SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND AMENDMENT TO REIMBURSEMENT AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND AMENDMENT TO REIMBURSEMENT AGREEMENT, dated as of April 30, 2002 (this
"Amendment"), between HURCO COMPANIES, INC., an Indiana corporation (the
"Company"), and BANK ONE, INDIANA, NA, a national banking association (the
"Bank").
RECITALS
A. The parties hereto have entered into a Second Amended and Restated
Credit Agreement and Amendment to Reimbursement Agreement dated as of October
31, 2001 (as amended or modified from time to time, the "Credit Agreement"),
which is in full force and effect.
B. The Company desires to further amend the Credit Agreement as
herein provided, and the Bank is willing to so amend the Credit Agreement on
the terms set forth herein.
AGREEMENT
Based upon these recitals, the parties agree as follows:
1. Amendment. Upon the Company satisfying the condition set
forth in paragraph 4 (the date that this occurs being called the
"Effective Date"), the Credit Agreement shall be amended as follows:
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(a) The definition of the term "Applicable Margin" is amended and
restated, to read as follows:
"Applicable Margin" means, with respect to Advances of any
Type at any time, the percentage rate per annum which is applicable at
such time with respect to Advances of such Type:
(a) from and including the Effective Date through
October 31, 2001:
Eurodollar Advances: 1.0%
Floating Rate Advances: 0.0%
(b) from and including November 1, 2001 and thereafter,
as follows:
Date Eurodollar Advances Floating Rate Advances
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From and including November 1, 2.0% per annum 0% per annum
2001, through April 30, 2002
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From and including May 1, 2002, 2.5% per annum 0.5% per annum
through October 30, 2002
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From and including November 1, 3.0% per annum 1.0% per annum
2002, through January 31, 2003
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From and including February 1, 3.5% per annum 1.5% per annum
2003, and thereafter
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(b) The definition of the term "Automatic Termination Date" is
amended and restated, to read as follows:
"Automatic Termination Date" means June 30, 2003.
(c) The definition of the term "Commitment" is amended and
restated, to read as follows:
"Commitment" means the obligation of the Bank to make Loans
to, and issue Facility LCs upon the application of, the Borrower in an
aggregate amount not exceeding $15,000,000, reduced by (i) $5,000,000
from and including June 30, 2002, and (ii) the amount required pursuant
to Section 2.5(d) and Section 2.5(e) (other than Sections 2.5(e)(iii)
and 2.5(e)(iv), which have already occurred).
(d) The definition of the term "European Facility" is amended and
restated, to read as follows:
"European Facility" means a facility under which Bank One, NA,
London Branch, in its sole discretion, may make revolving credit loans
in favor of any of the European Subsidiaries not to exceed $5,000,000
or its Dollar Equivalent (subject to Section 2.1(a)) pursuant to a
letter agreement dated as of August 17, 1999, as amended from time to
time, provided, however, that, after the New Hurco GmbH Facility has
been issued, no borrower under that facility may obtain loans under the
European Facility.
(e) The definition of the term "Intangible Assets" is amended and
restated, to read as follows:
"Intangible Assets" means, for the Borrower or any of its
Subsidiaries, the net book value, calculated in accordance with
Agreement Accounting Principles, of all items of the following
character which are included in the assets of such person: (i)
goodwill, including without limitation the excess of cost over book
value of any asset, (ii) organization or experimental expenses, (iii)
unamortized debt discount and expense, (iv) patents, trademarks, trade
names and copyrights, (v) deferred taxes and deferred charges, (vi)
franchises, licenses and permits, and (vii) other assets which are
deemed intangible assets under Agreement Accounting Principles,
provided, however, that, for purposes of calculating the Consolidated
Tangible Net Worth, the net book value of any intangible assets
acquired under the CIMPlus Option shall be excluded from this
definition.
(f) Section 2.1(a) is amended and restated, to read as follows:
(a) From and including the Effective Date and prior to the
Facility Termination Date, the Bank agrees, on the terms set forth in
this Agreement, to (i) make Advances to the Borrower and (ii) issue
Facility LCs upon the request of the Borrower not to exceed in the
aggregate principal amount at any time outstanding the lesser of (A)
the amount of the Borrowing Base as of the close of business on the
last day of the month next preceding the date any such Advance is made
and (B) the amount of the Commitment as of the date any such Advance is
made, provided, however, that the aggregate principal amount of
Facility LCs outstanding at any time shall not exceed the amount of the
Commitment, and, provided, further, that the aggregate principal amount
of Advances and Facility LCs outstanding at any time, together with the
aggregate principal amount of Loans (as defined in the European
Facility) outstanding at such time under the European Facility, shall
not exceed the lesser of (A) the amount of the Borrowing Base as of the
close of business on the last day of the month next preceding such date
and (B) the amount of the Commitment as of that date. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow at
any time prior to the Facility Termination Date. The Commitment to
extend credit hereunder shall expire on the Facility Termination Date.
The Bank will issue Facility LCs hereunder on the terms and conditions
set forth in Section 2.18.
(g) Section 2.5(b) is amended and restated, to read as follows:
(b) Facility Fee. The Borrower agrees to pay to the Bank a
facility fee on March 31, 2003, equal to $50,000, provided that, if all
Obligations are repaid and the Commitment is terminated on or before
March 31, 2003, the facility fee shall be forgiven, and provided
further, if a Default occurs, the entire facility fee shall be earned
as of the Default occurring and be payable by the Borrower to the Bank
on March 31, 2003.
(h) Section 2.18.1 is amended and restated, to read as follows:
2.18.1. Issuance. The Bank agrees, on the terms set forth in
this Agreement, to issue standby and commercial letters of credit
(each, a "Facility LC") and to renew, extend, increase, decrease or
otherwise modify each Facility LC ("Modify," and each such action a
"Modification"), from time to time from and including the date of this
Agreement and prior to the Facility Termination Date upon the request
of the Borrower; provided that immediately after each such Facility LC
is issued or Modified, (i) the aggregate amount of the outstanding LC
Obligations shall not exceed the amount of the Commitment, and (ii) the
Outstanding Credit Exposure shall not exceed the Commitment. No
Facility LC shall have an expiry date later than the earlier of (x) the
fifth Business Day prior to the Facility Termination Date and (y) one
year after its issuance.
(i) Section 6.11(iv) is amended and restated, to read as follows:
(iv) Indebtedness of any Subsidiary owing to the
Borrower or to any other Subsidiary, and indebtedness of the Borrower
owing to any Subsidiary.
(j) Section 6.14(iv) is amended and restated, to read as follows:
(iv) The exercise of the CIMPlus Option, provided that, if the
Borrower does not exercise the CIMPlus Option on or before June 14,
2002, the Borrower shall have provided to the Bank a certificate of the
chief financial officer of the Borrower (attaching computations to
demonstrate compliance with all financial covenants hereunder), stating
that, following the exercise of the CIMPlus Option, the Company will be
in compliance with Article VI of this Agreement.
(k) Section 6.15(vii) is amended and restated, to read as follows:
(vii) Liens on the assets of Hurco GmbH to secure the New
Hurco GmbH Facility, and, if Hurco BV is a borrower or guarantor under
the New Hurco GmbH Facility, on the assets of Hurco BV to secure the
New Hurco GmbH Facility.
(l) Section 6.20 is amended and restated, to read as follows:
6.20. Financial Covenants.
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6.20.1. Minimum Consolidated EBITDA. The Borrower will not
permit Consolidated EBITDA, determined as of the end of the twelve (12)
consecutive months then ending, to be less than: (i) on October 31,
2001, $2,000,000, (ii) on January 31, 2002, negative $620,000, (iii) on
April 30, 2002, negative $2,750,000, (iv) on July 31, 2002, negative
$2,750,000, (v) on October 31, 2002, negative $2,150,000, (vi) on
January 31, 2003, negative $750,000, and (vii) on April 30, 2003,
positive $1,000,000.
6.20.2. Minimum Consolidated Tangible Net Worth. The Borrower
will maintain Consolidated Tangible Net Worth as of the last day of
each fiscal quarter then ending of not less than, (i) on October 31,
2001, $35,900,000, (ii) on January 31, 2002, $34,500,000, (iii) on
April 30, 2002, $33,500,000, (iv) on July 31, 2002, $32,500,000, (v) on
October 31, 2002, $32,300,000, (vi) on January 31, 2003, $32,300,000,
and (vii) on April 30, 2003, $32,300,000.
6.20.3. Maximum Consolidated Total Indebtedness to
Consolidated Total Capitalization. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters, of (i)
Consolidated Total Indebtedness to (ii) Consolidated Total
Capitalization, to be greater than 0.4 to 1.0.
(m) Section 6.21 is amended and restated, to read as follows:
6.21. Capital Expenditures. The Borrower will not, nor will it
permit any Subsidiary to, acquire or contract to acquire any fixed
asset or make any other Capital Expenditure if the aggregate purchase
price and other acquisition costs of all Consolidated Capital
Expenditures made during any fiscal quarter, together with the
Consolidated Capital Expenditures made during the prior three fiscal
quarters, would exceed an amount equal to the lesser of (i) 125% of the
consolidated depreciation and amortization expense of the Borrower and
its Subsidiaries for the four fiscal quarters immediately preceding the
date of the proposed Capital Expenditure and (ii) $3,000,000. For
clarification, any acquisition of intangible assets under the CIMPlus
Option shall not be considered an acquisition of a fixed or capital
asset and such acquisition shall not be governed by this covenant.
2. References to Credit Agreement. From and after the effective date of
this Amendment, references to the Credit Agreement in the Credit Agreement and
all other documents issued under or with respect thereto (as each of the
foregoing is amended hereby or pursuant hereto) shall be deemed to be references
to the Credit Agreement as amended hereby.
3. Representations and Warranties. The Company represents and
warrants to the Bank that:
(a) (i) The execution, delivery and performance of this
Amendment and all agreements and documents delivered pursuant hereto by the
Company have been duly authorized by all necessary corporate action and do not
and will not violate any provision of any law, rule, regulation, order,
judgment, injunction, or award presently in effect applying to it, or of its
articles of incorporation or bylaws, or result in a breach of or constitute a
default under any material agreement, lease or instrument to which the Company
is a party or by which it or its properties may be bound or affected (including
without limitation any credit facility with Principal Mutual Life Insurance
Company); (ii) no authorization, consent, approval, license, exemption or filing
of a registration with any court or governmental department, agency or
instrumentality is or will be necessary to the valid execution, delivery or
performance by the Company of this Amendment and all agreements and documents
delivered pursuant hereto; and (iii) this Amendment and all agreements and
documents delivered pursuant hereto by the Company are the legal, valid and
binding obligations of the Company, enforceable against it in accordance with
the terms thereof.
(b) After giving effect to the amendments contained herein,
the representations and warranties contained in Article V of the Credit
Agreement (with the exception of Section 5.5) are true and correct on and as of
the effective date hereof with the same force and effect as if made on and as of
the effective date. Since March 31, 2002, there has been no change in the
business, Property, prospects, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
(c) As of the date hereof, there are no loans or other
obligations outstanding under the European Facility. Prior to the date a letter
agreement regarding the Fifth Amendment to European Facility is executed among
the European Subsidiaries and the Bank, in form and substance satisfactory to
the Bank, the Borrower shall cause the European Subsidiaries to not utilize the
credit facilities provided under the European Facility.
(d) No Event of Default has occurred and is continuing or will
exist under the Credit Agreement as of the effective date hereof.
4. Conditions to Effectiveness. This Amendment shall not
become effective until the Bank has received the following documents and the
following conditions have been satisfied, each in form and substance
satisfactory to the Bank:
(a) Copies, certified as of the effective date hereof, of such
corporate documents of the Company and the Guarantors as the Bank may request,
including articles of incorporation, bylaws (or certifying as to the continued
accuracy of the articles of incorporation and by-laws previously delivered to
the Bank), and incumbency certificates, and such documents evidencing necessary
corporate action by the Company and the Guarantors with respect to this
Amendment and all other agreements or documents delivered pursuant hereto as the
Bank may request;
(b) A Confirmation of Subsidiary Guaranty of even date
herewith executed by the Guarantors in favor of the Bank, in form and substance
satisfactory to the Bank;
(c) Such additional agreements and documents, fully
executed by the Company, as are reasonably requested by the Bank; and
(d) The Company has paid the Bank on or prior to the
Effective Date an arrangement fee in the amount of $15,000.
5. Miscellaneous. The terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement. Except as
expressly amended, the Credit Agreement and all other documents issued under or
with respect thereto are ratified and confirmed by the Banks and the Company and
shall remain in full force and effect, and the Company hereby acknowledges that
it has no defense, offset or counterclaim with respect thereto.
6. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by
signing any such counterpart.
7. Expenses. The Company agrees to pay and save the Bank harmless from
liability for all costs and expenses of the Bank arising in respect of this
Amendment, including the reasonable fees and expenses of Xxxxxxxxx Xxxxxx PLLC,
counsel to the Bank, in connection with preparing and reviewing this Amendment
and any related agreements and documents.
8. Governing Law. This Amendment is a contract made under, and shall be
governed by and construed in accordance with, the laws of the State of Indiana
applicable to contracts made and to be performed entirely within such state and
without giving effect to the choice law principles of such state.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.
HURCO COMPANIES, INC. BANK ONE, INDIANA, NA
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxxx
Its: Senior Vice President Its: Assistant Vice President
and Chief Financial Officer
DETROIT 15275-5 660867