▇▇▇▇ VALVE COMPANY
THIRD AMENDMENT AGREEMENT
Re: Note Agreements dated as of August 15, 1991
Dated as of
August 1, 1995
To the Institutional Investor
named in Schedule I hereto
which is a signatory to this
Amendment Agreement
Ladies and Gentlemen:
Reference is made to the separate Note Agreements, each dated
as of August 15, 1991, as amended (the "Note Agreements"), between
▇▇▇▇ VALVE COMPANY, INC., an Ohio corporation (the "Company"), and,
respectively, each of the institutional investors listed therein,
under and pursuant to which $11,500,000 aggregate principal amount
of the Company's 13% Senior Secured Notes due September 30, 2001
(the "Outstanding Notes") were originally issued and are presently
outstanding.
The Company now desires to amend certain provisions of the
Note Agreements. You are the owner and holder of the Outstanding
Notes set opposite your name on Schedule I to the Note Agreements.
The Company hereby requests that from and after your acceptance
hereof in the manner hereinafter provided and upon receipt by the
Company of similar acceptances from the holders of all other
Outstanding Notes, said Note Agreements shall be amended in the
respects, but only in the respects, hereinafter set forth.
ARTICLE I
AMENDMENTS TO NOTE AGREEMENTS
1.1. The portion of 2.1 of the Note Agreements beginning with
the first sentence and ending at the end of the table contained
therein shall be and is hereby amended as follows:
"The Company agrees that on (i) the Effective Date
of the Third Amendment Agreement dated as of August 1,
1995, it will prepay and apply and there shall become due
and payable on the principal indebtedness evidenced by
the Notes an amount equal to $133,333 and (ii) the last
day of each calendar quarter beginning September 30, 1995
and ending June 30, 2001, both inclusive, it will prepay
and apply and there shall become due and payable on the
principal indebtedness evidenced by the Notes an amount
equal to the respective principal amount set forth
opposite the period encompassing such fiscal quarter
ending date as indicated in the following table:
PERIOD PREPAYMENT AMOUNT
September 30, 1995
to and including
December 31, 1995 $133,333 as of the end of each fiscal quarter
March 31, 1996 to
and including
December 31, 1996 $250,000 as of the end of each fiscal quarter
March 31, 1997 to
and including
December 31, 1997 $300,000 as of the end of each fiscal quarter
March 31, 1998 to
and including
December 31, 1998 $425,000 as of the end of each fiscal quarter
March 31, 1999 to
and including
December 31, 1999 $500,000 as of the end of each fiscal quarter
March 31, 2000 to
and including
December 31, 2000 $600,000 as of the end of each fiscal quarter
March 31, 2001 to
and including
June 30, 2001 $700,000 as of the end of each fiscal quarter"
1.2. 2.2 of the Note Agreements shall be and is hereby
amended by adding the following subsection thereto:
"(c) The Company shall have the privilege, upon compliance
with 2.5, on the last day of any fiscal quarter on which a
prepayment is made pursuant to 2.1, of prepaying the Notes, in
multiples of $100,000, up to a principal amount equal to the
difference between the principal balance of the Notes outstanding
immediately after giving effect to the prepayment required to be
made on such date pursuant to 2.1 and the Original Scheduled
Principal Balance as of the date of prepayment pursuant to this
2.2(c). Any such prepayment shall be made by payment of the
principal amount to be prepaid together with accrued and unpaid
interest thereon to the date of prepayment and without premium. The
"Original Scheduled Principal Balance" shall mean, as of the date
of any determination of the amount permitted to be prepaid pursuant
to this 2.2(c), the amount as of such date that would have been
outstanding if the Company had prepaid the Notes on such date
pursuant to and in accordance with the provisions of 2.1 hereof,
without giving effect to any amendment or modification of 2.1
after the Closing Date."
1.3. The first sentence of 2.4 shall be and is hereby amended
so that the same shall henceforth read as follows:
"In the event that the Company is unable to deliver an
Unencumbered First Lien to the Noteholders on or before the earlier
of (i) the first date on which Stanchart no longer provides a
senior credit facility to the Company or (ii) December 31, 1996,
the Company will, within three business days after the first to
occur of the dates described in clauses (i) and (ii) above, give
written notice (the "Company Notice") of such failure to all
holders of the Notes who are also holders of the Warrants."
1.4. The last three entries in the table in 5.7 shall be and
are hereby deleted and replaced by the following:
"January 1, 1995 through
December 31, 1995 82%
January 1, 1996 through
December 31, 1996 79%
January 1, 1997 through
December 31, 1997 75%
January 1, 1998 and thereafter 71%"
1.5. 5.11 shall be and is hereby amended in its entirety so
that the same shall henceforth read as follows:
"5.11. Fixed Charge Coverage Ratio. The Company will have, at
the end of each fiscal quarter, a ratio of Net Income Available for
Fixed Charges to Fixed Charges (such calculation to be made in
accordance with Sec 5.26) of not less than the following levels for
each period of four consecutive fiscal quarters (taken as a single
accounting period) ending during the respective period set forth
below (determined as of the end of each fiscal quarter):
PERIOD OF FOUR CONSECUTIVE
FISCAL QUARTERS ENDING ON THE
FOLLOWING DATE OR DURING THE
FOLLOWING PERIODS MINIMUM RATIO
January 1, 1995 through
December 31, 1995 1.25:1.0
January 1, 1996 through
December 31, 1996 1.75:1.0
January 1, 1997 through
December 31, 1997 2.0:1.0
January 1, 1998 and thereafter 2.5:1.0"
1.6. SEC 5.17 of the Note Agreements shall be and is hereby amended as
follows:
SEC 5.17(ii)(y)(a) shall be and is hereby amended by deleting the
reference to the word "Excess" contained therein.
1.7. SEC 6.1(h) of the~Note Agreement shall be and is hereby
amended to read as follows:
"(h) An Event of Default under any Collateral Document or the
Stanchart Facility or (ii) any termination of the Stanchart
Facility on or before January 1, 1997;"
1.8. Paragraph 2 of Exhibit A to the First Amendment-Note
Agreement dated March 29, 1993 to the Note Agreements shall be and
is hereby amended by inserting the following provisions at the end
thereof:
"Notwithstanding anything contained in this paragraph 2 or in
this Note to the contrary, the aggregate principal amount paid or
prepaid hereunder shall not exceed at any time an amount equal to
$571,260 multiplied by the remainder of one minus a fraction the
numerator of which is equal to the then aggregate unpaid principal
amount of the 13% Senior Secured Notes due September 30, 2001 and
the denominator of which is equal to $11,000,000."
1.9. Paragraph 2(a) and paragraph 2(c) of Exhibit A to the
First Amendment-Note Agreement dated March 29, 1993 to the Note
Agreements shall be and is hereby amended by (i) changing the
ratios of "2.25:1" and "2.50:1," respectively, therein, to "2.00:1"
and (ii) changing the number"$1,000,000" therein to "$500,000."
ARTICLE II
CONDITIONS PRECEDENT
2.1. The Noteholders' agreements set forth in this Third
Amendment Agreement are effective subject to the satisfaction of
the following conditions precedent on or before August 31, 1995
(the "Effective Date "):
(a) Each Noteholder shall have received this Third Amendment
Agreement, duly executed by the Company.
(b) The Company shall have (i) extended the Stanchart Facility
for a period ending on or after December 31, 1996 which extension
is hereby consented to by ,he Noteholders and (ii) obtained all
necessary consents of approvals of all necessary parties (including
Stanchart and THV Acquisition Corp.) and shall have delivered
executed copies thereof to you.
(c) The Senior Subordinated Note shall have been amended in a
manner contemplated by SEC 1.8 and SEC 1.9 of Article I above.
(d) The representations and warranties of the Company
contained in Article III hereof shall be true and correct on and as
of the Effective Date
(e) On or prior to the Effective Date, the Company shall have
paid a consent fee to the Noteholders equal to $8,000 in the
aggregate.
(f) On or prior to the Effective Date, the Company shall have
paid the fees and expenses of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel
to the Noteholders.
(g) The Noteholders shall have received such representations
and warranties, legal opinions and closing certificates as they may
request with respect to the transactions contemplated by this Third
Amendment Agreement.
(h) All proceedings taken in connection with the transactions
contemplated by this Third Amendment Agreement (including, without
limitation, any amendment or modification of the Stanchart
Facility) and all documents necessary to the consummation thereof
shall be satisfactory in form and substance to you and you shall
have received a copy of all legal documents or proceedings taken in
connection with the consummation of such transactions in form and
substance satisfactory to you.
ARTICLE III
REPRESENTATIONS
The Company hereby represents and warrants that as of the date
hereof and as of the Effective Date and after giving effect to the
provisions of this Third Amendment Agreement:
(a) The Company is duly incorporated, validly existing and in
good standing under the laws of its state of incorporation.
(b) This Third Amendment Agreement, and the Financing
Documents are within the corporate powers of the Company (if the
Company is a party), and have been duly authorized by all necessary
corporate action on the part of the Company and constitute legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms.
(c) No Default or Event of Default under the Note Agreements
has occurred and is continuing.
ARTICLE IV
MISCELLANEOUS
4.1 The capitalized terms used in this Third Amendment
Agreement shall have the respective meanings specified in the Note
Agreements unless otherwise herein defined or the context hereof
shall otherwise require.
4.2 Except as amended herein, all other terms and provisions
of the Note Agreements are hereby ratified, confirmed and approved
in all respects.
4.3 Any and all notices, requests, certificates and other
instruments, including the Notes, may refer to the "Note
Agreements" without making specific reference to this Third
Amendment Agreements, but nevertheless all such references shall be
deemed to include this third Amendment Agreement unless the context
shall otherwise require.
4.4 This Third Amendment Agreement and all covenants herein
contained shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereunder. All
covenants made by the Company herein shall survive the closing and
the delivery of this Third Amendment Agreement.
4.5 The Company will pay and/or reimburse all expenses of the
Noteholders in connection with the negotiation, preparation,
execution and delivery of this Third Amendment Agreement and the
transactions contemplated hereby.
4.6 This Third Amendment Agreement may be executed in any
number of counter parts, each executed counterpart constituting an
original but all together only one
Very truly yours,
▇▇▇▇ VALVE COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
its Chairman and CEO
The foregoing Amendment Agreement and the amendments referred
to therein are hereby accepted and agreed to as of August 1, 1995,
and the undersigned hereby confirms that on August 1, 1995 it held
Outstanding Notes of the Company as indicated on Schedule I to the
Note Agreements and that on the date of actual execution hereof it
continues to hold such Outstanding Notes.
RHODE ISLAND HOSPITAL TRUST NATIONAL
BANK, as Trustee for the Textron
Collective Investment Trust B
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Assistant Vice President
The ▇▇▇▇ ▇▇▇▇▇▇ Investment Management
Corporation, as Agent
BALBOA LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Vice President
The ▇▇▇▇ ▇▇▇▇▇▇ Investment Management
Corporation, as Agent
BALBOA LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Vice President
Each of the undersigned, severally acknowledges and agrees to
the foregoing Amendment Agreement and all prior amendments and
modification so any Financing Documents and any guaranty thereof
and hereby ratifies and confirms any and all of its respective
obligations under any Financing Documents (as defined in the Note
Agreements) and any guaranty thereof to which it is a party or by
which it is bound.
HVHC, Inc.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its President
TRANSTECH INDUSTRIES, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Chairman