UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 Or 15(d) of The Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported)
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October 30,
2009
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Hurco
Companies, Inc.
(Exact
name of registrant as specified in its charter)
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Indiana
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0-9143
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35-1150732
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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One
Technology Way
Indianapolis,
Indiana 46268
(Address
of principal executive offices) (Zip
Code)
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Registrant’s
telephone number, including area code
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(317)
293-5309
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Not
Applicable
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01
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Entry
into a Material Definitive
Agreement.
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As of October 30, 2009, Hurco
Companies, Inc. (the "Company") and JPMorgan Chase Bank, N.A. ("Chase") entered
into a first amendment (the "Amendment") to the outstanding credit agreement,
dated as of December 7, 2007, between the Company and Chase (the "U.S. Credit
Agreement"). Prior to the effectiveness of the Amendment, the U.S.
Credit Agreement provided to the Company a $30 million unsecured revolving
credit and letter of credit facility (the "U.S. Facility"), and a separate
letter of credit facility in the amount of New Taiwan Dollars 100 million (the
"Taiwan Facility"). Pursuant to the Amendment, the maximum available
credit under the U.S. Facility is reduced to $15 million, and the maximum amount
of outstanding letters of credit under the U.S. Facility is set at $3
million. The Amendment does not change the scheduled maturity date of
the U.S. Facility, which remains December 7, 2012. The Taiwan
Facility remains an uncommitted demand credit facility, and the amount of
available credit under the Taiwan Facility is not changed by the
Amendment.
Borrowings
under the U.S. Facility will bear interest at a LIBOR-based rate or a floating
rate based on the prime rate of Chase, in each case, plus an applicable
margin. The Amendment provides that the floating rate will not be
less than a one month LIBOR-based rate plus 2.50% per annum. The
Amendment changes the method by which the applicable margins are
determined. When the consolidated net income of the Company and its
subsidiaries for the four most recently reported consecutive fiscal quarters
is:
(i) equal
to or greater than $0.00 (a "No Loss Four Quarter Period"), the applicable
margins are determined by reference to the ratio of the total consolidated
interest-bearing debt and obligations and the undrawn face amount of all letters
of credit outstanding of the Company and its subsidiaries ("consolidated total
indebtedness"), to their consolidated EBITDA (as defined in the U.S. Credit
Agreement); and
(ii) less
than $0.00 (a "Net Loss Four Quarter Period"), the applicable margins are
determined based on the ratio of the positive remainder, if any, of the
aggregate cash and cash equivalent investments of the Company and its
subsidiaries, on a consolidated basis, minus the consolidated total
indebtedness, to an amount equal to two (2) times the consolidated net loss
(stated as an absolute value) of the Company and its subsidiaries for the two
consecutive fiscal quarters ending at the close of such four quarter period (the
"Excess Cash to Annualized Net Loss Ratio").
Based on
the most recent determination of applicable margins under the U.S. Credit
Agreement, the applicable margin under the U.S. Facility immediately following
the effective date of the Amendment will be the same as was in effect under the
U.S. Facility prior to the Amendment. The Amendment also reduces the
rates used to determine fees payable by the Company for that portion of the U.S.
Facility which is not utilized by the Company from time to time.
The
Amendment adds further limitations on the Company's ability to declare and pay
dividends, incur additional indebtedness and make acquisitions following the
occurrence of a Net Loss Four Quarter Period, which limitations remain in effect
until there occurs a No Loss Four Quarter Period. The Amendment also
changes the Company's financial covenants under the U.S. Credit
Agreement. The Amendment eliminates the minimum quarterly
consolidated net income covenant. Pursuant to the Amendment, the
covenant establishing a maximum ratio of consolidated total indebtedness to
total indebtedness and net worth remains applicable as of the close of the last
fiscal quarter of each No Loss Four Quarter Period. For the last
fiscal quarter of a Net Loss Four Quarter Period, the Amendment establishes a
covenant requiring the Company to achieve an Excess Cash to Annualized Net Loss
Ratio of not less than 1.00 to 1.00.
A copy of
the Amendment is included as Exhibit 10.1 to this filing and is incorporated
herein by reference. A copy of the U.S. Credit Agreement was included
as Exhibit 10.1 to the Form 8-K filed by the Company on December 12,
2007.
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Effective
October 31, 2009, the Board of Directors of the Company appointed Michael Doar
to the office of President. As previously announced by the Company,
James D. Fabris resigned as President and Chief Operating Officer of the Company
effective October 31, 2009. In his capacity as President, Mr. Doar,
age 54, will perform the
functions previously performed by Mr. Fabris. Mr. Doar will continue
to serve as the Company's Chief Executive Officer and Chairman of the Board,
positions he has held since 2001. Mr. Doar's compensation
arrangements, as described in the proxy statement for the Company's 2009 annual
meeting of shareholders, were not changed as a result of his appointment to the
office of President.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits
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Exhibit No.
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Description
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10.1
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First
Amendment to Credit Agreement dated as of October 30, 2009, between Hurco
Companies, Inc. and JPMorgan Chase Bank,
N.A.
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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 hereunto
duly authorized.
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HURCO
COMPANIES, INC.
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By:
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/s/ John G. Oblazney
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Name:
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John
G. Oblazney
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Title:
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Vice
President and Chief Financial
Officer
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Dated: November
3, 2009
EXHIBIT
INDEX
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Exhibit No.
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Description
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10.1
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First
Amendment to Credit Agreement dated as of October 30, 2009, between Hurco
Companies, Inc. and JPMorgan Chase Bank,
N.A.
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Exhibit
No. 10.1
FIRST AMENDMENT TO CREDIT
AGREEMENT
THIS FIRST AMENDMENT TO CREDIT
AGREEMENT, dated as of October 30, 2009 (this “Amendment”), is by and between
HURCO COMPANIES, INC., an Indiana corporation (the “Borrower”), and JPMORGAN
CHASE BANK, N.A. (the "Bank").
RECITALS
A. The
Borrower and the Bank have entered into that certain Credit Agreement dated as
of December 7, 2007 (the "Credit Agreement").
B. The
Borrower and the Bank desire to amend the Credit Agreement as set forth in this
Amendment.
NOW, THEREFORE, in consideration of the
premises and of the mutual agreements herein contained, the parties hereto agree
as follows:
ARTICLE
1. AMENDMENTS TO CREDIT
AGREEMENT
Subject to Article 2 of this Amendment,
the Credit Agreement hereby is amended as follows:
1.1 The
following definition of the term "Adjusted One Month LIBOR Rate" is added to
Section 1.1 in its alphabetical place:
"Adjusted One Month LIBOR Rate" means,
with respect to any Floating Rate Loan for any day, the sum of (i) 2.50% per
annum plus (ii) the quotient of (a) the interest rate determined by the Bank by
reference to the Page to be the rate at approximately 11:00 a.m. London time, on
such date or, if such date is not a Business Day, on the immediately preceding
Business Day for dollar deposits with a maturity equal to one (1) month, divided
by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to
dollar deposits in the London interbank market with a maturity equal to one (1)
month.
1.2 The
definition of the term "Applicable Margin" set forth in Section 1.1 is amended
and restated as follows:
"Applicable Margin" means, with respect
to the Eurodollar Rate, Floating Rate and Commitment Fees, as set forth in
either subpart (a) or subpart (b) below, as the case may be from time to
time:
(a) when
the Consolidated Net Income of the Borrower and its Subsidiaries for the period
of four consecutive fiscal quarters of the Borrower ending with the last fiscal
quarter for which financial statements have been furnished under Section 6.1(ii)
was equal to or greater than $0 (it being understood that such Consolidated Net
Income is to be determined for the entire period of four consecutive fiscal
quarters taken as one accounting period), the applicable percentage rates per
annum set forth in the table below based upon the Total Funded Debt/EBITDA Ratio
as of the end of such last fiscal quarter:
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Total Funded Debt/
EBITDA
Ratio
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Eurodollar
Loans
(% per annum)
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Floating Rate
Loans
(% per annum)
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Commitment
Fee
(% per annum)
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|||||||||
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Greater
than or
equal
to 2.00
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1.75 | % | 0 | % | .10 | % | ||||||
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Less
than 2.00
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1.50 | % | 0 | % | .075 | % | ||||||
; or (b)
when the Consolidated Net Income of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters of the Borrower ending with the last
fiscal quarter for which financial statements have been furnished under Section
6.1(ii) was less than $0 (it being understood that such Consolidated Net Income
is to be determined for the entire period of four consecutive fiscal quarters
taken as one accounting period), the applicable percentage rates per annum set
forth in the table below based upon the Excess Cash/Annualized Net Loss Ratio as
of the end of such last fiscal quarter:
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Excess Cash/
Annualized Net Loss
Ratio
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Eurodollar
Loans
(% per annum)
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Floating Rate
Loans
(% per annum)
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Commitment
Fee
(% per annum)
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|||||||||
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Less
than or
equal
to 1.50
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1.75 | % | 0 | % | .10 | % | ||||||
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Greater
than 1.50
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1.50 | % | 0 | % | .075 | % | ||||||
Notwithstanding
anything to the contrary, (i) the Applicable Margin with respect to the
Eurodollar Rate and the Floating Rate shall be adjusted quarterly as necessary
as of the first day of the month following the Bank receiving the financial
statements required pursuant to Section 6.1(ii) allowing the Total Funded
Debt/EBITDA Ratio or Excess Cash/Annualized Net Loss Ratio, as applicable, to be
calculated for the quarterly periods ending on each January 31, April 30, July
31, and October 31, and (ii) upon the First Amendment Date until the next
change, if any, in accordance with this definition, the "Applicable Margin"
shall be based upon the tier above with the lowest pricing levels.
1.3 The
definition of the term "Business Day" set forth in Section 1.1 is amended and
restated as follows:
"Business Day" means (i) with respect
to the Adjusted One Month LIBOR Rate and any borrowing, payment or rate
selection of Eurodollar Rate Loans, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago for the
conduct of substantially all of their commercial lending activities and
interbank wire transfers can be made on the Fedwire system.
1.4 The
definition of the term "Cash Equivalent Investments" set forth in Section 1.1 is
amended and restated as follows:
"Cash Equivalent Investments" means (i)
short-term obligations of, or fully guaranteed by, the United States of America,
(ii) commercial paper rated A-1 or better by S&P or P-1 or better by
Moody's, (iii) demand deposit accounts maintained in the ordinary course of
business, (iv) certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus in
excess of $100,000,000.00, and (v) money market funds rated
AAAm or better by S&P or Aaa or better by Moody's; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency (other than the
passage of time or notice) regarding the payment of principal or
interest.
1.5 The
following definition of the term "CB Floating Rate" is added to Section 1.1 in
its alphabetical place:
"CB Floating Rate" means the Prime
Rate; provided that the CB Floating Rate shall, on any day, not be less than the
Adjusted One Month LIBOR Rate. The CB Floating Rate is a variable
rate and any change in the CB Floating Rate due to any change in the Prime Rate
or the Adjusted One Month LIBOR Rate is effective from and including the
effective date of such change in the Prime Rate or the Adjusted One Month LIBOR
Rate, respectively
1.6 The
definition of the term "Commitment" set forth in Section 1.1 is amended and
restated as follows:
"Commitment" means, the obligation of
the Bank pursuant to Section 2.1(a) to make Loans to, and issue US Facility LCs
upon the application of, the Borrower in an aggregate amount not exceeding
$15,000,000.00, reduced by the amount as permitted pursuant to Section
2.5(c).
1.7 The
following definition of the term "Excess Cash/Annualized Loss Ratio" is added
to Section 1.1 in its alphabetical place:
"Excess Cash/Annualized Net Loss Ratio"
means, as of the end of any fiscal quarter of the Borrower, the ratio of (a) the
positive remainder, if any, of (i) the aggregate cash and Cash Equivalent
Investments of the Borrower and its Subsidiaries on a consolidated basis as of
such date minus (ii) the Consolidated Total Indebtedness as of such date to (b)
two (2) times the net loss (stated as an absolute value) of the Borrower and its
Subsidiaries calculated on a consolidated basis for the period of two
consecutive fiscal quarters of the Borrower ending as of such fiscal quarter
end. Notwithstanding anything to the contrary, in the event there is
no net loss of the Borrower and its Subsidiaries on a consolidated basis for
such period of two consecutive fiscal quarters, the amount of the foregoing
clause (b) shall be deemed to be $1.00.
1.8 The
following definitions of the terms "First Amendment" and "First Amendment Date",
respectively, are added to Section 1.1 in their respective alphabetical
place:
"First Amendment" means the First
Amendment to this Agreement dated as of October 30, 2009.
"First Amendment Date" means the date
of the First Amendment.
1.9 The
definition of the term "Floating Rate" set forth in Section 1.1 is amended and
restated as follows:
"Floating Rate" means the per annum
rate that is equal to the remainder of (a) the CB Floating Rate in effect from
time to time plus (b) the Applicable Margin in effect from time to
time. If the Bank determines on any day that quotations of interest
rates for the relevant deposits referred to in the definition of Adjusted One
Month LIBOR Rate are not being provided for purposes of determining the interest
rate on any Floating Rate Loan on any day, then each Floating Rate Loan shall
bear interest at the Prime Rate in effect from time to time plus the Applicable
Margin in effect from time to time until the Bank determines that quotations of
interest rates for the relevant deposits referred to in the definition of
Adjusted One Month LIBOR Rate are being provided.
1.10 The
definition of the term "Eurodollar Reference Rate" set forth in Section 1.1 is
amended and restated as follows:
"Eurodollar Reference Rate" means, with
respect to any Eurodollar Loan for the relevant Interest Period, the interest
rate determined by the Bank by reference to Reuters Screen LIBOR01, formerly
known as Page 3750 of the Moneyline Telerate Service (together with any
successor or substitute, the "Service") or any successor or substitute page of
the Service providing rate quotations comparable to those currently provided on
such page of the Service, as determined by the Bank from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market (the "Page"), to be the rate at approximately
11:00 a.m. London time, two Business Days prior to the commencement of such
Interest Period for dollar deposits with a maturity equal to such Interest
Period. If no Eurodollar Reference Rate is available to the Bank, the
applicable Eurodollar Reference Rate for the relevant Interest Period shall
instead be the rate determined by the Bank to be the rate at which the Bank
offers to place U.S. dollar deposits having a maturity equal to such Interest
Period with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period.
1.11 The
following definition of the term "Page" is added to Section 1.1 in its
alphabetical place:
"Page" shall have the meaning ascribed
thereto in the definition of the term "Eurodollar Reference Rate"
1.12 The
definition of the term "Reserve Requirement" set forth in Section 1.1 is
amended and restated as follows:
"Reserve Requirement" means, for
purposes of the definition of "Adjusted One Month LIBOR Rate" or with respect to
an Interest Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed under
Regulation D or any comparable regulation from time to time on
Eurocurrency funding. Eurodollar Loans shall be deemed to constitute
Eurocurrency funding and to be subject to such reserve requirements, and such
reserve requirements shall be deemed applicable for purposes of the definition
of "Adjusted One Month LIBOR Rate", without the benefit of or credit for
pro-ration, exemption or offset, that may be available under such Regulation D
or any comparable regulation. The Reserve Requirement shall be
adjusted automatically on and as of the effective date of any change of such
reserve requirement.
1.13 The
definitions of the terms "Alternate Base Rate" and "Federal Funds Effective
Rate" set forth in Section 1.1 are deleted.
1.14 The
second sentence of Section 2.10 is amended and restated as follows:
Changes
in the rate of interest on that portion of any Loan maintained as a Floating
Rate Loan will take effect simultaneously with each change in the CB Floating
Rate.
1.15 Subpart
(a) of Section 2.18.1 is amended and restated as follows:
(a) The Bank agrees, on the terms set
forth in this Agreement, to issue standby and commercial letters of credit (i)
for the Borrower's general corporate purposes (each, a "US Facility LC") and
(ii) for the purpose of providing credit enhancement for the benefit of one or
more Replacement Taiwan Lenders to induce such Replacement Taiwan Lenders to
provide one or more Replacement Taiwan Facilities in an aggregate principal
amount not to exceed the amount of the Taiwan Facility LC Commitment (each, a
"Taiwan Facility LC", and each US Facility LC and Taiwan Facility LC, a
"Facility LC"), and to renew, extend, increase, decrease or otherwise modify
each Facility LC ("Modify" and each such action a "Modification"), from time to
time from and including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that immediately
after each such Facility LC is issued or Modified, (A) the aggregate amount of
the outstanding LC Obligations with respect to US Facility LCs shall not exceed
$3,000,000.00, (B) the Outstanding Credit Exposure for Loans and US Facility LCs
shall not exceed the Commitment, and (C) the aggregate amount of the outstanding
LC Obligations with respect to Taiwan Facility LCs shall not exceed the Taiwan
Facility LC Commitment. No Facility LC shall have an expiry date
later than the earlier of (x) the fifth Business Day prior to the Facility
Termination Date and (y) one year after its issuance.
1.16 Section
6.10 is amended and restated as follows:
6.10 Dividends. The
Borrower will not, nor will it permit any Subsidiary to, declare or pay any
dividends or make any distributions on its Capital Stock (other than dividends
payable in its own Capital Stock) or redeem, repurchase or otherwise acquire or
retire any of its Capital Stock at any time outstanding; provided that if (i)
the Consolidated Net Income of the Borrower and its Subsidiaries for the period
of four consecutive fiscal quarters of the Borrower ending with the then last
fiscal quarter for which financial statements have been furnished under Section
6.1(ii) was equal to or greater than $0 (it being understood that such
Consolidated Net Income is to be determined for the entire period of four
consecutive fiscal quarters taken as one accounting period), (ii) no Default or
Unmatured Default has occurred and is continuing or would be caused thereby and
(iii) as of the end of the fiscal quarter of the Borrower immediately preceding
the date of declaration, payment, distribution, redemption, repurchase,
acquisition or retirement, as the case may be, the Total Funded Debt/EBITDA
Ratio was less than 3.0, the Borrower may declare and pay such dividends, make
such distributions and make such redemptions, repurchases or other acquisitions
or retirements which in the aggregate do not exceed $5,000,000.00 in any fiscal
year.
1.17 Section
6.11 is amended and restated as follows:
6.11. Indebtedness. The
Borrower will not, nor will it permit any Subsidiary to, create, incur or suffer
to exist any Indebtedness, except:
(i) The
Loans, the other Outstanding Facilities, and the Reimbursement
Obligations.
(ii) Indebtedness
arising under Rate Management Transactions.
(iii) The
Hurco GmbH Facility and a guaranty of payment of the Hurco GmbH Facility from
the Borrower or any Subsidiary.
(iv) Indebtedness
of any Subsidiary owing to the Borrower or to any other Subsidiary and
Indebtedness of the Borrower owing to any Subsidiary.
(v) The
UK Facility, the Taiwan Facility (or one or more Replacement Taiwan Facilities
in an aggregate principal amount up to the principal amount of the Taiwan
Facility when it was available), the Hurco UK Guaranty and the Hurco Taiwan
Guaranty.
(vi) Product
warranty obligations incurred in the ordinary course of business.
(vii) [Reserved]
(viii) [Reserved]
(ix) Subordinated
Indebtedness.
(x) So
long as the Consolidated Net Income of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters of the Borrower ending with the then
last fiscal quarter for which financial statements have been furnished under
Section 6.1(ii) was equal to or greater than $0 (it being understood that such
Consolidated Net Income is to be determined for the entire period of four
consecutive fiscal quarters taken as one accounting period), Indebtedness (other
than Indebtedness permitted under subparts (i) through (ix) of this Section
6.11) the aggregate outstanding principal amount of which, together with the
aggregate Contingent Obligations of the Borrower and its Subsidiaries as
guarantors of Indebtedness of customers and other Indebtedness permitted under
subpart (xi) of this Section 6.11, does not at any time exceed
$10,000,000.00.
(xi) (A)
Contingent Obligations of the Borrower and its Subsidiaries as guarantors of
Indebtedness of their respective customers and (B) other Indebtedness existing
as of the First Amendment Date or subsequently incurred when permitted under
subpart (x) of this Section 6.11, in an aggregate amount for the foregoing
clauses (A) and (B) not exceeding $10,000,000.00 at any time.
1.18 Subpart
(iv) of Section 6.14 is amended and restated as follows:
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(iv)
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The
Borrower or any Subsidiary may make any Acquisition so long as (i) the
Borrower or such Subsidiary, as the case may be, shall be the survivor of
such Acquisition, (ii) the Acquisition is of or with a Person engaged in a
line of business similar to the lines of business presently engaged in by
the Borrower, which include the manufacturing of machine tools,
development of software for machine tools and distribution of machine
tools, or a line of business that reasonably would be considered an
ordinary extension of any such line of business presently engaged in by
the Borrower, (iii) the Acquisition is consensual and not hostile or
contested, (iv) both immediately before and after giving effect to such
Acquisition, no Default or Unmatured Default shall have occurred and be
continuing or would result therefrom and the representations and
warranties contained in this Agreement and in the other Loan Documents
shall be true and correct on and as of the date thereof (both before and
after such Acquisition is consummated), (v) as soon as available, and in
any event not later than a date that provides the Bank a reasonable amount
of time prior to the proposed date of consummation of such Acquisition to
complete its review, the Borrower shall have furnished to the Bank such
agreements, documents and information relating to the Acquisition,
including without limitation pro forma covenant compliance calculations
taking into account such Acquisition, and evidence of such authorizations
and consents with respect to the Acquisition and the requirements of the
Loan Documents and the Bank in connection therewith, as the Bank may
reasonably request, all in form, substance and detail satisfactory to the
Bank, (vi) neither the Borrower nor any of its Subsidiaries shall, as a
result of or in connection with such Acquisition, assume or incur any
direct or contingent liabilities (whether relating to environmental, tax,
litigation, or other matters) that could reasonably be expected to have a
Material Adverse Effect, (vii) immediately before and after the
consummation of such Acquisition, the sum of the unused amount of the
Commitment plus the Borrower's cash on hand as demonstrated to the Bank to
its reasonable satisfaction shall be not less than $5,000,000.00, (viii)
if the Consolidated Net Income of the Borrower and its Subsidiaries for
the period of four consecutive fiscal quarters of the Borrower ending with
the then last fiscal quarter for which financial statements have been
furnished under Section 6.1(ii) was less than $0 (it being understood that
such Consolidated Net Income is to be determined for the entire period of
four consecutive fiscal quarters taken as one accounting period), (A) the
aggregate consideration, including without limitation cash, indebtedness
and contingent obligations incurred, and liabilities assumed, which, in
accordance with Agreement Accounting Principles, in each case would be
reflected on a consolidated balance sheet of the Borrower and its
Subsidiaries (collectively, "Consideration"), with respect to the
Acquisition shall not exceed $750,000.00 and (B) the aggregate
Consideration with respect to such Acquisition and all other Acquisitions
permitted under this Section 6.14(iv) since the First Amendment Date shall
not exceed $2,500,000.00, and (ix) concurrently with the consummation of
such Acquisition, the Borrower and its Subsidiaries, including without
limitation each such Subsidiary acquired or created in connection with
such Acquisition, shall comply with all of the requirements of this
Agreement and the other Loan Documents, including without limitation
causing to be executed and/or delivered at such time all agreements and
other documents of the types required under Sections 4.1, 6.22 and 6.23 of
this Agreement.
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1.19 Section
6.20 is amended and restated as follows:
6.20. Financial
Covenants.
6.20.1. When
the Consolidated Net Income of the Borrower and its Subsidiaries for the period
of four consecutive fiscal quarters of the Borrower ending with the then last
fiscal quarter for which financial statements have been furnished under Section
6.1(ii) was equal to or greater than $0 (it being understood that such
Consolidated Net Income is to be determined for the entire period of four
consecutive fiscal quarters taken as one accounting period):
6.20.1.1. Maximum Consolidated Total
Indebtedness to Consolidated Total Capitalization. The
Borrower will not permit the ratio, determined as of the end of each of its
fiscal quarters (including such then last fiscal quarter for which financial
statements have been furnished under Section 6.1(ii)), of (i) Consolidated Total
Indebtedness to (ii) Consolidated Total Capitalization, to be greater than 0.50
to 1.0.
6.20.2. When the
Consolidated Net Income of the Borrower and its Subsidiaries for the period of
four consecutive fiscal quarters of the Borrower ending with the then last
fiscal quarter for which financial statements have been furnished under Section
6.1(ii) was less than $0 (it being understood that such Consolidated Net Income
is to be determined for the entire period of four consecutive fiscal quarters
taken as one accounting period):
6.20.2.1. Excess Cash/Annualized Net Loss
Ratio. The Borrower will not permit the Excess Cash/Annualized
Loss Ratio, determined as of the end of each of its fiscal quarters (including
such then last fiscal quarter for which financial statements have been furnished
under Section 6.1(ii)), to be less than 1.00 to 1.00.
1.20 For
purposes of Section 6.10, 6.11, 6.14 and 6.20 of the Credit Agreement as amended
by this Amendment, it shall be assumed that, as of the date of this Amendment,
the Borrower shall have furnished the financial statements required under
Section 6.1(ii) for the fiscal quarter ending on or about October 31, 2009 and
that the Consolidated Net Income of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters of the Borrower ending October 31,
2009 is less than $0. Nothing herein shall be deemed to relieve the
Borrower of its obligation under Section 6.1(ii) with respect to the fiscal
quarter ending on or about October 31, 2009.
1.21 Exhibit
B attached to the Credit Agreement is replaced with Exhibit B attached to this
Amendment. (There is no Exhibit A to this
Amendment.)
ARTICLE
2. CONDITIONS
PRECEDENT
As conditions precedent to the
effectiveness of the amendments to the Credit Agreement set forth in Article 1
of this Amendment, the Bank shall receive the following documents and the
following matters shall be completed, all in form and substance satisfactory to
the Bank:
2.1 This
Amendment duly executed on behalf of the Borrower and the Bank, together with
the Reaffirmation and Acknowledgment at the end of this Amendment duly executed
by each Guarantor.
2.2 Copies,
certified by the Secretary or Assistant Secretary of the Borrower and the
Guarantors, of each of their respective Board of Directors' resolutions and of
resolutions or actions of any other body authorizing this Amendment and the
transactions contemplated hereby.
2.3 An
incumbency certificate, executed by the Secretary or Assistant Secretary of the
Borrower and the Guarantors, which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers of the Borrower and
each Guarantor authorized to sign this Amendment and the other Loan Documents to
which the Borrower and each such Guarantor is a party, upon which certificate
the Bank shall be entitled to rely until informed of any change in writing by
the Borrower or such Guarantor, as the case may be.
2.4 Such
other documents and completion of such other matters as the Bank may reasonably
request.
ARTICLE
3. REPRESENTATIONS AND
WARRANTIES
In order to induce the Bank to enter
into this Amendment, the Borrower represents and warrants that:
3.1 The
execution, delivery and performance by the Borrower of this Amendment 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 any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
governmental authority, or of the terms of the Borrower's charter or by-laws, or
of any contract or undertaking to which the Borrower is a party or by which the
Borrower or its property is or may be bound or affected.
3.2 This
Amendment is a legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject also to the availability
of equitable remedies if equitable remedies are sought.
3.3 No
consent, approval or authorization of or declaration, registration or filing
with any governmental or nongovernmental person or entity, including without
limitation any creditor, stockholder or lessor of the Borrower, is required on
the part of the Borrower in connection with the execution, delivery and
performance of this Amendment or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this
Amendment.
3.4 After
giving effect to the amendments contained in Article 1 of this Amendment, the
representations and warranties contained in Article V of the Credit Agreement
and in the other Loan Documents are true on and as of the date hereof with the
same force and effect
as if made on and as of the date hereof. No Default or Unmatured
Default has occurred and is continuing.
ARTICLE
4. MISCELLANEOUS
4.1 If
the Borrower shall fail to perform or observe any term, covenant or agreement in
this Amendment, or any representation or warranty made by the Borrower in this
Amendment shall prove to have been incorrect in any material respect when made,
such occurrence shall be deemed to constitute an event of default under the
Credit Agreement.
4.2 All
references to the Credit Agreement in the Note, any other Loan Documents or any
other document, instrument or certificate referred to in the Credit Agreement or
delivered in connection therewith or pursuant thereto, hereafter shall be deemed
references to the Credit Agreement, as amended hereby.
4.3 Except
as amended hereby, the Credit Agreement and the other Loan Documents shall in
all respects continue in full force and effect.
4.4 Capitalized
terms used but not defined herein shall have the respective meanings ascribed
thereto in the Credit Agreement.
4.5 This
Amendment shall be governed by and construed in accordance with the laws of the
State of Indiana.
4.6 The
Borrower agrees to pay the reasonable fees and expenses of Dickinson Wright
PLLC, counsel for the Bank, in connection with the negotiation and preparation
of this Amendment and the documents referred to herein and the consummation of
the transactions contemplated hereby.
4.7 This
Amendment may be executed upon any number of counterparts with the same effect
as if the signatures thereto were upon the same instrument.
4.8 Each
party hereto, after consulting or having had the opportunity to consult with
counsel, knowingly, voluntarily, and intentionally waives any right any of them
may have to a trial by jury in any litigation based upon or arising out of this
Amendment, or any agreement referenced herein or other related instrument or
agreement, or any of the transactions contemplated by this Amendment, or any
course of conduct, dealing, statements (whether oral or written) or actions of
any of them. None of the parties hereto 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 any party hereto except by a written instrument
executed by both of them.
4.9 The
Borrower agrees to execute any and all documents reasonably deemed necessary or
appropriate by the Bank to carry out the intent of, and/or to implement, this
Amendment.
4.10 This
Amendment constitutes the entire understanding of the parties with respect to
the subject matter hereof. This Amendment is binding on the parties
hereto and their respective successors and assigns, and shall inure to the
benefit of the parties hereto and
their respective successors and assigns. If any of the provisions of
this Amendment are in conflict with any applicable statute
or rule or law or otherwise
unenforceable, such offending provisions shall be null and void only to the
extent of such conflict or unenforceability, but shall be deemed separate from
and shall not invalidate any other provision of this Amendment.
4.11 No
course of dealing on the part of the Bank, nor any delay or failure on the part
of the Bank in exercising any right, power or privilege hereunder shall operate
as a waiver of such right, power or privilege or otherwise prejudice the Bank's
rights and remedies hereunder or under any Loan Document or any other agreement
or instrument of the Borrower with or in favor of the Bank; 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 Bank under this Amendment or under any Loan
Document or any other agreement or instrument of the Borrower with or in favor
of the Bank 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 Amendment or under any
Loan Document or any other agreement or instrument of the Borrower with or in
favor of the Bank or by applicable law to the Bank may be exercised from time to
time and as often as may be deemed expedient by the Bank.
[The
remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be duly executed and delivered as of the day and
year first-above written.
|
HURCO
COMPANIES, INC.
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|||
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By:
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/s/ |
John G. Oblazney
|
|
|
|
Its:
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Vice President – Chief Financial
Officer
|
|
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JPMORGAN
CHASE BANK, N.A.
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|||
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By:
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/s/ |
Ryan McKeown
|
|
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Its:
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Vice
President
|
||
GUARANTOR REAFFIRMATION AND
ACKNOWLEDGMENT
Each of the undersigned Guarantors
hereby acknowledges and agrees that it has reviewed and fully consents to the
foregoing First Amendment to Credit Agreement (the "Amendment"), that the
Subsidiary Guaranty made as of December 7, 2007 by the undersigned in favor of
the Bank (the "Guaranty") continues in full force and effect, that the
guaranteed obligations under each Guaranty shall include, among other things and
without limitation, all indebtedness, obligations and liabilities of the
Borrower under the Credit Agreement, as amended by the Amendment and as further
amended or modified from time to time, and that each of the undersigned has no
defenses, counterclaims or offsets with respect thereto. All
references to the Credit Agreement in the Guaranty hereafter shall be deemed
references to the Credit Agreement, as amended by the
Amendment. Except as otherwise expressly set forth herein,
capitalized terms used but not defined herein shall have the respective meanings
ascribed thereto in the Amendment or the Credit Agreement, as the case may
be.
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HURCO
INTERNATIONAL, INC.
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|||
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By:
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/s/ |
John G.
Oblazney
|
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Its:
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Director
|
|
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HURCO
INTERNATIONAL HOLDINGS, INC.
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|||
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By:
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/s/ |
John
G. Oblazney
|
|
|
Its:
|
Director
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