EXHIBIT 10.20.18
Second Amendment to the Credit Agreement
dated May 31, 1995
between the Registrant and NBD Bank
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of May 31, 1995
(this "Second Amendment"), between HURCO COMPANIES, INC., an Indiana corporation
(the "Company"), and NBD BANK, a Michigan banking corporation (the "Bank").
RECITALS
A. The parties hereto have entered into a Credit Agreement and Amendment to
Term Loan Agreement, dated as of March 24, 1994, as amended (the "Credit
Agreement"), which is in full force and effect.
B. The Company desires to amend the Credit Agreement as herein provided,
and the Bank is willing to so amend the Credit Agreement on the terms and
conditions set forth herein.
AGREEMENT
Based upon these recitals, the parties agree as follows:
1. AMENDMENT. Upon the Company satisfying the conditions set forth in paragraph
4 (the date that this occurs being called the "effective date"), the Credit
Agreement shall be amended as follows:
(A) The terms "Automatic Termination Date", "Letter of Credit", "Letter of
Credit Advance", and "Outstanding Facilities" in Section 1.1 of the Credit
Agreement are amended to read as follows:
"AUTOMATIC TERMINATION DATE" means May 1, 1996.
"LETTER OF CREDIT" means any Authorization Letter of Credit and
any New Facility Letter of Credit.
"LETTER OF CREDIT ADVANCE" means any Authorization Letter of
Credit Advance and any New Facility Letter of Credit Advance.
"OUTSTANDING FACILITIES" means, collectively, the New Facility,
the New Facility Note, the NBD Term Loan Agreement (as amended
hereby), the Amended Term Note, the Reimbursement Agreement, the
IRB L/C, the Hurco Guaranty, the NBD Guaranty, the Authorization
Note, and the Letters of Credit, each as existing following the
execution of this Agreement.
(B) The following definitions are added to Section 1.1 in appropriate
alphabetical order:
"AUTHORIZATION NOTE" means the demand promissory note of the
Company evidencing the Company's obligations under the
Authorization Letters of Credit, in substantially the form of
Exhibit G, as amended or modified from time to time and together
with any promissory notes issued in exchange or replacement
therefor.
"AUTHORIZATION LETTER OF CREDIT" means a standby or commercial
letter of credit or bankers acceptance having a stated expiry
date not later than January 31, 1996, issued by NBD pursuant to
Section 3.1(a)(ii) for the account of the Company under an
application and related documentation acceptable to NBD
requiring, among other things, the Company to immediately
reimburse NBD in respect of all drafts or other demands for
payment honored thereunder and all expenses paid or incurred by
NBD relative thereto.
"AUTHORIZATION LETTER OF CREDIT ADVANCE" means any issuance of an
Authorization Letter of Credit.
"NEW FACILITY ADVANCE" means the issuance of any New Facility
Loan or any New Facility Letter of Credit Advance.
"NEW FACILITY LETTER OF CREDIT" means a standby or commercial
letter of credit, bankers acceptance, or bank guaranty having a
stated expiry date not later than the earlier of (a) eighteen
months after the issuance date, and (b) the date which is 30 days
prior to the Automatic Termination Date, and issued by NBD under
the New Facility for the account of the Company under an
application and related documentation acceptable to NBD
requiring, among other things, the Company to immediately
reimburse NBD in respect of all drafts or other demands for
payment honored thereunder and all expenses paid or incurred by
NBD relative thereto.
"NEW FACILITY LETTER OF CREDIT ADVANCE" means any issuance of a
New Facility Letter of Credit under the New Facility.
"NOTES" means the Authorization Note and the New Facility Note.
C. Section 2.1(a) is amended by deleting the term "Letter of Credit" where
it appears in the section and substituting therefor the term "New Facility
Letter of Credit".
D. Section 2.1(b) is amended by deleting the term "Advances" in subsection
(iii) and substituting therefor the term "New Facility Advances", and deleting
the term "Letter of Credit Advances" in subsections (iv) and (v) and
substituting therefor the term "New Facility Letter of Credit Advances".
E. A new Section 2.1A is added, to read as follows:
Section 2.1A AUTHORIZATION LETTERS OF CREDIT. NBD, in its sole
and uncontrolled discretion, may issue Authorization Letters of
Credit for the benefit of the Company pursuant to Section
3.1(a)(ii) from time to time to but excluding September 30, 1995,
not to exceed at any time outstanding the aggregate amount of
$2,000,000.
F. A new Section 2.3(e) is added, to read as follows:
(e) AUTHORIZATION USAGE FEE. The Company agrees to pay to NBD a
fee of $10,000 on or before the first date that an Authorization
Letter of Credit Advance is made in an amount which, together
with the amount of all Authori-zation Letters of Credit then
outstanding, equals or exceeds $2,000,000.
G. Section 3.1 is amended to read as follows:
3.1 DISBURSEMENT OF ADVANCES. (a)(i) The Company shall give NBD
notice of its request for each New Facility Advance in
substantially the form of Exhibit B hereto not later than 12:00
p.m. Noon Detroit time (i) five Business Days prior to the date
any New Facility Letter of Credit Advance is requested to be
made, and (ii) on the Business Day any New Facility Loan is
requested to be made, which notice shall specify whether a New
Facility Loan or a New Facility Letter of Credit is requested
and, in the case of each New Facility Letter of Credit Advance,
such information as may be necessary for its issuance by NBD.
Subject to the terms of this Agreement, the proceeds of each
requested New Facility Advance shall be made available to the
Company by depositing the proceeds thereof, in immediately
available funds, in an account maintained and designated by the
Company at NBD's principal office.
(ii) The Company shall give NBD notice of its request for each
Authorization Letter of Credit Advance in accordance with Section
9.2 not later than 12:00 p.m. Noon Detroit time five Business
Days prior to the date any Authorization Letter of Credit Advance
is requested to be made, which notice shall contain such
information as may be necessary for its issuance by NBD. The
Company shall contemporaneously provide PML with a copy of such
request in the manner specified for notices in the Intercreditor
Agreement. Prior to making its first request for an Authorization
Letter of Credit Advance, the Company shall provide documents
satisfactory to NBD evidencing necessary corporate action by the
Company with respect to the Authorization Letters of Credit.
(b) All New Facility Loans shall be evidenced by the New Facility
Note, all reimbursement obligations under the Authorization
Letters of Credit shall be evidenced by the Authorization Note,
and all such loans shall be due and payable and bear interest as
provided in this Agreement. NBD is hereby authorized by the
Company to record on the schedule attached to the Notes, or in
its books and records, the date, amount and type of each loan,
the amount of each payment or prepayment of principal thereon,
and the other information provided for on such schedule, which
schedule or books and records, as the case may be, shall
constitute prima facie evidence of the information so recorded,
PROVIDED, HOWEVER, that failure of NBD to record, or any error in
recording, any such information shall not relieve the Company of
its obligation to repay the outstanding principal amount of the
loans, all accrued interest thereon, and other amounts payable
with respect thereto in accordance with the terms of the Notes
and this Agreement. Subject to the terms of this Agreement, the
Company may borrow new Facility Loans under this Section 2.4,
prepay New Facility Loans pursuant to Section 5.2, and reborrow
New Facility Loans under this Section.
(c) Subject to the terms of this Agreement, NBD shall, on the
date any Letter of Credit Advance is requested to be made, issue
the related Letter of Credit for the account of the Company.
Notwithstanding anything herein to the contrary, NBD may decline
to issue any requested Letter of Credit on the basis that the
beneficiary, the purpose of issuance, or the terms of the drawing
are unacceptable to it.
(d) Notwithstanding any provisions of this agreement, it is
understood and agreed that NBD shall at no time be obligated to
make any Authorization Letter of Credit Advance hereunder,
despite compliance with any express conditions precedent thereto,
and NBD shall be privileged at any time to make demand for
payment of the Authorization Note, the reimbursement obligations,
the cash collateral obligations pursuant to Section 5.2A, and all
other indebtedness, obligations and liabilities of the Company to
NBD in connection with the Authorization Letters of Credit,
despite the fact that there may not then exist an Event of
Default.
H. Section 3.3(c) is amended to read as follows:
(c) NBD shall have received the Borrowing Base Certificate
required to be delivered under Section 7.1(d)(vi) as of the day
next preceding the date such Advance, and the aggregate principal
amount of the New Facility Advances then outstanding, after
giving effect to the requested Advance, does not exceed the
Borrowing Base as calculated in the Borrowing Base Certificate;
and
I. Section 4.2(b) is amended to delete the phrase "payable in installments
of $1,750,000 payable on the Automatic Termination Date (as defined in this
Agreement)," and substituting therefor the phrase "payable in installments of
$1,750,000 payable on February 1, 1996,".
J. A new Section 5.2A is added, to read as follows:
5.2A AUTHORIZATION NOTE PAYMENTS. Unless earlier payment is
required under this Agreement, the Company shall pay to NBD on
demand the entire outstanding principal amount of the
Authorization Note and to immediately deliver cash collateral to
NBD in an amount equal to the maximum amount that may be
available to be drawn at any time prior to the stated expiry of
all outstanding Authorization Letters of Credit, which cash
collateral shall be held in the Cash Collateral Account and is
hereby pledged to NBD to secure all indebtedness, obligations and
liabilities of any kind of the Company to NBD, and the Company
agrees to execute such further written agreements and documents
in form and substance satisfactory to NBD to further document
such pledge.
K. Section 5.4(b) is amended by deleting the term "Advances" and
substituting therefor the term "New Facility Advances".
L. Section 5.4(d) is amended to read as follows:
(d) VIOLATION OF LETTER OF CREDIT SUBLIMITS. If at any time the
face amount of the New Facility Letters of Credit exceeds the
lesser of $9,500,000 and the New Facility Commitment, or if the
face amount of the standby New Facility Letters of Credit exceeds
the lesser of $2,000,000 and the New Facility Commitment, the
Company shall immediately pay to NBD an amount to be deposited in
the Cash Collateral Account equal to the amount by which this
excess exceeds the sum of all amounts then being held in the Cash
Collateral Account allocable to the New Facility Letters of
Credit. If at any time the face amount of the Authorization
Letters of Credit exceeds $2,000,000, the Company shall
immediately pay to NBD an amount to be deposited in the Cash
Collateral Account equal to the amount by which this excess
exceeds the sum of all amounts then being held in the Cash
Collateral Account allocable to the Authorization Letters of
Credit.
M. Section 7.2(c) is amended by adding the following after the phrase
"first fiscal quarter of fiscal year 1996":
, and $375,000 during the second fiscal quarter of fiscal year
1996
N. Section 7.2(m) is amended by adding the following at the end of that
subsection:
, or (iii) if the aggregate purchase price and other acquisition
costs of all such Capital Expenditures made by the Company or any
of its Subsidiaries during the second fiscal quarter of fiscal
year 1996, when combined with all other Capital Expenditures made
during that fiscal year, would exceed $875,000.
O. Exhibit D is amended by substituting therefor the form of Third Amended
and Restated NBD Term Note attached as Exhibit D.
P. A new Exhibit G, Demand Promissory Note, is added to the Credit
Agreement in the form attached as Exhibit G.
2. REFERENCES TO CREDIT AGREEMENT. From and after the effective date of this
Second 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 Second
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; (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 Second Amendment and all agreements and documents
delivered pursuant hereto; and (iii) this Second 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 VI (other
than Section 6.5) of the Credit Agreement 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 such effective date.
(c) 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 Second 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 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 with respect to this Second Amendment and
all other agreements or documents delivered pursuant hereto as
the Bank may request, except that the Company may provide
evidence of proper corporate authorization for requesting the
Authorization Letters of Credit at the time of its first request
for an Authorization Letter of Credit Advance, as contemplated by
Section 3.1(a)(ii) of the Credit Agreement;
(b) An Amendment to Amended and Restated Note Agreement of even
date herewith between the Company and Principal Mutual Life
Insurance Company ("PML"), in the form and substance satisfactory
to the Bank;
(c) An Amendment to Intercreditor, Agency, and Sharing Agreement
of even date herewith among the Company, the Bank, PML, and the
Bank as Agent for the Bank and PML, in form and substance
satisfactory to the Bank;
(d) The Third Amended and Restated NBD Term Note executed and
delivered by the Company in the form attached as Exhibit D;
(e) The Demand Promissory Note executed and delivered by the
Company in the form attached as Exhibit G;
(f) A Confirmation of Guaranty of even date herewith executed and
delivered by the Guarantor in favor of the Bank;
(g) An initial usage fee of $10,000 paid to NBD; and
(h) Such additional agreements and documents, fully executed by
the Company, as are reasonably requested by the Bank.
5. MISCELLANEOUS. The terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement. Except as
expressly amended hereby, the Credit Agreement and all other documents issued
under or with respect thereto are hereby ratified and confirmed by the Bank 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 Second 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 Second 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 Second
Amendment, including the reasonable fees and expenses of Dickinson, Wright,
Moon, Van Dusen & Freeman, counsel to the Bank, in connection with preparing and
reviewing this Second Amendment and any related agreements and documents.
8. GOVERNING LAW. This Second Amendment is a contract made under, and shall be
governed by and construed in accordance with, the laws of the State of Michigan
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 Second Amendment to be
duly executed and delivered as of the date first written above.
HURCO COMPANIES, INC. NBD BANK
By: /S/ROGER J. WOLF By: /S/ANDREW P. ARTON
---------------------- ----------------------
Roger J. Wolf Andrew P. Arton
Its: Senior Vice President Its: Second Vice President
and Chief Financial Officer
EXHIBIT D
THIRD AMENDED AND RESTATED NBD TERM NOTE
$4,035,936.42 Dated as of May 31, 1995
Detroit, Michigan
FOR VALUE RECEIVED, HURCO COMPANIES, INC. ("Borrower"), an Indiana corporation,
hereby unconditionally promises to pay to the order of NBD Bank (formerly known
as NBD Bank, N.A.), a Michigan banking corporation (the "Bank"), at the
principal banking office of the Bank in lawful money of the United States of
America and in immediately available funds, the principal sum of Four Million
Thirty-Five Thousand Nine Hundred Thirty-six and 42/100 Dollars ($4,035,936.42),
unless earlier payment is required, in installments as follows: (i) $1,750,000
payable on February 1, 1996, and (ii) the remainder payable on the Maturity
Date, when the entire outstanding principal balance of the Term Loan evidenced
hereby, and all accrued interest thereon, shall be due and payable; and to pay
interest on the unpaid principal balance hereof from time to time outstanding,
in like money and funds, for the period from the date hereof until such Term
Loan shall be paid in full, at the rates per annum and on the dates provided in
the Term Loan Agreement referred to below.
The Bank is hereby authorized by the Borrower to record on its books and records
the date, amount and type of each Loan, the applicable interest rate, the amount
of each payment or prepayment of principal thereon, and any other information
required by the Bank, which books and records shall constitute prima facie
evidence of the information so recorded, PROVIDED, HOWEVER, that any failure by
the Bank to record any such information shall not relieve the Borrower of its
obligation to repay the outstanding principal amount of the Term Loan evidenced
hereby, all accrued interest thereon and any amount payable with respect thereto
in accordance with the terms of this Term Note and the Term Loan Agreement.
This Term Note evidences a Term Loan made under a Term Loan Agreement dated as
of September 9, 1991, as amended by a Credit Agreement and Amendment to Term
Loan Agreement dated as of March 24, 1994, and as further amended by a First
Amendment to Credit Agreement dated as of January 31, 1995, and by a Second
Amendment to Credit Agreement of even date herewith between the Borrower and the
Bank (as amended, the "Term Loan Agreement"), to which reference is made for a
statement of the circumstances under which this Term Note is subject to
prepayment and under which its due date may be accelerated. Capitalized terms
used but not defined in this Term Note shall have the respective meanings
assigned to them in the Term Loan Agreement.
This Term Note is made under, and shall be governed by and construed in
accordance with, the laws of the State of Michigan applicable to contracts made
and to be performed entirely within such State and without giving effect to
choice of law principles of such State.
HURCO COMPANIES, INC.
By: __________________________
Its: _________________________
EXHIBIT G
MASTER PROMISSORY NOTE
$2,000,000 Detroit, Michigan
Dated as of May 31, 1995
For value received, on demand or at such other maturity or maturities as are set
forth in the Bank's records, Hurco Companies, Inc. (the "Borrower"), promises to
pay to the order of NBD Bank (the "Bank"), at the Bank's principal office in the
State of Michigan, in lawful money of the United States of America and in
immediately available funds, the principal sum of TWO MILLION AND 00/100 DOLLARS
($2,000,000), or such lesser amount as is indicated on the Bank's records,
together with interest computed on the balance from time to time unpaid on the
basis of the actual number of days elapsed in a year of 360 days at the rate(s)
per annum determined from time to time pursuant to the Credit Agreement, as
defined below, and reflected on the Bank's records, which interest shall be
payable in accordance with the terms set forth in the Credit Agreement, and to
pay interest on overdue principal from the date of demand or default until paid
at the rate which is three percent (3%) per annum in excess of the rate
announced from time to time by the Bank as its prime rate.
In no event shall the interest rate exceed the maximum rate allowed by law. Any
interest which would for any reason be deemed unlawful under applicable law
shall be applied to principal.
WAIVER: The Borrower and each endorser of this note and any other party liable
for the debt evidenced by this note severally waives demand, presentment, notice
of dishonor and protest of this note, and consents to any extension or
postponement of time of its payment without limit as to number or period, to the
addition of any party, and to the release, discharge, or suspension of any
rights and remedies against any person who may be liable for the payment of this
note. No delay on the part of the holder in exercising any right or remedy shall
operate as a waiver. No single or partial exercise by the holder of any right or
remedy shall preclude any future exercise of that right or remedy or the
exercise of any other right or remedy. No waiver or indulgence by the holder of
any default shall be effective unless it is in writing and signed by the holder,
nor shall a waiver on one occasion be construed as a bar to or waiver of any
right on any future occasion.
This note evidences a debt under the terms of a certain Credit Agreement and
Amendment to Term Loan Agreement between the Bank and the Borrower dated as of
March 24, 1994, and any amendments (the "Credit Agreement"), which is
incorporated by reference for additional terms and conditions, including default
and acceleration provisions.
WAIVER OF JURY TRIAL: The Bank and the Borrower, after consulting or having had
the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this note, or any related instrument or
agreement, or any of the transactions contemplated by this note, or any course
of conduct, dealing, statements (whether oral or written), or actions of either
of them. Neither the Bank nor the Borrower shall seek to consolidate, by
counterclaim or otherwise, any such action in which a jury trial cannot be or
has not been waived. These provisions shall not be deemed to have been modified
in any respect or relinquished by either the Bank or the Borrower except by a
written instrument executed by both of them.
HURCO COMPANIES, INC.
By: _______________________
Its: _______________________