1
Exhibit 10.10(b)
EXECUTION COPY
AMENDMENT NO.2
TO
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO.2 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment"), made as of this 24th day of December, 1997, among STAR BANK,
NATIONAL ASSOCIATION, a national banking association ("Bank"), HMI INDUSTRIES
INC., a Delaware corporation ("Parent"), and BLISS MANUFACTURING COMPANY, an
Ohio corporation ("Bliss") (Parent and Bliss being sometimes hereinafter
collectively referred to as the "Borrowers" and individually as a "Borrower").
WITNESSETH:
-----------
WHEREAS, the Borrowers and Bank have entered into that certain Amended
and Restated Credit Agreement, dated as of June 6, 1997, as amended by that
certain Waiver and Amendment No.1 to Amended and Restated Credit Agreement
("Amendment No. 1"), dated December 5, 1997 (collectively the "Credit
Agreement") pursuant to which Bank has made certain loans and financial
accommodations available to the Borrowers;
WHEREAS, as of the date of this Amendment, Amendment No. 1 remains
ineffective as a result of the Borrower's failure to satisfy the condition
precedent set forth in Section 4.3 of Amendment No. 1;
WHEREAS, the Borrowers and Bank desire to amend the Credit Agreement as
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Bank and the Borrowers agree as
follows:
SECTION 1. DEFINED TERMS.
-------------------------
Each defined term used herein and not otherwise defined herein has the
meaning ascribed to such term in the Credit Agreement.
SECTION 2. AMENDMENT TO CREDIT AGREEMENT.
-----------------------------------------
The Credit Agreement is amended, effective as of the date all of the
conditions set forth in SECTION 4 hereof shall have been satisfied, as follows:
2
2.1 AMENDMENT TO PRELIMINARY SECTION. The first paragraph following
WITNESSETH in the Credit Agreement is amended in its entirety to read as
follows:
WHEREAS, HMI Incorporated, an Ontario corporation ("HMI Inc."),
▇▇▇▇▇▇ Falls Holding Company, a Delaware corporation ("▇▇▇▇▇▇"),
Tube-Fab Ltd., an Ontario corporation ("Tube-Fab"), Tube Form, Inc., an
Ohio corporation ("Tube Form"), Health-Mor International, Inc., a U.S.
Virgin Islands corporation ("International"), Health-Mor Acceptance
Corporation, a Delaware corporation ("Acceptance"), HMI Acceptance
Corporation, an Ontario corporation ("HMI Acceptance"), and Health-Mor
Acceptance Pty. Ltd., an Australian corporation ("Pty") (HMI Inc.,
▇▇▇▇▇▇, Tube-Fab, Tube Form, International, Acceptance, HMI Acceptance,
Pty and Health-Mor Personal Care Corporation, a Delaware corporation
("Personal Care") being sometimes hereinafter collectively referred to
as the "Guarantor Subsidiaries" and individually as a "Guarantor
Subsidiary"), Borrowers and Bank entered into that certain Credit
Agreement, dated as of August 14, 1996, as amended by that certain First
Amendment to Credit Agreement, dated as of November 15, 1996, and as
further amended by that certain Second Amendment to Credit Agreement,
dated as of December 19, 1996, that certain Third Amendment to Credit
Agreement, dated as of March 7, 1997, and that certain Fourth Amendment
to Credit Agreement, dated as of April 7, 1997 (collectively, the
"Existing Credit Agreement");
2.2 AMENDMENT TO SECTION 1.1. Section 1.1 of the Credit Agreement is
amended by adding the following new definitions in proper alphabetical order:
"SPECIAL TERM LOAN" shall have the meaning ascribed thereto in
SECTION 2.1 hereof.
"SPECIAL TERM LOAN FACILITY" shall have the meaning ascribed
thereto in SECTION 2.1 hereof.
"SPECIAL TERM LOAN B" shall have the meaning ascribed thereto in
SECTION 2.1 hereof.
"SPECIAL TERM LOAN B FACILITY" shall have the meaning ascribed
thereto in SECTION 2.1 hereof.
2.3 AMENDMENT TO SECTION 1.1. The definition of "Term Loans" in Section
1.1 of the Credit Agreement are amended in their entirety to read as follows:
"TERM LOANS" shall mean, collectively, the Bliss Equipment Term Loan,
the Real Estate Term Loan, the Special Term Loan, and the Special Term Loan B.
2
3
2.4 AMENDMENT TO SECTION 2.1. Section 2.1 of the Credit Agreement is
amended in its entirety to read as follows:
2.1 TOTAL FACILITY. Bank will make up to a Twenty Million Dollar
($20,000,000) reducing total credit facility (the "Total Facility")
available to Borrowers, subject to the terms and conditions of this
Agreement and comprised of the following loans or other financial
accommodations advanced, made or made available under the following
facilities (collectively, the "Loans"): (i) Revolving Loans (as
hereinafter defined) to be advanced under the Revolving Loan facility
(the "Revolving Loan Facility"), (ii) a term loan with respect to
certain real property (the "Real Estate Term Loan") to be advanced under
the Real Estate Term Loan facility (the "Real Estate Term Loan
Facility"), (iii) a term loan with respect to machinery and equipment
owned by Bliss (the "Bliss Equipment Term Loan") to be advanced under
the Bliss Equipment Term Loan facility (the "Bliss Equipment Term Loan
Facility"), (iv) a special term loan (the "Special Term Loan") to be
advanced under the Special Term Loan facility (the "Special Term Loan
Facility"), (v) a special term loan (the "Special Term Loan B") to be
advanced under the Special Term Loan B facility (the "Special Term Loan
B Facility"), and (vi) as a portion of the Revolving Loan Facility, a
letter of credit facility (the "Letter of Credit Facility"), all as more
particularly described below.
2.5 AMENDMENT TO SECTION 2. Section 2 of the Credit Agreement is amended
by adding the following new Section 2.18:
2.18 SPECIAL TERM LOAN B FACILITY. The Special Term Loan B under
the Special Term Loan B Facility will be made to Parent in the amount of
Two Million Dollars ($2,000,000) on or after December 24, 1997, upon the
oral or written request of Parent. The principal of the Special Term
Loan B then outstanding, together with and all accrued and unpaid
interest thereon, shall be due and payable upon the earlier to occur of
(i) the effective date of any termination of this Agreement pursuant to
SECTION 11 and/or SECTION 13 hereof, or (ii) March 31, 1998. No
repayment or prepayment of the Special Term Loan B shall be reason for
any relending or additional lending of Special Term Loan B proceeds to
Parent. The Special Term Loan B may be prepaid in whole or in part so
long as such prepayment is accompanied by the fee referred to in SECTION
3.11 hereof. Any payments required to be made pursuant to this SECTION
2.18 shall be in addition to any payments made pursuant to SECTION 2.17
hereof.
2.6 AMENDMENT TO SECTION 3.1. Section 3.1 of the Credit Agreement is
amended in its entirety to read as follows:
3.1 INTEREST ON LOANS. The applicable Borrower shall pay Bank
interest on the average daily outstanding principal amount of its (a)
Revolving Loans and all other Obligations (other than the Letter of
Credit Obligations and the Term Loans) at a per annum rate which shall
vary from time to time equal to the rate announced at Bank from time to
time as its prime rate (the "Prime Rate"), (b) Bliss Equipment Term Loan
and Real Estate
3
4
Term Loan at a per annum rate which shall vary from time to time
equal to the Prime Rate PLUS one-half percent (.50%), (c)
Special Term Loan at a per annum rate which shall vary from time
to time equal to the Prime Rate PLUS two and one-quarter percent
(2.25%), and (d) Special Term Loan B at a per annum rate which
shall vary from time to time equal to the Prime Rate PLUS two
percent (2%), each such rate to be adjusted on the effective
date of any change in the Prime Rate by Bank. The Prime Rate is
determined solely by Bank pursuant to market factors and its own
operating needs and is not necessarily Bank's best or most
favorable rate for commercial or other loans. The per annum rate
of interest applicable at all times after the occurrence of an
Event of Default shall be the applicable rate of interest set
forth above plus an additional two percent (2.00%) per annum.
2.7 ADDITION OF SECTION 3.11. Section 3 of the Credit Agreement is
amended by the addition of the following Section 3.11 in proper numeric order:
3.11 SUCCESS FEE. Borrowers shall pay Bank a success fee of Eighty
Thousand Dollars ($80,000) with respect to the Special Term Loan B on the date
any payment is made upon the Special Term Loan B.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
-----------------------------------------
Each Borrower represents and warrants to Bank as follows:
3.1 THE AMENDMENT. This Amendment has been duly and validly executed by
an authorized executive officer of each Borrower and constitutes the legal,
valid and binding obligation of such Borrower, enforceable against such Borrower
in accordance with its terms.
3.2 CLAIMS AND DEFENSES. Each Borrower hereby represents, warrants and
acknowledges that as of the date of this Amendment, it has no defenses, claims,
counterclaims or setoffs with respect to the Credit Agreement or its Obligations
thereunder or with respect to any actions of the Bank or any of its officers,
directors, shareholders, employees, agents or attorneys, and each Borrower
irrevocably and absolutely waives any such defenses, claims, counterclaims and
setoffs and releases the Bank and each of its officers, directors, shareholders,
employees, agents and attorneys from the same.
3.3 CREDIT AGREEMENT. The Credit Agreement, as previously amended and as
further amended by this Amendment, remains in full force and effect and remains
the valid and binding obligation of each Borrower enforceable against each
Borrower in accordance with its terms. Each Borrower hereby ratifies and
confirms the Credit Agreement, as previously amended and as farther amended by
this Amendment.
3.4 NONWAIVER. Except as otherwise expressly provided herein, the
execution, delivery, performance and effectiveness of this Amendment shall not
operate nor be deemed to be nor construed as a waiver (i) of any right, power or
remedy of Bank under the Credit Agreement, nor (ii) of any term, provision,
representation, warranty or covenant contained in the
4
5
Credit Agreement or any other documentation executed in connection therewith.
Further, except as otherwise specifically set forth herein, none of the
provisions of this Amendment shall constitute, be deemed to be or construed as,
a waiver of any Event of Default under the Credit Agreement, as previously
amended and as further amended by this Amendment. Nor shall this Amendment
constitute, be deemed to be or construed as, consent to the Bliss Sale or the
Bliss Sale Documents.
3.5 REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof', "herein", or words of like import shall mean
and be a reference to the Credit Agreement, as amended hereby, and each
reference to the Credit Agreement in any other document, instrument or agreement
executed and/or delivered in connection with the Credit Agreement shall mean and
be a reference to the Credit Agreement, as previously amended and as further
amended hereby.
3.6 DELIVERY OF BLISS SALE DOCUMENTS. The Borrowers have delivered to
Bank true, correct and complete fully executed copies of that certain Stock
Purchase Agreement, dated December 17, 1997, between Parent and Rhone Capital
LLC, together with all exhibits and schedules thereto, and other agreements,
instruments and other documents executed and/or delivered in connection with
such Stock Purchase Agreement (collectively the "Bliss Sale Documents").
3.7 CONSENTS. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or other
Person is required for the execution, delivery and performance by Borrowers or
any Guarantor Subsidiary, as the case maybe, of this Amendment or any of the
agreements, instruments and documents required to be executed and/or delivered
in connection herewith as conditions precedent hereof (such agreements,
instruments and documents, together with this Amendment, are Collectively
referred to as the "Amendment Documents").
3.8 NO VIOLATION. The execution, delivery and/or performance by
Borrowers or the Guarantor Subsidiaries of the Amendment Documents do not and
will not (i) constitute a violation of any applicable law or breach any
provision contained in the Borrowers' or Guarantor Subsidiaries' Articles or
Certificate of Incorporation or Code of Regulations or By-Laws or contained in
any order of any court or other governmental agency or in any agreement,
instrument or document to which any of them is a party or by which any of them
or their respective properties are bound, or (ii) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of their property.
5
6
SECTION 4. CONDITIONS PRECEDENT TO
----------------------------------
EFFECTIVENESS OF THIS AMENDMENT NO.2
------------------------------------
In addition to all of the other conditions and agreements set forth
herein, the effectiveness of this Amendment is subject to the each of the
following conditions precedent:
4.1 AMENDMENT NO.2 TO AMENDED AND RESTATED CREDIT AGREEMENT. Bank shall
have received an original of this Amendment No.2 to Amended And Restated Credit
Agreement, executed and delivered by a duly authorized officer of each Borrower.
4.2 CONSENT, AGREEMENT AND ACKNOWLEDGMENT. Bank shall have received an
original counterpart of the Consent, Agreement and Acknowledgment to this
Amendment executed and delivered by a duly authorized officer of each Guarantor
Subsidiary.
4.3 BLISS SALE DOCUMENTS. Bank shall have received executed copies of
the Bliss Sale Documents certified as true, correct and complete by a duly
authorized officer of each Borrower.
4.4 PROCEEDINGS OF BORROWERS. Bank shall have received certificates of
the Secretary of each Borrower and each Guarantor Subsidiary dated as of the
date hereof as to (i) true copies of all action taken by each Borrower and each
Guarantor Subsidiary, as the case may be, approving or otherwise relating to the
Amendment Documents, and (ii) the incumbency and signature of the respective
officers of each Borrower and each Guarantor Subsidiary, as the case maybe,
executing the Amendment Documents, together with satisfactory evidence of the
incumbency of each such Secretary.
4.5 PAYMENT OF ALL LEGAL FEES AND EXPENSES. The Borrowers shaH have paid
to Bank all of Bank's legal fees and expenses incurred through the date hereof,
in connection with the Credit Agreement, this Amendment and all other matters,
and documentation relating thereto and which is unpaid as of the date hereof.
4.6 COOPERS & ▇▇▇▇▇▇▇ LETTER. Bank shall have received and
satisfactorily reviewed a letter from Coopers & ▇▇▇▇▇▇▇ explaining the loss
carry-back and containing an estimation of the tax refund which will be due to
Parent.
SECTION 5. MISCELLANEOUS.
------------------------
5.1 GOVERNING LAW. This Amendment has been delivered and accepted at and
shall be deemed to have been made at Cleveland, Ohio. This Amendment shall be
interpreted and the rights and liabilities of the parties hereto determined in
accordance with the laws of the State of Ohio, without regard to principles of
conflict of law.
5.2 SEVERABILITY. Each provision of this Amendment shall be interpreted
in such manner as to be valid under applicable law, but if any provision hereof
shall be invalid
6
7
under applicable law, such provision shall be ineffective to the extent of such
invalidity, without invalidating the remainder of such provision or the
remaining provisions hereof.
5.3 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which, when taken together, shall constitute but one and
the same agreement.
5.4 NO CONSENT. In no event shall Borrower's delivery of, and Bank's
receipt of, the Bliss Sale Documents Constitute, be deemed to be or construed
as, consent to the consummation of the transactions contemplated by the Bliss
Sale Documents. Such consent shall only be given by Bank in writing after its
satisfactory review of the Bliss Sale Documents. Borrowers acknowledge and agree
that the transactions contemplated by the Bliss Sale Documents cannot and will
not be consummated without the Bank's prior written consent. Any breach of the
foregoing shall constitute an Event of Default under the Credit Agreement, as
previously amended, as amended hereby and as the same may be hereafter further
amended.
5.5 CONFESSION OF JUDGMENT. Each Borrower hereby irrevocably authorizes
and empowers any attorney-at-law to appear for such Borrower in any action upon
or in connection with this Amendment at any time after the Loans and/or other
Obligations become due, as herein provided, in any court in or of the State of
Ohio or elsewhere, and waives the issuance and service of process with respect
thereto, and irrevocably authorizes and empowers any attorney-at-law to confess
judgment in favor of Bank against such Borrower, the amount due thereon or
hereon, plus interest as herein provided, and all costs of collection, and
waives and releases all errors in said proceedings and judgments and all rights
of appeal from the judgment rendered. Each Borrower agrees and consents that the
attorney confessing judgment on behalf of such Borrower may also be counsel to
Bank or any of Bank's Affiliates, waives any conflict of interest which might
otherwise arise, and consents to Bank paying such confessing attorney a
reasonable legal fee or allowing such attorney's reasonable fees to be paid from
the proceeds of collection of the Loans and/or Ohhgations or proceeds of any
Collateral, the Premises or any other security for the Loans and the other
Obligations.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
7
8
IN WITNESS WHEREOF, each Borrower has caused this Amendment No.2 to
Amended And Restated Credit Agreement to be duly executed and delivered by its
duly authorized officer as of the date first above written.
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT
CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY
HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
Signed and acknowledged
in the presence of: HMI INDUSTRIES INC.
________________________ By:_______________________________
Name:___________________________________ Its:______________________________
Name:______________________________
WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT
CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY
HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY
GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
Signed and acknowledged
in the presence of: BLISS MANUFACTURING COMPANY
__________________________________________ By:____________________________
Name:_____________________________________ Its:___________________________
Name:______________________________
8
9
STATE OF )
) ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
December, 1997, by ____________________, _____________ of HMI Industries Inc., a
Delaware corporation, on behalf of the company.
-----------------------------
Notary Public
STATE OF )
) ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
December, 1997, by ___________________, ____________ of Bliss Manufacturing
Company, an Ohio corporation, on behalf of the company.
-----------------------------
Notary Public
Accepted at _____________, Ohio,
as of December ___, 1997.
STAR BANK, NATIONAL ASSOCIATION
By:_____________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
9
10
CONSENT, AGREEMENT AND ACKNOWLEDGMENT
-------------------------------------
The undersigned, HMI Incorporated, an Ontario corporation, ▇▇▇▇▇▇ Falls
Holding Company, a Delaware corporation, Tube Form, Inc., and Ohio corporation,
Tube-Fab Ltd., an Ontario corporation, Health-Mor International, Inc., a U.S.
Virgin Islands corporation, Health-Mor Acceptance Corporation, a Delaware
corporation, HMI Acceptance Corporation, an Ontario corporation, Health-Mor
Acceptance Pty. Ltd., an Australian corporation, and Health-Mor Personal Care
Corporation, an Illinois corporation, hereby acknowledge, consent and agree to
the terms of the foregoing Amendment No. 2 to Amended and Restated Credit
Agreement, dated as of December 24, 1997, among Star Bank, National Association,
HMI Industries, Inc. and Bliss Manufacturing Company (the "Amendment"). All
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed thereto in the Amendment. Each of the undersigned represents
and warrants to Bank that its obligations under or in connection with the Credit
Agreement, as amended by the Amendment, remain the valid and binding obligations
of each of the undersigned, enforceable against them in accordance with their
respective terms. Each of the undersigned, having guaranteed the indebtedness of
the Borrowers under the Credit Agreement, as amended by the Amendment, pursuant
to the Amended and Restated Guaranty, and the Canadian Guaranty, (collectively,
the "Guaranties"), the Security Agreement and the Canadian Security Agreements
(collectively, the "Security Agreements"), executed and delivered by the
undersigned to Bank, hereby acknowledges and agrees to the terms of the
foregoing Amendment and to the terms of the Credit Agreement, as amended through
the date hereof. Each of the undersigned represents and warrants to Bank that
the respective Guaranties and the respective Security Agreements to which it is
a party remain the valid and binding obligation of each of the undersigned,
enforceable against it in accordance with its terms. Each of the undersigned
hereby represents, warrants and acknowledges that as of the date of the
Amendment, it has no defenses, claims, counterclaims or setoffs with respect to
the Credit Agreement, as amended by the Amendment, the Guaranties or its
Obligations (as defined in each such document) thereunder or with respect to any
actions of the Bank or any of its officers, directors, shareholders, employees,
agents or attorneys, and each of the undersigned irrevocably and absolutely
waives any such defenses, claims, Counterclaims and setoffs and releases the
Bank and each of its officers, directors, shareholders, employees, agents and
attorneys from the same. Each of the undersigned acknowledges and agrees that
the execution of this Consent, Agreement and Acknowledgment to the Amendment
does not grant to any of the undersigned the right or power to require notice to
the undersigned of, or the consent of any of the undersigned to, any future
waiver, amendment, consent, termination or other modification of, or with
respect to, the Credit Agreement or any other Loan Document.
HMI INCORPORATED ▇▇▇▇▇▇ FALLS HOLDING COMPANY
By________________________________ By___________________________________
Its_______________________________ Its___________________________________
11
TUBE-FAB LTD. HEALTH-MOR PERSONAL CARE CORPORATION
By_____________________ By______________________________
Its____________________ Its______________________________
HEALTH-MOR INTERNATIONAL, INC. HEALTH-MOR ACCEPTANCE CORPORATION
By_____________________ By______________________________
Its____________________ Its______________________________
HMI ACCEPTANCE CORPORATION HEALTH-MOR ACCEPTANCE PTY. LTD.
By_____________________ By______________________________
Its____________________ Its______________________________
TUBE FORM, INC.
By____________________
Its___________________
Dated: December 24, 1997
2
