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SAFETY COMPONENTS INTERNATIONAL, INC.
PHOENIX AIRBAG GmbH & CO. KG
And
AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL LIMITED
as Borrowers
And
THE LENDERS NAMED HEREIN
as Lenders
And
KEYBANK NATIONAL ASSOCIATION
as Administrative Agent
------------------------
FORM OF AMENDMENT NO. 2
dated as of
July 15, 1997
to
CREDIT AGREEMENT
dated as of
May 21, 1997
------------------------
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FORM OF AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of July 15, 1997, is
made among SAFETY COMPONENTS INTERNATIONAL, INC., a Delaware corporation
(herein, together with its successors and assigns, the "COMPANY" or a
"BORROWER"); PHOENIX AIRBAG GMBH & CO. KG., a company organized under the laws
of the Federal Republic of Germany (herein, together with its successors and
assigns, the "GERMAN BORROWER" or a "BORROWER"), AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL LIMITED, a company organized under the laws of the United Kingdom
(herein, together with its successors and assigns, the "BRITISH BORROWER" or a
"BORROWER"); and KEYBANK NATIONAL ASSOCIATION, a national banking association,
as administrative agent (the "ADMINISTRATIVE AGENT") for the Lenders under the
Credit Agreement (hereafter defined):
PRELIMINARY STATEMENTS:
(1) The Borrowers, the Lenders named therein, and the Administrative
Agent entered into the Credit Agreement, dated as of May 21, 1997, as amended by
Amendment No. 1 to Credit Agreement, dated as of June 2, 1997 (as so amended,
the "CREDIT AGREEMENT"; with the terms defined therein, or the definitions of
which are incorporated therein, being used herein as so defined).
(2) The Borrowers, such Administrative Agent and the Lenders party
hereto desire to amend certain of the terms and provisions of the Credit
Agreement, all as more fully set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT.
1.1 MODIFICATION OF CERTAIN ANNEXES. Effective on the Effective Date
(as hereinafter defined), Annex II, III, IV, V and VII to the Credit Agreement
are amended to read in their entirety as set forth on Annex II, III, IV, V and
VII hereto, respectively.
1.2 TERMINATION OF TERM LOAN COMMITMENT; INCREASE OF REVOLVING
COMMITMENT; RE-DESIGNATION OF OUTSTANDING TERM LOANS AS REVOLVING LOANS.
Effective on the Effective Date, (a) the Total Term Loan Commitment is
terminated, (b) the Total Revolving Commitment is increased from $12,000,000 to
$27,000,000 (and the Revolving Commitment of KeyBank on Annex I to the Credit
Agreement is amended to change it from $12,000,000 to $27,000,000), and (c)
after giving effect to all payments thereof on or prior to the Effective Date,
any remaining outstanding Term Loans are re-designated as outstanding Revolving
Loans of the Company.
1.3 REVOLVING FACILITY. Effective on the Effective Date, section 2.1(b)
of the Credit Agreement is amended to read in its entirety as follows:
(b) REVOLVING FACILITY. Loans under the Revolving Facility
(each a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS"): (i)
may be incurred by any Borrower, PROVIDED that (A) Revolving Loans made
to the Company to finance (or refinance Indebtedness originally
incurred to finance) Permitted Acquisitions of businesses directly
related to the automotive airbag industry may not be incurred in an
aggregate principal amount in excess of $15,000,000 and may only be
incurred after July 24, 1997, if at the time of incurrence the Company
would be in compliance with the covenants contained in sections 9.7 and
9.8 based on pro forma combined financial statements for the most
recently completed four fiscal quarters, which acquisitions permitted
by this clause (i) shall not require the consent of the Required
Lenders or Lenders specified in the definition of Permitted
Acquisition, and (B) the principal amount of the Revolving Loans of the
German Borrower and the British Borrower may not exceed, in the
aggregate for both such Borrowers, $2,000,000 at any time; (ii) may be
made at any time and from time to time on and after the Initial
Borrowing Date and prior to the Maturity Date; (iii) except as
otherwise provided, may, at the option of the applicable Borrower, be
incurred and maintained as, or converted into, Revolving Loans which
are Prime Rate Loans, or Eurocurrency Loans denominated in Dollars or
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in an Alternative Currency, PROVIDED that all Revolving Loans made as
part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of Revolving Loans of the same currency and
Type; (iv) may be repaid or prepaid and reborrowed in accordance with
the provisions hereof; and (v) shall not exceed for any Lender at any
time outstanding that aggregate principal amount which, when added to
the product at such time of (A) such Lender's Revolving Facility
Percentage, TIMES (B) the aggregate Letter of Credit Outstandings,
equals the Revolving Commitment of such Lender at such time. Revolving
Loans to the Company which are Eurocurrency Loans may only be
denominated in Dollars. For the avoidance of doubt, as of July 24,
1997, $0 aggregate principal amount of Revolving Loans incurred to
finance or refinance Permitted Acquisitions were outstanding. Revolving
Loans made to the Company to finance (or refinance Indebtedness
originally incurred to finance) Permitted Acquisitions may not be
reborrowed unless repaid or prepaid in full within six months of the
date such Revolving Loans are first incurred.
1.4 COMPLIANCE WITH ERISA. Effective on the Effective Date, section
7.14 of the Credit Agreement is amended by adding in the last sentence thereof
following "writing," and "except for the Health Care Plan for Employees and
Dependents under the Group Protection Plan for Employees and the Term Life
Insurance Plan under the Group Protection Plan for Employees."
1.5 INDEBTEDNESS. Effective on the Effective Date, section 9.4 of the
Credit Agreement is amended by changing the amount "$5,000,000" which appears in
clause (d) thereof to "$90,000,000", and the Lenders consent to the issuance by
the Company of $90,000,000 aggregate original principal amount of its Senior
Subordinated Notes due 2007 (and any Exchange Notes issued pursuant to the
Registration Rights Agreement entered into in connection therewith).
1.6 TOTAL SENIOR FUNDED DEBT/EBITDA RATIO. Effective on the Effective
Date, section 9.7 of the Credit Agreement is amended to read in its entirety as
follows:
9.7. TOTAL SENIOR FUNDED DEBT/EBITDA RATIO. The Company will not at any
time permit the ratio of (i) the amount of Total Senior Funded Debt at such time
to (ii) EBITDA for any Testing Period to be less than the ratio shown below for
any applicable period:
Period Ratio
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June 30, 1997 through 2.50 to 1.00
March 31, 1998
April 1, 1998 through 2.00 to 1.00
September 30, 1998
October 1, 1998 through 1.50 to 1.00
May 31, 2002
1.7 FIXED CHARGE COVERAGE RATIO. Effective on the Effective Date,
section 9.8 of the Credit Agreement is amended to read in its entirety as
follows:
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9.8. FIXED CHARGE COVERAGE RATIO. The Company will not permit its Fixed
Charge Coverage Ratio for any Testing Period to be less than the ratio shown
below for any applicable period:
Period Ratio
------ -----
June 30, 1997 through 1.00 to 1.00
December 31, 1998
January 1, 1999 through 1.10 to 1.00
March 31, 1999
April 1, 1999 through 1.15 to 1.00
March 31, 2000
April 1, 2000 through 1.25 to 1.00
May 31, 2002
1.8 CAPITAL EXPENDITURES. Effective on the Effective Date, section 9.9
of the Credit Agreement is amended by changing the amount "$8,000,000" which
appears therein to "$10,000,000".
1.9 MINIMUM CONSOLIDATED NET WORTH. Effective on the Effective Date,
section 9.11 of the Credit Agreement is amended by changing the amount
"$37,000,000" which appears therein to "$35,000,000".
1.10 TOTAL SENIOR FUNDED DEBT. Effective on the Effective Date, section
1.1 of the Credit Agreement is amended by adding the following definition in
proper alphabetical order:
"TOTAL SENIOR FUNDED DEBT" shall mean Total Indebtedness less
the outstanding balance of the Indebtedness permitted by section 9.4(d).
1.11 AMORTIZATION OF REVOLVING LOANS FOR PERMITTED ACQUISITIONS, ETC.
Effective on the Effective Date, (i) section 5.2(i) of the Credit Agreement is
redesignated as section 5.2(j), and (ii) new section 5.2(i) is added to the
Credit Agreement, reading as follows:
(i) Any Revolving Loans incurred by the Company to finance (or
refinance Indebtedness incurred to finance) any Permitted Acquisition
which are not repaid or prepaid in full within six months of the date
first incurred ("AMORTIZING REVOLVING LOANS"), shall be subject to
mandatory prepayment as provided below. On the last Business Day of
each March, June, September and December, commencing with the first
such date which follows the twelve month anniversary of the date any
Amortizing Revolving Loan was first incurred, the Company shall prepay
a principal amount thereof equal to 5% of the outstanding principal
amount thereof which was outstanding on such twelve month anniversary
date, with a final prepayment of principal in the amount of the entire
remaining principal amount thereof being due and payable on the
Maturity Date. Each such prepayment shall be accompanied by interest on
the amount prepaid accrued to the date of prepayment, and any voluntary
prepayment by the Company of any such Amortizing Revolving Loans shall
be applied to the mandatory installment payment amounts in inverse
order of maturity.
SECTION 2. AMENDMENTS TO OTHER CREDIT DOCUMENTS AND
ADDITIONAL CREDIT DOCUMENTS.
2.1 PLEDGE AGREEMENT. On the Effective Date, the Credit Parties named
therein and the Collateral Agent shall enter into Amendment No. 2 to Pledge
Agreement, substantially in the form attached hereto as Exhibit A (AMENDMENT NO.
2 TO PLEDGE AGREEMENT), and the additional stock to be pledged thereunder shall
be pledged to the Collateral Agent as provided therein.
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2.2 SECURITY AGREEMENT. On the Effective Date, the Credit Parties named
therein and the Collateral Agent shall enter into Amendment No. 2 to Security
Agreement, substantially in the form attached hereto as Exhibit B (AMENDMENT NO.
2 TO SECURITY AGREEMENT).
2.3 SUBSIDIARY GUARANTY. On the Effective Date, the Credit Parties
named therein and the Administrative Agent shall enter into Amendment No. 2 to
Subsidiary Guaranty, substantially in the form attached hereto as Exhibit C
(AMENDMENT NO. 2 TO SUBSIDIARY GUARANTY).
2.4 CONSENT TO AMENDMENTS. The Lenders party hereto and the
Administrative Agent hereby consent to the execution and delivery of Amendment
No. 2 to Pledge Agreement, Amendment No. 2 to Security Agreement, and Amendment
No. 2 to Subsidiary Guaranty, and to the amendments effected thereby.
2.5 SOUTH CAROLINA MORTGAGE. On the Effective Date, Safety Components
Fabric Technologies, Inc. shall enter into an Open End Mortgage, Assignment of
Leases and Security Agreement substantially in the form attached hereto as
Exhibit D (the "MORTGAGE").
2.6 PATENT AND TRADEMARK ASSIGNMENTS. On the Effective Date, Safety
Components Fabric Technologies, Inc. shall enter into a Collateral Assignment of
Patents and Security Agreement substantially in the form attached hereto as
Exhibit E (the "PATENT ASSIGNMENT")and a Collateral Assignment of Trademarks and
Security Agreement substantially in the form attached hereto as Exhibit F (the
"TRADEMARK ASSIGNMENT").
2.7 FILINGS, RECORDINGS, ETC. Promptly following the Effective Date,
the Company will at its expense cause any and all UCC financing statements,
notices of secured transactions and other filings and recordings considered by
the Collateral Agent to be necessary or desirable in connection with the grant
of the security interests pursuant to Amendment No. 1 to Pledge Agreement,
Amendment No. 1 to Security Agreement, the Mortgage, the Patent Assignment and
the Trademark Assignment to be executed, delivered, made, filed and/or otherwise
effected.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants as follows:
3.1 JPS ACQUISITION AND PRIVATE PLACEMENT. (a) The Company has
delivered to the Administrative Agent prior to the execution of this Amendment a
true, correct and complete copy of the Asset Purchase Agreement made and entered
into as of June 30, 1997 by and between JPS Automotive, L.P. and the Company
(the "ASSET PURCHASE AGREEMENT") relating to the acquisition by the Company of
the air restraint and technical products division of JPS Automotive, L.P. There
are no "side letters" or similar documents which purport to modify or waive any
of the terms or conditions of the Asset Purchase Agreement.
(b) The Company has delivered to the Administrative Agent prior to the
execution of this Amendment true, correct and complete copies of all of the
documents relating the private placement (collectively, the "PRIVATE PLACEMENT
DOCUMENTS") of an aggregate principal amount of $80,000,000 Senior Subordinated
Notes, Due 2007 (the "SENIOR SUBORDINATED NOTES"). There are no "side letters"
or similar documents which purport to modify or waive any of the terms or
conditions of the Private Placement Documents. On or prior to the Effective
Date, the Company has completed the private placement of the Senior Subordinated
Notes and has received the net proceeds thereof.
(c) On or prior to the Effective Date, the transactions contemplated by
the Asset Purchase Agreement have been consummated in accordance with all legal
requirements and the terms and provisions of the Asset Purchase Agreement and
any other documents contemplated thereby without any material waiver or other
modifications which have not been approved by the Administrative Agent.
3.2 AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has been
duly authorized by all necessary corporate action on the part of each Borrower,
has been duly executed and delivered by a duly authorized officer or officers
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of each Borrower, and constitutes the valid and binding agreement of each
Borrower, enforceable against such Borrower in accordance with its terms.
3.3 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The
representations and warranties of the Company contained in the Credit Agreement,
as amended hereby, are true and correct on and as of the date hereof as though
made on and as of the date hereof, except to the extent that such
representations and warranties expressly relate to a specified date, in which
case such representations and warranties are hereby reaffirmed as true and
correct when made.
3.4 NO EVENT OF DEFAULT, ETC. No condition or event has occurred or
exists which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
3.5 COMPLIANCE. Each Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby, and the
other Credit Documents to which it is a party.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. BINDING EFFECT.
This Amendment shall become effective on the date (the "EFFECTIVE
DATE") the following conditions shall have been satisfied:
(a) this Amendment shall have been executed by each Borrower
and the Administrative Agent, and counterparts hereof as so executed
shall have been delivered to the Administrative Agent;
(b) the Acknowledgment and Consent appended hereto shall have
been executed by the Credit Parties named therein, and counterparts
thereof as so executed shall have been delivered to the Administrative
Agent;
(c) the Administrative Agent shall have been notified by
Lenders constituting the Required Lenders that such Lenders have
executed this Amendment (which notification may be by facsimile or
other written confirmation of such execution);
(d) Amendment No. 2 to Pledge Agreement, Amendment No. 2 to
Security Agreement, Amendment No. 2 to Subsidiary Guaranty, the
Mortgage, the Patent Assignment and the Trademark Assignment shall each
have been duly executed and delivered and shall each be in full force
and effect;
(e) the transactions contemplated by the Asset Purchase
Agreement have been consummated in accordance with all legal
requirements and the terms and provisions of the Asset Purchase
Agreement and any other documents contemplated thereby without any
waiver or other modifications which have not been approved by the
Administrative Agent;
(f) the Company has completed the private placement of the
Senior Subordinated Notes and in accordance with all legal requirements
and the terms and provisions of the Private Placement Documents without
any waiver or other modifications which have not been approved by the
Administrative Agent has received the net proceeds thereof;
(g) the Company has repaid the outstanding principal of and
interest on the Term Loan in full in immediately available funds;
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and thereafter this Amendment shall be binding upon and inure to the benefit of
the Borrowers, the Administrative Agent, and each Lender and their respective
permitted successors and assigns. After this Amendment becomes effective, the
Administrative Agent will promptly furnish a copy of this Amendment to each
Lender and the Company on behalf of each Borrower and confirm the specific
Effective Date hereof.
SECTION 6. MISCELLANEOUS.
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment shall survive the execution and delivery of
this Amendment, and no investigation by the Administrative Agent or any Lender
or any subsequent Loan or other Credit Event shall affect the representations
and warranties or the right of any Agent or any Lender to rely upon them.
6.2 REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and all
other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
6.3 PERMITTED ACQUISITION. Keybank National Association, as sole
Lender, hereby approves the acquisition of the air restraint and technical
products division of JPS Automotive, L.P. as contemplated by the Asset Purchase
Agreement as a Permitted Acquisition under the Credit Agreement.
6.4 EXPENSES. As provided in the Credit Agreement, but without limiting
any terms or provisions thereof, the Company agrees to pay on demand all
reasonable costs and expenses incurred by the Administrative Agent in connection
with the preparation, negotiation, and execution of this Amendment, including
without limitation the reasonable costs and fees of the Administrative Agent's
special legal counsel, regardless of whether this Amendment becomes effective in
accordance with the terms hereof, and all reasonable costs and expenses incurred
by the Administrative Agent or any Lender in connection with the enforcement or
preservation of any rights under the Credit Agreement, as amended hereby.
6.5 SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
6.6 APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
6.7 HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
6.8 ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
6.9 COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
SAFETY COMPONENTS INTERNATIONAL, INC.
BY:
-----------------------------------
EXECUTIVE VICE PRESIDENT
AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL LIMITED
BY:
-----------------------------------
EXECUTIVE VICE PRESIDENT
PHOENIX AIRBAG GMBH & CO. KG.,
BY ITS GENERAL PARTNER, PHOENIX AIRBAG
VERWALTUNGS GMBH
BY:
-----------------------------------
ATTORNEY-IN-FACT
KEYBANK NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
BY:
-----------------------------------
EXECUTIVE VICE PRESIDENT
