June 30, 2002
Atchison Casting Corporation
000 Xxxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000-0188
Attention: Chief Financial Officer
Re: Atchison Casting Corporation (the "Company") April 3, 1998 Amended
and Restated Credit Agreement by and among the Company, Xxxxxx Trust and
Savings Bank, as Agent and the Banks party thereto (as heretofore amended,
the "Credit Agreement")
Ladies and Gentlemen:
Pursuant to the Twelfth Amendment and Forbearance Agreement dated as of
December 18, 2001 (as amended, the "Twelfth Amendment") the Bank Group agreed to
temporarily forbear from enforcing its rights and remedies with respect to the
Credit Agreement through June 30, 2002 (the "Standstill Expiration Date"). The
Company has requested that the Bank Group extend the Standstill Expiration Date
through July 31, 2002.
Accordingly, effective upon the execution of this letter by the Required
Banks, the Company and each Guarantor in the spaces provided for that purpose
below (which execution may be on separate counterparts of this letter, all of
which are to constitute one and the same instrument) and satisfaction of the
further conditions precedent to effectiveness set forth below, (i) the
Standstill Period shall be extended so that the new Standstill Expiration Date
shall be July 31, 2002 and (ii) Paragraph 8 of the Twelfth Amendment shall be
amended by deleting "and" appearing at the end of Paragraph 8(e); deleting the
period (".") appearing at the end of Paragraph 8(f) and inserting in its place
"; and"; and adding the following new Paragraph 8(g) to the end thereof:
"(g) as soon as available, and in any event no later than the earlier
of (i) the date of the Bank Group meeting currently scheduled during the
second week in July, 2002 or (ii) July 15, 2002, a summary of the
Borrower's work plan and timeline for the sale of certain of the Company's
assets as previously discussed with the Agent, in a form acceptable to the
Agent and business plans (with assumptions) in reasonable detail for the
balance of 2002 and pertaining to the Company's British and French
subsidiaries."
Further, the Collateral Agent is authorized to release $1,757,270 from the
Cash Collateral Account to repay the Loans in such amount; provided that upon
such repayment, the Agent shall increase the stated amount of Letter of Credit
No. SPL 90006391 by $1,757,270.
The Company (i) confirms that the Maximum Exposure Cap is $69,251,703.97 as
of June 26, 2002, (ii) agrees that Liquidation Proceeds in excess of those which
result in a reduction of the Commitments or are to be applied to the Teacher's
Note pursuant Paragraph 7 of the Twelfth Amendment shall be deposited with the
Collateral Agent and held under the Cash Collateral Use
Agreement in a separate Cash Collateral Account (as defined therein), such funds
to only be released upon written authorization of the Required Banks and TIAA
and (iii) represents that its July 2002 cash flow budget is based upon the best
information available to the Company as of the date hereof and if, as the
Company anticipates, actual July performance is consistent with such budget the
Company and its subsidiaries will be able to fund their cash requirements during
such month. The Company and the Guarantors repeat and reaffirm the
acknowledgements and releases contained in Paragraph 19 of the Twelfth
Amendment, all as though set forth herein in their entirety.
This Agreement shall also not become effective (a) unless on or before June
30, 2002 (i) the Company has engaged Xxxxxxx and Marsal or another operational
consultant reasonably acceptable to the Agent to review the Company's fiscal
2003 business plan from an operational perspective and to assess and identify
potential operational efficiencies and (ii) the Company has selected investment
banks reasonably acceptable to the Agent to assist the Company in implementing
its strategic initiative to focus on non core assets and operations (the Company
agreeing to have engagement agreements in place with such investment banks by
July 5, 2002) and (b) unless and until TIAA shall have consented to the
provisions hereof dealing with the release, deposit and/or use of cash
collateral in which it has an interest and extended its standstill termination
date to July 31, 2002 in a manner reasonably acceptable to the Agent.
Except as specifically waived hereby, all of the terms and conditions of
the Credit Agreement shall remain in full force and effect and are deemed to be
reaffirmed as of the date hereof. Without limiting the generality of the
foregoing, this letter does not waive any of the other Defaults or Events of
Default that now exist.
All defined terms used herein and not defined herein shall have the same
meaning herein as in the Twelfth Amendment. This waiver shall be governed and
construed in accordance with the laws of the State of Illinois. All capitalized
terms used herein without definition shall have the same meaning herein as such
terms have in the Credit Agreement.
Very truly yours,
XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and as Agent
By: /s/ Xxxxxxxx Xxxxxxxx
Title: Vice President
COMMERCE BANK, N.A.
By: /s/ Xxxxxx X. Xxxxx
Title: Senior Vice President
-2-
US BANK NATIONAL ASSOCIATION (f/k/a Firstar
Bank N.A. (f/k/a Firstar Bank Midwest, N.A.)
(f/k/a Mercantile Bank)
By: /s/ Xxxxx X. Xxxxxxx
Title: Vice President
KEY BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx
Title: Senior Vice President
COMERICA BANK
By: /s/ Xxxxxx X. Xxxxx
Title: Vice President
HIBERNIA NATIONAL BANK
By: /s/ Xxxxx Xxxxxxxx
Title: Vice President
NATIONAL WESTMINSTER BANK PLC
Nassau Branch
By: /s/ Xxxx Xxxxxxx
Title: Head of Mid Corporate Team
Corporate Restructuring Unit
New York Branch
By: /s/ Xxxx Xxxxxxx
Title: Head of Mid Corporate Team
Corporate Restructuring Unit
-3-
XXXXX FARGO BANK, NATIONAL ASSOCIATION
(successor by merger to Norwest Bank
Minnesota, N.A.)
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President
Agreed and Accepted:
XXXXXXXX CASTING CORPORATION
By: /s/ Xxxxx X. XxXxxxxx
Title: VP & Xxxxxxxx
-4-
AMITE FOUNDRY AND MACHINE, INC.
PROSPECT FOUNDRY, INC.
QUAKER ALLOY, INC.
CANADIAN STEEL FOUNDRIES, LTD.
3210863 CANADA INC.
XXXXXX INTERNATIONAL, INC.
EMPIRE STEEL CASTINGS, INC.
LAGRANGE FOUNDRY INC.
THE G & C FOUNDRY COMPANY
LOS ANGELES DIE CASTING INC.
CASTCAN STEEL LTD.
CANADA ALLOY CASTINGS, LTD.
PENNSYLVANIA STEEL FOUNDRY & MACHINE COMPANY
XXXX FOUNDRY CORP.
INVERNESS CASTINGS GROUP, INC.
DU-WEL PRODUCTS, INC.
XXXXX CASTING AND ASSEMBLY, INC.
CLAREMONT FOUNDRY, INC.
LONDON PRECISION MACHINE & TOOL LTD.
By: /s/ Xxxxx X. XxXxxxxx
Title: Vice Pres.
XXXXXXX INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx
Title: President
-5-
