ARROW AUTOMOTIVE INDUSTRIES, INC.
WAIVER AND FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING
CREDIT AND TERM LOAN AGREEMENT
THIS WAIVER AND FIRST AMENDMENT (this "Amendment"), dated as of December
28, 1996, by and among Arrow Automotive Industries, Inc. (the "Borrower"), The
First National Bank of Boston, a national banking association ("FNBB"), the
other lending institutions listed on Schedule 1 to the Credit Agreement
(together with FNBB, the "Banks"), and The First National Bank of Boston as
agent to the Banks (the "Agent"), as parties to a certain Amended and Restated
Revolving Credit and Term Loan Agreement, dated as of December 3, 1996 (the
"Credit Agreement"). Capitalized terms not otherwise defined herein shall
have the same meanings ascribed thereto in the Credit Agreement.
WHEREAS, the Borrower has requested the Bank to make certain amendments
to the Credit Agreement; and
WHEREAS, the Banks are willing to make such amendments to the Credit
Agreement subject to the terms and conditions set forth herein.
NOW THEREFORE, the Borrower and the Agent and the Banks hereby covenant
and agree as follows:
1. AMENDMENT TO CREDIT AGREEMENT.
(a) The definition of Revolving Credit Loan Maturity Date
contained in Section 1.1 of the Credit Agreement is amended
by deleting the date "September 30, 1997" contained in such
definition and substituting the date "December 31, 1997" therefor.
(b) Section 11.2 of the Credit Agreement is amended by
deleting the table contained in such Section 11.2 and restating
it in its entirety as follows:
FISCAL PERIOD RATIO
3 month period: Q3, 1997 1.0:1.0
6 month period: Q3, 1997 through
Q4, 1997 1.0:1.0
9 month period: Q3, 1997 through
Q1, 1998 1.0:1.0
Each period of four consecutive
fiscal quarters thereafter,
commencing with the four
consecutive fiscal quarters
ending on the last day of
Q2, 1998 1.0:1.0
(c) Section 11.4 of the Credit Agreement is amended by
deleting such Section 11.4 and restating it in its entirety as
follows:
Section 11.4 TANGIBLE NET WORTH. The Borrower will not
permit, as at the end of any fiscal quarter described in the
table set forth below, Tangible Net Worth to be less than the
amount set forth opposite such fiscal quarter in each table:
FISCAL QUARTER AMOUNT
Q2, 1997 $29,000,000
Q3, 1997 $29,100,000
Q4, 1997 $29,250,000
Q1, 1998 and thereafter $29,250,000
(d) Section 11.5 of the Credit Agreement is amended by
deleting the table contained in such Section 11.5 and restating
it in its entirety as follows:
FISCAL PERIOD AMOUNT
9 month period: Q1, 1997 through Q3, 1997 -$1,600,000
12 month period: Q1, 1997 through Q4, 1997 -$1,500,000
Each fiscal quarter thereafter, commencing
with the fiscal quarter ending on the last
day of Q1, 1998. $1.00
2. WAIVER. The Bank hereby waives the provisions of Sections 11.2 and
11.5 of the Credit Agreement solely to the extent necessary to permit non-
compliance with such Sections 11.2 and 11.5, and only for the fiscal quarter
ended December 28, 1996.
3. AMENDMENT FEE. The Borrower shall pay to the Agent for the PRO
RATA accounts of the Banks on or prior to February 10, 1997 an amendment fee of
$10,000.
4. CONDITIONS TO EFFECTIVENESS. This Amendment shall be effective
upon receipt by the Agent of (a) this Amendment duly and properly executed and
delivered by the Borrower, the Banks and the Agent, and (b) the Amendment Fee.
5. REPRESENTATIONS AND WARRANTIES. The Borrower, hereby represents
and warrants to the Bank as follows:
(a) REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. The
representations and warranties of the Borrower contained in the Credit
Agreement (i) were true and correct in all material respects when made, and
(ii) except to the extent such representations and warranties by their terms
are made solely as of a prior date, continue to be true and correct in all
material respects on the date hereof.
(b) RATIFICATION, ETC. Except as expressly provided by this
Amendment, the Credit Agreement and all documents, instruments and agreements
related thereto, including, but not limited to the Security Documents, are
hereby ratified and confirmed in all respects and shall continue in full force
and effect. The Credit Agreement and this Amendment shall be read and
construed as a single agreement. All references in the Credit Agreement or any
related agreement or instrument to the Credit Agreement shall hereafter refer
to the Credit Agreement as amended hereby.
(c) AUTHORITY, ETC. The execution and delivery by the Borrower
of this Amendment and the performance by the Borrower of all of its agreements
and obligations under the Credit Agreement as amended hereby are within the
corporate authority of the Borrower and have been duly authorized by all
necessary corporate action on the part of the Borrower.
(d) ENFORCEABILITY OF OBLIGATIONS. This Amendment and the Credit
Agreement as amended hereby constitute the legal, valid and binding obligations
of the Borrower, enforceable against the Borrower in accordance with their
terms.
(e) NO DEFAULT. After giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing.
6. NO OTHER AMENDMENTS OR WAIVERS. Except as expressly provided in
this Amendment, all of the terms and conditions of the Credit Agreement and the
other Loan Documents remain in full force and effect.
7. EXPENSES. Pursuant to Section 17 of the Credit Agreement, all
costs and expenses incurred or sustained by the Agent in connection with this
Amendment, including the fees and disbursements of legal counsel for the Agent
in producing, reproducing and negotiating the Amendment, will be for the
account of the Borrower whether or not the transactions contemplated by this
Amendment are consummated.
8. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
number of counterparts, each of which shall be deemed an original, but which
together shall constitute one instrument.
9. MISCELLEANOUS. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
The captions in this Amendment are for the convenience of reference only and
shall not define or limit the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
under seal as of the date first set forth above.
ARROW AUTOMOTIVE INDUSTRIES, INC.
By: /S/ JAMES F. FAGAN
Name: James F. Fagan
Title: Executive Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /S/ MATTHEW A. ROSS
Name: Matthew A. Ross
Title: Vice President
BTM CAPITAL CORPORATION
By: /S/WILLIAM R. YORK, JR.
Name: WILLIAM R. YORK, JR.
Title: SR VP
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