Document:

td10k09132013ex10u.htm

Ehibit 10(u)

 

CONSENT AND WAIVER

 

This Consent and Waiver (this “Consent”) is made as of ___________, 2012 and is by and between TWIN DISC, INCORPORATED, a Wisconsin corporation (the “Borrower”), and BMO HARRIS BANK N.A., successor-by-merger to M&I Marshall & Ilsley Bank ("BMO").

 

A.           The Borrower and BMO have entered into an Amended and Restated Loan Agreement dated as of May 13, 2011 (as amended, supplemented or otherwise modified through the date hereof, the “Loan Agreement”).  Any terms which are used herein but are not defined herein shall have the meaning for such terms as set forth in the Loan Agreement.

 

B.           The Borrower has informed BMO that the Borrower and the Borrower's Subsidiary, Twin Disc International, S.A., a Belgian corporation ("TD International"), as co-borrowers, wish to obtain an additional credit facility in the principal amount of $15,000,000 from Wells Fargo Bank, National Association (the "New Wells Fargo Facility").  The New Wells Fargo Facility is not recognized as Permitted Indebtedness under the Loan Agreement.  Borrower also desires to enter into an amendment to the Prudential Agreement.

 

C.           The Borrower has requested that BMO consent to the New Wells Fargo Facility, consent to an amendment to the Prudential Agreement and waive certain provisions of the Loan Agreement on the terms and conditions set forth below with respect to the transactions described in Paragraph B.

 

1. Consent and Waiver.  Section 4.3 of the Loan Agreement contains restrictions on the Borrower or any Subsidiary of Borrower incurring Indebtedness, except for Permitted Indebtedness as such is defined in the Loan Agreement.

 

BMO hereby consents to (i) the Borrower and TD International, as co-borrowers, obtaining the New Wells Fargo Facility from Wells Fargo Bank, National Association and incurring thereunder Indebtedness as contemplated thereby and agrees that the New Wells Fargo Facility shall be deemed to be Permitted Indebtedness under the Loan Agreement; provided, that the New Wells Fargo Facility (a) does not exceed $15,000,000 in aggregate principal amount at any time outstanding other than as a result of currency fluctuations, (b) is and remains unsecured and (c) shall be extended pursuant to the Credit Agreement in the form of Exhibit 1 hereto, as the same may (subject to the second sentence of Section 2 below) be from time to time amended, restated, amended and restated or otherwise modified, (ii) the Borrower and any Subsidiary being able to incur additional unsecured Indebtedness in an aggregate principal amount not to exceed $2,000,000 at any time outstanding, subject to Section 5.14 of the Loan Agreement.  Promptly after execution of same, the Borrower shall deliver to BMO a fully executed copy of such Credit Agreement including all schedules and exhibits, and (iii) the Amendment No. 7 to the Prudential Agreement in the form of Exhibit 2 hereto.

 

This Consent is only a consent to the transactions as described in this Consent and a waiver of the specific covenants specified in this Consent for the transactions as specified in this Consent.  Nothing contained in this Consent shall be construed as a waiver of these or any other covenants for any subsequent period or any other waiver of any covenant contained in the Loan Agreement.

 

2. Representations, Warranties and Acknowledgements.  The Borrower hereby confirms that each of the representations and warranties contained in the Loan Agreement is true and correct in all material respects on and as of the date hereof as if made on the date hereof; and that No Default or Event of Default has occurred and is continuing as of the date hereof.  The Borrower further acknowledges and agrees that once the Credit Agreement for the New Wells Fargo Facility is executed and a copy of it is delivered to BMO as required under this Consent, any amendment or modification of said Credit Agreement shall be subject to Section 5.14 of the Loan Agreement.

 

3. Effective Date.  This Consent shall become effective upon the execution and delivery hereof by the Borrower and BMO.

 

4. Reference to and Effect Upon the Loan Agreement.

 

(a) Except as specifically waived and consented to above, the Loan Agreement shall remain in full force and effect and are hereby ratified and confirmed by Borrower.

 

(b) The execution, delivery and effectiveness of this Consent shall not operate as a waiver of any right, power or remedy of BMO under the Loan Agreement, nor constitute a waiver of any provision of the Loan Agreement, except as specifically set forth herein.

 

5. GOVERNING LAW.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONSENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WISCONSIN, WITHOUT REGARD TO ITS CHOICE OF LAW RULES.

 

6. Headings.  Section headings in this Consent are included herein for convenience of reference only and shall not constitute a part of this Consent for any other purposes.

 

7. Counterparts.  This Consent may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument.

 

QB\18480743.4

  

  

  

IN WITNESS WHEREOF, the parties hereto have executed this Consent as of the day and year first above written.

 

TWIN DISC, INCORPORATED,

Borrower

By:                                                                

Its:                                                                

	  	
BMO HARRIS BANK N.A.

 

 

 

By:                                                              

Its:                                                              

 

 

By:                                                              

Its:                                                              

 

 

 

QB\18480743.4

  

  

  

Exhibit 1

Credit Agreement for the New Wells Fargo Facility

[See attached]

QB\18480743.4

  

  

  

Exhibit 2

Amendment No. 7 to the Prudential Agreement

[See attached]

QB\18480743.4td10k09132013ex10bb.htm

Exhibit 10(bb)

 

 

Execution Copy

 

November 29, 2011

 

Twin Disc, Incorporated

1328 Racine Street

Racine, Wisconsin  5340311208

Attention: Mr. Christopher J. Eperjesy

 

Re:           Amendment No. 6 to Note Agreement

 

Ladies and Gentlemen:

 

This letter amendment (this “Letter”) makes reference to that certain Note Agreement, dated as of April 10, 2006 (as amended by Amendment No. 1 thereto dated March 1, 2007, Amendment No. 2 thereto dated August 22, 2007, Amendment No. 3 thereto dated February 19, 2009, Amendment No. 4 thereto dated May 27, 2009 and Amendment No. 5 thereto dated March 9, 2011, the “Note Agreement”), among The Prudential Insurance Company of America, Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, Security Benefit Life Insurance Company, Inc., American Skandia Life Assurance Corporation, Mutual of Omaha Insurance Company (collectively, the “Holders” and each, a “Holder”) and Twin Disc, Incorporated, a Wisconsin corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Note Agreement, as amended hereby.

The Company has requested that the Holders amend the Note Agreement as set forth below.  Subject to the terms and conditions hereof, the Holders are willing to agree to such requests.

 

Accordingly, and in accordance with the provisions of paragraph 11C of the Note Agreement, the parties hereto agree as follows:

 

SECTION 1.                                Amendment. Effective upon the Effective Date (as defined in Section 2 below), the Holders party hereto and the Company agree that Schedule 10B to the Note Agreement is amended by (i) deleting the reference therein to “$1,500,000” under “Available Funds” for the Twin Disc (Far East) Ltd. credit facility with Standard Chartered Bank and replacing it with “$3,000,000” and (ii) deleting the reference therein to “Standard Chartered Bank” and replacing it with “Standard Chartered Bank and The Hongkong and Shanghai Banking Corporation Limited” under “Name of Lender” for the Twin Disc (Far East) Ltd. indebtedness.

 

SECTION 2.                                Effectiveness.  The amendment in Section 1 of this Letter shall become effective on the date (the “Effective Date”) of satisfaction of the following:

 

(a) Receipt by each Holder party hereto of counterparts of this Letter executed by the Company and the Required Holders; and

 

(b) Receipt by each Holder party hereto of a copy of an amendment or consent under the Credit Agreement, modifying the Credit Agreement consistent with the amendments set forth herein and otherwise in form and substance satisfactory to the Required Holders, duly executed by the Company and the Bank, and such amendment or consent shall be in full force and effect.

 

SECTION 3.                                Representations and Warranties. The Company represents and warrants to the Holders that, after giving effect hereto (a) each representation and warranty set forth in paragraph 8 of the Note Agreement is true and correct as of the date of the execution and delivery of this Letter by the Company with the same effect as if made on such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct as of such earlier date), (b) no Event of Default or Default exists and (c) neither the Company nor any of its Subsidiaries has paid or agreed to pay, and neither the Company nor any of its Subsidiaries will pay or agree to pay, any fees or other consideration to any Person in connection with the amendment or consent referenced in Section 2(b) hereof.

 

SECTION 4.                                Reference to and Effect on Note Agreement.  Upon the effectiveness of the amendment made in this Letter, each reference to the Note Agreement in any other document, instrument or agreement shall mean and be a reference to the Note Agreement as modified by this Letter.  Except as specifically set forth in Section 1 hereof, the Note Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects.  The Company hereby represents and warrants that all necessary or required consents to this Letter have been obtained and are in full force and effect.  Except as specifically stated in Section 1 of this Letter, the execution, delivery and effectiveness of this Letter shall not (a) amend the Note Agreement or any Note, (b) operate as a waiver of any right, power or remedy of the holder of any Note, or (c) constitute a waiver of, or consent to any departure from, any provision of the Note Agreement or any Note at any time.  The execution, delivery and effectiveness of this Letter shall not be construed as a course of dealing or other implication that any Holder has agreed to or is prepared to grant any amendments to the Note Agreement or any Note in the future, whether or not under similar circumstances.

 

SECTION 5.                                Expenses. The Company hereby confirms its obligations under the Note Agreement, whether or not the transactions hereby contemplated are consummated, to pay, promptly after request by any Holder, all reasonable out-of-pocket costs and expenses, including attorneys’ fees and expenses, incurred by the Holders in connection with this Letter or the transactions contemplated hereby, in enforcing any rights under this Letter, or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Letter or the transactions contemplated hereby.  The obligations of the Company under this Section 5 shall survive transfer by any Holder of any Note and payment of any Note.

 

SECTION 6.                                Governing Law.  THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

 

SECTION 7. Counterparts; Section Titles.  This Letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together  shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Letter by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Letter. The section titles contained in this Letter are and shall be without substance, meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

 

[remainder of page intentionally left blank; signature page follows]

 

  

  

  

Very truly yours,

 

 

 

THE PRUDENTIAL INSURANCE COMPANY

 

   OF AMERICA

 

 

 

 

By: ___________________________________

 

Vice President

 

PRUCO LIFE INSURANCE COMPANY

 

By:  ___________________________________

Vice President

 

PRUCO LIFE INSURANCE COMPANY OF

 

  NEW JERSEY

 

By:  ___________________________________

Vice President

SECURITY BENEFIT LIFE INSURANCE

  COMPANY, INC.

By:           Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:           Prudential Private Placement Investors, Inc.

(as its General Partner)

By:  ______________________________

Vice President

AMERICAN SKANDIA LIFE ASSURANCE

 

   CORPORATION

 

By:           Prudential Investment Management, Inc.,

as investment manager

By:______________________________

Vice President

MUTUAL OF OMAHA INSURANCE

  COMPANY

By:           Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:           Prudential Private Placement Investors, Inc.

(as its General Partner)

By:  ______________________________

Vice President

Signature Page to

Amendment No. 6

  

  

  

THE LETTER IS AGREED TO

 

AND ACCEPTED BY:

 

TWIN DISC, INCORPORATED

By:______________________________

Name: ___________________________

Title: ____________________________

Signature Page to

Amendment No. 6

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