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EXHIBIT 4.9
CASTING TECHNOLOGY COMPANY
________________________________________
$ 25,000,000
CREDIT AND INTERCREDITOR AGREEMENT
DATED JULY 28, 1995
___________________________________
NBD BANK
THE ASAHI BANK, LTD.,
ACTING THROUGH ITS CHICAGO BRANCH
AND
NBD BANK, AS AGENT
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TABLE OF CONTENTS
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Article Page
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I. DEFINITIONS
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitions; Rules of
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
II. THE COMMITMENTS AND THE LOANS
2.1 Commitment of the Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Disbursement of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Conditions for First Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6 Further Conditions for Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.7 Subsequent Elections as to Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Limitation of Requests and Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.9 Minimum Amounts; Limitation on
Number of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.10 Security and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
III. PAYMENTS AND PREPAYMENTS OF LOANS
3.1 Principal Payments and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.3 Payment Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 No Setoff or Deduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.5 Payment on Non-Business Day; Payment Computations . . . . . . . . . . . . . . . . . . . . 18
3.6 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.7 Illegality and Impossibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
IV. REPRESENTATIONS AND WARRANTIES
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4.1 Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.3 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.7 Use of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.8 Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.10 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.12 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.13 Environmental and Safety Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
V. COVENANTS
5.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Preservation of Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . 26
(d) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Accounting; Access to Records, Books, Etc. . . . . . . . . . . . . . . . . . . . 28
(f) Additional Security and Collateral . . . . . . . . . . . . . . . . . . . . . . . 29
(g) Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Payment of Indebtedness to Others . . . . . . . . . . . . . . . . . . . . . . . . 29
(i) Right to Consider Additional Indebtedness . . . . . . . . . . . . . . . . . . . . 30
5.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(b) Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(c) Merger, Acquisitions, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) Disposition of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(e) Nature of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
(f) Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
(g) Negative Pledge Limitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
(h) Distributions and Other Restricted Payments. . . . . . . . . . . . . . . . . . . . 33
(i) Investment, Loans, and Advances. . . . . . . . . . . . . . . . . . . . . . . . . . 33
(j) Inconsistent Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(k) Payments following Guarantor Default. . . . . . . . . . . . . . . . . . . . . . . .33
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VI. DEFAULT
6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.3 Remedies upon Guarantor Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
VII. THE AGENT AND THE BANKS
7.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.2 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.3 Scope of Agent's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.5 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.6 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.7 Nonreliance on Agent and Other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.8 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.9 Resignation of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.10 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
VIII. MISCELLANEOUS
8.1 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.3 No Waiver By Conduct; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.4 Reliance on and Survival of
Various Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.9 Table of Contents and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.10 Construction of Certain Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.11 Integration and Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.12 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.13 Interest Rate Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.14 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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EXHIBITS AND SCHEDULES
Exhibit A-1 Revolving Credit Note
Exhibit A-2 Term Note
Exhibit B Request for Borrowing
Exhibit C Request for Continuation or
Conversion of Borrowing
Exhibit D Security Agreement
Exhibit E Guaranty Agreement - NBD
Exhibit F Guaranty Agreement - Asahi
Schedule 2.5(g)(ii) Leased Real Property
Schedule 4.5 Litigation
Schedule 4.13 Environmental Matters
Schedule 5.2(a) Indebtedness
Schedule 5.2(b) Liens
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THIS CREDIT AND INTERCREDITOR AGREEMENT, dated July 28, 1995 (this
"Agreement"), is among Casting Technology Company, an Indiana general
partnership (the "Company"), NBD Bank, a Michigan banking corporation ("NBD"),
and The Asahi Bank, Ltd., a Japanese banking corporation acting through its
Chicago Branch ("Asahi") (collectively, the "Banks" and individually, a "Bank")
and NBD Bank, a Michigan banking corporation, as agent for the Banks (in such
capacity, the "Agent").
INTRODUCTION
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The Company desires to obtain a revolving credit facility in the
aggregate principal amount of $25,000,000 in order to provide funds to finance
the purchase and construction of a new manufacturing facility, and to finance
the purchase of certain machinery and equipment and its other corporate
purposes, which credit facility shall be convertible into a term loan, and the
Banks are willing to establish such a credit facility in favor of the Company
on the terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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1.1 CERTAIN DEFINITIONS. As used herein the following terms shall
have the following respective meanings:
"ACTI" means Amcast Casting Technologies, Inc., an Indiana
corporation and a general partner of the Company.
"AFFILIATE", when used with respect to any person, means any
other person which, directly or indirectly, controls or is controlled by or is
under common control with such person. For purposes of this definition,
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any person, means possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
"AMCAST" means Amcast Industrial Corporation, an Ohio
corporation and parent corporation of ACTI.
"APPLICABLE LENDING OFFICE" means, with respect to any Loan made
by any Bank or, with respect to such Bank's Commitment, the office of such Bank
or of any affiliate of such Bank located at the address set forth next to its
name in the signature pages hereof or
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any other office or affiliate of such Bank hereafter selected and notified to
the Company and the Agent by such Bank.
"BORROWING" means the aggregation of Loans, or continuations and
conversions of any Loans, made pursuant to Article II on a single date for a
single Eurodollar Interest Period, which Borrowings may be classified for
purposes of this Agreement by referring to the type of Loans comprising the
related Borrowing, e.g., a "Eurodollar Rate Borrowing" is a Borrowing comprised
of Eurodollar Rate Loans.
"BORROWING DATE" means the date of the first Borrowing under
Section 2.1(a) made in accordance with Sections 2.5 and 2.6.
"BUSINESS DAY" means a day other than a Saturday, Sunday or
other day which is a legal holiday or on which banking institutions are
authorized or required by law or other governmental action to close, in
Detroit, Michigan, or Chicago, Illinois.
"CAPITAL LEASE" of any person means any lease which, in
accordance with generally accepted accounting principles, is or should be
capitalized on the books of such person.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations thereunder.
"COMMITMENT" means, with respect to each Bank, the commitment of
each such Bank to make Loans pursuant to Section 2.1, in amounts not exceeding
in aggregate principal amount outstanding at any time the respective commitment
amounts for each such Bank set forth next to the name of each such Bank in the
signature pages hereof, as such amounts may be reduced from time to time
pursuant to Section 2.2.
"CONSOLIDATED" or "consolidated" means, when used with reference
to any financial term in this Agreement, the aggregate for two or more persons
of the amounts signified by such term for all such persons determined on a
consolidated basis in accordance with generally accepted accounting principles.
"CUMULATIVE NET INCOME BEFORE TAXES" of any person means, as of
any date, the net income (before deducting for income and other taxes of the
person, or the Partners in the case of the Company, determined by reference to
the income or profits of the person) for the period commencing on the specified
date through the end of the most recently completed fiscal year of the person
(but without reduction for any net loss incurred for any
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fiscal year during the period), taken as one accounting period, all as
determined in accordance with generally accepted accounting principles.
"DEFAULT" means any of the events or conditions described in
Section 6.1 which might become an Event of Default with notice or lapse of time
or both.
"DOLLARS" and "$" means the lawful money of the United States of
America.
"EFFECTIVE DATE" means the effective date specified in the final
paragraph of this Agreement.
"ENVIRONMENTAL LAWS" at any date means all provisions of law,
statute, ordinance, rules, regulations, judgments, writs, injunctions, decrees,
orders, awards and standards promulgated by the government of the United States
of America or any foreign government or by any state, province, municipality or
other political subdivision thereof or therein, or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning the protection of, or regulating the discharge of substances into,
the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which, together with the Company or any Subsidiary of the
Company, would be treated as a single employer under Section 414 of the Code.
"EURODOLLAR BUSINESS DAY" means, with respect to any Eurodollar
Rate Loan, a day which is both a Business Day and a day on which dealings in
Dollar deposits are carried out in London, England.
"EURODOLLAR INTEREST PERIOD" means, with respect to any
Eurodollar Rate Loan, the period commencing on the day such Eurodollar Rate
Loan is made or converted to a Eurodollar Rate Loan and ending on the date one,
two, three or six months thereafter, as the Company may elect under Section 2.4
or 2.7, and each subsequent period commencing on the last day of the
immediately preceding Eurodollar Interest Period and ending on the date one,
two, three or six months thereafter, as the Company may elect under Section 2.4
or 2.7, PROVIDED, HOWEVER, that (a) any Eurodollar Interest Period which
commences on the last Eurodollar Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Eurodollar Business Day of the
appropriate subsequent calendar month, (b) each Eurodollar Interest Period
which would otherwise end on a day which is not a Eurodollar Business Day shall
end on the next succeeding Eurodollar
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Business Day or, if such next succeeding Eurodollar Business Day falls in the
next succeeding calendar month, on the next preceding Eurodollar Business Day,
and (c) if the Eurodollar Interest Period before the Termination Date or the
Maturity Date would otherwise end on a day other than the Termination Date or
the Maturity Date (as the case may be), then such Eurodollar Interest Period
shall end as of the Termination Date or the Maturity Date (as the case may be)
and no Eurodollar Interest Period which would end after the Maturity Date (or
the Termination Date with respect to any Revolving Credit Loans) shall be
permitted.
"EURODOLLAR RATE" means, with respect to any Eurodollar Rate
Loan and the related Eurodollar Interest Period, the per annum rate that is
equal to the sum of:
(a) four-tenths of one percent (.40%) per annum with respect to
any Revolving Credit Loan and four-tenths of one percent (.40%) per annum with
respect to any Term Loan, plus
(b) the rate per annum obtained by dividing (i) the per annum
rate of interest determined by the Agent in accordance with its usual
procedures to be the average of the London interbank offered rates set forth on
the "LIBO" page of the Reuters Monitor Money Rate Service (or appropriate
successor or comparable replacement) determined by the Agent at approximately
11:00 a.m. London time on the second Eurodollar Business Day prior to the first
day of the Eurodollar Interest Period for an amount comparable to the amount of
such Eurodollar Rate Loan to be made by the Agent in its capacity as a Bank and
having a borrowing date and a maturity comparable to the Eurodollar Interest
Period, by (ii) an amount equal to one minus the stated maximum rate (expressed
as a decimal) of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is specified
on the first day of such Eurodollar Interest Period by the Board of Governors
of the Federal Reserve System (or any successor agency thereto) for determining
the maximum reserve requirement with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"EURODOLLAR RATE LOAN" means any Loan which bears interest at
the Eurodollar Rate.
"EVENT OF DEFAULT" means any of the events or conditions
described in Section 6.1.
"FORBEARANCE PERIOD" shall have the meaning set forth in Section
6.3(b).
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"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means generally
accepted accounting principles applied on a basis consistent with that
reflected in the audited financial statements referred to in Section 4.6.
"GUARANTIES" means, collectively, the Guaranty-NBD and the
Guaranty-Asahi.
"GUARANTOR" means each of Amcast and Izumi and each person
otherwise entering into a Guaranty, from time to time.
"GUARANTOR DEFAULT" means an Event of Default set forth in
Section 6.1(i).
"GUARANTY-ASAHI" means the Guaranty Agreement-Asahi entered into
by Izumi, for the benefit of Asahi pursuant to this Agreement, in substantially
the form of Exhibit F hereto, as amended or modified from time to time.
"GUARANTY-NBD" means the Guaranty Agreement-NBD entered into by
Amcast for the benefit of NBD pursuant to this Agreement, in substantially the
form of Exhibit E hereto, as amended or modified from time to time.
"INDEBTEDNESS" of any person means, as of any date, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such person whether or not the
obligation secured thereby shall have been assumed by such person, (d) the
unpaid purchase price for goods, property or services acquired by such person,
except for trade accounts payable arising in the ordinary course of business
that are not past due, (e) all obligations of such person to purchase goods,
property or services where payment therefor is required regardless of whether
delivery of such goods or property or the performance of such services is ever
made or tendered (generally referred to as "take or pay contracts"), (f) all
liabilities of such person in respect of Unfunded Benefit Liabilities under any
Plan or of any ERISA Affiliate, (g) all obligations of such person in respect
of any interest rate or currency swap, rate cap or other similar transaction
(valued in an amount equal to the highest termination payment, if any, that
would be payable by such person upon termination for any reason on the date of
determination), and (h) all obligations of others similar in character to those
described in clauses (a) through (g) of this definition for which such person
is contingently liable, as obligor, guarantor, surety or in any other capacity,
or in respect of which obligations such person assures a creditor against loss
or agrees to take any action to prevent any such loss (other than endorsements
of negotiable instruments for collection in the ordinary course of business),
including without limitation all reimbursement obligations
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of such person in respect of letters of credit, surety bonds or similar
obligations and all obligations of such person to advance funds to, or to
purchase assets, property or services from, any other person in order to
maintain the financial condition of such other person.
"INTEREST PAYMENT DATE" means with respect to any Eurodollar
Rate Loan, the last day of each Eurodollar Interest Period with respect to such
Eurodollar Rate Loan and, in the case of any Eurodollar Interest Period
exceeding three months, those days that occur during such Eurodollar Interest
Period at intervals of three months after the first day of such Eurodollar
Interest Period.
"IZUMI" means Izumi Industries, Ltd., a Japanese corporation and
parent corporation of Izumi U.S.
"IZUMI U.S." means Izumi, Inc., a Delaware corporation and a
general partner of the Company.
"LIEN" means any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any lease, subordination of any claim or
right, or any other type of lien, charge, encumbrance, preferential arrangement
or other claim or right.
"LOAN" means any Revolving Credit Loan and any Term Loan. Any
such Loan or portion thereof may also be denominated as a Eurodollar Rate Loan
and such Eurodollar Rate Loans are referred to herein as "types" of Loans.
"MANAGEMENT COMMITTEE" means the Management Committee of the
Company established under Section 2.02-1 of the Partnership Agreement.
"MATURITY DATE" means the maturity date of the Term Loans issued
under Section 2.1(b), which will be three years from the Termination Date.
"MULTIEMPLOYER PLAN" means any "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NOTE" means any Revolving Credit Note or Term Note.
"OVERDUE RATE" means (a) in respect of principal of Eurodollar
Rate Loans, a rate per annum that is equal to the sum of two percent (2%) per
annum plus the per annum rate in effect thereon until the end of the
then-current Eurodollar Interest Period for such Loan and, thereafter, a rate
per annum that is equal to the sum of two percent (2%) per annum plus the Prime
Rate, and (b) in respect of other amounts payable by the Company
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hereunder, a per annum rate that is equal to the sum of two percent (2%) per
annum plus the Prime Rate.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"PARTNERS" means ACTI and Izumi U.S., the general partners of
the Company.
"PARTNERSHIP AGREEMENT" means that certain Joint Venture
Partnership Agreement, dated April 14, 1994, between the Partners, as it may be
amended from time to time.
"PERMITTED LIENS" means Liens permitted by Section 5.2(b) hereof.
"PERSON" or "person" shall include an individual, a corporation,
an association, a partnership, a limited liability company, a trust or estate,
a joint stock company, an unincorporated organization, a joint venture, a trade
or business (whether or not incorporated), a government (foreign or domestic)
and any agency or political subdivision thereof, or any other entity.
"PLAN" means any pension plan (other than a Multiemployer Plan)
subject to Title IV of ERISA or to the minimum funding standards of Section 412
of the Code which has been established or maintained by the Company, any
Subsidiary of the Company or any ERISA Affiliate, or by any other person if the
Company, any Subsidiary of the Company or any ERISA Affiliate could have
liability with respect to such pension plan.
"PRIME RATE" means the per annum rate announced by the Agent
from time to time as its "prime rate" (it being acknowledged that such
announced rate may not necessarily be the lowest rate charged by the Agent to
any of its customers), which Prime Rate shall change simultaneously with any
change in such announced rate.
"PROHIBITED TRANSACTION" means any transaction involving any
Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"PRO RATA SHARE" means, with respect to any payments to be made
to a Bank under the Agreement, that portion of the payment equal to the Bank's
percentage share of the Commitments originally provided under this Agreement,
i.e., sixty percent for NBD and forty percent for Asahi, PROVIDED, HOWEVER,
that if this Agreement is amended to change the Banks' respective Commitment
amounts, then this definition shall thereafter be based on the amended
Commitments.
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"REPORTABLE EVENT" means a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
"REQUIRED BANKS" means Banks holding not less than one hundred
percent of the aggregate principal amount of the Loans then outstanding (or one
hundred percent of the Commitments if no Loans are then outstanding).
"REVOLVING CREDIT LOAN" means any borrowing under Section 2.4
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1.
"REVOLVING CREDIT NOTE" means any promissory note of the Company
evidencing the Revolving Credit Loans, in substantially the form annexed hereto
as Exhibit A-1, as amended or modified from time to time and together with any
promissory note or notes issued in exchange or replacement therefor.
"SECURITY AGREEMENT" means the security agreement entered into
by the Company for the benefit of the Agent and the Banks pursuant to this
Agreement, in substantially the form of Exhibit D hereto, as amended or
modified from time to time.
"SECURITY DOCUMENTS" means, collectively, the Security
Agreement, the Guaranties and all other related agreements and documents,
including financing statements and similar documents, otherwise entered into by
any person to secure the Company's obligations under this Agreement.
"SUBSIDIARY" of any person means any other person (whether now
existing or hereafter organized or acquired) in which (other than directors'
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and
of record, by such person or by one or more of the other Subsidiaries of such
person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" means a Subsidiary of the Company.
"SUPPLY CONTRACTS" means, collectively, the Letter of Intent
dated May 10, 1994, from Sanden International (U.S.A.), Inc., to the Company
regarding purchasing orbiting and fixed scroll casting, and the Long-Term
Purchase Agreement dated February 21, 1994, between General Motors Corporation
and the Company regarding certain front knuckle castings, as such agreements
may be modified or amended from time to time.
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"TERM LOAN" means any borrowing under Section 2.4 evidenced by
the Term Note and made pursuant to Section 2.1.
"TERM NOTE" means any promissory note of the Company evidencing
the Term Loans, in substantially the form annexed hereto as Exhibit A-2, as
amended or modified from time to time and together with any promissory note or
notes issued in exchange or replacement therefor.
"TERMINATION DATE" (of the revolver period) means the earlier to
occur of (a) three years from the Borrowing Date, and (b) the date on which the
Commitment shall be terminated pursuant to Section 6.2.
"UNFUNDED BENEFIT LIABILITIES" means, with respect to any Plan
as of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.
1.2 OTHER DEFINITIONS; RULES OF CONSTRUCTION. As used herein, the
terms "Agent", "Banks", "Company", "NBD", "Asahi", and "this Agreement" shall
have the respective meanings ascribed thereto in the introductory paragraph of
this Agreement. Such terms, together with the other terms defined in Section
1.1, shall include both the singular and the plural forms thereof and shall be
construed accordingly. All computations required hereunder and all financial
terms used herein shall be made or construed in accordance with generally
accepted accounting principles unless such principles are inconsistent with the
express requirements of this Agreement. Use of the terms "herein", "hereof",
and "hereunder" shall be deemed references to this Agreement in its entirety
and not to the Section or clause in which such term appears. References to
"Sections" and "subsections" shall be to Sections and subsections,
respectively, of this Agreement unless otherwise specifically provided.
ARTICLE II
THE COMMITMENTS AND THE LOANS
-----------------------------
2.1 Commitment of the Banks.
------------------------
(a) REVOLVING CREDIT LOANS. Each Bank agrees, for itself
only, subject to the terms and conditions of this Agreement, to make Revolving
Credit Loans to the Company pursuant to Section 2.4, from time to time from and
including the Borrowing Date to but excluding the Termination Date, not to
exceed in aggregate principal amount at any time outstanding the amount of its
respective Commitment as of the date any such Loan is made.
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(b) TERM LOAN. Each Bank further agrees, for itself only,
subject to the terms and conditions of this Agreement, to make a single Term
Loan to the Company on the Termination Date in an amount not to exceed its
respective Commitment then effective as of the Termination Date.
2.2 REDUCTION OF COMMITMENTS. The Company shall have the right to
reduce the Commitments at any time and from time to time, PROVIDED that (a) the
Company shall give notice of such reduction to the Agent (with sufficient
executed copies for each Bank) specifying the amount and effective date
thereof, (b) each partial reduction of the Commitments shall be in a minimum
amount of $1,000,000 and in an integral multiple of $100,000 and shall reduce
the Commitments of all of the Banks proportionately in accordance with the
respective commitment amounts for each such Bank set forth in the signature
pages hereof next to name of each such Bank, (c) no such reduction shall be
permitted with respect to any portion of the Commitments as to which a request
for a Borrowing pursuant to Section 2.4 is then pending, and (d) the
Commitments may not be reduced below the principal amount of Loans then
outstanding. In addition to the foregoing option of the Company to reduce the
Commitments, the Commitments shall be automatically reduced at the time the
Term Loans are made in an amount equal to the original principal amount of the
Term Loans. The Commitments or any portion thereof reduced pursuant to this
Section 2.2, whether optional or mandatory, may not be reinstated.
2.3 FEES. (a) The Company agrees to pay to the Banks a commitment
fee on the daily average unused amount of the Commitments, for the period from
the Effective Date to but excluding the Termination Date, at a rate equal to
one-eighth of one percent (1/8 of 1%) per annum, such fee to be shared pro rata
between the Banks based on their respective Commitments. Accrued commitment
fees shall be payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing on the first such day occurring
after the Effective Date, and also on the Termination Date.
(b) The Company agrees to pay to the Banks a facility fee in the
amount of $31,250, such fee to be shared pro rata between the Banks based on
their respective Commitments. The facility fee shall be payable to the Agent
on or prior to the Effective Date.
(c) The Company agrees to pay to the Agent an agency fee for
its services as Agent under this Agreement in the amount of $4,000 per annum,
payable quarterly in advance on the date of this Agreement and thereafter on
the last Business Day of each March, June, September, and December.
2.4 DISBURSEMENT OF LOANS . (a) The Company shall give the Agent
notice of its request for each Borrowing in substantially the form of EXHIBIT B
hereto (with sufficient executed copies for each Bank) not later than 10:00
a.m. Detroit time three Eurodollar
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Business Days prior to the date such Borrowing is requested to be made, which
notice shall specify the Eurodollar Interest Period to be initially applicable
to such Borrowing. The Agent, not later than the Business Day next succeeding
the day such notice is given, shall provide notice of such requested Borrowing
to each Bank. Subject to the terms and conditions of this Agreement, the
proceeds of each such requested Loan 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 the principal office of the Agent,
PROVIDED, HOWEVER, that the proceeds of the Term Loans shall be applied to the
outstanding principal amount of the Revolving Credit Loans.
(b) Each Bank, before 1:30 p.m. Detroit time on the date any
Borrowing is requested to be made, shall make its pro rata share of such
Borrowing available in immediately available funds at the principal office of
the Agent for disbursement to the Company. Unless the Agent shall have
received notice from any Bank prior to the date such Borrowing is requested to
be made under this Section 2.4 that such Bank will not make available to the
Agent such Bank's pro rata portion of such Borrowing, the Agent may assume that
such Bank has made such portion available to the Agent in accordance with this
Section 2.4. If and to the extent such Bank shall not have so made such pro
rata portion available to the Agent, the Agent may (but shall not be obligated
to) make such amount available to the Company, and such Bank and the Company
severally agree to pay to the Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount is made available
to the Company by the Agent until the date such amount is repaid to the Agent,
at a rate per annum equal to the interest rate applicable to such Borrowing
during such period. If such Bank shall pay such amount to the Agent together
with interest, such amount so paid shall constitute a Loan by such Bank as a
part of such Borrowing for purposes of this Agreement. The failure of any Bank
to make its pro rata portion of any such Borrowing available to the Agent shall
not relieve any other Bank of its obligations to make available its pro rata
portion of such Borrowing on the date such Borrowing is requested to be made,
but no Bank shall be responsible for failure of any other Bank to make such pro
rata portion available to the Agent on the date of any such Borrowing.
(c) All Revolving Credit Loans made under this Section 2.4
shall be evidenced by the Revolving Credit Notes and the Term Loans made under
this Section 2.4 shall be evidenced by the Term Notes, and all such Loans shall
be due and payable and bear interest as provided in Article III. Each Bank is
hereby authorized by the Company to record on the schedule attached to the
Notes, or in its books and records, the date, and amount and type of each Loan
and the duration of the related Eurodollar Interest Period (if applicable), 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 any Bank to record, or any error
in recording, any such information
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shall not relieve the Company of its obligation to repay the outstanding
principal amount of the Loan, 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 and conditions of this Agreement, the Company
may borrow Revolving Credit Loans under this Section 2.4, prepay Revolving
Credit Loans pursuant to Section 3.1 and reborrow Revolving Credit Loans but
not Term Loans under this Section 2.4.
(d) The Company may enter into any interest rate protection
arrangements with either or both of the Banks with respect to any portion of
any outstanding Loans under procedures to be agreed upon among each of the
Company and the Required Banks. Any Indebtedness incurred thereunder shall
constitute Indebtedness evidenced by the Notes and secured by the Guaranties
and the other Security Documents.
2.5 CONDITIONS FOR FIRST DISBURSEMENT. The obligation of the Banks
to make the first Borrowing hereunder is subject to receipt by each Bank and
the Agent of the following documents and completion of the following matters,
in form and substance satisfactory to each Bank and the Agent:
(a) CHARTER DOCUMENTS. Certificates of recent date of the
appropriate authority or official of the Company's, Amcast's, and each of the
Partners' respective state of organization or incorporation listing all charter
documents of the Company, Amcast, and the Partners, respectively, on file in
that office and certifying as to the good standing and valid existence of the
Company, Amcast, and the Partners, respectively, together with copies of such
charter documents of the Company, Amcast, and the Partners, respectively,
certified as of a recent date by such authority or official and certified as
true and correct as of the Closing Date by a duly authorized general partner or
officer of the Company, Amcast, or the Partners, as appropriate;
(b) BY-LAWS AND AUTHORIZATIONS. Copies of the by-laws of
Amcast and the Partners, together with all authorizing resolutions and evidence
of other action taken by the Company, Amcast, and the Partners to authorize the
execution, delivery and performance by the Company and Amcast of this
Agreement, the Notes, and the Security Documents to which the Company and
Amcast, respectively, is a party and the consummation by the Company and
Amcast, respectively, of the transactions contemplated hereby and thereby,
certified as true and correct as of the Closing Date by a duly authorized
general partner or officer of the Company, Amcast, or the Partners, as
appropriate;
(c) INCUMBENCY CERTIFICATE. Certificates of incumbency of
the Company, Amcast and the Partners containing, and attesting to the
genuineness of, the signatures of those officers authorized to act on behalf of
the Company, Amcast and the Partners in connection with this Agreement, the
Notes, and the Security Documents to which the Company or Amcast is a party and
the consummation by the Company and Amcast of the
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transactions contemplated hereby, certified as true and correct as of the
Closing Date by a duly authorized general partner or officer of the Company,
Amcast or the Partners, as appropriate;
(d) NOTES. The Revolving Credit Notes duly executed on
behalf of the Company for each Bank;
(e) PARTNER'S GOOD STANDING. Certificates of recent date of
the Indiana Secretary of State certifying as to Izumi U.S.'s qualifications to
do business as a foreign corporation in Indiana.
(f) IZUMI DOCUMENTS; AUTHORIZATION; CERTIFICATES. An
incumbency certificate, dated as of the Effective Date, from the duly elected
Representative Director (Daihyo Torishimariyaku) of Izumi, providing facsimile
signatures of the Persons authorized to execute and deliver on behalf of Izumi
the Guaranty-Asahi and any other documents in connection therewith, and stating
that the signatory is a duly elected and qualified Representative Director
(Daihyo Torishimariyaku) of Izumi, fully authorized to execute such
certificate, and stating that attached to such certificate are true, complete
and correct copies of: (i) the Articles of Incorporation (Teikan) of Izumi;
(ii) resolutions duly adopted by the Board of Directors (Torishimariyakukai) of
Izumi which (I) authorize the execution, delivery and performance of the terms
of the Guaranty-Asahi, and (II) designate the Persons authorized to execute and
deliver on behalf of Izumi the Guaranty-Asahi and any other documents in
connection therewith; (iii) an original of Certificate of Seal (Inkanshomei) of
the Representative Director (Daihyo Torishimariyaku) issued recently by the
appropriate homukyoku.
(g) SECURITY DOCUMENTS. The Security Agreement duly
executed on behalf of the Company and the Guaranties duly executed on behalf of
each Guarantor, granting to the Banks and the Agent the collateral and security
intended to be provided pursuant to Section 2.10, together with:
(i) RECORDING, FILING, ETC. Evidence of the
recordation, filing and other action (including payment of any applicable taxes
or fees) in such jurisdictions as the Banks and the Agent may deem necessary or
appropriate with respect to the Security Documents, including the filing of
financing statements and similar documents which the Banks and the Agent may
deem necessary or appropriate to create, preserve or perfect the liens,
security interests and other rights intended to be granted to the Banks and the
Agent thereunder, together with Uniform Commercial Code record searches in such
offices as the Banks and the Agent may request;
(ii) LEASED PROPERTY; LANDLORD WAIVERS. A schedule
setting forth all real property leased by the Company, together with copies of
the related leases, certified
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as true and correct as of the Effective Date by a duly authorized partner of
the Company and an agreement of each landlord under such leases, in form and
substance acceptable to the Banks and the Agent, waiving its distraint, lien
and similar rights with respect to any property subject to the Security
Documents and agreeing to permit the Banks and the Agent to enter such premises
in connection therewith; and
(iii) CASUALTY AND OTHER INSURANCE. Evidence that
the casualty and other insurance required pursuant to Section 5.1(c) and
paragraph 1(e) of the Security Agreement is in full force and effect;
(h) LEGAL OPINIONS. The favorable written opinion of
Thompson, Hine and Flory, counsel for the Company, ACTI, and Amcast, and of
Latham & Watkins, counsel for Izumi U.S., and of Yoshida Yutaka
Horitsu-Jimusho, counsel for Izumi, which collectively will address each of the
matters set forth in Sections 4.1 (other than Section 4.1(c)), 4.2, 4.3, and
4.8, in paragraph 1(a) of the Security Agreement, and paragraphs 5(a), (b),
(c), and (g) of the Guaranties and such other matters as the Banks and the
Agent may reasonably request;
(i) CONSENTS, APPROVALS, ETC. Copies of all governmental
and nongovernmental consents, approvals, authorizations, declarations,
registrations or filings, if any, required on the part of the Company or any
Guarantor in connection with the execution, delivery and performance of this
Agreement, the Notes, or the Security Documents or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Agreement, the Notes or any of the Security Documents,
certified as true and correct and in full force and effect as of the Effective
Date by a duly authorized general partner of the Company, or if none are
required, a certificate of a general partner to that effect;
(j) FEES. The facility fee described in Section 2.3(b) and
the agency fee then due and payable under Section 2.3(c); and
(k) SUPPLY CONTRACTS. Copies of the Supply Contracts, each
certified as true and correct as of the Closing Date by a general partner of
the Company.
2.6 FURTHER CONDITIONS FOR DISBURSEMENT. The obligation of the
Banks to make any Loan (including the first Loan), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article
IV hereof and in the Security Documents shall be true and correct on and as of
the date such Loan is made (both before and after such Loan is made) as if such
representations and warranties were made on and as of such date;
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(b) No Event of Default or Default shall exist or shall have
occurred and be continuing on the date such Loan is made (whether before or
after such Loan is made);
(c) The Company shall have executed and delivered all
further documents and taken all further action that the Agent may request in
order to perfect the Banks' security interest in the collateral to be purchased
with the proceeds of the requested Loan;
(d) In the case of any Term Loan, the Company shall have
delivered the Term Notes to the Agent for each Bank appropriately completed and
duly executed on behalf of the Company.
The Company shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Loan to the effect set forth in clauses (a) and (b) of this Section 2.6. For
purposes of this Section 2.6, the representations and warranties contained in
Section 4.6 hereof shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
delivered pursuant to Section 5.1(d)(ii) and (iii).
2.7 SUBSEQUENT ELECTIONS AS TO BORROWINGS. The Company may elect to
continue a Eurodollar Rate Borrowing, or a portion thereof, as a Eurodollar
Rate Borrowing by giving notice thereof to the Agent (with sufficient executed
copies for each Bank) in substantially the form of EXHIBIT C hereto not later
than 10:00 a.m. Detroit time three Eurodollar Business Days prior to the date
any such continuation of a Eurodollar Rate Borrowing is to be effective,
PROVIDED that an outstanding Borrowing may only be continued on the last day of
the then-current Eurodollar Interest Period with respect to such Borrowing, and
PROVIDED, FURTHER, such notice shall also specify the Eurodollar Interest
Period to be applicable thereto upon such continuation. The Agent, not later
than the Business Day next succeeding the day such notice is given, shall
provide notice of such election to the Banks. If the Company shall not timely
deliver such a notice with respect to any outstanding Borrowing, the Company
shall be deemed to have elected to continue such Borrowing as a Eurodollar Rate
Borrowing, with a Eurodollar Interest Period of one month, on the last day of
the then-current Eurodollar Interest Period with respect to such Borrowing.
2.8 LIMITATION OF REQUESTS AND ELECTIONS. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Eurodollar Rate Borrowing pursuant to Section 2.4, or a request for a
continuation of a Eurodollar Rate Borrowing pursuant to Section 2.7, (a)
deposits in Dollars for periods comparable to the Eurodollar Interest Period
elected by the Company are not available to any Bank in the relevant interbank
or secondary market, or (b) the applicable interest rate will not adequately
and fairly reflect the cost to any Bank of making, funding or maintaining the
related Borrowing, or (c) by reason of national or international financial,
political or economic conditions or by
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reason of any applicable law, treaty, rule or regulation (whether domestic or
foreign) now or hereafter in effect, or the interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank with any guideline, request
or directive of such authority (whether or not having the force of law),
including without limitation exchange controls, it is impracticable, unlawful
or impossible for any Bank (i) to make or fund the relevant Borrowing or (ii)
to continue such Borrowing, then the Company shall not be entitled, so long as
such circumstances continue, to request a Eurodollar Rate Borrowing pursuant to
Section 2.4 or a continuation of a Eurodollar Rate Borrowing pursuant to
Section 2.7. In the event that such circumstances no longer exist, the Banks
shall again consider requests for Eurodollar Rate Borrowings of the affected
type pursuant to Section 2.4, and requests for continuations of Eurodollar Rate
Borrowings of the affected type pursuant to Section 2.7. Notwithstanding any
other provision of this Agreement to the contrary and in order to give effect
to the provisions of Section 3.1(b), the Company shall make requests for
Borrowings pursuant to Section 2.4, and requests for continuations of
Borrowings pursuant to Section 2.7, such that, on each date that any scheduled
principal payment is due with respect to any Term Loan pursuant to Section
3.1(a), Eurodollar Rate Loans having a Eurodollar Interest Period ending on
such date are outstanding on such date in an aggregate outstanding principal
amount not less than the amount of such principal payment.
2.9 MINIMUM AMOUNTS; LIMITATION ON NUMBER OF BORROWINGS. Except for
(a) Borrowings which exhaust the entire remaining amount of the Commitments and
(b) payments required pursuant Section 3.7, each Borrowing and each
continuation pursuant to Section 2.7 and each prepayment thereof shall be in a
minimum amount of $500,000 and in an integral multiple of $100,000 (or, in the
case of any Term Borrowing, in integral multiples of the semi-annual
installments of principal thereon). The aggregate number of Eurodollar Rate
Borrowings outstanding at any one time under this Agreement may not exceed ten.
No more than five Eurodollar Interest Periods shall be permitted to exist at
any one time with respect to all Borrowings outstanding hereunder from time to
time.
2.10 SECURITY AND COLLATERAL. To secure the payment when due of the
Notes and all other obligations of the Company under this Agreement to the
Banks and the Agent, the Company shall execute and deliver, or cause to be
executed and delivered, to the Banks and the Agent Security Documents granting
the following:
(a) Security interests in all present machinery and equipment
of the Company, and in all future machinery and equipment other than machinery
and equipment purchased solely with proceeds of Indebtedness permitted under
Section 5.2(a)(iv).
(b) Guarantees of the Guarantors; PROVIDED, HOWEVER, that the
Guaranty-NBD shall secure only the obligations of the Company to NBD and that
the Guaranty-Asahi shall secure only the obligations of the Company to Asahi.
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(c) All other security and collateral described in the Security
Documents.
ARTICLE III
PAYMENTS AND PREPAYMENTS OF LOANS
3.1 PRINCIPAL PAYMENTS AND PREPAYMENTS. (a) Unless earlier
payment is required under this Agreement (i) the Company shall pay to the Banks
on the Termination Date the entire outstanding principal amount of the
Revolving Credit Loans and (ii) the Company shall pay to the Banks the
outstanding principal amount of the Term Loans in 6 equal semi-annual
installments payable on the last Business Day of each April and October
commencing on the last Business Day of October, 1998, to and including the
Maturity Date, when the entire outstanding principal amount of the Term Loans
shall be due and payable.
(b) The Company may at any time and from time to time prepay
all or a portion of the Borrowings, without premium or penalty, PROVIDED that
(i) the Company may not prepay any portion of any Borrowing as to which an
election for a continuation of a Eurodollar Borrowing is pending pursuant to
Section 2.7, (ii) unless earlier payment is required under this Agreement, any
Eurodollar Borrowing may only be prepaid on the last day of the then-current
Eurodollar Interest Period with respect to such Borrowing, and (iii) such
prepayment of any Term Loan shall only be permitted if the Company shall have
given not less than 10 days' notice thereof specifying the Term Loan or portion
thereof to be so prepaid and shall have paid to the Banks, together with such
prepayment of principal, all accrued interest to the date of payment on such
Loan or portion thereof so prepaid and all amounts owing to the Banks under
Section 3.8 in connection with such prepayment. Upon the giving of such
notice, the aggregate principal amount of such Borrowing or portion thereof so
specified in such notice, together with such accrued interest and other
amounts, shall become due and payable on the specified prepayment date.
(c) All prepayments of the Term Loans, whether optional or
mandatory, shall be applied to installments of principal of the Term Loans in
inverse order of their maturities and no partial prepayment of the Term Loans
shall reduce the amount or defer the date of the scheduled installments of
principal required to be paid thereon.
3.2 INTEREST PAYMENTS. The Company shall pay interest to the Banks
on the unpaid principal amount of each Loan, for the period commencing on the
date such Loan is made until such Loan is paid in full, on each Interest
Payment Date and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, during such periods that such Loan is a
Eurodollar Rate Loan, at the Eurodollar Rate applicable to such Loan for each
related Eurodollar Interest Period. Notwithstanding the foregoing, the
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Company shall pay interest on demand at the Overdue Rate on the outstanding
principal amount of any Loan and any other amount payable by the Company
hereunder which is not paid in full when due (whether at stated maturity, by
acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full, PROVIDED, HOWEVER, that interest shall accrue
and be computed on any installment of interest which has become due and remains
unpaid at the lower of the Overdue Rate and the highest legal rate then
permitted on such amounts (presently ten percent (10%) per annum) from the time
at which it becomes due until paid.
3.3 PAYMENT METHOD. (a) All payments to be made by the Company
hereunder will be made in Dollars and in immediately available funds to the
Agent for the account of the Banks at its address set forth in Section 8.2 not
later than 1:00 p.m. Detroit time on the date on which such payment shall
become due. Payments received after 1:00 p.m. Detroit time shall be deemed to
be payments made prior to 1:00 p.m. Detroit time on the next succeeding
Business Day. The Company hereby authorizes the Agent to charge its account
with the Agent in order to cause timely payment of amounts due hereunder to be
made (subject to sufficient funds being available in such account for that
purpose).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Loan or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify
the relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion to obligations of the Company to the Bank arising under this
Agreement or otherwise.
(c) On the day such payments are deemed received, the Agent
shall remit to the Banks their Pro Rata Share of such payments in immediately
available funds (other than the Agent's fees payable pursuant to Section 2.3(c)
and amounts payable to any Bank under Section 2.4 or 3.6).
3.4 NO SETOFF OR DEDUCTION. All payments of principal and interest
on the Loans and other amounts payable by the Company hereunder shall be made
by the Company without setoff or counterclaim, and free and clear of, and
without deduction or withholding for, or on account of, any present or future
taxes, levies, imposts, duties, fees, assessments, or other charges of whatever
nature, imposed by any governmental authority, or by any department, agency or
other political subdivision or taxing authority.
3.5 PAYMENT ON NON-BUSINESS DAY; PAYMENT COMPUTATIONS. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next
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succeeding Business Day and, in the case of any installment of principal,
interest shall be payable thereon at the rate per annum determined in
accordance with this Agreement during such extension. Computations of interest
and other amounts due under this Agreement shall be made on the basis of a year
of 360 days (or 365 or 366 days as the case may be, when determining the Prime
Rate) for the actual number of days elapsed, including the first day but
excluding the last day of the relevant period.
3.6 ADDITIONAL COSTS. (a) In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Bank or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank or
the Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), shall (i) affect the basis of
taxation of payments to any Bank or the Agent of any amounts payable by the
Company under this Agreement (other than taxes imposed on the overall net
income of the Bank or the Agent, by the jurisdiction, or by any political
subdivision or taxing authority of any such jurisdiction, in which any Bank or
the Agent, as the case may be, has its principal office), or (ii) shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by
any Bank or the Agent, or (iii) shall impose any other condition with respect
to this Agreement, the Commitments, the Notes or the Loans, and the result of
any of the foregoing is to increase the cost to any Bank or the Agent, as the
case may be, of making, funding or maintaining any Eurodollar Rate Loan or to
reduce the amount of any sum receivable by any Bank or the Agent, as the case
may be, thereon, then the Company shall pay to such Bank or the Agent, as the
case may be, from time to time, upon request by such Bank (with a copy of such
request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Bank or the Agent for such increased cost or
reduced sum receivable to the extent such Bank or the Agent is not compensated
therefor in the computation of the interest rate applicable to such Eurodollar
Rate Loan for the period of up to 200 days after the event resulting in the
increased capital requirement and reduced rate of return. A statement as to
the amount of such increased cost or reduced sum receivable, prepared in good
faith and in reasonable detail by such Bank or the Agent and submitted by such
Bank or the Agent to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation.
(b) In the event that any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether
or not presently applicable to any Bank or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or the
Agent with any guideline, request or directive of any such authority (whether
or not having the force of law), including any risk-based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Bank or the
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Agent (or any corporation controlling such Bank or the Agent) and such Bank or
the Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Bank's or the Agent's
obligations hereunder and such increase has the effect of reducing the rate of
return on such Bank's or the Agent's (or such controlling corporation's)
capital as a consequence of such obligations hereunder to a level below that
which such Bank or the Agent (or such controlling corporation) could have
achieved but for such circumstances (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Bank or the Agent
to be material, then the Company shall pay to such Bank or the Agent, as the
case may be, from time to time, upon request by such Bank (with a copy of such
request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Bank or the Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Bank or the Agent reasonably determines to be allocable to
the existence of such Bank's or the Agent's obligations hereunder for the
period of up to 200 days after the event resulting in the increased capital
requirement and reduced rate of return. A statement as to the amount of such
compensation, prepared in good faith and in reasonable detail by such Bank or
the Agent, as the case may be, and submitted by such Bank or the Agent to the
Company, shall be conclusive and binding for all purposes absent manifest error
in computation.
3.7 ILLEGALITY AND IMPOSSIBILITY. In the event that any applicable
law, treaty, rule or regulation (whether domestic or foreign) now or hereafter
in effect and whether or not presently applicable to any Bank, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, shall
make it unlawful or impossible for any Bank to maintain any Eurodollar Rate
Loan under this Agreement, the Company shall upon receipt of notice thereof
from such Bank, repay in full the then-outstanding principal amount of each
Eurodollar Rate Loan so affected, together with all accrued interest thereon to
the date of payment and all amounts owing to such Bank under Section 3.8, (a)
on the last day of the then-current Eurodollar Interest Period applicable to
such Loan if such Bank may lawfully continue to maintain such Loan to such day,
or (b) immediately if such Bank may not continue to maintain such Loan to such
day.
3.8 INDEMNIFICATION. If the Company makes any payment of principal
with respect to any Eurodollar Rate Loan on any other date than the last day of
a Eurodollar Interest Period applicable thereto (whether pursuant to Section
3.7, Section 6.2 or otherwise), or if the Company fails to borrow any
Eurodollar Rate Loan after notice has been given to the Banks in accordance
with Section 2.4, or if the Company fails to make any payment of principal or
interest in respect of a Eurodollar Rate Loan when due, the Company shall
reimburse each Bank on demand for any resulting loss or expense incurred by
each such Bank, including without limitation any loss incurred in obtaining,
liquidating or employing
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deposits from third parties, whether or not such Bank shall have funded or
committed to fund such Loan. A statement as to the amount of such loss or
expense, prepared in good faith and in reasonable detail by such Bank and
submitted by such Bank to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation. Calculation of all amounts
payable to such Bank under this Section 3.8 shall be made as though such Bank
shall have actually funded or committed to fund the relevant Eurodollar Rate
Loan through the purchase of an underlying deposit in an amount equal to the
amount of such Loan and having a maturity comparable to the related Eurodollar
Interest Period and, in the case of any Eurodollar Rate Loan, through the
transfer of such deposit from an offshore office of such Bank to a domestic
office of such Bank in the United States of America; PROVIDED, HOWEVER, that
such Bank may fund any Eurodollar Rate Loan in any manner it sees fit and the
foregoing assumption shall be utilized only for the purpose of calculation of
amounts payable under this Section 3.8.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants that:
4.1 EXISTENCE AND POWER. (a) The Company is a general partnership
duly organized, validly existing and in good standing under the laws of the
State of Indiana, and is duly qualified to do business, and is in good
standing, in all additional jurisdictions where such qualification is necessary
under applicable law. The Company has all requisite partnership power to own
or lease the properties used in its business and to carry on its business as
now being conducted and as proposed to be conducted, and to execute and deliver
this Agreement, the Notes and the Security Documents to which it is a party and
to engage in the transactions contemplated by this Agreement.
(b) Each of the Partners is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and is duly qualified to do business, and is in good standing, in
all additional jurisdictions where such qualification is necessary under
applicable law (including without limitation the State of Indiana). Each of
the Partners has all requisite corporate power to own or lease the properties
used in its business and to carry on its business as now being conducted and as
proposed to13 be conducted, and to execute and deliver this Agreement on behalf
of the Company.
(c) The ownership interests in the Company are held
beneficially and of record sixty percent (60%) by Casting and forty percent
(40%) by Izumi U.S. Amcast owns beneficially and of record all of the
outstanding equity securities of Casting. Izumi owns beneficially and of
record all of the outstanding equity securities of Izumi U.S.
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4.2 AUTHORITY. (a) The execution, delivery and performance by the
Company of this Agreement, the Notes, and the Security Documents to which it is
a party 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 of any
contract or undertaking to which the Company is a party or by which the Company
or its property may be bound or affected and will not result in the imposition
of any Lien except for Permitted Liens.
(b) The execution, delivery and performance by the Partners on
behalf of the Company of this Agreement, the Notes, and the Security Documents
to which the Company is a party 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 charter of either
Partner, or of any contract or undertaking to which either Partner is a party
or by which either Partner or its property may be bound or affected and will
not result in the imposition of any Lien except for Permitted Liens.
4.3 BINDING EFFECT. This Agreement is, and the Notes and the
Security Documents to which the Company is a party when delivered hereunder
will be, legal, valid and binding obligations of the Company and its Partners,
enforceable against the Company and its Partners in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
enforcement of creditors rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
4.4 SUBSIDIARIES. The Company has no Subsidiaries as of the date
hereof, but each corporation becoming a Subsidiary of the Company after the
date hereof will be a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and will be duly
qualified to do business in each additional jurisdiction where such
qualification may be necessary under applicable law. Each Subsidiary of the
Company will have all requisite corporate power to own or lease the properties
used in its business and to carry on its business as now being conducted and as
proposed to be conducted. All outstanding shares of capital stock of each
class of each Subsidiary of the Company will be validly issued and will be
fully paid and nonassessable and, except as disclosed in writing to the Bank
from time to time, will be owned, beneficially and of record, by the Company or
another Subsidiary of the Company free and clear of any Liens.
4.5 LITIGATION. Except as set forth in SCHEDULE 4.5 hereto, there
is no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator,
which if adversely decided might result, either individually or
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collectively, in any material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Company or any of its
Subsidiaries or in any material adverse effect on the legality, validity or
enforceability of this Agreement, the Notes or any Security Document and, to
the best of the Company's knowledge, there is no basis for any such action,
suit or proceeding.
4.6 FINANCIAL CONDITION. The consolidated balance sheet of the
Company and its Subsidiaries and the consolidated statements of income and cash
flow of the Company and its Subsidiaries for the fiscal year ended August 31,
1994, certified by the Chief Financial Officer of Amcast as an accurate
representation of the Company's financial condition as of that date, and the
interim consolidated balance sheet and interim consolidated statements of
income and cash flow of the Company and its Subsidiaries, as of or for the
10-month period ended on June 25, 1995, copies of which have been furnished to
the Banks, fairly present, and the financial statements of the Company and its
Subsidiaries delivered pursuant to Section 5.1(d) will fairly present, the
consolidated financial position of the Company and its Subsidiaries as at the
respective dates thereof, and the consolidated results of operations of the
Company and its Subsidiaries for the respective periods indicated, all in
accordance with generally accepted accounting principles consistently applied
(subject, in the case of said interim statements, to year- end audit
adjustments). There has been no material adverse change in the business,
properties, operations or condition, financial or otherwise, of the Company or
any of its Subsidiaries since August 31, 1994. There is no material Contingent
Liability of the Company that is not reflected in such financial statements or
in the notes thereto.
4.7 USE OF LOANS. The Company will use the proceeds of the Loans to
finance the purchase and construction of a new manufacturing facility and
certain machinery and equipment, and to provide working capital for the
Company's business. Neither the Company nor any of its Subsidiaries extends or
maintains, in the ordinary course of business, credit for the purpose, whether
immediate, incidental, or ultimate, of buying or carrying margin stock (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan will be used for the purpose,
whether immediate, incidental, or ultimate, of buying or carrying any such
margin stock or maintaining or extending credit to others for such purpose.
After applying the proceeds of each Loan such margin stock will not constitute
more than 25% of the value of the assets (either of the Company alone or of the
Company and its Subsidiaries on a consolidated basis) that are subject to any
provisions of this Agreement or any Security Document that may cause any Loan
to be deemed secured, directly or indirectly, by margin stock.
4.8 CONSENTS, ETC. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 2.5(g), if any, each of which is in full force and effect,
no consent, approval or authorization of or
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declaration, registration or filing with any governmental authority or any
nongovernmental person or entity, including without limitation any creditor,
lessor or stockholder of the Company or any of its Subsidiaries, is required on
the part of the Company in connection with the execution, delivery and
performance of this Agreement, the Notes, the Security Documents or the
transactions contemplated hereby or thereby or as a condition to the legality,
validity or enforceability of this Agreement, the Notes or any of the Security
Documents.
4.9 TAXES. The Company and its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and have paid all taxes
shown thereon to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof. Neither the Company nor any of its Subsidiaries knows of any actual
or proposed tax assessment or any basis therefor, and no extension of time for
the assessment of deficiencies in any federal or state tax has been granted by
the Company or any Subsidiary.
4.10 TITLE TO PROPERTIES. Except as otherwise disclosed in the
latest balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this
Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets
(including, without limitation, the collateral subject to the Security
Documents to which any of them is a party) reflected in said balance sheet or
subsequently acquired by the Company or any Subsidiary. All of such properties
and assets are free and clear of any Lien except for Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, the ERISA Affiliates and
the Plans are in compliance in all material respects with those provisions of
ERISA and of the Code which are applicable with respect to any Plan. No
Prohibited Transaction and no Reportable Event has occurred with respect to any
Plan. None of the Company, any of its Subsidiaries or any of the ERISA
Affiliates is an employer with respect to any Multiemployer Plan. The Company,
its Subsidiaries and the ERISA Affiliates have met the minimum funding
requirements under ERISA and the Code with respect to each of the respective
Plans, if any, and have not incurred any liability to the PBGC or any Plan.
The execution, delivery and performance of this Agreement, the Notes, and the
Security Documents does not constitute a Prohibited Transaction. There is no
material Unfunded Benefit Liability, determined in accordance with Section
4001(a)(18) of ERISA, with respect to any Plan.
4.12 DISCLOSURE. No report or other information furnished in writing
or on behalf of the Company, any Partner, or any Guarantor to any Bank or the
Agent in connection with the negotiation or administration of this Agreement
(including without limitation the Business Growth Financing Binder dated
October 21, 1994, and provided by the Company to the Banks) contains any
material misstatement of fact or omits to state any material fact
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or any fact necessary to make the statements contained therein not misleading.
Neither this Agreement, the Notes, the Security Documents, nor any other
document, certificate, or report or other information furnished to any Bank or
the Agent by or on behalf of the Company in connection with the transactions
contemplated hereby (including without limitation the Business Growth Financing
Binder dated October 21, 1994, and provided by the Company to the Banks)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. There is no fact known to the Company which materially and
adversely affects, or which in the future may (so far as the Company can now
foresee) materially and adversely affect, the business, properties, operations
or condition, financial or otherwise, of the Company, any Partner, or any
Subsidiary, which has not been set forth in this Agreement or in the other
documents, certificates, statements, reports and other information furnished in
writing to the Banks by or on behalf of the Company, any Partner, or any
Guarantor in connection with the transactions contemplated hereby.
4.13 ENVIRONMENTAL AND SAFETY MATTERS. The Company and each
Subsidiary is in compliance with all federal, state and local laws, ordinances
and regulations relating to safety and industrial hygiene or to the
environmental condition, including without limitation all Environmental Laws in
jurisdictions in which the Company or any Subsidiary owns or operates, or has
owned or operated, a facility or site, or arranges or has arranged for disposal
or treatment of hazardous substances, solid waste, or other wastes, accepts or
has accepted for transport any hazardous substances, solid wastes or other
wastes or holds or has held any interest in real property or otherwise. No
demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private
person or entity or otherwise, arising under, relating to or in connection with
any Environmental Laws is pending or threatened against the Company or any of
its Subsidiaries, any real property in which the Company or any such Subsidiary
holds or has held an interest or any past or present operation of the Company
or any Subsidiary. Neither the Company nor any of its Subsidiaries (a) is the
subject of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic substances, radioactive
materials, hazardous wastes or related materials into the environment, (b) has
received any notice of any toxic substances, radioactive materials, hazardous
waste or related materials in, or upon any of its properties in violation of
any Environmental Laws, or (c) knows of any basis for any such investigation,
notice or violation, except as disclosed on SCHEDULE 4.13 hereto, and as to
such matters disclosed on such Schedule, none will have an adverse material
affect on the financial condition or business of the Company or any of its
Subsidiaries. No release, threatened release or disposal of hazardous waste,
solid waste or other wastes is occurring or has occurred on, under or to any
real property in which the Company or any of its Subsidiaries holds any
interest or performs any of its operations, in violation of any Environmental
Law.
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ARTICLE V
COVENANTS
---------
5.1 AFFIRMATIVE COVENANTS. The Company covenants and agrees that,
until the Termination Date and thereafter until payment in full of the
principal of and accrued interest on the Notes and the performance of all other
obligations of the Company under this Agreement, unless the Required Banks
shall otherwise consent in writing, it shall, and shall cause each of its
Subsidiaries to:
(a) PRESERVATION OF EXISTENCE, ETC. (i) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and its qualification in good standing to do business in
each jurisdiction in which such qualification is necessary under applicable
law, and the rights, licenses, permits (including those required under
Environmental Laws), franchises, patents, copyrights, trademarks and trade
names material to the conduct of its businesses; and defend all of the
foregoing against all claims, actions, demands, suits or proceedings at law or
in equity or by or before any governmental instrumentality or other agency or
regulatory authority.
(ii) Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect the legal existence of each
of the Partners and their qualification in good standing to do business in each
jurisdiction in which such qualification is necessary under applicable law, and
the rights, licenses, permits (including those required under Environmental
Laws), franchises, patents, copyrights, trademarks and trade names material to
the conduct of their businesses; and defend all of the foregoing against all
claims, actions, demands, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory
authority.
(b) COMPLIANCE WITH LAWS, ETC. Comply in all material
respects with all applicable laws, rules, regulations and orders of any
governmental authority whether federal, state, local or foreign (including
without limitation ERISA, the Code and Environmental Laws), in effect from time
to time; and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, revenues or
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might give rise to Liens upon such properties or any portion thereof, except to
the extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the
Company or such Subsidiary.
(c) MAINTENANCE OF PROPERTIES; INSURANCE. Maintain,
preserve and protect all property that is material to the conduct of the
business of the Company or any of its
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Subsidiaries and keep such property in good repair, working order and condition
and from time to time make, or cause to be made all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection therewith may be properly conducted
at all times in accordance with customary and prudent business practices for
similar businesses; and, in addition to that insurance required under the
Security Documents, maintain in full force and effect insurance with
responsible and reputable insurance companies or associations in such amounts,
on such terms and covering such risks, including fire and other risks insured
against by extended coverage, as is usually carried by companies engaged in
similar businesses and owning similar properties similarly situated and
maintain in full force and effect public liability insurance, insurance against
claims for personal injury or death or property damage occurring in connection
with any of its activities or any of any properties owned, occupied or
controlled by it, in such amount as it shall reasonably deem necessary, and
maintain such other insurance as may be required by law or as may be reasonably
requested by the Required Banks for purposes of assuring compliance with this
Section 5.1(c).
(d) REPORTING REQUIREMENTS. Furnish to the Banks and the
Agent the following:
(i) Promptly and in any event within three
Business Days after becoming aware of the occurrence of (A) any Event of
Default or Default, (B) the commencement of any material litigation against, by
or affecting the Company, the Partners, or any of the Subsidiaries, and any
material developments therein, or (C) entering into any material contract or
undertaking that is not entered into in the ordinary course of business or (D)
any development in the business or affairs of the Company or any of its
Subsidiaries which has resulted in or which is likely in the reasonable
judgment of the Company, to result in a material adverse change in the
business, properties, operations or condition, financial or otherwise of the
Company or any of its Subsidiaries, a statement of the chief financial officer
of the Company setting forth details of each such Event of Default or Default
and such litigation, material contract or undertaking or development and the
action which the Company or such Subsidiary, as the case may be, has taken and
proposes to take with respect thereto;
(ii) As soon as available and in any event within
45 days after the end of each of the first three fiscal quarters of the
Company, the consolidated balance sheet of the Company and its Subsidiaries as
of the end of such quarter, and the related consolidated statements of income,
retained earnings and changes in financial position for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
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 duly certified (subject to year-end audit adjustments) by
the chief financial officer of the Company as having been prepared in
accordance with generally accepted accounting
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principles, together with a certificate of the chief financial officer of the
Company stating that no Event of Default or Default has occurred and is
continuing or, if an Event of Default or Default has occurred and is
continuing, a statement setting forth the details thereof and the action which
the Company has taken and proposes to take with respect thereto;
(iii) As soon as available and in any event within
90 days after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income, retained
earnings and changes in financial position of the Company and its Subsidiaries
for such fiscal year, as provided by the Company to the Partners under the
Partnership Agreement, with a customary audit report of independent certified
public accountants selected by the Company if required to be delivered to the
Partners under the Partnership Agreement, together with a certificate of the
chief financial officer of the Company stating that no Event of Default or
Default has occurred and is continuing or, if an Event of Default or Default
has occurred and is continuing, a statement setting forth the details thereof
and the action which the Company has taken and proposes to take with respect
thereto;
(iv) Promptly and in any event within 10 calendar
days after receiving or becoming aware thereof, (A) a copy of any notice of
intent to terminate any Plan filed with the PBGC, (B) a statement of the chief
financial officer of the Company setting forth the details of the occurrence of
any Reportable Event with respect to any Plan, (C) a copy of any notice that
the Company, any of its Subsidiaries or any ERISA Affiliate may receive from
the PBGC relating to the intention of the PBGC to terminate any Plan or to
appoint a trustee to administer any Plan, or (D) a copy of any notice of
failure to make a required installment or other payment within the meaning of
Section 412(n) of the Code or Section 302(f) of ERISA with respect to a Plan;
(v) Promptly and in any event within 10 days
after receipt, a copy of any management letter or comparable analysis prepared
by the auditors for the Company or any of its Subsidiaries;
(vi) Annually and concurrently with being
delivered to the Management Committee, the business plan to be reviewed by the
Management Committee, as well as any revisions of the business plan reviewed by
the Management Committee;
(vii) Annually, on or before the anniversary date
of this Agreement, a certificate of the Company's chief financial officer
stating that he or she has reviewed the Security Documents and that the Company
is in compliance with the terms thereof; and
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(viii) Promptly, such other information respecting
the business, properties, operations or condition, financial or otherwise, of
the Company or any of it Subsidiaries as any Bank or the Agent may from time to
time reasonably request.
(e) ACCOUNTING, ACCESS TO RECORDS, BOOKS, ETC. Maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with generally accepted accounting principles and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, (i) permit any Bank or the Agent any agents or representatives thereof to
examine (and upon the occurrence and during the continuance of any Event of
Default, make copies of and abstracts from) the records and books of account
of, and visit the properties of, the Company and its Subsidiaries, and to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with their respective directors, officers, employees and independent auditors,
and by this provision the Company does hereby authorize such persons to discuss
such affairs, finances and accounts with any Bank or the Agent, and (ii) permit
the Agent or any of its agents or representatives to conduct a comprehensive
field audit of its books, records, properties and assets, including without
limitation all collateral subject to the Security Documents.
(f) ADDITIONAL SECURITY AND COLLATERAL. Promptly execute
and deliver, and cause each of the Guarantors to execute and deliver,
additional Security Documents, within 30 days after request therefor by the
Banks and the Agent, sufficient to grant to the Banks and the Agent liens and
security interests in any after acquired property of the type described in
Section 2.10. The Company shall notify the Banks and the Agent, within 10 days
after the occurrence thereof, of any event or condition that may require
additional action of any nature in order to preserve the effectiveness and
perfected status of the liens and security interests of the Banks and the Agent
pursuant to the Security Documents.
(g) FURTHER ASSURANCES. Will, and will cause each Guarantor
to, execute and deliver within 30 days after request therefor by the Banks and
the Agent, all further instruments and documents and take all further action
that may be necessary or desirable, or that the Agent may request, in order to
give effect to, and to aid in the exercise and enforcement of the rights and
remedies of the Banks under, this Agreement, the Notes and the Security
Documents, including without limitation causing each lessor of real property to
the Company or any Subsidiary to execute and deliver to the Agent, prior to or
upon the commencement of any tenancy, an agreement in form and substance
acceptable to the Bank and the Agent duly executed on behalf of such lessor
waiving any distraint, lien and similar rights with respect to any property
subject to the security documents and agreeing to permit the Banks and the
Agent to enter such premises in connection therewith. The Company further
agrees to deliver to the Agent, on or before each anniversary date of the
Effective Date, a certificate of the chief financial officer of the Company
stating that he has reviewed the Security Documents and that the Company and
each Guarantor are in
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compliance with the terms and conditions thereof. The Company shall take, or
cause to be taken, all action necessary to permit such an opinion to be
rendered, including filing such financing statements and continuation
statements and executing and delivering such supplements to the Security
Documents and other instruments as may be necessary or desirable in connection
with such opinion.
(h) PAYMENT OF INDEBTEDNESS TO OTHERS. Pay when due (or
within any applicable grace periods) all Indebtedness due to third Persons,
except when the amount thereof is being contested in good faith by appropriate
proceedings and with adequate reserves therefor being set aside on the
Company's financial books and records. If the Company fails to make any such
payment, the Company shall give the Agent proper notice of the failure. The
Company further agrees to make all lease payments when due, and to take no
action that could result in any additional fees or penalties being imposed
under any leases, such as late fees, prepayment penalties, or cancellation
penalties.
(i) RIGHT TO CONSIDER ADDITIONAL INDEBTEDNESS. In the event
the Company determines to borrow additional funds as permitted under Section
5.2(a)(iv) from a lender other than the Banks, the Company shall notify the
Agent and the Banks in writing of the proposed borrowing at least thirty-five
(35) days prior to entering into the proposed borrowing. The notice shall
identify the proposed lender or lenders, and the amount and terms of the
proposed borrowing, including without limitation the interest rate, term, and
repayment schedule of the proposed borrowing. The Banks, either individually
or collectively, in such proportions as they may establish, shall thereupon
have a right of first refusal to make the proposed loan to the Company in the
amount and on the terms offered by the proposed lender. Either or both of the
Banks shall exercise their right by giving notice to the Company not more than
twenty-five (25) days after receiving the Company's notice. If the Banks do
not exercise their right to provide such borrowing, the Company shall be free
for a sixty (60) day period to undertake such borrowing, in the same amount and
on the same material terms set forth in the Company's notice of intended
borrowing. If the Company does not undertake the proposed borrowing within
this sixty (60) day period, then the Company may not enter into any proposed
borrowing without again observing the requirements of this subsection.
5.2 NEGATIVE COVENANTS. Until the Termination Date and thereafter
until payment in full of the principal of and accrued interest on the Notes and
the performance of all other obligations of the Company under this Agreement,
the Company agrees that, unless the Required Banks shall otherwise consent in
writing it shall not, and shall not permit any of its Subsidiaries to:
(a) INDEBTEDNESS. Create, incur, assume, or in any manner
become liable in respect of, or suffer to exist, any Indebtedness other than:
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(i) The Loans;
(ii) The Indebtedness described on Schedule 5.2(a)
hereto, having the same terms as those existing on the
date of this Agreement, but no extension or renewal
thereof shall be permitted;
(iii) Indebtedness of any Subsidiary of the Company
owing to the Company or to any other Subsidiary of the
Company;
(iv) Indebtedness to the Banks or, if the Banks
have declined to issue such debt after having been
offered the opportunity to do so or otherwise failed to
exercise their rights under Section 5.1(i), to any other
lender, in aggregate principal amount not exceeding
$10,000,000;
(v) Liabilities not exceeding $2,000,000 in the
aggregate in respect of Unfunded Benefit Liabilities
under any Plan or of any ERISA Affiliate; and
(vi) Other Indebtedness in aggregate principal
amount not exceeding $500,000 outstanding at any one
time.
(b) LIENS. Create, incur or suffer to exist any Lien on any
of the assets, rights, revenues or property, real, personal or mixed, tangible
or intangible, whether now owned or hereafter acquired, of the Company or any
of its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes
being contested in good faith by appropriate proceedings
and as to which adequate financial reserves have been
established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of
business which do not secure obligations exceeding
$500,000 in the aggregate and which would not have a
material adverse effect on the business or operations of
the Company or any of its Subsidiaries and which
constitute (A) pledges or deposits under worker's
compensation laws, unemployment insurance laws or
similar legislation, (B) good faith deposits in
connection with bids, tenders, contracts or leases to
which the Company or any of its Subsidiaries is a party
for a purpose other than borrowing money or obtaining
credit, including rent security deposits, (C) liens
imposed by law, such as those of carriers, warehousemen
and mechanics, if payment of the obligation secured
thereby is
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not yet due, (D) Liens securing taxes, assessments or
other governmental charges or levies not yet subject to
penalties for nonpayment, and (E) pledges or deposits to
secure public or statutory obligations of the Company or
any of its Subsidiaries, or surety, customs or appeal
bonds to which the Company or any of its Subsidiaries is
a party;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or
irregularities in title, minor encumbrances, easements
or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning or other
restrictions as to the use of such real property,
PROVIDED that all of the foregoing, in the aggregate, do
not at any time materially detract from the value of
said properties or materially impair their use in the
operation of the businesses of the Company or any of its
Subsidiaries;
(iv) Liens created pursuant to the Security
Documents and Liens expressly permitted by the Security
Documents;
(v) Each Lien described on Schedule 5.2(b) hereto
may be suffered to exist upon the same terms as those
existing on the date hereof, but no extension or renewal
thereof shall be permitted; and
(vi) The interest or title of a lessor under any
lease otherwise permitted under this Agreement with
respect to the property subject to such lease to the
extent performance of the obligations of the Company or
its Subsidiary thereunder are not delinquent.
(c) MERGER, ACQUISITIONS, ETC. Purchase or otherwise
acquire, whether in one or a series of transactions, all or a substantial
portion of the business assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, of any person, or all or a substantial portion
of the capital stock of or other ownership interest in any other person; nor
merge or consolidate or amalgamate with any other person or take any other
action having a similar effect, nor enter into any joint venture or similar
arrangement with any other person, PROVIDED, HOWEVER, that this subsection
shall not prohibit any merger or acquisition if the Company shall be the
surviving or continuing person and, immediately after such merger or
acquisition, no Default or Event of Default shall exist or shall have occurred
and be continuing and, prior to the consummation of such merger or acquisition,
the Company shall have provided to the Banks an opinion of counsel and a
certificate of the chief financial officer of the Company (attaching
computations to demonstrate compliance with all financial covenants hereunder),
each stating that such merger or acquisition complies with this subsection and
that any other conditions under this Agreement relating to such transaction
have been satisfied and PROVIDED, however, that this subsection shall not
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prohibit the incorporation of the Company so long as the equity interests on
the resulting corporation are owned only by the Partners in the same
proportions as the Company is owned by them prior to the incorporation, and the
Company, the Agent, and the Banks shall amend this Agreement, the Notes, and
the Security Documents as necessary to accommodate such incorporation.
(d) DISPOSITION OF ASSETS; ETC. Sell, lease, license,
transfer, assign or otherwise dispose of all or a substantial portion of its
business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether in one or a series of transactions, other than
finished inventory sold in the ordinary course of business upon customary
credit terms and sales of scrap or obsolete material or equipment, PROVIDED,
HOWEVER, that, if no Default or Event of Default is existing or would result
therefrom, this subsection shall not prohibit any such sale, lease, license,
transfer, assignment or other disposition of assets if the aggregate book value
(disregarding any write-downs of such book value other than ordinary
depreciation and amortization) of all of such business, assets, rights,
revenues and property disposed of after the date of this Agreement shall be
less than twenty-five percent of such aggregate book value of the total assets
of the Company or such Subsidiary, as the case may be.
(e) NATURE OF BUSINESS. Make any substantial change in the
nature of its business from that engaged in on the date of this Agreement or
engage in any other businesses other than those in which it is engaged on the
date of this Agreement, or assign or otherwise transfer its rights or
obligations under the Supply Contracts to any third party.
(f) TRANSACTIONS WITH AFFILIATES. Enter into, become a
party to, or become liable in respect of, any contract or undertaking with any
Affiliate except in the ordinary course of business and on terms not less
favorable to the Company or such Subsidiary than those which could be obtained
if such contract or undertaking were an arms length transaction with a person
other than an Affiliate.
(g) NEGATIVE PLEDGE LIMITATION. Enter into any Agreement
with any person other than the Banks pursuant hereto which prohibits or limits
the ability of the Company or any Subsidiary to create, incur, assume or suffer
to exist any Lien upon any of its assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, whether now owned or hereafter
acquired.
(h) DISTRIBUTIONS AND OTHER RESTRICTED PAYMENTS. Make, pay,
declare, or authorize any payment or distribution in respect of any partnership
interest or in connection with any redemption, purchase, retirement, or other
acquisition, directly or indirectly, of any partnership interests, or make or
authorize any payments on any loan, advance, or other credit extension made by
any of the Partners, the Guarantors, or their Affiliates, PROVIDED, HOWEVER,
that, if no Default or Event of Default is existing or would result therefrom,
the
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Company may authorize and make payments and other distributions during or
with respect to any fiscal year which, in the aggregate, do not exceed fifty
percent (50%) of the Consolidated Cumulative Net Income before Taxes of the
Company and its Subsidiaries for such year.
(i) INVESTMENT, LOANS, AND ADVANCES. Make any loan,
advance, or other credit extension to, or purchase or otherwise acquire any
capital stock of or other ownership interest in, or debt security of or other
evidences of Indebtedness of, any of the Partners, the Guarantors, or their
Affiliates.
(j) INCONSISTENT AGREEMENTS. Enter into any agreement
containing any provision which would be violated or breached by this Agreement
or any of the transactions contemplated hereby or by performance by the Company
or any of its Subsidiaries or any Guarantor of its obligations in connection
therewith.
(k) PAYMENTS FOLLOWING GUARANTOR DEFAULT. Following the
occurrence of a Guarantor Default, and during the continuance of a Forbearance
Period, make any payments or prepayments of principal or interest on any
outstanding Indebtedness except for regularly scheduled payments of principal
and interest otherwise due in the absence of the Guarantor Default.
ARTICLE VI
DEFAULT
6.1 EVENTS OF DEFAULT. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived by the Required Banks pursuant to Section 8.1:
(a) NONPAYMENT. The Company shall fail to pay when due any
principal of or interest on the Notes or any fees or any other amount payable
hereunder;
(b) MISREPRESENTATION. Any representation or warranty made
by the Company in Article IV hereof or in any Security Document or any other
certificate, report, financial statement or other document furnished by or on
behalf of the Company in connection with this Agreement, shall prove to have
been incorrect in any material respect when made or deemed made;
(c) CERTAIN COVENANTS. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V hereof, or there
occurs any change in the ownership of the Company or of any of the Partners;
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(d) OTHER DEFAULTS. The Company shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement or in
any Security Document, and any such failure shall remain unremedied for 15
calendar days after notice thereof shall have been given to the Company by the
Agent (or such longer or shorter period of time as may be specified in such
Security Document);
(e) OTHER INDEBTEDNESS. The Company or any of its
Subsidiaries shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
Indebtedness (other than Indebtedness hereunder), beyond any period of grace
provided with respect thereto; or if the Company or any of its Subsidiaries
fails to perform or observe any other term, covenant or agreement contained in
any agreement, document or instrument evidencing or securing any such
Indebtedness having such aggregate outstanding principal amount, or under which
any such Indebtedness was issued or created, beyond any period of grace, if
any, provided with respect thereto if the effect of such failure is either (i)
to cause, or permit the holders of such Indebtedness (or a trustee on behalf of
such holders) to cause, any payment in respect of such Indebtedness to become
due prior to its due date or (ii) to permit the holders of such Indebtedness
(or a trustee on behalf of such holders) to assume operational control of the
Company;
(f) JUDGMENTS. One or more judgments or orders for the
payment of money in an aggregate amount of $500,000 shall be rendered against
the Company, the Partners or any of its Subsidiaries, or any other judgment or
order (whether or not for the payment of money) shall be rendered against or
shall affect the Company, the Partners or any of its Subsidiaries which causes
or could cause a material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Company, the Partners
or any of its Subsidiaries or which does or could have a material adverse
effect on the legality, validity or enforceability of this Agreement, the Notes
or any Security Document, and either (i) such judgment or order shall have
remained unsatisfied and the Company, such Partner or such Subsidiary shall not
have taken action necessary to stay enforcement thereof by reason of pending
appeal or otherwise, prior to the expiration of the applicable period of
limitations for taking such action or, if such action shall have been taken, a
final order denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order;
(g) ERISA. The occurrence of a Reportable Event that
results in or could result in liability of the Company, any Subsidiary of the
Company or any ERISA Affiliate to the PBGC or to any Plan and such Reportable
Event is not corrected within thirty (30) days after the occurrence thereof; or
the occurrence of any Reportable Event which could constitute grounds for
termination of any Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer any Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the
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filing by the Company, any Subsidiary of the Company or any
ERISA Affiliate of a notice of intent to terminate a Plan or the institution of
other proceedings to terminate a Plan; or the Company, any Subsidiary of the
Company or any ERISA Affiliate shall fail to pay when due any liability to the
PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate,
or to cause a trustee to be appointed to administer, any Plan; or any person
engages in a Prohibited Transaction with respect to any Plan which results in
or could result in liability of the Company, any Subsidiary of the Company, any
ERISA Affiliate to make a required installment or other payment to any Plan
within the meaning of Section 302(f) of ERISA or Section 412(n) of the Code
that results in or could result in liability of the Company, any Subsidiary of
the Company or any ERISA Affiliate to the PBGC or any Plan; or the withdrawal
of the Company, any of its Subsidiaries or any ERISA Affiliate from a Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(9a)(2) of ERISA; or the Company, any of its Subsidiaries or any
ERISA Affiliate becomes an employer with respect to any Multiemployer Plan
without the prior written consent of the Required Banks;
(h) INSOLVENCY, ETC. The Company or any of the Partners
shall be dissolved or liquidated (or any judgment, order or decree therefor
shall be entered), or shall generally not pay its debts as they become due, or
shall admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against the Company or any of the Partners any proceeding
or case seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
entry of an order for relief, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
assets, rights, revenues or property, and, if such proceeding is instituted
against the Company or a Partner and is being contested by the Company or the
Partner in good faith by appropriate proceedings, such proceeding shall remain
undismissed or unstayed for a period of 60 days; or the Company or a Partner
shall take any action (corporate or other) to authorize or further any of the
actions described above in this subsection; or
(i) GUARANTOR DEFAULTS. Any event of default described in
any Guaranty shall have occurred and be continuing, and the holder of the
defaulted Guaranty notifies the Agent, the Guarantors, and the other Bank of
such default and requests in writing that such default be declared an Event of
Default under this Agreement.
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6.2 REMEDIES.
(a) Upon the occurrence and during the continuance of any Event
of Default, and subject to the terms of Section 6.3, the Agent may and, upon
being directed to do so by any Bank, shall, within one Business Day, by notice
to the Company and the Guarantors, (i) terminate the Commitments or (ii)
declare the outstanding principal of, and accrued interest on, the Notes and
all other amounts owing under this Agreement to be immediately due and payable,
or both of the foregoing, whereupon the Commitments shall terminate forthwith
and all such amounts shall become immediately due and payable, as the case may
be, PROVIDED that in the case of any event or condition described in Section
6.1(h) with respect to the Company, the Commitments shall automatically
terminate forthwith and all such amounts shall automatically become immediately
due and payable without notice; in all cases without demand, presentment,
protest, diligence, notice of dishonor or other formality, all of which are
hereby expressly waived.
(b) Subject to Section 6.3, the Agent may and, upon being
directed to do so by the Required Banks, shall, in addition to the remedies
provided in Section 6.2(a), exercise and enforce any and all other rights and
remedies available to it or the Banks, whether arising under this Agreement,
the Notes or any Security Document or under applicable law, in any manner
deemed appropriate by the Agent, including suit in equity, action at law, or
other appropriate proceedings, whether for the specific performance (to the
extent permitted by law) of any covenant or agreement contained in this
Agreement or in the Notes or any Security Document or in aid of the exercise of
any power granted in this Agreement, the Notes or any Security Document.
(c) Subject to Section 6.3, upon the occurrence and during the
continuance of any Event of Default, each Bank may at any time and from time to
time, without notice to the Company (any requirement for such notice being
expressly waived by the Company) set off and apply against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
whether owing to such Bank or any other Bank or the Agent, any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Bank to or for the credit or the
account of the Company and any property of the Company from time to time in
possession of such Bank, irrespective of whether or not such Bank shall have
made any demand hereunder and although such obligations may be contingent and
unmatured. The Company hereby grants to the Banks and the Agent a lien on and
security interest in all such deposits, indebtedness and property as collateral
security for the payment and performance of the obligations of the Company
under this Agreement. The rights of such Bank under this Section 6.2(c) are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which such Bank may have. Any funds obtained by the Agent or
any Bank under this subsection shall be shared between the Banks under Section
7.10.
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(d) In addition to other amounts payable pursuant to this
Agreement, the Company confirms that it shall further pay, together with any
payment of the Loans hereunder after the occurrence and during the continuance
of any Event of Default, all amounts required to be paid pursuant to Section
3.8.
6.3 REMEDIES UPON GUARANTOR DEFAULT. (a) Upon a Guarantor Default
occurring, the Agent shall terminate the Commitments and declare the
outstanding principal of, and accrued interest on, the Notes and all other
amounts owing under this Agreement to be immediately due and payable, whereupon
the Commitments shall terminate and all such amounts shall become immediately
due and payable. Thereafter, each Bank may pursue any and all remedies which
it may have under its respective Guaranty with respect to its portion of the
Company's obligations hereunder, with any proceeds received by the Banks to be
applied as set forth in Section 7.10(a).
(b) During the continuance of a Guarantor Default, the Agent
and the Banks shall not pursue any remedies against the Company other than
terminating the Commitments and accelerating the obligations as permitted under
Section 6.3(a) until one of the following has occurred (such period from the
occurrence of a Guarantor Default until one of the following has occurred being
referred to as the "Forbearance Period"):
(i) A Default or an Event of Default (other than
the Guarantor Default) has occurred; or
(ii) A Guarantor Default exists and is continuing
with respect to each Guarantor; or
(iii) A period of thirty (30) days has passed from
the date the Guarantor Default occurred, and the Guarantor
Default has not been cured or waived in writing by the Banks.
(c) Notwithstanding any other provision of this Agreement to
the contrary, during the Forbearance Period, the Agent and the Banks agree that
(i) there shall be due and payable under this Agreement from the Company only
such amounts as would be due and payable if no Guarantor Default had occurred,
PROVIDED, HOWEVER, that any interest which accrues during the Forbearance
Period shall accrue and be payable at the Overdue Rate, and (ii) no Event of
Default shall occur or be declared under Section 6.1(a) unless and until the
Company fails to pay when due any amounts due and payable under Section
6.3(c)(i).
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ARTICLE VII
THE AGENT AND THE BANKS
-----------------------
7.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement, the Notes and the Security
Documents as are delegated to the Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto. The
provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Company shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement, the Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Company.
7.2 AGENT AND AFFILIATES. NBD Bank in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent. NBD Bank and its affiliates may (without having to account therefor to
any Bank) accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with the Company, any
Guarantor, or any Subsidiary of the Company as if it were not acting as Agent
hereunder, and may accept fees and other consideration therefor without having
to account for the same to the Banks.
7.3 SCOPE OF AGENT'S DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or shall otherwise exist against the Agent. As to
any matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement action under the Notes and the Security
Documents), the Agent shall not be required to exercise any discretion or take
any action, but may request instructions from the Required Banks. The Agent
shall in all cases be fully protected in acting, or in refraining from acting,
pursuant to the written instructions of the Required Banks, which instructions
and any action or omission pursuant thereto shall be binding upon all of the
Banks; PROVIDED, HOWEVER, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to personal liability or is contrary to this Agreement, the Notes or the
Security Documents or applicable law.
7.4 RELIANCE BY AGENT. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it
to be genuine and correct and to have
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been sent or given by or on behalf of a proper person. The Agent may treat the
payee of any Note as the holder thereof unless and until the Agent receives
written notice of the assignment thereof pursuant to the terms of this
Agreement signed by such payee and the Agent receives the written agreement of
the assignee that such assignee is bound hereby to the same extent as if it had
been an original party hereto. The Agent may employ agents (including, without
limitation, collateral agents) and may consult with legal counsel (who may be
counsel for the Company), independent public accounts and other experts
selected by it and shall not be liable to the Banks, except as to money or
property received by it or its authorized agents, for the negligence or
misconduct of any such agent selected by it with reasonable care or for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
7.5 DEFAULT. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or the Company specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice, the Agent shall give written notice
thereto to the Banks.
7.6 LIABILITY OF AGENT. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Banks for any action
taken or not taken by it or them in connection herewith with the consent or at
the request of the Required Banks or in the absence of its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any recital, statement, warranty or
representation contained in this Agreement, any Note or any Security Document,
or in any certificate, report, financial statement or other document furnished
in connection with this Agreement, (ii) the performance or observance of any of
the covenants or agreements of the Company or any Guarantor, (iii) the
satisfaction of any condition specified in Article II hereof, of (iv) the
validity, effectiveness, legal enforceability, value or genuineness of this
Agreement, the Notes or the Security Documents or any collateral subject
thereto or any other instrument or document furnished in connection herewith.
7.7 NONRELIANCE ON AGENT AND OTHER BANKS. Each Bank acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decision in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company or any Guarantor of this Agreement, the Notes or the Security
Documents or any other documents referred to or provided for herein or to
inspect the properties or books of
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the Company or any Guarantor and, except for notices, reports and other
documents and information expressly required to be furnished to the Banks by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any information concerning the affairs, financial
condition or business of the Company or any of its Subsidiaries which may come
into the possession of the Agent or any of its affiliates.
7.8 INDEMNIFICATION. The Banks agree to indemnify the Agent (to the
extent not reimbursed by the Company, but without limiting any obligation of
the Company to make such reimbursement), ratably according to the respective
principal amounts of the Loans then outstanding made by each of them (or if no
Loans are at the time outstanding, ratably according to the respective amounts
of their Commitments), from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel) which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or the transactions contemplated hereby or any action
taken or omitted by the Agent under this Agreement, PROVIDED, HOWEVER, that no
Bank shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including, without limitation, fees and expenses of
counsel) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that
the Agent is not reimbursed for such expenses by the Company, but without
limiting the obligation of the Company to make such reimbursement. Each Bank
agrees to reimburse the Agent promptly upon demand for its ratable share of any
amounts owing to the Agent by the Banks pursuant to this Section. If the
indemnity furnished to the Agent under this Section shall, in the judgment of
the Agent, be insufficient or become impaired, the Agent may call for
additional indemnity from the Banks and cease, or not commence, to take any
action until such additional indemnity is furnished.
7.9 RESIGNATION OF AGENT. The Agent may resign as such at any time
upon thirty days' prior written notice to the Company and the Banks. In the
event of any such resignation, the Required Banks shall, by an instrument in
writing delivered to the Company and the Agent, appoint a successor, which
shall be Asahi, or, if Asahi declines, then a commercial bank acceptable to the
Banks. If a successor is not so appointed or does not accept such appointment
before the Agent's resignation becomes effective, the resigning Agent may
appoint a temporary successor to act until such appointment by the Required
Banks is made and accepted or if no such temporary successor is appointed as
provided above by the resigning Agent, the Required Banks shall thereafter
perform all the duties of the Agent hereunder until such appointment by the
Required Banks is made and accepted. Any successor to the Agent shall execute
and deliver to the Company and the Banks an
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instrument accepting such appointment and thereupon such successor Agent,
without further act, deed, conveyance or transfer shall become vested with all
of the properties, rights, interests, powers, authorities and obligations of
its predecessor hereunder with like effect as if originally named as Agent
hereunder. Upon request of such successor Agent, the Company and the resigning
Agent shall execute and deliver such instruments of conveyance, assignment and
further assurance and do such other things as may reasonably be required for
more fully and certainly vesting and confirming in such successor Agent all
such properties, rights, interests, powers, authorities and obligations. The
provisions of this Article VII shall thereafter remain effective for such
resigning Agent with respect to any actions taken or omitted to be taken by
such Agent while acting as the Agent hereunder.
7.10 SHARING OF PAYMENTS. (a) The Banks agree among themselves that,
in the event that any Bank shall obtain payment in respect of any Loan or any
other obligation owing to the Banks under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of
its Pro Rata Share, such Bank shall promptly purchase from the other Banks
participations in such Loans and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end that
all of the Banks share such payment in accordance with such ratable shares,
PROVIDED, HOWEVER, that no sharing shall be required in respect of any payments
received by any Bank from a Guarantor under its respective Guaranty, or in
respect of any sale or assignment of all Notes held by any Bank under Section
8.6 below, and any amounts so received shall be applied to pay all amounts owed
by the Company or the respective Guarantor to the receiving Bank and the
receiving Bank has no obligation to share any payments so received with the
Agent or the other Bank. This provision shall not release either Bank from its
obligations to the Agent under this Agreement, and shall not affect the
application of funds received from the Company under this Agreement or under
the Security Documents (other than the Guaranties).
(b) The Banks further agree among themselves that if payment
to a Bank obtained by such Bank through the exercise of a right of set-off,
banker's lien, counterclaim or otherwise as aforesaid shall be rescinded or
must otherwise be restored, each Bank which shall have shared the benefit of
such payment shall, by repurchase of participations theretofore sold, return
its share of that benefit to each Bank whose payment shall have been rescinded
or otherwise restored. The Company agrees that any Bank so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including set-off, banker's lien or counterclaim, with respect to
such participation as fully as if such Bank were a holder of such Loan or other
obligation in the amount of such participation. The Banks further agree among
themselves that, in the event that amounts received by the Banks and the Agent
hereunder are insufficient to pay all such obligations or insufficient to pay
all such obligations when due, the fees and other amounts owing to the Agent in
such capacity shall be paid therefrom before payment of obligations
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owing to the Banks under this Agreement. Except as otherwise expressly
provided in this Agreement, if any Bank or the Agent shall fail to remit to the
Agent or any other Bank an amount payable by such Bank or the Agent to the
Agent or such other Bank pursuant to this Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid
to the Agent or such other Bank at a rate per annum equal to the rate at which
borrowings are available to the payee in its overnight federal funds market.
It is further understood and agreed among the Banks and the Agent that if the
Agent shall engage in any other transactions with the Company and shall have
the benefit of any collateral or security therefor which does not expressly
secure the obligations arising under this Agreement except by virtue of a
so-called dragnet clause or comparable provision, the Agent shall be entitled
to apply any proceeds of such collateral or security first in respect of the
obligations arising in connection with such other transaction before
application to the obligations arising under this Agreement.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1 AMENDMENTS, ETC. (a) No amendment, modification, termination or
waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Required Banks and, to the extent any rights or duties of the Agent may be
affected thereby, the Agent, PROVIDED, HOWEVER, that either Bank may in its
sole discretion amend or discharge the Guaranty made in its favor.
(b) Any such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
8.2 NOTICES. (a) All notices and other communications hereunder
shall be in writing and shall be delivered or sent to the Company at 1561
Northwest 11th Street, P.O. Box 1607, Richmond, Indiana 47374, Attention: Chief
Financial Officer, Facsimile No. (317) 738-0262, and to the Agent and the Banks
at the respective addresses and numbers for notices set forth on the signature
pages hereof, or to such other address as may be designated by the Company, the
Agent or any Bank by notice to the other parties hereto. All notices and other
communications shall be deemed to have been given at the time of actual
delivery thereof to such address, or if sent by facsimile, at the time of
sending, or if sent by certified or registered mail, postage prepaid, to such
address, on the third day after the date of mailing, PROVIDED, HOWEVER, that
notices to the Agent shall not be effective until received.
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(b) Notices by the Company to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Loans pursuant to Section 2.4, requests for continuations or conversions of
Loans pursuant to Section 2.7, and notices of prepayment pursuant to Section
3.1 shall be irrevocable and binding on the Company.
8.3 NO WAIVER BY CONDUCT; REMEDIES CUMULATIVE. No course of dealing
on the part of the Agent or any Bank, nor any delay or failure on the part of
the Agent or any Bank in exercising any right, power or privilege hereunder
shall operate as a waiver of such right, power or privilege or otherwise
prejudice the Agent's or such Bank's rights and remedies hereunder; nor shall
any single or partial exercise thereof preclude any further exercise thereof or
the exercise of any other right, power or privilege. No right or remedy
conferred upon or reserved to the Agent or any Bank under this Agreement, the
Notes or any Security Document is intended to be exclusive of any other right
or remedy, and every right and remedy shall be cumulative and in addition to
every other right or remedy granted thereunder or now or hereafter existing
under any applicable law. Every right and remedy granted by this Agreement,
the Notes or any Security Document or by applicable law to the Agent or any
Bank may be exercised from time to time and as often as may be deemed expedient
by the Agent or any Bank and, unless contrary to the express provisions of this
Agreement, the Notes or any Security Document, irrespective of the occurrence
or continuance of any Default or Event of Default.
8.4 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms,
covenants, agreements, representations and warranties of the Company or any
Guarantor made herein or in any Security Document or in any certificate,
report, financial statement or other document furnished by or on behalf of the
Company or any Guarantor in connection with this Agreement shall be deemed to
be material and to have been relied upon by the Banks, notwithstanding any
investigation heretofore or hereafter made by any Bank or on such Bank's
behalf, and those covenants and agreements of the Company set forth in Section
3.6, 3.8 and 8.5 hereof shall survive the repayment in full of the and the
termination of the Commitments.
connection with this Agreement shall be deemed to be material and to have been
relied upon by the Banks, notwithstanding any investigation heretofore or
hereafter made by any Bank or on such Bank's behalf, and those covenants and
agreements of the Company set forth in Section 3.6, 3.8 and 8.5 hereof shall
survive the repayment in full of the and the termination of the Commitments.
8.5 EXPENSES. The Company agrees to pay, or reimburse the Agent for
the payment of, on demand, (i) the reasonable fees and expenses of Dickinson,
Wright, Moon, Van Dusen & Freeman, counsel to the Agent, in the amount of
$12,000 in connection with the preparation, execution, and delivery of this
Agreement, the Notes, and the Security Documents, (ii) the reasonable fees and
expenses of counsel to the Agent in connection with advising the Agent as to
its rights and responsibilities with respect thereto, and in connection with
any amendments, waivers or consents in connection therewith, (iii) reasonable
fees and expenses of counsel to Asahi (not to exceed $6,000) in connection with
the preparation, execution, and delivery of this Agreement, the Notes, and the
Security Documents, (iv) all stamp and other taxes and fees payable or
determined to be payable in
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connection with the execution, delivery, filing or recording of this Agreement,
Notes, the Security Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, and (v) all
reasonable costs and expenses of the Agent and the Banks (including reasonable
fees and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise) in connection with any Default or Event of Default or
the enforcement of, or the exercise or preservation of any rights under, this
Agreement or the Notes or any Security Document or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement.
8.6 SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, PROVIDED that the Company may not, without the prior
consent of the Required Banks, assign its rights or obligations hereunder or
under the Notes or any Security Document and the Banks shall not be obligated
to make any Loan hereunder to any entity other than the Company. With the
prior written consent of the Company, the Partners, the Guarantors, the Agent,
and each other Bank, any Bank may assign to any financial institution or
institutions, and such financial institution or institutions may further
assign, all (but not less than all) of such Bank's rights and benefits under
this Agreement and the Notes and the Security Documents. To the extent of that
assignment, such assignee or assignees shall have the same rights and benefits
against the Company under Section 6.2(c) as it or they would have had if such
assignee or assignees were the Bank making the Loans to the Company hereunder.
(b) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement
and the transactions contemplated hereby and enforcing or exercising any rights
or remedies of the Agent provided under this Agreement, the Notes, any Security
Documents or otherwise. In furtherance of such agency, the Agent may from time
to time direct that the Company and the Guarantors provide notices, reports and
other documents contemplated by this Agreement (or duplicates thereof) to such
agent. The Company and each Guarantor hereby consents to the appointment of
such agent and agrees to provide all such notices, reports and other documents
and to otherwise deal with such agent acting on behalf of the Agent in the same
manner as would be required if dealing with the Agent itself.
8.7 COUNTERPARTS. This Agreement 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 Agreement by signing
any such counterpart.
8.8 GOVERNING LAW. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect
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to choice of law principles of such State. The Company further agrees that any
legal action or proceeding with respect to this Agreement, the Notes or any
Security Document or the transactions contemplated hereby may be brought in any
court of the State of Michigan, or in any court of the United States of America
sitting in Michigan, and the Company hereby submits to and accepts generally
and unconditionally the jurisdiction of those courts with respect to its person
and property, and irrevocably appoints The Corporation Company, whose address
in Michigan is 30600 Telegraph, Bingham Farms, Michigan 48025, as its agent for
service of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal delivery to such
agent or to the Company or by the mailing thereof by registered or certified
mail, postage prepaid to the Company at its address set forth in Section 8.2.
Nothing in this paragraph shall affect the right of the Banks and the Agent to
serve process in any other manner permitted by law or limit the right of the
Banks or the Agent to bring any such action or proceeding against the Company
or its property in the courts of any other jurisdiction. The Company hereby
irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts.
8.9 TABLE OF CONTENTS AND HEADINGS. The table of contents and the
headings of the various subdivisions hereof are for the convenience of
reference only and shall in no way modify any of the terms or provisions
hereof.
8.10 CONSTRUCTION OF CERTAIN PROVISIONS. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
8.11 INTEGRATION AND SEVERABILITY. This Agreement embodies the
entire agreement and understanding between the Company and the Agent and the
Banks, and supersedes all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of the
Company under this Agreement, the Notes or any Security Document shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of the Company shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of the Company under this Agreement, the
Notes or any Security Document in any other jurisdiction.
8.12 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default or any event
or condition which with notice or lapse of time, or both, could
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become such a Default or an Event of Default if such action is taken or such
condition exists.
8.13 INTEREST RATE LIMITATION. Notwithstanding any provision of this
Agreement, the Notes or any Security Document, in no event shall the amount of
interest paid or agreed to be paid by the Company exceed an amount computed at
the highest rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Agreement, the
Notes or any Security Document at the time performance of such provision shall
be due, shall involve exceeding the interest rate limitation validly prescribed
by law which a court of competent jurisdiction may deem applicable hereto,
then, IPSO FACTO, the obligations to be fulfilled shall be reduced to an amount
computed at the highest rate of interest permissible under applicable law, and
if for any reason whatsoever the Bank shall ever receive as interest an amount
which would be deemed unlawful under such applicable law such interest shall be
automatically applied to the payment of principal of the outstanding hereunder
(whether or not then due and payable) and not to the payment of interest, or
shall be refunded to the Company if such principal and all other obligations of
the Company to the Banks have been paid in full.
8.14 WAIVER OF JURY TRIALu. The Banks and the Company, after
consulting or having had the opportunity to consult with counsel, knowingly,
voluntarily and intentionally waive any right each of them may have to a trial
by jury in any litigation based upon or arising out of this Agreement or any
related instrument or agreement or any of the transactions contemplated by this
Agreement or any course of conduct, dealing, statements (whether oral or
written) or actions of either of them. Neither of the Banks nor the Company
shall seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other 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 of the Banks or the
Company except by a written instrument executed by each of them.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.
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CASTING TECHNOLOGY COMPANY
By: AMCAST CASTING TECHNOLOGIES, INC.,
its General Partner
By: __________________________________
Its: __________________________________
And
By: IZUMI, INC.,
its General Partner
By: __________________________________
Its: __________________________________
Address for Notices: NBD BANK
611 Woodward Avenue
Detroit, MI 48226
Attention: Victoria L. Decker By: __________________________________
Facsimile: (313) 225-3269
Commitment Amount: $15,000,000 Its: __________________________________
Percentage of
Total Commitments: 60%
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54
Address for Notices: THE ASAHI BANK, LTD.,
190 South LaSalle Street acting through its Chicago
Branch
Suite 2350
Chicago, IL 60603
Attention: Masahiro Katagiri By: ________________________
Facsimile No.: (312) 606-1010
Commitment Amount: $10,000,000 Its: Manager
Percentage of
Total Commitments: 40%
Address for Notices: NBD BANK, as Agent
611 Woodward Avenue
Detroit, Michigan 48226
Attention: Victoria L. Decker By: ________________________
Facsimile No.: (313) 225-3269
Its: ______________________
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WP6:[WPMRH.00007.2852]AGR_CR.9[10]
55
GUARANTY AGREEMENT-NBD
THIS GUARANTY AGREEMENT-NBD, dated as of July 28, 1995 (this
"Guaranty") made by AMCAST INDUSTRIAL CORPORATION, an Ohio corporation (the
"Guarantor"), in favor of NBD Bank, a Michigan banking corporation ("NBD").
WHEREAS, Casting Technology Company, an Indiana general partnership
(the "Company"), has entered into a Credit Agreement, of even date herewith
(such agreement, as it may be amended from time to time, the "Credit
Agreement"), with NBD, as a lender, and The Asahi Bank, Ltd., as a lender
(collectively, the "Banks"), and NBD as agent for the Banks (in such capacity,
the "Agent"), pursuant to which the Banks have agreed to provide certain credit
facilities to the Company in an aggregate principal amount not to exceed
$25,000,000, of which NBD has committed under the Credit Agreement to provide
sixty percent of the Loans extended to the Company under the Credit Agreement;
WHEREAS, Amcast Casting Technologies, Inc. ("Casting") is a general
partner of the Company, and the Guarantor is the parent corporation of Casting;
WHEREAS, as a condition to the effectiveness of the NBD's obligations
under the Credit Agreement, the Guarantor is required to guarantee, among other
things, certain obligations of the Company to NBD under the Credit Agreement
and the Notes held and to be held by NBD;
WHEREAS, the Guarantor has participated in the drafting and
negotiation of the Credit Agreement, the Notes, the Security Documents, and all
other documents, agreements, instruments and certificates furnished by or on
behalf of the Company in connection therewith (all of the foregoing being
herein collectively referred to as the "Operative Documents"), and the
Guarantor has determined that it is in its interest and to its financial
benefit that the parties to the Operative Documents enter into the transactions
contemplated thereby.
NOW, THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, and as further consideration, and as an inducement to NBD
to enter into the transactions contemplated by the Operative Documents, the
Guarantor agrees with NBD as follows:
1. Guarantee of Obligations.
------------------------
(a) The Guarantor hereby (i) guarantees to NBD the prompt
payment of the principal of the loans made to the Company by NBD as a lender
under the Credit
GUARANTY AGREEMENT-NBD
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56
Agreement but in no event more than $15,000,000 (the "NBD Share of
the Loans") and any and all accrued and unpaid interest on the NBD Share of the
Loans when due, whether by scheduled maturity, acceleration or otherwise, all
in accordance with the terms of the Credit Agreement and the Notes held and to
be held by NBD, and (ii) agrees to make prompt payment, on demand, of any and
all costs and expenses incurred by NBD or the Agent in connection with
enforcing the obligations of the Guarantor hereunder, including without
limitation, the reasonable fees and disbursements of counsel (all of the
foregoing being collectively referred to as the "Guaranteed Obligations").
(b) If for any reason any of the Guaranteed Obligations
shall not be paid in full when the same becomes due and payable, the Guarantor
undertakes to pay forthwith each such amount to NBD regardless of any defense
or setoff or counterclaim which the Company may have or assert, and regardless
of any other condition or contingency. If the Guarantor shall make any
payments in respect of the Guaranteed Obligations, the Guarantor shall be
subrogated pro tanto to the rights of NBD in connection therewith, PROVIDED,
HOWEVER, that no such rights of subrogation or any other rights of the
Guarantor against the Company in connection with the transactions contemplated
hereby shall accrue or be exercisable by the Guarantor until all principal of
and accrued and unpaid interest on the Loans and other amounts due under the
Operative Documents shall have been paid in full to the Banks and the Agent and
not be subject to any revocation or rescission.
(c) The date and amount of advances of principal made by NBD in
respect of the Loans and of each payment of principal and interest thereon
received by NBD, and the aggregate principal amount thereof and accrued
interest thereon shown upon the books and records of NBD, and in any
certificate delivered by NBD to the Guarantor in respect thereof, shall be
prima facie evidence of the principal amount and accrued interest owing and
unpaid on the Loans. The failure to record any such information on such books
and records shall not, however, limit or otherwise affect the obligations of
the Company to repay the principal amount of the Loans together with accrued
interest thereon or the obligations of the Guarantor hereunder with respect to
the Guaranteed Obligations.
2. NATURE OF GUARANTY. Subject to paragraph 8(d), this
Guaranty is an absolute and irrevocable guaranty of payment and not a guaranty
of collection and is wholly independent of and in addition to other rights and
remedies of NBD and is not contingent upon the pursuit by NBD of any such
rights and remedies, such pursuit being hereby waived by the Guarantor.
3. WAIVERS AND OTHER AGREEMENTS. The Guarantor hereby
unconditionally (a) waives any requirement that NBD, in the event of any default
by the Company, first make
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GUARANTY AGREEMENT-NBD
57
demand upon, or seek to enforce remedies against, the Company before
demanding payment under or seeking to enforce this Guaranty, (b) covenants that
this Guaranty will not be discharged except by full payment of the Guaranteed
Obligations, (c) agrees that this Guaranty shall remain in full force and
effect without regard to, and shall not be affected or impaired, without
limitation, by any invalidity, irregularity or unenforceability in whole or in
part of any of the Operative Documents, or any limitation on the liability of
the Company thereunder, or any limitation on the method or terms of payment
thereunder which may now or hereafter be caused or imposed in any manner
whatsoever, (d) waives diligence, presentment and protest with respect to, and
any notice of default or dishonor in the payment of any amount at any time
payable by the Company under or in connection with, any of the Operative
Documents, and further waives any requirement of notice of acceptance of, or
other formality relating to, this Guaranty and (e) agrees that the Guaranteed
Obligations shall include any amounts paid by the Company to NBD which may be
required to be returned to the Company or to its representative or to a
trustee, custodian or receiver for the Company.
4. OBLIGATIONS ABSOLUTE. The obligations, covenants, agreements
and duties of the Guarantor under this Guaranty shall not be released, affected
or impaired by any of the following, whether or not undertaken with notice to
or consent of the Guarantor: (a) any assignment or transfer, in whole or in
part, of the Loans, or any of the Operative Documents, or (b) any waiver by NBD
or by any other person of the performance or observance by the Company of any
of the agreements, covenants, terms or conditions contained in any of the
Operative Documents, or (c) any indulgence in or the extension of the time for
payment by the Company of any amounts payable under or in connection with any
of the Operative Documents, or of the time for performance by the Company of
any other obligations under or arising out of any of the Operative Documents,
or the extension or renewal thereof, or (d) the modification, amendment or
waiver (whether material or otherwise) of any duty, agreement or obligation of
the Company set forth in any of the Operative Documents (the modification,
amendment or waiver from time to time of the Credit Agreement, the Note or any
of the Security Documents to which the Company is a party being expressly
authorized without further notice to or consent of the Guarantor), or (e) the
voluntary or involuntary liquidation, sale or other disposition of all or
substantially all of the assets of the Company, or any receivership,
insolvency, bankruptcy, reorganization, or other similar proceedings, affecting
the Company or any of its assets, or (f) the release of any security, if any,
for the obligations of the Company under any of the Operative Documents, or the
impairment of or failure to perfect an interest in any such security, or (g)
the merger or consolidation of the Company or the Guarantor with any other
person, or (h) the release or discharge of the Company or the Guarantor from
the performance or observance of any agreement, covenant, term or condition
contained in any of the Operative Documents, by operation of law, or (i) any
other cause whether similar or dissimilar to the foregoing which would release,
affect or impair the obligations, covenants, agreements or duties of the
Guarantor hereunder.
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GUARANTY AGREEMENT-NBD
58
5. REPRESENTATIONS AND WARRANTIES. As of the date hereof and as of the
date of each Loan made by NBD to the Company, the Guarantor represents and
warrants that:
(a) CORPORATE EXISTENCE AND POWER. The Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of State of Ohio and is duly qualified to do business in each additional
jurisdiction where such qualification is necessary under applicable law except
where the failure to so qualify would not have a material adverse effect on the
Guarantor. The Guarantor has all requisite corporate power to own its
properties and to carry on its business as now being conducted and as proposed
to be conducted, and to execute and deliver this Guaranty and to engage in the
transactions contemplated by this Guaranty.
(b) CORPORATE AUTHORITY. The execution, delivery and
performance by the Guarantor of this Guaranty 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 of any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Guarantor's articles or code of regulations, or of any
contract or undertaking to which the Guarantor is a party or by which it or its
property may be bound or affected.
(c) BINDING EFFECT. This Guaranty is the legal, valid and
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors rights generally and by general principles
of equity (whether applied in a proceeding at law or in equity).
(d) SUBSIDIARIES. Annex I hereto correctly sets forth the
corporate name, jurisdiction of organization, and ownership percentage with
respect to each Subsidiary of the Guarantor. Each such Subsidiary and each
corporation becoming a Subsidiary of the Guarantor after the date hereof is and
will be duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization, and is and will be duly qualified to do
business in each additional jurisdiction where such qualification is or may be
necessary under applicable law except where the failure to so qualify would not
have a material adverse effect on the Guarantor. Each Subsidiary of the
Guarantor has and will have all requisite power to own its properties and to
carry on its business as now being conducted and as proposed to be conducted.
All outstanding shares of capital stock of each class of each corporate
Subsidiary of the Guarantor have been and will be validly issued and are and
will be fully paid and nonassessable and, except as otherwise indicated in
Annex I hereto or disclosed in writing to NBD from time to time, are and will
be owned, beneficially and of record, by the Guarantor or another Subsidiary of
the Guarantor free and clear of any liens, charges, encumbrances or rights of
others whatsoever.
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GUARANTY AGREEMENT-NBD
59
(e) LITIGATION. Except as set forth on Exhibit A, there is no
action, suit or proceeding pending or, to the best of the Guarantor's
knowledge, threatened against or affecting the Guarantor or any of its
Subsidiaries before or by any court, governmental authority or arbitrator,
which if adversely decided might result, either individually or collectively,
in any material adverse change in the business, properties, operations or
conditions, financial or otherwise, of the Guarantor or any of its Subsidiaries
and, to the best of the Guarantor's knowledge, there is no basis for any such
action, suit or proceeding.
(f) FINANCIAL CONDITION. The consolidated balance sheet of the
Guarantor and its Subsidiaries and the consolidated statements of income,
retained earnings and changes in financial position of the Guarantor and its
Subsidiaries for the fiscal year ended August 31, 1994, and certified by Ernst
& Young, independent certified public accountants, and the interim consolidated
balance sheet and interim consolidated statements of income, retained earnings
and changes in financial position of the Guarantor and its Subsidiaries, as of
or for the six-month period, ended on February 26, 1995, copies of which have
been furnished to NBD, fairly present the consolidated financial position of
the Guarantor and its Subsidiaries as at the respective dates thereof, and the
consolidated results of operations of the Guarantor and its Subsidiaries for
the respective periods indicated, all in accordance with generally accepted
accounting principles consistently applied (subject, in the case of said
interim statements, to year-end audit adjustments). There has been no material
adverse change in the business, properties, operations or condition, financial
or otherwise, of the Guarantor or any of its Subsidiaries since August 31,
1994.
(g) CONSENTS, ETC. 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
equity holder of the Guarantor or any of its Subsidiaries, is required on the
part of the Guarantor in connection with the execution, delivery and
performance of this Guaranty or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this Guaranty.
(h) TAXES. The Guarantor and its Subsidiaries have filed all
tax returns (federal, state and local) required to be filed and have paid all
taxes shown thereon to be due, including interest and penalties, except for
those that are being contested in good faith by appropriate proceedings as to
which adequate financial reserves have been established on their respective
books and records for payment thereof.
(i) TITLE TO PROPERTIES. Except as set forth in the financial
statements described in paragraph 5(f) or as otherwise disclosed in the
financial statements delivered to NBD pursuant to paragraph 6(d), the Guarantor
and its Subsidiaries have good and marketable title to, and a valid
indefeasible ownership interest in, all of their respective properties and
assets, free and clear of any lien or security interest, except for (i) liens
for taxes not delinquent or for taxes being contested in good faith by
appropriate proceedings
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GUARANTY AGREEMENT-NBD
60
as to which adequate financial reserves have been established on its
books and records, and (ii) liens created in connection with workers'
compensation, unemployment insurance, and social security, or to secure the
performance of bids, tenders or contracts (other than for the repayment of
borrowed money), leases, statutory obligations, surety and appeal bonds, and
other obligations of like nature made in the ordinary course of business.
6. COVENANTS. The Guarantor agrees that, until the Maturity Date and
thereafter until payment in full of the principal of and accrued interest on
the Notes held by NBD, and the performance of all other obligations of the
Company to NBD under the Credit Agreement, unless NBD shall otherwise consent
in writing:
(a) PRESERVATION OF CORPORATE EXISTENCE, ETC. The Guarantor
shall, and shall cause each of its Subsidiaries to preserve and maintain its
existence and qualify and remain qualified to do business in good standing in
each jurisdiction in which such qualification is necessary under applicable law
except where the failure to so qualify would not have a material adverse effect
on the Guarantor.
(b) COMPLIANCE WITH LAWS, ETC. The Guarantor shall, and shall
cause each of its Subsidiaries to comply in all material respects with all
applicable laws, rules, regulations and orders of any governmental authority,
noncompliance with which could materially and adversely affect the financial
condition or operations of the Guarantor or any of its Subsidiaries or the
legality, validity or enforceability of this Guaranty (such compliance to
include, without limitation, paying before the same become delinquent all
taxes, assessments and governmental charges imposed upon it or upon its
property), except to the extent that compliance with any of the foregoing is
being contested in good faith and by appropriate legal proceedings and with
respect to which adequate financial reserves have been established on the books
and records ofd. the Guarantor or such Subsidiary.
(c) MAINTENANCE OF INSURANCE. The Guarantor shall, and shall
cause each of its Subsidiaries to maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties similarly situated.
(d) REPORTING REQUIREMENTS. The Guarantor shall furnish to NBD the
following:
(i) Within 45 days after the close of each of the
first three quarterly accounting periods in each fiscal year of the Guarantor,
the consolidated statements of financial condition of the Guarantor as at the
end of such quarterly period and the related consolidated statements of
operations, retained earnings and cash
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GUARANTY AGREEMENT-NBD
61
flows for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, all in reasonable detail, prepared in accordance with
generally accepted accounting principles consistently applied throughout the
period involved (except for such changes as are disclosed in such financial
statements or in the notes thereto and concurred in by the independent
certified public accountants) and with the prior year and certified by the
chief financial officer of the Guarantor subject to customary year-end audit
adjustments;
(ii) Within 90 days after the close of each fiscal year of the
Guarantor, the consolidated statements of financial condition of the Guarantor
as at the end of such fiscal year, the related consolidated statements of
operations, shareholders equity and cash flows for such fiscal year, in each
case setting forth comparative figures of the preceding fiscal year, all in
reasonable detail, prepared in accordance with generally accepted accounting
principles consistently applied throughout the period involved (except for such
changes as are disclosed in such financial statements or in the notes thereto
and concurred in by the independent certified public accounts) and with the
prior year and accompanied by an opinion relating thereto of independent
certified public accountants of recognized standing selected by the Guarantor;
(iii) At the time of the delivery of the financial statements
required by paragraph 6(d)(ii), a certificate of the independent public
accountants stating that, in making the examination necessary for expressing an
opinion on such financial statements, nothing came to their attention that
caused them to believe that there is in existence any event of default or, if
in the opinion of such accountants any event of default exists, the certificate
shall state its nature and the length of time it has existed;
(iv) At the time of delivery of the financial statements required by
paragraphs 6(d)(i) and 6(d)(ii), a certificate of the chief financial officer
of the Guarantor to the effect either that such officer is aware of no event
of default or, if he is aware that any event of default exists, specifying the
nature thereof, its period of existence and the action that is proposed to be
taken with respect thereto, and also setting forth the calculations required to
establish whether the Guarantor was in compliance with the provisions of
paragraphs 6(f), 6(g) and 6(h) as at the end of such fiscal period;
(v) Promptly and in any event within three Business Days after the
Guarantor obtains knowledge thereof, notice of (i) any event which constitutes
an event of default (such notice to specify the nature thereof, the period of
existence thereof and the action that is proposed to be taken with respect
thereto) and (ii) any litigation or governmental proceeding pending against the
Company or any Subsidiary
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GUARANTY AGREEMENT-NBD
62
as to which there is a reasonable possibility that it might materially
and adversely affect the business, operations or condition (financial or
otherwise) of the Guarantor and its Subsidiaries taken as a whole;
(vi) Promptly, copies of all regular and periodic financial and
other reports, if any, which the Company or any of its Subsidiaries shall file
with the Securities and Exchange Commission or any governmental agencies
substituted therefor;
(vii) From time to time, and promptly upon each request, such other
information or documents as NBD may reasonably request; PROVIDED, HOWEVER,
that, if the Guarantor has provided NBD with information under the Amcast
Credit Agreement equivalent to that required under subsections (i) through (iv)
above, the Guarantor need not separately provide such information to NBD under
this Agreement.
(e) ACCESS TO RECORDS, BOOKS, ETC. The Guarantor shall, and
shall cause each of its Subsidiaries to, at any reasonable time and from time
to time, permit NBD or any agents or representatives thereof to examine and
make copies of and abstracts from the records and books of account of, and
visit the properties of, the Guarantor and its Subsidiaries, and to discuss the
affairs, finances and accounts of the Guarantor and its Subsidiaries with their
respective officers and employees.
(f) CONSOLIDATION, MERGER AND SALE OF ASSETS. The Guarantor shall
not nor shall it permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) assets constituting (in the aggregate) 25% or
more of the value of the Guarantor's Consolidated Total Assets (as determined
in accordance with generally accepted accounting principles consistently
applied), PROVIDED that (i) the Guarantor may enter into a merger transaction
if it is the surviving entity and no event of default would result therefrom,
(ii) any Subsidiary may merge into, or sell, convey, lease or otherwise dispose
of any or all of its property to the Guarantor, another Subsidiary or any
Person that after giving effect to the foregoing shall constitute a Subsidiary,
PROVIDED that no event of default would result therefrom, and (iii) the
Guarantor shall have the right to sell, merge, or otherwise dispose of all or
any part of the assets of its Stanley G. Flagg & Co. division or to cease in
whole or in part operations of the Stanley G. Flagg & Co. division and deal
with the assets of such division, and/or the proceeds from the sale of such
assets, for accounting purposes as the Guarantor shall determine in accord with
generally accepted accounting principles consistently applied. Such action
with regard to Stanley G. Flagg & Co. shall not be included in the calculation
of the 25% limit referred to in this subparagraph (f).
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GUARANTY AGREEMENT-NBD
63
(g) TANGIBLE NET WORTH. The Guarantor will maintain
Consolidated Tangible Net Worth of not less than $90,000,000 plus 25% of the
Guarantor's cumulative Consolidated Net Income (to the extent said Net Income
is greater than zero) from September 1, 1994, through the end of the
Guarantor's most recent fiscal quarter, such calculation to be revised at the
end of each fiscal quarter.
(h) ADDITIONAL INDEBTEDNESS. The Guarantor will not, and will
not permit any Subsidiary to create, assume, incur or guarantee any
Indebtedness except (i) Indebtedness incurred under this Agreement, (ii) any
Indebtedness which is outstanding as of February 26, 1995, as shown on Exhibit
A hereto, and (iii) any other Indebtedness if after giving effect to the
creation, incurrence, assumption or guarantee thereof, Indebtedness would not
exceed 60% of Consolidated Capitalization.
(i) CHANGES IN BUSINESS. The Guarantor and its Subsidiaries
will not enter into any business which is substantially different from that
presently conducted by them. For purposes of this subparagraph, "substantially
different" means "outside of the metal manufacturing or processing business."
(j) ADDITIONAL LIENS. The Guarantor will not, nor will it
permit any of its Subsidiaries to, create, assume or incur, directly or
indirectly, any Lien on any of its properties or assets except as permitted
under the Amcast Credit Agreement as in effect on the date hereof.
7. EVENTS OF DEFAULT. The occurrence of any of the following events or
conditions shall be deemed an "event of default" hereunder unless waived by NBD
pursuant to paragraph 9:
(a) An event of default under that certain Amended and
Restated Credit Agreement, dated as of June 7, 1995, among the Guarantor, NBD,
The First National Bank of Chicago, Bank One, Dayton, NA, Society National
Bank, and Star Bank, National Association, individually and as agent, as such
agreement may be amended, restated, or refinanced from time to time (the
"Amcast Credit Agreement"); or
(b) The Guarantor shall fail to pay when due any amount payable
under paragraph 1 hereof; or
(c) Any representation or warranty made by the Guarantor in
paragraph 5 hereof or in any other document or certificate furnished by or on
behalf of the Guarantor in connection with this Guaranty shall prove to have
been incorrect in any material respect when made or any material provision of
this Guaranty shall at any time for any reason cease to be valid and binding
and enforceable against the Guarantor, or the validity, binding effect or
enforceability thereof shall be contested by
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GUARANTY AGREEMENT-NBD
64
any person, or the Guarantor shall deny that it has any or further liability or
obligation under this Guaranty, or this Guaranty shall be terminated,
invalidated or set aside, or be declared ineffective or inoperative or in
any way cease to give or provide to NBD the benefits purported to be created
thereby; or
(d) The Guarantor shall default in the due performance or
observance by it of any term, covenant or agreement to be performed or observed
pursuant to paragraph 6 (other than paragraph 6(d)), and such default shall
continue for a period of five days after the Company has knowledge or should
have knowledge of such default; or
(e) The Guarantor shall default in any material respect in the
due performance or observance by it of any term, covenant or agreement (other
than those referred to in subparagraphs (a) through (d) of this paragraph 7,
inclusive) contained in this Agreement and such default shall continue
unremedied for a period of 30 days after the Guarantor shall have become aware
of the existence of such default; or
(f) The Company or any of its Subsidiaries (each a "Designated
Party") shall default in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Indebtedness (other than
under the Credit Agreement), including any and all interest and fees accrued to
the date of default, the aggregate amount of which was at least $5,000,000 at
the time of the default, or any Designated Party shall default in the
performance or observance of any obligation or condition with respect to any
such other Indebtedness if the effect of such default (after giving effect to
any applicable grace period) is to accelerate the maturity of any such
Indebtedness or to permit the holder or holders thereof, or any trustee or
agent for such holders, to cause such Indebtedness to become due and payable
prior to its expressed maturity; or
(g) A judgment or order for the payment of money (if the
aggregate amount involved is at least $1,000,000 in excess of the amount of all
insurance applicable thereto), or any other judgment or order (whether or not
for the payment of money), shall be rendered against or shall affect the
Guarantor or any of its Subsidiaries which causes or could cause a material
adverse change in the business, properties, operations or condition, financial
or otherwise, of the Guarantor or any of its Subsidiaries or which does or
could have a material adverse effect on the legality, validity or
enforceability of this Guaranty, and either (i) such judgement or order shall
have remained unsatisfied for a period of 30 days and the Guarantor or such
Subsidiary shall not have taken action necessary to stay enforce thereof, by
reason of pending appeal or otherwise, prior to the expiration of the
applicable period of limitations for taking such action or, if such action
shall have been taken, a final order
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GUARANTY AGREEMENT-NBD
65
denying such stay shall have been rendered, or (ii) enforcement
proceedings shall have been commenced by any creditor upon any such judgment or
order; or
(h) The occurrence of a Reportable Event that results in or there
is a reasonable possibility that it could result in liability of the Guarantor,
any Subsidiary of the Guarantor or any of their ERISA Affiliates to the PBGC or
to any Plan which is material and adverse to any of them and such Reportable
Event is not corrected within thirty (30) days after the occurrence thereof; or
the occurrence of any Reportable Event which there is a reasonable possibility
that it could constitute grounds for termination of any Plan of the Guarantor,
its Subsidiaries or their ERISA Affiliates by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer any
such Plan and such Reportable Event is not corrected within thirty (30) days
after the occurrence thereof; or the filing by the Guarantor, any Subsidiary of
the Guarantor or any of their ERISA Affiliates of a notice of intent to
terminate a Plan or the institution of other proceedings to terminate a Plan
which is material and adverse to any of them; or the Guarantor, any Subsidiary
of the Guarantor or any of their ERISA Affiliates shall fail to pay when due
any liability to the PBGC or to a Plan which is material and adverse to any of
them; or the PBGC shall have instituted proceedings to terminate, or to cause a
trustee to be appointed to administer, any Plan of the Guarantor, its
Subsidiaries or their ERISA Affiliates; or any person engages in a Prohibited
Transaction with respect to any Plan which results in or there is a reasonable
possibility that it could result in liability of the Guarantor, any Subsidiary
of the Guarantor, any of their ERISA Affiliates, any Plan of the Company, its
Subsidiaries or their ERISA Affiliates, or fiduciary of any such Plan which is
material and adverse to any of them; or failure by the Guarantor, any
Subsidiary of the Guarantor or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f)
of ERISA or Section 412(n) of the Code that results in or there is a reasonable
possibility that it could result in liability of the Guarantor, any Subsidiary
of the Guarantor or any of their ERISA Affiliates to the PBGC or any Plan which
is material and adverse to any of them; or the withdrawal of the Guarantor, any
of its Subsidiaries or any of their ERISA Affiliates from a Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(9a)(2)
of ERISA; or the Guarantor, any of its Subsidiaries or any of their ERISA
Affiliates becomes an employer with respect to any Multiemployer Plan without
the prior written consent of NBD; or
(i) The Guarantor or any of its Subsidiaries shall be dissolved or
liquidated (or any judgment, order or decree therefor shall be entered), or
shall generally not pay its debts as they become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors, or shall institute, or there shall be instituted
against the Guarantor or any of its Subsidiaries, any proceeding or case
seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
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GUARANTY AGREEMENT-NBD
66
relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief or protection of debtor or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its assets, rights, revenues or property, and, if such proceeding is
instituted against the Guarantor or such Subsidiary and is being contested by
the Guarantor or such Subsidiary, as the case may be, in good faith by
appropriate proceedings, such proceedings shall remain undismissed or unstayed
for a period of 60 days; or the Guarantor or such Subsidiary shall take any
action (corporate or other) to authorize or further any of the actions
described above in this subsection; or
(j) OWNERSHIP. The outstanding capital stock of all classes of the
Guarantor entitled to voting power of 25% or more, in the aggregate, for the
election of the Guarantor's directors is owned, or directly or indirectly
controlled, by any one Person or by an Associate of such Person.
8. Remedies.
--------
(a) Upon the occurrence and during the continuance of such event
of default, NBD may, in addition to the remedies provided in Section 6.2 of the
Credit Agreement, enforce its rights either by suit in equity, or by action at
law, or by other appropriate proceedings, whether for the specific performance
(to the extent permitted by law) of any covenant or agreement contained in this
Guaranty or in aid of the exercise of any power granted in this Guaranty and
may enforce payment under this Guaranty and any of its other rights available
at law or in equity.
(b) Upon the occurrence and during the continuance of any event
of default hereunder, NBD is hereby authorized at any time and from time to
time, without notice to the Guarantor (any requirement for such notice being
expressly waived by the Guarantor) to set off and apply against any and all of
the obligations of the Guarantor now or hereafter existing under this Guaranty
any deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by NBD to or for the credit
or the account of the Guarantor and any property of the Guarantor from time to
time in possession of NBD, irrespective of whether or not NBD shall have made
any demand hereunder and although such obligations may be contingent and
unmatured. The rights of NBD under this subparagraph (b) are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which it may have.
(c) To the extent that it lawfully may, the Guarantor agrees
that it will not at any time insist upon or plead, or in any manner whatever
claim or take any benefit or advantage of any applicable present or future
stay, extension or moratorium
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GUARANTY AGREEMENT-NBD
67
law, which may affect observance or performance of the provisions
of this Guaranty, the Credit Agreement, the Notes or any Security Document; nor
will it claim, take or insist upon any benefit or advantage of any present or
future law providing for the evaluation or appraisal of any security for its
obligations hereunder or the Company under the Credit Agreement and under the
Notes prior to any sale or sales thereof which may be made under or by virtue
of any instrument governing the same; nor will it, after any such sale or
sales, claim or exercise any right, under any applicable law, to redeem any
portion of such security so sold.
(d) Notwithstanding anything to the contrary contained
herein, after an Izumi Guarantor Default has occurred and during the related
Forbearance Period, NBD shall not seek to collect from the Guarantor any
amounts due with respect to the Notes under paragraph 1, and no event of
default shall be deemed to have occurred under paragraph 7(b) because such
amounts have not been paid.
9. AMENDMENTS, ETC. This Guaranty may be amended from
time to time and any provision hereof may be waived by the parties hereto. No
such amendment or waiver of any provision of this Guaranty nor consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by NBD, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be delivered or sent to the Guarantor at 7887
Washington Village Drive, P.O. Box 98, Dayton, Ohio 45401-0098, Attention:
Chief Financial Officer, Facsimile No. 513-291-7005, to NBD at 611 Woodward
Avenue, Detroit, Michigan 48226, Attention: Victoria L. Decker, or to such
other address as may be designated by the Guarantor and NBD by notice to the
other party hereto. All notices and other communications shall be deemed to
have been given at the time of actual delivery thereof to such address, or if
sent by certified or registered mail, postage prepaid, to such address, on the
third day after the date of mailing, or in the case of telex notice, upon
receipt of the appropriate answerback, PROVIDED, HOWEVER, that notices to NBD
shall not be effective until received.
11. CONDUCT NO WAIVER; REMEDIES CUMULATIVE. The obligations of the
Guarantor under this Guaranty are continuing obligations and an additional
cause of action shall arise in respect of each event of default hereunder. No
course of dealing on the part of NBD, nor any delay or failure on the part of
NBD in exercising any right, power or privilege hereunder shall operate as a
waiver of such right, power or privilege or otherwise prejudice NBD's rights
and remedies hereunder; nor shall any single or partial exercise thereof
preclude any further exercise thereof or the exercise of any other right, power
or privilege. No right or remedy conferred upon or reserved to NBD under this
Agreement is intended to be exclusive of any other right or remedy, and every
right and remedy shall be
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GUARANTY AGREEMENT-NBD
68
cumulative and in addition to every other right or remedy given hereunder or
now or hereafter existing under any applicable law. Every right and remedy
given by this Agreement or by applicable law to NBD may be exercised from time
to time and as often as may be deemed expedient by NBD.
12. RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms,
covenants, agreements, representations and warranties of the Guarantor made
herein or in any certificate or other document delivered pursuant hereto shall
be deemed to be material and to have been relied upon NBD, notwithstanding any
investigation heretofore or hereafter made by NBD or on NBD's behalf.
13. SUCCESSORS AND ASSIGNS. The rights and remedies of NBD
hereunder shall inure to the benefit of, and the duties and obligations of the
Guarantor hereunder shall be binding upon, the parties hereto and their
respective successors and assigns.
14. GOVERNING LAW. This Guaranty is a contract made under, and the
rights and obligations of the parties hereunder, shall be governed by and
construed in accordance with, the laws of the State of Michigan applicable to
contracts to be made and to be performed entirely with such State.
15. DEFINITIONS; HEADINGS. As used herein the following terms
shall have the following respective meanings:
"AMCAST CREDIT AGREEMENT": shall have the meaning ascribed to
it in paragraph 7(a).
"ASSOCIATE" shall mean any person which, directly or
indirectly, controls or is controlled by or is under common control with
another person and for the purposes of this definition, "control", including
"controlled by" and "under common control with" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting securities or
by contract or otherwise.
"CONSOLIDATED CAPITALIZATION" means the sum of Funded
Indebtedness of the Guarantor plus Consolidated Tangible Net
Worth.
"CONSOLIDATED NET INCOME" means for any period the
after-tax net income determined in accord with generally
accepted accounting principles consistently applied, of the Guarantor and its
Subsidiaries for such period determined on a consolidated basis.
"CONSOLIDATED TANGIBLE NET WORTH" means at any time
the Net Worth of the Guarantor and its Subsidiaries determined on a
consolidated basis after deducting therefrom the amount of all intangible items
reflected therein, including but not limited to
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GUARANTY AGREEMENT-NBD
69
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks, brand names, write-up of assets, any unallocated excess cost of
investments in Subsidiaries over equity in underlying net assets at their dates
of acquisition, and organizational costs but only to the extent such items are
booked by the Guarantor after September 1, 1994.
"CONSOLIDATED TOTAL ASSETS" means at any time the total assets
of the Guarantor and its Subsidiaries determined on a consolidated basis.
"FUNDED INDEBTEDNESS" means all short-term and long-term
interest-bearing Indebtedness, including but not limited to all amounts
outstanding under the Amcast Credit Agreement and the Guarantor's short-term
lines, original issue discount debt and capitalized leases.
"IZUMI GUARANTOR DEFAULT" means a Guarantor Default declared
under the Credit Agreement by reason of any event of default under any Guaranty
other than the Guaranty-NBD.
"LIEN" shall have the meaning ascribed thereto in the Amcast
Credit Agreement.
"NET WORTH" of the Guarantor means the sum of its capital
stock, capital in excess of par or stated value of shares of its capital stock,
retained earnings, and any other account which, in accordance with generally
accepted account principles, constitutes stockholders' equity, less treasury
stock. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement. The headings of the various
subdivisions hereof are for convenience of reference only and shall in no way
modify any of its terms or provisions hereof.
16. CONSTRUCTION OF CERTAIN PROVISIONS. All computations required
hereunder and all financial terms used herein shall be made or construed in
accordance with generally accepted accounting principles unless such principles
are inconsistent with the express requirements of this Guaranty. If any
provision of this Guaranty refers to any action to be taken by any person, or
which such person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such person, whether or
not expressly specified in such provision.
17. INTEGRATION AND SEVERABILITY. This Guaranty embodies the entire
agreement and understanding between the Guarantor and NBD and supersedes all
prior all agreements and understandings relating to the subject matter hereof.
In case one or more of the obligations of the Guarantor under this Guaranty
shall be invalid, illegal or
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GUARANTY AGREEMENT-NBD
70
unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining obligations of the Guarantor shall not in any way be affected
or impaired thereby, and such invalidity, illegality or unenforceability in one
jurisdiction shall not affect the validity, legality or enforceability of the
obligations of the Guarantor under this Guaranty in any other jurisdiction.
18. WAIVER OF JURY TRIAL. NBD and the Guarantor, after consulting
or having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waive any right any of them may have to a trial by jury in
any litigation based upon or arising out of this Guaranty or any related
instrument or agreement or any of the transactions contemplated by this
Guaranty or any course of conduct, dealing, statements (whether oral or
written) or actions of either of them. Neither NBD nor the Guarantor shall
seek to consolidate, by counterclaim or otherwise, any such action in which a
jury trial has been waived with any other 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 NBD or the Guarantor except
by a written instrument executed by each of them.
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GUARANTY AGREEMENT-NBD
71
IN WITNESS WHEREOF, the parties have caused this Guaranty to be duly
executed and delivered as of the day and year first above written.
AMCAST INDUSTRIAL CORPORATION
By: ___________________________
Its: ___________________________
NBD BANK
By: ___________________________
Its: ___________________________
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GUARANTY AGREEMENT-NBD
72
ANNEX I TO
GUARANTY AGREEMENT-NBD
SUBSIDIARIES
------------
Percentage of
Name of Jurisdiction Ownership by Company
Subsidiary of Organization or Other Subsidiaries
- ---------- -------------- --------------------
143
GUARANTY AGREEMENT-NBD
73
EXHIBIT A TO
GUARANTY AGREEMENT-NBD
OUTSTANDING INDEBTEDNESS
------------------------
1. Amcast Credit Agreement (as defined herein)
LITIGATION
----------
144
GUARANTY AGREEMENT-NBD