 to
1.00 on September 30, 1997 through December 31, 1997, (c) 1.50 to 1.00
on January 1, 1998 through December 31, 1998, (d) 1.75 to 1.00 on
January 1, 1999 through December 31, 1999, and (e) 2.00 to 1.00 on
January 1, 2000 and thereafter, based upon Borrower's financial
statements for the most recent calendar quarter and the fiscal year to
date period ended at the end of such quarter.
6. In the event that Borrower acquires a majority of the outstanding
shares of stock of Arden on or before July 31, 1997, then, as of the date
hereof, Section 5.9 of the Credit Agreement is hereby deleted in its entirety
with the following being inserted in place thereof:
SECTION 5.9. NET WORTH. Borrower will not suffer or permit the
Consolidated Net Worth of Borrower and its Consolidated Subsidiaries at
any time to fall below the current minimum amount required, which
current minimum amount required shall be (a) Seventy Two Million
Dollars ($72,000,000) on December 31, 1996 through December 30, 1997,
(b) Eighty Five Million Dollars ($85,000,000) on December 31, 1997
through December 30, 1998, (c) One Hundred Million Dollars
($100,000,000) on December 31, 1998 through December 30, 1999, (d) One
Hundred Seventeen Million Dollars ($117,000,000) on December 31, 1999
through December 30, 2000, and (e) One
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Hundred Thirty Six Million Dollars ($136,000,000) on December 31, 2000
and thereafter, based upon Borrower's financial statements for the most
recent calendar quarter.
7. In the event that Borrower acquires a majority of the outstanding
shares of stock of Arden on or before July 31, 1997, then, as of the date
hereof, Section 5.10 of the Credit Agreement is hereby deleted in its entirety
with the following being inserted in place thereof:
SECTION 5.10. LEVERAGE. Borrower and its Consolidated
Subsidiaries will not suffer or permit at any time the ratio of (a)
Total Liabilities minus Subordinated Indebtedness to (b) Consolidated
Net Worth (hereinafter referred to as "Leverage Ratio"), to exceed (i)
3.00 to 1.00 on December 31, 1996 through December 30, 1997, (iv) 2.50
to 1.00 on December 31, 1997 through December 30, 1998, and (v) 2.00 to
1.00 on December 31, 1998 and thereafter, based upon Borrower's
financial statements for the most recent calendar quarter.
8. Section 5.11 of the Credit Agreement is hereby deleted in its
entirety with the following being inserted in place thereof:
SECTION 5.11. BORROWING. Borrower will not create, incur or
have outstanding or permit any Subsidiary to create, incur or have
outstanding any obligation for borrowed money or any Indebtedness of
any kind; provided, that this Section shall not apply to (a) the Loans;
(b) any loans granted to Borrower evidenced by promissory notes issued
pursuant to any other agreement hereafter in effect so long as the
aggregate principal amount of all such loans does not exceed Two
Hundred Fifty Thousand Dollars ($250,000) at any one time outstanding;
(c) the Indebtedness set forth in Annex 2 attached hereto and made a
part hereof; or (d) loans to Subsidiaries from Borrower.
9. Subpart (viii) of Section 5.14 of the Credit Agreement is hereby
deleted in its entirety with the following being inserted in place thereof:
(viii) any investment of a Subsidiary of up to Two Million Five Hundred
Thousand Dollars ($2,500,000) in the common stock of a corporation that
such Subsidiary is considering acquiring, so long as (A) such
Subsidiary is a Guarantor of Payment, (B) the investment of all
Companies for such purposes does not exceed the aggregate amount of
Five Million Dollars ($5,000,000) and (C) the stock acquired by all
Companies in any one corporation shall not exceed the amount of Two
Million Five Hundred Thousand Dollars ($2,500,000), unless acquired
pursuant to the terms of Section 5.16 hereof;
10. Subpart (f) of Section 5.16 of the Credit Agreement is hereby
deleted in its entirety with the following being inserted in place thereof:
(f) Borrower shall have provided the Agent, at least fourteen
(14) Cleveland Banking Days prior to the acquisition, with (i) notice
of the proposed acquisition, which notice shall include (A) the name of
the entity to be acquired, (B) the proposed date of the acquisition,
(B) the aggregate amount of the consideration to be paid, (ii)
certifications of
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compliance with all financial covenants and of no default under the
credit agreement, both prior to and subsequent to the acquisition
(after taking the acquisition into effect), (iii) copies of the
Purchase Agreement, (iv) pro forma financial projections for three (3)
years, and (v) such other financial information as the Banks may
request; provided, however, that if the aggregate consideration to be
paid in connection with such acquisition does note exceed the aggregate
amount of Two Million Dollars ($2,000,000), Borrower shall only provide
the items listed in (iii) and (iv) upon request of the Agent;
11. Section 5.21 of the Credit Agreement is hereby deleted in its
entirety with the following being inserted in place thereof:
SECTION 5.21. CAPITAL EXPENDITURES. Borrower and its
Consolidated Subsidiaries will not invest in Capital Expenditures more
than an aggregate amount equal to Sixteen Million Dollars ($16,000,000)
during each fiscal year of Borrower.
12. In the event that Borrower acquires a majority of the outstanding
shares of stock of Arden on or before July 31, 1997, then, as of the date
hereof, Section 5.25 of the Credit Agreement is hereby deleted in its entirety
with the following being inserted in place thereof:
SECTION 5.25. TOTAL DEBT TO CAPITALIZATION. Borrower and its
Consolidated Subsidiaries will not suffer or permit at any time, on a
consolidated basis, the ratio of (a) Total Funded Indebtedness to (b)
Total Funded Indebtedness plus Equity, to exceed (i) .60 to 1.00 on
June 30, 1997 through December 31, 1997, (ii) .55 to 1.00 on January 1,
1998 through December 31, 1998, and (iii) .50 to 1.00 on January 1,
1999 and thereafter, based upon Borrower's financial statements for the
most recent calendar quarter.
13. The Credit Agreement is hereby amended by deleting Annex 1 and
Annex 2 thereof in its entirety and by inserting in place thereof a new Annex 1
and Annex 2, respectively, in the form of Annex 1 and Annex 2, respectively,
attached hereto.
14. The Credit Agreement is hereby amended by deleting Exhibit A in its
entirety and by substituting in place thereof a new Exhibit A in the form of
Exhibit A attached hereto.
15. Concurrently with the execution of this Fifth Amendment Agreement,
Borrower shall:
(a) execute and deliver to each Bank a new Revolving Credit Note dated
as of April 11, 1995, and such new Revolving Credit Note shall be in the form
and substance of Exhibit A attached hereto. After a Bank receives a new
Revolving Credit Note, such Bank will xxxx its Revolving Credit Note being
replaced thereby "Replaced" and return the same to Borrower;
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(b) pay to Agent, for the benefit of the Banks, an amendment fee in the
amount of twenty five (25) basis points times the amount of the increase in the
Revolving Credit Commitment; and
(c) pay all legal fees and expenses of Agent in connection with this
Fifth Amendment Agreement.
16. Borrower hereby represents and warrants to Agent and the Banks that
(a) Borrower has the legal power and authority to execute and deliver this Fifth
Amendment Agreement; (b) officials executing this Fifth Amendment Agreement have
been duly authorized to execute and deliver the same and bind Borrower with
respect to the provisions hereof; (c) the execution and delivery hereof by
Borrower and the performance and observance by Borrower of the provisions hereof
do not violate or conflict with the organizational agreements of Borrower or any
law applicable to Borrower or result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against Borrower; (d) no Possible Default or Event of
Default exists under the Credit Agreement, nor will any occur immediately after
the execution and delivery of the Fifth Amendment Agreement or by the
performance or observance of any provision hereof; (e) neither Borrower nor any
Subsidiary has any claim or offset against, or defense or counterclaim to, any
of Borrower's or any Subsidiary's obligations or liabilities under the Credit
Agreement or any Related Writing, and Borrower and each Subsidiary hereby waives
and releases Agent and each of the Banks from any and all such claims, offsets,
defenses and counterclaims of which Borrower and any Subsidiary is aware, such
waiver and release being with full knowledge and understanding of the
circumstances and effect thereof and after having consulted legal counsel with
respect thereto, and (f) this Fifth Amendment Agreement constitutes a valid and
binding obligation of Borrower in every respect, enforceable in accordance with
its terms.
17. Each reference that is made in the Credit Agreement or any other
writing to the Credit Agreement shall hereafter be construed as a reference to
the Credit Agreement as amended hereby. Except as herein otherwise specifically
provided, all provisions of the Credit Agreement shall remain in full force and
effect and be unaffected hereby.
18. This Fifth Amendment Agreement may be executed in any number of
counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
19. The rights and obligations of all parties hereto shall be governed
by the laws of the State of Ohio.
Address: 00000 Xxxxxx Xxxxxx PARK-OHIO INDUSTRIES, INC.
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Xxxxxx, Xxxx 00000
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice President
and /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Secretary
Address: Key Center KEYBANK NATIONAL ASSOCIATION,
000 Xxxxxx Xxxxxx as a Bank and as Agent
Xxxxxxxxx, XX 00000-0000
Attn: Commercial Loans- By: /s/ Xxxxxxx X. Xxxxxx
Cleveland District --------------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Address: Huntington Building THE HUNTINGTON NATIONAL BANK
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 By: /s/ Xxxxx X. Xxxxxxxx
Attn: Corporate Banking Div. -------------------------------------
Xxxxx X. Xxxxxxxx, Assistant
Vice President
Address: 000 Xxxxxxxx Xxxxxx XXX XXXX
Xxxxxxx, XX 00000
Attn: Midwest Banking By: /s/ Xxxxxxx X. XxXxxxxxx
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Xxxxxxx X. XxXxxxxxx, Vice President
Address: 000 Xxxxxx Xxxxxx XXXXXX XXXX, N.A.
00xx Xxxxx
Xxxxxxxxx, XX 00000-0000 By: /s/ Xxxxx X. Xxxxx
Attn: Corporate Banking Div. ----------------------------------------
Xxxxx X. Xxxxx, Vice President
Address: 0000 Xxxx Xxxxx Xxxxxx NATIONAL CITY BANK
Xxxxxxxxx, XX 00000-0000
Attn: Metro/Ohio Division By: /s/ Xxxxxxx X. XxXxxx
Loc.# 2104 ----------------------------------------
Xxxxxxx X. XxXxxx, Senior
Vice President
The undersigned consent to the terms hereof.
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CASTLE RUBBER COMPANY
XXX HOME PRODUCTS, INC.
GENERAL ALUMINUM MFG. COMPANY
BLUE FALCON INVESTMENTS, INC.
RB&W CORPORATION
BLUE FALCON FORGE, INC.
TOCCO, INC.
THE AJAX MANUFACTURING COMPANY
CICERO FLEXIBLE PRODUCTS, INC.
SUMMERSPACE, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Treasurer of each
of the Companies listed above
and /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Secretary of each
of the Companies listed above
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ANNEX 1
REVOLVING CREDIT TERM LOAN
COMMITMENT COMMITMENT MAXIMUM
BANKING INSTITUTIONS PERCENTAGE AMOUNT AMOUNT AMOUNT
KeyBank National Association,
f.k.a. Society National Bank 35% $ 49,000,000 $12,250,000 $ 61,250,000
NBD Bank 25% $ 35,000,000 $ 8,750,000 $ 43,750,000
The Huntington National Bank 25% $ 35,000,000 $ 8,750,000 $ 43,750,000
National City Bank 10% $ 14,000,000 $ 3,500,000 $ 17,500,000
Mellon Bank, N.A. 5% $ 7,000,000 $ 1,750,000 $ 8,750,000
TOTAL 100% $140,000,000 $35,000,000
TOTAL COMMITMENT
AMOUNT $175,000,000
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EXHIBIT A
REVOLVING CREDIT NOTE
$_______________ Cleveland, Ohio
As of April 11, 1995
FOR VALUE RECEIVED, the undersigned PARK-OHIO INDUSTRIES, INC. (the
"Borrower") promises to pay on April 11, 2001, to the order of _________ (the
"Bank") at the Main Office of KeyBank National Association (successor by merger
to Society National Bank), as Agent, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000-0000 the principal sum of
DOLLARS
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or the aggregate unpaid principal amount of all Revolving Loans made by Bank to
Borrower pursuant to Section 2.1 of the Credit Agreement, as hereinafter
defined, whichever is less, in lawful money of the United States of America. As
used herein, "Credit Agreement" means the Credit Agreement dated as of April 11,
1995, among Borrower, the banks named therein and KeyBank National Association,
as Agent, as such agreement may be from time to time amended, restated or
otherwise modified. Capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.
Borrower also promises to pay interest on the unpaid principal amount
of each Revolving Loan from time to time outstanding, from the date of such
Revolving Loan until the payment in full thereof, at the rates per annum which
shall be determined in accordance with the provisions of Section 2.1A of the
Credit Agreement. Such interest shall be payable on each date provided for in
such Section 2.1A; provided, however, that interest on any principal portion
which is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of any thereof,
shall be shown on the records of Bank by such method as Bank may generally
employ; provided, however, that failure to make any such entry shall in no way
detract from Borrower's obligations under this Note.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit Agreement, the principal hereof
and the unpaid interest thereon shall bear interest, until paid, at a rate per
annum which shall be two per cent (2%) in excess of the Adjusted Prime Rate from
time to time in effect. All payments of principal of and interest on this Note
shall be made in immediately available funds. In an Event of Default in the
payment of interest or balance of principal, when the same becomes due, Bank may
collect and Borrower agrees to pay a late charge of an amount equal to the
greater of (a) ten per cent (10%) of the amount of such late payment, or (b)
Twenty Five Dollars ($25).
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This Note is one of the Revolving Credit Notes referred to in the
Credit Agreement. Reference is made to the Credit Agreement for a description of
the right of the undersigned to anticipate payments hereof, the right of the
holder hereof to declare this Note due prior to its stated maturity, and other
terms and conditions upon which this Note is issued.
The undersigned authorizes any attorney at law at any time or times
after the maturity hereof (whether maturity occurs by lapse of time or by
acceleration) to appear in any state or federal court of record in the United
States of America, to waive the issuance and service of process, to admit the
maturity of this Note and the nonpayment thereof when due, to confess judgment
against the undersigned in favor of the holder of this Note for the amount then
appearing due, together with interest and costs of suit, and thereupon to
release all errors and to waive all rights of appeal and stay of execution. The
foregoing warrant of attorney shall survive any judgment, and if any judgment be
vacated for any reason, the holder hereof nevertheless may thereafter use the
foregoing warrant of attorney to obtain an additional judgment or judgments
against the undersigned. The undersigned agrees that the Agent or the Banks'
attorney may confess judgment pursuant to the foregoing warrant of attorney. The
undersigned further agrees that the attorney confessing judgment pursuant to the
foregoing warrant of attorney may receive a legal fee or other compensation from
the Agent or the Banks.
PARK-OHIO INDUSTRIES, INC.
By:
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Xxxxx X. Xxxxxx, Vice President
and
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Xxxxxx X. Xxxxxx, Secretary
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"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE."
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