<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended August 31, 1995 Commission file number 1-9967
--------------- ------
AMCAST INDUSTRIAL CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 31-0258080
- ----------------------- ------------------
(State of Incorporation) (I.R.S. employer
identification no.)
7887 Washington Village Drive, Dayton, Ohio 45459
- -----------------------------------------------------------------------------
(Address of principal executive officers) (Zip Code)
291-7000 (Area Code 513)
- -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
COMMON SHARES, WITHOUT PAR VALUE
PREFERRED SHARE PURCHASE RIGHTS
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
------ ------
Aggregate market value of common stock, no par value, held by non-affiliates
of the registrant (assuming only for the purposes of this computation that
directors and officers may be affiliates) as of October 13, 1995--$158,428,042.
Number of common shares outstanding, without par value, as of October 13,
1995--8,558,125 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV-Portions of Annual Report to Shareholders for the year
ended August 31, 1995.
Part III--Portions of Proxy Statement for the Annual Meeting of Shareholders
to be held on December 13, 1995 filed November 7, 1995.
Index to exhibits at page 15 of this report.
<PAGE> 2
PART I
------
ITEM 1 - BUSINESS
- -----------------
Amcast Industrial Corporation, an Ohio corporation organized in 1869, and
its subsidiaries (called collectively "Amcast" or the "Company") are engaged in
the business of producing fabricated metal products, valves and controls, and
cast and tubular metal products, in a variety of shapes, sizes, and metals for
sale to end users directly and through sales representatives and distributor
organizations and to original equipment manufacturers. Manufacturing
facilities are located in five states, primarily in the eastern half of the
United States. The Company's business operations are conducted through three
divisions and nine wholly-owned subsidiaries. Its subsidiaries include Amcast
Industrial Ltd., an Ontario, Canada corporation; Elkhart Products Corporation
(Elkhart), an Indiana corporation; WheelTek, Inc. (WheelTek), an Indiana
corporation; Amcast Industrial Investment Corporation, a Delaware corporation;
Amcast Automotive, Inc. (formerly Midwest Marketing Services Corporation), a
Michigan corporation; Amcast Industrial Financial Services, Inc., an Ohio
corporation; Amcast Industrial Sales Corporation, a U.S. Virgin Islands
corporation; Amcast Casting Technologies, Inc., an Indiana Corporation and
Amcast Precision Products, Inc., a California corporation. Amcast Casting
Technologies, Inc. owns 60% of a jointly controlled partnership formed with
Izumi Industries, Ltd. of Japan.
Effective August 31, 1995, the Company decided to retain the brass pipe
fittings business of the Stanley G. Flagg & Co. division, previously reported
as a discontinued operation. See Discontinued and Retained Operations note in
the Company's Annual Report to Shareholders for the year ended August 31, 1995,
Exhibit 13.1, page 228 herein.
The Company operates in two business segments--1) Flow Control Products
and (2) Engineered Components. Information concerning the net sales, operating
profit and identifiable assets of each segment for years 1993 through 1995
appears under "Business Segments" in the Notes to Consolidated Financial
Statements in the Company's Annual Report to Shareholders for the year ended
August 31, 1995, such information is incorporated herein by reference and is
filed as Exhibit 13.1 to this report. Amcast has no foreign manufacturing
operations and export sales to customers in foreign countries are not material.
FLOW CONTROL PRODUCTS
- ---------------------
The Flow Control Products segment (Flow Control) includes the business
of the Superior Valve division (Superior Valve), the Elkhart subsidiary, Flagg
Brass division, and Amcast Industrial Ltd. Superior Valve manufactures
valves and accessories used in air conditioning and refrigeration systems, and
compressed gas cylinder valves for the welding, specialty, carbonic, and
medical gas industries. Elkhart produces wrot copper fittings for use in
residential and commercial water systems and markets brass pipe fittings.
Flagg Brass produces brass pipe fittings for the marine and industrial markets.
Amcast Industrial Ltd. is the common Canadian marketing arm for Amcast's Flow
Control segment manufacturing units.
The Company's Flow Control business is a leading supplier of pipe
fittings for the industrial, commercial, and residential construction markets,
valves utilized in air-conditioning and refrigeration systems, and industrial
compressed gas applications. These products are sold through distributors and
wholesalers. Shipments are made by truck from Company locations directly to
customers. The competition is comprised of a number of manufacturers of parts
for air conditioning, refrigeration, and plumbing systems, and valves and
controls. The Company believes that competition in this segment is based on a
number of factors including product quality, service, delivery, and value.
2
<PAGE> 3
ITEM 1 - BUSINESS (cont'd)
- -----------------
FLOW CONTROL PRODUCTS (cont'd)
- ---------------------
Most of the Flow Control business is based on customer purchase orders
for their current product requirements and such orders are filled from Company
inventory. Orders are not considered firm beyond a 90-day period.
See Properties at Item 2 of this report for information on the Company's
facilities which operate in this segment.
ENGINEERED COMPONENTS
- ---------------------
The Engineered Components segment produces cast and fabricated metal
products principally for sale to original equipment manufacturers in the
transportation, construction, air conditioning, refrigeration, and aerospace
industries. The Company's manufacturing processes involve the melting of raw
materials for casting into metal products having the configuration,
flexibility, strength, weight, and finish required for the customer's end use.
The Company also custom fabricates copper and aluminum tubular parts. The
Company manufactures products on a high-volume, medium-volume, and specialized
basis and its metal capabilities include aluminum, steel, brass, and copper.
Products manufactured by this segment include castings for suspension, air
conditioning and anti-lock braking systems, master cylinders, differential
carriers and cast aluminum wheels for use on automobiles and light trucks, and
parts for use in heating and air conditioning systems. The Company also
designs and manufactures close-tolerance aluminum and specialty steel
investment castings and related items for sale to aviation and aerospace
companies. Delivery is mostly by truck from Amcast locations directly to
customers.
Amcast is not solely dependent on a single customer. However, a
significant portion of the Company's Engineered Components business is directly
or indirectly dependent on the major automobile manufacturers. The Company's
net sales to various divisions of General Motors Corporation in 1995 were
$120.1 million. No other customer accounted for more than 10% of consolidated
sales in 1995.
The Company's non-aerospace business of the Engineered Components segment
is on a "blanket" order basis and is generally based on supplying a percentage
of the customer's annual requirements for a particular part. Customers issue
firm releases and shipping schedules each month against their blanket orders
depending on their current needs. As a result, order backlog varies from month
to month and is not considered firm beyond a 30-day period. Amcast believes
that price, product quality, and delivery are the principal bases of
competition within the industry.
The order backlog of the aerospace business was $19.6 million at August
31, 1995, and $23.4 million at August 31, 1994. The backlog at August 31,
1995, is expected to result in revenue of $10.8 million during 1996.
See Properties at Item 2 of this report for information on the Company's
facilities which operate in this segment.
GENERAL INFORMATION
- -------------------
Raw materials essential to the business are purchased from suppliers
located in the general vicinity of each operating facility. Availability of
these materials is judged to be adequate. The Company does not anticipate any
material shortage that will alter production schedules during the coming year.
Amcast owns a number of patents and patent applications relating to the
design of its products. While Amcast considers, in the aggregate, these
patents are important to operations, it
3
<PAGE> 4
ITEM 1 - BUSINESS (cont'd)
- -----------------
GENERAL INFORMATION (cont'd)
- -------------------
believes that the successful manufacture and sale of its products generally
depend more on the Company's technological know-how and manufacturing skills.
Capital expenditures related to compliance with federal, state, and local
environmental protection regulations for 1996 and 1997 are not expected to be
material. Management believes that operating costs related to environmental
protection will not have a materially adverse effect on future earnings or the
Company's competitive position in the industry.
The number of persons employed by Amcast averaged 2,400 in 1995, 2,100 in
1994, and 1,900 in 1993.
No material portion of Amcast's business is seasonal.
RECENT DEVELOPMENTS
- -------------------
Effective November 1, 1995, the Company entered into a new $50 million,
ten-year credit agreement with two institutional investors, Principal Mutual
Life Insurance Company, Des Moines, Iowa, and Northwestern Mutual Life
Insurance Company, Milwaukee, Wisconsin. The notes will carry an interest rate
of 7.09% and will have an average term of eight and one half years. The
proceeds of the notes will be used to retire existing bank debt, fund Amcast's
capital expenditures for expansion, as well as other general corporate and
business purposes. See Exhibit 4.10, page 145 herein.
4
<PAGE> 5
ITEM 2 - PROPERTIES
- -------------------
The following table provides certain information relating to the Company's
principal facilities as of October 13, 1995:
<TABLE>
<CAPTION>
SQUARE
FACILITY FOOTAGE USE
- ----------------------------- ------- ------------------------------------
Flow Control Products Segment
- -----------------------------
<S> <C> <C>
SUPERIOR VALVE DIVISION 108,200 High and low pressure specialty
Washington, Pennsylvania valve manufacturing plant,
warehouse, sales and general offices
ELKHART PRODUCTS 222,000 Copper fittings manufacturing
CORPORATION SUBSIDIARY plant, warehouse, and sales and
Elkhart, Indiana general offices
Fayetteville, Arkansas 107,800 Copper fittings manufacturing
plant
AMCAST INDUSTRIAL LTD. 20,214 Distribution warehouse and branch
SUBSIDIARY sales office for Flow Control
Burlington, Ontario Canada Products
FLAGG BRASS DIVISION 150,000 Brass foundry, machining
Stowe, Pennsylvania operations, warehouse, and sales
and general offices
Engineered Components Segment
- -----------------------------
ELKHART PRODUCTS 105,748 Custom fabricated copper and
CORPORATION SUBSIDIARY aluminum tubular products
Geneva, Indiana manufacturing plant
AMCAST PRECISION 70,000 Aluminum and specialty steel
PRODUCTS, INC. SUBSIDIARY investment casting foundry
Rancho Cucamonga, California
META-MOLD DIVISION 133,000 High-volume, aluminum alloy
Cedarburg, Wisconsin permanent-mold foundry
Richmond, Indiana 97,300 High-volume, aluminum alloy
permanent-mold foundry
WHEELTEK, INC. 139,788 Cast aluminum automotive wheels
SUBSIDIARY
Fremont, Indiana
Gas City, Indiana 152,000 Cast aluminum automotive wheels
SUSPENSION COMPONENTS 188,000 Cast, machined and assembled
DIVISION aluminum suspension components
Wapakoneta, Ohio -- under construction.
</TABLE>
5
<PAGE> 6
ITEM 2 - PROPERTIES (cont'd)
- -------------------
<TABLE>
<CAPTION>
SQUARE
FACILITY FOOTAGE USE
- ------------------------------------ ------- ----------------------
<S> <C> <C>
AMCAST AUTOMOTIVE, INC. 8,840 Automotive component sales,
SUBSIDIARY product development and
Southfield, Michigan engineering center offices
Corporate
- ---------
CORPORATE CENTER 16,281 Executive and general offices
Dayton, Ohio
</TABLE>
The land and building in Rancho Cucamonga, California, are leased under a
5-year lease, with a requirement that Amcast purchase the property at the fair
market price at the lease expiration in 1997. The land and building in
Burlington, Ontario, are leased under a 3-year lease expiring in 1998. The
land in Richmond and Gas City, Indiana is leased under 99 year leases, expiring
in 2091. The Corporate offices are being leased for five years expiring in
1998. The Amcast Automotive offices are being leased for five years expiring
in the year 2000, with an option for a five year renewal. All other properties
are owned by the Company.
A portion of the land and building at Fayetteville, Arkansas is subject
to a mortgage in favor of Bank One, Dayton, NA, to secure the payment of a
$5,050,000 bond issue dated December 1, 1991, and maturing December 1, 2004.
The Company's operating facilities are in good condition and are suitable
for the Company's purposes. Utilization of capacity is dependent upon customer
demand. During 1995, productive capacity utilization ranged from 61% to 92%,
and averaged 82% of the Company's total capacity.
6
<PAGE> 7
ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
Refer to "Commitments and Contingencies" in the Notes to Consolidated
Financial Statements of the Company's Annual Report to Shareholders for the
year ended August 31, 1995, Exhibit 13.1., page 235 herein.
The Company's Flagg division, is a defendant in UNITED STEEL WORKERS OF
AMERICA VS. STANLEY G. FLAGG & CO., INC. filed on March 27, 1995 before the
National Labor Relations Board, Fourth Region (Case No. 4-CA-23069). In August
1994, Flagg declared that negotiations with the Steelworkers Union relating to
a new labor contract for approximately 121 employees at its Stowe, Pennsylvania
facility had reached impasse. Flagg then implemented the last offer made to
the Union. The Union claims, among other things, that Flagg's declaration of
an impasse was improper and is seeking lost wages since August 1, 1994 and
other relief. A hearing has been scheduled before the National Labor
Relations Board for January 1996. The Company believes that if it has any
liability, such liability would be subject to various offsets and would not be
material to its results of operations.
Allied Signal, Inc. has brought a superfund private cost recovery and
contribution action against the Company in the United States District Court for
the Southern District of Ohio, Western Division, which is captioned
ALLIED-SIGNAL, INC. V. AMCAST INDUSTRIAL CORPORATION (Case No. C-3-92-013).
The action involves the Goldcamp Disposal Site in Ironton, Ohio. Allied-Signal
has taken the lead in remediating the site and has estimated that its total
costs for the remediation may reach $30 million. Allied is seeking a
contribution from the Company in an amount equal to 50 percent of the final
remediation costs. A trial in this proceeding was completed in February 1995,
but no judgment is anticipated until after certain post-trial proceedings are
completed. The Company believes its responsibility with respect to the
Goldcamp Site is limited, primarily due to the nature of the foundry sand waste
it disposed of at the site. The Company believes that if it has any liability
at all in regard to the Goldcamp Site, that liability would not be material to
its financial position or results of operations.
The Company is also a defendant in a lawsuit captioned PUBLIC INTEREST
RESEARCH GROUP, INC., ET AL. V. STANLEY G. FLAGG & CO., ET AL., filed in the
United States District Court for the Eastern District of Pennsylvania (Case No.
89-2137). In this proceeding, it is alleged that the content of zinc and other
minerals in the waste water discharged at the Company's Stowe, Pennsylvania
facility exceeded the level allowed under the applicable permit during the
period from October 1984 through October 1988. The suit seeks the assessment
of penalties. The Company had believed that penalties, if any, would not be
material because the discharge has been in compliance with the permit since at
least early 1990 and the proceedings had been inactive for more than four years
prior to March 16, 1995. On March 16, 1995, the Court moved the case to the
current docket from the civil suspense file. While the possibility of a
penalty of $ 25,000 per day for each day in the period during which the
minerals in the waste water discharge exceeded the level allowed in the
applicable permit is again at issue, the Company believes that such penalties
would not be material to its financial position or results of operations.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None
7
<PAGE> 8
ITEM 4A - EXECUTIVE OFFICERS OF REGISTRANT
- ------------------------------------------
Leo W. Ladehoff, age 63, has been a Director since 1978, Chairman of the
Board of the Company since December 1980, Chief Executive Officer from May 1979
to March 1995, and President of the Company from September 1990 to December
1993. Mr. Ladehoff was also President of the Company from December 1978 until
November 1986.
John H. Shuey, age 49, has been President and Chief Executive Officer
since March 1995 and a Director since March 1994. Mr. Shuey was President and
Chief Operating Officer from December 1993 to March 1995. He was Executive
Vice President from February 1991 to December 1993. From 1986 to 1991, Mr.
Shuey was Senior Vice President, Finance and Chief Financial Officer at AM
International (producer of business graphics equipment used in preparation and
reproduction of information).
Thomas K. Walker, age 54, was appointed President of Amcast Automotive,
beginning August 1995. He was President of ITT Automotive's North American
operations from 1992 to 1995. Mr. Walker was President of Allied Signal
Automotive Catalyst Co. in Tulsa, Oklahoma from 1985 to 1992.
Dennis A. Bertram, age 58, has been Senior Vice President, Operations of
Amcast Automotive since August 1995. From May 1992 until his recent
appointment, he was President and General Manager of the same group. Prior to
that, he was Vice President of Operations for WheelTek.
J. Randall Caraway, age 44, has been President of Amcast Precision
since March 1991. From August 1990 to March 1991 he was Vice
President/General Manager of the Ontario Division. From 1988 to 1990 Mr.
Caraway was President of Coastcast in California. Prior to his role of
President he was Vice President of Operations of Coastcast.
David L. Ewing, age 47, has been President of the Flow Control Products
Group since January 1994 and Vice President/General Manager of Elkhart Products
Corporation, Plumbing Division since April 1990. From May 1989 to April 1990
Mr. Ewing was President of Sensus Technologies. Prior to that, he was
President of the coupling division of Rockwell International in TexarKana,
Arkansas.
Michael N. Powell, age 48, has been Vice President/General Manager of
Superior Valve Company since April 1994. Mr. Powell was President and Chief
Operating Officer of Versa Technologies, Inc. in Racine, Wisconsin from May
1991 to December 1993. Prior to that he was a Senior Vice President for Mark
Controls Corporation in Skokie, Illinois.
Douglas D. Watts, age 50, has been Vice President, Finance since August
1994. From 1987 to August 1994 Mr. Watts held various financial management
positions with General Cable Corporation, of which the most recent post was
Vice President and Controller. Prior to that, he was Vice President, Finance
and Chief Financial Officer of LCP Chemicals and Plastics Inc., Edison, New
Jersey.
William L. Bown, age 49, has been Vice President and Controller since
June 1992. From November 1983 to May 1992 Mr. Bown was Controller of
Worthington Industries, Inc. in Columbus, Ohio.
8
<PAGE> 9
ITEM 4A - EXECUTIVE OFFICERS OF REGISTRANT (cont'd)
- ------------------------------------------
Denis G. Daly, age 53, has been Vice President, Legal Affairs and
Secretary, since January 1990. From January 1988 to December 1989 he worked in
private practice at the law firm of Thompson, Hine, and Flory.
William J. Durbin, age 50, has been Vice President, Human Resources,
since July 1984.
Myron E. Frye, age 56, has been Vice President of Purchasing since
November 1992. From March 1983 to November 1992 he was President of Purchasing
/ Materials Group, Inc. in Naperville, Illinois.
Michael R. Higgins, age 49, has been Treasurer since January 1987.
Yeshwant P. Telang, age 70, has been Senior Vice President, Technology
and Competitive Manufacturing, since November 1991. He was Vice President,
Technology from January 1985 to November 1991.
Officers of Amcast are elected at the Board of Directors' first meeting
following the annual meeting of shareholders and hold office until the first
meeting of the board following the next Annual Meeting of Shareholders.
PART II
-------
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- --------------------------------------------------------------
STOCKHOLDER MATTERS
-------------------
Amcast common stock is listed on the New York Stock Exchange, ticker
symbol AIZ. As of August 31, 1995, there were 8,555,875 of the Company's
common shares outstanding, and there were approximately 7,400 shareholders of
Amcast's common stock, including shareholders of record and the Company's
estimate of beneficial holders.
Range of Stock
Prices Dividends
--------------------
High Low Per Share
---- --- ---------
1995
- ----
First Quarter $ 23 3/8 $ 19 3/8 $ .13
Second Quarter 22 1/4 18 3/8 .13
Third Quarter 20 5/8 17 1/2 .13
Fourth Quarter 20 16 3/4 .14
1994
- ----
First Quarter $ 20 3/4 $ 20 1/4 $ .12
Second Quarter 25 3/4 25 1/8 .12
Third Quarter 25 7/8 21 3/8 .12
Fourth Quarter 22 20 .13
9
<PAGE> 10
PART II (cont'd)
-------
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- --------------------------------------------------------------
STOCKHOLDER MATTERS (cont'd)
-------------------
See Long-Term Debt and Credit Arrangement note in the Company's Annual
Report to Shareholders for the year ended August 31, 1995, Exhibit 13.1, page
231 herein for other information required by this item.
ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
See "Selected Data" of the Company's Annual Report to Shareholders for
the year ended August 31, 1995, Exhibit 13.1, page 222 herein.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
See "Results of Operations", "Liquidity", and "Capital Resources" of the
Company's Annual Report to Shareholders for the year ended August 31, 1995,
Exhibit 13.1, pages 218-220 herein.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
See "Financial Statements and Notes", together with the report thereon of
Ernst & Young LLP and "Quarterly Financial Data (Unaudited)" of the Company's
Annual Report to Shareholders for the year ended August 31, 1995, Exhibit 13.1,
pages 223-241 herein.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None
PART III
--------
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
The information required by this item relating to directors of the
Company is incorporated herein by reference to that part of the information
under "Election of Directors" beginning on page 2 of the Company's Proxy
Statement for its Annual Meeting of Shareholders to be held on December 13,
1995. Information concerning executive officers of the Company appears under
"Executive Officers of Registrant" at Part I, pages 8 and 9, of this Report.
ITEM 11 - EXECUTIVE COMPENSATION
- --------------------------------
The information required by this item is incorporated herein by reference
to "Executive Compensation" on pages 6 through 12 of the Company's Proxy
Statement for its Annual Meeting of Shareholders to be held on December 13,
1995.
10
<PAGE> 11
PART III (cont'd)
--------
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- -------------------------------------------------------------
MANAGEMENT
----------
The information required by this item is incorporated herein by reference
to "Security Ownership of Directors, Nominees and Officers" on page 5 and
"Security Ownership of Certain Beneficial Owners" on page 15 of the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held on December
13, 1995.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
The information required by this item is contained on pages 9 and 12 in
the Company's Proxy Statement for its Annual Meeting of Shareholders to be held
on December 13, 1995, which is incorporated herein by reference.
PART IV
-------
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
- --------------------------------------------------------------
ON FORM 8-K
-----------
(a) Documents filed as part of this report.
1. Financial statements:
The following financial statements of Amcast Industrial Corporation
and subsidiaries, included in the Annual Report to Shareholders for
the year ended August 31, 1995, are incorporated by reference at
Item 8 of this report.
Consolidated Statements of Operations -
Years Ended August 31, 1995, 1994, and 1993.
Consolidated Statements of Financial Condition -
August 31, 1995 and 1994.
Consolidated Statements of Shareholders' Equity -
Years Ended August 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows -
Years Ended August 31, 1995, 1994, and 1993.
Notes to Consolidated Financial Statements
11
<PAGE> 12
PART IV (cont'd)
-------
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
- --------------------------------------------------------------
ON FORM 8-K (cont'd)
-----------
2. Consolidated financial statement schedule:
Schedule Page Number
Number Description In This Report
-------- ------------------------------- --------------
II Valuation and qualifying accounts
and reserves - August 31, 1995,
1994, and 1993 14
All other financial statement schedules are omitted because they
are not applicable or because the required information is shown in
the financial statements and notes.
3. Exhibits - See Index to Exhibits (page 15 hereof).
4. Form 8-K - During the quarter ended August 31, 1995, the Company
did not file any reports on Form 8-K.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 22 day of November 1995.
AMCAST INDUSTRIAL CORPORATION
(Registrant)
By /s/John H. Shuey
---------------------------
John H. Shuey
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.
Signature Title Date
- ------------------- --------------- -------------
/s/John H. Shuey President, Chief Executive November 22, 1995
- -------------------
John H. Shuey Officer, Director
(Principle Executive Officer)
/s/Douglas D. Watts Vice President, Finance November 22, 1995
- -------------------
Douglas D. Watts (Principle Financial Officer)
/s/William L. Bown Vice President and Controller November 22, 1995
- ------------------
William L. Bown (Principle Accounting Officer)
*Leo W. Ladehoff Chairman of the Board,
Director November 22, 1995
*James K. Baker Director November 22, 1995
*Walter E. Blankley Director November 22, 1995
*Peter H. Forster Director November 22, 1995
*Ivan W. Gorr Director November 22, 1995
*Earl T. O'Loughlin Director November 22, 1995
*William G. Roth Director November 22, 1995
*R. William Van Sant Director November 22, 1995
*The undersigned John H. Shuey, by signing his name hereto, does sign and
execute this annual report on Form 10-K on behalf of each of the above-named
directors of the registrant pursuant to powers of attorney executed by each
such director and filed with the Securities and Exchange Commission as an
exhibit to this report.
By /s/John H. Shuey
----------------------
John H. Shuey
Attorney in Fact
13
<PAGE> 14
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
AMCAST INDUSTRIAL CORPORATION AND SUBSIDIARIES
(Thousands of dollars)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col.D Col.E
- -----------------------------------------------------------------------------------------------------------------------------------
Additions
--------------------------------
Balance Charged to Charged to
Beginning Costs and Other Balance at
Description of Period Expenses Accounts Deductions End of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deducted From Asset Accounts
Reserves for unrealized
losses on properties and other
assets held for sale:
Year ended August 31, 1995 $ 3,073 $ 1,136(2) $ (1,138)(3) $ 3,071
Year ended August 31, 1994 $ 11,370 $ (8,297)(1) $ 3,073
Year ended August 31, 1993 $ 11,117 $ 270 $ (17) $ 11,370
</TABLE>
(1) Includes loss on the sale of assets ($2.2 million) and a revised estimate
of operating losses to disposal ($6.1 million) of the discontinued
operation.
(2) Revised estimate of unrealized loss on sale of assets.
(3) Loss on sale of assets.
14
<PAGE> 15
INDEX OF EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------- -------------------------------------------------------------- -------------
<S> <C> <C>
3 ARTICLES OF INCORPORATION AND BY-LAWS:
3.1 Articles of Incorporation of Amcast Industrial
Corporation - incorporated by reference from Form
10-K for the year ended August 31, 1987.
3.2 Code of Regulations of Amcast Industrial
Corporation - incorporated by reference from
Form 10-K for the year ended August 31, 1987.
4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY
HOLDERS, INCLUDING INDENTURES:
4.1 $60,000,000 amended and restated Revolving Credit
Agreement between Amcast Industrial
Corporation and Star Bank, The First National Bank of
Chicago, Bank One, Dayton, NA, Society National Bank,
and National Bank of Detroit dated June 7, 1995. 20
4.2 Loan Agreement between the City of Elkhart, Indiana,
and Elkhart Products Corporation, dated as of February
1, 1988, for $2,050,000, Economic Development
Revenue Refunding Bonds, Series 1988. +
4.3 $20,000,000 Senior Note Agreement between
Amcast Industrial Corporation and Principal
Mutual Life Insurance Company (formerly
Bankers Life Company), dated May 1, 1986,
as amended - incorporated by reference
from Form 10-K for the year ended August
31, 1987.
4.4 Amendment Agreement, dated July 24, 1995, to the
$20,000,000 Senior Note Agreement between Amcast
Industrial Corporation and Principal Mutual Life
Insurance Company, dated May 1, 1986. 64
4.5 $10,000,000 Senior Note Agreement between
Amcast Industrial Corporation and Principal
Mutual Life Insurance Company dated
September 1, 1989, as amended - incorporated
by reference from Form 10-K for the year ended
August 31, 1989.
4.6 Amendment Agreement, dated July 24, 1995, to the
$10,000,000 Senior Note Agreement between Amcast
Industrial Corporation and Principal Mutual Life Insurance
Company, dated September 1, 1989. 68
</TABLE>
15
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INDEX TO EXHIBITS (cont'd)
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------- -------------------------------------------------------------- -------------
<S> <C> <C>
4.7 Loan Agreement by and between the City of Fayetteville,
Arkansas, and Amcast Industrial Corporation, dated as of
December 1, 1991, for $5,050,000 City of Fayetteville,
Arkansas, variable/fixed rate demand Industrial
Development Revenue Refunding Bonds, Series 1992. +
4.8 Lease Agreement between PNC Leasing Corp., lessor, and
Amcast Industrial Corporation, lessee, dated July 15, 1992
incorporated by reference from Form 10-K for the year
ended August 31, 1993.
4.9 Amcast guarantee of $15,000,000 of the $25,000,000 Credit
and Intercreditor Agreement between Casting Technology
Company (a joint venture partnership between Amcast
Industrial Corporation and Izumi Industries, Ltd.) and
National Bank of Detroit and The Asahi Bank,
Ltd., and a copy of the Creditor and Intercreditor
Agreement, dated July 28, 1995. 72
4.10 $50,000,000 Note Agreement between Amcast Industrial
Corporation and Principal Mutual Life Insurance Company
and The Northern Mutual Life Insurance Company, dated
November 1, 1995. 145
10 MATERIAL CONTRACTS:
10.1 Amcast Industrial Corporation Employee Share-
builder Plan effective August 26, 1987 -
incorporated by reference from Form 10-K for
the year ended August 31, 1989.
10.2 Amcast Industrial Corporation 1981 Stock
Option Plan - incorporated by reference from
Form 10-K for the year ended August 31, 1988.
10.3 Amcast Industrial Corporation Annual Incentive
Plan effective September 1, 1982 -incorporated
by reference from Form 10-K for the year ended
August 31, 1988.
10.4 Deferred Compensation Agreement for Directors
of Amcast Industrial Corporation - incorporated
by reference from Form 10-K for the year ended
August 31, 1988.
10.5 Executive Agreement between Amcast
Industrial Corporation and Leo W. Ladehoff,
Chairman of the Board and former Chief Executive
Officer of the Company, dated March 3, 1995 -
</TABLE>
16
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INDEX TO EXHIBITS (cont'd)
-----------------
<TABLE>
<CAPTION>
Exhibit Located at
Number Description Numbered Page
- ------- ------------------------------------------------------------- -------------
<S> <C>
MATERIAL CONTRACTS (cont'd)
incorporated by reference from Form 10-Q for the
quarter ended May 28, 1995.
10.6 Indemnification Agreement for Directors of
Amcast Industrial Corporation, effective
October 30, 1987 - incorporated by reference
from Form 10-Q for the quarter ended
February 28, 1988.
10.7 First Master Benefit Trust Agreement between
Amcast Industrial Corporation and Bank One,
Dayton, NA, effective March 11, 1988 -
incorporated by reference from Form 10-Q
for the quarter ended February 28, 1988.
10.8 Amcast Industrial Corporation 1989 Stock
Incentive Plan, effective October 19, 1988 -
as amended, effective December 9, 1992 -
incorporated by reference from Form 10-Q
for the quarter ended February 28, 1994.
10.9 Amcast Industrial Corporation 1989 Director
Stock Option Plan, effective October 19, 1988 -
incorporated by reference from Registration
Statement on Form S-8 (Reg. No. 33-28084)
dated April 11, 1989.
10.10 Amcast Industrial Corporation Severance
Agreements effective March 1, 1990 - as amended,
effective October 1, 1992 - incorporated by reference
from Form 10-K for the year ended August 31, 1992.
10.11 Amcast Industrial Corporation Long-Term
Incentive Plan effective September 1, 1991 -
incorporated by reference from Form 10-K for
the year ended August 31, 1992.
10.12 Amcast Industrial Corporation Nonqualified
Supplementary Benefit Plan, effective
May 29, 1991 - incorporated by reference
from Form 10-K for the year ended
August 31, 1994.
10.13 Change of Control Agreement between Amcast Industrial
Corporation and John H. Shuey, Chief Executive Officer,
effective August 14, 1995. 205
</TABLE>
17
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INDEX TO EXHIBITS (cont'd)
-----------------
<TABLE>
<CAPTION>
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Number Description Numbered Page
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<S> <C>
13 ANNUAL REPORT TO SECURITY HOLDERS:
13.1 Amcast Industrial Corporation Annual Report to
Shareholders for year ended August 31, 1995.
Those portions of the Annual Report as are
specifically referenced under Parts I, II, and IV of
this report are filed herein. 218
21 SUBSIDIARIES OF THE REGISTRANT:
Amcast Industrial Corporation has nine wholly-owned
subsidiaries which are included in the consolidated
financial statements of the Company. Information
regarding these subsidiaries is set forth below:
Amcast Industrial Limited
Jurisdiction of Incorporation: Ontario, Canada
Name Under Which Business Is Done: Amcast Industrial Limited
Elkhart Products Corporation
Jurisdiction of Incorporation: Indiana
Name Under Which Business Is Done: Elkhart Products Corporation
WheelTek, Inc.
Jurisdiction of Incorporation: Indiana
Name Under Which Business Is Done: WheelTek, Inc.
Amcast Precision Products, Inc.
Jurisdiction of Incorporation: California
Name Under Which Business Is Done: Amcast Precision Products, Inc.
Amcast Industrial Investment Corporation
Jurisdiction of Incorporation: Delaware
Name Under Which Business Is Done: Amcast Industrial
Investment Corporation
Amcast Industrial Financial Services, Inc.
Jurisdiction of Incorporation: Ohio
Name Under Which Business is Done: Amcast Industrial
Financial Services, Inc.
Amcast Industrial Sales Corporation
Jurisdiction of Incorporation: U.S. Virgin Islands
Name Under Which Business is Done: Amcast Industrial
Sales Corporation
Amcast Automotive, Inc.
Jurisdiction of Incorporation: Michigan
Name Under Which Business is Done: Amcast Automotive, Inc.
Amcast Casting Technologies, Inc.
Jurisdiction of Incorporation: Indiana
Name Under Which Business is Done: Amcast Casting Technologies, Inc.
</TABLE>
18
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23 CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Ernst & Young LLP dated
November 17, 1995, with respect to the
incorporation by reference of
their report dated October 10, 1995 into this
Annual Report (Form 10-K), the inclusion of the
financial statement schedules listed in Item 14(a)(2)
to the financial statements covered by their report
dated October 10, 1995, and material incorporated by
reference into Amcast Industrial Corporation's
Post-Effective Amendment No. 1 to Registration
Statement No. 33-2876 on Form S-8, on Registration
Statements on Form S-8 (Registration Nos. 33-18690,
33-28080, 33-28084, 33-38176 and 33-61290),
and on Registration Statement No. 33-28075 on
Form S-3 242
24 POWER OF ATTORNEY:
24.1 Powers of attorney of persons who are indicated
as having executed this Annual Report Form 10-K 243
on behalf of another.
27 FINANCIAL DATA SCHEDULE:
27.1 Article 5 of Regulation S-X Financial Data Schedule
Form 10-K for the year ended August 31, 1995 251
</TABLE>
+ Indicates that the document relates to a class of indebtedness that does not
exceed 10% of the total consolidated assets of the Company and that the
Company will furnish a copy of the document to the Commission upon its
request.
19
<PAGE> 1
Exhibit 4.1
AMCAST INDUSTRIAL CORPORATION
________________
$60,000,000
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
________________
DATED AS OF JUNE 7, 1995
20
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.01 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.06 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.07 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.08 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.09 Increased Costs, Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.10 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 Election Revision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.12 Extension of the Revolver Period . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.13 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.14. Proceeds; Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.01 Commitment Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.02 Voluntary Termination of Commitments . . . . . . . . . . . . . . . . . . . . . . . . 13
3.03 Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.02 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.03 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.01 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.02 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.02 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.03 Payment of Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.04 Inspection of Books and Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.05 Maintenance of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.07 Preservation of Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . 18
6.08 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.09 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.10 Consolidation, Merger and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . 19
6.11 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.12 Additional Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.13 Changes in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
21
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<TABLE>
<S> <C>
Section 7. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8. Representations, Warranties and Agreement . . . . . . . . . . . . . . . . . . . . . 21
8.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.02 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.05 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.06 Use of Proceeds; Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.07 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.08 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.01 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.07 Calculations; Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.08 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.10 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.11 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.12 The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
22
<PAGE> 4
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this
"Agreement"), dated as of June 7, 1995, among AMCAST INDUSTRIAL CORPORATION
(the "Company"), an Ohio corporation, the commercial banks listed on the
signature pages hereto (each a "Bank" and, collectively, the "Banks") and STAR
BANK, NATIONAL ASSOCIATION, acting in the manner and to the extent described in
Section 9.12 (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Banks, the Company and the Agent are parties to a
certain Amended and Restated Revolving Credit Agreement dated as of September
30, 1992, (the "Original Agreement"); and
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Company the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. DEFINITIONS
As used herein, the following terms shall have the meanings
herein specified unless the context otherwise requires. Defined terms in this
Agreement shall include in the singular number the plural and in the plural
number the singular:
1.01 "Acquisition" shall mean the purchase or other acquisition
of in excess of 5% of the stock (or other evidences of ownership) of any Person
or the purchase or acquisition of all or substantially all of the assets of any
Person or any division, profit center or other similar subpart of any Person.
1.02 "Agent" shall have the meaning provided in the first
paragraph of this Agreement.
1.03 "Agent's Fee" shall have the meaning provided in Section
3.03.
1.04 "Agreement" shall mean this credit agreement as the same
may hereafter be modified, supplemented or amended.
1.05 "Applicable Margin" shall mean at any time with respect to
each Fixed Rate Loan, (x) in the case of CD Rate Loans the applicable
percentage in excess of the Fixed CD Rate referred to in Section 2.07 and (y)
in the case of Eurodollar Loans, the applicable percentage in excess of the
Quoted Rate referred to in Section 2.07.
1.06 "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.
1.07 "Bank" shall have the meaning provided in the first
paragraph of this Agreement.
1.08 "Borrowing" shall mean the incurrence of one Type of Loan
or Term Loan from all the Banks on a given date, having in the case of Fixed
Rate Loans the same Interest Period, pursuant to Section 2.03.
23
<PAGE> 5
-2-
1.09 "Business Day" shall mean (i) for all purposes other than
as covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of Cincinnati, Ohio a legal holiday or a day on
which banking institutions are authorized by law or other government actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar Market.
1.10 "Cash Flow" shall mean the Company's Consolidated Net
Income plus depreciation and amortization for the four fiscal quarters
immediately preceding the date the measurement is calculated.
1.11 "CD Rate Loan" shall mean a Loan or Term Loan bearing
interest at the rates provided in Section 2.07(b).
1.12 "Certificate of Deposit Rate" shall mean the consensus bid
rate determined by the Agent for the bid rates per annum, at approximately
10:00 a.m. (New York time) on the first day of the Interest Period for which
such Certificate of Deposit Rate is to be applicable of two or more New York or
other money center certificate of deposit dealers of recognized standing
selected by the Agent for the purchase at face value from the Agent of
certificates of deposit in an aggregate amount approximately comparable to the
CD Rate Loan of the Agent to which such Certificate of Deposit Rate is to be
applicable and with a maturity equal to the Interest Period for such CD Rate
Loan.
1.13 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations thereunder.
1.14 "Commitment" shall mean, for each Bank, the amount set
forth opposite its name in Annex I hereto, as same may be reduced from time to
time in accordance with the provisions of this Agreement.
1.15 "Company" shall have the meaning provided in the first
paragraph of this Agreement, PROVIDED that for purposes of Sections 6.06, 7 and
8.08, "Company" shall be deemed to include any member (whether or not
incorporated) of a group which the Company or any of its Subsidiaries is a
member and which is under common control with the Company or any of its
Subsidiaries within the meeting of Section 414(c) of the Code or Section
1301(b) of Title 29 of the United States Code.
1.16 "Consolidated Capitalization" shall mean the sum of Funded
Debt of the Company plus Consolidated Tangible Net Worth.
1.17 "Consolidated Current Assets" shall mean the current
assets of the Company and its Subsidiaries determined on a consolidated basis
determined in accord with generally accepted accounting principles consistently
applied.
1.18 "Consolidated Current Liabilities" shall mean the current
liabilities of the Company and its Subsidiaries determined on a consolidated
basis determined in accord with generally accepted accounting principles
consistently applied.
1.19 "Consolidated Net Income" shall mean for any period the
after tax net income determined in accord with generally accepted accounting
principles consistently applied, of the Company and its Subsidiaries for such
period determined on a consolidated basis.
1.20 "Consolidated Tangible Net Worth" shall mean at any time
the Net Worth of the Company and its Subsidiaries determined on a consolidated
basis after deducting therefrom (i)
24
<PAGE> 6
-3-
the amount of all intangible items reflected therein, including but not limited
to 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 the dates of acquisition, and organizational costs but only to the extent
such items are booked by the company after February 26, 1995.
1.21 "Consolidated Total Assets" shall mean at any time the
total assets of the Company and its Subsidiaries determined on a consolidated
basis.
1.22 "Control" shall have the meaning associated to it by
generally accepted accounting principles.
1.23 "Debt" shall mean, with respect to any Person, all
indebtedness for borrowed money of such Person which in accordance with
generally accepted accounting principles would be shown on the consolidated
balance sheet of such Person as a liability; all rental obligations under
leases required to be capitalized under generally accepted accounting
principles; all guarantees and other contingent obligations of such Person in
respect of, or obligations to purchase or otherwise acquire, Debt of others;
the principal amount of all Debt of Persons other than Subsidiaries of such
Person if such Person is obligated under a Maintenance Agreement with respect
to such Persons, not in excess of the amount of any limitation on aggregate
cumulative payments under such Maintenance Agreement; and Debt of others
secured by any Lien upon property owned by such Person, whether or not assumed;
all obligations of such Person in respect of letters of credit (other than
letters of credit required by insurers to satisfy worker's compensation bonding
requirements), PROVIDED that (i) Debt shall not include lease obligations under
operating leases which are not required to be capitalized under generally
accepted accounting principles, (ii) Debt shall not include the presently
outstanding secured loans in the original principal amount of $700,000 and
$350,000 from the City of Fremont, Indiana to WheelTek, Inc., and (iii) Debt
shall not include Non-Recourse Debt to the extent (and only to the extent) that
such Non-Recourse Debt does not exceed $5,000,000 in the aggregate.
1.24 "Default" shall mean any event, act or condition which
with notice, or lapse of time, or both, would constitute an Event of Default.
1.25 "Designated Party" shall have the meaning provided in
Section 7(f).
1.26 "Effective Date" shall have the meaning provided in
Section 5.01.
1.27 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974 as amended from time to time. Section references to ERISA are to
ERISA as in effect at the date of this Agreement and any subsequent provisions
of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
1.28 "ERISA Affiliate" shall mean each trade or business
(whether or not incorporated) which together with the Company or a Subsidiary
would be deemed to be a "single employer" within the meaning of Section 4001 of
ERISA.
1.29 "Eurodollar Loan" shall mean any Loan or Term Loan bearing
interest at the rates provided in Section 2.07.
1.30 "Event of Default" shall have the meaning provided in
Section 7.
1.31 "Expiry Date of the Revolver Period" shall mean the
earlier of the occurrence of an Event of Default or March 31, 1998, unless
extended as provided in Section 2.12 hereof, or, if such Day is not a Business
Day, the immediately preceding Business Day.
25
<PAGE> 7
-4-
1.32 "Expiry Date" of the Term Loan Period shall mean the
earlier of the occurrence of an Event of Default or April 1, 2000 unless the
term period is extended as a result of the extension of the Revolver Period as
provided in Section 2.12 hereof or, if such Day is not a Business Day, the
immediately preceding Business Day.
1.33 "Fixed CD Rate" shall mean, with respect to each Interest
Period, the sum (rounded up to the nearest 1/100 of 1% of (i) the rate obtained
by dividing (x) the Certificate of Deposit Rate for such Interest Period by (y)
a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) applicable during
such Interest Period to a negotiable certificate of deposit in excess of
$100,000 with a maturity equal to such Interest Period of any member bank of
the Federal Reserve System, PLUS (ii) the then daily net annual assessment rate
as estimated by the Agent for determining the current maximum annual assessment
payable by the Banks to the Federal Deposit Insurance Corporation for insuring
such certificates of deposit.
1.34 "Fixed Rate Loan" shall mean and include any CD Rate Loan
and any Eurodollar Loan.
1.35 "Funded Debt" shall mean all short and long term interest
bearing debt, including but not limited to, all amounts outstanding under this
Agreement and the Company's short term bank lines, original issue discount debt
and capitalized leases.
1.36 "Interest Determination Date" shall mean each date for the
determination of the Quoted Rate or the Certificate of Deposit Rate, as the
case may be, for any Interest Period (i.e., two Business Days' prior to the
first day of the Interest Period, in the case of the Quoted Rate, and the first
day of the Interest Period, in the case of the Certificate of Deposit Rate).
1.37 "Interest Period" shall have the meaning specified in
Section 2.08.
1.38 "Interim Maturity Date" shall mean each date other than
the Expiry Date on which Loans mature.
1.39 "Investment" shall mean any investment made after February
26, 1995 including, but not limited to (i) any investments in real estate, (ii)
any investments Joint Ventures (iii) any investments in Subsidiaries, and (iv)
any investments in Persons which, by the nature of such investments, do not
transmit Control of the relevant Person to the Company.
1.40 "Joint Venture" shall mean any association with one or
more Persons to undertake a commercial or business enterprise.
1.41 "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
1.42 "Loan" shall have the meaning specified in Section 2.01.
1.43 "Maintenance Agreement" shall mean any agreement,
contingent or otherwise, pursuant to which a Person, with respect to Debt of
any Person other than a Subsidiary of such Person, obligates itself directly or
indirectly (i) to purchase such Debt or any property constituting security
therefor; (ii) to advance or supply funds (x) for the purchase or payment of
such Debt, or (y) to maintain working capital or any other balance sheet or
income statement condition, or otherwise to advance or make available funds for
the purchase or payment of such Debt; (iii) to lease property or to purchase
securities or other property or services primarily for the purpose of assuring
the owner of such Debt of the ability of such Person to make payment of the
Debt; or
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(iv) otherwise to assure (other than through a direct guarantee of such Debt)
the owner of such Debt against loss in respect thereof.
1.44 "Margin Stock" shall have the meaning provided such term
in Regulation U of the Board of Governors of the Federal Reserve System.
1.45 "Net Worth" of a Person shall mean 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 accounting principles, constitutes stockholders' equity, LESS,
treasury stock.
1.46 "Non-Recourse Debt" shall mean Debt of Amcast Industrial
Financial Services, Inc. evidenced by a Lien wherein liability is limited to
the security without any liability of the Company or its Subsidiaries (other
than Amcast Industrial Financial Services, Inc.) for any deficiency.
1.47 "Note" shall have the meaning specified in Section 2.05(a).
1.48 "Notice of Borrowing" shall have the meaning provided in
Section 2.03.
1.49 "Notice Office" shall have the meaning provided in Section
2.03.
1.50 "Original Agreement" shall have the meaning provided in
the first WHEREAS clause hereof.
1.51 "Payment Office" shall have the meaning provided in
Section 2.04.
1.52 "PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
1.53 "Person" shall mean and include any individual, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or agency, department or instrumentality thereof.
1.54 "Plan" shall mean any multiemployer plan, multiple
employer plan or single employer plan maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries contributes, as
the context may require.
1.55 "Prime Lending Rate" shall mean the rate which the Agent
announces from time to time at its principal office as its prime rate for
domestic unsecured commercial loans.
1.56 "Prime Rate Loan" shall mean any Loan or Term Loan bearing
interest at the rates provided in Section 2.07(a).
1.57 "Quarterly Payment Date: shall mean the last Business Day
of each March, June, September and December of each year commencing June 30,
1995.
1.58 "Quoted Rate" shall mean the rate obtained by dividing (i)
the offered quotation to banks rated (for short term obligations) AA or higher
by Standard and Poor's Corporation in the interbank Eurodollar market by the
Agent for U.S. dollar deposits of amounts in immediately available funds
comparable to the outstanding principal amount of the Eurodollar Loan of the
Agent with maturities comparable to the Interest Period for which a Quoted Rate
determined with reference to such offered rate will apply as of 10:00 a.m.
(New York time) two Business Days prior to the commencement of such Interest
Period by (ii) a percentage equal to 100% minus the maximum stated rate of all
reserve requirements as specified in Regulation D
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including, without limitation, any marginal, emergency, supplemental, special
or other reserves, that would be applicable to any member bank of the Federal
Reserve System during such Interest Period in respect of eurocurrency or
eurofunding lending or liabilities.
1.59 "Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
1.60 "Reportable Event" shall mean any event set forth in
Section 4043(b) of ERISA (with respect to which the 30 day notice requirement
has not been waived by PBGC).
1.61 "Required Banks" as of a particular date shall mean Banks
having a least 100% of the Total Commitment.
1.62 "Restricted Margin Stock" shall mean at any time for
determination thereof all of the Margin Stock owned by the Company to the
extent the value of such Margin Stock does not exceed 25% of the Consolidated
Total Assets subject to the provisions of Sections 6.09 and 6.10.
1.63 "Roll-Over Borrowing" shall mean a Borrowing of Loans or
Term Loans on any Interim Maturity date wherein the aggregate principal amount
of the Loans or Term Loans being incurred equals or is less than the aggregate
principal amount of the Loans or Term Loans maturing on the date of such
Borrowing.
1.64 "Subsidiary" shall mean any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by the Company directly or indirectly through
Subsidiaries. The term "Subsidiaries" shall not be construed to include
Casting Technology Company, a partnership in which the Company is a general
partner.
1.65 "Term Loan" shall be any loan made pursuant to the
provision of Section 2.13 hereof.
1.66 "Term Loan Repayment" shall have the meaning specified in
Section 2.13
1.67 "Term Note" shall have the meaning specified in Section
2.05(c).
1.68 "Total Commitment" shall mean $60,000,000, as such amount
may be reduced from time to time pursuant to Section 3.02.
1.69 "Total Debt" shall mean the Debt of the Company and its
Subsidiaries determined on a consolidated basis.
1.70 "Type" shall mean any type of Loan, I.E., whether a Prime
Rate Loan, a CD Rate Loan or a Eurodollar Loan.
1.71 "Unrestricted Margin Stock" shall mean all of the Margin
Stock of the Company and its Subsidiaries which is not Restricted Margin Stock.
1.72 "Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device,
telegraph or cable.
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Section 2. AMOUNT AND TERMS OF CREDIT.
2.01 COMMITMENTS. Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees at any time and from time to time
prior to the Expiry Date of the Revolver Period (all capitalized terms used
herein shall have the meaning specified therefor in Section 1 unless otherwise
defined herein) to make loans (each a "Loan" and collectively the "Loans") to
the Company, which Loans (x) shall, at the option of the Company, be either
Prime Rate Loans, CD Rate Loans or Eurodollar Loans, provided that all Loans
made pursuant to the same Borrowing shall be of the same Type, (y) may be
repaid and reborrowed in accordance with the provisions hereof and (z) shall
not exceed in aggregate principal amount at any time outstanding such Bank's
Commitment.
2.02 MINIMUM AMOUNT OF EACH BORROWING. The aggregate principal
amount of each Borrowing hereunder shall (x) in the case of Fixed Rate Loans,
be not less than $2,500,000 and (y) in the case of Prime Rate Loans, be not
less than $1,000,000 and, in each case, if greater, shall be in an integral
multiple of $500,000.
2.03 NOTICE OF BORROWING. (a) Whenever the Company desires to
make a Borrowing (including a Roll-Over Borrowing) hereunder, it shall give
written notice (or telephonic notice, confirmed in writing) to the Agent at its
office located at 425 Walnut Street, Cincinnati, Ohio 45201 (the "Notice
Office") no later than (x) Noon (Cincinnati time) on the date of Borrowing in
the case of each Prime Rate Loan to be made hereunder, (y) 10:30 A.M.
(Cincinnati time) on the date of Borrowing in the case of each CD Rate Loan to
be made hereunder and (z) noon (Cincinnati time) on the second Business Day
preceding the date of Borrowing in the case of each Eurodollar Loan to be made
hereunder. Each such notice (each a "Notice of Borrowing") shall specify (x)
the aggregate principal amount of the Loans to be made pursuant to such
Borrowing, (y) the date of Borrowing (which shall be a Business Day), and (z)
whether the Loans or Term Loans being made pursuant to such Borrowing are to be
initially maintained as Prime Rate Loans, CD Rate Loans or Eurodollar Loans and
the Interest Period to be applicable thereto. The Agent shall promptly give
each Bank telephonic notice (confirmed in writing) of the proposed Borrowing,
of such Bank's proportionate share thereof and of the other matters covered by
the Notice of Borrowing. If any Bank requests that Notices of Borrowing
requesting CD Rate Loans or Eurodollar Loans be given by the Company at times
earlier than those set forth above, the Company shall comply with such request,
provided that such earlier times shall not be earlier than the third Business
Day preceding the date of the Borrowing.
(b) Unless the Company shall have given the Agent (x) a Notice
of Borrowing requesting that Loans or Term Loans be made on any Interim
Maturity Date or (y) written or telephonic notice (confirmed in writing) prior
to Noon (Cincinnati time) on such Interim Maturity Date of the Company's intent
not to incur Loans or Term Loans on such date, the Company shall be deemed to
have requested that the Banks make Prime Rate Loans to the Company on such
Interim Maturity Date. Such Prime Rate Loans or Term Loans deemed requested by
the Company shall be in an aggregate principal amount equal to the aggregate
principal amount of the Loans made by the Banks maturing on such Interim
Maturity Date.
2.04 DISBURSEMENT OF FUNDS. No later than Noon (Cincinnati
time) on the date specified in each Notice of Borrowing, each Bank will make
available its pro rata portion of the Borrowing requested to be made on such
date in U.S. dollars and in immediately available funds, at the office (the
"Payment Office") of the Agent located at 425 Walnut Street, Cincinnati, Ohio
45201 and the Agent will make available to the Company at its Payment Office
the aggregate of the amounts so made available by the Banks, provided that each
Bank shall apply the proceeds of each Roll-Over Borrowing to the payment of the
Loans or Term Loans maturing on the date of such Roll-Over Borrowing. Unless
the Agent shall have been notified by any Bank prior to the date of Borrowing
that such Bank does not intend to make available to the Agent such Bank's
portion of the borrowing to be made on such date, the Agent may assume that
such Bank has
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<PAGE> 11
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made such amount available to the Agent on such date of Borrowing and the Agent
may, in reliance upon such assumption, make available to the Company a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Bank, the Agent shall be entitled to recover
such corresponding amount on demand from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Company and the Company shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from such Bank or the Company, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Company to the date such
corresponding amount is recovered by the Agent (x) in the case of the Banks, at
the overnight Federal Funds rate in effect from time to time and (y) in the
case of the Company, the interest rate applicable to the Loans or Term Loans
made pursuant to such Borrowing. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its Commitment hereunder or to prejudice
any rights which the Company may have against any Bank as a result of any
default by such Bank hereunder.
2.05 NOTES. (a) The Company's obligation to pay the principal
of, and interest on, all the Loans made by each Bank shall be evidenced by a
promissory note (each a "Note" and collectively the "Notes) duly executed and
delivered by the Company substantially in the form of Exhibit A1 hereto with
blanks appropriately completed in conformity herewith. The Note issued to each
Bank shall (i) be payable to the order of such Bank and be dated the Effective
Date, (ii) be in a stated principal amount equal to the Commitment of such Bank
and be payable in the principal amount of the Loans evidenced thereby, (iii)
mature on the expiration of the Interest Period applicable to each Loan
evidenced thereby, (iv) bear interest as provided in the appropriate clauses of
Section 2.07 in respect of the Prime Rate Loans, the CD Rate Loans and the
Eurodollar Loans, as the case may be, evidenced thereby and (v) be entitled to
the benefits of this Agreement. Each Bank shall maintain internal records
showing each Loan made by it hereunder and each principal payment thereon with
such information available to the Company as the Company may from time to time
request.
(b) Although each Note shall be dated the Effective Date,
interest in respect thereof shall be payable only for the periods during which
Loans are outstanding thereunder. In addition, although the stated amount of
each Note shall be equal to each Bank's Commitment, such Note shall be
enforceable with respect to the Company's obligation to pay the principal
amount thereof only to the extent of the unpaid principal amount of the Loans
outstanding thereunder at the time such enforcement shall be sought.
(c) The Company's obligation to pay principal of, and interest
on, all the Term Loans made by each Bank shall be evidenced by a promissory
note (each a "term Note" and collectively the "Term Notes") duly executed and
delivered by the Company to each Bank at the Expiry Date of the Revolver
Period, and substantially in the form of Exhibit A2 attached hereto with blanks
appropriately completed in conformity herewith. The Term Note issued to each
Bank shall (i) be payable to the order of such Bank and dated as of the
Revolving Period Expiry Date, (ii) be in a stated principal amount equal to
such Bank's pro-rata share of all outstanding Term Loans of any Type and be
payable in the principal amount of the Term Loans evidenced thereby (subject at
all times to the payment schedule set forth in Section 2.12 of the Agreement),
(iii) bear interest and provide for Roll-Over borrowings as stated in the
appropriate clauses of Sections 2.07 and 2.12 in respect of the Prime Rate
Loans, CD Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, and (iv) be entitled to the benefits of this Agreement. Each Bank
shall maintain internal records showing each Term Loan made by it hereunder and
each term Loan Repayment thereon, and make such information available to the
Company as the Company may from time to time request.
(d) Each Term Note shall be dated as of the Revolving Period
Expiry Date, interest in respect thereto shall be payable only for the periods
during which Term Loans are outstanding
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thereunder. Although the stated amount of each term Note shall be equal to
each Bank's Commitment as of the Revolving Period Expiry Date, such Term Note
shall be enforceable with respect to the Company's obligation to pay the
principal amount thereof only to the extent of the unpaid principal amount of
Term Loans outstanding thereunder at the time such enforcement shall be sought.
2.06 PRO RATA BORROWINGS. Except as otherwise specifically
contemplated by this Agreement, all Loans and Term Loans under this Agreement
shall be made by the Banks simultaneously and in such amount as necessary so
that after giving effect thereto, to the extent possible, the outstanding Loans
and Term Loans of each Bank shall bear the same proportion to all outstanding
Loans and Term Loans of all Banks as such Bank's Commitment bears to the Total
Commitment. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans and Term Loans hereunder and
that each Bank shall be obligated to make the Loans and Term Loans provided to
be made by it hereunder, regardless of the failure of any other Bank to fulfill
its Commitment hereunder. The aggregate Commitments of all Banks shall never
exceed the Total Commitment.
2.07 INTEREST. The Company agrees to pay interest in respect
to the unpaid principal amount of each CD Rate Loan and/or Eurodollar Loan from
the date the proceeds thereof are made available to the Company in accord with
the following schedule:
In any fiscal quarter when the Company's financial statements
delivered in accord with Section 6.01(a) or (b) shows that the Company's ratio
of Funded Debt to Cash Flow is
<TABLE>
<CAPTION>
Ratio of Funded Debt to Cash The relevant CD rate plus: The relevant Quoted Rate for
Flow: each Eurodollar Loan plus:
<S> <C> <C>
Less than 1.75:1.0 0.5000% 0.3750%
Equal to or greater than 1.75:1.0, 0.6250% 0.5000%
but equal to or less than 3.5:1.0
Greater than 3.5:1.0 0.7500% 0.6250%
</TABLE>
Interest rates shall be increased or decreased in accord with
the above schedule as of the next proceeding fiscal quarter end by all Banks as
of the quarterly or annual financial statement date upon all CD Rate Loans
and/or Eurodollar Rate Loans which were then outstanding, regardless of whether
such CD Rate Loans and/or Eurodollar Rate Loans remain outstanding at the time
the ratio of Funded Debt to Cash Flow is recalculated.
(a) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan or Term Loan shall bear interest at a
rate per annum equal to greater (i) of 1% per annum in excess of the Prime
Lending Rate or (ii) the interest rate in effect at the time of maturity of the
relevant Loan or Term Loan in effect from time to time, provided that no Loan
or Term Loan shall bear interest after maturity at a rate per annum less than
the rate of interest applicable thereto at maturity.
(b) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (x) in respect of each Prime Rate Loan, quarterly in arrears on each
Quarterly Payment Date, and (y) in respect of each Fixed Rate Loan, on the last
day of each Interest Period applicable to such Loan or Term Loan and on any
prepayment (on the amount prepaid), and in the case of all Loans or Term Loans,
at maturity (whether by acceleration or otherwise), and after such maturity, on
demand.
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(c) The Agent, upon determining the Fixed CD Rate or Quoted
Rate for any Interest Period shall promptly notify the Company and the other
Banks thereof by telephone (confirmed in writing).
2.08 INTEREST PERIODS. At the time it gives any Notice of
Borrowing, the Company shall have the right to elect, by giving the Agent
written notice (or telephonic notice confirmed in writing), the interest period
(each an "Interest Period") applicable to the Loans being requested by such
Notice of Borrowing, which Interest Period shall (x) in the case of CD Rate
Loans be either a 30, 60, 90 or 180 day period, (y) in the case of Eurodollar
Loans shall be either one, two, three, or six month period provided in each
case that such six month period is then available to the Banks and (z) in the
case of Prime Rate Loans shall be a period from one to 360 days, provided that:
(i) The Interest Period for any Loan or Term Loan shall
commence on the date of such Loan or Term Loan;
(ii) If any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED that if any Interest Period in respect of a
Eurodollar Loan would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day; and
(iii) No Interest Period in respect of any Loan shall extend
beyond the Expiry Date for the Revolver Period in the case of a CD Rate,
Eurodollar or Prime Rate Loan or the Expiry Date for the Term Loan Period in
the case of a Term Loan.
(iv) No Interest Period shall extend beyond any date upon
which the Loans or Term Loans (or any portion thereof) are required to be paid
pursuant to the Notes, Term Notes and/or Agreement, unless the aggregate
principal amount of Loans or Term Loans which have Interest Periods which will
expire on or before the date on which principal payments are required under the
Notes, Term Notes and/or the Agreement, is equal to or in excess of the amount
of such payment or payments.
2.09 INCREASED COSTS, ILLEGALITY, ETC.
(a) In the event that any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties but, with respect to the following clause (i), shall be made
only after consultation with the Company and the Agent):
(i) on any date for determining the Quoted Rate for
any Interest Period, that by reason of any changes arising
after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis
provided for in the definition of Quoted Rate; or
(ii) at any time, that by reason of (x) any change
since the date of this Agreement in any applicable law or
governmental rule, regulation, guideline or order (or any
interpretation thereof and including the introduction of
any new law or governmental rule, regulation, guideline or
order) (such as for example but not limited to a change in
official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the
extent included in the computation of the Fixed CD Rate or
the Quoted Rate, as the case may be) and/or (y) in the case
of Eurodollar Loans, other circumstances affecting such
Bank or the interbank Eurodollar market or the position of
such Bank in such market, the Quoted Rate or Fixed CD Rate,
as the case may be, shall not
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represent the effective pricing to such Bank for funding or
maintaining the affected Fixed Rate Loan; or
(iii) at any time, that the making or continuance of
any Eurodollar Loan has become unlawful by compliance by
such Bank in good faith with any law, governmental rule,
regulation, guideline or order, or has become impracticable
as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the
interbank Eurodollar market; then, and in any such event,
such Bank shall on such date give notice (by telephone
confirmed in writing) to the Company and to the Agent of
such determination. Thereafter (x) in the case of clauses
(i) and (ii), the Company shall pay to such Bank, upon
written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole
discretion shall determine) as shall be required to cause
such Bank to receive interest with respect to its affected
Fixed Rate Loan at a rate per annum which shall be equal to
the effective pricing to such Bank to make or maintain such
Fixed Rate Loan plus the Applicable Margin (a written
notice as to additional amounts owed such Bank, showing the
basis for the calculation thereof, submitted to the Company
by such Bank shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto) and
(y) in the case of clause (iii), take one of the actions
specified in Section 2.09(b) as promptly as possible and,
in any event, within the time period required by law.
(b) At any time that any of its Fixed Rate Loans is affected by
the circumstances described in Section 2.09(a), the Company may (and in the
case of a Fixed Rate Loan affected pursuant to Section 2.09(a)(iii) shall)
either (x) if the affected Fixed Rate Loan is then being made pursuant to a
Notice of Borrowing, cancel said Notice of Borrowing or convert said Notice of
Borrowing into one requesting Prime Rate Loans by giving the Agent telephonic
notice (confirmed in writing) thereof on the same date that the Company was
notified by a Bank pursuant to Section 2.09(a), or (y) if the affected Fixed
Rate Loan or Loans are then outstanding, upon at least three Business Days'
written notice to the Agent and the affected Bank, require the affected Bank to
convert each Fixed Rate Loan so affected into a Loan or Term Loan or Loans or
Term Loans of a different Type, provided that if more than one Bank is affected
at any time, then all affected Banks must be treated the same pursuant to this
Section 2.09(b).
(c) If any Bank determines at any time that any applicable law
or governmental rule, regulation, order or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank based on the existence of
such Bank's Commitment hereunder or its obligations hereunder, then the Company
shall pay to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank for the increased cost to
such Bank as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 2.09(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be
payable pursuant to this Section 2.09(c), will give prompt written notice
thereof to the Company, which notice shall show the basis for calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Company's obligations to pay additional amounts
pursuant to this Section 2.09(c); provided however that the Borrower shall have
no obligation to pay any such amount with respect to any day prior to the 180th
day prior to demand by such Bank.
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2.10 COMPENSATION. The Company shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by such Bank to lenders of
funds borrowed by it to make or carry its Fixed Rate Loans to the extent not
recovered by such Bank in connection with the re-employment of such funds),
which such Bank may sustain: (i) if for any reason (other than a default by
such Bank or the Agent) a Borrowing of Fixed Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing (whether or not withdrawn),
(ii) if any prepayment of any of its Fixed Rate Loans occurs on a date which is
not the last day of an Interest Period applicable thereto, (iii) if any
prepayment of any of its Fixed Rate Loans is not made on the date specified in
a notice of prepayment given by the Company, or (iv) as a consequence of (x)
any other default by the Company to repay its Fixed Rate Loans when required by
the terms of this Agreement or (y) an election made by the Company pursuant to
Section 2.09(b).
2.11 ELECTION REVISION. At any time (x) after the Company has
given the Agent a Notice of Borrowing in respect of Fixed Rate Loans and (y)
prior to 10:30 a.m. (Cincinnati time) on the Interest Determination Date in
respect of the Interest Period applicable to such Fixed Rate Loans, the Company
shall have the right to notify the Agent and each Bank (by telephone, confirmed
in writing) that it no longer elects to incur such Fixed Rate Loans. Pursuant
to such notice, the Company shall, withdraw such Notice of Borrowing or, at its
option, convert such Notice of Borrowing into one requesting Prime Rate Loans
in equal principal amount. No amounts shall be payable pursuant to Section
2.10 as a result of any withdrawal or conversion effected in compliance with
this Section 2.11.
2.12 EXTENSION OF THE REVOLVER PERIOD. The Company shall have
the option to request an extension of the Expiry Date of the Revolver Period
for two additional periods of one year each.
(a) The exercise of the option for the first of such one-year
extensions cannot become effective until one year after the effective date of
this agreement. The exercise of the option for the second of such one year
extensions cannot become effective until two years after the effective date of
this agreement. In no event can any extension become effective on any date
which would result in the then remaining term of this agreement exceeding five
years.
(b) The Company shall give written notice of the request to
extend, addressed to the Agent Bank as described in Section 9.03 of the
Agreement, no later than ninety (90) days in advance of the date on which the
Company intends for such extension to become effective and ninety (90) days
prior to the Expiry Date of the Revolver Period or extended Expiry Date of the
Revolver Period in effect immediately prior to the exercise of the option to
extend. Notwithstanding anything to the contrary contained herein such
extension shall only become effective if 100% of the Banks agree.
(c) The Banks agree to provide written acceptance or
rejection of the Company's proposed extension within 45 days of the date of the
Company's notice.
(d) In the event that the Company exercises an option to
extend the Expiry Date of the Revolver Period, as provided herein above, the
Expiry Date of the Term Loan Period shall be automatically extended for an
equal period.
2.13 TERM LOAN. At the Expiry Date of the Revolver Period
assuming no Event of Default or situation which, with the passage of time,
would evolve into an Event of Default if not remedied within the applicable
grace period, has occurred or is ongoing, the Company may elect to convert all
Loans then outstanding to a Term Loan or Term Loans. If the Company elects not
to convert all Loans to Term Loans at the Expiry Date of the Revolver Period,
any such Loans not converted shall be immediately due and payable. At such
time the Total Commitment shall be
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reduced to an amount equal to the aggregate amount so converted to a Term Loan
or Term Loans and the Commitment of each Bank shall likewise be ratably reduced
and all Term Loans initiated thereafter by the Company shall be considered
Roll-Over Borrowings. Upon each repayment by the Company of a Term Loan (each
a "Term Loan Repayment"), whether partial or in full, whether contractually
required by this Agreement or voluntarily made by the Company, the Total
Commitment will be reduced on the date of such Term Loan Repayment and the
Commitment of each Bank shall likewise be ratably reduced. Interest is to be
calculated and paid on Term Loans in a similar manner as set forth in Section
2.07, provided that the rates set forth in Section 2.07 shall each be increased
by one eighth of one percent (0.125%) for all Term Loans outstanding during the
Term Loan Period. At the minimum, the Company agrees to make Term Loan
Repayments as follows:
<TABLE>
<S> <C> <C>
(a) The first day of the seventh month
following the Expiry Date of the
Revolver Period 15% of outstanding balance is due
(b) The first day of the thirteenth month
following the Expiry Date of the
Revolver Period 15% of outstanding balance is due
(c) The first day of the nineteenth month
following the Expiry Date of the
Revolver Period 35% of outstanding balance is due
(d) The first day of the twenty-fifth month
following the Expiry Date of the Revolver
Period All outstanding Term Loans are due and
payable
</TABLE>
2.14 PROCEEDS; INITIAL LOANS. The proceeds of the initial Loan
made by the Banks hereunder will be applied to pay in full the outstanding
principal indebtedness under the Original Agreement. On the Effective Date,
the Company will pay in full all of its outstanding indebtedness owing under
the Original Agreement (including all interest and fees accrued to date) and
upon such payment the Original Agreement (other than the provisions thereof
which by their terms continue after termination pursuant to Section 9.13 of the
Original Agreement) shall terminate and cease to be in force and effect and
each Bank shall promptly return to the Company the notes issued thereunder.
Section 3. COMMITMENTS.
3.01 COMMITMENT COMMISSION. The Company agrees to pay to the
Agent for pro rata distribution to each Bank a commitment commission
("Commitment Commission") for the period commencing on the Effective Date to
and including the Expiry Date of the Revolver Period (or such earlier date as
the Total Commitment shall have been terminated) computed at a rate equal to
3/20 of 1% per annum on the daily average unutilized portion of the Total
Commitment. The Accrued Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Expiry Date of
the Revolver Period or upon such earlier date as the Total Commitment shall be
terminated.
3.02 VOLUNTARY TERMINATION OF COMMITMENTS. Upon at least three
Business Days' prior written notice (or telephonic notice, confirmed in
writing) to the Agent at the Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), the Company shall have the right,
without premium or penalty, to terminate the unutilized portion of the Total
Commitment in whole or in part, in increments of $5,000,000, or if greater in
integral multiples of
35
<PAGE> 17
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$1,000,000, PROVIDED that any such reduction shall apply proportionately to the
Commitment of each of the Banks.
3.03 AGENT'S FEE. The Company agrees to pay the Agent for its
own account a fee (the "Agent's Fee") for the period commencing on the
Effective Date to and including the Expiry Date of the Term Loan Period (or
such earlier date as the Total Commitment shall have been terminated) computed
at a rate equal to 3/25 of 1% per annum the Commitment (as it was on the
Effective Date) of the Agent. Accrued Agent's Fee shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Expiry Date of
the Term Loan Period or upon such earlier date as the Total Commitment shall be
terminated.
Section 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. The Company shall have the right
to prepay the Loans or Term Loans in whole or in part, without premium or
penalty (but subject to Section 2.10) from time to time on the following terms
and conditions: (i) the Company shall give the Agent at the Notice Office at
lease three Business Days, in the case of a prepayment of Fixed Rate Loans or
by 12:00 Noon (Cincinnati time) on the date of prepayment, in the case of a
prepayment of Prime Rate Loans, prior written notice (or telephonic notice
confirmed in writing) of its intent to prepay the Loans or Term Loans, the
amount of such prepayment and what Types of Loans or Term Loans are to be
prepaid and the Borrowing(s) pursuant to which made, which notice the Agent
shall promptly transmit to each of the Banks; (ii) each prepayment shall be in
an aggregate principal amount of not less than $2,500,000 in the case of Fixed
Rate Loans, or $1,000,000 in the case of Prime Rate Loans or in each case, if
greater, in an integral multiple of $1,000,000, PROVIDED that no partial
prepayment of Fixed Rate Loans made pursuant to a single Borrowing shall reduce
the outstanding Loans or Term Loans made pursuant to such Borrowing to an
amount less than $2,500,000; and (iii) each prepayment in respect of any Loans
or Term Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans or Term Loans. It is understood that each prepayment of Fixed Rate Loans
shall be subject to Section 2.10.
4.02 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
to the Agent for the ratable account of the Banks not later than Noon
(Cincinnati time) on the date when due and shall be made in lawful money of the
United States of America in immediately available funds at the Payment Office
of the Agent. Whenever any payment to be made hereunder or under any Note
shall be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable at the applicable rate
during such extension.
4.03 NET PAYMENTS. If any payment required to be paid by this
Agreement (or by any Note) with respect to any Eurodollar Loan is or will be
subject to any present or future income, withholding or similar tax or
government levy (but not including taxes on or measured by the net income of a
Bank pursuant to the laws of the jurisdictions where such Bank's principal
office or offices or lending office or offices are located), the payment shall
be grossed up so that the amount actually paid is not less than the payment
otherwise specified herein (or in any Note) to be paid in the absence of any
such tax or levy. Each Bank shall promptly furnish to the Company all
receipts or other evidence of such tax or levy. In the event that the Banks
receive notice of the existence of such tax or levy prior to the date on which
interest or penalties for late payment of such tax or levy would be imposed,
the Banks shall promptly give notice of such tax or levy to the Company so that
the Company receives notice of such tax or levy in time to allow the Company to
pay such tax or levy without interest or penalty. Such failure to notify will
not remove the obligation of Company with regard to the original tax or levy,
however, if any penalty or interest is incurred as a result of the failure of
the Banks to provide such notice in the time specified the Banks shall bear the
cost of such interest or penalty.
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<PAGE> 18
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Section 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS TO EFFECTIVENESS. This Agreement shall become
effective as of June 7, 1995 or such date (the "Effective Date") on which all
of the following conditions have been satisfied, which ever is later:
(a) NOTES. The Company shall have executed and delivered to
each Bank, the appropriate Note in the amount, maturity and as otherwise
provided herein against delivery of the promissory notes delivered pursuant to
the Original Agreement.
(b) NO DEFAULT; ETC. On the Effective Date and after giving
effective to the effectiveness of this Agreement (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any document, certificate or financial or other
statement delivered in connection herewith shall be true and correct with the
same force and effect as though such representations and warranties had been
made on and as of such time.
(c) OFFICER'S CERTIFICATE. The Agent shall have received a
certificate dated the Effective Date, and signed by a duly authorized officer
of the Company stating that the conditions set forth in Section 5.01(b) exist
as of such date.
(d) OPINION OF COUNSEL. The Agent shall have received from
Denis G. Daly, Vice President & Secretary of the Company, an opinion addressed
to each of the Banks and dated the Effective Date covering the matters set
forth in Exhibit B hereto and such other matters incident to the transactions
contemplated herein as any Bank may reasonably request.
(e) CORPORATE PROCEEDINGS. All corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Agent and the Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings and
governmental approvals, if any, which any Bank reasonably may have requested in
connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
5.02 CONDITIONS TO EACH LOAN. The obligation of each Bank to
make each Loan hereunder is subject, at the time of the making of each Loan
(except as hereinafter indicated), to the satisfaction of the following
conditions, with the making of each Loan (including any Loan made pursuant to a
Roll-Over Borrowing) constituting a representation and warranty by the Company
that the conditions specified in Sections 5.02(a) and (b) below are then
satisfied:
(a) NO DEFAULT. At the time of the making of each Loan and
after giving effect thereto, there shall exist no Default or Event of Default.
(b) REPRESENTATIONS AND WARRANTIES. At the time of the
making of each Loan and after giving effect thereto, all representations and
warranties (except, in the case of a Roll-Over Borrowing, the representations
and warranties contained in Section 8.04 and the last sentence of Section 8.05
hereof) contained herein or otherwise made in writing in connection herewith
shall be true and correct with the same force and effect as though such
representations and warranties had been made on and as of such time.
(c) SUBSEQUENT LEGAL OPINIONS. If, at the time of the
making of any Loan, the Required Banks shall have reasonably requested same,
the Agent shall have received from the counsel of the Company referred to in
Section 5.01(d) or such other counsel for the Company (who shall be reasonably
satisfactory to the Agent) an opinion in form and substance satisfactory to the
Agent, addressed to the Banks and dated the date of such Loan, and covering
such of the matters as the Required Banks may reasonably request.
37
<PAGE> 19
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Section 6. COVENANTS.
The Company and Banks agree that the financial covenants set
forth in Section 6.11, 6.12 and were arrived at based on accounting rules,
methods and principles, and Federal tax laws, rules and regulations in effect
and applicable to the Company as of the date of this Agreement. If, at any
time during which the Total Commitment has not been permanently terminated or
permanently reduced to zero, a change occurs or is instituted in the accounting
rules, regulations or principles, Federal tax laws, rules or regulations
applicable to the Company which materially affects (either adversely or
constructively) the aforementioned financial covenants, the Banks, the Company
and the Agent shall hereby agree that some or all of those financial covenants
set forth in Section 6.11, 6.12 and of the Agreement, in whole or in part,
shall be renegotiated in good faith by all parties to this Agreement.
Notwithstanding the above, the Company covenants and agrees that, so long as
this Agreement is in effect and until the Loans, Notes and Term Notes, together
with interest, Commitment Commission and all other obligations incurred
hereunder are paid in full:
6.01 INFORMATION COVENANTS. The Company will furnish to the
Agent Bank:
(a) within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Company, five copies of
the consolidated statements of financial condition of the Company as at the end
of such quarterly period and the related consolidated statements of operations,
shareholder's equity and cash 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 Company subject
to customary year-end audit adjustments;
(b) within 90 days after the close of each fiscal year of the
Company, five copies of the consolidated statements of financial condition of
the Company as at the end of such fiscal year and the related consolidated
statements of operations, shareholders equity and cash flows for such 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
accountants) and with the prior year and accompanied by an opinion relating
thereto of Ernst & Young or other independent certified public accounts of
recognized standing selected by the Company;
(c) at the time of the delivery of the financial statements
required by Section 6.01(b), 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 Default or Event of
Default or, if in the opinion of such accountants any Default or Event of
Default exists, the certificate shall state its nature and the length of time
it has existed;
(d) at the time of the delivery of the financial statements
required by Section 6.01(a) and (b) a certificate of the chief financial
officer of the Company to the effect either that such officer is aware of no
Default or Event of Default or, if he is aware that any Default or 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 Company was in compliance
with the provisions of Sections 6.11, and 6.12, as at the end of such fiscal
period;
38
<PAGE> 20
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(e) within five business days after the Company obtains
knowledge thereof, notice of (x) any event which constitutes a Default or 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
(y) any litigation or governmental proceeding pending against the Company or
any Subsidiary which might materially and adversely affect the business,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole;
(f) 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;
(g) promptly upon the execution after the Effective Date of
any Maintenance Agreements, and any amendments or modifications thereto or
waivers thereof, by the Company or a Subsidiary, written notice thereof; and
(h) from time to time, and promptly upon each request, such
other information or documents as any Bank may reasonably request.
6.02 COMPLIANCE WITH LAW. The Company will comply, and will
cause each of its Subsidiaries to comply, with all laws, rules and regulations
relating to their respective businesses, other than laws, rules and regulations
the failure to comply with which and the sanctions and penalties resulting
therefrom, when taken together with the failure to comply with all other laws,
rules and regulations and the sanctions and penalties resulting therefrom,
would not have a material adverse effect on the operations, business, property,
assets or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole, PROVIDED that the Company and its Subsidiaries
shall not be required to comply with laws, rules and regulations the validity
or applicability of which are being contested in good faith and by appropriate
proceedings.
6.03 PAYMENT OF CHARGES. The Company will pay and discharge
when due, and will cause each of its Subsidiaries to pay and discharge when
due, all taxes, assessments and governmental charges or levies imposed upon it
or its property or assets, or upon properties leased by it (but only to the
extent required to do so by the applicable lease), prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become
a lien or charge upon its property or assets, PROVIDED that neither the Company
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim, the payment of which is being contested in good faith
and by proper proceedings and with respect to which adequate reserves are
maintained in accordance with generally accepted accounting principles.
6.04 INSPECTION OF BOOKS AND ASSETS. The Company will allow,
and will cause each of its Subsidiaries to allow, any representative of any
Bank to visit and inspect any of its properties, to examine its books of record
and account and to discuss its affairs, finances and accounts with its
officers, all at such reasonable times and as often, as the Banks deem
appropriate, but in no event more frequently than once each calendar quarter,
except, in the event the Company is in default under the provisions of Section
7(c) of this Agreement the Bank shall be free to conduct such examinations at
such times as the Banks reasonably deem appropriate .
6.05 MAINTENANCE OF RECORDS. The Company will keep, and will
cause each of its Subsidiaries to keep, at all times books of record and
account in which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs, and the Company will, and
will cause each of its Subsidiaries to, provide reasonable protection against
loss or damage to such books of record and account.
6.06 ERISA. As soon as possible and, in any event, within 30
days after the Company or a Subsidiary knows or has reason to know that a
Reportable Event has occurred, that an accumulated funding deficiency has been
incurred, or an application may be or has been
39
<PAGE> 21
-18-
made to the Secretary of the Treasury for a waiver of the minimum funding
standard under Section 412 of the Code with respect to a Plan, that a Plan has
been or may be terminated, that proceedings may be or have been instituted to
terminate a Plan, or that the Company, a Subsidiary or an ERISA Affiliate will
or may incur any liability to or on account of a Plan under Section 4062, 4063,
4064, 4201 or 4204 of ERISA, the Company will deliver to the Banks a
certificate of one of its officers setting forth details as to such occurrence
and the action, if any, which the Company or the Subsidiary is required or
proposes to take, together with a copy of any notices required or proposed to
be filed with or by the Company, the Subsidiary, the ERISA Affiliate, the PBGC
or the plan administrator with respect thereto. Upon the request of any Bank,
the Company will furnish to the Banks a copy of the annual report of each Plan
(Form 5500) required to be filed with the Internal Revenue Service. Copies of
annual reports or any notices required to be delivered to the Banks under this
Section 6.06 shall be delivered no later than 30 days after the later of the
date such report or notice has been filed with the Internal Revenue Service or
the PBGC or received by the Company or the Subsidiary.
6.07 PRESERVATION OF CORPORATE EXISTENCE. Subject to Section
6.10, the Company will maintain and preserve, and will cause each Subsidiary to
maintain and preserve, its corporate existence and right to carry on its
business and duly procure all necessary renewals and extensions thereof and
use, and cause each Subsidiary to use, its best efforts to maintain, preserve
and renew all of its rights, powers, privileges and franchises which in the
opinion of the Board of Directors or senior management of the Company continue
to be advantageous to the Company and its Subsidiaries.
6.08 INSURANCE. The Company will insure and keep insured, and
cause each Subsidiary to insure and keep insured, to a reasonable amount with
financially sound and reputable insurance companies, so much of their
respective properties as companies engaged in a similar business and to the
extent such companies in accordance with good business practice customarily
insure properties of a similar character against loss by fire and from other
causes. The Company shall give the Banks prompt written notice of its
inability or failure to continue to maintain its insurance coverage at the
levels in effect on June 7, 1995.
6.09 LIENS. The Company 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 (other than Unrestricted Margin Stock)
whether now owned or hereafter acquired except:
(i) Liens incurred in the ordinary course of business not
in connection with the borrowing of money or the obtaining of
credit and which do not in the aggregate materially impair the
use of the property or assets covered thereby in the operation
of the Company's business,
(ii) pledges or deposits to secure public or statutory
obligations or to secure payment of workmen's compensation or to
secure performance in connection with tenders, leases of real or
personal property, bids or contracts or to secure (or in lieu
of) surety or appeal bonds and pledges or deposits made in the
ordinary course of business for similar purposes.
(iii) Liens on any property hereafter acquired which are
created simultaneously with such acquisition or within 90 days
thereafter to secure the purchase price thereof, provided that
the indebtedness secured thereby does not exceed the cost to the
Company or the relevant Subsidiary of such property.
(iv) Liens on property acquired pursuant to an
Acquisition which existed at the time of such Acquisition,
PROVIDED that the Debt secured by such Liens is not increased
after the date of such Acquisition,
40
<PAGE> 22
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(v) Liens existing on the property of another Person on
the date such Person becomes a Subsidiary or whose assets are
acquired by Amcast as a result of an Acquisition, PROVIDED that
the Debt secured by such Liens is not increased after the date
of such Acquisition, and
(vi) Liens on existing property created in connection
with the industrial development bond financing of newly acquired
property which is used in connection with such existing property
to the extent (and only to the extent) required by law.
6.10 CONSOLIDATION, MERGER AND SALE OF ASSETS. The Company
will not, nor will 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 Company's Consolidated Total Assets (as determined in
accordance with generally accepted accounting principles consistently applied)
(other than Unrestricted Margin Stock provided that any sale of Unrestricted
Margin Stock shall be made for cash consideration equal to the fair value of
the Unrestricted Margin Stock sold or otherwise disposed of at the time of such
sale or disposition), PROVIDED that (i) the Company may enter into a merger
transaction if it is the surviving entity and no Default or Event of Default
would result therefrom and (ii) any Subsidiary may merge into, or sell, convey,
lease or otherwise dispose of any or all of its property to, the Company,
another Subsidiary or any Person that after giving effect to the foregoing
shall constitute a Subsidiary, PROVIDED that no Default or Event of Default
would result therefrom; and (iii) the Company 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 Company
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 Section
6.10.
6.11 TANGIBLE NET WORTH. The Company will maintain as at the
end of each fiscal quarter of the Company Consolidated Tangible Net Worth of
not less than $90,000,000 plus 25% of the company's cumulative Consolidated Net
Income (to the extent said Net Income is greater than zero) since September 1,
1994, to be measured at the end of each fiscal quarter.
6.12 ADDITIONAL DEBT. The Company will not, and will not
permit any Subsidiary to, create, assume, incur or guarantee any Debt except
(i) Debt incurred under this Agreement, (ii) any Debt which is outstanding as
of February 26, 1995, as shown on Exhibit D hereto and (iii) any other Debt if
after giving effect to the creation, incurrence, assumption or guarantee
thereof, Debt would not exceed 60% of Consolidated Capitalization.
6.13 CHANGES IN BUSINESS. The Company and its Subsidiaries
will not enter into any business which is substantially different from that
presently conducted by them. In the context of this Paragraph 6.14
"substantially different" shall mean outside of the metal working or processing
businesses.
Section 7. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events
(each an "Event of Default") and so long as such Event of Default shall
continue unremedied:
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<PAGE> 23
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(a) PRINCIPAL. The Company shall default in the payment of any
principal of the Loans or Term Loans when due; or
(b) INTEREST AND COMMITMENT COMMISSION. The Company shall
default in the payment of interest in respect of any Loan or Term Loans or any
Commitment Commission or other amounts payable under this Agreement and such
default shall continue unremedied for five Business Days; or
(c) REPRESENTATIONS; ETC. Any representation, warranty or
statement made by the Company herein or in any document, certificate or
financial or other statement delivered in connection herewith shall prove to be
untrue in any material respect on the date as of which made; or
(d) CERTAIN COVENANTS. The Company shall default in the due
performance or observance by it of any term, covenant or agreement to be
performed or observed pursuant to Section 6 (other than Sections 6.01 through
6.08) 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) OTHER COVENANTS. The Company shall default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in paragraphs (a) through (d) of this Section 7, inclusive)
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after the Company shall have become aware of the existence of
such default; or
(f) DEFAULT UNDER OTHER AGREEMENTS. 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 other indebtedness the total outstanding obligations, including any and
all interest and fees accrued to the date of default the aggregate amount, of
which was at least $5,000,000.00 at the time of the default, for borrowed money
of, or guaranteed by, such Designated Party, or any Designated Party shall
default in the performance or observance of any obligation or condition with
respect to any such other indebtedness (except for a default arising under any
restrictive provision relating to any sale, pledge or other disposition of
Unrestricted Margin Stock contained in any lending agreement to which any Bank
or "affiliate" thereof (as defined in Regulation U) is a party) 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 any
such indebtedness shall become due prior to its maturity; or
(g) LITIGATION. A judgment or judgments 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, shall be entered against any
Designated Party, and such judgment or judgments shall remain unsatisfied or
unstayed for a period of 45 days; or
(h) BANKRUPTCY; ETC. Any Designated Party shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy" as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case in commenced against any
Designated Party and the petition is controverted but is not dismissed within
60 days after the commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of any Designated Party or any Designated Party commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to any Designated
Party or there is commenced against any Designated Party any such proceeding
which remains undismissed for a period of 60 days or any Designated Party is
adjudicated insolvent or
42
<PAGE> 24
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bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any Designated Party suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Designated
Party makes a general assignment for the benefit of creditors; or any corporate
action is taken by any Designated Party for the purpose of effecting any of the
foregoing; or
(i) ERISA. A Plan shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or a waiver of
such standard is sought or granted under Section 412(d), or a Plan is or shall
have been terminated or the subject of termination proceedings under ERISA, or
the Company or a Subsidiary or an ERISA Affiliate has incurred a liability to
or on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA,
and there shall result from any such event or events either a liability or a
material risk of incurring a liability to the PBGC or a Plan, which in the
reasonable opinion of the Required Banks, will have a material adverse effect
upon the business, operations or the financial condition of the Company and its
Subsidiaries taken as a whole; or
(j) OWNERSHIP. The outstanding capital stock of all classes of
the Company entitled, at the time, to voting power of 25% or more, in the
aggregate, for the election of the Company's directors is owned, or
(k) QUALIFIED OPINIONS. Any fiscal year end statement
submitted to the Banks pursuant to Section 6.01(b) shall be accompanied by a
qualified opinion (6.01(b)).
In the event of Default, and at any time thereafter, if any
Event of Default shall then be continuing, the Agent, upon the written request
of the Required Banks, shall by written notice to the Company, take either or
both of the following actions, without prejudice to the rights of the Agent,
any Bank or the holder of any Note to enforce its claims against the Company:
(i) declare the Total Commitment terminated, whereupon the Commitment of each
Bank shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; or (ii)
declare the principal of and any accrued interest in respect of the Loans, and
all obligations owing hereunder, to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company, PROVIDED that, if
an Event of Default specified in clause (h) shall occur with respect to the
Company, the result which would occur upon the giving of written notice by the
Agent to the Company, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENT.
In order to induce the Banks to enter into this Agreement and to
make the Loans provided for herein, the Company makes the following
representations, warranties and agreements which shall survive the execution
and delivery of this Agreement and the Notes and the making of the Loans:
8.01 CORPORATE STATUS. The Company and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the State of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact
the business in which it is engaged and (iii) has duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
every jurisdiction in which the failure so to qualify would have a material
adverse effect on the business of the Company and its Subsidiaries taken as a
whole.
8.02 CORPORATE POWER AND AUTHORITY. The Company has the
corporate power to execute, deliver and carry out the terms and provisions of
this Agreement and the Notes and has
43
<PAGE> 25
-22-
taken all necessary corporate action (including, without limitation, any
consent of stockholders required by law or by its Articles of Incorporation or
Code of Regulations) to authorize the execution, delivery and performance of
this Agreement and the Notes. This Agreement has been duly executed and
delivered by the Company and constitutes, and the Notes when executed and
delivered by the Company pursuant hereto will constitute, the legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms except to the extent that enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
8.03 NO VIOLATION. Neither the execution, delivery or
performance by the Company of this Agreement or the Notes, nor the consummation
of the transactions herein or therein contemplated, nor compliance with the
terms and provisions hereof or thereof, (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality or (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Company pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which the
Company is a party or by which it or any of its property or assets is bound or
to which it may be subject, or (iii) will violate any provision of the Articles
of Incorporation or the Code of Regulations of the Company.
8.04 LITIGATION. There are no actions, suits or proceedings
pending or, to the best of the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary before any court or before any
governmental or administrative body or agency the outcome of which is likely to
have a material and adverse effect upon the operations, business, property or
assets or financial condition of the Company and its Subsidiaries taken as a
whole. A listing of the Company's significant litigation is attached as
Exhibit E.
8.05 FINANCIAL STATEMENTS. The audited consolidated statement
of financial condition of the Company at August 31, 1994, and the related
consolidated statements of operations, shareholders equity and cash flows of
the Company for the fiscal year ended on said date heretofore furnished to the
Banks present fairly the consolidated financial condition of the Company at the
date of said statements of financial condition and the consolidated results of
the operations of the Company for said fiscal year. All such financial
statements have been prepared in accordance with generally accepted accounting
principles and practices consistently applied. Since February 26, 1995, there
has been no material adverse change in the operations, business, property or
assets of, or in the condition (financial or otherwise ) of, the Company and
its Subsidiaries taken as a whole.
8.06 USE OF PROCEEDS; REGULATION U. The proceeds of the Loans
and Term Loans will be used only for general corporate purposes, including,
without limitation, any Acquisition. No part of the proceeds of any Loan or
Term Loan will be used to purchase or carry any Margin Stock in violation of
Regulation U or X of the Board of Governors of the Federal Reserve Board.
8.07 GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with (i) the execution, delivery and performance of this Agreement or the
Notes, or (ii) the legality, validity, binding effect or enforceability of this
Agreement or the Notes.
8.08 COMPLIANCE WITH ERISA. The Plans are in substantial
compliance with ERISA, no Plan is insolvent or in reorganization, no Plan has
an accumulated or waived funding deficiency within the meaning of Section 412
of the Code, neither the Company nor a Subsidiary nor an ERISA Affiliate has
incurred any material liability (including any material contingent
44
<PAGE> 26
-23-
liability) to or on account of a Plan pursuant to Section 4062, 4063, 4064,
4201 or 4204 of ERISA, no proceedings has been instituted to terminate any
Plan, and no other condition exists which, in any case described in the
foregoing clauses, presents a material risk to the Company or a Subsidiary of
incurring a material liability to or on account of a Plan pursuant to ERISA.
It is understood that the representations set forth in this Section 7.08 (other
than with respect to any liability under Section 4201 or Section 4204 of ERISA)
to the extent applicable to multiemployer plans shall be made to the best of
the Company's knowledge after reasonable inquiry.
Section 9. MISCELLANEOUS.
9.01 PAYMENT OF EXPENSES; ETC. The Company shall: (i) whether
or not the transactions hereby contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses in connection with the preparation, execution,
delivery and enforcement of this Agreement, the Notes, the documents and
instruments referred to herein and any amendment, waiver or consent relating
hereto or thereto (including, without limitation, the reasonable fees and
disbursements of special counsel for each of the Banks); (ii) pay and hold each
of the Banks harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and to save each Bank
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes and (iii) to indemnify the Agent and each Bank from and hold each of
them harmless against any and all losses, liabilities, claims, damages, or
expenses incurred by any of them arising out of or by reason of any
investigation, litigation or other proceeding related to any Acquisition
effected or proposed to be effected by the Company with the proceeds of the
Loans or the Company's entering into and performance of this Agreement,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified or in connection with any proceeding brought
against the Person to be indemnified by a security holder of such Person based
on the rights afforded such security holder solely in its capacity as such).
In addition, the Company shall not be liable under Section 9.01(iii) with
respect to claims directly arising out of any settlement made without its
consent (which consent shall not be unreasonably withheld) in any action other
than one arising out of a tender offer.
9.02 RIGHT OF SETOFF. In addition to any rights now or
hereafter granted under applicable law or otherwise and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Company or to
any other Person, any such notice being hereby expressly waived, to setoff and
to appropriate and apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by such Bank to or for the credit
or the account of the Company against and on account of the obligations and
liabilities of the Company to such Bank under this Agreement and the Notes,
including (without limitation) all claims of any nature or description arising
out of or connected with this Agreement and the Notes, irrespective of whether
or not such Bank shall have made any demand hereunder and although said
obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
9.03 NOTICES. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered
to the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement or the Notes,
addressed to such party at its address set forth opposite its signature below,
or at such other address as any of the parties hereto may hereafter notify the
others in writing.
9.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto,
45
<PAGE> 27
-24-
provided that the Company may not assign or transfer any of its interest
hereunder without the prior written consent of the Banks.
(b) Any Bank may (i) assign its rights and its obligations
under this Agreement upon notice to and with the prior written consent of the
Company, which consent shall not be unreasonably withheld, and (ii) may sell
participations in (without the consent of the Company) any of its rights or
interest hereunder or in its Note, to another financial institution. In the
case of an assignment, upon the notice and consent described above, the
assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights and benefits as it would have if it were a
Bank hereunder and the holder of a Note and, if the assignee has expressly
assumed, for the benefit of the Company, the assignor Bank's obligations
hereunder, such assignor Bank shall be relieved of its obligations hereunder to
the extent of such assignment and assumption. In the case of a participation,
the participant shall not have any rights under this Agreement or any Note or
any other document delivered in connection herewith (the participant's rights
against such Bank in respect of such participation to be those set forth in the
Agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Company under Sections 2.09, 2.10 and 4.03
hereof or otherwise shall be determined as if such Bank had not sold such
participation.
9.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Company, the Agent or any Bank or any holder of a Note in
exercising any right, power or privilege hereunder and no course of dealing
between the Company and the Agent or any Bank or the holder of any Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under a Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein expressly provided are cumulative
and not exclusive of any rights or remedies which the Company, the Agent or any
Bank or the holder of any Note would otherwise have. No notice to or demand on
the Company in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of the Agent, the Banks or the holder of any Note to any other or
further action in any circumstances without notice or demand.
9.06 PAYMENTS PRO RATA. Each of the Banks agrees that if it
should receive any payment (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under this
Agreement or the Notes, or otherwise) in respect of any obligation of the
Company hereunder or under the Notes of a sum which with respect to the related
sum or sums received by other Banks is in a greater proportion than the total
amount of principal, interest, Commitment Commission or any other obligation
incurred hereunder, as the case may be, then owed and due to such Bank bears to
the total amount of principal, interest, Commitment Commission, or any such
other obligation then owed and due to all of the Banks immediately prior to
such receipt, then such Bank receiving such excess payment shall purchase for
cash without recourse from the other Banks an interest in the obligations of
the Company to such Banks in such amount as shall result in a proportional
participation by all of the Banks in the aggregate unpaid amount of principal,
interest, Commitment Commission, or any such other obligation, as the case may
be, owed to all of the Banks, PROVIDED that if all or any portion of such
excess payment is thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
9.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except for such changes as are disclosed in
such financial statements or in the notes thereto and are concurred in by the
independent certified public accountants. Except as otherwise specifically
provided in this Agreement, all computations pursuant to Section 6 through
Section 9 shall utilize accounting
46
<PAGE> 28
-25-
principles in conformity with those used in the preparation of the financial
statements referred to in Section 8.05.
(b) All computations of interest and Commitment Commission
hereunder shall be made on the actual number of days elapsed over a year of 360
days.
9.08 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder and under the Notes shall be construed in
accordance with and be governed by the law of the State of Ohio.
9.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counter parts shall be lodged with the Company
and the Agent.
9.10 DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
9.11 AMENDMENT OR WAIVER. This Agreement may not be amended,
changed, waived, discharged or terminated without the written consent of each
of the Banks and the Company.
9.12 THE AGENT. The Banks hereby designate the Agent to act as
specified herein and in Exhibit C hereto, the terms of which exhibit are hereby
incorporated by reference as if set forth herein at length.
9.13 SURVIVAL. All indemnities set forth herein including,
without limitation, in Section 9.01, and in paragraph 6 of Exhibit C annexed
hereto shall survive the execution and delivery of this Agreement and the Notes
and Term Notes and the making and repayment of the Loans and Term Loans
hereunder.
9.14 CONFIDENTIALITY. Each Bank shall keep confidential all
information which is non-public or confidential or proprietary in nature,
disclosed or furnished to such Bank by the Company pursuant to Sections 6.01 or
604 hereof or otherwise, and shall not, without the prior written consent of
the Company, disclose in any manner whatsoever, in whole or in part, any of
such information to any Person, except that such Bank shall be permitted to
disclose any of such information (i) to any regulatory agency having
jurisdiction over such Bank in connection with such agency's regulatory
function, (ii) otherwise as required by law or court order or in connection
with any investigation, action or proceeding arising out of the transactions
contemplated by this Agreement and (iii) to any prospective assignee,
transferee or participant provided that, prior to such disclosure, such
assignee, transferee or participant enters into a confidentiality agreement
with the Company the terms of which are no less restrictive than this Section
9.14.
47
<PAGE> 29
-26-
IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this Agreement as of the
date first above written.
<TABLE>
<CAPTION>
ADDRESS:
- -------
<S> <C>
7887 Washington Village Drive AMCAST INDUSTRIAL CORPORATION
Dayton, Ohio 45459
By __________________________
Title: President
425 Walnut Street STAR BANK, NATIONAL ASSOCIATION.
Location 8160 Individually and as Agent
Cincinnati, Ohio 45201
By: __________________________
Title:
Kettering Tower BANK ONE, DAYTON, NA
40 North Main Street
P.O. Box 1103
Dayton, OH 45401-1103
By: _________________________
Title:
1301 East 9th Street FIRST NATIONAL BANK OF CHICAGO
Suite 250
Cleveland, Ohio 44114-1824
By __________________________
Title:
611 Woodward Avenue NBD Bank
Detroit, Michigan 48220
By: __________________________
Title:
34 North Main Street SOCIETY NATIONAL BANK
Dayton, Ohio 45401-1103
By: __________________________
Title:
</TABLE>
48
<PAGE> 30
ANNEX I
(SEE SECTION 1.14)
<TABLE>
<CAPTION>
BANK COMMITMENT
- ---- -----------
<S> <C>
STAR BANK, NATIONAL ASSOCIATION $ 14,000,000
BANK ONE, DAYTON NA 14,000,000
THE FIRST NATIONAL BANK OF CHICAGO 9,000,000
NBD BANK 9,000,000
SOCIETY NATIONAL BANK 14,000,000
----------
Total Commitment $60,000,000
===========
</TABLE>
49
<PAGE> 31
EXHIBIT A
(SEE SECTION 2.05)
NOTE
$_______________________________ Cincinnati, Ohio
___________, 19___
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION an
Ohio corporation (the "Company"), hereby promises to pay to the order of
____________ (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of STAR BANK, NATIONAL ASSOCIATION
(the "Agent") located at 425 Walnut Street, Cincinnati, Ohio 45201 (i) the
principal amount of each Loan made by the Bank pursuant to, and as defined in
the Agreement referred to below on the last day of the Interest Period (as
defined in the Agreement) applicable thereto and (ii) on March 31, 1998 the
principal sum of _________ dollars ($________) or, if less, the unpaid
principal amount of all Loans made by the Bank pursuant to the Agreement.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of June 7, 1995 among the Company, the Bank and the other
banking institutions party thereto (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof and shall be subject to
the provisions thereof.
In case an Event of Default (as defined in the
Agreement) shall occur and be continuing, the principal of and accrued interest
on this Note may be declared to be due and payable in the manner and with the
effect provided in the Agreement.
The Company hereby waives presentment, demand, protest
or notice of any kind in connection with this Note.
This Note shall be construed in accordance with and be
governed by the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By ___________________________________________
Title _______________________________________
50
<PAGE> 32
EXHIBIT B
(SEE SECTION 5.01(D))
OPINION OF COUNSEL FOR THE COMPANY
The opinion of Denis G. Daly, counsel for Amcast Industrial
Corporation (the "Company") referred to in Section 4.01(d) of the Credit
Agreement (the "Agreement") to which this Exhibit B is attached shall cover the
matters set forth in paragraphs 1 through 5 below; except as otherwise defined
herein, terms used herein and defined in the Agreement shall be used herein as
so defined.
1. The Company (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation and (ii) has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged.
2. The Company has the corporate power to execute, deliver and
carry out the terms and provisions of the Agreement and the Notes and has taken
all necessary corporate action (including, without limitation, any consent of
stockholders required by law or by its Articles of Incorporation or Code of
Regulations) to authorize the execution, delivery and performance of the
Agreement and the Notes. The Agreement and the Notes have been duly executed
and delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
3. Neither the execution, delivery or performance by the
Company of the Agreement or the Notes, nor the consummation of the transactions
therein contemplated, nor compliance with the terms and provisions thereof, (i)
will contravene any applicable provision of any law, statute, rule or
regulation, or of any order, writ, injunction or decree of any court or
governmental instrumentality known to such counsel or (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) and Lien upon
any of the property or assets of the Company pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument known to such
counsel to which the Company is a party or by which it or any of its property
or assets is bound or to which it may be subject, or (iii) will violate any
provision of the Articles of Incorporation or Code of Regulations of the
Company.
4. Except as set forth in Exhibit E to the Agreement, a copy of
which is attached hereto, to the best of the knowledge of such counsel after
due inquiry, there are no actions, suits or proceedings pending or threatened
against or affecting the Company before any court or before any governmental or
administrative body or agency the outcome of which might materially and
adversely affect the operations, business, property or assets or the financial
condition of the Company and its Subsidiaries taken as a whole.
51
<PAGE> 33
5. To the best of counsel's knowledge after due inquiry, no
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with (i) the execution, delivery and performance of the
Agreement or the Notes, or (ii) the legality, validity, binding effect or
enforceability of the Agreement or the Notes.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of Ohio and the federal laws of the United States of
America.
Very truly yours,
Denis G. Daly
Vice President, Legal Affairs & Secretary
52
<PAGE> 34
EXHIBIT C
(SEE SECTION 9.12 AND 9.13)
THE AGENT AGREEMENT
-------------------
1. APPOINTMENT. The Banks hereby designate STAR BANK,
NATIONAL ASSOCIATION, as Agent to act as herein specified. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of a Note
shall be deemed irrevocably to authorize, the Agent to take such action on its
behalf under the provisions of this Agreement and the Notes and any other
instruments and agreements referred to herein and to exercise such powers and
to perform such duties hereunder and thereunder as are specifically delegated
to or required of the Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. The Agent may perform any of its
duties hereunder by or through its agents or employees.
2. NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. Neither
the Agent nor any of its officers, directors, employees or agents shall be
liable for any action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Bank; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement except as expressly set forth herein.
3. LACK OF RELIANCE ON THE AGENT. Independently and
without reliance upon the Agent, each Bank, to the extent it deems appropriate,
has made and shall continue to make (i) its own independent investigation of
the financial condition and affairs of the Company in connection with the
making and the continuance of the Loans hereunder and the taking or not taking
of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Company, and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Loans or at any time or times thereafter. The Agent shall not be
responsible to any Bank for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, collectibility, priority or sufficiency
of this Agreement or the Notes or the financial condition of the Company or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or the Notes, or
the financial condition of the Company, or the existence or possible existence
of any Default or Event of Default.
4. CERTAIN RIGHTS OF THE AGENT. If the Agent shall
request instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement, the Agent shall
be entitled to refrain from such act or taking such action unless and until the
Agent shall have received instructions from the Required Banks; and the Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Bank shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
hereunder in accordance with the instructions of the Required Banks.
5. RELIANCE. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution,
notice, statement, certificate, telex, teletype or
53
<PAGE> 35
telecopier message, cablegram, radiogram, order or other document or telephone
message believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement and its duties hereunder, upon advice of counsel
selected by it.
6. INDEMNIFICATION. To the extent the Agent is not
reimbursed and indemnified by the Company, the Banks will reimburse and
indemnify the Agent, in proportion to their respective aggregate Commitments to
lend under this Agreement, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suites, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement; PROVIDED
that no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct.
7. THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to
its obligation to lend under this Agreement, the Loans made by it and the Note
issued to it, the Agent shall have the same rights and powers hereunder as any
other Bank or holder of a Note and may exercise the same as though it were not
performing the duties specified herein; and the terms "Banks", Required Banks",
"holders of Notes", or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity. The Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Company or any affiliate of the
Company as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Company for services in connection
with this Agreement and otherwise without having to account for the same to the
Banks.
8. HOLDERS OF NOTES. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof shall have been filed
with the Agent. Any request, authority or consent of any person or entity who,
at the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
9. RESIGNATION BY THE AGENT. (a) The Agent may resign
from the performance of all its functions and duties hereunder and/or under the
Assignment at any time by giving 15 Business Days' prior written notice to the
Company and the Banks. Such resignation shall take effect upon the appointment
of a successor Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Banks shall
appoint a successor Agent hereunder who shall be reasonably satisfactory to the
Company and shall be an incorporated bank or trust company.
(c) If a successor Agent shall not have been so appointed
within said 15 Business Day period, the Agent, with the consent of the Company,
shall then appoint a successor Agent who shall serve as Agent hereunder until
such time, if any, as the Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all the duties of the Agent
hereunder until such time, if any, as the Banks appoint a successor Agent as
provided above.
54
<PAGE> 36
STAR BANK, NATIONAL ASSOCIATION
Individually and as "AGENT"
By: ________________________________
Title: ______________________________
BANK ONE, DAYTON, NA
By: ________________________________
Title: _____________________________
THE FIRST NATIONAL BANK OF CHICAGO
By: ________________________________
Title: _____________________________
NBD BANK
By: ________________________________
Title: _____________________________
SOCIETY NATIONAL BANK
By: ________________________________
Title: _____________________________
55
<PAGE> 37
EXHIBIT D
(SEE SECTION 6.12)
DEBT
----
$20 Million Senior Note Agreement, due June 5, 1996, 9.32%, between Amcast
Industrial Corporation and Principal Mutual Life Insurance Company, dated May
1, 1986, as amended. Annual principal payments of $2,857,143 starting June 5,
1990.
$10 Million Senior Note Agreement, due September 15, 1999, 9%, between Amcast
Industrial Corporation and Principal Mutual Life Insurance Company, dated
September 1, 1989, as amended. Annual principal payments of $1.5 million in
1990 and 1991, and $875,000 thereafter.
Loan Agreement by and between the City of Fayetteville, Arkansas, and Amcast
Industrial Corporation, dated as of December 1, 1991, for $5,050,000 City of
Fayetteville, Arkansas, variable/fixed rate demand Industrial Development
Revenue Refunding Bonds, Series 1992. Principal payable at maturity, December
1, 2004. Supported by a letter of credit issued by Bank One, Dayton, NA.
Loan Agreement between City of Elkhart, Indiana, and Elkhart Products
Corporation, dated as of February 1, 1988, for $2,050,000, Economic Development
Revenue Refunding Bonds, Series 1988. Annual principal payments $125,000 in
1992 and $175,000 thereafter. Maturity February 1, 2003. Supported by a
letter of credit issued by Bank One, Columbus, NA.
Loan Agreement between The Town of Fremont, Indiana and WheelTek, Inc., an
Indiana corporation, dated November 20, 1990, for $350,000, 5%, due December
15, 1997. Principal payable annually.
Bank loans under short-term credit facilities provided by the banks
participating in the revolving credit agreement.
56
<PAGE> 38
NOTE
----
$14,000,000 Cincinnati, Ohio
June 7, 1995
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION,
an Ohio corporation (the "Company"), hereby promises to pay to the order of
BANK ONE, DAYTON, NA (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of STAR BANK, NATIONAL
ASSOCIATION (the "Agent") located at 425 Walnut Street, Cincinnati, Ohio 45201
(i) the principal amount of each Loan made by the Bank pursuant to, and as
defined in the Agreement referred to below on the last day of the Interest
Period (as defined in the Agreement) applicable thereto and (ii) on March 31,
1998 the principal sum of FOURTEEN MILLION dollars ($14,000,000) or, if less,
the unpaid principal amount of all Loans made by the Bank pursuant to the
Agreement.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of June 7, 1995 among the Company, the Bank and the other
banking institutions party thereto (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof and shall be subject to
the provisions thereof.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
This Note shall be constructed in accordance with and be
governed by the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By: _______________________________
Title: ______________________________
57
<PAGE> 39
NOTE
----
$14,000,000 Cincinnati, Ohio
June 7, 1995
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION, an Ohio
corporation (the "Company"), hereby promises to pay to the order of STAR BANK,
NATIONAL ASSOCIATION (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of STAR BANK, NATIONAL
ASSOCIATION (the "Agent") located at 425 Walnut Street, Cincinnati, Ohio 45201
(i) the principal amount of each Loan made by the Bank pursuant to, and as
defined in the Agreement referred to below on the last day of the Interest
Period (as defined in the Agreement) applicable thereto and (ii) on March 31,
1998 the principal sum of FOURTEEN MILLION dollars ($14,000,000) or, if less,
the unpaid principal amount of all Loans made by the Bank pursuant to the
Agreement.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of June 7, 1995 among the Company, the Bank and the other
banking institutions party thereto (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof and shall be subject to
the provisions thereof.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
This Note shall be construed in accordance with and be governed
by the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By: ________________________________
Title: _______________________________
58
<PAGE> 40
NOTE
----
$9,000,000 Cincinnati, Ohio
June 7, 1995
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION, an Ohio
corporation (the "Company"), hereby promises to pay to the order of THE FIRST
NATIONAL BANK OF CHICAGO (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of STAR BANK, NATIONAL
ASSOCIATION (the "Agent") located at 425 Walnut Street, Cincinnati, Ohio 45201
(i) the principal amount of each Loan made by the Bank pursuant to, and as
defined in the Agreement referred to below on the last day of the Interest
Period (as defined in the Agreement) applicable thereto and (ii) on March 31,
1998 the principal sum of NINE MILLION dollars ($9,000,000) or, if less, the
unpaid principal amount of all Loans made by the Bank pursuant to the
Agreement.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of June 7, 1995 among the Company, the Bank and the other
banking institutions party thereto (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof and shall be subject to
the provisions thereof.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
This Note shall be construed in accordance with and be governed
by the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By: _______________________________
Title: ______________________________
59
<PAGE> 41
NOTE
----
$9,000,000 Cincinnati, Ohio
June 7, 1995
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION,
an Ohio corporation (the "Company"), hereby promises to pay to the order of NBD
BANK (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of STAR BANK, NATIONAL ASSOCIATION
(the "Agent") located at 425 Walnut Street, Cincinnati, Ohio 45201 (i) the
principal amount of each Loan made by the Bank pursuant to, and as defined in
the Agreement referred to below on the last day of the Interest Period (as
defined in the Agreement) applicable thereto and (ii) on March 31, 1998 the
principal sum of NINE MILLION dollars ($9,000,000) or, if less, the unpaid
principal amount of all Loans made by the Bank pursuant to the Agreement.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of June 7, 1995 among the Company, the Bank and the other
banking institutions party thereto (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof and shall be subject to
the provisions thereof.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
This Note shall be constructed in accordance with and be
governed by the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By: _______________________________
Title: ______________________________
60
<PAGE> 42
NOTE
----
$14,000,000 Cincinnati, Ohio
June 7, 1995
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION, an Ohio
corporation (the "Company"), hereby promises to pay to the order of SOCIETY
NATIONAL BANK (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of STAR BANK, NATIONAL ASSOCIATION
(the "Agent") located at 425 Walnut Street, Cincinnati, Ohio 45201 (i) the
principal amount of each Loan made by the Bank pursuant to, and as defined in
the Agreement referred to below on the last day of the Interest Period (as
defined in the Agreement) applicable thereto and (ii) on March 31, 1998 the
principal sum of FOURTEEN MILLION dollars ($14,000,000) or, if less, the unpaid
principal amount of all Loans made by the Bank pursuant to the Agreement.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of June 7, 1995 among the Company, the Bank and the other
banking institutions party thereto (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof and shall be subject to
the provisions thereof.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Agreement.
The Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
This Note shall be constructed in accordance with and be
governed by the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By: _______________________________
Title: ______________________________
61
<PAGE> 43
AMCAST INDUSTRIAL CORPORATION
OFFICER'S CERTIFICATE
SECTION 5.01(C) OF
CREDIT AGREEMENT
This certificate is delivered pursuant to Section 5.01(c) of the
Credit Agreement, dated June 7, 1995 (the "Agreement"), among Amcast Industrial
Corporation (the "Company") and Star Bank, National Association acting
individually and as agent, Bank One, Dayton, NA, The First National Bank of
Chicago, NBD Bank, and Society National Bank (the "Banks").
The undersigned officer of Company does hereby certify that he is an
officer of Company and that he is duly authorized to execute this Certificate
on behalf of Company and further certifies as follows:
Each of the representations, warranties and agreements of the Company
set forth in the Agreement is true and correct as of the date hereof
with the same effect as though made on and (except to the extent that
any such representation or warranty relates to a particular date) as
of the date hereof and no Default or Event of Default has occurred and
is continuing under the Agreement.
WITNESS the due execution hereof this 6th day of June, 1995.
AMCAST INDUSTRIAL CORPORATION
By: _______________________________
John H. Shuey
President and Chief
Executive Officer
I hereby certify that John H. Shuey is the duly elected President and
Chief Executive Officer of AMCAST INDUSTRIAL CORPORATION and that the signature
appearing immediately above is his own true signature.
By: _______________________________
Denis G. Daly
Secretary
62
<PAGE> 44
EXHIBIT A2
SEE SECTION 2.05(C)
TERM NOTE
---------
$_______________ Cincinnati, Ohio
___________, 1995
FOR VALUE RECEIVED, AMCAST INDUSTRIAL CORPORATION, an Ohio corporation
(the "Company"), hereby promises to pay to the order of
_________________________ (the "Bank"), in lawful money of the United States of
America in immediately available funds, at the office of STAR BANK, NATIONAL
ASSOCIATION (the "Agent") located at 425 Walnut Street, Cincinnati, Ohio,
45201, by the dates prescribed in Section 2.13 of the Agreement (or such
earlier date as this Term Note may expire, by acceleration or otherwise,
pursuant to the terms and conditions of the Agreement), the principal sum(s)
corresponding with such dates as described in Section 2.13 of the Agreement.
Subject to Section 2.13 of the Agreement referred to below, this term Note
shall have as its final maturity April 1, 2000.
The Company promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in the Agreement.
This Term Note is one of the Term Notes referred to in the Amended and
Restated Credit Agreement dated as of June 7, 1995 among the Company, the Bank
and the other financial institutions party thereto (as from time to time in
effect, the "Agreement") and is entitled to the benefits thereof and shall be
subject to the provisions thereof.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Term Note may
be declared due and payable in the manner and with the effect provided in the
Agreement.
The Company hereby waives presentment, demand, protest or notice of
any kind in connection with this Term Note.
This Note shall be construed in accordance with and be governed by
the law of the State of Ohio.
AMCAST INDUSTRIAL CORPORATION
By: _______________________________
Title: ______________________________
63
<PAGE> 1
Exhibit 4.4
FIFTH AMENDMENT TO NOTE AGREEMENT
This Fifth Amendment to the Note Agreement (the "Fifth Amendment") is entered
into as of this 24th day of July, 1995, between AMCAST INDUSTRIAL CORPORATION,
an Ohio corporation (the "Company"), having an address at 3931 S. Dixie
Avenue, P.O. Box 98, Dayton, Ohio, 45401 and PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY, an Iowa corporation, formerly known as Bankers Life Company
("Principal Mutual"), having its home office and principal mailing address at
711 High Street, Des Moines, Iowa 50392-0800.
R E C I T A L S :
The Company and Principal Mutual entered into a Note Agreement dated May 1,
1986, as amended by a First Amendment dated February 27, 1987, Amendment No. 2
dated December 1, 1997, an Amendment Agreement dated September 1, 1989, and a
Fourth Amendment to Note Agreement dated December 20, 1994 (the "Note
Agreement"). In accordance with the terms of the Note Agreement, the Company
issued its 9.32% Senior Notes due June 5, 1996 to Principal Mutual in the
original principal amount of $20,000,000 (the "Notes"). Principal Mutual is
the owner and registered holder of the Notes.
The Company has requested, and Principal Mutual has agreed, that the Note
Agreement be amended in certain particulars as set forth in this Fifth
Amendment.
Terms used herein but not defined herein shall have the meaning set forth in
the Note Agreement.
NOW THEREFORE, in consideration of the premises set forth above and in
consideration of the mutual covenants and conditions herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged.
1. RECITALS INCORPORATED. The Recitals set forth above are incorporated
herein by reference.
2. AMENDMENT TO THE NOTE AGREEMENT.
2.1 Section 5.1 of the Note Agreement is hereby amended by
inserting the following definitions in their respective alphabetical order:
"ACT" shall mean Amcast Casting Technologies, Inc., an Indiana
corporation.
64
<PAGE> 2
"CTC" shall mean Casting Technologies Company, an Indiana
general partnership, the general partners of which are ACT and Izumi
Industries, Inc., a Delaware corporation.
"CTC INDEBTEDNESS" shall mean the Revolving Credit Agreement
dated July 1995, by and between CTC, as borrower, and NBD Bank and Asahi Bank,
as lenders, as the same may be amended, modified or supplemented from time to
time and in accordance with its terms, in an aggregate amount not to exceed
$25,000,000.
2.2 Section 6.8(b) is hereby amended to read in its entirety as
follows:
"(b) The Company (i) will not permit any Subsidiary to
create, assume, incur, guarantee, suffer to exist or otherwise become liable,
directly or indirectly, in respect of any Indebtedness described in clauses (i)
through (iv) of the definition of "Indebtedness" ("Specified Indebtedness")
except (w) Specified Indebtedness owed to the Company, (x) Specified
Indebtedness secured by mortgages, pledges, security interests, encumbrances,
liens or charges of any kind permitted in Section 6.9 hereof, (y) unsecured
Specified Indebtedness incurred in connection with the issuance of industrial
revenue bonds and (z) unsecured Specified Indebtedness of ACT incurred in
connection with and limited to the CTC Indebtedness, (ii) will not permit the
aggregate Specified Indebtedness of its Subsidiaries (excluding (x) Specified
Indebtedness owed to the Company and (y) Specified Indebtedness of ACT incurred
in connection with and limited to the CTC Indebtedness) to exceed 20% of
Consolidated Adjusted Net Worth and (iii) will not permit the aggregate
Specified Indebtedness of its Subsidiaries secured by mortgages, pledges,
security interests, encumbrances, liens or charges of any kind permitted in
Section 6.9 hereof (excluding (x) secured Specified Indebtedness incurred in
connection with the issuance of industrial revenue bonds and (y) only to the
extent secured by mortgages, liens or security interests on property or assets
of CTC, Specified Indebtedness of ACT incurred in connection with and limited
to the CTC Indebtedness) to exceed 10% of Consolidated Adjusted Net Worth."
2.3 Section 6.9 is hereby amended so that: (i) the word "and" at
the end of Section 6.9(f) is deleted; (ii) the "." at the end of Section 6.9(g)
is replaced with "; and"; and (iii) Section 6.9(h) is inserted immediately
after Section 6.9(g) to read as follows:
"(h) mortgages, liens or security interests on property or
assets of CTC securing the CTC Indebtedness."
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company,
by its execution and delivery of this Amendment, hereby represents and warrants
to Principal Mutual as follows:
3.1 As of the date of this Fifth Amendment, no Default or Event of
Default under the Note Agreement, or under any other agreement to which the
Company is subject, exists or is continuing, after giving effect to the
amendment set forth herein.
65
<PAGE> 3
3.2 The representations and warranties of the Company referred to
in Section 3.1 of the Note Agreement are true and correct and complete in all
material respects as if made on the date hereof, except as to those
representations and warranties made as of a specific date, which are true and
correct and materially complete as of such date.
3.3 No dissolution proceedings with respect to the Company have
been commenced or are contemplated, and there has been no material adverse
change in the business, condition or operations (financial or otherwise) of the
Company, taken as a whole, since May 1, 1986.
3.4 This Fifth Amendment has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company.
3.5 The Company has not modified any agreement with any creditor
of the Company, other than by this Fifth Amendment, unless the Company has
disclosed the terms of such modification to Principal Mutual in writing.
4. MISCELLANEOUS.
4.1 Except as expressly set forth in this Fifth Amendment, the
terms of this Fifth Amendment shall not operate as a waiver by Principal Mutual
of any provisions of, or otherwise prejudice, remedies or powers under the Note
Agreement, the Notes or applicable law and shall not operate as a waiver of or
otherwise prejudice any rights it may have against any other Person. Except as
set forth in this Fifth Amendment, none of the terms or provisions of either
the Note Agreement or the Notes shall be deemed to be modified hereby, and each
of the Note Agreement and the Notes, as modified herein, shall continue in full
force and effect.
4.2 All headings and captions preceding the text of the several
sections of this Fifth Amendment are intended solely for convenience of
reference and shall not constitute a part of this Fifth Amendment, nor shall
they affect its meaning, construction or effect.
4.3 This Fifth Amendment embodies the entire agreement and
understanding among the Company and Principal Mutual with regard to the matters
set forth herein, and supersedes all prior agreements and undertakings relating
to such matters.
4.4 This Fifth Amendment shall be governed by, and construed and
enforced in accordance with the law of the State of Ohio.
4.5 This Fifth Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
[The rest of this page is intentionally blank]
66
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Amendment to be executed by their authorized officers as of the date first
written above.
AMCAST INDUSTRIAL CORPORATION
By: /s/ Douglas D. Watts
--------------------------------
Douglas D. Watts
Its: Vice President, Finance
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By:/s/ Christopher J. Henderson
---------------------------------
Christopher J. Henderson
Its: Counsel
By:/s/ Jon C. Heiny
---------------------------------
Jon C. Heiny
Its: Counsel
67
<PAGE> 1
Exhibit 4.6
AMENDMENT TO NOTE AGREEMENT
This Amendment to the Note Agreement (the "Amendment") is entered into as of
this 24th day of July, 1995, between AMCAST INDUSTRIAL CORPORATION, an Ohio
corporation (the "Company"), having an address at 3931 S. Dixie Avenue, P.O.
Box 98, Dayton, Ohio, 45401 and PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an
Iowa corporation ("Principal Mutual"), having its home office and principal
mailing address at 711 High Street, Des Moines, Iowa 50392-0800.
R E C I T A L S :
The Company and Principal Mutual entered into a Note Agreement dated September
1, 1989 (the "Note Agreement"). In accordance with the terms of the Note
Agreement, the Company issued its 9.0% Senior Notes due September 15, 1999 to
Principal Mutual in the original principal amount of $10,000,000 (the "Notes").
Principal Mutual is the owner and registered holder of the Notes.
The Company has requested, and Principal Mutual has agreed, that the Note
Agreement be amended in certain particulars as set forth in this Amendment.
Terms used herein but not defined herein shall have the meaning set forth in
the Note Agreement.
NOW THEREFORE, in consideration of the premises set forth above and in
consideration of the mutual covenants and conditions herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged.
1. RECITALS INCORPORATED. The Recitals set forth above are incorporated herein
by reference.
2. AMENDMENT TO THE NOTE AGREEMENT.
2.1 Section 5.1 of the Note Agreement is hereby amended by
inserting the following definitions in their respective alphabetical order:
"ACT" shall mean Amcast Casting Technologies, Inc., an
Indiana corporation.
"CTC" shall mean Casting Technologies Company, an
Indiana general partnership, the general partners of which are ACT and Izumi
Industries, Inc., a Delaware corporation.
68
<PAGE> 2
"CTC Indebtedness" shall mean the Revolving Credit Agreement dated July
1995, by and between CTC, as borrower, and NBD Bank and Asahi Bank, as lenders,
as the same may be amended, modified or supplemented from time to time and in
accordance with its terms, in an aggregate amount not to exceed $25,000,000.
2.2 Section 6.8(b) is hereby amended to read in its entirety as follows:
"(b) The Company (i) will not permit any Subsidiary to create, assume,
incur, guarantee, suffer to exist or otherwise become liable, directly or
indirectly, in respect of any Indebtedness described in clauses (i) through
(iv) of the definition of "Indebtedness" ("Specified Indebtedness") except (w)
Specified Indebtedness owed to the Company, (x) Specified Indebtedness secured
by mortgages, pledges, security interests, encumbrances, liens or charges of
any kind permitted in Section 6.9 hereof, (y) unsecured Specified Indebtedness
incurred in connection with the issuance of industrial revenue bonds and (z)
unsecured Specified Indebtedness of ACT incurred in connection with and limited
to the CTC Indebtedness, (ii) will not permit the aggregate Specified
Indebtedness of its Subsidiaries (excluding (x) Specified Indebtedness owed to
the Company and (y) Specified Indebtedness of ACT incurred in connection with
and limited to the CTC Indebtedness) to exceed 20% of Consolidated Adjusted Net
Worth and (iii) will not permit the aggregate Specified Indebtedness of its
Subsidiaries secured by mortgages, pledges, security interests, encumbrances,
liens or charges of any kind permitted in Section 6.9 hereof (excluding (x)
secured Specified Indebtedness incurred in connection with the issuance of
industrial revenue bonds and (y) only to the extent secured by mortgages, liens
or security interests on property or assets of CTC, Specified Indebtedness of
ACT incurred in connection with and limited to the CTC Indebtedness) to exceed
10% of Consolidated Adjusted Net Worth."
2.3 Section 6.9 is hereby amended so that: (i) the word "and" at the end of
Section 6.9(f) is deleted; (ii) the "." at the end of Section 6.9(g) is
replaced with "; and"; and (iii) Section 6.9(h) is inserted immediately after
Section 6.9(g) to read as follows:
"(h) mortgages, liens or security interests on property or assets of
CTC securing the CTC Indebtedness."
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company, by its
execution and delivery of this Amendment, hereby represents and warrants to
Principal Mutual as follows:
3.1 As of the date of this Amendment, no Default or Event of Default under the
Note Agreement, or under any other agreement to which the Company is subject,
exists or is continuing, after giving effect to the amendment set forth herein.
3.2 The representations and warranties of the Company referred to in Section
3.1 of the Note Agreement are true and correct and complete in all material
respects as if made on the date hereof, except as to those representations and
warranties made as of a specific date, which are true and correct and
materially complete as of such date.
69
<PAGE> 3
3.3 No dissolution proceedings with respect to the Company have been commenced
or are contemplated, and there has been no material adverse change in the
business, condition or operations (financial or otherwise) of the Company,
taken as a whole, since September 1, 1989.
3.4 This Amendment has been duly authorized, executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company.
3.5 The Company has not modified any agreement with any creditor of the
Company, other than by this Amendment, unless the Company has disclosed the
terms of such modification to Principal Mutual in writing.
4. Miscellaneous.
-------------
4.1 Except as expressly set forth in this Amendment, the terms of this
Amendment shall not operate as a waiver by Principal Mutual of any provisions
of, or otherwise prejudice, remedies or powers under the Note Agreement, the
Notes or applicable law and shall not operate as a waiver of or otherwise
prejudice any rights it may have against any other Person. Except as set forth
in this Amendment, none of the terms or provisions of either the Note Agreement
or the Notes shall be deemed to be modified hereby, and each of the Note
Agreement and the Notes, as modified herein, shall continue in full force and
effect.
4.2 All headings and captions preceding the text of the several sections of
this Amendment are intended solely for convenience of reference and shall not
constitute a part of this Amendment, nor shall they affect its meaning,
construction or effect.
4.3 This Amendment embodies the entire agreement and understanding among the
Company and Principal Mutual with regard to the matters set forth herein, and
supersedes all prior agreements and undertakings relating to such matters.
4.4 This Amendment shall be governed by, and construed and enforced in
accordance with the law of the State of Ohio.
4.5 This Amendment may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
[The rest of this page is intentionally blank]
70
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their authorized officers as of the date first written above.
AMCAST INDUSTRIAL CORPORATION
/s/ Douglas D. Watts
By:_________________________________
Its: Vice President, Finance
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
/s/ Christopher J. Henderson
By:__________________________________
Its: Christopher J. Henderson
Counsel
/s/ Jon C. Heiny
By:__________________________________
Its: Jon C. Heiny
71
<PAGE> 1
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
72
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<S> <C> <C>
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
</TABLE>
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<TABLE>
<CAPTION>
EXHIBITS AND SCHEDULES
<S> <C>
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
</TABLE>
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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
------------
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
-----------
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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<PAGE> 8
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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<PAGE> 9
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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<PAGE> 10
"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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<PAGE> 52
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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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]
<PAGE> 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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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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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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
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(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
<PAGE> 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
135
GUARANTY AGREEMENT-NBD
<PAGE> 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
<PAGE> 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
<PAGE> 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
138
GUARANTY AGREEMENT-NBD
<PAGE> 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
139
GUARANTY AGREEMENT-NBD
<PAGE> 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
140
GUARANTY AGREEMENT-NBD
<PAGE> 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.
141
GUARANTY AGREEMENT-NBD
<PAGE> 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: ___________________________
142
GUARANTY AGREEMENT-NBD
<PAGE> 72
ANNEX I TO
GUARANTY AGREEMENT-NBD
SUBSIDIARIES
------------
<TABLE>
<CAPTION>
Percentage of
Name of Jurisdiction Ownership by Company
Subsidiary of Organization or Other Subsidiaries
- ---------- -------------- --------------------
<S> <C> <C>
</TABLE>
143
GUARANTY AGREEMENT-NBD
<PAGE> 73
EXHIBIT A TO
GUARANTY AGREEMENT-NBD
OUTSTANDING INDEBTEDNESS
------------------------
1. Amcast Credit Agreement (as defined herein)
LITIGATION
----------
144
GUARANTY AGREEMENT-NBD
<PAGE> 1
Draft of November 7, 1995 Exhibit 4.10
================================================================================
AMCAST INDUSTRIAL CORPORATION
NOTE AGREEMENT
Dated as of November 1, 1995
Re: $50,000,000 7.09% Senior Notes
Due
November 7, 2005
================================================================================
145
<PAGE> 2
TABLE OF CONTENTS
(Not a part of the Agreement)
<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C> <C>
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Description of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Commitment, Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2. Optional Prepayment with Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Prepayment of Notes upon Change of Control . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.4. Notice of Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Application of Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Direct Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.1. Representations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Representations of the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2. Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5. COMPANY COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.1. Corporate Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with Laws . . . . . . . . . . . . . . 8
Section 5.4. Maintenance, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.5. Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.6. Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.7. Maintenance of Consolidated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.8. Limitations on Consolidated Priority Indebtedness . . . . . . . . . . . . . . . . . . . 9
Section 5.9. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.10. Mergers, Consolidations and Sales of Assets . . . . . . . . . . . . . . . . . . . 12
Section 5.11. Repurchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.12. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.13. Termination of Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.14. Notes to Rank Pari Passu . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.15. Reports and Rights of Inspection . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR . . . . . . . . . . . . . . . . . . . . . 19
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.2. Notice to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.3. Acceleration of Maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 6.4. Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.1. Consent Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.2. Solicitation of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.3. Effect of Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS . . . . . . . . . . . . . . . . . . . . 23
Section 8.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.2. Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 8.3. Directly or Indirectly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.1. Registered Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.2. Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative . . . . . . . . . . . . . . . . 32
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.7. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.8. Survival of Covenants and Representations . . . . . . . . . . . . . . . . . . . . 32
Section 9.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.11. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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<PAGE> 4
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Names and Addresses of Purchasers and Amounts of
Commitments
Schedule II - Indebtedness; Liens Securing Indebtedness
(including Capitalized Leases); and Subsidiaries as
of the Closing Date
Schedule III - Use of Proceeds
Exhibit A - Form of 7.09% Senior Note due November 7, 2005
Exhibit B - Representations and Warranties of the Company
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinions of Counsel to the
Company
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<PAGE> 5
AMCAST INDUSTRIAL CORPORATION
7887 Washington Village Drive
Dayton, Ohio 45459
NOTE AGREEMENT
Re: $50,000,000 7.09% Senior Notes
Due November 7, 2005
Dated as of
November 1, 1995
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Amcast Industrial Corporation, an Ohio corporation
(the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $50,000,000 aggregate principal amount of its 7.09% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from such
date at the rate of 7.09% per annum, payable quarterly on the seventh day of
February, May, August and November in each year (commencing February 7, 1996)
and at maturity and to bear interest on overdue principal (including any
overdue required or optional prepayment of principal) and premium, if any, and
(to the extent legally enforceable) on any overdue installment of interest at
the Overdue Rate after the date due, whether by acceleration or otherwise,
until paid, to be expressed to mature on November 7, 2005, and to be
substantially in the form attached hereto as Exhibit A. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve 30-day months. The
Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and
in the amounts and with the premium, if any, set forth in SECTION 2 of this
Agreement. The term "Notes" as used herein shall include each Note delivered
pursuant to this Agreement and the separate agreements with the other
purchasers named in Schedule I. You and
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<PAGE> 6
the other purchasers named in Schedule I are hereinafter sometimes referred to
as the "Purchasers". The terms which are capitalized herein shall have the
meanings set forth in SECTION 8.1 unless the context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes in the principal amount set forth
opposite your name on Schedule I hereto at a price of 100% of the principal
amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, against payment
therefor in Federal Reserve or other funds current and immediately available at
the principal office of in the amount of the purchase price at 10:00 A.M.,
Chicago, Illinois time, on November 7, 1995 or such later date (not later than
November 30, 1995) as shall mutually be agreed upon by the Company and the
Purchasers (the "Closing Date"). The Notes delivered to you on the Closing
Date will be delivered to you in the form of a single registered Note in the
form attached hereto as Exhibit A for the full amount of your purchase (unless
different denominations are specified by you), registered in your name or in
the name of such nominee, as may be specified in Schedule I attached hereto.
Section 1.3. Other Agreements. Simultaneously with the
execution and delivery of this Agreement, the Company is entering into similar
agreements with the other Purchasers under which such other Purchasers agree to
purchase from the Company the principal amount of Notes set opposite such
Purchasers' names in Schedule I, and your obligation and the obligations of the
Company hereunder are subject to the execution and delivery of the similar
agreements by the other Purchasers. This Agreement and said similar agreements
with the other Purchasers are herein collectively referred to as the
"Agreements". The obligations of each Purchaser shall be several and not joint
and no Purchaser shall be liable or responsible for the acts of any other
Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. In addition to paying the
entire outstanding principal amount and the interest due on the Notes on the
maturity date thereof, the Company agrees that on the seventh day of November
in each year, commencing November 7, 2002 and ending November 7, 2004, 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 lesser
of (a) $12,500,000 or (b) the principal amount of the Notes then outstanding.
The entire remaining principal amount of the Notes shall become due and payable
on November 7, 2005. No premium shall be payable in connection with any
required prepayment made pursuant to this SECTION 2.1.
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<PAGE> 7
In the event that the Company shall prepay less than all of the Notes
pursuant to SECTION 2.2, the amounts of the prepayments required by this SECTION
2.1 shall be reduced by an amount which is the same percentage of such required
prepayment as the percentage that the principal amount of Notes prepaid
pursuant to SECTION 2.2 is of the aggregate principal amount of outstanding
Notes immediately prior to such prepayment.
Section 2.2. Optional Prepayment with Premium. In addition to
the payments required by SECTION 2.1, upon compliance with SECTION 2.4, the
Company shall have the privilege, at any time and from time to time of
prepaying the outstanding Notes, either in whole or in part (but if in part
then in a minimum principal amount of $1,000,000), by payment of the principal
amount of the Notes, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with a premium equal to the
Make-Whole Amount, determined as of two Business Days prior to the date of such
prepayment pursuant to this SECTION 2.2.
Section 2.3. Prepayment of Notes upon Change of Control. (a) In
the event that any Change of Control (as hereinafter defined) shall occur or
the Company shall have knowledge of any proposed Change of Control, the Company
will give written notice (the "Company Notice") of such fact in the manner
provided in SECTION 9.6 hereof to the holders of the Notes. The Company Notice
shall be delivered promptly upon receipt of such knowledge by the Company and
in any event no later than three Business Days following the occurrence of any
Change of Control. The Company Notice shall (1) describe the facts and
circumstances of such Change of Control in reasonable detail, (2) make
reference to this SECTION 2.3 and the right of the holders of the Notes to
require prepayment of the Notes on the terms and conditions provided for in
this SECTION 2.3, (3) offer in writing to prepay the outstanding Notes,
together with accrued interest to the date of prepayment, and (4) specify a
date for such prepayment (the "Change of Control Prepayment Date"), which
Change of Control Prepayment Date shall be not more than 90 days nor less than
30 days following the date of such Company Notice. Each holder of the then
outstanding Notes shall have the right to accept such offer and require
prepayment of the Notes held by such holder in full by written notice to the
Company (a "Noteholder Notice") given not later than 20 days after receipt of
the Company Notice. The Company shall on the Change of Control Prepayment Date
prepay in full all of the Notes held by holders which have so accepted such
offer of prepayment. The prepayment price of the Notes payable upon the
occurrence of any Change of Control shall be an amount equal to 100% of the
outstanding principal amount of the Notes so to be prepaid and accrued interest
thereon to the date of such prepayment.
(b)(1) Without limiting the foregoing, notwithstanding any failure on
the part of the Company to give the Company Notice herein required as a result
of the occurrence of a Change of Control, each holder of the Notes shall have
the right by delivery of written notice to the Company to require the Company
to prepay, and the Company will prepay, such holder's Notes in full, together
with accrued interest thereon to the date of prepayment. Notice of any
required
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<PAGE> 8
prepayment pursuant to this SECTION 2.3(B)(1) shall be delivered by any holder
of the Notes which was entitled to, but did not receive, such Company Notice to
the Company after such holder has actual knowledge of such Change of Control.
On the date (the "Change of Control Delayed Prepayment Date") designated in
such holder's notice (which shall be not more than 90 days nor less than 30
days following the date of such holder's notice), the Company shall prepay in
full all of the Notes held by such holder, together with accrued interest
thereon to the date of prepayment. If the holder of any Note gives any notice
pursuant to this SECTION 2.3(B)(1), the Company shall give a Company Notice
within three Business Days of receipt of such notice and identify the Change of
Control Delayed Prepayment Date to all other holders of the Notes and each of
such other holders shall then and thereupon have the right to accept the
Company's offer to prepay the Notes held by such holder in full and require
prepayment of such Notes by delivery of a Noteholder Notice within 20 days
following receipt of such Company Notice; provided only that any date for
prepayment of such holder's Notes shall be the Change of Control Delayed
Prepayment Date. On the Change of Control Delayed Prepayment Date, the Company
shall prepay in full the Notes of each holder thereof which has accepted such
offer of prepayment at a prepayment price equal to 100% of the outstanding
principal amount of the Notes so to be prepaid and accrued interest thereon to
the date of such prepayment.
(2) Compliance with the provisions of this SECTION 2.3(B) shall
not be deemed to constitute a waiver of, or consent to, any Default or Event of
Default caused by any violation of the provisions of SECTION 2.3(A).
Section 2.4. Notice of Optional Prepayments. The Company will
give notice of any prepayment of the Notes pursuant to SECTION 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (a) such date, (b) the principal
amount of the holder's Notes to be prepaid on such date, (c) that a premium may
be payable, (d) the date when such premium will be calculated, (e) the
estimated premium, together with a reasonably detailed computation of such
estimated premium, and (f) the accrued interest applicable to the prepayment.
Such notice of prepayment shall also certify all facts, if any, which are
conditions precedent to any such prepayment. Notice of prepayment having been
so given, the aggregate principal amount of the Notes specified in such notice,
together with accrued interest thereon and the premium, if any, payable with
respect thereto shall become due and payable on the prepayment date specified
in said notice. Two Business Days prior to the prepayment date specified in
such notice, the Company shall provide each holder of a Note written notice of
the premium, if any, payable in connection with such prepayment and, whether or
not any premium is payable, a reasonably detailed computation of the Make-Whole
Amount.
Section 2.5. Application of Prepayments. All partial
prepayments made pursuant to SECTION 2.1 or SECTION 2.2 shall be applied on all
outstanding Notes ratably in accordance with the unpaid
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<PAGE> 9
principal amounts thereof. All partial prepayments made pursuant to SECTION
2.3 shall be applied only to the Notes of the holders who have elected to
participate in such prepayment.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note
owned by you or your nominee or owned by any subsequent Institutional Holder
which has given written notice to the Company requesting that the provisions of
this SECTION 2.6 shall apply, the Company will punctually pay when due the
principal thereof, interest thereon and premium, if any, due with respect to
said principal, without any presentment thereof, directly to you, to your
nominee or to such subsequent Institutional Holder at your address or your
nominee's address set forth in Schedule I hereto or such other address as you,
your nominee or such subsequent Institutional Holder may from time to time
designate in writing to the Company or, if a bank account with a United States
bank is designated for you or your nominee on Schedule I hereto or in any
written notice to the Company from you, from your nominee or from any such
subsequent Institutional Holder, the Company will make such payments in
immediately available funds to such bank account, no later than 1:00 p.m.
Chicago, Illinois time on the date due, marked for attention as indicated, or
in such other manner or to such other account in any United States bank as you,
your nominee or any such subsequent Institutional Holder may from time to time
direct in writing. If for any reason whatsoever the Company does not make any
such payment by such 1:00 p.m. transmittal time, such payment shall be deemed
to have been made on the next following Business Day and such payment shall
bear interest at the Overdue Rate.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations and warranties set forth in
Exhibit B are true and correct as of the date hereof and are incorporated
herein by reference with the same force and effect as though herein set forth
in full.
Section 3.2. Representations of the Purchaser. (a) You
represent, and in entering into this Agreement the Company understands, that
(1) you are an accredited investor within the meaning of Rule 501 of Regulation
D under the Securities Act of 1933, as amended, and (2) you are acquiring the
Notes for the purpose of investment and not with a view to the distribution
thereof, and that you have no present intention of selling, negotiating or
otherwise disposing of the Notes; it being understood, however, that the
disposition of your property shall at all times be and remain within your
control. You understand that the Notes have not been registered under the
Securities Act of 1933, as amended, or any state securities act and may be
resold only if registered pursuant to the provisions of such Securities Act or
such state laws or if an exemption from registration is available, except under
circumstances where neither such registration nor any
153
<PAGE> 10
such exemption is required by law. You further understand and acknowledge that
the Notes shall bear the following legend:
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF
REGISTERED UNDER SAID ACT OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
provided that the legend may be removed from the Notes of a holder upon
delivery of an opinion of counsel (which may be internal counsel for such
holder) that such legend is no longer required.
(b) You further represent that at least one of the following
statements concerning each source of funds to be used by you to purchase the
Notes is accurate as of the Closing Date:
(1) the source of funds is an "insurance company general
account" within the meaning of Department of Labor Prohibited
Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and the
purchase of the Notes by you is eligible for and satisfies the
requirements of PTE 95-60;
(2) all or a part of such funds constitute assets of one
or more separate accounts, trusts or a commingled pension trust
maintained by you, and you have disclosed to the Company the names of
such employee benefit plans whose assets in such separate account or
accounts or pension trusts exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account or accounts
or trusts as of the date of such purchase (for the purpose of this
clause (2), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);
(3) all or part of such funds constitute assets of a bank
collective investment fund maintained by you, and you have disclosed
to the Company the names of such employee benefit plans whose assets
in such collective investment fund exceed 10% of the total assets or
are expected to exceed 10% of the total assets of such fund as of the
date of such purchase (for the purpose of this clause (3), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(4) all or part of such funds constitute assets of one or
more employee benefit plans, each of which has been identified to the
Company in writing;
(5) you are acquiring the Notes for the account of one or
more pension funds, trust funds or agency accounts, each of which is a
"governmental plan" as defined in Section 3(32) of ERISA;
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<PAGE> 11
(6) the source of funds is an "investment fund" managed
by a "qualified professional asset manager" or "QPAM" (as defined in
Part V of PTE 84-14, issued March 13, 1984), provided that no other
party to the transactions described in this Agreement and no
"affiliate" of such other party (as defined in Section V(c) of PTE
84-14) has at this time, and during the immediately preceding one year
has exercised the authority to appoint or terminate said QPAM as
manager of the assets of any plan identified in writing pursuant to
this clause (6) or to negotiate the terms of said QPAM's management
agreement on behalf of any such identified plans; or
(7) if you are other than an insurance company, all or a
portion of such funds consists of funds which do not constitute "plan
assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (i) it is neither a "party in interest" (as
defined in Title I, Section 3(14) of ERISA) nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as
amended), with respect to any plan identified pursuant to clauses (2), (3) or
(4) above, or (ii) with respect to any plan identified pursuant to clause (6)
above, neither it nor any "affiliate" (as defined in Section V(c) of PTE 84-14)
is described in the proviso to said clause (6). As used in this SECTION
3.2(B), the terms "separate account" and "employee benefit plan" shall have the
respective meanings assigned to them in ERISA and the term "plan assets" shall
have the meaning assigned to it in Department of Labor Regulation 29 C.F.R.
Section 2510.3-101.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on
the Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Closing Certificate. You shall have received a
certificate dated the Closing Date, signed by the President or a Vice
President of the Company, the truth and accuracy of which shall be a
condition to your obligation to purchase the Notes proposed to be sold
to you and to the effect that (1) the representations and warranties
of the Company set forth in Exhibit B hereto are true and correct on
and with respect to the Closing Date, (2) the Company has performed
all of its obligations hereunder which are to be performed on or prior
to the Closing Date, and (3) no Default or Event of Default has
occurred and is continuing.
(b) Legal Opinions. You shall have received from Chapman
and Cutler, who are acting as your special counsel in this
transaction, and from Denis G. Daly, Esq.,
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<PAGE> 12
General Counsel of the Company, and Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, P.C., special counsel for the Company, their
respective opinions dated the Closing Date, in form and substance
satisfactory to you, and covering the matters set forth in Exhibits C
and D, respectively, hereto.
(c) Company's Existence and Authority. On or prior to
the Closing Date, you shall have received, in form and substance
reasonably satisfactory to you and your special counsel, such
documents and evidence with respect to the Company as you may
reasonably request in order to establish the existence and good
standing of the Company and the authorization of the transactions
contemplated by this Agreement.
(d) Related Transactions. The Company shall have
consummated the sale of the entire principal amount of the Notes
scheduled to be sold on the Closing Date pursuant to this Agreement
and the other agreements referred to in SECTION 1.3.
(e) Private Placement Number. On or prior to the Closing
Date, special counsel to the Purchasers shall have duly made the
appropriate filings with Standard & Poor's CUSIP Service Bureau, as
agent for the National Association of Insurance Commissioners, in
order to obtain a private placement number for the Notes.
(f) Funding Instructions. At least three Business Days
prior to the Closing Date, you shall have received written
instructions executed by a Responsible Officer of the Company
directing the manner of the payment of funds and setting forth (1) the
name and address of the transferee bank, (2) such transferee bank's
ABA number, (3) the account name and number into which the purchase
price for the Notes is to be deposited, and (4) the name and telephone
number of the account representative responsible for verifying receipt
of such funds.
(g) Special Counsel Fees. Concurrently with the delivery
of the Notes to you on the Closing Date, the charges and disbursements
of Chapman and Cutler, your special counsel, shall have been paid by
the Company.
(h) Legality of Investment. The Notes to be purchased by
you shall be a legal investment for you under the laws of each
jurisdiction to which you may be subject (without resort to any
so-called "basket provisions" to such laws).
(i) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to you and your special counsel,
and you shall have received a copy (executed or certified as may be
appropriate)
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of all legal documents or proceedings taken in connection with the
consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the
Company fails to tender to you the Notes to be issued to you on such date or if
the conditions specified in SECTION 4.1 have not been fulfilled, you may
thereupon elect to be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in SECTION 4.1 have
not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine. Nothing
in this SECTION 4.2 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will
preserve and keep in full force and effect, and will cause each Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business, provided
that the foregoing shall not prevent any transaction permitted by SECTION 5.10.
Section 5.2. Insurance. The Company will maintain, and will
cause each Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials; Compliance
with Laws. (a) The Company will promptly pay and discharge, and will cause
each Subsidiary promptly to pay and discharge, all lawful taxes, assessments
and governmental charges or levies imposed upon the Company or such Subsidiary,
respectively, or upon or in respect of all or any part of the property or
business of the Company or such Subsidiary, all trade accounts payable in
accordance with usual and customary business terms, and all claims for work,
labor or materials, which if unpaid might become a Lien upon any property of
the Company or such Subsidiary; provided the Company or such Subsidiary shall
not be required to pay any such tax, assessment, charge, levy, account payable
or claim if (1) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will
prevent the forfeiture or sale of any property of the Company or such
Subsidiary or any material interference with the use thereof by the Company or
such Subsidiary, and (2) the Company or such Subsidiary shall set aside on its
books, reserves deemed by it to be adequate with respect thereto.
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(b) The Company will promptly comply and will cause each
Subsidiary to promptly comply with all laws, ordinances or governmental rules
and regulations to which it is subject, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and all
Environmental Laws, the violation of which could materially and adversely
affect the properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries or would result in any Lien not
permitted under SECTION 5.9.
Section 5.4. Maintenance, Etc. The Company will maintain,
preserve and keep, and will cause each Subsidiary to maintain, preserve and
keep, its properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working order
and from time to time will make all necessary repairs, replacements, renewals
and additions so that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Subsidiaries would be substantially changed from the
general nature of the business engaged in by the Company and its Subsidiaries
on the date of this Agreement.
Section 5.6. Consolidated Net Worth. The Company will at all
times keep and maintain Consolidated Net Worth at an amount not less than (a)
90,000,000 plus (b) 25% of Consolidated Net Earnings computed on a cumulative
basis for each of the elapsed fiscal years ending after August 31, 1995;
provided that notwithstanding that Consolidated Net Earnings for any such
elapsed fiscal year may be a deficit figure, no reduction as a result thereof
shall be made in the sum to be maintained pursuant hereto.
Section 5.7. Maintenance of Consolidated Indebtedness. The
Company will not at any time permit Consolidated Indebtedness to exceed 60% of
Consolidated Total Capitalization.
Section 5.8. Limitations on Consolidated Priority Indebtedness.
(a) The Company will not, and will not permit any Subsidiary to, create, assume
or incur or in any manner be or become liable in respect of any Consolidated
Priority Indebtedness, except:
(1) Consolidated Priority Indebtedness of the Company and
its Subsidiaries outstanding as of the Closing Date and reflected on
Schedule II hereto, or any extension, renewal or refunding of any such
Consolidated Priority Indebtedness; provided that (i) such extension,
renewal or refunding of such Consolidated Priority Indebtedness shall
be without increase in the principal amount thereof at the time of
such extension, renewal or refunding, (ii) in the case of secured
Consolidated Priority Indebtedness, the related Lien shall attach
solely to the same such property, and (iii) at the time of such
extension,
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renewal or refunding and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of Default
would exist; and
(2) additional Consolidated Priority Indebtedness of the
Company and its Subsidiaries incurred after the Closing Date; provided
that at the time of creation, issuance, assumption, guarantee or
incurrence thereof and after giving effect thereto and to the
application of the proceeds thereof:
(i) no Default or Event of Default would exist; and
(ii) Consolidated Priority Indebtedness would not exceed an amount
equal to 20% of Consolidated Net Worth.
(b) Any corporation which becomes a Subsidiary after the date
hereof shall for all purposes of this SECTION 5.8 be deemed to have created,
assumed or incurred at the time it becomes a Subsidiary all Indebtedness of
such corporation existing immediately after it becomes a Subsidiary.
Section 5.9. Limitation on Liens. (a) The Company will
not, and will not permit any Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets, whether now
owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors, or
acquire or agree to acquire, or permit any Subsidiary to acquire, any property
or assets upon conditional sales agreements or other title retention devices,
except:
(1) Liens for property taxes and assessments or
governmental charges or levies and Liens securing claims or demands of
mechanics and materialmen, provided that payment thereof is not at the
time required by SECTION 5.3;
(2) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary shall at
any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal
or proceeding for review shall have been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens)
and Liens to secure the performance of bids, tenders or trade
contracts,
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or to secure statutory obligations, surety or appeal bonds or other
Liens of like general nature, in any such case incurred in the
ordinary course of business and not in connection with the borrowing
of money, provided in each case, the obligation secured is not overdue
or, if overdue, is being contested in good faith by appropriate
actions or proceedings;
(4) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other restrictions
as to the use of real properties, which are necessary for the conduct
of the activities of the Company and its Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company, and the Company and its Subsidiaries, taken as a whole, or
the value of such properties for the purpose of such business;
(5) Liens securing Indebtedness of a Subsidiary to the
Company or to another Wholly-owned Subsidiary;
(6) Liens existing as of the Closing Date and described
on Schedule II hereto and any extensions, renewals or replacements, in
whole or in part, of any such Lien, provided that (i) such extension,
renewal or replacement of Indebtedness shall be without increase in
the principal amount remaining unpaid as of the date of such
extension, renewal or replacement, (ii) such Lien shall attach solely
to the same property theretofore subject to such Lien and (iii) after
giving effect to any such extension, renewal or refunding and to the
application of the proceeds thereof, no Default or Event of Default
would exist;
(7) Liens created or incurred after the Closing Date
given to secure the payment of the purchase price or cost of
construction of property or assets useful and intended to be used in
carrying on the business of the Company or a Subsidiary, including
Liens existing on such property or assets at the time of acquisition
thereof, whether or not such existing Liens were given to secure the
payment of the purchase price of the property or assets to which they
attach, provided that (i) except in connection with industrial
development bond financings where applicable law shall otherwise
require, the Lien shall attach solely to the property or assets
acquired, purchased or constructed, (ii) such Lien shall have been
created or incurred within 180 days of the date of acquisition or
purchase or of completion of construction, as the case may be, (iii)
at the time of acquisition or purchase or the date of completion of
construction, as the case may be, the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on such property or
assets, whether or not assumed by the Company or a Subsidiary, shall
not exceed fair market value at the time of acquisition or purchase or
the date of completion of the construction
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of such property or assets (as determined in good faith by the Board
of Directors of the Company) and (iv) at the time of creation,
issuance, assumption, guarantee or incurrence of the Indebtedness
relating to such Lien and after giving effect thereto and to the
application of the proceeds thereof, no Default or Event of Default
would exist;
(8) Liens affixed on real or personal property existing
(i) at the time of acquisition thereof, whether or not the
Indebtedness secured thereby is assumed by the Company or any of its
Subsidiaries, or (ii) on the property or outstanding shares of a
corporation at the time such corporation is merged into or
consolidated with the Company or a Subsidiary or at the time of a
sale, lease or other disposition of the properties or outstanding
shares or Indebtedness of a corporation or firm as an entirety to the
Company or a Subsidiary; provided that (A) the amount of Indebtedness
secured by such Liens shall not exceed an amount equal to the fair
market value of such real or personal property (as determined in good
faith by the Board of Directors of the Company) and (B) at the time of
the creation, issuance, assumption, guarantee or incurrence of the
Indebtedness relating to any such Lien and after giving effect thereto
and to the application of the proceeds thereof, no Default or Event of
Default would exist; and
(9) Liens created or incurred after the Closing Date
given to secure Indebtedness of the Company or any Subsidiary in
addition to the Liens permitted by the preceding clauses (1) through
(8) hereof, provided that all Indebtedness secured by such Liens shall
have been incurred within the limitations provided in SECTION
5.8(A)(2).
(b) If at any time the Company is requested by any holder of
Indebtedness of the Company or any Subsidiary to grant a Lien (other than a
Lien expressly permitted by SECTION 5.9(A)) on any of the property or assets of
the Company or any of its Subsidiaries as security for the payment of such
Indebtedness, then and in such event the Company shall at least ten Business
Days prior to the granting of any such Lien so notify the holders of the Notes
and, concurrently with the granting of such Lien, the Company shall, in a
manner satisfactory to the Requisite Holders, equally and ratably secure the
Notes with the such Indebtedness under and pursuant to a mortgage, security
agreement or other agreement securing such Indebtedness and pursuant to an
intercreditor agreement to be entered into by the holder or holders of such
Indebtedness with the holders of the Notes confirming such equal and ratable
security of the such Indebtedness and the Notes, and the Company shall furnish
to the holders of the Notes on the date of the creation or incurrence of such
Lien an opinion of independent counsel (which independent counsel shall be
satisfactory to the Requisite Holders) to such effect and otherwise in form and
substance satisfactory to the Requisite Holders.
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Section 5.10. Mergers, Consolidations and Sales of Assets. (a)
The Company will not, and will not permit any Subsidiary to, consolidate with
or be a party to a merger with any other Person, or sell, lease or otherwise
dispose of all or substantially all of its assets; provided that:
(1) any Subsidiary may merge or consolidate with or into
the Company or any Wholly-owned Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
(2) the Company may consolidate or merge with or into any
other corporation if (i) the corporation which results from such
consolidation or merger (the "surviving corporation") is organized
under the laws of any state of the United States or the District of
Columbia, (ii) the due and punctual payment of the principal of and
premium, if any, and interest on all of the Notes, according to their
tenor, and the due and punctual performance and observation of all of
the covenants in the Notes and this Agreement to be performed or
observed by the Company are expressly assumed in writing by the
surviving corporation and the surviving corporation shall furnish to
the holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid
and binding contract and agreement of the surviving corporation
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (iii) at the
time of such consolidation or merger and immediately after giving
effect thereto, no Default or Event of Default would exist;
(3) the Company may sell or otherwise dispose of all or
substantially all of its assets (other than stock and Indebtedness of
a Subsidiary, which may only be sold or otherwise disposed of pursuant
to SECTION 5.10(C)) to any Person for consideration which represents
the fair market value of such assets (as determined in good faith by
the Board of Directors of the Company, a copy of which determination,
certified by the Secretary or an Assistant Secretary of the Company,
shall have been furnished to the holders of the Notes) at the time of
such sale or other disposition if (i) the acquiring Person is a
corporation organized under the laws of any state of the United States
or the District of Columbia, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all the Notes,
according to their tenor, and the due and punctual performance and
observance of all of the covenants in the Notes and in this Agreement
to be performed or observed by the Company are expressly assumed in
writing by the acquiring corporation and the acquiring corporation
shall furnish to the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal,
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valid and binding contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles, and (iii) at the
time of such sale or disposition and immediately after giving effect
thereto, no Default or Event of Default would exist.
(b) The Company will not, and will not permit any Subsidiary to,
sell, lease, transfer, abandon or otherwise dispose of assets (except assets
sold in the ordinary course of business for fair market value and except as
provided in SECTION 5.10(A)(3)); provided that the foregoing restrictions do
not apply to:
(1) the sale, lease, transfer or other disposition of
assets of a Subsidiary to the Company or a Wholly-owned Subsidiary; or
(2) the sale of the Flagg Brass Division Assets; or
(3) the sale of assets for cash or other property to a
Person or Persons other than an Affiliate if all of the following
conditions are met:
(i) such assets (valued at net book value) do
not, together with all other assets of the Company and its
Subsidiaries previously disposed of during the period from the
date of this Agreement to and including the date of the sale
of such assets (other than in the ordinary course of
business), exceed 25% of Consolidated Total Assets determined
as of the end of the immediately preceding fiscal year;
(ii) in the opinion of the Company's Board of
Directors, the sale is for fair value and is in the best
interests of the Company; and
(iii) immediately after the consummation of the
transaction and after giving effect thereto, no Default or
Event of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied within twelve months of the date of sale of such assets to
either (A) the acquisition of, or Binding Commitment to acquire, fixed
assets useful and intended to be used in the operation of the business
of the Company and its Subsidiaries as described in SECTION 5.5 and
having a fair market value (as determined in good faith by the Board
of Directors of the Company) at least equal to that of the assets so
disposed of or (B) the prepayment at any applicable prepayment
premium,
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on a pro rata basis, of Senior Indebtedness of the Company. It is
understood and agreed by the Company that any such proceeds paid and
applied to the prepayment of the Notes as hereinabove provided shall
be prepaid as and to the extent provided in SECTION 2.2.
Computations pursuant to this SECTION 5.10(B) shall include
dispositions made pursuant to SECTION 5.10(C) and computations pursuant to
SECTION 5.10(C) shall include dispositions made pursuant to this SECTION
5.10(B).
(c) The Company will not, and will not permit any Subsidiary to,
sell, pledge or otherwise dispose of any shares of the stock (including as
"stock" for the purposes of this SECTION 5.10(C) any options or warrants to
purchase stock or other Securities exchangeable for or convertible into stock)
of a Subsidiary (said stock, options, warrants and other Securities herein
called "Subsidiary Stock") or any Indebtedness of any Subsidiary, nor will any
Subsidiary issue, sell, pledge or otherwise dispose of any shares of its own
Subsidiary Stock, provided that the foregoing restrictions do not apply to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company; or
(3) the sale or other disposition at any one time to a
Person (other than directly or indirectly to an Affiliate) of the
entire investment of the Company and its other Subsidiaries in any
Subsidiary if all of the following conditions are met:
(i) such assets (valued at net book value) of
such Subsidiary do not, together with all other assets of the
Company and its Subsidiaries previously disposed of during the
period from the date of this Agreement to and including the
date of the sale of such assets (other than in the ordinary
course of business), exceed 25% of Consolidated Total Assets
determined as of the end of the immediately preceding fiscal
year;
(ii) in the opinion of the Company's Board of
Directors, the sale is for fair value and is in the best
interests of the Company;
(iii) immediately after the consummation of the
transaction and after giving effect thereto, such Subsidiary
shall have no Indebtedness of or continuing investment in the
capital stock of the Company or of any Subsidiary and any such
Indebtedness or investment shall have been discharged or
acquired, as the case may be, by the Company or a Subsidiary;
and
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(iv) immediately after the consummation of the
transaction and after giving effect thereto, no Default or
Event of Default would exist;
provided, however, that for purposes of the foregoing calculation,
there shall not be included any assets the proceeds of which were or
are applied, within twelve months of the date of sale of such assets
to either (A) the acquisition of, or Binding Commitment to acquire,
fixed assets useful and intended to be used in the operation of the
business of the Company and its Subsidiaries as described in SECTION
5.5 and having a fair market value (as determined in good faith by the
Board of Directors of the Company) at least equal to that of the
assets so disposed of or (B) the prepayment at any applicable
prepayment premium, on a pro rata basis, of Senior Indebtedness of the
Company. It is understood and agreed by the Company that any such
proceeds paid and applied to the prepayment of the Notes as
hereinabove provided shall be prepaid as and to the extent provided
SECTION 2.2.
Computations pursuant to this SECTION 5.10(C) shall include
dispositions made pursuant to SECTION 5.10(B) and computations pursuant to
SECTION 5.10(B) shall include dispositions made pursuant to this SECTION
5.10(C).
Section 5.11. Repurchase of Notes. Except as provided in SECTION
2.2 or SECTION 2.3, neither the Company nor any Subsidiary or Affiliate,
directly or indirectly, may repurchase or make any offer to repurchase any
Notes.
Section 5.12. Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of
any service by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person other than an Affiliate.
Section 5.13. Termination of Pension Plans. The Company will not
and will not permit any Subsidiary to withdraw from any Multiemployer Plan or
permit any employee benefit plan maintained by it to be terminated if such
withdrawal or termination could result in withdrawal liability (as described in
Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a Lien on any
property of the Company or any Subsidiary pursuant to Section 4068 of ERISA.
Section 5.14. Notes to Rank Pari Passu. The Company will keep
and maintain the obligation of the Company with respect to the Notes and all
other monetary obligations outstanding at any time owing to the holders of the
Notes under this Agreement as direct obligations of the Company ranking pari
passu as against assets of the Company with all of the
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present and future unsecured Senior Indebtedness of the Company with the
exception of Indebtedness secured by Liens maintained within the limitations of
SECTION 5.9(A).
Section 5.15. Reports and Rights of Inspection. The Company will
keep, and will cause each Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the Company or
such Subsidiary, in accordance with GAAP consistently applied (except for
changes disclosed in the financial statements furnished to you pursuant to this
SECTION 5.15 and concurred in by the independent public accountants referred to
in SECTION 5.15(B)), and will furnish to you so long as you are the holder of
any Note and to each other Institutional Holder of the then outstanding Notes
(in duplicate if so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and in
any event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(1) consolidated statements of financial
condition of the Company and its Subsidiaries as of the close
of such quarterly fiscal period, setting forth in comparative
form the consolidated figures for the fiscal year then most
recently ended,
(2) consolidated statements of operations and
retained earnings of the Company and its Subsidiaries for such
quarterly fiscal period and for the portion of the fiscal year
ending with such quarterly fiscal period, in each case setting
forth in comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(3) a consolidated statement of cash flows of the
Company and its Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth
in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
(b) Annual Statements. As soon as available and in any
event within 90 days after the close of each fiscal year of the
Company, copies of:
(1) consolidated statements of financial
condition of the Company and its Subsidiaries as of the close
of such fiscal year, and
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(2) consolidated statements of operations,
shareholders' equity and cash flows of the Company and its
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and
accompanied by a report thereon of a firm of independent public
accountants of recognized national standing selected by the Company to
the effect that the consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the
Company and its Subsidiaries as of the end of the fiscal year being
reported on and the consolidated results of the operations and cash
flows for said year in conformity with GAAP and that the examination
of such accountants in connection with such financial statements has
been conducted in accordance with generally accepted auditing
standards and included such tests of the accounting records and such
other auditing procedures as said accountants deemed necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one
copy of each interim or special audit made by independent accountants
of the books of the Company or any Subsidiary and any management
letter received from such accountants;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or
proxy statement sent by the Company to its creditors and stockholders
generally and of each regular or periodic report, and any registration
statement or prospectus filed by the Company or any Subsidiary with
any securities exchange or the Securities and Exchange Commission or
any successor agency, and copies of any orders in any proceedings to
which the Company or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (1) a Reportable Event with respect to any Plan; (2)
the institution of any steps by the Company, any ERISA Affiliate, the
PBGC or any other Person to terminate any Plan; (3) the institution of
any steps by the Company or any ERISA Affiliate to withdraw from any
Plan; (4) a non-exempt "prohibited transaction" within the meaning of
Section 406 of ERISA in connection with any Plan; (5) any material
increase in the contingent liability of the Company or any Subsidiary
with respect to any post-retirement welfare liability; or (6) the
taking of any action by, or the threatening of the taking of any
action by, the Internal Revenue Service, the Department of Labor or
the PBGC with respect to any of the foregoing;
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(f) Officer's Certificates. Within the periods provided
in paragraphs (a) and (b) above, a certificate of the chief financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (1) the information
and computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of
SECTIONS 5.6 through 5.15 at the end of the period covered by the
financial statements then being furnished, and (2) whether there
existed as of the date of such financial statements and whether, to
the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying
the nature and period of existence thereof and the action the Company
is taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the accountants who
render an opinion with respect to such financial statements, stating
that they have reviewed this Agreement and stating further whether, in
making their audit, such accountants have become aware of any Default
or Event of Default under any of the terms or provisions of this
Agreement insofar as any such terms or provisions pertain to or
involve accounting matters or determinations, and if any such
condition or event then exists, specifying the nature and period of
existence thereof; and
(h) Requested Information. With reasonable promptness,
such other data and information as you or any such Institutional
Holder may reasonably request.
Without limiting the foregoing, the Company will permit you, so long as you are
the holder of any Note, and each Institutional Holder of the then outstanding
Notes (or such Persons as either you or such Institutional Holder may
designate), to visit and inspect, under the Company's guidance, any of the
properties of the Company or any Subsidiary, to examine all of their books of
account, records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and accounts with
their respective officers, employees, and independent public accountants (and
by this provision the Company authorizes said accountants to discuss with you
the finances and affairs of the Company and its Subsidiaries), all at such
reasonable times and as often as may be reasonably requested. Any visitation
shall be at the sole expense of you or such Institutional Holder, unless a
Default or Event of Default shall have occurred and be continuing or the holder
of any Note or of any other evidence of Indebtedness of the Company or any
Subsidiary gives any written notice or takes any other action with respect to a
claimed default, in which case, any such visitation or inspection shall be at
the sole expense of the Company.
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You agree that you will keep confidential in accordance with your
internal policies and procedures in effect from time to time any written
information with respect to the Company or its Subsidiaries which is furnished
pursuant to this Agreement and which is designated by the Company or its
Subsidiaries to you in writing as confidential, provided that you may disclose
any such information (1) as has become generally available to the public (other
than as a consequence of your actions) or to you on a non-confidential basis
from a source other than the Company or its Subsidiaries or as was known to you
on a non-confidential basis prior to its disclosure by the Company or its
Subsidiaries, (2) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over you or to the National Association of
Insurance Commissioners or similar organizations or their successors, (3) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (4) to the extent that you reasonably believe
it appropriate in order to protect your investment in the Notes or in order to
comply with any law, order, regulation or ruling applicable to you, (5) to your
officers, trustees, employees, auditors or counsel or to rating agencies or
another holder of the Notes, (6) to Persons who are parties to similar
confidentiality agreements, or (7) to the prospective transferee in connection
with any contemplated transfer of any of the Notes by you. By its acceptance
of a Note, any transferee shall be bound by the terms of this SECTION 5.15.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any
Note when the same shall have become due and such default shall
continue for more than five Business Days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in SECTION 2.1; or
(c) Default shall occur in the making of any other
payment of the principal of any Note or premium, if any, thereon at
the expressed or any accelerated maturity date or at any date fixed
for prepayment; or
(d) Default shall occur in the observance or performance
of any covenant or agreement contained in SECTION 5.6 through SECTION
5.10 or SECTION 6.2; or
(e) Default shall occur in the observance or performance
of any other provision of this Agreement which is not remedied within
30 days after the earlier of
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(1) the day on which a Responsible Officer of the Company first
obtains knowledge of such default, or (2) the day on which written
notice thereof is given to the Company by the holder of any Note; or
(f) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for redemption or
otherwise) of the principal of or interest on any Indebtedness for
borrowed money (other than the Notes) of the Company or any Subsidiary
aggregating in excess of $5,000,000 in principal amount outstanding
may be issued and such default shall continue beyond the period of
grace, if any, allowed with respect thereto; or
(g) Default or the happening of any event shall occur
under any indenture, agreement or other instrument under which any
Indebtedness for borrowed money (other than the Notes) of the Company
or any Subsidiary aggregating in excess of $5,000,000 may be issued
and such default or event shall result in the acceleration of the
maturity of any Indebtedness for borrowed money of the Company or any
Subsidiary outstanding thereunder; or
(h) Any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company in connection with the consummation of the
issuance and delivery of the Notes or furnished by the Company
pursuant hereto, is untrue in any material respect as of the date of
the issuance or making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 (net of insurance proceeds to the
extent the insurer has acknowledged liability in writing) is or are
outstanding against the Company or any Subsidiary or against any
property or assets of either and any one of such judgments has
remained unpaid, unvacated, unbonded or unstayed by appeal or
otherwise for a period of 45 days from the date of its entry; or
(j) A custodian, liquidator, trustee or receiver is
appointed for the Company or any Subsidiary or for the major part of
the property of either and is not discharged within 60 days after such
appointment; or
(k) The Company or any Subsidiary becomes insolvent or
bankrupt, is generally not paying its debts as they become due or
makes an assignment for the benefit of creditors, or the Company or
any Subsidiary applies for or consents to the appointment of a
custodian, liquidator, trustee or receiver for the Company or such
Subsidiary or for the major part of the property of either; or
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(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Subsidiary and, if instituted against the
Company or any Subsidiary, are consented to or are not dismissed
within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of Default
described in the foregoing SECTION 6.1 has occurred, or if the holder of any
Note or of any other evidence of Indebtedness of the Company gives any notice
or takes any other action with respect to a claimed default, the Company agrees
to give notice within five days of such event to all holders of the Notes then
outstanding.
Section 6.3. Acceleration of Maturities. When any Event of
Default described in paragraph (a), (b) or (c) of SECTION 6.1 has happened and
is continuing, any holder of any Note may, by notice in writing sent to the
Company in the manner provided in SECTION 9.6, declare the entire principal and
all interest accrued on such Note to be, and such Note shall thereupon become
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event
of Default described in paragraphs (a) through (i), inclusive, of said SECTION
6.1 has happened and is continuing, the holder or holders of 25% or more of the
principal amount of the Notes at the time outstanding may, by notice in writing
to the Company in the manner provided in SECTION 9.6, declare the entire
principal and all interest accrued on all Notes to be, and all Notes shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in paragraph (j), (k) or (l) of SECTION 6.1
has occurred, then all outstanding Notes shall immediately become due and
payable without presentment, demand or notice of any kind. Upon the Notes
becoming due and payable as a result of any Event of Default as aforesaid, the
Company will forthwith pay to the holders of the Notes the entire principal and
interest accrued on the Notes and, to the extent not prohibited by applicable
law, an amount as liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the Make-Whole Amount, determined as of
the date on which the Notes shall so become due and payable. No course of
dealing on the part of the holder or holders of any Notes nor any delay or
failure on the part of any holder of Notes to exercise any right shall operate
as a waiver of such right or otherwise prejudice such holder's rights, powers
and remedies. The Company further agrees, to the extent permitted by law, to
pay to the holder or holders of the Notes all costs and expenses incurred by
them in the collection of any Notes upon any default hereunder or thereon,
including reasonable compensation to such holder's or holders' attorneys for
all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of
SECTION 6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been
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declared immediately due and payable by reason of the occurrence of any Event
of Default described in paragraphs (a) through (i), inclusive, of SECTION 6.1,
the Requisite Holders may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement (except
any principal, interest or premium on the Notes which has become due
and payable solely by reason of such declaration under SECTION 6.3)
shall have been duly paid; and
(c) each and every other Default and Event of Default
shall have been made good, cured or waived pursuant to SECTION 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Company shall have
obtained the consent in writing of the Requisite Holders; provided that without
the written consent of the holders of all of the Notes then outstanding, no
such amendment or waiver shall be effective (a) which will change the time of
payment (including any prepayment required by SECTION 2.1) of the principal of
or the interest on any Note or change the principal amount thereof or change
the rate of interest thereon, or (b) which will change any of the provisions
with respect to optional prepayments, or (c) which will change the percentage
of holders of the Notes required to consent to any such amendment or waiver of
any of the provisions of this SECTION 7 or SECTION 6.
Section 7.2. Solicitation of Holders. So long as there are any
Notes outstanding, the Company will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each holder of Notes (irrespective of the
amount of Notes then owned by it) shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be supplied
by the Company with sufficient information to enable it to make an informed
decision with respect thereto. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration,
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whether by way of supplemental or additional interest, fee or otherwise, to any
holder of Notes as consideration for or as an inducement to entering into by
any holder of Notes of any waiver or amendment of any of the terms and
provisions of this Agreement or the Notes unless such remuneration is
concurrently offered, on the same terms, ratably to the holders of all Notes
then outstanding. Promptly and in any event within 30 days of the date of
execution and delivery of any such waiver or amendment, the Company shall
provide a true, correct and complete copy thereof to each of the holders of the
Notes.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation
not expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Acquiring Person" shall mean a "person" or "group of persons" within
the meaning of Section 13(d) and 14(d) of the Securities and Exchange Act of
1934, as amended.
"Affiliate" shall mean any Person (other than a Subsidiary) (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (c) 5% or more of the Voting Stock (or in the case of a Person which
is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
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 Stock, by contract or otherwise.
"Binding Commitment" shall mean, with respect to the acquisition of
assets to be used in the operation of the business of the Company and its
Subsidiaries as described in SECTION 5.5, a binding agreement, in writing,
between the Company and the seller of such assets pursuant to which the Company
agrees to purchase such assets for a specified price and on a specified date,
which date shall not be more than 60 days following the date such agreement is
entered into.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in Dayton, Ohio or Chicago, Illinois are required by
law to close or are customarily closed.
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"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet (or the
statements of financial condition) of such Person.
"Change of Control" shall mean the earliest to occur of: (1) the date
the Company enters into a binding written agreement with an Acquiring Person to
permit such Acquiring Person to acquire, directly or indirectly, beneficial
ownership of more than 50% of the total Voting Stock of the Company then
outstanding, or (2) the date a tender offer or exchange offer results in an
Acquiring Person, directly or indirectly, beneficially owning more than 50% of
the total Voting Stock of the Company then outstanding, or (3) the date an
Acquiring Person becomes, directly or indirectly, the beneficial owner of more
than 50% of the total Voting Stock of the Company then outstanding, or (4) the
date of a merger between the Company and any other Person, a consolidation of
the Company with any other Person or an acquisition of any other Person by the
Company, if immediately after such event, an Acquiring Person shall hold more
than 50% of the total Voting Stock of the Company outstanding immediately after
giving effect to such merger, consolidation or acquisition, or, if the Company
shall not be the surviving entity, of the surviving, resulting or continuing
corporation, or (5) during any period of twelve consecutive calendar months,
the date on which individuals who served as Directors on the Company's Board of
Directors on the first day of such period shall cease to constitute a majority
of the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time promulgated thereunder.
"Company" shall mean Amcast Industrial Corporation, an Ohio
corporation, and any Person who succeeds to all, or substantially all, of the
assets and business of Amcast Industrial Corporation.
"Consolidated Indebtedness" shall mean all Indebtedness of the Company
and its Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Earnings" for any period shall mean the net income
of the Company and its Subsidiaries for such period determined in accordance
with GAAP, excluding (a) extraordinary items, and (b) any equity interest of
the Company on the unremitted earnings of any corporation which is not a
Subsidiary.
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"Consolidated Net Worth" shall mean, as of the date of any
determination thereof the amount of the capital stock accounts (net of treasury
stock, at cost) plus (or minus in the case of a deficit) the surplus in
retained earnings of the Company and its Subsidiaries as determined in
accordance with GAAP.
"Consolidated Priority Indebtedness" shall mean the sum of (a)
Indebtedness of the Company secured by any Lien other than Liens permitted by
SECTIONS 5.8(A)(1) through (8), plus (b) all Indebtedness of the Company's
Subsidiaries.
"Consolidated Total Assets" shall mean as of the date of any
determination thereof, total assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Indebtedness plus (b)
Consolidated Net Worth.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Environmental Law" shall mean any international, federal, state or
local statute, law, regulation, order, consent decree, judgment, permit,
license, code, covenant, deed restriction, common law, treaty, convention,
ordinance or other requirement relating to public health, safety or the
environment, including, without limitation, those relating to releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal
or use of groundwater, to the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or management of hazardous or
solid waste, or Hazardous Substances or crude oil, or any fraction thereof, or
to exposure to toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and any
regulation, order, notice or demand issued pursuant to such law, statute or
ordinance, in each case applicable to the property of the Company and its
Subsidiaries or the operation, construction or modification of any thereof,
including without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous
and Solid Waste Amendments of 1984, the Hazardous Materials Transportation Act,
as amended, the Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1976, the Safe Drinking Water Control Act, the Clean Air Act of
1966, as amended, the Toxic Substances Control Act of 1976, the Emergency
Planning and Community Right-to-Know Act of 1986, the National Environmental
Policy Act of 1975, the Oil Pollution Act of 1990 and any similar or
implementing state law, and any state statute and any further amendments to
these laws providing for financial responsibility
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for cleanup or other actions with respect to the release or threatened release
of Hazardous Substances or crude oil, or any fraction thereof, and all rules,
regulations, guidance documents and publications promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in SECTION 6.1.
"Flagg Brass Division Assets" shall mean the assets of the Company
used to manufacture brass pipe fittings in the operation of the Stanley G.
Flagg Division of the Company located in Stowe, Pennsylvania, which Division is
identified in Item 2 of the Company's August 31, 1994 Form 10-K as a
discontinued operation.
"GAAP" shall mean generally accepted accounting principles at the time.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or obligation
or any property or assets constituting security therefor, (b) to advance or
supply funds (1) for the purchase or payment of such Indebtedness or
obligation, or (2) to maintain working capital or any balance sheet or income
statement condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (c) to lease property
or to purchase Securities or other property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation of the ability
of the primary obligor to make payment of the Indebtedness or obligation, or
(d) otherwise to assure the owner of the Indebtedness or obligation of the
primary obligor against loss in respect thereof. For the purposes of all
computations made under this Agreement, a Guaranty in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the
principal amount of such Indebtedness for borrowed money which has been
guaranteed, and a Guaranty in respect of any other obligation or liability or
any dividend
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shall be deemed to be Indebtedness equal to the maximum aggregate amount of
such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic material,
substance or waste, pollutant or contaminant which is regulated under any
statute, law, ordinance, rule or regulation of any local, state, regional or
federal authority having jurisdiction over the property of the Company and its
Subsidiaries or its use, including but not limited to any material, substance
or waste which is: (a) defined as a hazardous substance under Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Section 1317), as amended;
(b) regulated as a hazardous waste under Section 1004 or Section 3001 of the
Federal Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), as amended; (c) defined as a
hazardous substance under Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as
amended; or (d) defined or regulated as a hazardous substance or hazardous
waste under any rules or regulations promulgated under any of the foregoing
statutes.
"Indebtedness" of any Person shall mean and include all (a)
obligations of such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets, (b) obligations secured
by any Lien upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations,
(c) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (d) Capitalized Rentals, (e) Guaranties of obligations of
others of the character referred to in this definition and (f) obligations of
such Person in respect of mandatorily redeemable Preferred Stock. Indebtedness
of the Company and its Subsidiaries shall be determined on a consolidated basis
after eliminating intercompany items. In no event shall Indebtedness include
(i) Unfunded Pension Liability of the Plans of the Company and its Subsidiaries
which amount, as of August 31, 1995, is reflected on Schedule II hereto and
(ii) letters of credit given to secure statutory worker's compensation bonds.
"Institutional Holder" shall mean any of the following Persons: (a)
any bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company, (d) any
fraternal benefit society, (e) any pension, retirement or profit-sharing trust
or fund within the meaning of Title I of ERISA or for which any bank, trust
company, national banking association or investment adviser registered under
the Investment Advisers Act of 1940, as amended, is acting as trustee or agent,
(f) any investment company or business development company, as defined in the
Investment Company Act of 1940, as amended, (g) any small business investment
company licensed under the Small Business Investment Act of 1958, as amended,
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(h) any broker or dealer registered under the Securities Exchange Act of 1934,
as amended, or any investment adviser registered under the Investment Advisers
Act of 1940, as amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the investment of
public funds, (j) any other entity all of the equity owners of which are
Institutional Holders or (k) any other Person which may be within the
definition of "qualified institutional buyer" as such term is used in Rule
144A, as from time to time in effect, promulgated under the Securities Act of
1933, as amended.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title to
the property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate resent value
as of the date of such prepayment or payment of each dollar of principal being
prepaid or paid (taking into account the application of such prepayment or
payment required by SECTION 2.1) and the amount of interest (exclusive of
interest accrued to the date of prepayment or payment) that would have been
payable in respect of such dollar if such prepayment or payment had not been
made, determined by discounting such amounts at the Reinvestment Rate from the
respective dates on which they would have been payable, over (b) 100% of the
principal amount of the outstanding Notes being prepaid or paid. If the
Reinvestment Rate is equal to or higher than 7.09%, the Make-Whole Amount shall
be zero. For purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean (1) the sum of 0.50%, plus the
yield reported on page "USD" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other nationally recognized
trading screen reporting on-line intraday trading in the United States
government Securities) at 11:00 A.M. (Chicago, Illinois time) for the
United States government Securities having a maturity (rounded to the
nearest month) corresponding to the remaining Weighted Average Life to
Maturity of the principal of the Notes being prepaid or paid (taking
into account the application of such prepayment or payment
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required by SECTION 2.1) or (2) in the event that no nationally
recognized trading screen reporting on-line intraday trading in the
United States government Securities is available, Reinvestment Rate
shall mean the sum of 0.50%, plus the arithmetic mean of the yields
for the two columns under the heading "Week Ending" published in the
Statistical Release under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the
Weighted Average Life to Maturity of the principal of the Notes being
prepaid or paid (taking into account the application of such
prepayment or payment required by SECTION 2.1). If no maturity
exactly corresponds to such Weighted Average Life to Maturity, yields
for the two published maturities most closely corresponding to such
Weighted Average Life to Maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month.
For the purposes of calculating the "Reinvestment Rate", the most
recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve System
and which establishes yields on actively traded U.S. Government
Securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination hereunder,
then such other reasonably comparable index which shall be designated
by the Requisite Holders.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (1) multiplying (i) the
remainder of (A) the amount of principal that would have become due on
each scheduled payment date if such prepayment or payment had not been
made, less (B) the amount of principal on the Notes scheduled to
become due on such date after giving effect to such prepayment or
payment and the application thereof in accordance with the provisions
of SECTION 2.1, by (ii) the number of years (calculated to the nearest
one-twelfth) which will elapse between the date of determination and
such scheduled payment date, and (2) totalling the products obtained
in (1).
"Minority Interests" shall mean any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that
are not owned by the Company and/or one or more of its Subsidiaries. Minority
Interests shall be valued by valuing Minority Interests constituting preferred
stock at the voluntary or involuntary liquidating value of such preferred
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stock, whichever is greater, and by valuing Minority Interests constituting
common stock at the book value of capital and surplus applicable thereto
adjusted, if necessary, to reflect any changes from the book value of such
common stock required by the foregoing method of valuing Minority Interests in
Preferred Stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Overdue Rate" shall mean the lesser of (a) the maximum interest rate
permitted by law and (b) the greater of (1) 9.09% per annum and (2) the rate
which Morgan Guaranty Trust Company of New York, New York City, New York,
announces from time to time as its prime lending rate as in effect from time to
time, not to exceed 11%.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Purchasers" shall have the meaning set forth in SECTION 1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Subsidiary, as lessee or sublessee under
a lease of real or personal property, but shall be exclusive of any amounts
required to be paid by the Company or a Subsidiary (whether or not designated
as rents or additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if any, required to
be paid by the lessee regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Requisite Holders" shall mean the holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes.
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<PAGE> 37
"Responsible Officer" shall mean the President, the Chief Executive
Officer, the Chief Financial Officer, the Treasurer or any other financial
officer of the Company.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Indebtedness" shall mean and include the Notes and all other
outstanding Indebtedness of the Company which is not expressed to be junior or
subordinate to any other Indebtedness of the Company.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be beneficially owned, directly or indirectly, by such
parent corporation. The term "Subsidiary" shall mean a subsidiary of the
Company.
"Unfunded Pension Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance
with statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Indebtedness for
borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in
this Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
181
<PAGE> 38
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be
kept at its principal office a register for the registration and transfer of
the Notes, and the Company will register or transfer or cause to be registered
or transferred, as hereinafter provided, any Note issued pursuant to this
Agreement.
At any time and from time to time the holder of any Note which has
been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the holder of
such Note or its attorney duly authorized in writing. Each holder by its
acceptance of any Note agrees that any transfer of such Note shall be made in
compliance with all applicable Federal and state securities laws.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium, if any, and interest on any
Note shall be made to or upon the written order of such holder.
Section 9.2. Exchange of Notes. At any time and from time to
time, upon surrender of such Note at its office, the Company will deliver in
exchange therefor, without expense to such holder, except as set forth below, a
Note for the same aggregate principal amount as the then unpaid principal
amount of the Note so surrendered, or Notes in the denomination of $500,000 (or
such lesser amount as shall constitute 100% of the Notes of such holder) or any
amount in excess thereof as such holder shall specify, dated as of the date to
which interest has been paid on the Note so surrendered or, if such surrender
is prior to the payment of any interest thereon, then dated as of the date of
issue, registered in the name of such Person or Persons as may be designated by
such holder, and otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the payment of a sum
sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft or destruction
upon delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation upon
surrender and cancellation of the Note, the Company will make and deliver
without expense to the holder thereof, a new Note, of like tenor, in lieu of
such lost, stolen, destroyed or mutilated Note. If the Purchaser or any
subsequent Institutional Holder is the owner of any such lost, stolen or
destroyed Note, then the affidavit of an authorized officer of such owner,
setting forth the fact of loss, theft or destruction and of its ownership of
such Note at the time of such loss, theft or
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<PAGE> 39
destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to
pay directly all of your out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the charges and disbursements
of Chapman and Cutler, your special counsel, duplicating and printing costs and
charges for shipping the Notes, adequately insured to you at your home office
or at such other place as you may designate, and all such expenses relating to
any amendments, waivers or consents pursuant to the provisions hereof (whether
or not the same are actually executed and delivered), including, without
limitation, any amendments, waivers, or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the Company of
its obligations under this Agreement and the Notes. The Company also agrees to
pay, within 10 Business Days of receipt thereof, supplemental statements of
Chapman and Cutler for disbursements unposted or not incurred as of the Closing
Date. The Company further agrees that it will pay and save you harmless
against any and all liability with respect to stamp and other taxes, if any,
which may be payable or which may be determined to be payable in connection
with the execution and delivery of this Agreement or the Notes, whether or not
any Notes are then outstanding. The Company agrees to protect and indemnify
you against any liability for any and all brokerage fees and commissions
payable or claimed to be payable to any Person in connection with the
transactions contemplated by this Agreement. Without limiting the foregoing,
the Company agrees to pay the cost of obtaining the private placement number
for the Notes and authorizes the submission of such information as may be
required by Standard & Poor's CUSIP Service Bureau for the purpose of obtaining
such number.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative.
No delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to you, delivered or mailed prepaid by registered
or certified mail or overnight air courier, or by facsimile communication, in
each case addressed to you at your address appearing on Schedule I to this
Agreement or such other address as you or the subsequent holder of any Note
initially issued to you may designate to the Company in writing, and if to the
Company, delivered or mailed by registered or certified mail or overnight air
courier, or by facsimile communication,
183
<PAGE> 40
to the Company at 7887 Washington Village Drive, Dayton, Ohio 45459,
Attention: Treasurer, or to such other address as the Company may in writing
designate to you or to a subsequent holder of the Note initially issued to you;
provided, however, that a notice to you by overnight air courier shall only be
effective if delivered to you at a street address designated for such purpose
in Schedule I, and a notice to you by facsimile communication shall only be
effective if confirmed by transmission of a copy thereof by prepaid overnight
air courier, or, in either case, as you or a subsequent holder of any Note
initially issued to you may designate to the Company in writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to your
benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.9. Severability. Should any part of this Agreement
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been executed
with the invalid or unenforceable portion thereof eliminated and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any such part,
parts or portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.10. Governing Law. This Agreement and the Notes issued
and sold hereunder shall be governed by and construed in accordance with Ohio
law, including all matters of construction, validity and performance.
Section 9.11. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
184
<PAGE> 41
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
AMCAST INDUSTRIAL CORPORATION
By
Its
Accepted as of November __, 1995.
[VARIATION]
By
Its
185
<PAGE> 42
NAME AND ADDRESSES
AMOUNTS OF
OF PURCHASERS
- ------------------
COMMITMENTS
-----------
THE NORTHWESTERN MUTUAL LIFE $25,000,000
INSURANCE COMPANY
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Amcast Industrial Corporation, 7.09% Senior Notes due November 7, 2005, PPN
023395 A@5, principal or interest") to:
Bankers Trust Company (ABA #0210-01033)
One Bankers Trust Plaza
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention: Treasurer's Department/Securities Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
Schedule I
(to Note Agreement)
186
<PAGE> 43
NAME AND ADDRESSES
AMOUNTS OF
OF PURCHASERS
- ------------------
COMMITMENT
----------
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY $25,000,000
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department-Securities Division
Regarding Bond Number OBI *07*S*60557@
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Amcast Industrial Corporation, 7.09% Senior Notes due November 7, 2005, PPN
023395 A@5, Bond Number OBI *07*S*60557@, principal, premium or interest") to:
ABA No. 073000228
Norwest Bank Iowa, N.A.
Des Moines, Iowa 50309
For credit to:
A. In the case of the Note originally issued in the denomination of
$21,000,000:
Principal Mutual Life Insurance Company
Account No. 014752
B. In the case of the Note originally issued in the denomination of
$4,000,000:
Principal Mutual Life Insurance Company
Account No. 032395
Notices
All notices concerning payment on or in respect of the Notes, to:
I-43
187
<PAGE> 44
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Department--Accounting & Treasury
Telefacsimile: (515) 247-5930
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-012-7290
I-44
188
<PAGE> 45
DESCRIPTION OF INDEBTEDNESS, LEASES
AND UNFUNDED PENSION LIABILITY
1. Indebtedness (other than Capitalized Rentals) and Liens related
thereto of the Company and its Subsidiaries outstanding on the Closing
Date is as follows:
<TABLE>
<CAPTION> <C> <C> <C> <C>
OBLIGATION PRINCIPAL FINAL COLLATERAL
AMOUNT MATURITY
</TABLE>
2. Capitalized Leases of the Company and its Subsidiaries outstanding on
the Closing Date are as follows:
3. Unfunded Pension Liability of Plans of the Company and its
Subsidiaries as of August 31, 1995 is as follows:
None
SCHEDULE II
(to Note Agreement)
189
<PAGE> 46
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
PERCENTAGE OF VOTING STOCK OWNED BY
COMPANY & EACH OTHER SUBSIDIARY
JURISDICTION OF INCORPORATION
NAME OF SUBSIDIARY
<S> <C> <C>
Amcast Aviation Corporation Ohio 100%
Amcast Industrial Limited Ontario, Canada 100%
Elkhart Products Corporation Indiana 100%
WheelTek Inc. Indiana 100%
Amcast Industrial Investment Corporation Delaware 100%
Amcast Industrial Financial Services, Inc. Ohio 100%
Amcast Industrial Sales Corporation U.S. Virgin Islands 100%
Amcast Automotive, Inc. Michigan 100%
Casting Technology Company Indiana General Partnership Partnership:
------------
Amcast (ACT) - 60%
Izumi - 40%
Amcast Casting Technologies, Inc. Indiana 100%
</TABLE>
SCHEDULE II
(to Note Agreement)
190
<PAGE> 47
USE OF PROCEEDS
Amcast's issuance of the Notes will be used to support the Company's
capital investments in new plants, expansions of existing plants, new products
development and program launches, as well as for other general corporate and
business purposes.
SCHEDULE III
(to Note Agreement)
191
<PAGE> 48
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER SAID ACT OR
IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
AMCAST INDUSTRIAL CORPORATION
7.09% Senior Note
Due November 7, 2005
No.
____________, ____
$
PPN 023395 A@5
AMCAST INDUSTRIAL CORPORATION, an Ohio corporation (the "Company"),
for value received, hereby promises to pay to
or registered assigns
on the seventh day of November, 2005
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 7.09% per annum from the date hereof until maturity, payable
quarterly on the seventh day of February, May, August and November in each year
(commencing on February 7, 1996) and at maturity. The Company agrees to pay
interest on overdue principal (including any overdue required or optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the Overdue Rate after
the due date, whether by acceleration or otherwise, until paid. "Overdue Rate"
shall mean the lesser of (a) the maximum interest rate permitted by law and (b)
the greater of (1) 9.09% per annum and (2) the rate which Morgan Guaranty Trust
Company of New York, New York City, New York, announces from time to time as
its prime lending rate as in effect from time to time, not to exceed 11%.
EXHIBIT A
(to Note Agreement)
192
<PAGE> 49
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Dayton, Ohio in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts. If any amount of principal, premium,
if any, or interest on or in respect of this Note becomes due and payable on
any date which is not a Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means any day other than a
Saturday, Sunday or other day on which banks in Dayton, Ohio or Chicago,
Illinois are required by law to close or are customarily closed.
This Note is one of the 7.09% Senior Notes due November 7, 2005 (the
"Notes") of the Company in the aggregate principal amount of $50,000,000 issued
or to be issued under and pursuant to the terms and provisions of the separate
Note Agreements, each dated as of November 1, 1995 (the "Note Agreements"),
entered into by the Company with the original Purchasers therein referred to
and this Note and the holder hereof are entitled equally and ratably with the
holders of all other Notes outstanding under the Note Agreements to all the
benefits provided for thereby or referred to therein. Reference is hereby made
to the Note Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the terms
and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing. Payment of or on account of principal, premium, if any, and interest
on this Note shall be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the laws of Ohio, including all matters of construction,
validity and performance.
AMCAST INDUSTRIAL CORPORATION
A-49
193
<PAGE> 50
By
Its
A-50
194
<PAGE> 51
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the Agreements states
the name of each of the Company's Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company
and/or its Subsidiaries. The Company and each Subsidiary has good and
marketable title to all of the shares it purports to own of the stock of each
Subsidiary, free and clear in each case of any Lien. All such shares have been
duly issued and are fully paid and non-assessable.
2. Corporate Organization and Authority. The Company, and each
Subsidiary,
(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all
necessary licenses and permits to own and operate its properties and
to carry on its business as now conducted and as presently proposed to
be conducted; and
(c) is duly licensed or qualified and is in good standing
as a foreign corporation in each jurisdiction wherein the nature of
the business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary.
3. Financial Statements. (a) The consolidated statements of
financial condition of the Company and its consolidated Subsidiaries as of
August 31 in each of the years 1990 to 1994, both inclusive, and the statements
of operations and retained earnings and cash flows for the fiscal years ended
on said dates, each accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise
without qualification except as therein noted, by Ernst & Young LLP, have been
prepared in accordance with GAAP consistently applied except as therein noted,
are correct and complete and present fairly the financial position of the
Company and its consolidated Subsidiaries as of such dates and the results of
their operations and changes in their cash flows for such periods. The
unaudited consolidated statements of financial condition of the Company and its
consolidated Subsidiaries as of May 28, 1995, and the unaudited statements of
operations and retained earnings and cash flows for the nine-month period ended
on said date prepared by the Company have been prepared in accordance with GAAP
consistently applied, are correct and complete and present fairly the financial
position of the Company and its consolidated Subsidiaries as of said date and
the results of their operations and changes in their cash flows for such
period.
EXHIBIT B
(to Note Agreement)
195
<PAGE> 52
(b) Since August 31, 1994, there has been no change in the
condition, financial or otherwise, of the Company and its consolidated
Subsidiaries as shown on the consolidated balance sheet as of such date except
changes in the ordinary course of business, none of which individually or in
the aggregate has been materially adverse.
4. Indebtedness, Liens and Unfunded Pension Liability. Schedule
II attached to the Agreements correctly describes all Indebtedness of the
Company and its Subsidiaries and Liens related thereto and all Capitalized
Leases of the Company and its Subsidiaries outstanding on the Closing Date and
the Unfunded Pension Liability of Plans of the Company and its Subsidiaries.
5. Full Disclosure. Neither the financial statements referred to
in paragraph 3 hereof, nor the Agreements, or any other written statement
furnished by the Company to you in connection with the negotiation of the sale
of the Notes, contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company or its Subsidiaries which
the Company has not disclosed to you in writing which materially affects
adversely nor, so far as the Company can now foresee, will materially affect
adversely the properties, business, prospects, profits or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole.
6. Pending Litigation. Except as disclosed in Annex 1 hereto,
there are no proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or tribunal which
involve the possibility of materially and adversely affecting the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company and its Subsidiaries.
7. Title to Properties. The Company and each Subsidiary has good
and marketable title in fee simple (or its equivalent under applicable law) to
all material parcels of real property and has good title to all the other
material items of property it purports to own, including that reflected in the
most recent statements of financial condition referred to in paragraph 3
hereof, except as sold or otherwise disposed of in the ordinary course of
business and except for Liens permitted by the Agreements.
8. Patents and Trademarks. The Company and each Subsidiary owns
or possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without any known conflict
with the rights of others other than the patent matter described in Annex 1
hereto.
B-52
196
<PAGE> 53
9. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreements and the
Notes --
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any
order of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company; and
(c) have been duly authorized by proper corporate action
on the part of the Company (no action by the stockholders of the
Company being required by law, by the Articles of Incorporation or
By-laws of the Company or otherwise), executed and delivered by the
Company and the Agreements and the Notes constitute the legal, valid
and binding obligations, contracts and agreements of the Company
enforceable in accordance with their respective terms.
10. No Defaults. No Default or Event of Default has occurred and
is continuing. The Company is not in default in the payment of principal or
interest on any Indebtedness for borrowed money and is not in default under any
instrument or instruments or agreements under and subject to which any
Indebtedness for borrowed money has been issued and no event has occurred and
is continuing under the provisions of any such instrument or agreement which
with the lapse of time or the giving of notice, or both, would constitute an
event of default thereunder.
11. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of the
Agreements or the issuance, sale or delivery of the Notes or compliance by the
Company with any of the provisions of the Agreements or the Notes.
12. Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective properties, income or franchises,
which are shown to be due and payable in such returns have been paid. For all
taxable years ending on or before August 31, 1991, the Federal income tax
liability of the Company and its Subsidiaries has been satisfied and either the
period of limitations on assessment of additional Federal income tax has
expired or the Company and its Subsidiaries have entered into an agreement with
the Internal Revenue Service closing conclusively the total tax liability for
the taxable year. The Company does not know of any proposed additional tax
assessment against
B-53
197
<PAGE> 54
it for which adequate provision has not been made on its accounts, and no
material controversy in respect of additional Federal or state income taxes due
since said date is pending or to the knowledge of the Company threatened. The
provisions for taxes on the books of the Company and each Subsidiary are
adequate for all open years, and for its current fiscal period.
13. Use of Proceeds. The net proceeds from the sale of the Notes
will be used for capital expansion as described in Schedule III attached to the
Agreement and for other corporate purposes. None of the transactions
contemplated in the Agreements (including, without limitation thereof, the use
of proceeds from the issuance of the Notes) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or
any regulation issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve System,
12 C.F.R., Chapter II. Neither the Company nor any Subsidiary owns or intends
to carry or purchase any "margin stock" within the meaning of said Regulation
G. None of the proceeds from the sale of the Notes will be used to purchase,
or refinance any borrowing the proceeds of which were used to purchase, any
"security" within the meaning of the Securities Exchange Act of 1934, as
amended.
14. Private Offering. Neither the Company, directly or
indirectly, nor any agent on its behalf has offered or will offer the Notes or
any similar Security to or has solicited or will solicit an offer to acquire
the Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any similar
Security with any Person other than the Purchasers and not more than 13 other
institutional investors, each of whom was offered a portion of the Notes at
private sale for investment. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or any similar
Security to or has solicited or will solicit an offer to acquire the Notes or
any similar Security from any Person so as to bring the issuance and sale of
the Notes within the provisions of Section 5 of the Securities Act of 1933, as
amended.
15. ERISA. The consummation of the transactions provided for in
the Agreements and compliance by the Company with the provisions thereof and
the Notes issued thereunder will not involve any prohibited transaction within
the meaning of ERISA or Section 4975 of the Code. Each Plan complies in all
material respects with all applicable statutes and governmental rules and
regulations, and (a) no Reportable Event has occurred and is continuing with
respect to any Plan, (b) neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or Multiemployer Plan or instituted steps to do so, and
(c) no steps have been instituted to terminate any Plan. No condition exists
or event or transaction has occurred in connection with any Plan which could
result in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any ERISA
Affiliate, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" as defined in Section 302 of ERISA nor does the present
value of all benefits vested under all Plans exceed, as of the last
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<PAGE> 55
annual valuation date, the value of the assets of the Plans allocable to such
vested benefits. Neither the Company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit plan"
(as such term is defined in ERISA) except as has been disclosed to the
Purchasers.
16. Compliance with Law. (a) Neither the Company nor any
Subsidiary (1) is in violation of any law, ordinance, franchise, governmental
rule or regulation to which it is subject; or (2) has failed to obtain any
license, permit, franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business, which violation or
failure to obtain would materially affect adversely the business, prospects,
profits, properties or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole, or impair the ability of the Company to
perform its obligations contained in the Agreements or the Notes. Neither the
Company nor any Subsidiary is in default with respect to any order of any court
or governmental authority or arbitration board or tribunal.
(b) Without limiting the provisions of clause (a) of this
paragraph 16, except as disclosed in Annex 2 hereto, the Company is in
compliance with all applicable Environmental Laws, the failure to comply with
which would materially affect adversely the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole or the ability of the Company to perform its
obligations under the Agreements or the Notes.
17. Investment Company Act. The Company is not, and is not
directly or indirectly controlled by or acting on behalf of any Person which
is, required to register as an "investment company" under the Investment
Company Act of 1940, as amended.
18. Foreign Assets Control Regulations, etc. Neither the Company
nor any Affiliate of the Company is, by reason of being a "national" of
"designated foreign country" or a "especially designated national" within the
meaning of the Regulations of the Office of Foreign Assets Control, United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or for any other
reason, subject to any restriction or prohibition under, or is in violation of,
any Federal statute or Presidential Executive Order, or any rules or
regulations of any department, agency or administrative body promulgated under
any such statute or order, concerning trade or other relations with any foreign
country or any citizen or national thereof or the ownership or operation of any
property.
B-55
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<PAGE> 56
DESCRIPTION OF LITIGATION
[TO BE PROVIDED BY THE COMPANY]
ANNEX 1
(to Exhibit B)
200
<PAGE> 57
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by SECTION 4.1 of the Note Agreements, shall be dated
the Closing Date and addressed to the Purchasers, shall be satisfactory in form
and substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of Ohio and has the
corporate power and the corporate authority to execute and deliver the
Note Agreements and to issue the Notes.
2. The Note Agreements have been duly authorized by all
necessary corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid
and binding contracts of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under
the circumstances contemplated by the Note Agreements does not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinions
of Denis G. Daly, Esq. and Reinhart, Boerner, Van Deuren, Norris & Rieselbach,
P.C. are satisfactory in scope and form to Chapman and Cutler and that, in
their opinion, the Purchasers are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely solely upon an examination of the Articles of Incorporation
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of Ohio, the By-laws of the
Exhibit C
(to Note Agreement)
201
<PAGE> 58
Company and the General Corporation Law of the State of Ohio. The opinion of
Chapman and Cutler is limited to the laws of the State of Illinois, the General
Corporation Law of the State of Ohio and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials and
officers of the Company.
C-58
202
<PAGE> 59
DESCRIPTION OF CLOSING OPINIONS OF COUNSEL TO THE COMPANY
The closing opinions of Denis G. Daly, Esq., General Counsel of the
Company, and Reinhart Boerner, Van Deuren, Norris & Rieselbach, P.C., special
counsel for the Company, which are called for by SECTION 4.1 of the Note
Agreements, shall be dated the Closing Date and addressed to the Purchasers,
shall be satisfactory in scope and form to the Purchasers and, taken together,
shall be to the effect that:
1. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of
Ohio, has the corporate power and the corporate authority to execute
and perform the Note Agreements and to issue the Notes and has the
full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or
qualified and is in good standing as a foreign corporation in each
jurisdiction in which the character of the properties owned or leased
by it or the nature of the business transacted by it makes such
licensing or qualification necessary.
2. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly licensed or qualified and is
in good standing in each jurisdiction in which the character of the
properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary and
all of the issued and outstanding shares of capital stock of each such
Subsidiary have been duly issued, are fully paid and non-assessable
and are owned by the Company, by one or more Subsidiaries, or by the
Company and one or more Subsidiaries.
3. Each Note Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid
and binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and general
principles of equity
EXHIBIT D
(to Note Agreement)
203
<PAGE> 60
(regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
5. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
governmental body, Federal, state or local, is necessary in connection
with the execution, delivery and performance of the Note Agreements or
the Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreements do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the property of the Company pursuant to the
provisions of the Articles of Incorporation or By-laws of the Company
or any agreement or other instrument known to such counsel to which
the Company is a party or by which the Company may be bound.
7. The issuance, sale and delivery of the Notes under
the circumstances contemplated by the Note Agreements does not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
8. The issuance of the Notes and the use of the proceeds
of the sale of the Notes in accordance with the provisions of and
contemplated by the Note Agreements do not violate or conflict with
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
9. There is no litigation pending or, to the best
knowledge of such counsel, threatened which in such counsel's opinion
could reasonably be expected to have a materially adverse effect on
the Company's business or assets or which would impair the ability of
the Company to issue and deliver the Notes or to comply with the
provisions of the Note Agreements.
The opinions of Denis G. Daly, Esq. and Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, P.C. shall cover such other matters relating to the sale
of the Notes as the Purchasers may reasonably request. With respect to matters
of fact on which such opinions are based, such counsel shall be entitled to
rely on appropriate certificates of public officials and officers of the
Company. The opinion of Denis G. Daly, Esq. shall state that Chapman and
Cutler may rely on such opinion for all matters of Ohio Law.
D-60
204
<PAGE> 1
Exhibit 10.13
CHANGE OF CONTROL AGREEMENT
This Agreement entered into this 14th day of August, 1995, by and
between Amcast Industrial Corporation (the "Company") and John H. Shuey (the
"Executive").
WHEREAS, Executive has performed valuable services to Company in
senior executive positions in the past and;
WHEREAS, it is the desire of the Company to continue to retain the
services of Executive in the future as the Company's chief executive officer
and;
WHEREAS, the Company recognizes that as is the case with most publicly
held corporations, the possibility of a change in control may raise distracting
and disrupting uncertainties especially for the chief executive officer, may
create a conflict and make it difficult for Executive to give his whole-hearted
attention and devotion to the performance of his duties, and may even lead to
his departure, all to the detriment of the best interests of the Company and
its shareholders.
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that the best interests of the Company and its shareholders will be
served by assuring Executive, the protection provided by an agreement which
defines the respective rights and obligations of the Company and the Executive
in the event of termination of employment subsequent to a change in control of
the Company and to induce Executive to remain in the employ of the Company.
NOW, THEREFORE, the parties agree that this agreement sets forth the
severance benefits which the Company agrees will be provided to Executive in
the event Executive's employment with the Company [or, in the case of a
transaction described in clause (iv) of paragraph 2, with the successor to the
Company (a "Successor")] is terminated subsequent to a "change in control of
the Company" under the circumstances described below.
Except where the context otherwise indicates, the term "Company"
hereinafter includes the Company and any Successor.
1. OPERATION AND TERM OF AGREEMENT. This agreement, although
effective immediately, shall not become operative unless and until
there has been a change in control of the Company. None of the
provisions of this agreement shall be applicable to any
termination of Executive's employment, however occurring, which is
effective prior to a change in control of the Company. This
agreement shall continue until the later of December 31, 1997 or
two years after the occurrence of a change in control of the
Company, provided such change in control occurs on or before
December 31, 1997, subject to extension beyond that date by mutual
written consent. This agreement will be reviewed with Executive
between January 1, 1997 and July 31, 1997, for the purpose of
determining whether or not an extension beyond December 31, 1997
is mutually agreeable and, if so, on what basis and for how long.
205
<PAGE> 2
CHANGE OF CONTROL AGREEMENT
2. CHANGE IN CONTROL. No benefits shall be payable hereunder unless
there shall have been a change in control of the Company, as set
forth below, and Executive's employment with the Company shall
thereafter have been terminated in accordance with paragraph 3
below. For purposes of this agreement, a "change in control of
the Company" shall mean and be deemed to have occurred on (i) the
date upon which the Company is provided a copy of a Schedule 13D,
filed pursuant to Section 13(d) of the Securities Exchange Act of
1934 (the "1934 Act"), indicating that a group or person, as
defined in Rule 13d-3 under the 1934 Act, has become the
beneficial owner of 20% or more of the outstanding Voting Shares
of the Company or the date upon which the Company first learns
that a person or group has become the beneficial owner of 20% or
more of the outstanding Voting Shares of the Company if a Schedule
13D is not filed; (ii) the date of a change in the composition of
the Board of Directors of the Company such that individuals who
were members of the Board of Directors on the date two years prior
to such change (or who were subsequently elected to fill a vacancy
in the Board, or were subsequently nominated for election by the
Company's shareholders, by the affirmative vote of at least
two-thirds of the directors then still in office who were
directors at the beginning of such two year period) no longer
constitute a majority of the Board of Directors of the Company;
(iii) the date the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the holders
of the Voting Shares of the Company outstanding immediately prior
to the merger or consolidation continuing to own immediately after
the merger or consolidation 80% or more of the Voting Shares of
the Company or the surviving entity, if the Company is not the
surviving entity in the merger or consolidation; or (iv) the date
shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets. "Voting
Shares" means any securities of the Company which vote generally
in the election of directors.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
(A) If any of the events described in paragraph 2 constituting a
change in control of the Company shall have occurred, then
upon any subsequent termination of Executive's employment at
any time within two years following the occurrence of such
event, Executive shall be entitled to the benefits provided
by this agreement, as set forth in paragraph 5, unless such
termination is (i) by the Company for Cause or because of
Executive's Disability, or (ii) because of Executive's
Retirement, or (iii) by Executive other than for Good
Reason, or (iv) because of Executive's death.
(B) As used in this agreement, the terms "Cause", "Retirement",
"Good Reason", and "Disability" shall have the meanings set
forth below:
206
<PAGE> 3
CHANGE OF CONTROL AGREEMENT
(i) CAUSE. "Cause" shall mean (a) the willful and continued
failure by Executive to substantially perform
Executive's duties with the Company (other than any such
failure resulting from Executive's physical or mental
illness or other physical or mental incapacity), after a
demand for substantial performance is delivered to
Executive by the Board which specifically identifies the
manner in which the Board believes that Executive has
not substantially performed Executive's duties, or (b)
the willful engaging by Executive in gross misconduct
which is materially and demonstrably injurious to the
Company resulting or intended to result, directly or
indirectly, in substantial personal gain or substantial
personal enrichment at the expense of the Company. For
purposes of this subparagraph, no act, or failure to
act, on Executive's part shall be considered "willful"
unless done, or omitted to be done, by Executive not in
good faith and without reasonable belief that
Executive's action or omission was in the best interests
of the Company. Notwithstanding the foregoing, Cause
shall not be deemed to exist unless and until there
shall have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of not
less than three-fourths of the number of directors then
in office at a meeting of the Board called and held for
that purpose (after reasonable notice to Executive and
an opportunity for Executive, together with Executive's
counsel, to be heard before the Board), finding that in
the good faith opinion of the Board Executive is guilty
of conduct set forth above in clauses (a) or (b) of the
first sentence of this subparagraph and specifying the
particulars thereof in detail.
(ii) RETIREMENT. "Retirement" shall meacessation of
Executive's employment in accordance with the Company's
retirement policy (including early retirement) generally
applicable to salaried employees, or in accordance with
any retirement arrangement with respect to Executive
established with Executive's consent.
(iii) GOOD REASON. "Good Reason" shall mean:
(a) The assignment to Executive of any duties
inconsistent with Executive's position, duties,
responsibilities and status with the Company
immediately prior to a change in control of the
Company, or a change in Executive's
responsibilities, as in effect immediately prior to
a change in control of the Company, which
materially diminishes Executive's responsibilities
with the Company when considered as a whole, or any
removal of Executive from or any failure to
re-elect Executive to any of such positions or
offices; provided, however, that the foregoing
shall not constitute Good Reason if done in
connection with termination of Executive's
employment because of Executive's Retirement, or by
the
207
<PAGE> 4
CHANGE OF CONTROL AGREEMENT
Company for Cause or because of Executive's
Disability, or by Executive other than for Good
Reason.
(b) A reduction by the Company of Executive's then
current annual base salary or, if higher,
Executive's annual base salary as in effect at the
time of the change in control of the Company.
(c) Failure by the Company to continue in effect any
benefit, incentive compensation, pension, employee
stock ownership, stock option, life insurance,
medical, health and accident, or disability plan in
which Executive is participating at the time of a
change in control of the Company or plans providing
Executive with substantially similar benefits, or
the taking of any action by the Company which would
adversely affect Executive's participation in or
materially reduce Executive's benefits under any of
such plans or deprive Executive of any material
fringe benefit enjoyed by Executive at the time of
the change in control of the Company, or the
failure by the Company to provide Executive with
the number of paid vacation days to which Executive
would then be entitled in accordance with the
Company's vacation policy in effect at the time of
the change in control of the Company.
(d) The relocation of the Company's principal executive
offices to a location outside Montgomery County,
Ohio, if at the time of a change in control of the
Company Executive is based at the Company's
principal executive offices.
(e) The Company requires Executive to be based anywhere
other than the location where Executive is based at
the time of a change in control of the Company, if
the same requires Executive to relocate Executive's
principal residence; or, in the event Executive
consents to being based anywhere other than such
location, the failure by the Company to pay (or
reimburse Executive for) all reasonable moving
expenses incurred by Executive relating to a change
of Executive's principal residence in connection
with such relocation and to indemnify Executive
against any loss [defined as the difference between
the higher of (1) Executive's aggregate investment
in such residence or (2) the fair market value of
such residence, as determined by a real estate
appraiser designated by Executive and reasonably
satisfactory to the Company, and the actual sale
price of such residence after the deduction of all
real estate brokerage charges and related selling
expenses] realized upon the sale of such residence
in connection with any such change of residence.
208
<PAGE> 5
CHANGE OF CONTROL AGREEMENT
(f) The Company's requiring Executive to perform duties
or services which necessitate absence overnight
from Executive's place of residence, because of
travel involving the business or affairs of the
Company, to a degree not substantially consistent
with the extent of such absence necessitated by
such travel during the period of twelve months
immediately preceding a change in control of the
Company.
(g) The failure of the Company to obtain the assumption
of this agreement by any Successor as provided in
paragraph 7 hereof.
(h) The Company's termination of Executive's employment
without satisfying any applicable requirements of
paragraph 4 and subparagraph 3B (i) above.
(iv) DISABILITY. "Disability" shall mean Executive's
inability to perform the duties required of Executive on
a full-time basis for a period of six consecutive months
because of physical or mental illness or other physical
or mental disability or incapacity, followed by the
Company giving Executive thirty days' written notice of
its intention to terminate Executive's employment by
reason thereof, and Executive's failure because of
physical or mental illness or other physical or mental
disability or incapacity to resume the full-time
performance of Executive's duties within such period of
thirty days and thereafter perform the same for a period
of two consecutive months.
(C) During any period of time subsequent to a change in control
of the Company, if Executive fails to perform Executive's
duties as a result of physical or mental illness or other
physical or mental disability or incapacity, Executive shall
continue to receive Executive's full salary at Executive's
annual base salary rate then in effect, together with
Incentive Compensation (as defined in paragraph 5A accrued
but not paid prior to Executive's Date of Termination) as
defined in paragraph 4 until Executive returns to work or
Executive's employment with the Company is terminated;
provided, however, that any amount otherwise payable for any
period of time pursuant to this subparagraph (C) shall be
reduced by any payment or payments Executive receives for
such period of time under any employee salary continuation
plan or employee disability insurance plan maintained by the
Company no part of the cost of which was paid or is payable
by Executive.
(D) If subsequent to a change in control of the Company
Executive's employment is terminated by the Company for
Cause, the Company shall pay Executive's full salary
through the Date of Termination at Executive's annual base
salary rate in effect at the time Notice of Termination is
given, and Executive shall also receive all accrued or
vested benefits of any kind to which Executiveis, or would
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<PAGE> 6
CHANGE OF CONTROL AGREEMENT
otherwise had been, entitled through the Date of Termination
(as defined in paragraph 4), and the Company shall thereupon
have no further obligation to Executive under this
agreement.
4. NOTICE AND DATE OF TERMINATION.
------------------------------
(A) Any termination of Executive's employment subsequent to a
change in control of the Company shall be consummated by
written Notice of Termination given to the other party. For
purposes of this agreement, "Notice of Termination" shall
mean a notice which indicates the specific termination
provision or provisions in this agreement relied upon, if
any, and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive's employment.
(B) "Date of Termination" shall mean (i) if Executive's
employment is terminated by the Company for Cause, the date
specified in the Notice of Termination or the date on which
the meeting of the Board referred to in subparagraph 3(B)(i)
is concluded, whichever date is the later; or (ii) if
Executive's employment is terminated for any other reason,
the date on which Notice of Termination is given or the
effective date specified in the Notice, whichever is later.
For purposes of this agreement, termination of Executive's
employment shall be deemed to have occurred within two years
following the occurrence of a change in control of the
Company if the Date of Termination is within such two year
period.
5. COMPENSATION AND BENEFITS UPON TERMINATION.
-------------------------------------------
(A) "Incentive Compensation" shall mean the annual cash payment
awarded under the Annual Incentive Program (AIP) or other
plan which replaces the AIP but not including any awards
under any stock option, stock grant, stock rights, or
similar plan or any award under any company sponsored profit
sharing, pension, 401k, or similar savings plan.
(B) "Long Term Incentive Compensation" shall mean compensation
payable under the terms of the Amcast (LTIP) or any other
plan which replaced the LTIP.
(C) The compensation and benefits to be provided to Executive
pursuant to paragraph 3 of this agreement upon termination
of Executive's employment with the Company under specified
circumstances within two years following a change in control
of the Company include the following:
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<PAGE> 7
CHANGE OF CONTROL AGREEMENT
(i) Subject to the provisions of paragraph 8 hereof, the
Company shall pay to Executive as severance pay in a
lump sum in cash on the first day following the Date of
Termination, the following amounts:
(a) Executive's full salary through the Date of
Termination at Executive's annual base salary rate
in effect at the time Notice of Termination is
given; and also the amount of Incentive
Compensation and Long Term Incentive Compensation
to any completed period or periods which has been
earned by or awarded to Executive but which has
not yet been paid to Executive.
(b) In lieu of any further salary payments to
Executive for periods subsequent to the Date of
Termination, an amount (the "Additional
Compensation Payment") equal to three hundred
percent (300%) of the sum of Executive's annual
base salary at the rate in effect as of the Date
of Termination (or, if higher, at the rate in
effect at the time of the change in control) plus
an amount equal to three times the average annual
amount awarded to Executive as Incentive
Compensation for the two years immediately
preceding the year during which the Date of
Termination occurs (whether or not fully paid).
(c) All amounts due Executive under the terms of the
LTIP as a result of a change of control.
(d) An amount in cash equal to the aggregate spread
between the exercise prices of all options granted
to Executive under the Company's existing stock
option plans or any stock option plan adopted by
the Company subsequent to the date hereof
("Options") which are then outstanding, whether or
not then fully exercisable, and the higher of (a)
the Fair Market Value of Common Share of the
Company ("Company Shares") on the Date of
Termination or (b) the average price per Company
Share actually paid by the acquiring party in
connection with any change in control of the
Company. As used in this subparagraph, "Fair
Market Value" shall mean (1) in the event the
Company Shares are listed on any exchange or in
the NASD National Market System, the last sale
price on such exchange or System on the Date of
Termination (or last trading date prior thereto)
or, if there are no sales on such date, the mean
between the representative bid and asked prices
for Company Shares on such exchange or System at
the close of business on such date or (2) in the
event that there is then no public market for the
Company Shares or that trading in the Company
Shares is sporadic and the mean between any bid
and asked prices is not representative of fair
market value, the fair market value of the Company
Shares determined in accordance with
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<PAGE> 8
CHANGE OF CONTROL AGREEMENT
Section 2031-2(f) of the Treasury Regulations or
any successor provision thereto. Any Option for
which payment is made as prescribed in this
subparagraph (c) shall be canceled effective upon
the making of such payment.
(e) All legal fees and expenses reasonably incurred by
Executive in good faith as a result of such
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
such termination or in seeking to obtain or
enforce any right or benefit provided by this
agreement).
(f) Interest at a rate equal to three percent (3%) per
annum plus the per annum rate announced from time
to time by the First National Bank of Chicago as
its "prime rate", compounded daily from the due
date of any payment required to be made by the
company under any provision of the agreement
through the date such payment is actually made.
(ii) The Company shall, at its expense, continue to provide to
Executive financial planning and tax preparation services
the same or similar to those provided to Executive prior to
the change of control and to continue to maintain in full
force and effect for Executive's continued benefit all life
insurance, medical, health, and accident plans, programs and
arrangements in which Executive was entitled to participate
at the time of the change in control, provided that
Executive's continued participation is possible under the
terms of such plans, programs and arrangements. In the
event that the terms of any such plan, program, or
arrangement do not permit Executive's continued
participation or that any such plan, program or arrangement
has been or is discontinued or the benefits thereunder have
been or are materially reduced, the Company shall arrange to
provide, at its expense, benefits to Executive which are
substantially similar to those which Executive was entitled
to receive under such plan, program or arrangement at the
time of the change in control. The Company's obligation
under this subparagraph (ii) shall terminate on the earliest
of the following dates: (a) the third anniversary date of
the Date of Termination, (b) the date an essentially
equivalent and no less favorable benefit is made available
to Executive by a subsequent employer or (c) the date that
would have been Executive's normal retirement date under the
Company's defined benefit pension plan for salaried
employees had Executive's remained employed by the Company.
(iii) In the event that because of their relationship to
Executive, members of Executive's family or other individuals
are covered by any plan, program, or arrangement described in
subparagraph (ii) above immediately prior to the Date of
Termination, the provisions set forth in subparagraph (ii)
shall apply
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<PAGE> 9
CHANGE OF CONTROL AGREEMENT
equally to require the continued coverage of such persons;
provided, however, that if under the terms of any such
plan, program or arrangement any such person would have
ceased to be eligible for coverage during the period in
which the Company is obligated to continue coverage for
Executive, nothing set forth herein shall obligate the
Company to continue to provide coverage for such person
beyond the date such coverage would have ceased even if
Executive had remained an employee of the Company.
(iv) The Company shall enable Executive to purchase the
automobile, if any, which the Company was providing for
Executive's use at the time Notice of Termination was given
at the wholesale value as set out in the latest Black Book
published by National Auto Research Division of Hearst
Business Media Corporation, of such automobile at such
time.
(D) If an event constituting Good Reason shall occur, Executive
shall be entitled to the compensation and benefits described
in (A) above only if Executive give a Notice of Termination
with respect thereto within 180 days after the occurrence of
such event, regardless of whether there has been an
intervening termination of Executive's employment by the
Company or otherwise.
(E) In the event that any payment to the Executive (whether
pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose
actions result in a change of control or any person
affiliated with the Company or such persons) shall be
subject to the tax (the "Excise Tax") imposed by Section
4999 of the Internal revenue Code of 1954, as amended (the
"Code") or any successor provision, the Company shall pay to
the Executive, prior to the date upon which the Executive is
required to pay the Excise Tax, an additional amount (the
"Gross-Up Payment"), appropriately calculated by the
Company's independent auditor, equal to the Excise Tax on
such payment and any additional federal, state, local tax
and additional Excise Tax incurred by the Executive in
respect of such Gross-Up Payment. For purposes of
determining whether any payment to the Executive is subject
to the Excise Tax (i) all payments received or to be
received by the Executive in connection with a change of
control of the Company or the termination of employment of
the Executive (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with
the Company, any person whose action results in a change of
control or any person affiliated with the Company or such
persons) shall be treated as "parachute payments" within the
meaning of Section 280(G)(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280
(G)(b)(i) shall be treated as subject to the Excise Tax and
(ii) the value of any noncash benefits on any deferred
payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of
Sections 280 (G)(d)(3) and (7) of the Code. For purposes of
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<PAGE> 10
CHANGE OF CONTROL AGREEMENT
determining the amount of the Gross-Up Payment, unless the
Executive notifies the Company's independent auditor to the
contrary the Executive shall be deemed to pay federal income
taxation at the maximum applicable individual rate in the
calendar year in which the Gross-Up Payment is to be made
and taxes at the maximum applicable rate in the state and
locality of the Executive's residence on the Date of
Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state
and local taxes. In the event that the Excise Tax is
subsequently finally determined to be less than the amount
taken into account hereunder at the time of termination of
the Executive's employment, the Executive shall repay to the
Company at the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction plus interest on the
amount of such repayment at the then current prime rate.
(F) Executive shall not be required to mitigate the amount of
any payment provided for in this agreement by seeking other
employment or otherwise; provided, however, that in the
event that Executive shall obtain other employment at any
time within three years immediately following Executive's
Date of Termination, 20% of all earnings obtained by reason
of such other employment during the three year period
immediately following Executive's Date of Termination shall
be payable to the Company in full satisfaction of any
obligation Executive has to mitigate payment made to
Executive by the Company. Upon obtaining any such other
employment, Executive, within thirty (30) days thereof,
shall notify the Company in writing of such other employment
and the aggregate compensation (including Incentive
Compensation, bonuses and all other forms of cash and
contingent remuneration) to which Executive will be
entitled. During each of the three years immediately
following Executive's Date of Termination, Executive shall
provide the Company, on or before April 15 of each year
following such year, a photostatic copy of Executive's
federal income tax return (including all schedules and
exhibits thereto), as filed with the Internal Revenue
Service for the preceding calendar year.
6. RIGHTS AS FORMER EMPLOYEE. Nothing contained in this agreement
shall be construed as preventing Executive, and shall not prevent
Executive, following any termination of Executive's employment
whether pursuant to this agreement or otherwise, from thereafter
participating in any benefit or insurance plans, programs or
arrangements (including without limitation, any retirement plans
or programs) in the same manner and to the same extent that
Executive would have been entitled to participate as a former
employee of the Company had this agreement not have been executed,
except, however, Executive shall not be entitled to any severance
payments under any severance pay programs of the Company (other
than this agreement) if Executive is paid the benefits provided
for under this agreement.
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CHANGE OF CONTROL AGREEMENT
7. SUCCESSORS. The Company shall require any Successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to
perform this agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of such succession shall be a
breach of this agreement and shall entitle Executive to
compensation from the Company in the same amount and on the same
terms as Executive would be entitled hereunder if Executive
terminated Executive's employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of
Termination.
This agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If Executive should die while any amounts would still
be payable to Executive hereunder if Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be
paid to such beneficiary or beneficiaries as Executive shall have
designated by written notice delivered to the Company prior to
Executive's death or, failing such written notice, to Executive's
estate.
8. UNAUTHORIZED DISCLOSURE; INVENTIONS.
------------------------------------
(A) During the period of Executive's employment hereunder, and
for a period of five (5) years following the termination of
such employment, Executive hereby agrees that Executive will
not, without the written consent of the Board or a person
authorized thereby, disclose to any person, other than an
employee of the Company, a person to whom disclosure is
reasonably necessary or appropriate in connection with the
performance by Executive of Executive's duties as an
executive of the Company or pursuant to any order or process
of any court or regulatory agency, any material confidential
information obtained by Executive while in the employ of the
Company with respect to any of the Company's products,
improvements, formulae, designs or styles, processes,
customers, methods of distribution or methods of
manufacture; provided, however, that confidential
information shall not include any information known
generally to the public (other than as a result of
unauthorized disclosure by Executive) or any information of
a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that
conducted by the Company.
(B) INVENTIONS. Any and all inventions made, developed or
created by Executive (whether at the request or suggestion
of the Company or otherwise, whether alone or in conjunction
with others, and whether during regular hours of work or
otherwise) during the period of Executive's employment by
the Company, which
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<PAGE> 12
CHANGE OF CONTROL AGREEMENT
may be directly or indirectly useful in, or relate to, the
business of or tests being carried out by the Company or any
of its subsidiaries or affiliates, will be promptly and
fully disclosed by Executive to an appropriate executive
officer of the Company and shall be the Company's exclusive
property as against Executive, and Executive will promptly
deliver to an appropriate executive officer of the Company
all papers, drawings, models, data and other material
relating to any invention made, developed or created by
Executive as aforesaid.
Executive will, upon the Company's request and without any
payment therefor, execute any documents necessary or
advisable in the opinion of the Company's counsel to direct
issuance of patents to the Company with respect to such
inventions as are to be the Company's exclusive property as
against Executive under this subsection (b) or to vest in
the Company title to such inventions as against the
Executive, the expense of securing any patent, however, to
be borne by the Company.
(C) The foregoing provision of this Section 8 shall be binding
upon the Executive's heirs, successors and legal
representatives.
9. NOTICES. All notices required or permitted to be given under this
agreement shall be in writing and shall be mailed (postage prepaid
by either registered or certified mail) or delivered, if to the
Company, addressed to
Amcast Industrial Corporation
7887 Washington Village Drive
Dayton, Ohio 45459
Attention: Secretary
and if to Executive, addressed to:
John H. Shuey
696 Uplands Camp Road
Dayton, Ohio 45419
Either party may change the address to which notices to such party
are to be directed by giving written notice of such change to the
other party in the manner specified in this paragraph. All
notices, including without limitation, any Notice of Termination,
shall be deemed to have been given upon the date of actual receipt
of the recipient party.
10. ARBITRATION. Any dispute or controversy arising out of or
relating to this agreement shall be settled by arbitration in
Dayton, Ohio, in accordance with the rules then obtaining of the
American Arbitration Association, and judgment may be entered
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<PAGE> 13
CHANGE OF CONTROL AGREEMENT
on the arbitrator's award in any court having jurisdiction. The
decision of such arbitrator shall be final, binding, and not
appealable.
11. MISCELLANEOUS. No provision of this agreement may be modified,
waived, or discharged unless such waiver, modification or
discharge is agreed to in writing, signed by Executive and such
officer of the Company as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach
by the other party hereto of, or of compliance by such other party
with, any condition or provision of this agreement to be performed
by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this agreement.
12. GOVERNING LAW. The validity, interpretation, construction and
performance of this agreement shall be governed by the laws of the
State of Ohio, without giving effect to the principles of
conflicts of law thereof.
13. VALIDITY. The invalidity or unenforceability of any provision of
this agreement shall no affect the validity or enforceability of
any other provision, which shall remain in full force and effect.
EXECUTIVE AMCAST INDUSTRAL CORPORATION
John H. Shuey By /s/ William G. Roth
---------------- -----------------------------
John H. Shuey Title: Chairman, Compensation Committee
---------------------------
8/14/95 8/4/95
---------------- -----------------------------------
Date Date
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<PAGE> 1
EXHIBIT 13.1
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
($ in thousands except per share amounts)
RESULTS OF OPERATIONS
- ---------------------
Net sales were $328,231, $271,856, and $222,643 in 1995, 1994, and 1993,
respectively. In 1995, sales increased 20.7% due to increased shipments of
aluminum wheels and other automotive components, and higher pricing driven by
escalating material costs. In 1994, sales increased 22.1% due to a strong
market for the Company's plumbing products and increased demand for aluminum
wheels and automotive components.
The gross profit percent was 20.8%, 21.8%, and 22.6% in 1995, 1994, and
1993, respectively. The gross profit percent decreased in 1995 due to rising
material costs. As higher aluminum and copper costs were passed through to
customers, material costs as a percentage of sales increased, resulting in a
lower gross profit percent. Gross profit decreased as a percent of sales in
1994, primarily due to the underutilization of two recently constructed
automotive parts plants. The higher gross profit percent in 1993, resulted from
improved pricing for copper plumbing products and lower costs for copper used
in many of the Company's flow control products. These improvements were
partially offset by reduced unit volumes for copper plumbing products and lower
demand for aluminum wheels.
Selling, general and administrative expenses, as a percent of sales, were
12.5% in 1995, 13.3% in 1994, and 14.2% in 1993. As a percent of sales, these
expenses have decreased due to higher sales levels. Expenses have increased
year to year reflecting higher sales and marketing costs to support business
expansion.
Interest expense was $1,387, $1,594, and $1,266 in 1995, 1994, and 1993,
respectively. Interest expense decreased in 1995 as long-term debt was retired.
Although borrowing increased in the current year, the proceeds financed plant
construction and expansions and accordingly, the interest related to these
long-term projects was capitalized. Average borrowings were lower in 1994,
however, interest expense was higher compared to 1993 when interest was
capitalized during the construction period of two new manufacturing facilities.
Interest rates were slightly higher in 1994 compared to 1993.
Other income was higher in 1993, compared to subsequent years, primarily due
to the gain realized on the sale of a facility.
The effective tax rate in 1995 was 34.2%, compared to the 34.5% in 1994.
The 1995 rate is lower than the statutory rate due to federal tax credits.
The rate decreased in 1994 compared to 36% in 1993 primarily due to the tax
benefit derived from the conversion of Casting Technology Corporation
(CTC), a joint venture of Amcast and Izumi, to a partnership.
In 1992, the Company adopted a plan to divest Stanley G. Flagg & Co.,
(Flagg), a manufacturer of iron and brass pipe fittings and pole line hardware
for the utility market. A significant portion of the Flagg assets, relating to
the iron and pole line hardware businesses have been sold. Effective August
31, 1995, the Company elected to retain the
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brass fittings business, which is currently operating in a portion of the
Flagg facility. The assets and operating results of the brass business are
not material to the Company, therefore, previously reported results of
operations and statements of financial condition of Amcast have not been
reclassified. The brass business will be reported as part of flow control
segment. Sales in 1995 were $7,615 and assets were $11,857 at year end. The
remaining idle assets of the iron and pole line businesses are being held for
sale and reported at their net realizable value in the caption, Other Assets.
See Discontinued and Retained Operations note on page 23.
During the fourth quarter of 1993, the Company elected early adoption,
effective September 1, 1992, of the Statement of Financial Accounting Standards
(SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions". This statement requires companies to record a liability for
employees' accumulated postretirement benefit costs and to recognize ongoing
expenses on an accrual basis. The Company recognized the $6,159 pre-tax
cumulative effect of the change in accounting principle, which represents the
accumulated postretirement benefit obligation as of September 1, 1992. The
effect on net income and shareholders' equity was $3,942, or $.47 per share.
The impact on 1993 operating results, due to the adoption of SFAS 106, was not
material.
FLOW CONTROL PRODUCTS
- ---------------------
Flow Control Products sales were $146,692, $124,090, and $110,096 in 1995,
1994, and 1993, respectively. Operating profits were $25,387, $19,849, and
$15,703 in 1995, 1994, and 1993, respectively. In 1995, sales increased 18.2%
while operating profits rose 27.9%. Margins increased due to higher operating
efficiencies and the Company's strong market position, which allowed for
improved price realization. In 1994, sales increased 12.7% while operating
profits rose 26.4% due to improved margins resulting from cost reductions and
increased sales volume.
ENGINEERED COMPONENTS
- ---------------------
Engineered Components sales were $181,539, $147,766, and $112,547 in 1995,
1994, and 1993, respectively. Operating profits were $8,862, $10,034, and
$8,228 in 1995, 1994, and 1993, respectively. In 1995, sales increased 22.9%
due to higher volumes of aluminum wheels and automotive components, and higher
pricing driven by escalating aluminum costs. Operating profits decreased 11.7%
due to costs related to launching several new products which offset the
improvements in sales volume. In 1994, sales increased 31.3% while operating
profits increased 21.9%. The increase in sales was primarily due to strong
customer demand for aluminum wheels and other aluminum automotive components.
Higher operating profits, resulting primarily from wheel sales, were partially
offset by the underutilization of two new automotive parts plants.
LIQUIDITY
- ---------
Net cash provided by operations was $15,464, $29,578, and $17,958 for the
years 1995, 1994, and 1993, respectively. In each of the three years, cash was
primarily provided by income from operations, and depreciation. In 1995,
inventories and accounts receivables increased to support the increased sales
volume.
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Net cash used by investing activities was $42,743, $8,848, and $11,121 for
the years 1995, 1994, and 1993, respectively. To support the business expansion
activities, investments were made in property, plant, and equipment, and
Casting Technology Company.
Net cash provided (used) by financing activities was $13,151, $(7,567), and
$(7,726) for the years 1995, 1994, and 1993, respectively. In 1995, increased
borrowings were used to fund business expansion. In 1994 and 1993, financing
activities used cash primarily to reduce long-term debt and pay cash
dividends.
CAPITAL RESOURCES
- -----------------
Capital expenditures were $41,724, $15,596, and $13,990 in 1995, 1994, and
1993, respectively. In 1995, expenditures were funded by additions to long-term
debt, cash provided by operations, and the prior year cash position. In 1994
and 1993, the expenditures were funded by cash provided by operations. At
August 31, 1995, the Company had $16,296 of commitments for capital
expenditures to be made in 1996, primarily for the Engineered Components
segment.
Book value per common share at August 31, 1995, was $14.52, up from $13.02
the prior year. The ratio of long-term debt as a percent of capital increased
to 19.3% at August 31, 1995, from 11.2% at August 31, 1994.
In June of 1995, the Company signed a new five year, $60 million, revolving
credit agreement with its five-member bank group. The agreement consists of a
three-year revolving period, which may be extended for up to two years under
certain conditions, followed by a two-year term loan commitment. The new
agreement provides enhanced borrowing capacity and flexibility to support the
Company's growth program. The financing replaces a prior $40 million agreement
which was to expire in 1997.
The Company has $146.9 million of unused borrowing capacity under the most
restrictive debt covenant relating to the above mentioned credit agreement. One
million preferred shares and 6.4 million common shares are authorized and
available for future issuance. Management believes the Company has adequate
financial resources to meet its future needs.
Contingencies. The Company, as is normal for the industry in which it
operates, is involved in certain legal proceedings and subject to certain
claims and site investigations that arise under the environmental laws and
which have not been finally adjudicated. To the extent possible, with the
information available, the Company regularly evaluates its responsibility with
respect to environmental proceedings. The factors considered in this
evaluation are described in detail in the Commitments and Contingencies note to
the consolidated financial statements. At August 31, 1995, the Company had
accrued reserves of $2.6 million for environmental liabilities. The Company is
of the opinion that, in light of its existing reserves, its liability in
connection with environmental proceedings should not have a material adverse
effect on its financial condition or results of operation.
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REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
Shareholders and Board of Directors
Amcast Industrial Corporation
Dayton, Ohio
We have audited the accompanying consolidated statements of financial condition
of Amcast Industrial Corporation and subsidiaries as of August 31, 1995 and
1994, and the related consolidated statements of operations, shareholders'
equity, and cash flows for each of the three years in the period ended August
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amcast
Industrial Corporation and subsidiaries at August 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended August 31, 1995, in conformity with generally
accepted accounting principles.
As discussed in the Postretirement Health Care and Life Insurance Benefits
note to the consolidated financial statements, in 1993 the Company adopted the
provisions of Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions."
Ernst & Young LLP
Dayton, Ohio
October 10, 1995
/s/ Ernst & Young LLP
--------------------
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<TABLE>
SELECTED DATA
($ in thousands except per common share and statistical data)
<CAPTION>
FINANCIAL DATA 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . $328,231 $271,856 $222,643 $236,805 $220,643
Gross profit . . . . . . . . . . . . . . . . 68,111 59,258 50,425 52,247 47,271
Gross profit percent . . . . . . . . . . . . 20.8% 21.8% 22.6% 22.1% 21.4%
Income before taxes . . . . . . . . . . . . 26,098 22,067 18,831 18,740 11,944
Income from continuing operations . . . . . . 17,171 14,454 12,052 11,994 7,405
Working capital . . . . . . . . . . . . . . 47,845 48,590 36,097 32,525 45,287
Total assets . . . . . . . . . . . . . . . . 229,367 194,161 176,537 173,774 175,211
Long-term debt . . . . . . . . . . . . . . . 29,687 13,910 17,929 22,276 40,424
PER COMMON SHARE DATA
Income from continuing operations . . . . . $ 2.02 $ 1.72 $ 1.44 $ 1.66 $ 1.14
Weighted average number of common
shares outstanding (in thousands). . . . . 8,517 8,425 8,347 7,223 6,487
Dividends declared . . . . . . . . . . . . . $ .53 $ .49 $ .48 $ .48 $ .48
Book value . . . . . . . . . . . . . . . . . 14.52 13.02 11.81 11.37 10.80
STATISTICAL DATA
Current ratio . . . . . . . . . . . . . . . 1.9 2.0 1.9 1.8 2.0
Long-term debt as a percent of capital . . . 19.3% 11.2% 15.3% 19.1% 36.9%
Average number of employess . . . . . . . . . 2,400 2,100 1,900 1,900 1,900
</TABLE>
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CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands except per share amounts)
<TABLE>
<CAPTION>
Year Ended August 31
1995 1994 1993
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $328,231 $271,856 $222,643
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260,120 212,598 172,218
------- ------- -------
GROSS PROFIT 68,111 59,258 50,425
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . 41,139 36,038 31,515
------ ------ ------
OPERATING INCOME 26,972 23,220 18,910
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 441 1,187
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,387 1,594 1,266
----- ----- -----
INCOME BEFORE INCOME TAXES 26,098 22,067 18,831
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,927 7,613 6,779
----- ----- -----
INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 17,171 14,454 12,052
Cumulative effect of change in accounting for postretirement
benefits other than pensions, net of taxes (3,942)
----------- ----------- -----------
NET INCOME $17,171 $14,454 $8,110
----------- ----------- -----------
Income per share:
Income before cumulative effect of a change in accounting principle . . . . $2.02 $1.72 $1.44
Cumulative effect of a change in accounting principle . . . . . . . . . . . . (.47)
----------- ----------- -----------
Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.02 $1.72 $.97
=========== =========== ===========
See notes to consolidated financial statements
</TABLE>
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CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
($ in thousands)
<TABLE>
<CAPTION>
AUGUST 31
1995 1994
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,286 $ 15,414
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,643 38,400
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,146 38,469
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,786 5,143
----------- -----------
TOTAL CURRENT ASSETS 102,861 97,426
PROPERTY, PLANT, AND EQUIPMENT
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,978 1,940
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,653 25,130
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,163 110,287
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,530 11,828
----------- -----------
200,324 149,185
Less allowances for depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,701 75,531
----------- -----------
105,623 73,654
NET ASSETS OF DISCONTINUED OPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,389
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,883 10,692
----------- -----------
$229,367 $194,161
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33,647 $ 27,169
Compensation and related items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,719 9,066
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,930 7,482
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,522 4,019
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,198 1,100
---------- -----------
TOTAL CURRENT LIABILITIES 55,016 48,836
LONG-TERM DEBT--less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,687 13,910
DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,952 4,024
DEFERRED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,507 17,228
SHAREHOLDERS' EQUITY
Preferred shares, without par value:
Authorized--1,000,000 shares
Issued--None
Common shares, at stated value:
Authorized--15,000,000 shares
Issued--8,555,875 shares, 8,457,896 shares in 1994 . . . . . . . . . . . . . . . . . . 8,556 8,458
Capital in excess of stated value . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,175 62,912
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,474 38,793
---------- -----------
124,205 110,163
---------- -----------
$229,367 $194,161
========== ===========
See notes to consolidated financial statements
</TABLE>
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<PAGE> 8
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
($ in thousands)
<TABLE>
<CAPTION>
Capital in Common
Common Excess of Retained Shares in
Shares Stated Value Earnings Treasury Total
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 1, 1992 . . . . . . . . . . . . . $8,370 $62,006 $24,695 $ (651) $ 94,420
Net income . . . . . . . . . . . . . . . . . . . . . 8,110 8,110
Cash dividends declared, $.48 per share . . . . . . . (4,014) (4,014)
Stock options exercised . . . . . . . . . . . . . . 13 61 564 638
Other . . . . . . . . . . . . . . . . . . . . . . . (20) (214) (234)
--------- --------- --------- -------- ----------
BALANCE AT AUGUST 31, 1993 8,383 62,047 28,577 (87) 98,920
Net income . . . . . . . . . . . . . . . . . . . . . 14,454 14,454
Cash dividends declared, $.49 per share . . . . . . . (4,134) (4,134)
Stock options exercised . . . . . . . . . . . . . . 75 698 87 860
Tax benefit from stock options exercised . . . . . . 167 167
Other . . . . . . . . . . . . . . . . . . . . . . . (104) (104)
--------- --------- --------- -------- -----------
BALANCE AT AUGUST 31, 1994 8,458 62,912 38,793 110,163
NET INCOME . . . . . . . . . . . . . . . . . . . . . 17,171 17,171
CASH DIVIDENDS DECLARED, $.53 PER SHARE . . . . . . . (4,523) (4,523)
STOCK OPTIONS EXERCISED . . . . . . . . . . . . . . 98 1,029 1,127
TAX BENEFIT FROM STOCK OPTIONS EXERCISED . . . . . . 234 234
Other . . . . . . . . . . . . . . . . . . . . . . . 33 33
--------- --------- --------- -------- -----------
Balance at August 31, 1995 $8,556 $64,175 $51,474 $ -- $124,205
========= ========= ========= ======== ===========
</TABLE>
See Notes to Consolidated Financial Statements
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<PAGE> 9
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands )
<TABLE>
<CAPTION>
Year Ended August 31
1995 1994 1993
<S> <C>
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,171 $ 14,454 $ 8,110
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,392 12,812 12,010
Cumulative effect of change in accounting principle . . . . . . . . . . . . 6,159
Deferred liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (793) 380 (1,183)
Loss (gain) on property, plant and equipment disposals . . . . . . . . . . 22 46 (850)
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . (6,243) (4,636) 1,245
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,677) (3,897) (1,757)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,643) (887) (1,622)
Prepaid pension costs . . . . . . . . . . . . . . . . . . . . . . . . . 249 336 548
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,691) 613 (2,105)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,478 9,119 (4,160)
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (801) 1,238 1,563
---------- ----------- -----------
NET CASH PROVIDED BY OPERATIONS 15,464 29,578 17,958
INVESTING ACTIVITIES:
Proceeds from property, plant, and equipment disposals. . . . . . . . . . . 482 171 1,907
Additions to property, plant, and equipment . . . . . . . . . . . . . . . . (41,724) (15,596) (13,990)
Contributions to joint venture . . . . . . . . . . . . . . . . . . . . . . (6,660) (1,014) (180)
Decrease in discontinued and other assets . . . . . . . . . . . . . . . . 5,159 7,591 1,142
---------- ----------- -----------
NET CASH USED BY INVESTING ACTIVITIES (42,743) (8,848) (11,121)
FINANCING ACTIVITIES:
Additions to long-term debt . . . . . . . . . . . . . . . . . . . . . . . . 20,300
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . 1,361 1,027 628
Reduction in long-term debt . . . . . . . . . . . . . . . . . . . . . . . . (4,523) (4,019) (4,347)
Short-term borrowings and current portion of long-term debt . . . . . . . . 503 (337) 231
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,523) (4,134) (4,014)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 (104) (224)
---------- ----------- -----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 13,151 (7,567) (7,726)
---------- ----------- -----------
Net change in cash and cash equivalents . . . . . . . . . . . . . . . . . . (14,128) 13,163 (889)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . 15,414 2,251 3,140
---------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,286 $ 15,414 $ 2,251
========== =========== ===========
See notes to consolidated financial statements
</TABLE>
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<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ in thousands except per share data)
ACCOUNTING POLICIES
THE CONSOLIDATED FINANCIAL STATEMENTS include the accounts of Amcast Industrial
Corporation and its subsidiaries (the Company). Intercompany transactions have
been eliminated.
CASH AND CASH EQUIVALENTS include amounts on deposit with financial
institutions and investments maturing within 90 days.
ACCOUNTS RECEIVABLE are stated net of allowances for doubtful accounts of $222
at August 31, 1995, and $147 at August 31, 1994.
INVENTORIES are valued at the lower of cost or market using the last-in,
first-out (LIFO) and the first-in, first-out (FIFO) methods.
PROPERTY, PLANT, AND EQUIPMENT are carried at cost. Expenditures for
significant renewals and improvements are capitalized. Repairs and maintenance
are charged to expense as incurred.
DEPRECIATION is computed on the straight-line method. The amortization periods
represent the estimated useful lives of the assets.
DEFERRED INCOME TAXES are provided for temporary differences between financial
and tax reporting in accordance with the liability method under the provisions
of Statement of Financial Accounting Standard No. 109, "Accounting for Income
Taxes".
NET INCOME PER SHARE is computed on the weighted average number of common
shares outstanding during each year. The exercise of outstanding options, which
are common stock equivalents, would cause no material dilution.
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<PAGE> 11
DISCONTINUED AND RETAINED OPERATIONS
Effective August 31, 1992, the Company adopted a plan to sell the Stanley G.
Flagg & Co. division (Flagg), a manufacturer of iron and brass pipe fittings
and utility pole line hardware. Since 1992, the Company has reported Flagg as
a discontinued operation.
The Company has sold inventory and machinery and equipment relating to the iron
fittings and the utility hardware product lines. Certain idle equipment
relating to these product lines remains unsold. Effective August 31,1995, the
Company decided to retain the brass business of Flagg. The brass business is
currently operating in a portion of the Flagg facility. The operations and the
assets of the brass business are immaterial to the Company and therefore,
previously reported results of operations and statements of financial condition
have not been reclassified. In the future, sales of the brass business will be
reported in the Flow Control Products Segment. Sales were $7,615 in 1995.
Total assets, included in Flow Control Products identifiable assets, were
$11,857 at year end. The asset values of the remaining idle facility and
machinery and equipment relating to the iron and utility hardware product lines
are being held for sale and are recorded at their net realizable value in other
assets.
228
<PAGE> 12
INVENTORIES
The major components of inventories as of August 31 are:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Finished products .............................. $31,881 $21,234
Work in process ................................ 15,450 13,121
Raw materials and supplies...................... 11,961 10,435
------ ------
59,292 44,790
Less amount to reduce certain
inventories to LIFO value .................... 10,146 6,321
------ ------
$49,146 $38,469
======= =======
</TABLE>
Inventories reported on the FIFO method were $12,901 and $5,435 at August 31,
1995 and 1994, respectively. The estimated replacement cost of inventories is
the amount reported before the LIFO reserve.
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<PAGE> 13
OTHER ASSETS
The major components of other assets as of August 31 are:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Assets held for resale................. $ 3,522 $ 553
Investment in joint venture............ 7,278 648
Other ................................. 10,083 9,491
------- -------
$20,883 $10,692
======= =======
</TABLE>
Properties held for resale reflect the estimated realizable values of the
fixed assets of closed facilities. The investment in joint venture represents
the Company's share of Casting Technology Company's net equity.
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<PAGE> 14
LONG-TERM DEBT AND CREDIT ARRANGEMENTS
The following table summarizes the Company's borrowings at August 31:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Senior notes........................ $7,232 $10,964
Revolving credit notes.............. 13,000
Lines of credit..................... 7,300
Industrial revenue bonds ........... 6,677 6,965
------- -------
34,209 17,929
Less current portion................ 4,522 4,019
------- -------
LONG-TERM DEBT $29,687 $13,910
======= =======
</TABLE>
Senior notes consist of two agreements with interest rates of 9.32% and 9%.
The notes call for periodic principal payments and mature June 5, 1996, and
September 15, 1999, respectively.
The Company has a $60,000 credit agreement extending through March 31, 2000.
There were $13,000 outstanding borrowings under this credit agreement at August
31, 1995, with a weighted average interest rate of 6.3%. The interest rate on
borrowings under this agreement is based on, at the Company's option, the prime
rate, the certificate of deposit rate plus a premium, or the Euro-dollar rate
plus a premium. Premiums are subject to Company performance measured on a
quarterly basis and range from 0.375% to 0.75%. A commitment fee of 0.15% is
payable on the unused portion of the credit line.
The Company has lines of credit totaling $25,000. At August 31, 1995,
borrowings were $7,300 with a weighted average interest rate of 6.4%. These
lines require no material compensating balances or commitment fees.
Industrial revenue bonds consist of various issues at fixed and variable
interest rates, ranging from 3.9% to 5%. These bonds call for principal
payments at various dates through 2004.
Debt covenants require the Company to maintain certain current and
debt-to-equity ratios. Other provisions limit the aggregate amount of certain
defined payments including purchase of Company stock and cash dividends. At
August 31, 1995, all retained earnings were available for the payment of
dividends.
The obligations in connection with industrial revenue bonds and certain
notes included in long-term debt are collateralized by property, plant, and
equipment with a net book value of $2,907 and $3,673 at August 31, 1995 and
1994, respectively.
Long-term debt maturities for each of the next five years are $4,522 in
1996, $1,105 in 1997, $1,107 in 1998, $6,990 in 1999, and $14,910 in 2000.
Capitalized interest was $390 and $878 in 1995 and 1993, respectively.
Interest paid was $1,830, $1,705, and $2,230 in 1995, 1994, and 1993,
respectively.
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<PAGE> 15
STOCK OPTIONS
The Company has two active stock option plans.
The 1981 Stock Option Plan was approved by shareholders of the Company on
December 16, 1981, and amended by the shareholders on December 18, 1985. The
plan provided for the granting of a maximum of 400,000 options to purchase
common shares to key employees of the Company and its subsidiaries. The option
price per share may not be less than the fair market value of a share on the
date the option is granted, and the maximum term of an option may not exceed
ten years. Options granted under the plan may include related stock
appreciation rights. Granting of options under this plan expired on October
13, 1991.
The 1989 Stock Incentive Plan was approved by shareholders of the Company on
December 14, 1988 and amended by the shareholders on December 9, 1992. The
plan provides for the granting of a maximum of 800,000 stock options, stock
appreciation rights, performance awards, and restricted stock awards to key
employees of the Company and its subsidiaries. The option price per share may
not be less than the fair market value of a share on the date the option is
granted, and the maximum term of an option may not exceed ten years.
The 1989 Director Stock Option Plan was approved by the shareholders of the
Company on December 14, 1988. The plan provides for the granting of a maximum
of 120,000 nonqualified stock options. The option price per share is equal to
the fair market value of a Company share on the date of grant. The term of
each option is five years, and an option first becomes exercisable one year
after the date of grant. Under the plan, each person serving as a director of
the Company on the first business day of January of each year, who is not
employed by the Company will automatically be granted 1,500 options.
Information regarding the Company's stock option plans is summarized below:
<TABLE>
<CAPTION>
1981 1989 1989
Stock Stock Director Stock
Option Plan Incentive Plan Option Plan
<S> <C> <C> <C>
Shares under option:
Outstanding at September 1, 1992 . . . . . . . . . . . . . . . . . . 30,832 263,084 45,000
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,623 12,000
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,832) (46,174) (10,500)
---------- ---------- ----------
Outstanding at August 31, 1993 . . . . . . . . . . . . . . . . . . . 7,000 319,533 46,500
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,932 10,500
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,000) (65,009) (15,000)
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,129)
---------- ---------- ----------
Outstanding at August 31, 1994 . . . . . . . . . . . . . . . . . . . 341,327 42,000
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,137 10,500
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . (91,144) (6,000)
Canceled. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,000)
---------- ----------
Outstanding at August 31, 1995 . . . . . . . . . . . . . . . . . . . 368,320 46,500
---------- ----------
Options available to grant at August 31, 1995 . . . . . . . . . . . . 121,803 39,000
========== ==========
Average option price per share:
At August 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . $ 12.75 $ 12.81 $ 14.37
At August 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . 14.95 16.69
At August 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 17.33 18.39
Options exercisable:
At August 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . 7,000 216,910 34,500
At August 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . 243,395 31,500
At August 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . 244,183 36,000
Average price of options exercised:
Year Ended August 31, 1993 . . . . . . . . . . . . . . . . . . . . $ 11.43 $ 9.44 $ 11.04
Year Ended August 31, 1994 . . . . . . . . . . . . . . . . . . . . 12.75 11.78 12.66
Year Ended August 31, 1995 . . . . . . . . . . . . . . . . . . . . 11.47 11.00
</TABLE>
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<PAGE> 16
LEASES
The Company has a number of operating lease agreements primarily involving
machinery, physical distribution, and computer equipment. Certain of these
leases contain renewal or purchase options which vary by lease. These leases
are noncancelable and expire on dates through 2000.
Rent expense was $5,206, $5,234, and $2,404 for the years ended August 31,
1995, 1994, and 1993, respectively.
The following is a schedule by year of future minimum rental payments
required under the operating leases that have initial or remaining
noncancelable lease terms in excess of one year as of August 31, 1995:
1996 . . . . . . . . . . . . . . . . . . . $ 4,403
1997 . . . . . . . . . . . . . . . . . . . 3,815
1998 . . . . . . . . . . . . . . . . . . . 8,210
1999 . . . . . . . . . . . . . . . . . . . 188
2000 . . . . . . . . . . . . . . . . . . . 61
----------
TOTAL MINIMUM LEASE PAYMENTS $ 16,677
==========
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<PAGE> 17
PREFERRED SHARE PURCHASE RIGHTS
The Company has a Shareholder Rights Plan pursuant to which holders of the
Company's common shares receive a dividend of one preferred share purchase
right (collectively, the "Rights") for each common share held. The Rights
contain features which, under defined circumstances, allow holders to buy
shares at a bargain price. The Rights will expire on February 28, 1998. The
Rights are not presently exercisable and trade in tandem with the common
shares. The Rights become exercisable following the close of business on the
tenth day after a public announcement that a person or group has acquired 20%
or more of the common shares of the Company or a public announcement or
commencement of a tender or exchange offer which would result in ownership of
30% or more of the common shares of Amcast. It is expected that the Rights will
begin to trade independently of the Company's common shares at that time.
The Company may redeem the Rights for one cent per Right any time prior to
the close of business on the tenth day following the day that a 20% position is
acquired and under certain circumstances thereafter, including certain
transactions not involving a 20% shareholder of the Company.
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<PAGE> 18
COMMITMENTS AND CONTINGENCIES
At August 31, 1995, the Company has committed to capital expenditures
of $16,296 in 1996, primarily for the Engineered Components segment.
The Company, as is normal for the industry in which it operates, is
involved in certain legal proceedings and subject to certain claims and site
investigations which arise under the environmental laws and which have not been
finally adjudicated.
The Company has been identified as a potentially responsible party by
various state agencies and by the United States Environmental Protection Agency
(U.S. EPA) under the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, for costs associated with eight U.S. EPA led
multi-party sites and six state environmental agency-led remediation sites.
Each of these claims involves third-party owned disposal sites for which
compensation is sought from the Company as an alleged waste generator for
recovery of past governmental costs or for future investigation or remedial
actions. The designation as a potentially responsible party and the assertion
of such claims against the Company are made without taking into consideration
the extent of the Company's involvement with the particular site. In each
instance, claims have been asserted against a number of other entities for the
same recovery or other relief as was asserted against the Company. These
claims are in various stages of administrative or judicial proceeding. The
Company has no reason to believe that it will have to pay a significantly
disproportionate share of clean-up costs associated with any site.
To the extent possible, with the information available at the time,
the Company has evaluated its responsibility for costs and related liability
with respect to the above sites. In making such evaluation, the Company did
not take into consideration any possible cost reimbursement claims against its
insurance carriers. The Company is of the opinion that its liability with
respect to those sites should not have a material adverse effect on its
financial position or results of operations. In arriving at this conclusion,
the principal factors considered by the Company were ongoing settlement
discussions with respect to certain of the sites, the volume and relative
toxicity of waste alleged to have been disposed of by the Company at certain
sites, which factors are often used to allocate investigative and remedial
costs among potentially responsible parties, the probable costs to be paid by
other potentially responsible parties, total projected remedial costs for a
site, if known, and the Company's existing reserve to cover costs associated
with unresolved environmental proceedings. At August 31, 1995, the Company's
accrued undiscounted reserve for such contingencies was $2.6 million.
Allied-Signal Inc. has brought an action against the Company seeking a
contribution from the Company equal to 50% of Allied-Signal's estimated $30
million remediation cost in connection with a site in southern Ohio. The
Company believes its responsibility with respect to this site is very limited
due to the nature of the foundry sand waste it disposed of at the site. A
trial in this case was completed in February of 1995, but no judgment has been
rendered. The Company believes that if it has any liability at all in regard
to this matter, that liability would not be material to its financial position
or results of operations.
The Company is a defendant in a lawsuit brought by the Public Interest
Research Group Inc. seeking substantial penalties for alleged waste water
discharges by the Company's Stanley G. Flagg & Co. division during a 48-month
period ended in October of 1988. The Company's discharges have been in
compliance since at least 1990. The Company therefore believes that penalties,
if any, will not be material to its financial position or results of
operations.
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<PAGE> 19
PENSION PLANS
The Company has a noncontributory defined benefit pension plan covering certain
employees. The plan covers salaried employees and provides pension benefits
that are based on years of credited service, employee compensation during years
preceding retirement, and the primary social security benefit. The plan also
covers hourly employees and provides pension benefits of stated amounts for
each year of credited service. The Company's policy is to fund the annual
amount required by the Employee Retirement Income Security Act of 1974. Plan
assets consist of U.S. Treasury bonds and notes, U.S. governmental agency
issues, corporate bonds, and common stocks. The plan held 350,000 common shares
of the Company at August 31, 1995 (7.8% of plan assets) and 1994 (9% of plan
assets).
The Company also sponsors a deferred compensation profit sharing plan for
the benefit of substantially all salaried employees. The Company provides a 15%
match on employee contributions up to 6% of eligible compensation and a
supplemental savings match from 1% to 35% based on the Company achieving a
minimum return on shareholders' equity and subject to IRS limitations.
The Company participates in a multiemployer plan which provides defined
benefits to certain bargaining unit employees.
The following table sets forth the funded status and the amounts recognized
in the consolidated statements of financial condition for the Company's
defined benefit plan at August 31:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(81,636) $(78,127)
========= ========
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(82,573) $(78,901)
========== ========
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(87,233) $(82,654)
Plan assets at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,559 82,986
--------- --------
(Under) overfunded projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . (1,674) 332
Unrecognized net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,026 1,847
Unrecognized prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,897 2,020
Unrecognized transition (asset) being recognized over a minimum of 15 years . . . . . . . . (3,625) (4,183)
--------- ---------
Net pension (liability) asset recognized in the consolidated
statement of financial condition . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (376) $ 16
======== =========
</TABLE>
<TABLE>
A summary of the components of net periodic pension cost for the defined plan in 1995, 1994, and 1993, and the total amounts
charged to expense for the defined contribution and multiemployer plans follows:
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Defined benefit plan:
Service cost of current period . . . . . . . . . . . . . . . . . . . . . . $ 1,133 $ 1,315 $ 1,278
Interest cost on projected benefit obligation . . . . . . . . . . . . . . 6,412 6,289 6,466
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . (10,021) (1,798) (10,159)
Net amortization and deferral . . . . . . . . . . . . . . . . . . . . . . 2,868 (5,320) 2,963
-------- --------- ---------
Net pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392 486 548
Defined contribution plan . . . . . . . . . . . . . . . . . . . . . . . . . . 510 410 301
Multiemployer pension plan . . . . . . . . . . . . . . . . . . . . . . . . . 214 197 180
--------- --------- ---------
TOTAL COST $ 1,116 $ 1,093 $ 1,029
========= ========= =========
Assumed rates of return:
Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . 7.5% 8.0% 7.5%
Rate of future compensation increase . . . . . . . . . . . . . . . . . . . 4.7% 4.7% 4.7%
Long-term return on assets:
Dedicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% 7.5% 8.5%
Nondedicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5% 10.0% 10.0%
</TABLE>
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<PAGE> 20
POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
The Company provides health care and life insurance benefits to designated
salary and hourly employees who participate in a defined benefit pension plan
and who retired prior to January 1, 1992. The plan coordinates with Medicare
and requires employee contributions. The Company also provides similar benefits
to certain employees, represented by bargaining units, who retire before
attaining age 65 and meet certain minimum service requirements. Benefits for
the bargaining unit employees terminate when the retiree attains age 65. The
Company funds the postretirement benefits on a cash basis.
In the fourth quarter of 1993, the Company elected to adopt Statement of
Financial Accounting Standards (SFAS) No.106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions", effective September 1, 1992. The
statement requires the cost of these benefits to be recognized during the
employee's active working career rather than expensed when paid as had been the
prior practice.
The cumulative effect of adopting SFAS 106 using the immediate recognition
method as of September 1, 1992, was a charge to earnings of $3,942, net of
$2,217 deferred income tax benefit. The adoption of SFAS 106 had no material
effect on 1993 operating results.
Accumulated postretirement benefit obligation recognized in 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Retirees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,390 $3,497
Fully eligible active plan participants . . . . . . . . . . . . . . . . . . . . . . . . 346 1,718
Other active employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 292
-------- ----------
5,163 5,507
Deferred gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 358
--------- ----------
$5,404 $5,865
========= ==========
</TABLE>
In prior years, health care and life insurance benefits for retired
employees of closed facilities were provided for at the time the related
facility was closed. The accrued postretirement benefit obligation for these
retirees at August 31, 1995 was $2,400.
Net periodic postretirement benefit expense for 1995, 1994 and 1993 is
as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25 $ 28 $ 40
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 460 447
-------- ------- -------
$ 440 $ 488 $ 487
======== ======== =======
</TABLE>
The actuarial assumptions used to determine 1995 and 1994 costs and benefit
obligation includes a discount rate of 7.5% and 8%, respectively. The assumed
rates of future increases in per capita cost of health care benefits (health
care trend rates) are 8% in 1996 and 9% in 1995, decreasing gradually to 5.5%
by the year 1999. Increasing the health care trend rate by one percentage
point would increase the accumulated postretirement benefit obligation $250 and
would increase the 1995 postretirement benefit cost $21.
1 of 1
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<PAGE> 21
<TABLE>
<CAPTION>
INCOME TAXES
The provisions for income taxes are as follows:
1995 1994 1993
<S> <C> <C> <C>
Currently payable
State and local . . . . . . . . . . . . . . . . . . . . . . $ 561 $ 466 $ 14
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . 542 460 108
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . 4,896 3,962 2,269
Deferred
State and local . . . . . . . . . . . . . . . . . . . . . . 88 (100) 100
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . 2,840 2,825 4,288
------------ ----------- ------------
$8,927 $7,613 $6,779
============ =========== ============
</TABLE>
Reconciliations of income taxes computed by applying the statutory federal
income tax rate to the provisions for income taxes are as follows:
<TABLE>
<S> <C> <C> <C>
Federal income tax at statutory rate . . . . . . . . . . . . . $9,134 $7,723 $6,528
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . (400)
State income taxes . . . . . . . . . . . . . . . . . . . . . . 422 238 74
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (229) (348) 177
------------ ----------- ----------
$8,927 $7,613 $6,779
============= =========== ===========
</TABLE>
Deferred taxes resulting from temporary differences between financial and tax
reporting are as follows:
<TABLE>
<S> <C> <C> <C>
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . $ 846 $ 628 $ 672
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . 847 518 646
Discontinued operation . . . . . . . . . . . . . . . . . . . . 645 2,493 1,882
Start-up costs . . . . . . . . . . . . . . . . . . . . . . . . 1,359 (137) 1,323
Federal tax credits . . . . . . . . . . . . . . . . . . . . . . (400)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (369) (317) (27)
------------ ----------- ----------
$2,928 $3,185 $4,496
============ =========== ==========
</TABLE>
The Company has income tax credits of $400 expiring in 2006 through 2010 and an
alternative minimum tax credit of $1,092 available to offset future tax
payments. Income taxes paid totaled $6,603, $3,347, and $2,474 in 1995, 1994,
and 1993, respectively.
Significant components of deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
Deferred tax assets related to: 1995 1994
<S> <C> <C>
Accrued compensation and related items . . . . . . . . . . . . $5,284 $6,747
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . 1,492 975
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,311 3,187
-------- -----------
10,087 10,909
</TABLE>
Deferred tax liabilities related to:
<TABLE>
<S> <C> <C>
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . 10,408 9,888
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,201 3,615
-------- -----------
15,609 13,503
-------- -----------
Net deferred tax liabilities . . . . . . . . . . . . . . . . . . $5,522 $2,594
======== ===========
</TABLE>
1 of 1
238
<PAGE> 22
MAJOR CUSTOMERS AND CREDIT CONCENTRATION
The Company sells products to customers primarily in the United States. The
Company performs ongoing credit evaluations of customers, and generally does
not require collateral. Allowances are maintained for potential credit losses
and such losses have been within management's expectations.
On August 31, 1995, trade receivables from the domestic automotive industry
were $17,674 and $21,173 was due from the construction industry.
Sales to Engineered Components' largest customer, General Motors
Corporation, were $120,100, $89,300, and $60,000 for the years ended August
31, 1995, 1994, and 1993, respectively. Trade receivables from General Motors
Corporation on August 31, 1995 and 1994, were $13,192 and $10,175 and were
current. No other single customer accounted for a material portion of trade
receivables.
1 of 1
239
<PAGE> 23
BUSINESS SEGMENTS
($ in thousands)
The Company has two business segments, Flow Control Products and Engineered
Components.
Through the Flow Control Products and Engineered Components segments, the
Company serves the construction, automotive, industrial, and aerospace sectors
of the economy. See Corporate Profile on the inside front cover and pages 4
through 13 for a review of the major products produced.
Flow Control Products sales of copper plumbing fittings amounted to
$112,492, $92,532, and $80,156 in 1995, 1994, and 1993, respectively. Sales of
aluminum products to the automotive industry by Engineered Components amounted
to $150,215, $111,104, and $76,873 in 1995, 1994, and 1993, respectively.
Export sales and sales by geographic area were not material.
<TABLE>
<CAPTION>
NET SALES INCOME BEFORE INCOME TAXES
1995 1994 1993 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Flow Control Products . . . . $146,692 $124,090 $110,096 $25,387 $19,849 $15,703
Engineered Components . . . . 181,539 147,766 112,547 8,862 10,034 8,228
Corporate . . . . . . . . . . (6,764) (6,222) (3,834)
Interest Expense. . . . . . . (1,387) (1,594) (1,266)
-------- -------- -------- ------- ------- -------
$328,231 $271,856 $222,643 $26,098 $22,067 $18,831
======== ======== ======== ======= ======= =======
IDENTIFIABLE ASSETS DEPRECIATION
Flow Control Products . . . . $ 92,373 $ 65,564 $ 61,753 $ 4,294 $ 3,913 $ 3,947
Engineered Components . . . . 133,437 97,798 89,061 9,954 8,707 7,813
Corporate . . . . . . . . . . 3,557 18,410 5,743 144 192 250
-------- -------- --------
Continuing Operations . . . . 229,367 181,772 156,557
Discontinued Operation . . . 12,389 19,980
-------- -------- -------- ------- ------- -------
$229,367 $194,161 $176,537 $14,392 $12,812 $12,010
======== ======== ======== ======= ======= =======
CAPITAL EXPENDITURES
Flow Control Products . . . . $ 12,236 $ 4,893 $ 2,345
Engineered Components . . . . 29,371 10,592 11,522
Corporate . . . . . . . . . . 117 111 123
-------- -------- --------
$ 41,724 $ 15,596 $ 13,990
======== ======== ========
</TABLE>
1 of 1
240
<PAGE> 24
QUARTERLY FINANCIAL DATA (UNAUDITED)
($ in thousands except per share data)
<TABLE>
<CAPTION>
FISCAL QUARTER FOR THE YEAR
------------------------------------------------------------------------------------------
1995 1ST 2ND 3RD 4TH
<S> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . $ 76,998 $ 81,755 $ 86,397 $ 83,081 $ 328,231
Gross profit . . . . . . . . . 15,657 17,055 17,893 17,506 68,111
Net income . . . . . . . . . . 3,623 4,278 4,674 4,596 17,171
Net income per share . . . . . $ .43 $ .50 $ .55 $ .54 $ 2.02
Average number of . . . . . . .
shares outstanding . . . . . 8,475 8,513 8,524 8,553 8,517
<CAPTION>
Fiscal Quarter For the Year
------------------------------------------------------------------------------------------
1994 1st 2nd 3rd 4th
<S> <C> <C> <C> <C> <C>
Net sales . . . . . . . . . . . $ 60,328 $ 67,697 $ 70,902 $ 72,929 $ 271,856
Gross profit . . . . . . . . . 12,635 14,694 15,822 16,107 59,258
Net income . . . . . . . . . . 2,685 3,513 4,291 3,965 14,454
Net income per share . . . . . $ .32 $ .42 $ .51 $ .47 $ 1.72
Average number of
shares outstanding . . . . . 8,390 8,409 8,444 8,455 8,425
</TABLE>
1 of 1
241
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Amcast Industrial Corporation and subsidiaries of our report dated October
10, 1995, included in the 1995 Annual Report to Shareholders of Amcast
Industrial Corporation.
Our audits also included the financial statement schedule of Amcast Industrial
Corporation listed in item 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
We also consent to the incorporation by reference in Post-Effective Amendment
No. 1 to Registration Statement Number 33-2876 on Form S-8 dated November 27,
1987, in Registration Statement Number 33-18690 on Form S-8 dated December 21,
1987, in Registration Statement Number 33-28084 on Form S-8 dated April 11,
1989, in Registration Statement Number 33-28080 on Form S-8 dated April 11,
1989, in Registration Statement Number 33-38176 on Form S-8 dated December 20,
1990, in Registration Statement Number 33-28075 on Form S-3 dated April 11,
1989, and in Registration Statement Number 33-61290 on Form S-8 dated April 19,
1993, of our report dated October 10, 1995, with respect to the consolidated
financial statements incorporated herein by reference, and our report included
in the preceding paragraph with respect to the financial statement schedule
included in this Annual Report (Form 10-K) of Amcast Industrial Corporation and
subsidiaries.
/s/ Ernst & Young LLP
---------------------
Dayton, Ohio
November 17, 1995
242
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
27th day of October, 1995.
/s/ James K. Baker
-----------------
James K. Baker
243
<PAGE> 2
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
27th day of October, 1995.
/s/ Walter E. Blankley
----------------------
Walter E. Blankley
244
<PAGE> 3
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 27th day
of October, 1995.
/s/ Peter H. Forster
--------------------
Peter H. Forster
245
<PAGE> 4
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
27th day of October, 1995.
/s/ Ivan W. Gorr
----------------
Ivan W. Gorr
246
<PAGE> 5
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
27th day of October, 1995.
/s/ Leo W. Ladehoff
----------------------
Leo W. Ladehoff
247
<PAGE> 6
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
27th day of October, 1995.
/s/ Earl T. O'Loughlin
----------------------
Earl T. O'Loughlin
248
<PAGE> 7
POWER OF ATTORNEY
------------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
27th day of October, 1995.
/s/ William G. Roth
-------------------
William G. Roth
249
<PAGE> 8
POWER OF ATTORNEY
-----------------
WHEREAS, Amcast Industrial Corporation (the "Company") intends to file
with the Securities and Exchange Commission its Annual Report on Form 10-K for
the year ended August 31, 1995;
NOW, THEREFORE, the undersigned in his capacity as a director of the
Company hereby appoints John H. Shuey, Douglas D. Watts, and William L. Bown
and each of them, his true and lawful attorneys-in-fact and agent, with full
power of substitution and resubstitution, to execute in his name, place, and
stead, the Company's Annual Report on Form 10-K for the year ended August 31,
1995, (including an amendment to such report) and any and all other instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Said attorneys shall have full power and
authority to do and perform in the name and on behalf of the undersigned, in
the aforesaid capacity, every act whatsoever necessary or desirable to be done,
as fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 27th day
of October, 1995.
/s/ William Van Sant
------------------
William Van Sant
250
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<CASH> 1,286
<SECURITIES> 0
<RECEIVABLES> 44,865
<ALLOWANCES> 222
<INVENTORY> 49,146
<CURRENT-ASSETS> 102,861
<PP&E> 200,324
<DEPRECIATION> 94,701
<TOTAL-ASSETS> 229,367
<CURRENT-LIABILITIES> 55,016
<BONDS> 34,209
<COMMON> 8,556
0
0
<OTHER-SE> 115,649
<TOTAL-LIABILITY-AND-EQUITY> 229,367
<SALES> 328,231
<TOTAL-REVENUES> 328,231
<CGS> 260,120
<TOTAL-COSTS> 301,259
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,387
<INCOME-PRETAX> 26,098
<INCOME-TAX> 8,927
<INCOME-CONTINUING> 17,171
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,171
<EPS-PRIMARY> 2.02
<EPS-DILUTED> 2.02
</TABLE>
