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Exhibit 10.8
THIRD AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
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THIS THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of March 19, 1997 (this "Amendment"), is by and among MONARCH MACHINE TOOL
COMPANY, an Ohio corporation (the "Company"), the BANKS identified on the
signature pages hereof (collectively the "Banks" and individually a "Bank"), and
NBD BANK, N.A., a national banking association, as successor by assignment to
NBD Bank, a Michigan banking corporation, as agent (in such capacity, the
"Agent") for the Banks.
INTRODUCTION
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The Company, the Banks and the Agent are parties to the Amended and
Restated Credit Agreement, dated as of June 9, 1995, as amended by the First
Amendment to Amended and Restated Credit Agreement, dated as of July 11, 1995,
and the Second Amendment to Amended and Restated Credit Agreement, dated as of
July 31, 1996 (the "Credit Agreement"). NBD Bank, N.A. purchased and assumed all
of NBD Bank's rights and obligations under the Credit Agreement, including NBD
Bank's rights and obligations as a Bank and as the Agent, pursuant to the
Assignment and Assumption Agreement dated February 20, 1997 between them (the
"Assignment"). The Company and the Banks previously consented to the Assignment
under Section 5.7 of the above-referenced Second Amendment. The parties now
desire to amend the Credit Agreement on the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:
ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT
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Effective upon the date that the conditions precedent set forth in
Article 2 of this Amendment are satisfied, which date (the "Amendment Date")
shall be determined by the Agent in its sole discretion, the Credit Agreement
hereby is amended as follows:
1.1 The definition of the term "Applicable Eurodollar Rate Margin" set
forth in Section 1.1 is amended to read in full as follows:
"APPLICABLE EURODOLLAR RATE MARGIN" shall be, for purposes of
determining the Eurodollar Rate applicable to any Eurodollar Rate Loan,
whether a Revolving Credit Loan or the Term Loan, outstanding at any
time during any calendar month (the "Application Month"), the percent
set forth under the heading "Applicable Eurodollar Rate Margin for
Revolving Credit Loans" and "Applicable Eurodollar Rate Margin for the
Term Loan", respectively, below in the row corresponding to the range
into which falls the ratio (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 as of the end of
the last fiscal quarter (the "Determination Quarter") preceding such
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Application Month for which financial statements have been delivered to
the Banks under Section 5.1(d)(ii):
Applicable Eurodollar Applicable Eurodollar
Rate Margin for Rate Margin for
Ratio Revolving Credit Loans the Term Loan
----- ---------------------- -------------
Less than or equal
to 0.75 to 1.00 0.75% 1.00%
Greater than
0.75 to 1.0
but less than or
equal to 1.15
to 1.00 1.00% 1.25%
Greater than
1.15 to 1.00 1.50% 1.75%
Each change in the Applicable Eurodollar Rate Margin in accordance
with this definition, as finally determined upon the Bank's receipt
of the Company's financial statements for any Determination Quarter
pursuant to Section 5.1 (d)(ii), shall be effective as of the first
day of the corresponding Application Month following such
Determination Quarter.
1.2 Subpart (vi) of Section 5.1(d) is relabeled as subpart (vii), and a
new subpart (vi) is added to Section 5.1(d) as follows:
(vi) As soon as available and in any event within 30 days after the
end of each month (other than those months which correspond to
fiscal quarter ends of the Company, which are covered by subpart
(ii) above), the consolidated balance sheet of the Company and its
Subsidiaries as of the end of such month, and the related
consolidated statements of income, retained earnings and cash flow
of the Company and its Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of such
month, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the
preceding fiscal year, all in reasonable detail; and
1.3 Subpart (iv) of Section 5.1(d) is amended to read in full as
follows:
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(iv) No later than the 30th calendar day following the end of each
month, a Borrowing Base Certificate prepared as of the close of
business on the last day of each such month, together with
supporting schedules, in form and detail satisfactory to the Agent,
setting forth such information as the Agent may request with respect
to the aging, value, location and other information relating to the
computation of the Borrowing Base and the eligibility of any
property or assets included in such computation, certified as true
and correct by the chief financial officer of the Company;
1.4 Section 5.2(b) is amended to read in full as follows:
(b) TANGIBLE NET WORTH. Permit or suffer (i) the sum of (A)
Consolidated Tangible Net Worth of the Company and its Subsidiaries
plus (B) unrealized foreign currency losses of the Company and its
Subsidiaries that do not exceed $5,000,000 in the aggregate plus (C)
the Aggregate Change LIFO Reserve Adjustment to be less than (ii)
the sum of (A) $44,000,000 plus (B) 50% of Consolidated Cumulative
Net Income of the Company and its Subsidiaries after December 31,
1996 plus (C) for each fiscal year end of the Company, the amount if
any by which $500,000 exceeds the aggregate amount added pursuant to
the foregoing clause (B) attributable to each such fiscal year; such
covenant to be tested as of the end of each fiscal quarter of the
Company.
1.5 Section 5.2(c) is amended to read in full as follows:
(c) TOTAL LIABILITIES TO TANGIBLE NET WORTH. Permit or suffer the
ratio of Consolidated Total Liabilities of the Company and its
Subsidiaries to Consolidated Tangible Net Worth of the Company and
its Subsidiaries to be greater than 1.25 to 1.00 at any time.
1.6 In recognition of the Assignment, (a) all references to the "Agent",
or to NBD Bank in its capacity as the Agent, in the Credit Agreement and all
other related instruments, agreements and documents (collectively, the "Loan
Documents") shall be deemed to refer to NBD Bank, N.A. in its capacity as the
Agent, and (b) all references in the Loan Documents to NBD Bank in its capacity
as a Bank shall be deemed to refer to NBD Bank, N.A. in its capacity as a Bank.
1.7 All references in the Loan Documents to any address for notices to
NBD Bank or the Agent shall be amended to read: Xxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxxx, Xxxxxxx 00000, Attn: Xxxxxx X. Xxxxxxxx, Facsimile: (317)
266-6042."
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ARTICLE 2. CONDITIONS PRECEDENT TO AMENDMENTS
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As conditions precedent to the effectiveness of the amendments to the
Credit Agreement set forth in Article 1 of this Amendment, the Agent and the
Banks shall receive the following documents and the following matters shall be
completed, all in form and substance satisfactory to the Agent and the Banks:
2.1 An incumbency certificate of the Company.
2.2 Payment by the Company to the Agent of an amendment fee in the
amount of $25,000 for the pro rata account of the Banks.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
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In order to induce the Agent and the Banks to enter into this Amendment,
the Company represents and warrants that:
3.1 The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or by-laws, or of any contract or undertaking to which the Company is a
party or by which the Company or its property is or may be bound or affected.
3.2 This Amendment is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
3.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor or stockholder of
the Company, is required on the part of the Company in connection with the
execution, delivery and performance of this Amendment or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Amendment.
3.4 After giving effect to the amendments contained in Article 1 of this
Amendment, the representations and warranties contained in Article IV of the
Credit 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.
ARTICLE 4. WAIVER OF CERTAIN DEFAULTS
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4.1 The Company has advised the Agent and the Banks that for the period
from and including December 31, 1996 through the date of this Amendment the
Company failed to comply with the covenants set forth in Sections 5.2(b) and (c)
of the Credit Agreement, and the Company has asked the Banks to waive the Events
of Default caused by such failure. Based upon such request, the Banks hereby
waive each such Event of Default, including, without limitation, any such Event
of Default pursuant to Section 6.1(e) of the Credit Agreement caused by the
occurrence of an event of default under the Company's credit facilities with The
Fifth Third Bank due to the
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Company's failure to so comply with Sections 5.2(b) and (c) of the Credit
Agreement (the "Fifth Third Cross Default"); PROVIDED that (a) such waiver shall
be limited to those Events of Default, including, without limitation, the Fifth
Third Cross Default, caused by such covenant compliance failures occurring
during the period from and including December 31, 1996 through the date of this
Amendment that are known to the Banks as of the date of this Amendment, and (b)
such waiver shall not be deemed to (i) be a waiver of or consent or agreement to
any other action or omission in violation of the Credit Agreement or any other
instrument, agreement or document referred to therein or executed in connection
therewith, (ii) be a waiver or modification of any provision of the Credit
Agreement or of any instrument, agreement or document referred to therein or
executed in connection therewith, or (iii) prejudice any other right or rights
which the Banks may now have or have in the future under or in connection with
the Credit Agreement or any instrument, agreement or document referred to
therein or executed in connection therewith.
ARTICLE 5. MISCELLANEOUS
5.1 If the Company shall fail to perform or observe any term, covenant
or agreement in this Amendment, or any representation or warranty made by the
Company in this Amendment shall prove to have been incorrect in any material
respect when made, such occurrence shall be deemed to constitute an Event of
Default.
5.2 All references to the Credit Agreement in any other document,
instrument or certificate referred to in the Credit Agreement or delivered in
connection with or pursuant thereto, hereafter shall be deemed references to the
Credit Agreement, as amended hereby.
5.3 Subject to the amendments herein provided, the Credit Agreement
shall in all respects continue in full force and effect.
5.4 Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
5.5 This Amendment shall be governed by and construed in accordance with
the laws of the State of Michigan.
5.6 The Company agrees to pay the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & Xxxxxxx, counsel for the Agent, in
connection with the negotiation and preparation of this Amendment and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto.
5.6 This Amendment may be executed upon any number of counterparts with
the same effect as if the signatures thereto were upon the same instrument.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first-above written.
THE MONARCH MACHINE TOOL COMPANY
By /s/ Xxxxxxx X. Xxxxxxx
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Its: President
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NBD BANK, N.A., as a Bank and as the Agent
By: /s/ Xxxxxx X Xxxxxxxx
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Its: First Vice President
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STAR BANK, N.A., as a Bank
By: /s/ Xxxxxx X. Xxxx
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Its: Vice President
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CLOSING CERTIFICATE
OF MONARCH MACHINE TOOL COMPANY
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NBD Bank, as Agent
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
I hereby certify that I am the Secretary of Monarch Machine Tool
Company, an Ohio corporation (the "Company"), and as such have access to the
Company's corporate records and am familiar with the matters therein contained
and herein certified, and that:
1. The Company is a corporation with a perpetual charter duly organized
and validly existing and in good standing under the laws of the State of Ohio.
2. No proceedings looking toward the dissolution or liquidation of the
Company have been commenced and no such proceedings are contemplated.
3. Each person who, as an officer of the Company, signed, by facsimile
or otherwise, and delivered the Third Amendment to Amended and Restated Credit
Agreement dated as of March 19, 1997 was duly appointed, qualified and acting as
an officer of the Company at the respective times of such signing and delivery.
Such execution and delivery was duly authorized by all necessary corporate
action of the Company.
4. The following persons are now, and at all times subsequent to March
10, 1997 have been, duly qualified and acting officers of the Company, duly
elected to the offices set forth opposite their respective names, and the
signature appearing opposite the name of each such officer is his authentic
signature:
Name Office Signature
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Xxxxxxx X. Xxxxxxx President and /s/ Xxxxxxx X. Xxxxxxx
Chief Executive -----------------------------
Officer
Xxxx X. Xxxx Secretary /s/ Xxxx X. Xxxx
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Xxxxxx X. Xxxxxxxx Treasurer /s/ Xxxxxx X. Xxxxxxxx
and Chief -----------------------------
Financial Officer
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IN WITNESS WHEREOF, I have hereunto set my hand as of the 19th day of March,
1997.
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, Secretary