AMENDMENT NO. 1 to CREDIT AND SECURITY AGREEMENT
EXHIBIT
10.1
AMENDMENT
NO. 1
to
This
AMENDMENT
NO. 1 TO CREDIT AND SECURITY AGREEMENT,
made as
of August 31, 2006 (this “Amendment”), among HAWK
CORPORATION,
a
Delaware corporation, ALLEGHENY
CLEARFIELD, INC.,
a
Pennsylvania corporation,
FRICTION PRODUCTS CO.,
an Ohio
corporation,
HAWK MIM, INC.,
an Ohio
corporation,
HAWK MOTORS, INC.,
a
Delaware corporation,
HAWK PRECISION COMPONENTS GROUP, INC.,
an Ohio
corporation,
▇▇▇▇▇▇, INC.,
a
Delaware corporation,
▇▇▇▇▇ METAL STAMPINGS, INC.,
an Ohio
corporation,
NET SHAPE TECHNOLOGIES LLC,
a
Delaware limited liability company, QUARTER
MASTER INDUSTRIES, INC.,
a
Delaware corporation,
SINTERLOY CORPORATION,
a
Delaware corporation,
▇.▇. ▇▇▇▇▇▇▇ CORP.,
a
Delaware corporation,
▇.▇. ▇▇▇▇▇▇▇ HOLDINGS, INC.,
a
Delaware corporation,
TEX RACING ENTERPRISES, INC.,
a
Delaware corporation,
▇▇▇▇▇▇▇ PRODUCTS GROUP, INC.,
an Ohio
corporation, and
▇▇▇▇▇▇▇
PRODUCTS, LLC,
an Ohio
limited liability company, each as a Borrower and collectively as the Borrowers,
the LENDERS
listed
on the signature pages of this Agreement, KEYBANK
NATIONAL ASSOCIATION,
a
national banking association, as Administrative Agent, and KEYBANK
NATIONAL ASSOCIATION, a
national banking association, as LC Issuer,
WITNESSETH:
WHEREAS,
the
Borrower has been extended certain financial accommodations pursuant to that
certain Credit and Security Agreement, dated as of November 1, 2004, (the
“Credit Agreement”), among the Borrowers, the Lenders, the Administrative Agent,
and the LC Issuer;
WHEREAS,
the
parties desire to amend certain
provisions of the Credit Agreement as set forth herein; and
WHEREAS,
the
Lenders which are signatories hereto constitute all of the Lenders for the
purposes of amending the Credit Agreement pursuant to Section 19.1
thereof;
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, the Borrowers, the Administrative Agent, the Lenders and the
LC
Issuer do hereby agree as follows:
Section
1 DEFINED
TERMS.
Each
defined term used herein and not otherwise defined herein shall have the meaning
ascribed to such term in the Credit Agreement.
Section
2 AMENDMENTS
TO THE CREDIT AGREEMENT.
2.1 Amendment
to Annex II to Credit Agreement. Annex
II
to the Credit Agreement is hereby amended by deleting the existing definition
of
“Adjustment Date” and “Applicable Margin” and replacing it with the following
new definition to read as follows:
“Adjustment
Date”
means
the first (1st) day of each Fiscal Month beginning with September 1, 2006
after the Borrower delivers the Officer’s Certificate containing the calculation
of Average Excess Availability required to be furnished by the Borrowers on
or
before the twentieth (20th) day of each Fiscal Month pursuant to (and complying
with) Section 11.1(d).
“Applicable
Margin”
means,
with respect to any Borrowing: (i) from the Amendment No. 1 Effective Date
until the first Adjustment Date, (x) for the Unused Commitment Fees, 25 bps
per annum and (y) for Revolving Credit Borrowings, zero (0) bps with
respect to Alternate Base Rate Advances and 175 bps per annum with respect
to
LIBOR Rate Advances, and (ii) with respect the first Adjustment Date and
any subsequent Adjustment Date, the percentage per annum applicable to Alternate
Base Rate Borrowings or LIBOR Rate Borrowings, as the case may be, corresponding
to the level of the Average Excess Availability reported on the twentieth (20th)
day of the Fiscal Month immediately preceding such Adjustment Date in the table
set forth below; provided,
however,
that
notwithstanding clauses (i)
and (ii)
above,
to the extent that the Officer’s Certificate required to be delivered following
any Fiscal Month is not delivered by the due date therefor, or (B) any
Event of Default occurs, then the Applicable Margin shall be, from and after
such due date or the date of such Event of Default (as applicable) until the
date on which such financial statements and Officer’s Certificate are delivered
or such Event of Default is no longer continuing (as applicable), the per annum
percentages set forth in Level IV; provided,
further,
however,
that
nothing in herein shall limit the applicability of Section 6.1(c) with
respect to the imposition of a default rate of interest.
|
Level
|
Average
Excess Availability
|
Alternate
Base Rate Margin (bps)
|
LIBOR
Rate Margin (bps)
|
Unused
Commitment
Fee Margin (bps)
|
|
I
|
>$20,000,000
|
0
bps
|
150
bps
|
25
bps
|
|
II
|
>$10,000,000
but
<$20,000,000
|
0 bps
|
175
bps
|
25
bps
|
|
III
|
>$5,000,000
but
<$10,000,000
|
0
bps
|
200
bps
|
25
bps
|
|
IV
|
<$5,000,000
|
0
bps
|
250
bps
|
25
bps
|
2.2 Amendment
to Annex II to the Credit Agreement.
Annex II
to the Credit Agreement is hereby amended by adding the following new definition
of “Amendment No. 1 Effective Date”) and “Average Excess Availability” to Annex
II in the proper alphabetical order:
“Amendment
No. 1 Effective Date” shall mean August 1, 2006.
“Average
Excess Availability” means, with respect to a Person for any period,
the
average daily Excess Availability of the Borrowers as calculated for such
period.
2.3 Amendment
to Section 11.1(d).
Section
11.1(d) of the Credit Agreement shall be amended by deleting the existing
Section 11.1(d) and replacing with the following new
Section 11.1(d):
(d) Officer’s
Certificate.
The
Borrower Representative shall furnish to the Administrative Agent and each
Lender, (1) concurrently with the financial statements delivered in connection
with Sections 11.1(a), a certificate of a Responsible Officer or the
non-officer controller of the Borrower Representative, in his or her capacity
as
a Responsible Officer, setting forth the computations necessary to determine
the
Average Excess Availability of the Borrowers and their consolidated Subsidiaries
for purposed of adjusting the Applicable Margin; (2) concurrently with the
financial statements delivered in connection with Sections 11.1(b) and
11.1(c), a certificate of a Responsible Officer or the non-officer controller
of
the Borrower Representative, in his or her capacity as a Responsible Officer,
setting forth the computations necessary to determine whether the Borrowers
and
their consolidated Subsidiaries are in compliance with the financial covenants
set forth in Section 11.4 of this Agreement; and (3) certifying,
concurrently with the financial statements delivered in connection with
Sections 11.1(a), 11.1(b) and 11.1(c), that: (A) those financial
statements fairly present in all material respects the financial condition
and
results of operations of the Borrowers and their consolidated Subsidiaries
(to
the knowledge of the Responsible Officer with respect to
Section 11.1(a))subject in the case of interim financial statements, to
routine year-end audit adjustments, absence of notes and absence of information
on discontinued operations (with respect to Sections 11.1(a) and 11.1(b))
and (B) no Potential Default or Event of Default then exists or, if any
Potential Default or Event of Default does exist, a brief description of the
Potential Default or Event of Default and the Borrowers’ intentions in respect
thereof.
Section
3 REPRESENTATIONS
AND WARRANTIES.
The
Borrower hereby represents and warrants to the Lenders, the Administrative
Agent
and the LC Issuer as follows:
3.1 The
Amendment. This
Amendment has been duly and validly executed by an authorized executive officer
of the Borrower and constitutes the legal, valid and binding obligation of
the
Borrower enforceable against the Borrower in accordance with its terms. The
Credit Agreement, as amended by this Amendment, remains in full force and effect
and remains the valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms. The Borrower hereby ratifies and
confirms the Credit Agreement as amended by this Amendment.
3.2 Nonwaiver.
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 the Lenders or the Administrative Agent under the Credit Agreement
or
any other Loan Document, or (ii) of any term, provision, representation,
warranty or covenant contained in the Credit Agreement or any other
documentation executed in connection therewith. Further, none of the provisions
of this Amendment shall constitute, be deemed to be or construed as, a waiver
of
any Potential Default or Event of Default under the Credit Agreement as amended
by this Amendment.
3.3 Reference
to and Effect on the Credit Agreement. Upon
the
Effectiveness of this Amendment, each reference in the Credit Agreement amended
hereby to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like
import shall mean and be a reference to the Credit Agreement, as amended by
the
prior amendments thereto and this Amendment 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 amended by the prior amendments thereto and this
Amendment.
Section
4 CONDITIONS
TO EFFECTIVENESS
The
effectiveness of this Amendment is subject to the condition precedent
that:
4.1 Amendment
No. 1 to Credit and Security Agreement.
The
Administrative Agent shall have received an original counterpart of this
Amendment No. 1 to Credit and Security Agreement, executed and delivered by
a duly authorized officer of each Borrower, the Lenders and the LC
Issuer.
Section
5 MISCELLANEOUS.
5.1 Governing
Law.
This
Amendment shall be governed by and construed in accordance with the laws of
the
State of Ohio with out giving effect to the conflict of laws rules
thereof.
5.2 Severability.
In the
event any provision of this Amendment should be invalid, the validity of the
other provisions hereof and of the Credit Agreement shall not be affected
thereby.
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.
IN
WITNESS WHEREOF,
the
Borrowers, the Administrative Agent, the Lenders and the LC Issuer have caused
this Amendment No. 1 to Credit and Security Agreement to be duly executed by
their respective officers or agents thereunto duly authorized as of the date
first written above.
BORROWERS
HAWK
CORPORATION
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
ALLEGHENY
CLEARFIELD, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
FRICTION
PRODUCTS CO.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
HAWK
MIM, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
HAWK
MOTORS, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
HAWK
PRECISION COMPONENTS GROUP, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
▇▇▇▇▇▇,
INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
▇▇▇▇▇
METAL STAMPINGS, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
NET
SHAPE TECHNOLOGIES LLC
By:
Hawk
MIM, Inc., its sole member
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
QUARTER
MASTER INDUSTRIES, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
SINTERLOY
CORPORATION
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
▇.▇.
▇▇▇▇▇▇▇ CORP.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
▇.▇.
▇▇▇▇▇▇▇ HOLDINGS, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
TEX
RACING ENTERPRISES, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
▇▇▇▇▇▇▇
PRODUCTS GROUP, INC.
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
▇▇▇▇▇▇▇
PRODUCTS, LLC
By:
▇▇▇▇▇▇▇ Products Group, Inc.,
its
sole member
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Its:
Vice
President - Finance
ADMINISTRATIVE
AGENT
KEYBANK
NATIONAL ASSOCIATION
as
a
Administrative Agent
/s/
▇▇▇▇ ▇. ▇▇▇▇
By:
▇▇▇▇
▇. ▇▇▇▇
Its:
Vice
President
LENDERS
KEYBANK
NATIONAL ASSOCIATION
as
a
Lender
/s/
▇▇▇▇ ▇. ▇▇▇▇
By:
▇▇▇▇
▇. ▇▇▇▇
Its:
Vice
President
LC
ISSUER
KEYBANK
NATIONAL ASSOCIATION
as
LC
Issuer
/s/
▇▇▇▇ ▇. ▇▇▇▇
By:
▇▇▇▇
▇. ▇▇▇▇
Its:
Vice
President