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Exhibit 4.3
FIRST AMENDMENT AGREEMENT
This First Amendment Agreement (this "Amendment") is made as of the
12th day of March, 2001, by and among PARK-OHIO INDUSTRIES, INC., an Ohio
corporation ("Borrower"), the banking institutions listed on Schedule 1 to the
Credit Agreement, as hereinafter defined ("Banks"), KEYBANK NATIONAL
ASSOCIATION, as administrative agent for the Banks ("Agent"), and THE HUNTINGTON
NATIONAL BANK, as co-agent for the Banks ("Co-Agent").
WHEREAS, Borrower, Agent and the Banks are parties to a certain Credit
and Security Agreement, dated as of December 21, 2000, as the same may from time
to time be amended, restated or otherwise modified, which provides, among other
things, for revolving loans and other financial accommodations aggregating One
Hundred Eighty Million Dollars ($180,000,000), all upon certain terms and
conditions stated therein (the "Credit Agreement");
WHEREAS, Borrower, Agent and the Banks desire to amend the Credit
Agreement to modify certain provisions thereof; and
WHEREAS, each capitalized term used herein shall be defined in
accordance with the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other valuable considerations, Borrower,
Agent and the Banks hereby agree as follows:
1. Article I of the Credit Agreement is hereby amended to delete the
definitions of "Applicable Commitment Fee" and "Applicable Margin" in their
entirety and to substitute in place thereof, respectively, the following:
"Applicable Commitment Fee Rate" shall mean:
(a) for the period from the Closing Date through March 31,
2001, forty-five (45) basis points;
(b) for the period from April 1, 2001 through May 31, 2001,
fifty (50) basis points; and
(c) commencing with the financial statements for the fiscal
quarter ending March 31, 2001, the number of basis points set forth in
the following matrix, based upon the result of the computation of the
Leverage Ratio, shall be used to establish the number of basis points
that will go into effect on June 1, 2001 and thereafter:
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APPLICABLE
LEVERAGE RATIO COMMITMENT FEE RATE
Greater than or equal to 4.90 to 1.00 55 basis points
Greater than or equal to 4.50 to 1.00, but less than 4.90 to 50 basis points
1.00
Greater than or equal to 4.25 to 1.00, but less than 4.50 to 45 basis points
1.00
Greater than or equal to 4.00 to 1.00, but less than 4.25 to 40 basis points
1.00
Greater than or equal to 3.75 to 1.00, but less than 4.00 to 35 basis points
1.00
Greater than or equal to 3.40 to 1.00, but less than 3.75 to 30 basis points
1.00
Less than 3.40 to 1.00 25 basis points
Changes to the Applicable Commitment Fee Rate shall be effective on the
first day of the month following the date upon which Agent received,
or, if earlier, should have received, pursuant to Section 5.3(a) and
(b) hereof, the financial statements of Borrower. The above matrix does
not modify or waive, in any respect, the requirements of Section 5.7
hereof, the rights of the Banks to charge the Default Rate, or the
rights and remedies of Agent and the Banks pursuant to Articles VIII
and IX hereof.
"Applicable Margin" shall mean:
(a) for the period from the Closing Date through March 31,
2001, twenty-five (25) basis points for each Base Interest Segment and
one hundred ninety (190) basis points for each LIBOR Interest Segment;
(b) for the period from April 1, 2001 through May 31, 2001,
one hundred (100) basis points for each Base Interest Segment and two
hundred seventy-five (275) basis points for each LIBOR Interest
Segment; and
(c) commencing with the financial statements for the fiscal
quarter ending March 31, 2001, the number of basis points (for each
Base Interest Segment or LIBOR Interest Segment, as appropriate) set
forth in the following matrix, based upon the result of the computation
of the Leverage Ratio, shall be used to establish the number of basis
points that will go into effect on June 1, 2001 and thereafter:
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APPLICABLE BASIS POINTS APPLICABLE BASIS POINTS
LEVERAGE RATIO FOR EACH BASE FOR EACH LIBOR
INTEREST SEGMENT INTEREST SEGMENT
Greater than or equal to 4.90 125 basis points 300 basis points
to 1.00
Greater than or equal to 4.75
to 1.00, but less than 4.90 to 100 basis points 275 basis points
1.00
Greater than or equal to 4.50
to 1.00, but less than 4.75 to 50 basis points 235 basis points
1.00
Greater than or equal to 4.25
to 1.00, but less than 4.50 to 25 basis points 190 basis points
1.00
Greater than or equal to 4.00
to 1.00, but less than 4.25 to 0 basis points 175 basis points
1.00
Greater than or equal to 3.75
to 1.00, but less than 4.00 to 0 basis points 162.50 basis points
1.00
Greater than or equal to 3.40
to 1.00, but less than 3.75 to 0 basis points 150 basis points
1.00
Less than 3.40 to 1.00 0 basis points 137.50 basis points
Changes to the Applicable Margin shall be effective on the first day of
the month following the date upon which Agent received, or, if earlier,
should have received, pursuant to Section 5.3(a) and (b) hereof, the
financial statements of Borrower. The above matrix does not modify or
waive, in any respect, the requirements of Section 5.7 hereof, the
rights of the Banks to charge the Default Rate, or the rights and
remedies of Agent and the Banks pursuant to Articles VIII and IX
hereof.
2. Article I of the Credit Agreement is hereby amended to add the
following new definitions thereto:
"Certified Acquisition Amount" shall mean the amount of
borrowings used for acquisitions for the period from November 25, 1997
through the day prior to first day of the Fixed Charge Condition
Period, as certified to Agent and the Banks in a certificate signed by
a Financial Officer of Borrower dated as of the first day of the Fixed
Charge Condition Period.
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"Fixed Charge Condition Period" shall mean the time period
from the date that the determination is made that the Fixed Charge
Coverage Ratio Condition exists or, within the next three (3) months,
is likely to exist, until the date when Borrower has presented evidence
to Agent, satisfactory to Agent in its sole discretion, that the Fixed
Charge Coverage Ratio Condition no longer exists and, within the next
three (3) months, will not be likely to exist.
3. The Credit Agreement is hereby amended to delete Sections 2.8
therefrom in its entirety and to insert in place thereof the following:
SECTION 2.8. FIXED CHARGE COVERAGE RATIO CONDITION.
(a) Borrower shall (i) provide immediate written notice to
Agent and the Banks at any time that the Fixed Charge Coverage Ratio
Condition exists or, within the next three (3) months, is likely to
exist, and, during any Fixed Charge Condition Period, Borrower shall
not request any Loan, and the Banks shall not be obligated to make any
Loan, unless (A) Borrower complies with the requirements of subparts
(b), (c) and (d) below, (B) the proceeds of such Loan shall constitute
Permitted Indebtedness (as defined in the Indenture), and (C) upon
request of Agent, Borrower shall provide to the Banks such evidence of
use of proceeds of the Loans and such opinion of counsel with respect
to the Indenture, as Agent may from time to time require in its sole
discretion, and (ii) on the first Business Day of each week, commencing
on the Monday after the Closing Date, furnish to Agent, a Weekly
Compliance Certification, certified by a Financial Officer of Borrower.
(b) During any Fixed Charge Condition Period, in addition to
the requirements set forth in this Article 2 or elsewhere in this
Agreement, Borrower shall not request any Loan, and the Banks shall not
be obligated to make any Loan, unless:
(i) after giving effect to the making of such Loan, the
aggregate principal amount of all Loans outstanding
on such date (minus the Certified Acquisition Amount)
shall be less than an amount equal to the greater of
(A) Fifty Million Dollars ($50,000,000), or (B) the
sum of (1) forty-five percent (45%) of the book value
of accounts receivable of Borrower and its
Subsidiaries and (2) twenty-five percent (25%) of the
book value of the inventory of Borrower and its
Subsidiaries;
(ii) concurrently with the request for any Loan, and in
addition to the requirements set forth in Section 2.2
hereof, Borrower shall have submitted to Agent a
Borrowing Base Certificate certified by a Financial
Officer of Borrower, in the form of Exhibit G-1
hereto and otherwise in form and substance
satisfactory to Agent and the Banks, certifying that
both the book value and the actual value of accounts
receivable and inventory of Borrower and its
Subsidiaries are no less than (A) One Hundred Million
Dollars ($100,000,000) (or such lesser amount as
Borrower, Agent and the Required
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Banks may agree to in writing), with respect to
accounts receivable, and (B) One Hundred Sixty
Million Dollars ($160,000,000) (or such lesser amount
as Borrower, Agent and the Required Banks may agree
to in writing), with respect to inventory;
(iii) on the fifteenth (15th) day of each month, commencing
on March 15, 2001, Borrower shall have provided to
Agent and the Banks a Monthly Borrowing Base Report
certified by a Financial Officer of Borrower, in the
form of Exhibit G-2 hereto and otherwise in form and
substance satisfactory to Agent and the Banks,
certifying as to the specific value of accounts
receivable and inventory of Borrower and its
Subsidiaries on such date; and
(iv) Borrower shall have provided such evidence as Agent
may require with respect to the actual use of the
proceeds of any Loan, certified by a Financial
Officer of Borrower and otherwise in form and
substance satisfactory to Agent and the Banks.
(c) During the Fixed Charge Condition Period, and
notwithstanding anything in this Agreement to the contrary:
(i) neither Borrower nor any of its Subsidiaries
shall make, or commit to make, any Acquisition;
(ii) the use of proceeds of any Loan by Borrower and
its Subsidiaries shall be solely for working capital purposes
of Borrower and its Subsidiaries; provided, however, that the
use of proceeds of any Loan by Borrower and its Subsidiaries
may be for capital expenditures of Borrower and its
Subsidiaries so long as:
(1) any such Loan shall constitute Permitted
Indebtedness (as defined in the Indenture) pursuant
to subpart (iv) of the definition of Permitted
Indebtedness set forth in the Indenture;
(2) the aggregate principal amount of all
such Loans the proceeds of which are used for capital
expenditures in accordance with this subpart shall
not exceed (when combined with all other loans and
capitalized leases used to finance capital
expenditures, so long as such other loans and capital
leases are permitted pursuant to Section 5.8(c)
hereof) at any time the lesser of (y) five percent
(5%) of the tangible consolidated total assets or (z)
Eighteen Million Five Hundred Thousand Dollars
($18,500,000);
(3) without the prior written consent of
Agent and the Required Banks, Borrower and its
Subsidiaries shall not make or commit to make
Consolidated Capital Expenditures in excess of the
amount of (y) Eighteen
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Million Five Hundred Thousand Dollars ($18,500,000)
during the 2001 fiscal year of Borrower and (z)
thereafter such amounts as Borrower, Agent and the
Required Banks may agree to in writing (provided that
such amount shall be zero until such agreement is
reached); provided, however, that, the aggregate
amount of capital expenditures made by Borrower to
replace the fixed assets lost due to the fire at the
Cicero, Illinois rubber plant shall be excluded from
the limitations set forth in this subpart so long as
such capital expenditures are made solely with and
directly from the insurance proceeds received as
reimbursement for the loss of fixed assets due to
such fire;
(4) with respect to the capital asset being
purchased with the proceeds of such Loan, within five
(5) Business Days after the purchase of such asset,
the appropriate Company shall have executed and
delivered to Agent, for the benefit of the Banks,
such security agreements, UCC financing statements
and other documents as Agent, in its discretion,
shall require so that Agent has, for the benefit of
the Banks, a first priority security interest and
Lien on such asset;
(iii) neither Borrower nor any of its Subsidiaries
shall make any loan or advance to any Subsidiary of Borrower
unless such Subsidiary is a Wholly-Owned Subsidiary of
Borrower and no Subsidiary of Borrower that is not a Wholly
Owned Subsidiary of Borrower shall make a loan or advance to
Borrower or any of its Subsidiaries; provided, however, that,
during the Fixed Charge Condition Period, Borrower may make
loans or advances to PMC-Colinet, Inc. and PMC-Colinet, Inc.
may make loans or advances to Borrower so long as (A) the
aggregate amount of all such loans and advances does not
exceed One Million Dollars ($1,000,000) at any time and (B)
each such loan or advance constitutes Permitted Indebtedness
(as defined in the Indenture); and
(iv) neither Borrower nor any of its Subsidiaries
shall incur any Indebtedness during the Fixed Charge Condition
Period other than (A) Indebtedness incurred under this
Agreement or the Secured Debt, (B) loans or capital leases
made in accordance with subpart (c)(ii) above and Section
5.8(c) hereof, (C) unsecured Indebtedness incurred by MP
Colinet under its existing line of credit so long as (1) the
aggregate principal amount of all such Indebtedness incurred
during the Fixed Charge Condition Period does not exceed One
Million Dollars ($1,000,000), and (2) such Indebtedness
constitutes Permitted Indebtedness (as defined in the
Indenture).
(d) Notwithstanding anything in this Section 2.8 or elsewhere
in this Agreement to the contrary, if, at any time, Agent, in its sole
discretion, is unable to agree with Borrower that any Loan made, or
requested to be made, during the Fixed Charge Condition Period
constitutes Permitted Indebtedness (as defined in the Indenture), then
the Banks shall not be
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obligated to make any Loan until such time as any uncertainty is
resolved in a manner reasonably satisfactory to Agent.
4. The Credit Agreement is hereby amended to delete Sections 5.7(a),
(c) and (d) in their entirety and to insert in place thereof, respectively, the
following:
(a) INTEREST COVERAGE RATIO. Borrower shall not suffer or
permit, at any time, for the most recently completed four (4) fiscal
quarters of Borrower, the ratio of (i) Consolidated Pro-Forma Pre-Tax
Earnings plus Consolidated Pro-Forma Interest Expense to (ii)
Consolidated Pro-Forma Interest Expense to be less than (A) 1.60 to
1.00 on the Closing Date through December 31, 2000, (B) 1.40 to 1.00 on
January 1, 2001 through December 30, 2001, and (C) 1.60 to 1.00 on
December 31, 2001 and thereafter.
(c) LEVERAGE RATIO. Borrower shall not suffer or permit, at
any time, for the most recently completed four (4) fiscal quarters of
Borrower, the Leverage Ratio to exceed (i) 4.80 to 1.00 on the Closing
Date through December 31, 2000, (ii) 5.25 to 1.00 on January 1, 2001
through December 30, 2001, and (iii) 4.80 to 1.00 on December 31, 2001
and thereafter.
(d) CASH-FLOW COVERAGE RATIO. Borrower shall not suffer or
permit, at any time, for the most recently completed four (4) fiscal
quarters of Borrower, the Cash-Flow Coverage Ratio to be less than (i)
1.25 to 1.00 on the Closing Date through December 31, 2000, (ii) 1.20
to 1.00 on January 1, 2001 through December 30, 2001, and (iii) 1.25 to
1.00 on December 31, 2001 and thereafter.
5. The Credit Agreement is hereby amended to delete Sections 5.24
therefrom in its entirety and to insert in place thereof the following:
SECTION 5.24. RIGHT TO TAKE ADDITIONAL COLLATERAL.
(a) In addition to any other right that Agent and the Banks
may have pursuant to this Agreement or otherwise, if the Leverage Ratio
shall be greater than 5.00 to 1.00 for two (2) consecutive fiscal
quarters or (a) In addition to any other right that Agent and the Banks
may have pursuant to this Agreement or otherwise, if the Leverage Ratio
shall be greater than 5.00 to 1.00 for two (2) consecutive fiscal
quarters or upon the occurrence of an Event of Default (each a
"Collateral Event"), Borrower shall, and shall cause each Guarantor of
Payment to, grant to Agent, for the benefit of the Banks, as additional
security for the Secured Debt a first priority security interest in or
Lien on any real or personal property of Borrower and each Guarantor of
Payment in which Agent does not already have a first priority security
interest or Lien (the "Additional Collateral").
(b) On or prior to March 27, 2001, the Companies shall execute
and deliver to Agent, for the benefit of the Banks, such security
agreements, intellectual property assignment agreements, pledge
agreements, mortgages (or deeds of trust, if applicable) or other
documents, instruments or agreements or such thereof as Agent and the
Required
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Banks may reasonably require in connection with security interests and
Liens to be granted in the Additional Collateral pursuant to subpart
(a) above (collectively, the "Additional Collateral Documents"). Agent
and the Banks hereby agree that the Additional Collateral Documents
shall be held by Agent in escrow until the occurrence of a Collateral
Event pursuant to subpart (a) hereof, whereupon Agent, at the written
direction of the Required Banks, shall release the Additional
Collateral Documents from escrow and the Lien granted in each such
Additional Collateral Document shall be immediately effective, without
any action on the part of any Person. In connection with the foregoing,
Agent shall be authorized to file or record such UCC financing
statements or mortgages or other evidence of the Liens granted pursuant
to the Additional Collateral Documents. Borrower agrees to provide such
assistance and further assurances as may be required by Agent in
connection with the Additional Collateral.
(c) If, at any time after the occurrence of the Collateral
Event, the Leverage Ratio shall have been less than or equal to 4.80 to
1.00 for two (2) consecutive fiscal quarters and so long as no Default
or Event of Default shall exist or immediately thereafter shall begin
to exist and the Fixed Charge Condition Period shall have ended, upon
written request of Borrower to Agent, Agent, on behalf of the Banks,
shall release the Additional Collateral, provided that no such release
shall be effective until confirmed by Agent in writing. In connection
with such release Agent shall provide to Borrower, and the Banks hereby
authorize Agent to provide to Borrower, such UCC partial release
statements and mortgage releases as are appropriate.
(d) At any time after the Additional Collateral has been
released pursuant to subpart (c) above or otherwise, and in addition to
any other right that Agent and the Banks may have pursuant to this
Agreement or otherwise, upon written request of Agent whenever made
after the occurrence of an Event of Default, Borrower shall, and shall
cause each Guarantor of Payment, to promptly grant to Agent, for the
benefit of the Banks, as additional security for the Secured Debt a
first priority security interest in or Lien on the Additional
Collateral pursuant to such security agreements, intellectual property
assignment agreements, pledge agreements, mortgages (or deeds of trust,
if applicable) or other documents, instruments or agreements or such
thereof as Agent and the Required Banks may reasonably require.
6. The Credit Agreement is hereby amended to add a new Exhibit G-1 and
Exhibit G-2 in the form of Exhibit G-1 and Exhibit G-2, respectively, attached
hereto.
7. Concurrently with the execution of this Amendment, Borrower shall:
(a) cause each Guarantor of Payment to consent and agree to and
acknowledge the terms of this Amendment;
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(b) pay to Agent, for the pro rata benefit of the Banks, an amendment
fee of One Hundred Eighty Thousand Dollars ($180,000);
(c) deliver to Agent and the Banks a certificate, signed by Financial
Officer of Borrower, certifying as to the Certified Acquisition Amount and
otherwise in form and substance satisfactory to Agent; and
(d) pay all legal fees and expenses of Agent in connection with this
Amendment.
8. Borrower hereby represents and warrants to Agent and the Banks that
(a) Borrower has the legal power and authority to execute and deliver this
Amendment, (b) the officers executing this Amendment have been duly authorized
to execute and deliver the same and bind Borrower with respect to the provisions
hereof, (c) the execution and delivery hereof by Borrower and the performance
and observance by Borrower of the provisions hereof do not violate or conflict
with the organizational agreements of Borrower or any law applicable to Borrower
or result in a breach of any provision of or constitute a default under any
other agreement, instrument or document binding upon or enforceable against
Borrower, (d) no Default or Event of Default exists under the Credit Agreement,
nor will any occur immediately after the execution and delivery of this
Amendment or by the performance or observance of any provision hereof, (e)
Borrower is not aware of any claim or offset against, or defense or counterclaim
to, any of Borrower's obligations or liabilities under the Credit Agreement or
any Related Writing and (f) this Amendment constitutes a valid and binding
obligation of Borrower in every respect, enforceable in accordance with its
terms.
9. Borrower, by signing below, hereby waives and releases Agent and
each of the Banks and their respective directors, officers, employees,
attorneys, affiliates and subsidiaries from any and all claims, offsets,
defenses and counterclaims of which Borrower is aware, such waiver and release
being with full knowledge and understanding of the circumstances and effect
thereof and after having consulted legal counsel with respect thereto.
10. Each reference that is made in the Credit Agreement or any Related
Writing to the Credit Agreement shall hereafter be construed as a reference to
the Credit Agreement as amended hereby. Except as herein otherwise specifically
provided, all provisions of the Credit Agreement shall remain in full force and
effect and be unaffected hereby. This Amendment is a Related Writing as defined
in the Credit Agreement.
11. This Amendment may be executed in any number of counterparts, by
different parties hereto in separate counterparts and by facsimile signature,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
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12. The rights and obligations of all parties hereto shall be governed
by the laws of the State of Ohio, without regard to principles of conflicts of
laws.
[Remainder of page intentionally left blank.]
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13. JURY TRIAL WAIVER. BORROWER, AGENT AND EACH OF THE BANKS HEREBY
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT AND THE BANKS, OR
ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT'S OR ANY BANK'S ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG BORROWER,
AGENT AND THE BANKS, OR ANY THEREOF.
PARK-OHIO INDUSTRIES, INC.
By: /s/ Ronald J. Cozean
---------------------------------------
Name: Ronald J. Cozean
Title: Secretary and General Counsel
KEYBANK NATIONAL ASSOCIATION,
as Agent and as a Bank
By: /s/ Kenneth M. Merhar
---------------------------------------
Kenneth M. Merhar, Vice President
THE HUNTINGTON NATIONAL BANK,
as Co-Agent and as a Bank
By: /s/ Michael Milliken
---------------------------------------
Michael Milliken, Senior Vice President
THE NORTHERN TRUST COMPANY
By: /s/ David Sullivan
---------------------------------------
Name: David Sullivan
Title: Vice President
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FIFTH THIRD BANK, NORTHEASTERN
OHIO
By: /s/ Roy Lanctot
---------------------------------
Name: Roy Lanctot
Title: Vice President
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GUARANTOR ACKNOWLEDGMENT
The undersigned consents and agrees to and acknowledges the terms of
the foregoing First Amendment Agreement. The undersigned specifically agrees to
the waivers set forth in such agreement, including, but not limited to, the jury
trial waiver. The undersigned further agrees that the obligations of the
undersigned pursuant to the Guaranty of Payment executed by the undersigned
shall remain in full force and effect and be unaffected hereby.
The undersigned hereby waives and releases Bank and Bank's directors,
officers, employees, attorneys, affiliates and subsidiaries from any and all
claims, offsets, defenses and counterclaims of which the undersigned is aware,
such waiver and release being with full knowledge and understanding of the
circumstances and effect thereof and after having consulted legal counsel with
respect thereto.
ATBD, INC.
CASTLE RUBBER COMPANY
CICERO FLEXIBLE PRODUCTS, INC.
DONEGAL BAY LTD.
GENERAL ALUMINUM MFG. COMPANY
ILS TECHNOLOGY, INC.
INTEGRATED HOLDING COMPANY
INTEGRATED LOGISTICS SOLUTIONS, INC.
INTEGRATED LOGISTICS SOLUTIONS LLC
for itself and as successor by merger to Columbia Nut
& Bolt LLC, GIS Industries, Inc. and Industrial
Fasteners LLC)
INTEGRATED LOGISTICS HOLDING COMPANY
PARK AVENUE TRAVEL LTD.
PARK-OHIO STRUCTURAL HARDWARE LLC
PHARMACEUTICAL LOGISTICS, INC.
PHARMACY WHOLESALE LOGISTICS, INC.
PMC-COLINET, INC.
PMC INDUSTRIES CORP.
PRECISION MACHINING CONNECTION LLC
RB&W MANUFACTURING LLC
THE AJAX MANUFACTURING COMPANY
THE METALLOY CORPORATION
TOCCO, INC.
TRICKERATION, INC.
By: /s/ Ronald J. Cozean
__________________________________________
Ronald J. Cozean, Secretary of each of the
foregoing companies
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EXHIBIT G-1
BORROWING BASE CERTIFICATE
[Date]_______________________, 20____
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114-0616
Attention: ________________
Ladies and Gentlemen:
The undersigned, a duly elected Financial Officer, as defined in the
Credit and Security Agreement (as hereinafter defined), or otherwise duly
authorized employee of PARK-OHIO INDUSTRIES, INC. ("Borrower"), refers to the
Credit and Security Agreement, dated as of December 21, 2000 (as amended and as
the same may from time to time be further amended, restated or otherwise
modified, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among Borrower, the Banks, KeyBank National Association, as
Agent, and The Huntington National Bank, as Co-Agent.
Concurrently herewith, Borrower has submitted a Notice With Respect to
Loan pursuant to which Borrower has requested a Loan under the Credit Agreement.
Pursuant to Section 2.8(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that on the proposed date of the Loan both prior to and after
giving effect thereto:
(a) the aggregate principal amount of all Loans outstanding on
such date (minus the Certified Acquisition Amount) is less
than an amount equal to the greater of (i) Fifty Million
Dollars ($50,000,000), or (ii) the sum of (A) forty-five
percent (45%) of the book value of accounts receivable of
Borrower and its Subsidiaries and (B) twenty-five percent
(25%) of the book value of the inventory of Borrower and its
Subsidiaries;
(b) the book value of accounts receivable and inventory of
Borrower and its Subsidiaries are no less than (i) One Hundred
Million Dollars ($100,000,000), with respect to accounts
receivable, and (ii) One Hundred Sixty Million Dollars
($160,000,000), with respect to inventory; and
(c) set forth on Schedule 1 hereto are calculations confirming the
amounts and values set forth in subparts (a) and (b) above.
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(d) the use of the proceeds of the Loan are for (Check One):
_____ working capital purposes only; or
_____ are for the purchase of capital assets and the
requirements of Section 2.8(c)(ii) of the Credit
Agreement have been met (and set forth on Schedule 1
hereto are calculations confirming the amounts and
values required to be confirmed pursuant to such
Section 2.8(c)(ii));
(e) under the undersigned's supervision, a review of the terms and
conditions of the Indenture has been made and, based on such
review, as of the date hereof, there is no Default (as defined
in the Indenture) or Event of Default (as defined in the
Indenture) that exists;
(e) the representations and warranties contained in each Loan
Document are correct as of the date hereof;
(f) no event has occurred and is continuing that constitutes a
Default or Event of Default; and
(g) the conditions set forth in Section 2.2, Section 2.8 and
Article IV of the Credit Agreement have been satisfied.
Very truly yours,
PARK-OHIO INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:________________________
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Schedule 1 to
Borrowing Base Certificate
I. FOR ALL LOANS
A. Book Value of Accounts Receivable Greater $_______________(1)
than(no less than $100,000,000)
B. Book Value of Inventory (no less than $_______________(2)
$160,000,000)
C. 45% of Book Value of Accounts Receivable $__________________
D. 25% of Book Value of Inventory $__________________
E. Total of C + D $__________________
F. (1) Aggregate amount of Loans $________________
outstanding
(2) Minus Certified Acquisition Amount $________________
Total of (1) minus (2) $__________________
G. Total of E minus F (availability) $__________________
H. Amount of requested Loan $__________________
I. Total of G minus H $__________________
II. FOR LOANS FOR CAPITAL EXPENDITURES
A. Aggregate amount of capital expenditures made $________________
since January 1, 2001(3)
B. Aggregate amount of loans and capital leases $________________
the proceeds of which have been used for
capital expenditures
C. Amount of requested Loan $________________
D. Total of B + C(4) $________________
- --------------------------
(1) An entry of "No less than $100,000,000" is sufficiently specific for this
Certificate.
(2) An entry of "No less than $160,000,000" is sufficiently specific for this
Certificate.
(3) Must be less than $17,500,000
(4) Must be less than the lesser of (a) five percent (5%) of the tangible
consolidated total assets or (b) $17,500,000
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EXHIBIT G-2
MONTHLY BORROWING BASE REPORT
[Date]_______________________, 20____
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114-0616
Attention: ________________
Ladies and Gentlemen:
The undersigned, a duly elected Financial Officer, as defined in the
Credit and Security Agreement (as hereinafter defined) of PARK-OHIO INDUSTRIES,
INC. ("Borrower"), refers to the Credit and Security Agreement, dated as of
December 21, 2000 (as amended and as the same may from time to time be further
amended, restated or otherwise modified, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among Borrower, the
Banks, KeyBank National Association, as Agent, and The Huntington National Bank,
as Co-Agent.
Pursuant to Section 2.8(b)(iii) of the Credit Agreement, the
undersigned hereby certifies that, as of the date hereof:
(a) the book value of accounts receivable of Borrower and its
Subsidiaries is $___________________;
(b) the book value of the inventory of Borrower and its
Subsidiaries is $________________;
(c) under the undersigned's supervision, a review of the terms and
conditions of the Indenture and based on such review, as of
the date hereof, there is no Default (as defined in the
Indenture) or Event of Default (as defined in the Indenture)
that exists;
(d) the representations and warranties contained in each Loan
Document are correct as of the date hereof;
(e) no event has occurred and is continuing that constitutes a
Default or Event of Default; and
(f) the conditions set forth in Section 2.2, Section 2.8 and
Article IV of the Credit Agreement have been satisfied.
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Very truly yours,
PARK-OHIO INDUSTRIES, INC.
By:___________________________
Name:_________________________
Title:________________________
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