<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 205499
Form 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR (15)d OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission file number 0-21964
----------------------
SHILOH INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 51-0347683
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(State or other jurisdiction of (I.R.S. Employer
or organization) Identification No.)
Suite 350, 1013 Centre Road, Wilmington, Delaware 19805
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(Address of principal executive offices - zip code)
(302) 998-0592
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
- -------------------------------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Number of shares of Common Stock outstanding as of March 13, 1997 was 13,038,763
shares.
<PAGE> 2
SHILOH INDUSTRIES, INC.
-----------------------
INDEX
-----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet
Consolidated Statement of Income
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
Exhibit 10.1 Master Unsecured Demand Promissory
Note of Shiloh Corporation to
The Richland Trust Company of
Mansfield, dated December 6, 1996
Exhibit 10.2 First Amendment to Credit Agreement,
dated January 31, 1997 by and among
the Company, the banks listed on
Annex A thereto and Keybank National
Association (successor to Society
National Bank), as Agent
Exhibit 10.3 First Amendment to Credit Agreement,
dated as of February 24, 1997, by and
among Shiloh of Michigan, LLC, the
banks listed on Annex A thereto and
Keybank National Association, as Agent
Exhibit 10.4 Master Promissory Note of the Company
to Keybank National Association, dated
as of January 31, 1997
Exhibit 27 Financial Data Schedule
<PAGE> 3
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 10.1 Master Unsecured Demand Promissory
Note of Shiloh Corporation to The
Richland Trust Company, dated
December 6, 1996
Exhibit 10.2 First Amendment to Credit
Agreement, dated January 31, 1997
by and among the Company, the banks
listed on Annex A thereto and
Keybank National Association
(successor to Society National
Bank), as Agent
Exhibit 10.3 First Amendment to Credit
Agreement, dated as of February 24,
1997, by and among Shiloh of
Michigan, LLC, the banks listed on
Annex A thereto and Keybank
National Association, as Agent
Exhibit 10.4 Master Promissory Note of the
Company to Keybank National
Association, dated as of
January 31, 1997
Exhibit 27.1 Financial Data Schedule
(b) The Company filed a Current Report on Form 8-K dated
November 1, 1996 in connection with the acquisition
of Greenfield Die & Manufacturing
Corp.
<PAGE> 4
SIGNATURES
Pursuant to the requirements 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.
Date: April 1, 1997 SHILOH INDUSTRIES, INC.
By: /s/ Robert L. Grissinger
--------------------------------
Robert L. Grissinger
Chairman,
President and Chief
Executive Officer
By: /s/ Craig A. Stacy
--------------------------------
Craig A. Stacy
Chief Financial Officer
and Treasurer
<PAGE> 1
Exhibit 10.1
PROMISSORY NOTE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$4,000,000.00 12-06-1996 Unsec NEW 521
- --------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
BORROWER: SHILOH CORPORATION INC. LENDER: The Richland Trust Company
(TIN: 340775101) Main Office
402 Ninth Avenue P.O. Box 355
Mansfield, OH 44905-1949 3 North Main Street
Mansfield, OH 44902
================================================================================
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PRINCIPAL AMOUNT: $4,000,000.00 Initial Rate: 6.000% Date of Note: December 6, 1996
</TABLE>
PROMISE TO PAY. SHILOH CORPORATION INC. ("Borrower") promises to pay to The
Richland Trust Company ("Lender"), or order, in lawful money of the United
States of America, on demand, the principal amount of Four Million & 00/100
Dollars ($4,000,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan immediately upon Lender's demand. In
addition, Borrower will pay regular quarterly payments of all accrued unpaid
interest due as of each payment date, beginning March 6, 1997, with all
subsequent interest payments to be due on the same day of each quarter after
that. Interest on this Note is computed on a 365/360 simple interest basis; that
is, by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, than to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Wall Street
Journal LIBOR Rate (the "Index"). The Index is not necessarily the lowest rate
charged by Lender on its loans. If the Index becomes unavailable during the term
of this loan, Lender may designate a substitute index after notice to Borrower.
Lender will tell Borrower the current index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each month. The index
currently is 5.250% per annum. The interest rate to be applied in the unpaid
principal balance of this Note will be at a rate of 0.750 percentage points over
the index, resulting in an initial rate of 6.000% per annum. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid interest. Rather, they will reduce the principal balance due.
LATE CHARGE. If a regularly scheduled interest payment is 5 days or more late,
Borrower will be charged 10.000% of the unpaid portion of the regularly
scheduled payment or $40.00, whichever is less if Lender demands payment of this
loan, and Borrower does not pay the loan within 5 days after Lender's demand,
Borrower also will be charged either 10.000% of the unpaid portion of the sum of
the unpaid principal plus accrued unpaid interest or $40.00, whichever is less.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due, (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender, (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents, (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished, (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws, (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender,
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note, (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired, (i) Lender
in good faith deems itself insecure.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, or if this Note is
not paid at final maturity, Lender, at its option, may add any unpaid accrued
interest to principal and such sum will bear interest therefrom until paid, at
the rate provided in this Note. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal
<PAGE> 2
12-06-1996 PROMISSORY NOTE PAGE 2
LOAN NO. (CONTINUED)
================================================================================
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals and any anticipated post-judgment
collection services. If not prohibited by applicable law, Borrower also will pay
any court costs, in addition to all other sums provided by law. This Note has
been delivered to Lender and accepted by Lender in the State of Ohio. If there
is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of Richland County, the State of Ohio. Lender and
Borrower hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against the other. This Note
shall be governed by and construed in accordance with the laws of the State of
Ohio.
CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any
attorney-at-law, including an attorney hired by Lender, to appear in any court
of record and to confess judgment against Borrower for the unpaid amount of this
Note as evidenced by an affidavit signed by an officer of Lender setting forth
the amount then due, plus attorneys' fees as provided in this Note, plus costs
of suit, and to release all errors, and waive all rights of appeal. If a copy of
this Note, verified by an affidavit, shall have been filed in the proceeding, it
will not be necessary to file the original as a warrant of attorney. Borrower
waives the right to any stay of execution and the benefit of all exemption laws
now or hereafter in effect. No single exercise of the foregoing warrant and
power to confess judgment will be deemed to exhaust the power, whether or not
any such exercise shall be held by any court to be invalid, voidable, or void;
but the power will continue undiminished and may be exercised from time to time
as Lender may elect until all amounts owing on this Note have been paid in full.
Borrower waives any conflict of interest that an attorney hired by Lender may
have in acting on behalf of Borrower in confessing judgment against Borrower
while such attorney is retained by Lender. Borrower expressly consents to such
attorney acting for Borrower in confessing judgment.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
COLLATERAL. This Note is secured by NO COLLATERAL.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all sums either: (a) advanced in accordance
with the Instructions of an authorized person or (b) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's
Internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or any guarantor is
in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender; or (e) Lender in good faith
deems itself insecure under this Note or any other agreement between Lender and
Borrower.
FINANCIAL STATEMENTS. At the option of the Bank, all Obligations shall become
immediately due and payable without notice or demand upon failure of the
undersigned or any endorser or guarantor to: (a) furnish the Bank within 90 days
after year end current financial statements; or (b) furnish the Bank with
financial statements as provided in any loan agreement(s) executed with this
note by borrower.
DISPUTED PAYMENTS, BALANCES AND TERMS. If Borrower has any dispute about the
amount of the payment, the balance on the note or other terms of the loan,
direct your question in writing to The Richland Trust Company, ATTN: Collection
Department Manager, P.O. Box 355, Mansfield, Ohio 44901-0355.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lender's right to
declare payment of this Note on its demand. If any part of this Note cannot be
enforced, this fact will not affect the rest of the Note. In particular, this
section means (among other things) that Borrower does not agree or intend to
pay, and Lender does not agree or intend to contract for, charge, collect, take,
reserve or receive (collectively referred to herein as "charge or collect"), any
amounts in the nature of interest or in the nature of a fee for this loan, which
would in any way or event (including demand, prepayment, or acceleration) cause
Lender to charge or collect more for this loan than the maximum Lender would be
permitted to charge or collect by federal law or the law of the State of Ohio
(as applicable). Any such excess interest or unauthorized fees shall, instead of
anything slated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be refunded
to Borrower. Lender may delay or forgo enforcing any of its rights or remedies
under this Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and to any length of time) this loan, or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE.
2
<PAGE> 3
12-06-1996 PROMISSORY NOTE PAGE 3
LOAN NO. (CONTINUED)
================================================================================
NOTICE: FOR THIS NOTICE "YOU" MEANS THE BORROWER AND "HIS" MEANS LENDER.
- --------------------------------------------------------------------------------
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
- --------------------------------------------------------------------------------
BORROWER:
SHILOH CORPORATION INC.
By: /s/ Robert L. Grissinger
-------------------------------------
Robert L. Grissinger, President
and Chief Executive Officer
================================================================================
Variable Rate. Line of Credit. LASEllPRO, Reg. U.S. Pat. & T.M. Off.,
OH-D20 F3.22a SHILOH.LN 01.OVL) Ver. 3.22b(e) 1998 CFI ProServices, Inc.
All rights reserved,
3
<PAGE> 1
Exhibit 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered
into as of January 31, 1997, by and among SHILOH INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), the financial institutions named below (the
"Banks"), and KEYBANK NATIONAL ASSOCIATION (SUCCESSOR BY MERGER TO SOCIETY
NATIONAL BANK), a national banking association, as agent for the Banks (the
"Agent").
RECITALS:
---------
A. The Borrower, the Banks and the Agent are the parties to that
certain Credit Agreement dated as of April 16, 1996 (together with all Exhibits
and Schedules thereto, the "Credit Agreement"), pursuant to which the Banks have
agreed, subject to certain conditions, to advance to the Borrower certain Loans
(as this and other capitalized terms not otherwise defined herein are defined in
the Credit Agreement).
B. The Borrower, the Banks and the Agent desire to modify certain
provisions of the Credit Agreement as hereinafter provided.
AGREEMENTS:
-----------
NOW, THEREFORE, in consideration of the foregoing Recitals and
other good and valuable consideration, the Borrower and the Banks hereby agree
as follows:
<PAGE> 2
1. AMENDMENT OF CREDIT AGREEMENT.
a. Annex A to the Credit Agreement is hereby deleted in its
entirety and replaced with Exhibit A hereto.
b. The definition of the term "Commitment Period" in Section 1.1
of the Credit Agreement is hereby amended by the deletion thereof in its
entirety and the substitution therefor of:
"Commitment Period" shall mean the period from the date
hereof to February 28, 2001, as such date may be extended
pursuant to Section 2.6 hereof."
c. The definition of the term "Total Commitment Amount" in Section
1.1 of the Credit Agreement is hereby amended by the deletion thereof in its
entirety and the substitution therefor of:
"Total Commitment Amount" shall mean the amount of Seventy Million
Dollars ($70,000,000).
d. Section 2.7 of the Credit Agreement is hereby amended by the
deletion in its entirety of the proviso from the first sentence thereof and the
substitution therefor of:
"provided, however, that the aggregate face amount of all Letters
of Credit outstanding at any time shall not exceed the amount of
Fifteen Million Dollars ($15,000,000) MINUS the face amount of
that certain Irrevocable Letter of Credit No. S95/93202, dated
March 8, 1995, issued by Society National Bank (predecessor to
KeyBank National Association), in favor of Valley City Steel
Company and any subsequent letters of credit issued to such
beneficiary in replacement thereof or substitution therefor (the
"Valley City LC") The Valley City LC shall be deemed to be a
Letter of Credit for all purposes of this credit agreement.
Notwithstanding anything to the contrary contained herein, in no
event shall the maturity date of any Letter of Credit be later
than the date which is fifteen (15) days prior to the last day of
the Commitment Period."
<PAGE> 3
e. Section 5.10 of the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of:
"Borrower shall maintain at all times a ratio of (a)(i)
Consolidated Net Earnings (including the gain on any sale of
capitalized assets to which the Majority Banks have given their
prior written consent) plus (ii) all taxes on Consolidated Net
Earnings or based on Consolidated Net Earnings, including deferred
taxes, plus (iii) all interest on all Borrowed Debtof the
Companies (including Subordinated indebtedness) accrued during the
time period in question to (b) all interest on all Borrowed Debt
of the Companies (including Subordinated indebtedness) accrued
during the time period in question, of no less than 3.0 to 1.0,
based upon the Borrower's financial statements for the most recent
fiscal quarter and the previous three fiscal quarters."
f. Section 5.11 of the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of:
"The Borrower will not suffer or permit its Consolidated Tangible
Net Worth at any time to fall below the current minimum amount
required, which current minimum amount required shall be One
Hundred and Ten Million Dollars ($110,000,000) until November 1,
1997, when it shall be increased by an amount equal to fifty
percent (50%) of its positive Consolidated Net Earnings during its
1997 fiscal year, and shall be increased on each October 31
thereafter by an amount equal to fifty percent (50%) of its
positive Consolidated Net Earnings during such fiscal year. Such
current minimum amount required shall be further increased by an
amount equal to one hundred percent (100%) of the net proceeds to
the Borrower from any equity offering by the undersigned, as of
the date any such proceeds are received by the Borrower."
g. Section 5.15 of the Credit Agreement is hereby amended by the
deletion of the word "or", and the substitution therefor of a comma, immediately
prior to clause (ix) thereof and the addition of the following at the conclusion
thereof:
<PAGE> 4
", or (x) any lien securing obligations of one or more of the
Companies under any capitalized lease if and to the extent that
the aggregate principal amount outstanding under all such
capitalized leases does not exceed Twenty Million Dollars
($20,000,000) at any time"
h. Section 5.16 of the Credit Agreement is hereby amended by the
deletion of the word "or", and the substitution therefor of a comma, immediately
prior to clause (iv) thereof and the addition of the following at the conclusion
thereof:
", or (v) any indebtedness in respect of capitalized leases if and
to the extent that the aggregate principal amount outstanding
under all such capitalized leases does not exceed Twenty Million
Dollars ($20,000,000) at any time"
i. Exhibit A to the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of the form of
promissory note attached as Exhibit B hereto.
j. Schedule 5.16 to the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitiution therefor of the Schedule
attached as Exhibit C hereto.
2. EFFECTIVE DATE; CONDITIONS PRECEDENT. The modifications to the
Credit Agreement set forth in Section 1, above, shall be effective on January
31, 1997, or such later date as is mutually acceptable to the Agent, the Banks
and the Borrower (the "Effective Date"), provided that such effectiveness shall
be subject to the satisfaction by the Borrower of each of the following
conditions precedent:
<PAGE> 5
a. On the Effective Date, (i) after giving effect to the
modifications effected hereby, there shall exist no Possible Default or Event of
Default, and (ii) the representations and warranties of the Borrower under the
Credit Agreement shall be true and correct in all material respects.
b. The Borrower shall have executed and delivered to each Bank an
amended and restated Revolving Credit Note in the form of Exhibit B hereto.
c. Each Subsidiary of the Borrower shall have executed and
delivered to the Agent a Confirmation of Guaranty in the form
of Exhibit D hereto.
d. The Borrower shall have delivered to the Agent a favorable
opinion of Borrower's counsel in form and substance reasonably satisfactory
to the Agent.
e. The Borrower shall have delivered to the Agent certified copies
of the resolutions of the respective Boards of Directors of the Borrower and
each Subsidiary evidencing approval of this Amendment and the execution and
delivery of the Notes or Confirmations, as the case may be, as provided for
herein.
3. NO OTHER MODIFICATIONS. Except as expressly modified herein,
all of the provisions of the Credit Agreement and the other Related Writings
remain unmodified and in full force and
effect.
4. BINDING EFFECT. This First Amendment shall bind and inure to
the benefit of the Borrower, the Banks, the Agent and their respective
successors and assigns.
<PAGE> 6
IN WITNESS WHEREOF, the Borrower and the Banks have hereunto set
their hands on and as of the date first above written.
KEYBANK NATIONAL ASSOCIATION SHILOH INDUSTRIES, INC.
(successor by merger to
Society National Bank),
individually and as Agent
By: /s/ Richard Pohle By: /s/ Robert L. Grissinger
-------------------------- --------------------------
Title: Vice President Title: President
NBD BANK NATIONAL CITY BANK
By: /s/ Lisa Ferris By: /s/ Robert E. Little
-------------------------- --------------------------
Title: Vice President Title: Vice President and Senior
----------------------- -----------------------
Lending Officer
-----------------------
<PAGE> 7
EXHIBIT A
ANNEX A
-------
Banking Institutions Party to the Credit Agreement dated as of April 16, 1996,
as amended as of January 31, 1997, with Shiloh Industries, Inc.
Commitments and Percentages
<TABLE>
<CAPTION>
NAME OF BANK COMMITMENT RATABLE PORTION
- ------------ ---------- ---------------
(in dollars) (percentage)
<S> <C> <C>
KeyBank National Association $35,000,000 50.00%
NBD Bank $17,500,000 25.00%
National City Bank $17,500,000 25.00%
---------- -----
Total Commitment Amount $70,000,000 100.00%
</TABLE>
<PAGE> 8
EXHIBIT B
REVOLVING CREDIT NOTE
---------------------
$_____________
Cleveland, Ohio
April 16, 1996
Amended and Restated
As of January __, 1997
FOR VALUE RECEIVED, the undersigned SHILOH INDUSTRIES, INC. (the "Borrower")
promises to pay on the last day of the Commitment Period, to the order of
_________________________ (the "Bank"), at __________________, the principal sum
of _________ MILLION DOLLARS ($__,000,000) or the aggregate unpaid principal
amount of all loans evidenced by this Note made by the Bank to the Borrower
pursuant to paragraph (a) of Section 2.1 of the Credit Agreement (as hereinafter
defined), whichever is less, in lawful money of the United States of America.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in that certain Credit Agreement, dated as of
the 16th day of April, 1996, as amended as of the date hereof, (as the same may
from time to time be amended, supplemented, restated or otherwise modified, the
"Credit Agreement")among the Borrower, the Bank and certain other parties
thereto, and KeyBank National Association (successor by merger to Society
National Bank), as Agent for the Bank and such other banks.
The Borrower promises to pay interest on the unpaid principal amount of each
Loan evidenced hereby from the date of such Loan until principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement. The Borrower promises to pay on demand interest on any
overdue principal and, to the extent permitted by law, overdue interest from
their due dates at the rate or rates set forth in the Credit Agreement.
The portions of the principal sum hereof from time to time representing Prime
Rate Loans and LIBOR Loans, and payments of principal of any thereof, will be
shown on a ledger or other record of the Bank or by such other method as such
Bank may generally employ; PROVIDED, however, that failure to make any such
entry or any error in such entries shall in no way detract from the Borrower's
obligations under this Note.
This Note is one of the Notes referred to in the Credit Agreement. Reference is
made to the Credit Agreement for a description of the right of the undersigned
to anticipate payments hereof, the right of the holder hereof to declare this
Note due prior to its stated maturity, and other terms and conditions upon which
this Note is issued.
Page 1 of 2 Pages
<PAGE> 9
This Note evidences the indebtedness of the undersigned to the holder hereof
previously evidenced by, and amends and restates in its entirety, the Revolving
Credit Note dated April 16, 1996 in the face amount of $__,000,000 (the "Prior
Note"), provided that this Note shall not be construed to evidence a payment and
readvance of such indebtedness, it being the intention of the undersigned and,
by his acceptance hereof, the holder hereof that this Note evidences the same
indebtedness. Without limiting the generality of the foregoing sentence, in
addition to the up to $__,000,000 of principal evidenced by the Prior Note, this
Note also evidences any and all accrued and unpaid interest under the Prior Note
not heretofore paid, all of which interest accrued and unpaid under the Prior
Note shall be due and payable together with the first installment of interest
due under this Note.
The Borrower hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder of any of its rights
hereunder in any particular instance shall not constitute a waiver in that or
any subsequent instance.
The undersigned authorizes any attorney-at-law at any time or times after the
maturity hereof to appear in any local, state or federal court of record in the
United States of America to waive the issuance and service of process, to admit
the maturity of this Note and the nonpayment thereof when due, to confess
judgment against the undersigned in favor of the holder of this Note for the
amount then appearing due, together with interest and cost of suit, and
thereupon to release all errors and to waive all rights of appeal and stay of
execution. The foregoing warrant of attorney shall survive any judgment, and if
any judgment be vacated for any reason, the holder hereof nevertheless may
thereafter use the foregoing warrant of attorney to obtain an additional
judgment or judgments against the undersigned.
- -------------------------------------------------------------------------------
"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURN GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR
ANY OTHER CAUSE."
- -------------------------------------------------------------------------------
SHILOH INDUSTRIES, INC.
By:
-----------------------------
Its:
-------------------------
Page 2 of 2 Pages
<PAGE> 10
EXHIBIT C
SCHEDULE 5.16
(to come from Shiloh -- will
increase the Richland County Bank line
of credit to $4 million)
<PAGE> 11
EXHIBIT D
January __, 1997
KeyBank National Association, individually
and as Agent
127 Public Square
Cleveland, Ohio 44114
Re: Shiloh Industries, Inc. ("the Borrower") -
Credit Agreement dated April 16, 1996, as
amended January __, 1997 ("the Credit Agreement")
Ladies and Gentlemen:
The undersigned is the Guarantor under a Guaranty of Payment of Debt in
favor of the Banks (as this and all other terms are defined in the Credit
Agreement) dated April 16, 1996 (the "Guaranty").
The undersigned confirms that it is aware that the Agent, the Banks and
the Borrower have entered into a First Amendment to the Credit Agreement dated
of even date herewith ("the Amendment"), which the undersigned has read and
hereby approves; that, INTER ALIA, the Amendment provides for (i) an increase in
the Total Commitment Amount, (ii) an increase in the aggregate principal amount
of permitted Letters of Credit, (iii) an increase in the Borrower's required
Tangible Net Worth, and (iv) the ability of the Borrower to incur certain liens
securing capitalized leases and to incur certain additional indebtedness; that
such Total Commitment Amount, as increased by the Amendment, continues to be
Debt of the Obligor (as such terms are defined in the Guaranty) guaranteed by
the undersigned pursuant to the provisions of the Guaranty; and that the
Amendment affects no obligation, liability or agreement of the undersigned under
the Guaranty (except to the extent that the Amendment has the effect, inter
alia, of increasing the principal amount of the Debt of the Obligor), which
remains unmodified and in full force and effect.
- -------------------------------------------------------------------------------
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
- -------------------------------------------------------------------------------
[SUBSIDIARY]
-----------------------
Name:
<PAGE> 12
Title:
<PAGE> 1
Exhibit 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered into
as of February 24, 1997, by and among SHILOH OF MICHIGAN, LLC, a Michigan
limited liability company (the "Borrower"), the financial institutions named
below (the "Banks"), and KEYBANK NATIONAL ASSOCIATION (SUCCESSOR BY MERGER TO
SOCIETY NATIONAL BANK), a national banking association, as agent for the Banks
(the "Agent").
RECITALS:
---------
A. The Borrower, the Banks and the Agent are the parties to that
certain Credit Agreement dated as of April 16, 1996 (together with all Exhibits
and Schedules thereto, the "Credit Agreement"), pursuant to which the Banks have
agreed, subject to certain conditions, to advance to the Borrower certain Loans
(as this and other capitalized terms not otherwise defined herein are defined in
the Credit Agreement).
B. The Borrower, the Banks and the Agent desire to modify certain
provisions of the Credit Agreement as hereinafter provided.
AGREEMENTS:
-----------
NOW, THEREFORE, in consideration of the foregoing Recitals and
other good and valuable consideration, the Borrower and the Banks hereby agree
as follows:
<PAGE> 2
1. AMENDMENT OF CREDIT AGREEMENT.
------------------------------
a. Annex A to the Credit Agreement is hereby deleted in its
entirety and replaced with Exhibit A hereto.
b. The definition of the term "Commitment Period" in Section 1.1
of the Credit Agreement is hereby amended by the deletion thereof in its
entirety and the substitution therefor of:
"'Commitment Period' shall mean, in respect of Loan A, the period
from the date hereof to February 28, 1998, and, in respect of Loan
B, the period from the date hereof to February 28, 2001, as such
date may be extended pursuant to Section 2.6 hereof."
c. The definition of the term "Total Commitment Amount" in Section
1.1 of the Credit Agreement is hereby amended by the deletion thereof in its
entirety and the substitution therefor of:
"Total Commitment Amount" shall mean, in respect of Loan A, the
amount of Twenty Five Million Dollars ($25,000,000) and, in
respect of Loan B, the amount of Three Million Dollars
($3,000,000)."
d. Section 5.4 of the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of:
"Shiloh Industries, Inc., together with one or more of its
Subsidiaries each of which will have executed and delivered to the
Agent a guaranty in substantially the form attached hereto as
Exhibit C-3, will hold at least an eighty percent (80%) equity
ownership interest in the Borrower at all times. The Borrower will
preserve and maintain at all times its existence, rights and
franchises; provided, however, that this Section shall not prevent
any merger or transfer permitted by Section 5.12 hereof."
<PAGE> 3
e. Section 5.10 of the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the
substitution therefor of:
"Commencing in respect of the Borrower's fiscal quarter ending
October 31, 1998, and in respect of each fiscal quarter thereafter
based upon the Borrower's financial statements for the then most
recent fiscal quarter and the previous three fiscal quarters, the
Borrower shall maintain a ratio of (a)(i) Consolidated Net
Earnings (including the gain on any sale of capitalized assets to
which the Majority Banks have given their prior written consent)
plus (ii) all taxes on Consolidated Net Earnings or based on
Consolidated Net Earnings, including deferred taxes, plus (iii)
all interest on all Borrowed Debt of the Borrower (including
Subordinated indebtedness) accrued during the time period in
question to (b) all interest on all indebtedness for borrowed
money of the Borrower (including Subordinated indebtedness)
accrued during the time period in question, of 1.50 to 1.0."
f. Exhibit A-1 to the Credit Agreement is hereby amended by the
deletion thereof in its entirety and the substitution therefor of the form of
promissory note attached as Exhibit B hereto.
3. EFFECTIVE DATE; CONDITIONS PRECEDENT. The modifications to the
Credit Agreement set forth in Section 1, above, shall be effective on February
24, 1997, or such later date as is mutually acceptable to the Agent, the Banks
and the Borrower (the "Effective Date"), provided that such effectiveness shall
be subject to the satisfaction by the Borrower of each of the following
conditions precedent:
a. On the Effective Date, (i) after giving effect to the
modifications effected hereby, there shall exist no Possible Default or Event of
Default, and (ii) the representations and
<PAGE> 4
warranties of the Borrower under the Credit Agreement shall be true and correct
in all material respects.
b. The Borrower shall have executed and delivered to each Bank an
amended and restated Revolving Credit Note in the form of Exhibit B hereto.
c. Each Subsidiary of Shiloh Industries, Inc. shall have executed
and delivered to the Agent a Confirmation of Guaranty in the form of Exhibit C-1
hereto. Rouge Steel Company shall have executed and delivered to the Agent a
First Amendment to Guaranty of Payment in the form of Exhibit C-2 hereto. Shiloh
Industries, Inc. shall have executed and delivered to the Agent a First
Amendment to Guaranty of Payment in the form of Exhibit C-3 hereto.
d. The Borrower shall have delivered to the Agent a favorable
opinion of Borrower's counsel in form and substance reasonably satisfactory to
the Agent.
e. The Borrower shall have delivered to the Agent certified copies
of the resolutions of the respective Boards of Directors of Shiloh Industries,
Inc. and of each Subsidiary of Shiloh Industries, Inc. evidencing approval of
this Amendment and the execution and delivery of the Notes or Confirmations, as
the case may be, as provided for herein.
3. NO OTHER MODIFICATIONS. Except as expressly modified herein,
all of the provisions of the Credit Agreement and the other Related Writings
remain unmodified and in full force and effect.
<PAGE> 5
4. BINDING EFFECT. This First Amendment shall bind and inure to
the benefit of the Borrower, the Banks, the Agent and their respective
successors and assigns.
IN WITNESS WHEREOF, the Borrower and the Banks have hereunto set
their hands on and as of the date first above written.
KEYBANK NATIONAL ASSOCIATION SHILOH OF MICHIGAN, LLC
(successor by merger to
Society National Bank),
individually and as Agent
By: /s/ Richard Pohle By: /s/ Robert L. Grissinger
------------------------ ------------------------
Title: Vice President Title: Treasurer
--------------------- ---------------------
NBD BANK NATIONAL CITY BANK
By: /s/ Lisa Ferris By: /s/ Robert E. Little
------------------------ ------------------------
Title: Vice President Title: Vice President and
--------------------- ---------------------
Senior Lending Officer
---------------------
<PAGE> 6
EXHIBIT A
ANNEX A
-------
Banking Institutions Party to the Credit Agreement dated April 16, 1996, as
amended as of February 24, 1997, with Shiloh of Michigan, L.L.C.
Commitments and Percentages
Loan A
NAME OF BANK COMMITMENT RATABLE PORTION
- ------------ ---------- ---------------
(in dollars) (percentage)
KeyBank National
Association $12,500,000 50.00%
NBD Bank $ 6,250,000 25.00%
National City Bank $ 6,250,000 25.00%
TOTAL COMMITMENT AMOUNT $25,000,000 100.00%
- -----------------------
Loan B
NAME OF BANK COMMITMENT RATABLE PORTION
- ------------ ---------- ---------------
(in dollars) (percentage)
KeyBank National
Association $ 1,500,000 50.00%
NBD Bank $ 750,000 25.00%
National City Bank $ 750,000 25.00%
TOTAL COMMITMENT AMOUNT $ 3,000,000 100.00%
- -----------------------
<PAGE> 7
EXHIBIT B
REVOLVING CREDIT NOTE
---------------------
$__________ Cleveland, Ohio
April 16, 1996
Amended and Restated
February 24, 1997
FOR VALUE RECEIVED, the undersigned SHILOH OF MICHIGAN, L.L.C. (the
"Borrower") promises to pay on the last day of the Commitment Period, to the
order of _____________________ (the "Bank"), at_____________________________,
the principal sum of ______ MILLION DOLLARS ($__________) or the aggregate
unpaid principal amount of all loans evidenced by this Note made by the Bank to
the Borrower pursuant to paragraph (a) of Section 2.1 of the Credit Agreement
(as hereinafter defined), whichever is less, in lawful money of the United
States of America. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in that certain Credit
Agreement, dated as of the 16th day of April, 1996 and amended as of the date
hereof (as the same may from time to time be amended, supplemented, restated or
otherwise modified, the "Credit Agreement"), among the Borrower, the Bank and
certain other parties thereto, and KeyBank National Association (successor by
merger to Society National Bank), as Agent for the Bank and such other banks.
The Borrower promises to pay interest on the unpaid principal amount of
each Loan evidenced hereby from the date of such Loan until principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement. The Borrower promises to pay on demand
interest on any overdue principal and, to the extent permitted by law, overdue
interest from their due dates at the rate or rates set forth in the Credit
Agreement.
The portions of the principal sum hereof from time to time representing
Prime Rate Loans and LIBOR Loans, and payments of principal of any thereof, will
be shown on a ledger or other record of the Bank or by such other method as such
Bank may generally employ; PROVIDED, however, that failure to make any such
entry or any error in such entries shall in no way detract from the Borrower's
obligations under this Note.
This Note is one of the Notes referred to in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the right of the
undersigned to anticipate payments hereof, the right of the holder hereof to
declare this Note due prior to its stated maturity, and other terms and
conditions upon which this Note is issued.
<PAGE> 8
This Note evidences the indebtedness of the undersigned to the holder
hereof previously evidenced by, and amends and restates in its entirety, the
Revolving Credit Note dated April 16, 1996 in the face amount of $__________
(the "Prior Note"), provided that this Note shall not be construed to evidence a
payment and readvance of such indebtedness, it being the intention of the
undersigned and, by his acceptance hereof, the holder hereof that this Note
evidences the same indebtedness. Without limiting the generality of the
foregoing sentence, in addition to the maximum of $__________ of principal
evidenced by the Prior Note, this Note also evidences any and all accrued and
unpaid interest under the Prior Note not heretofore paid, all of which interest
accrued and unpaid under the Prior Note shall be due and payable together with
the first installment of interest due under this Note.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver in
that or any subsequent instance.
The undersigned authorizes any attorney-at-law at any time or times
after the maturity hereof to appear in any local, state or federal court of
record in the United States of America to waive the issuance and service of
process, to admit the maturity of this Note and the nonpayment thereof when due,
to confess judgment against the undersigned in favor of the holder of this Note
for the amount then appearing due, together with interest and cost of suit, and
thereupon to release all errors and to waive all rights of appeal and stay of
execution. The foregoing warrant of attorney shall survive any judgment, and if
any judgment be vacated for any reason, the holder hereof nevertheless may
thereafter use the foregoing warrant of attorney to obtain an additional
judgment or judgments against the undersigned.
- --------------------------------------------------------------------------------
"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURN GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR
ANY OTHER CAUSE."
- --------------------------------------------------------------------------------
SHILOH OF MICHIGAN, L.L.C.
By:
--------------------------------
Its:
--------------------------------
<PAGE> 9
EXHIBIT C-1
January __, 1997
KeyBank National Association, individually
and as Agent
127 Public Square
Cleveland, Ohio 44114
Re: Shiloh of Michigan LLC - Credit Agreement dated
April 16, 1996, as amended January __, 1997 ("the
Credit Agreement")
Ladies and Gentlemen:
The undersigned is the Guarantor under a [Guaranty of Payment of
Debt][Guaranty of Payment] in favor of the Banks (as this and all other terms
are defined in the Credit Agreement) dated April 16, 1996 (the "Guaranty").
The undersigned confirms that it is aware that the Agent, the Banks and
the Borrower have entered into a First Amendment to the Credit Agreement dated
of even date herewith (the "Amendment"), which the undersigned has read and
hereby approves; that, INTER ALIA, the Amendment provides for (i) an increase in
the Total Commitment Amount, and (ii) an extension of the maturity of Loan B;
that such Total Commitment Amount, as increased by the Amendment, continues to
be Debt of the Obligor (as such terms are defined in the Guaranty) guaranteed by
the undersigned pursuant to the provisions of the Guaranty; and that the
Amendment affects no obligation, liability or agreement of the undersigned under
the Guaranty (except to the extent that the Amendment has the effect, inter
alia, of increasing the principal amount of the Debt of the Obligor), which
remains unmodified and in full force and effect.
- --------------------------------------------------------------------------------
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
- --------------------------------------------------------------------------------
[SUBSIDIARY/MEMBER]
-----------------------
Name:
Title:
<PAGE> 10
EXHIBIT C-2
FIRST AMENDMENT TO GUARANTY OF PAYMENT
- --------------------------------------------------------
THIS FIRST AMENDMENT TO GUARANTY OF PAYMENT (this "Amendment") is made
and entered into as of the 24th day of February, 1997, by and among ROUGE STEEL
COMPANY (the "Guarantor") and the Banks from time to time parties to that
certain Credit Agreement, dated as of April 16, 1996 and amended as of the date
hereof, between Shiloh of Michigan, LLC (the "Borrower"), KeyBank National
Association, individually and as Agent, and the Banks named therein.
R E C I T A L S:
----------------
A. Pursuant to a Guaranty of Payment dated as of April 16, 1996 (the
"Guaranty"), the Guarantor has guaranteed to the Banks the punctual payment of
the full amount, when due, of the Guaranteed Obligations (this and all other
capitalized terms not otherwise defined herein are defined in the Guaranty).
B. The Borrower has requested that the Banks (i) increase the amount of
the credit extended by the Banks to the Borrower and (ii) extend the maturity
date thereof.
C. One of the conditions to the Banks' agreeing to the Borrower's
request is that the Guarantor agrees to the amendment to the Guaranty set forth
herein.
A G R E E M E N T S:
- --------------------------------------------------
In consideration of the foregoing Recitals and to induce the Banks to
increase the maximum amount of the credit available to the Borrower and extend
the maturity date thereof, which increase and extension shall be of material
economic benefit to the
<PAGE> 11
Guarantor, and for other good and valuable consideration, the receipt of which
is hereby acknowledged by the Guarantor, the Guarantor and the Banks hereby
agree as follows:
1. AMENDMENT. The Guaranty is hereby amended by the deletion of Section
2 thereof in its entirety and the substitution therefor of:
"So long as the Guarantor or any one or more of its direct or
indirect subsidiaries is a Member of the Borrower, the Guarantor
hereby unconditionally guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of Twenty
Percent (20%), calculated as of any date of determination, of the
Borrower's Obligations (as defined in the Credit Agreement), whether
or not allowed as a claim in bankruptcy, including post-petition
interest and fees (all such obligations of the Borrower being
referred to herein as the "Guaranteed Obligations"), and agrees to
pay any and all expenses (including counsel fees and expenses)
incurred by the Agent or the Banks in enforcing any rights under
this Agreement; PROVIDED, HOWEVER, that no transfer by the Guarantor
of any of its interest in the Borrower (whether legal, equitable or
otherwise) after the occurrence and during the continuance of an
Event of Default shall operate as a discharge of the Guarantor's
unconditional guaranty as set forth above or otherwise relieve the
Guarantor of any of its obligations in respect of the Guaranteed
Obligations."
2. CONFLICTING TERMS; NO OTHER MODIFICATIONS. To the extent that any of
the terms and conditions of this Amendment are inconsistent with the terms and
conditions of the Guaranty, the terms and conditions of this Amendment shall
prevail. Otherwise, unless expressly hereby modified or superseded herein, all
of the terms and conditions of the Guaranty shall remain unaffected and in full
force and effect, and the Guarantor hereby confirms that the Guaranty remains in
full force and effect on and as of the date hereof.
<PAGE> 1
Exhibit 10.4
MASTER PROMISSORY NOTE
$3,000,000.00 Cleveland, Ohio
Executed as of January 31, 1997
Company promises to pay to the order of Bank, at any of its offices, on
the Maturity Date applicable to each Advance, the principal amount of each
Advance, together with interest on the daily principal balance of such Advance
at a rate per annum equal to the Interest Rate applicable to such Advance. The
principal amount of each Advance shall be due and payable on the Maturity Date
applicable to such Advance. Accrued interest on each to such Advance. The daily
principal balance of each Advance that remains outstanding after its Maturity
Date shall bear interest at a rate per annum equal to the Default Interest Rate.
No Money Market Advance or LIBOR Advance may be prepaid prior to its Maturity
Date. Each Money Market Advance shall be in the principal sum of at least One
Million Five Hundred Thousand Dollars ($1,500,000).
This Note shall serve as a master note to evidence all Advances;
provided, however, that the aggregate unpaid principal amount of all Advances
shall not at any one time outstanding exceed the amount specified in the Line
Facility. Bank's records shall be rebuttably presumptive evidence as to (a) the
principal amount, the Maturity Date, and the Interest Rate applicable to each
Advance, and (b) each payment of principal and interest received by Bank
applicable to each Advance. Company waives presentment, demand, notice, protest,
and all other demands and notices in connection with delivery, acceptance,
performance, default, or enforcement of this Note.
For each payment of principal or interest not received by Bank when
due, Company agrees to pay Bank a late charge equal to the greater of ten
percent (10%) of the amount of the payment or twenty-five dollars ($25.00).
If any Money Market Advance or LIBOR Advance becomes due and payable
and is prepaid prior to its Maturity Date, Company also promises to reimburse
Bank on demand for any resulting loss, cost, or expense incurred by Bank as a
result thereof, including, without limitation, any loss incurred in obtaining,
liquidating, or employing deposits from third parties, but excluding loss of
margin for the period after any such payment. If, because of the introduction of
or any change in, or because of any judicial, administrative, or other
governmental interpretation of, any law or regulation, there shall be any
increase in the cost to Bank of
-1-
<PAGE> 2
making, funding, maintaining, or allocating capital to any Money Market Advance
or LIBOR Advance, then Company shall, from time to time upon demand by Bank, pay
to Bank additional amounts sufficient to compensate Bank for such increased
cost. If, because of the introduction of or any change in, or because of any
judicial, administrative, or other governmental interpretation of, any law or
regulation, it becomes unlawful for Bank to make, fund, or maintain any Money
Market Advance or LIBOR Advance, then Bank's obligation to make, fund, or
maintain any Money Market Advance or LIBOR Advance shall terminate and each
affected outstanding Money Market Advance or LIBOR Advance shall be converted to
a Prime Advance on the earlier of the applicable Maturity Date for each such
Advance or the date the making, funding, or maintaining of each such Advance
becomes unlawful.
Upon the occurrence of any Event of Default and at all times
thereafter, at the option of Bank all Obligations shall become immediately due
and payable, Bank may terminate the Line Facility and no further Advance shall
be made, and bank may apply or set off any Deposit Account against all
Obligations, all without any notice to or demand upon Company, in addition to
any other rights and remedies Bank may have pursuant to law, this Note, or any
other instruments or agreements, which rights and remedies shall be cumulative.
All provisions hereof shall be subject to, governed by, and construed
in accordance with Ohio law. Unenforceability of any provision affect the
enforceability of any other provision or application of any provision. Any
amendment or waiver hereof or any waiver of any right or remedy otherwise
available must be in writing and signed by the party against whom enforcement of
the amendment or waiver is sought.
For the purposes of this Note:
"ADVANCE" means loan advance made by Bank to Company pursuant to the
Line Facility;
"BANK" means KEYBANK NATIONAL ASSOCIATION, a national banking associate
with its main office located at 127 Public Square, Cleveland, Ohio
44114, and its successors and assigns;
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in Cleveland, Ohio and, if the applicable
Business Day relates to any LIBOR Advance, on which dealings are
carried on in the London interbank Eurodollar market;
-2-
<PAGE> 3
"COMPANY" means SHILOH INDUSTRIES, INC. and its successors and assigns;
provided, however, that Company may not assign or otherwise transfer
any of its rights under this Note without the express written consent
of Bank;
"DEFAULT INTEREST RATE" means that floating rate per annum (calculated
on the basis of a year of 360 days for the actual number of days
elapsed) equal to three percent (3%) in excess of the Prime Rate, which
rate shall be immediately adjusted to correspond with each change in
the Prime Rate;
"DEPOSIT ACCOUNT" means any demand, time, statement, savings, passbook,
or similar account or balance (including, without limitation, any
certificate of deposit) presently or at any time hereafter maintained
with Bank at any of its foreign or domestic offices either by Company
severally or jointly by Company and another person or organization;
"EVENT OF DEFAULT" means the occurrence of any of the following events:
(a) failure to pay or perform any Obligation when it becomes due and
such failure remains unremedied for ten (10) calendar days thereafter,
(b) untruthfulness, proved to the satisfaction of Bank, of any
statement, representation, or certification contained in any financial
statement, credit application, or other document given by Company in
connection with any Advance or any other Obligation, (c) breach by
Company of any provision, agreement, representation, warranty, or
covenant set forth in this Note, in the Line Facility, in any other
instrument, document, or agreement evidencing or relating to any
Obligation, or in any mortgage deed, assignment, pledge, or security
agreement given as or evidencing security for any Obligation of
Company, (d) dissolution, termination of existence, insolvency,
business failure, appointment of a receiver of any part of the property
of Company, (e) assignment for the benefit of creditors by Company, (f)
failure or inability of Company to pay its debts as they come due, or
(h) the commencement of any proceedings under any bankruptcy or
insolvency laws by or against Company;
"INTEREST RATE" means (a) as to any Prime Advance, that floating rate
per annum (calculated on the basis of a year of 360 days, for the
actual number of days elapsed) equal to the Prime Rate, which rate
shall be immediately adjusted to correspond with each change in the
Prime Rate, (b) as to any LIBOR Advance, that fixed rate per annum
(calculated on the basis of a year of 360 days for the actual number of
days elapsed) equal to one-half percent (1/2 of 1%) in excess of the
Reserve Adjusted LIBOR Rate, and (c) as to any Money Market Advance,
that fixed rate per annum (calculated on the
-3-
<PAGE> 4
basis of a year of 360 days for the actual number of days elapsed)
mutually agreed upon between Bank and Company;
"LIBOR ADVANCE" means any Advance that bears interest determined with
reference to the Reserve Adjusted LIBOR Rate;
"LIBOR RESERVE REQUIREMENTS" means, for any LIBOR Advance, the maximum
reserves (whether basic, supplemental, marginal, emergency, or
otherwise) prescribed by the Board of Governors of the Federal Reserve
System (or any successor) with respect to liabilities or assets
consisting of or including "Eurocurrency liabilities" (as defined in
Regulation D of the Board of Governors of the Federal Reserve System)
having a term equal to the term of such advance;
"LINE FACILITY" means the line of credit established by bank in favor
of Company in the maximum principal amount of Three Million Dollars
($3,000,000) at any one time outstanding, together with all extensions,
renewals, restatements, and substitutions thereof, in whole or in part;
"MATURITY DATE" means (a) with respect to any Prime Advance, the
earlier of (1) February 28, 1998, or (2) ninety (90) days after the
date of such Advance, (b) with respect to any LIBOR Advance, the
earlier of (1) February 28, 1998 or (2) the date selected by Company
that ends, one, two, or three months after the date of the making of
such Advance, and (c) with respect to any Money Market Advance, the
earlier of (1) February 28, 1998 or (2) the date selected by Company
and agreed to be the Bank but in no event later than 30 days after the
date of the making of any Money Market Advance;
"MONEY MARKET ADVANCE" means any Advance that bears interest determined
with reference to the overnight federal funds rate for the Bank or such
other fixed money market rate offered by the Bank;
"OBLIGATION" means any present or future obligation, indebtedness, or
liability of Company owed to Bank of whatever kind and however
evidenced, together with all extensions, renewals, amendments,
restatements and substitutions thereof or therefor (including, without
limitation, each Advance evidenced by this Note or the Line Facility);
"PRIME ADVANCE" means any Advance that bears interest determined with
reference to the Prime Rate;
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<PAGE> 5
"PRIME RATE" means interest rate established from time to time by Bank
as Bank's Prime Rate, whether or not such rate is publicly announced.
The Prime Rate may not be the lowest interest rate charged by Bank for
commercial or other extensions of credit;
"RESERVE ADJUSTED LIBOR RATE" means, with respect to any LIBOR Advance,
the rate per annum (rounded upwards to the next higher whole multiple
of 1/16% if such rate is not such a multiple) equal to the quotient of
(a) the rate per annum (rounded upwards to the next higher whole
multiple of 1/16% if such rate is not such a multiple) at which
deposits in United States dollars are offered at 11:00 a.m. (London,
England time) (or as soon thereafter as is reasonably practicable) by
prime banks in the London interbank Eurodollar market two Business Days
prior to the day such Advance is made in an amount and with a maturity
comparable to the amount and maturity of such Advance, divided by (b) a
number equal to 1.00 minus the aggregate (without duplication) of the
rates (expressed as a decimal fraction) of the LIBOR Reserve
Requirements current on the date two (2) Business Days prior to the day
such Advance is made.
After all obligations evidenced by this Note become due and payable,
any attorney-at-law is irrevocably authorizes to (a) appear for Company in any
state or federal court of record, (b) waive the issuance and service of process,
all errors, and all rights of appeal and stay of execution, and (c) confess
judgement against Company in favor of Bank for the principal balance of all
Advances evidenced by this Note, the amount of all unpaid accrued interest, the
amount of all costs of suit, and the amount of a reasonable attorney's fee.
These authorizations shall survive any judgement(s) and any vacation of any
judgement(s). Company agrees that Bank's attorney may confess judgement pursuant
to the foregoing warrant of attorney. Company further agrees that the attorney
confessing judgement pursuant to the foregoing warrant of attorney may receive a
legal fee or other compensation from Bank.
Company, to the extent permitted by law, waives any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort,
or otherwise, between Bank and Company arising out of, in connection with,
related to, or incidental to the relationship established between Company and
Bank in connection with this Note or any other agreement, instrument or document
executed or delivered in connection therewith or the transactions related
thereto. This waiver shall not in any way affect, waive, limit, amend or modify
Bank's ability to pursue remedies pursuant to any confession of judgement or
cognovit provision contained in this Note, or any other agreement, instrument or
document related thereto.
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<PAGE> 6
WARNING: BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGEMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
ADDRESS: COMPANY:
402 Ninth Avenue SHILOH INDUSTRIES, INC.
P.O. Box 2037
Mansfield, Ohio 44905 By: /s/ Robert L. Grissinger
-----------------------------------
Title: Chairman, President & CEO
--------------------------------
And:
----------------------------------
Title:
---------------------------------
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