AMENDMENT NO. 6 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 6 TO CREDIT AGREEMENT, dated as of June 23, 1999 (this
"Amendment"), is made among the following:
(i) SAFETY COMPONENTS INTERNATIONAL, INC., a Delaware corporation
(herein, together with its successors and assigns, the "Company" or a
"Borrower");
(ii) AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL GmbH & CO. K.G.
(formerly Phoenix Airbag GmbH & Co. K.G.), 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"),
(iii) 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");
(iv) each of the financial institutions signatory hereto as a
Lender (herein, together with their successors and assigns,
individually a "Lender" and collectively, the "Lenders"); and
(v) KEYBANK NATIONAL ASSOCIATION, a national banking association,
as administrative agent (the "Administrative Agent") for the Lenders
under the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrowers, the Lenders, and the Administrative Agent have
previously entered into the Credit Agreement, dated as of May 21, 1997, as
amended by (i) Amendment No. 1 thereto, dated as of June 2, 1997, (ii) Amendment
No. 2 thereto, dated as of July 15, 1997, (iii) Amendment No. 3 thereto, dated
as of July 30, 1998, (iv) Amendment No. 4 thereto, dated as of October 9, 1998
and (v) Amendment No. 5 thereto, dated as of February 9, 1999 (as so amended and
in effect immediately prior to the Effective Date of this Amendment, 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 have requested the Administrative Agent and the
Lenders to modify certain of the financial covenants contained in the Credit
Agreement and certain of the other 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. Definitions. On and as of the Effective Date of this Amendment
provided for in section 5 hereof, section 1.1 of the Credit Agreement is amended
by adding in proper alphabetical order or by amending in their entirety, as
applicable, the following terms:
"Adjusted Fixed Charge Coverage Ratio" shall mean, for any Testing
Period, the ratio of (i) EBITDA plus cash and Cash Equivalents of the Company
and its Subsidiaries as of the end of such Testing Period to (ii) the sum of (A)
Total Cash Interest Expense, (B) scheduled or mandatory repayments, prepayments
or redemptions of the principal of Indebtedness (including required reductions
in committed credit facilities), (C) without duplication of any amount included
under the preceding clause (B), scheduled payments representing the principal
portion of Capitalized Lease Obligations, (D) Dividends, (E) Consolidated
Capital Expenditures and (F) provision for taxes based on income and franchise
taxes, in each case for such Testing Period.
"Amendment No. 6" shall mean Amendment No. 6 to Credit Agreement, dated
as of June 23, 1999, among the Borrowers, the Lenders named therein, and the
Administrative Agent.
"Amendment No. 6 Effective Date" shall mean the "Effective Date" as
defined in Amendment No. 6.
"Applicable Commitment Fee Rate" shall mean 37.50 basis points per
annum.
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"Applicable Eurocurrency Margin" shall mean in the case of any
Revolving Loan which is a Eurocurrency Loan, (i) from and including the
Amendment Closing Date referenced in Amendment No. 6 through June 30, 2000, 300
basis points per annum and (ii) thereafter, in accordance with the terms of the
Interest Rate/Fee Letter.
"Applicable Prime Rate Margin" shall mean in the case of any Revolving
Loan which is a Prime Rate Loan, (i) from and including the Amendment Closing
Date referenced in Amendment No. 6 through June 30, 2000, 50 basis points per
annum and (ii) thereafter, in accordance with the terms of the Interest Rate/Fee
Letter.
"Approved Business Plan" shall mean the one year business plan of the
Company and its Subsidiaries, including financial projections for fiscal year
2000, delivered to the Lenders on or about May 20, 1999.
"Domestic Subsidiary" shall mean any Subsidiary organized under the
laws of the United States of America, any State thereof, the District of
Columbia, or any United States possession, the chief executive office and
principal place of business of which is located in, and which conducts the
majority of its business within, the United States of America and its
territories and possessions.
"EBIT" shall mean for any period, (A) the sum of the amounts for such
period of, without duplication, (i) Consolidated Net Income (exclusive of the
effect thereon of any foreign currency translation adjustments made thereto),
(ii) provisions for taxes based on income and franchise taxes and (iii) Total
Interest Expense less (B) gains on sales of assets (excluding sales in the
ordinary course of business) and extraordinary gains plus (C) extraordinary
losses and other non-cash charges, all as determined for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"EBITDA" shall mean for any period, (A) the sum of the amounts for such
period of, without duplication, (i) Consolidated Net Income (exclusive of the
effect thereon of any foreign currency translation adjustments made thereto),
(ii) provisions for taxes based on income and franchise taxes, (iii) Total
Interest Expense and (vi) depreciation and amortization less (B) gains on sales
of assets (excluding sales in the ordinary course of business) and extraordinary
gains plus (C) extraordinary losses and other non-cash charges, all as
determined for the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Interest Coverage Ratio" shall mean, for any Testing Period, the ratio
of (i) EBIT to (ii) Total Cash Interest Expense.
"Interest Rate/Fee Letter" shall mean the letter agreement dated as of
the date of Amendment No. 6, among the Borrowers, the Administrative Agent and
the Lenders, as the same may be from time to time further amended, modified
and/or supplemented.
"Notice Office" shall mean the office of the Administrative Agent at
000 Xxxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxxxxxx (telephone: (000) 000-0000; facsimile: (000) 000-0000), or such other
office, located in a city in the United States Eastern Time Zone, as the
Administrative Agent may designate to the Company from time to time.
"Subordinated Notes" shall have the meaning provided in section
10.1(d).
"Testing Period" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Company then last
ended (whether or not such quarters are all within the same fiscal year), except
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular month, months, fiscal quarter or quarters then last ended which
are so indicated in such provision.
"Total Cash Interest Expense" shall mean total cash interest expense
(including that which is capitalized and that attributable to Capital Leases) of
the Company and its Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of the Company and its Subsidiaries, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and net costs under Hedge Agreements, all as
determined in accordance with GAAP.
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1.2. Effect of Foreign Currency Exchange Rates. On and as of the
Effective Date of this Amendment, a new section 1.5 is added to the Credit
Agreement, reading in its entirety as follows:
1.5. Effect of Foreign Currency Exchange Rates on Covenant
Calculations. For purposes of calculating the financial covenants
contained in sections 9.7 through 9.11 of this Agreement, the budgeted
foreign currency exchange rates attached to Amendment No. 6 as Exhibit
A shall be used to determine Consolidated Net Income with respect to
any Foreign Subsidiary.
1.3. Commitments for Loans. On and as of the Effective Date of this
Amendment, no Borrower may incur additional Revolving Loans or request any
Letters of Credit. Revolving Loans outstanding on the Effective Date of this
Amendment may, at the option of the applicable Borrower, be maintained as, or
converted into, Revolving Loans which are Prime Rate Loans or Eurocurrency Loans
denominated in Dollars or an Alternative Currency, provided that all Revolving
Loans part of the same Borrowing shall consist of Revolving Loans of the same
currency and Type, may be repaid or prepaid in accordance with the provisions of
the Credit Agreement, and shall not exceed for any Lender at any time
outstanding the 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.
1.4. Interest on Loans. On and as of the Effective Date of this
Amendment, section 2.7 of the Credit Agreement is amended to read in its
entirety as follows:
2.7. Interest on Loans. (a) The unpaid principal amount of
each Loan which is a Prime Rate Loan shall bear interest from the date
of the Borrowing thereof until maturity (whether by acceleration or
otherwise) at a fluctuating rate per annum which shall at all times be
equal to the Applicable Prime Rate Margin for such Loan plus the Prime
Rate in effect from time to time.
(b) The unpaid principal amount of each Loan which is a
Eurocurrency Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a rate
per annum which shall at all times be the Applicable Eurocurrency
Margin for such Loan plus the relevant Eurocurrency Rate.
(c) Notwithstanding the above provisions, if a Default under
section 10.1(a) or Event of Default is in existence, all outstanding
amounts of principal and, to the extent permitted by law, all overdue
interest, in respect of each Loan shall thereafter bear interest,
payable on demand, at a rate per annum equal to 2% per annum above the
interest rate otherwise applicable thereto. If any amount (other than
the principal of and interest on the Loans) payable by any Borrower
under the Credit Documents is not paid when due, such amount shall
thereafter bear interest, payable on demand, at a rate per annum equal
to the Prime Rate in effect from time to time plus 2% per annum.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any prepayment or repayment
thereof and shall be payable, in respect of each Loan, (i) monthly in
arrears on the last Business Day of each month and (ii) on any
prepayment or conversion (on the amount prepaid or converted), at
maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with section 13.7(b).
(f) Each Reference Bank agrees to furnish the Administrative
Agent timely information for the purpose of determining the
Eurocurrency Rate for any Borrowing consisting of Eurocurrency Loans.
If any one or more of the Reference Banks shall not timely furnish such
information, the Administrative Agent shall determine the Eurocurrency
Rate on the basis of timely information furnished by the remaining
Reference Banks. The Administrative Agent upon determining the interest
rate for any Borrowing shall promptly notify the Company (on behalf of
any applicable Borrower) and the Lenders thereof.
1.5. Effectiveness of Pricing Change. All Loans outstanding on or after
the Amendment Closing Date provided for in section 5 of this Amendment shall
reflect any increase in the interest margin applicable thereto which is provided
for in section 1.4 of this Amendment for all periods from and after the
Amendment Closing Date. The
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increase in the Applicable Commitment Fee Rate effected pursuant to this
Amendment shall be effective for all periods from and after the Amendment
Closing Date.
1.6. Field Audit and Collateral Monitoring Expenses. Effective on and
as of the Effective Date, section 4.1(d) of the Credit Agreement is amended by
adding the following at the end thereof:
The Company will pay to the Collateral Agent such fees as the
Collateral Agent may from time to time invoice at its standard rates
for field audit and other examinations and reviews conducted from time
to time of the Company's and its Domestic Subsidiaries' inventory and
eligible receivables and other aspects of the Company's assets,
liabilities and operations, and the Company will also reimburse the
Collateral Agent for all reasonable out-of-pocket costs and expenses
incurred by the Collateral Agent in connection therewith, including,
without limitation, reasonable fees, costs and expenses of independent
auditors, appraisers, equipment brokers, and other professionals
employed by the Collateral Agent in connection therewith; provided that
unless a Default or Event of Default then exists and is continuing, the
Company shall not be required to reimburse the Collateral Agent for
more than two field audits in any fiscal year. Such invoices shall be
paid promptly and in any event within 20 days after the date of
submission to the Company. The Administrative Agent may debit the
Company's master concentration account to the extent any such invoices
remain unpaid after 20 days.
1.7. Voluntary Reduction of Commitments. On and as of the Effective
Date of this Amendment, section 4.2 of the Credit Agreement is amended to read
in its entirety as follows:
4.2 Termination or Reduction of Commitments. The Borrowers
shall have no right to terminate the Total Revolving Commitment or the
Total Commitment unless (i) contemporaneously therewith all Revolving
Loans and Unpaid Drawings are paid or prepaid in full, together with
accrued interest thereon, and (ii) after giving effect thereto there
are no Letter of Credit Outstandings.
1.8. Mandatory Adjustments of Commitments, etc. On and as of the
Effective Date of this Amendment, section 4.3 of the Credit Agreement is amended
in its entirety to read as follows:
4.3. Mandatory Adjustments of Commitments, etc. (a) The Total
Revolving Commitment (and the Revolving Commitment of each Lender)
shall terminate on the earlier of (i) the Maturity Date and (ii) the
date on which a Change of Control occurs.
(b) The Total Revolving Commitment shall be permanently
reduced at the time that any voluntary prepayment of Revolving Loans is
made pursuant to section 5.1, in an amount equal to such prepayment.
Any such reduction shall be applied to proportionately and permanently
reduce the Revolving Commitment of each Lender.
(c) The Total Revolving Commitment shall be permanently
reduced at the time that any mandatory prepayment of Revolving Loans
would be made pursuant to section 5.2(c), (d), (e) or (g) if Revolving
Loans were then outstanding in the full amount of the Total Revolving
Commitment, in an amount at least equal to the required prepayment of
principal of Revolving Loans which would be required to be made in such
circumstance. Any such reduction shall be applied to proportionately
and permanently reduce the Revolving Commitment of each Lender. The
Company will provide at least three Business Days' prior written notice
(or telephonic notice confirmed in writing) to the Administrative Agent
at its Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), of any reduction of the
Total Revolving Commitment pursuant to this section 4.3(d), specifying
the date and amount of the reduction.
1.9. Voluntary Prepayments. On and as of the Effective Date of this
Amendment, section 5.1 of the Credit Agreement is amended to read in its
entirety as follows:
5.1. Voluntary Prepayments. Any Borrower shall have the right
to prepay any of its Revolving Loans, in whole or in part, without
premium or penalty, from time to time on the following terms and
conditions: (i) such Borrower (or the Company on its behalf) shall give
the Administrative Agent at the Notice Office written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing
if so requested by the Administrative Agent) of its intent to prepay
the Revolving Loans, the amount of such
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prepayment and (in the case of Eurocurrency Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be received by
the Administrative Agent by (x) 11:00 A.M. (local time at the Notice
Office) three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurocurrency Loans, or (y) 12:00 noon
(local time at the Notice Office) on the date of such prepayment, in
the case of any prepayment of Prime Rate Loans, and which notice shall
promptly be transmitted by the Administrative Agent to each of the
affected Lenders; (ii) each partial prepayment of any Borrowing shall
be in an aggregate principal of at least $100,000 or an integral
multiple of $100,000 in excess thereof, in the case of Loans which are
Prime Rate Loans, and at least $100,000 or an integral multiple of
$100,000 in excess thereof, in the case of Loans which are Eurocurrency
Loans, provided that no partial prepayment of Eurocurrency Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of
the Loans outstanding pursuant to such Borrowing to an amount less than
the Minimum Borrowing Amount applicable thereto; (iii) each prepayment
in respect of any Revolving Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans; and (iv) each prepayment of
Eurocurrency Loans pursuant to this section 5.1 on any date other than
the last day of the Interest Period applicable thereto shall be
accompanied by any amounts payable in respect thereof under section
2.10.
1.10. Mandatory Prepayments and Scheduled Repayments. On and as of the
Effective Date of this Amendment, sections 5.2(a) and (b) of the Credit
Agreement are amended to read in their entirety as follows:
5.2 Mandatory Prepayments and Scheduled Repayments. (a) If on
any date (after giving effect to any other payments on such date) the
sum of (i) the aggregate outstanding principal amount of Revolving
Loans plus (ii) the aggregate amount of Letter of Credit Outstandings,
exceeds the Total Revolving Commitment as then in effect, the Borrowers
shall prepay on such date that principal amount of Revolving Loans and,
after Revolving Loans have been paid in full, Unpaid Drawings, in an
aggregate amount equal to such excess. If, after giving effect to the
prepayment of Revolving Loans and Unpaid Drawings, the aggregate amount
of Letter of Credit Outstandings exceeds the Total Revolving Commitment
as then in effect the Company shall pay to the Administrative Agent an
amount in cash and/or Cash Equivalents equal to such excess and the
Administrative Agent shall hold such payment as security for the
obligations of the Company hereunder pursuant to a cash collateral
agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and the Company (which shall
permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Company until the proceeds are applied to
the secured obligations).
(b) [Reserved]
1.11. Affirmative Covenants. On and as of the Effective Date of this
Amendment, section 8.1 of the Credit Agreement is amended by (i) inserting the
following paragraphs (c) and (d) immediately following section 8.1(b), (ii)
re-designating the remaining paragraphs as appropriate, (iii) amending section
8.1(e) (as so redesignated) to read in its entirety as set forth below, and (iv)
inserting a new paragraph (k) immediately following section 8.1(j) (as so
redesignated):
(c) Monthly Financial Statements. Within 20 days after the end
of each calendar month in each fiscal year of the Company, the
unaudited condensed consolidated and consolidating balance sheets of
the Company and its consolidated Subsidiaries as at the end of such
month and the related unaudited condensed consolidated and
consolidating statement of income for such month and such portion of
the fiscal year ended with the last day of such month, which shall be
certified on behalf of the Company by the Chief Financial Officer or
other Authorized Officer of the Company, subject to changes resulting
from normal year-end audit adjustments, and together with such balance
sheets and statements of income, a comparison of the year to date
results against the Approved Business Plan and the financial
projections delivered in connection therewith, with detailed
explanations of any variance from such Approved Business Plan and
projections of greater than 5%.
(d) Information as to Collateral. Within 20 days after the end
of each calendar month, (i) a written report, reasonably satisfactory
in form and scope to the Administrative Agent, as to the inventory,
accounts receivable and accounts payable of the Company and its
Subsidiaries, setting forth the type, amount, value, location and aging
of inventory and accounts receivable as of the end of such month, such
report to detail the information as to inventory and receivables as set
forth on Exhibit B to Amendment No. 6 and (ii) such other financial
information related to the foregoing as the Administrative Agent may
reasonably request.
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(e) Officer's Compliance Certificates. (i) At the time of the
delivery of the financial statements provided for in sections 8.1(a),
(b) and (c), a certificate on behalf of the Company of the Chief
Financial Officer or other Authorized Officer of the Company to the
effect that, (A) to the best knowledge of the Company, no Default or
Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate
shall be substantially in the form attached as Exhibit C to Amendment
No. 6 and shall set forth the calculations required to establish
compliance with the provisions of sections 9.4, 9.5, 9.6, 9.7, 9.8,
9.9, 9.10 and 9.11 of this Agreement (to the extent that such sections
contain provisions that require measurement as of the date for which
the certificate is delivered) and (B) to the best knowledge of the
Company, no default or event of default under the Indenture relating to
the Subordinated Notes exists, and if any such default or event of
default does exist, specifying the nature and extent thereof and (ii)
at the time of the delivery of the financial statements provided for in
section 8.1(c), a certificate on behalf of the Company of the Chief
Financial Officer or other Authorized Officer of the Company showing
the amount of cash and Cash Equivalents held by the Company and its
Subsidiaries as of the end of the previous month, detailing the
location of such cash and Cash Equivalents by particular account and
country.
(k) Notice of Defaults. Immediately, and in any event within
two Business Days after the Company obtains knowledge thereof, notice
of the occurrence of any Default (as defined in the Subordinated Notes
or the Indenture related thereto).
1.12. Acquisitions and Dispositions. On and as of the Effective Date of
this Amendment, the following is added at the end of section 9.2 of the Credit
Agreement:
Notwithstanding anything to the contrary contained above in this
section 9.2, from and after June 1, 1999, the Company shall not, and
shall not permit any Subsidiary to, (i) without the prior written
consent of all of the Lenders, make or otherwise effect any Acquisition
or (ii) make or otherwise effect any Asset Sale involving property with
a fair value, together with the fair market value of all property
subject to an Asset Sale after June 1, 1999, in excess of $100,000
unless (x) at least 90% of the proceeds from such sale are received in
cash, (y) the Company notifies the Administrative Agent in writing no
later than ten days after such Asset Sale and (z) proceeds from such
Asset Sale in excess of $100,000 are deposited immediately upon receipt
in the special deposit account described in section 7.4 of Amendment
No. 6.
1.13. Liens. On and as of the Effective Date of this Amendment, section
9.3 of the Credit Agreement is amended by amending paragraph (k) thereof to read
in its entirety as follows:
(k) Liens (i) placed upon Real Property, improvements thereto,
equipment or machinery used in the ordinary course of business of the
Company or any Subsidiary at the time of (or within 270 days after) the
acquisition or completion of construction thereof by the Company or any
such Subsidiary to secure Indebtedness incurred to pay all or a portion
of the purchase price or construction cost thereof or (ii) existing on
property or other assets at the time acquired by the Company or any
Subsidiary or on assets of a person at the time such person first
becomes a Subsidiary of the Company (other than any such Liens which
were created at the time of or in contemplation of the acquisition of
such assets or person by the Company or any of its Subsidiaries);
provided (A) in the case of any such acquisition of a person, any such
Lien attaches only to the property and assets of such person, (B) in
the case of any such acquisition of property or assets by the Company
or any Subsidiary, any such Lien attaches only to the property and
assets so acquired or constructed and not to any other property or
assets of the Company or any Subsidiary, and (C) the Indebtedness
secured by any such Lien is permitted by sections 9.4(c), 9.4(e) or
9.4(j).
1.14. Indebtedness. On and as of the Effective Date of this Amendment,
section 9.4 of the Credit
Agreement is amended to read in its entirety as follows:
9.4 Indebtedness. The Company will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer
to exist any Indebtedness of the Company or any of its Subsidiaries,
except:
(a) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(b) Indebtedness of Automotive Safety Components
International, s.r.o., a Foreign Subsidiary, in the original aggregate
principal amount of approximately $7,500,000 (or the equivalent in any
applicable
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currency or currencies), used to finance Real Property, improvements
and related properties subject to Liens permitted by section 9.3(j),
and an unsecured guaranty by the Company of such Indebtedness; and any
refinancing, extension, renewal or refunding of any such Indebtedness
not involving an increase in the principal amount thereof or a
reduction of more than 10% in the remaining weighted average life to
maturity thereof (computed in accordance with standard financial
practice);
(c) Indebtedness of the Company or any Subsidiary (i) subject
to Liens permitted by section 9.3(k), provided that the aggregate
principal amount of such Indebtedness incurred in any fiscal year shall
not exceed an amount equal to 80% of Consolidated Capital Expenditures
for such year; and any refinancing, extension, renewal or refunding of
any such Indebtedness not involving an increase in the principal amount
thereof or a reduction of more than 10% in the remaining weighted
average life to maturity thereof (computed in accordance with standard
financial practice);
(d) unsecured Subordinated Indebtedness of the Company in the
aggregate principal amount of up to $5,000,000 (or such larger amount
as may be approved by the Required Lenders), having a weighted average
life to maturity (computed in accordance with standard financial
practice) at the time of incurrence thereof in excess of 5 years,
incurred pursuant to a public offering, Rule 144A offering or private
placement with institutional investors, of the Company's subordinated
unsecured debt securities;
(e) to the extent not otherwise permitted pursuant to the
foregoing clauses, Indebtedness of the Company and its Foreign
Subsidiaries not in excess of $5,000,000 (or the equivalent in any
applicable currency or currencies) outstanding at any time, which
Indebtedness may be secured solely by accounts receivable located
outside of the United States;
(f) Existing Indebtedness, to the extent not otherwise
permitted pursuant to the foregoing clauses; and any refinancing,
extension, renewal or refunding of any such Existing Indebtedness not
involving an increase in the principal amount thereof or a reduction of
more than 10% in the remaining weighted life to maturity thereof
(computed in accordance with standard financial practice);
(g) Indebtedness of the Company or any Subsidiary under
Hedge Agreements;
(h) Indebtedness of the Company to any of its Subsidiaries,
and Indebtedness of any of the Company's Subsidiaries to the Company or
to another Subsidiary of the Company, in each case to the extent
permitted under section 9.5;
(i) Guaranty Obligations permitted under section 9.5; and
(j) Indebtedness of (A) the Company or any Domestic Subsidiary
in respect of Capital Leases for assets acquired by the Company or any
Domestic Subsidiary after March 27, 1999 or (B) any Foreign Subsidiary
in respect of Capital Leases for assets acquired by such Foreign
Subsidiary after March 27, 1999, provided that the aggregate principal
portion of such Capital Leases may not exceed $6,500,000.
1.15. Dividends. On and as of the Effective Date of this Amendment,
section 9.6 of the Credit Agreement is amended to read in its entirety as
follows:
9.6 Dividends, etc. The Company will not declare or pay any
dividends (other than dividends payable solely in equivalent shares of
capital stock of the Company) on, or make any other distribution or
payment on account of (other than in shares of the capital stock of the
Company), and the Company will not, and will not permit any of its
Subsidiaries to, purchase, redeem, retire or otherwise acquire, any
shares of any class of the capital stock of the Company, whether now or
hereafter outstanding (all of the foregoing, "Dividends").
1.16. Total Senior Funded Debt/EBITDA Ratio; Minimum EBITDA; Minimum
Net Income. On and as of the Effective Date of this Amendment, section 9.7 of
the Credit Agreement is amended to read in its entirety as follows:
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9.7. (a) 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 its Testing Period then
most recently ended to be greater than the ratio shown below for any
applicable period:
Period Ratio
Any Testing Period ended on or after the 1.50 to 1.00
fiscal quarter ended on or nearest to June 30,
2000
(b) Required Minimum Cumulative EBITDA. The Company will not
at any time permit cumulative EBITDA from March 28, 1999 through any
Testing Period indicated below to be less than the amount set forth
opposite such Testing Period:
Testing Period Cumulative Minimum
EBITDA
Month ending on or nearest to $2,300,000
April 30, 1999
Month ending on or nearest to $4,300,000
May 31, 1999
Month ending on or nearest to $6,000,000
June 30, 1999
Month ending on or nearest to $8,000,000
July 31, 2000
Month ending on or nearest to August 31, $9,400,000
1999
Month ending on or nearest to September 30, $11,200,000
1999
Month ending on or nearest to October 31, $14,700,000
1999
Month ending on or nearest to November 30, $18,000,000
1999
Month ending on or nearest to December 31, $19,800,000
1999
Month ending on or nearest to January 31, $23,000,000
2000
Month ending on or nearest to February 28, $26,400,000
2000
Month ending on or nearest to March 31, $30,000,000
2000
8
(c) Minimum Cumulative Net Income. The Company will not permit
(i) its cumulative Consolidated Net Loss from March 28, 1999 through
the fiscal quarter ending on or nearest to June 30, 1999 to be greater
than $500,000, (ii) its cumulative Consolidated Net Loss from March 28,
1999 through the period of two fiscal quarters ending on or nearest to
September 30, 1999 to be greater than $1,600,000, (iii) its cumulative
Consolidated Net Loss from March 28, 1999 through the period of three
fiscal quarters ending on or nearest to December 31, 1999 to be greater
than $625,000 and (iv) its cumulative Consolidated Net Income from
March 28, 1999 through the period of four fiscal quarters ending on or
nearest to March 31, 2000 to be less than $1,000,000.
1.17. Adjusted Fixed Charge Coverage Ratio; Fixed Charge Coverage
Ratio; Interest Coverage Ratio. On and as of the Effective Date of this
Amendment, section 9.8 of the Credit Agreement is amended to read in its
entirety as follows:
9.8. (a) Adjusted Fixed Charge Coverage Ratio. The Company will not
permit its Adjusted Fixed Charge Coverage Ratio for any Testing Period to be
less than the ratio shown below for any applicable period:
Period Ratio
Testing Period for the fiscal quarter ending 2.15 to 1.00
on or nearest to June 30, 1999
Testing Period for the two fiscal quarters 0.90 to 1.00
ending on or nearest to September 30, 1999
Testing Period for the three fiscal quarters 1.20 to 1.00
ending on or nearest to December 31, 1999
Testing Period for the four fiscal quarters .95 to 1.00
ending on or nearest to Xxxxx 00, 0000
(x) 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
----------------------------------------- ------------
Any Testing Period ended on or after the 1.25 to 1.00
fiscal quarter ended on or nearest to June 30,
2000
(c) Interest Coverage Ratio. The Company will not permit its
Interest Coverage Ratio for any Testing Period to be less than the
ratio shown below for any applicable period:
Period Ending Ratio
---------------------------------------------- ------------
Testing Period for the fiscal quarter ended on 2.00 to 1.00
or nearest to June 30, 1999
Testing Period for the two fiscal quarters 0.70 to 1.00
ended on or nearest to September 30, 1999
Testing Period for the three fiscal quarters 1.25 to 1.00
ended on or nearest to December 31, 1999
Any Testing Period thereafter 1.20 to 1.00
9
1.18. Capital Expenditures. On and as of the Effective Date of this
Amendment, section 9.9 of the Credit Agreement is amended to read in its
entirety as follows:
9.9. Capital Expenditures. The Company will not, and will not
permit any of its Subsidiaries to, make or incur Consolidated Capital
Expenditures during the following fiscal periods of the Company, in an
aggregate amount in excess of (a) during the fiscal year ending on or
nearest to March 31, 1999, $14,000,000, (b) during the fiscal year
ending on or nearest to March 31, 2000, $12,000,000, and (c) during any
subsequent fiscal year, $12,000,000.
1.19. Certain Leases. On and as of the Effective Date of this
Amendment, section 9.10 of the Credit Agreement is amended to read in its
entirety as follows:
9.10. Certain Leases. The Company will not (a) permit the
aggregate payments (excluding any property taxes, insurance or
maintenance obligations paid by the Company and its Subsidiaries as
additional rent or lease payments) by the Company and its Subsidiaries
on a consolidated basis under agreements to rent or lease any personal
property for a period exceeding 12 months (including any renewal or
similar option periods), other than pursuant to Capital Leases, to
exceed $1,000,000 is any fiscal year of the Company; or (b) permit the
aggregate fair value of property leased by the Company and/or its
Subsidiaries pursuant to one or more Capital Leases from any single
lessor (or related group of lessors), determined at the time of any
applicable Capital Leases, to exceed $10,000,000.
1.20. Minimum Consolidated Net Worth. On and as of the Effective Date
of this Amendment, section 9.11 of the Credit Agreement is amended to read in
its entirety as follows:
9.11. Minimum Consolidated Net Worth. The Company will not, at
any time subsequent to June 30, 2000, permit its Consolidated Net
Worth, without regard to foreign currency translation adjustments for
any period, to be less than the Company's Consolidated Net Worth as of
the last day of the fiscal year ended on or nearest to March 31, 1999,
except that effective as of the end of the Borrower's fiscal quarter
ended on or nearest to June 30, 1999, and as of the end of each fiscal
quarter thereafter, the foregoing amount (as it may from time to time
be increased as herein provided) shall be increased by 100% of
Consolidated Net Income for the fiscal quarter ended on such date, if
any (there being no reduction in the case of any such Consolidated Net
Income which reflects a deficit).
1.21. Events of Default. On and as of the Effective Date of this
Amendment, section 10.1 of the Credit Agreement is amended by amending paragraph
(d) thereof to read in its entirety as follows:
(d) Cross Default Under Other Agreements: the Company or any
of its Subsidiaries shall (i) default in any payment of principal or
interest with respect to the Company's 101/8% Senior Subordinated Notes
due 2007 (the "Subordinated Notes") or any other Indebtedness (other
than the Obligations) owing to any Lender or any of its Affiliates or
having an unpaid principal amount of $1,000,000 or greater, and such
default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness,
or (ii) default in the observance or performance of any agreement or
condition relating to the Subordinated Notes or any other such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto (and all grace periods applicable to such
observance, performance or condition shall have expired), or any other
event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or
holders of the Subordinated Notes or any other such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or the
Subordinated Notes or any other such Indebtedness of the Company or any
of its Subsidiaries shall be declared to be due and payable, or shall
be required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof); or
10
1.22. Notices. On and as of the Effective Date of this Amendment,
section 13.3 of the Credit Agreement is amended to read in its entirety as
follows:
13.3 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, facsimile transmission or cable
communication) and mailed, telegraphed, telexed, transmitted, cabled or
delivered, (a) if to any Borrower, to such Borrower at 0000 X. Xxxxxxx
Xxxx, Xx. Xxx, Xxx Xxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx,
Executive Vice President & Chief Financial Officer (facsimile: (201)
592-7501); (b) if to any Lender, at its address specified for such
Lender on Annex I to the Credit Agreement; (c) if to the Administrative
Agent, at its Notice Address; or (d) at such other address as shall be
designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, and shall be effective when received.
1.23. Modification of Certain Annexes. On and as of the Effective Date
of this Amendment, (i) Annexes I, II, III, V, VI and VII to the Credit Agreement
are amended to read in their entirety as the same are set forth in Exhibit D to
Amendment No. 6 and (ii) Annex IV to the Credit Agreement is amended by the
addition of the following information:
Name and Address of Name and Address of Secured Place of Filing Filing Collateral
Debtor Party Records Designation
Information
Automotive Safety KeyCorp Leasing, Secretary of 8/11/98 Equipment
Components, Inc. a Division of Key Corporate State of New 1853975 and Proceeds
0000 X. Xxxxxxx Xxxx Capital, Inc. Jersey
Xxxx Xxx, XX 00000 00 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
SECTION 2. WAIVERS.
2.1. Waivers. On the Effective Date, the Administrative Agent and the
Lenders waive (i) any default occasioned under the Credit Agreement as a result
of the failure of the Company, prior to the Effective Date of Amendment No. 6,
to comply with any financial covenants contained therein as in effect
immediately prior to the effectiveness of this Amendment No. 6 and (ii) any
default occasioned under the Credit Agreement as a result of the existence of
the junior lien created by the Master Equipment Lease Agreement dated as of July
10, 1998, between KeyCorp Leasing, a division of Key Corporate Capital, Inc. and
the Company, and each Lender hereby consents to the existence and continuation
of such Lien on the Collateral.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants as follows:
3.1. 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 of each Borrower, and constitutes the valid and binding agreement of
each Borrower, enforceable against such Borrower in accordance with its terms.
3.2. Representations and Warranties True and Correct. Except as set
forth on Exhibit E to this Amendment, 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 only to a specified date, in which case such representations and
warranties are hereby reaffirmed as true and correct when made.
3.3. 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 a Default or an Event of Default.
11
3.4. 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.
3.5. Recent Financial Statements. The Company has furnished to the
Lenders and the Administrative Agent complete and correct copies of the proposed
final and definitive audited consolidated balance sheets of the Company and its
consolidated subsidiaries as of the end of its fiscal years ended on or nearest
to March 31, 1999 and the related proposed final and definitive audited
consolidated statements of income, shareholders' equity, and cash flows of the
Company and its consolidated subsidiaries for the fiscal year then ended,
accompanied by the proposed final and definitive unqualified report thereon of
the Company's independent accountants, as proposed to be filed with the SEC. All
such financial statements have been prepared in accordance with GAAP,
consistently applied (except as stated therein), and fairly present the
financial position of the Company and its consolidated subsidiaries as of the
respective dates indicated and the consolidated results of their operations and
cash flows for the respective periods indicated, subject to any minor
adjustments, none of which will involve a Material Adverse Effect.
3.6. Financial Projections. The financial projections included in the
Approved Business Plan were prepared on behalf of the Company in good faith
after taking into account the existing and historical levels of business
activity of the Company and its Subsidiaries, known trends, including general
economic trends, and all other information, assumptions and estimates considered
by management of the Company and its Subsidiaries to be pertinent thereto. Such
financial projections were considered by management of the Company, as of such
date of preparation, to be realistically achievable; provided, that no
representation or warranty is made as to the impact of future general economic
conditions or as to whether the Company's projected consolidated results as set
forth in such financial projections will actually be realized. No facts are
known to the Company at the date hereof which, if reflected in such financial
projections, would result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
3.7. No Domestic Unencumbered Real Property Owned in Fee. At the date
hereof neither the Company nor any Domestic Subsidiary owns in fee any Real
Property which is not subject to the Lien of a Security Document.
3.8. Prior Credit Events Permitted by Indenture, etc. All Loans
incurred under the Credit Agreement and outstanding on the date hereof, and all
Letters of Credit issued under the Credit Agreement and outstanding on the date
hereof, were incurred or issued in compliance with all applicable provisions of
the Indenture, dated as of July 24, 1997 (the "Indenture"), relating to the
Subordinated Notes. After giving effect to this Amendment, the Revolving Loans
from time to time outstanding under the Credit Agreement, and the Letters of
Credit from time to time outstanding under the Credit Agreement, will constitute
"Permitted Indebtedness", as defined in the Indenture, or are otherwise
permitted under Section 4.12 of the Indenture. No Collateral has been granted to
the Collateral Agent by any Credit Party as security for the Obligations in
violation of any of the terms or provisions of the Indenture. The execution,
delivery and performance of this Amendment by the Company and the other
Borrowers, and the consummation by the Credit Parties of the transactions
contemplated hereby, does not and will not involve any breach or violation of
any of the terms or provisions of the Indenture, and does not and will not
result in an Event of Default thereunder. Both at the date hereof and after
giving effect to the transactions contemplated by this Amendment, no Event of
Default has occurred and is continuing under, and as defined in, the Indenture.
After giving effect to this Amendment, the Revolving Loans and reimbursement
obligations in respect of Letters of Credit constitute "Senior Indebtedness", as
defined in the Indenture.
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. CONDITIONS; BINDING EFFECT.
This Amendment shall become effective as of, and with retroactive
effect to, March 27, 1999 (the "Effective Date"), if and only if, on a Business
Day (the "Amendment Closing Date") or before June 24, 1999, all of the following
conditions shall have been satisfied:
12
(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 each
Lender that such Lender has executed this Amendment (which notification
may be by facsimile or other written confirmation of such execution);
(d) the Company shall have paid to the Administrative Agent,
in immediately available funds, for the pro rata account of and for
immediate distribution to the Lenders in accordance with their
Commitments, a nonrefundable amendment fee as consideration for the
execution and delivery of this Amendment, in the aggregate amount
specified in the Interest Rate/Fee Letter as being payable on the
Amendment Closing Date;
(e) the Administrative Agent shall have received, in
sufficient quantity for the Administrative Agent and the Lenders, a
Solvency Certificate of the Chief Financial Officer of the Company,
dated on or shortly prior to the Amendment Closing Date and otherwise
substantially in the form attached to the Credit Agreement as Exhibit
H;
(f) the Administrative Agent and each of the Lenders shall
have received complete and correct copies of the consolidated balance
sheet of the Company and its Subsidiaries as of March 27, 1999 and the
related consolidated statements of income, shareholders' equity and
cash flow of the Company and its consolidated Subsidiaries for the
fiscal year then ended, accompanied by the compliance certificate
required by section 8.1(c);
(g) the Administrative Agent and each of the Lenders shall
have received a copy of the Approved Business Plan, and each of the
Lenders shall be satisfied, in its sole discretion, with the Approved
Business Plan;
(h) the Company shall have delivered evidence satisfactory to
the Administrative Agent and the Lenders in their sole discretion that
the Net Loss of the Company, before provision for taxes, for the fiscal
year ending on or nearest to March 31, 1999 is not greater than
$(16,000,000);
(i) the Administrative Agent shall have received an opinion,
addressed to the Administrative Agent and each of the Lenders, dated as
of the Amendment Closing Date, from Xxxxxxx Berlin Shereff Xxxxxxxx
LLP, counsel to the Company, covering such matters incident to the
transactions contemplated hereby as the Administrative Agent may
require, such opinion to be in form and substance satisfactory to the
Administrative Agent;
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. CERTAIN ADDITIONAL PROVISIONS;
RELEASE OF ANY CLAIMS BY BORROWER
AND OTHER CREDIT PARTIES.
6.1. Confirmation of Certain Outstanding Amounts. The Borrowers, the
Administrative Agent and the Lenders hereby acknowledge and agree that, as of
the close of business on June 18, 1999, $37,900,000 aggregate principal amount
of Revolving Loans was outstanding under the Credit Agreement, all of which was
denominated in Dollars, and the Letter of Credit Outstandings consisted of
$2,064,949, all of which was denominated in Dollars.
13
6.2. Circumstances of Amendment; No Duress, etc. The Company and each
other Credit Party each hereby represents and warrants to, and stipulates,
covenants and agrees with, the Administrative Agent and the Lenders that: (i) no
representations, warranties, statements, promises or inducements, oral or
written, have been made by the Administrative Agent, any Lender, or any of their
respective officers, directors, employees, agents, representatives, consultants,
advisors, counsel or Affiliates, to any Credit Party (or any of its officers,
directors, employees, agents, representatives, consultants, advisors, counsel or
Affiliates) concerning the existence or absence of any Default or Event of
Default under the Credit Agreement, as amended by this Amendment, or the
likelihood that the Company will be able to remain in compliance with the
financial and other covenants contained in the Credit Agreement, as amended by
this Amendment, for any period of time or under any particular set of
circumstances, foreseen or unforeseen, or concerning any future willingness or
unwillingness of the Lenders to hereafter grant any waivers under the Credit
Agreement or to hereafter enter into any further or subsequent amendments,
supplements or other modifications thereof or of any of the other Credit
Documents or any agreements or instruments referred to therein; (ii) this
Amendment, the other Credit Documents, and all of the other agreements,
instruments, certificates and documents to which any Credit Party is a party or
which have been delivered on its behalf in connection herewith, have been
executed and delivered voluntarily after due deliberation by officers of the
Company and the other Credit Parties, consultations by the Company and the other
Credit Parties with Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, counsel for the
Company and the other Credit Parties, and negotiations between the Company and
the other Credit Parties, on the one hand, and the Administrative Agent and the
Lenders on the other hand; (iii) neither the Administrative Agent, nor any
Lender, nor any of their respective officers, directors, employees, agents,
representatives, consultants, advisors, counsel or Affiliates, has exerted or
attempted to exert any improper or unlawful pressure, or has in any way induced
or attempted to induce, through coercion, threats, unreasonable demands or
requirements, or other improper or unlawful means, any particular or general
conduct or course of action on the part of the Company or any of the other
Credit Parties (including the execution and delivery of this Amendment and the
other agreements, instruments, certificates and documents contemplated hereby),
which the Company and the other Credit Parties had not freely and independently
determined to be prudent, proper and appropriate under the circumstances; and
(iv) without limitation of the foregoing, the Company and each of the other
Credit Parties has, to the extent deemed necessary or advisable in its or their
sole discretion, been advised and assisted by its or their counsel, Xxxxxxx
Berlin Shereff Xxxxxxxx, LLP, in connection with the negotiation of this
Amendment and the consideration of any and all legal matters related hereto or
to the other Credit Documents or the transactions and circumstances related
thereto.
6.3. Release. In order to induce the Lenders to enter into this
Amendment, effective as of the Amendment Closing Date, the Company and each of
the other Credit Parties each hereby agrees to release, and does hereby release
and discharge, and each further agrees not to make any claim for, or assert in
any proceeding, by way of claim or counterclaim, or by way of defense or set-off
or otherwise, any and all claims, damages, losses, expenses, liabilities,
obligations, defenses, recoupments, objections, actions and causes of action,
that any Credit Party may now or as of such Amendment Closing Date have, whether
known or unknown, of every nature and to all extent whatsoever, whether based on
negligence, fraud, misrepresentation, undue or improper influence, or
interference in business operations, opportunities or other contracts, or tort,
strict liability, contract or other conduct or action or failure to act, against
the Administrative Agent, any Lender, or any of their respective officers,
directors, employees, agents, representatives, consultants, advisors, counsel or
Affiliates, on account of or in any way, directly or indirectly, touching,
concerning, arising out of or founded upon or related to, the Credit Documents,
including Amendment No. 6, or the transactions contemplated thereby, or the
lending or other banking relationships related thereto, or any actions or
failure to act in connection therewith; provided that the foregoing release will
not extend to any claim arising after the Amendment Closing Date to the extent
that such claim is based on conduct of the Administrative Agent or any Lender
occurring after the Amendment Closing Date. The Credit Parties acknowledge and
agree that they understand that the Administrative Agent and the Lenders would
not have entered into this Amendment but for, among other things, the provisions
of this section 6.3. The Company and each of the other Credit Parties hereby
confirms that it has agreed to the provisions of this section 6.3 freely and of
its own volition, with full knowledge of the effect and extent of the various
releases, waivers and agreements herein contained and of the importance to the
Administrative Agent and the Lenders thereof, and after having had an
opportunity to discuss this matter with its own counsel, freely selected by it.
SECTION 7. CERTAIN ADDITIONAL COVENANTS.
From and after the Amendment Closing Date, the Company will comply with
the following additional covenants, and the Company and the other Borrowers
agree that breach of any of the following additional covenants
14
will constitute an immediate Event of Default under the Credit Agreement without
the necessity of any notice from the Administrative Agent or any Lender with
regard thereto:
7.1. Lockbox Arrangements. (a) On or before the Amendment Closing Date,
the Company will establish deposit accounts with, and enter into lockbox
agreements with, the Collateral Agent, and cause each of its Domestic
Subsidiaries to do likewise, all of which arrangements shall be satisfactory in
form and substance to the Collateral Agent. Any such deposit accounts with the
Collateral Agent shall be considered a Cash Collateral Account as provided in
the Security Agreement.
(b) On or before the Amendment Closing Date, the Company will cause all
funds to be paid to the Borrower and its Domestic Subsidiaries by customers,
account debtors and others to be paid to said lockboxes and deposited in said
accounts with the Collateral Agent.
(c) No later than the Amendment Closing Date, the Company will cease
using deposit accounts, (other than the payroll or xxxxx cash accounts detailed
by Company and Subsidiary on Exhibit F to this Amendment) and any lockbox
arrangements with any financial institution other than the Collateral Agent, and
cause each of its Domestic Subsidiaries to do likewise, it being understood that
the Company and its Domestic Subsidiaries may continue using controlled
disbursement accounts with other financial institutions as and to the extent
permitted by the Collateral Agent, acting in its reasonable discretion.
(d) Such lockbox agreements with the Collateral Agent shall provide,
among other things, that once the Company and its Domestic Subsidiaries shall
have so established such lockbox agreements and deposit accounts with the
Collateral Agent, and funds shall be received by the Collateral Agent as
contemplated thereby, (A) if no Default under section 10.1(a) of the Credit
Agreement or Event of Default shall have occurred and be continuing, the
Collateral Agent will immediately release such funds so received by it to or as
directed by the Company, or (B) if a Default under section 10.1(a) of the Credit
Agreement or Event of Default shall have occurred and be continuing, the
Collateral Agent shall have sole and complete dominion over all funds so
received and shall, on a daily or similar frequent basis, promptly apply such
funds to the Loans and other obligations secured by the Security Agreement, and
after all Loans and other obligations secured by the Security Agreement have
been satisfied and the Total Commitment has been terminated, release any surplus
remaining to the Borrower or to whomsoever shall be lawfully entitled thereto.
7.2. Establishment of Special Deposit Account with Collateral Agent.
Within five Business Days following the Amendment Closing Date, the Company will
convert to cash the entire cash and money market fund balances currently held by
the Company and its Domestic Subsidiaries in its accounts with brokers, mutual
funds and other investment firms (other than the payroll or xxxxx cash accounts
described on Exhibit F to this Amendment), the current value of which accounts
has been disclosed to the Lenders, and transfer such resulting cash balances, by
wire transfer of immediately available funds, to a special deposit account
established with the Collateral Agent (which special deposit account shall be
considered a Cash Collateral Account as provided in the Security Agreement) from
which the Company may make such payments as it may elect, provided that the
Collateral Agent reserves the right, at any time, to require the Company to, and
the Company agrees that it will, if the Collateral Agent so exercises such
right, pledge such special deposit account and all proceeds thereof to the
Collateral Agent, and grant the Collateral Agent sole dominion and control
thereof, as collateral for the equal and ratable security of the Obligations and
any other obligations secured by the Security Agreement.
7.3. Concentration Account. The Company and its Subsidiaries shall make
arrangements, which arrangements shall be satisfactory in form and substance to
the Collateral Agent, to cause, on and after the Amendment Closing Date, all
cash and other funds on deposit in any deposit account (other than the payroll
accounts described on Exhibit F to this Amendment) at the end of any Business
Day, to the extent such funds exceed $25,000 in the aggregate, to be deposited
into the Company's master concentration account with KeyBank, account number
3238 9000 5099.
7.4. Establishment of Sale Proceeds Account with Collateral Agent.
Within five Business Days following the Amendment Closing Date, the Company will
establish with the Collateral Agent a special deposit account (which special
deposit account shall be considered a Cash Collateral Account as provided in the
Security Agreement) into which the Company shall deposit, immediately upon the
receipt thereof, (i) Cash Proceeds in excess of $250,000 received from any one
or more Asset Sales on or after June 1, 1999 and (ii) proceeds received from any
one or more sales of the capital stock (or other equity interests) of any
Subsidiary or on account of the merger or consolidation of any Subsidiary with a
person that is not a Subsidiary of the Company. In addition, at the end of each
fiscal quarter of
15
the Company, the Company shall deposit into the special deposit account cash in
an amount equal to the difference, if any, between (A) actual cash and Cash
Equivalents held by the Company and its Subsidiaries as of such date and (B)
150% of the cash and Cash Equivalents projected to be held on such date by the
Company and its Subsidiaries in the financial projections contained in the
Approved Business Plan. Funds deposited in such special deposit account may be
released at the sole discretion of the Lenders upon application therefor by the
Company for use by the Company to purchase, construct or otherwise acquire
capital assets to be used in the business of the Company or its Subsidiaries.
7.5. Lien Searches, etc. The Company will promptly and in any event
within 45 days following the Amendment Closing Date, cause its counsel to
deliver to the Lenders and the Administrative Agent complete UCC, judgment and
lien (including tax liens) searches against the Company and each of the Domestic
Subsidiaries and their respective properties, including copies of all pertinent
filings, in all jurisdictions in the United States in which the Borrower or any
of its Domestic Subsidiaries has its chief executive or registered office,
maintains an office or owns or leases property, together with a chart
summarizing in reasonable detail all such filings, including the name of the
secured party, the filing office, filing number and filing date, and the
collateral covered.
7.6. Machinery and Equipment Appraisal. The Company, at its own cost
and expense, will promptly and in any event (i) no later than August 1, 1999,
deliver to the Administrative Agent a comprehensive schedule of all machinery
and equipment owned by the Company and its Subsidiaries, including make, model,
date of manufacture, serial number, location, indication of whether owned or
leased, and description of related indebtedness, if any, and (ii) no later than
September 1, 1999, deliver to the Lenders and the Administrative Agent an
appraisal of the orderly liquidation value and forced liquidation value of the
machinery and equipment owned by the Company and its Domestic Subsidiaries and
located in the United States, and an inventory valuation analysis with respect
to all Inventory owned by the Company and its Domestic Subsidiaries and located
in the United States, such appraisal and valuation to be satisfactory in form
and substance to the Administrative Agent and prepared by an independent
appraiser selected and engaged by the Administrative Agent and the Lenders.
SECTION 8. MISCELLANEOUS.
8.1. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the Borrowers, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
8.2. Amendments, Waivers. No term or provision included in this
Amendment (including specifically, but without limitation, this section 8.2 and
the amendments to the Credit Agreement effected by this Amendment), nor any term
or provision of the Credit Agreement or any of the other Credit Documents, as
from time to time in effect, nor any term or provision of any of the other
agreements or instruments related to any of the foregoing, may be changed,
amended or otherwise modified, nor may performance thereof be waived, except
pursuant to a written instrument signed by each Borrower and all of the Lenders.
8.3. 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.
8.4. 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.
8.5. Expenses. Without limiting any terms or provisions of the Credit
Agreement, the Company agrees to pay on demand all reasonable costs and expenses
incurred by the Administrative Agent and/or any of the Lenders (including,
without limitation, reasonable out-of-pocket costs and expenses of any special
counsel for the Administrative Agent or any individual Lender; and reasonable
costs and expenses of appraisers, consultants, surveyors, independent
accountants, financial advisors, and lien and title searches and policies of
title insurance), in connection with (i) the preparation, negotiation, and
execution of this Amendment, any other documents referred to herein and any
subsequent proposed amendments to, or waivers of, the Credit Agreement or any of
the other Credit Documents, (ii) the enforcement or preservation of any rights
under the Credit Agreement and/or the other Credit Documents, as the same may
from time to time be in effect, (iii) any analysis of the financial condition of
the Company and its Subsidiaries, their
16
properties, assets, operations, and/or the collateral position of the Lenders,
and/or (iv) the administration of the Credit Agreement and the other Credit
Documents, as the same may from time to time be in effect. The Administrative
Agent may debit the Company's master concentration account to the extent any
such invoices remain unpaid after 20 days.
8.6. 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.
8.7. Applicable Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
8.8. Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
8.9. 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.
8.10. Further Assurances. Without limitation of any of the obligations
of the Company or any of its Subsidiaries under this Amendment or any of the
Credit Documents, the Company will, and will cause each of its Subsidiaries to,
at the expense of the Company, make, execute, endorse, acknowledge, file and/or
deliver to the Administrative Agent, the Collateral Agent and/or the Lenders,
from time to time, all such agreements, mortgages, deeds of trust, trust deeds,
security agreements, pledge agreements, collateral assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
and other assurances or instruments, and take such further lawful steps and
actions, as the Administrative Agent may consider reasonably necessary or
appropriate in order to give full effect to the intent and provisions of this
Amendment and the other Credit Documents.
8.11. Jury Trial Waiver, Limitations of Liability, etc. For the
avoidance of doubt, the parties confirm that the provisions of section 13.8(c),
section 13.17, 13.18, 13.19 and 13.20 of the Credit Agreement apply to this
Amendment and the transactions contemplated hereby as fully as if such
provisions had been set forth in full in this Amendment.
8.12. 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.
[Signatures are on the following page.]
17
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
SAFETY COMPONENTS INTERNATIONAL, KEYBANK NATIONAL ASSOCIATION,
INC. individually and as Administrative Agent
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxxxxx Xxxxxxxx
--------------------------------- -------------------------
Executive Vice President Senior Vice President
AUTOMOTIVE SAFETY COMPONENTS FLEET BANK
INTERNATIONAL LIMITED
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxxxx
--------------------------------- ---------------------
Executive Vice President Vice President
AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL GmbH & CO. K.G.,
by its General Partner, Phoenix Airbag
Verwaltungs GmbH
By:By: /s/Xxxxxxx X. Xxxxxx
-----------------------------
Attorney in Fact
18
ANNEX I
INFORMATION AS TO LENDERS
Name of Lender Commitment Domestic Lending Office Eurocurrency Lending Office
--------------- -------------- ---------------------------- ----------------------------
KeyBank National Revolving Loan KeyBank National Association KeyBank National Association
Association Commitment: 000 Xxxxxxxxxxx Xxxxxx 000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000 Xxxxx Xxxxxx, XX 00000
$20,000,000
Contacts/Notification Methods:
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
Xxxxxxx Xxxxxxxx
Senior Vice President
Direct Dial: (000) 000-0000
Contacts for Borrowings,
Payments:
Xxxxx Xxxxxxxxx
Administrative Assistant
Direct Dial: (000) 000-0000
Fax: (000) 000-0000
Payment Instructions:
ABA # 000 000 000
Attn:
Ref: Safety Components
International, Inc.
1
Fleet Bank Revolving Loan Fleet Bank Eurocurrency Lending Office
Commitment: 0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
$20,000,000
Contacts/Notification Methods:
000 Xxxx Xxxxxx
Mail Stop: CT/MOH21A
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Direct Dial: (000) 000-0000
Fax: (000) 000-0000
Contacts for Borrowings,
Payments:
Xxxxx Xxxxxxxxxx
000 Xxxx Xxxxxx
Mail Stop: CT/MOH21B
Xxxxxxxx, XX 00000
Direct Dial: (000) 000-0000
Fax: (000) 000-0000
Payment Instructions:
ABA # 000000000
Account # 0000000-03102
Attn: Xxxxx Xxxxxxxxxx
Ref: Safety Components
International, Inc.
2
ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and effect
of sections 6 and 10 of the Subsidiary Guaranty (as each of such terms is
defined in the Credit Agreement referred to in the Amendment No. 6 to Credit
Agreement (the "Amendment"), to which this Acknowledgment and Consent is
appended), each of the undersigned hereby unconditionally and irrevocably (i)
acknowledges receipt of a copy of the Credit Agreement and the Amendment, (ii)
consents to all of the terms and provisions of the Credit Agreement as amended
by the Amendment, and (iii) joins in and agrees to be bound by all of the terms
and provisions and releases provided in section 6 of the Amendment which are
applicable to the Credit Parties, as fully as if the undersigned had been a
signatory to the Amendment.
Capitalized terms which are used herein without definition shall have the
respective meanings ascribed thereto in the Credit Agreement referred to herein.
This Acknowledgment and Consent is for the benefit of the Lenders, the
Administrative Agent, the Collateral Agent, and any Hedge Creditor (as defined
in the Subsidiary Guaranty) which may be a third party beneficiary of the
Subsidiary Guaranty or any Security Document, and their respective successors
and assigns. No term or provision of this Acknowledgment and Consent may be
modified or otherwise changed without the prior written consent of the
Administrative Agent, given as provided in the Credit Agreement. This
Acknowledgment and Consent shall be binding upon the successors and assigns of
each of the undersigned. This Acknowledgment and Consent may be executed by any
of the undersigned in separate counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Acknowledgment and Consent as of the date of the Amendment
referred to herein.
AUTOMOTIVE SAFETY COMPONENTS
INTERNATIONAL, INC.
ASCI HOLDINGS GERMANY (DE), INC.
ASCI HOLDINGS CZECH (DE), INC.
ASCI HOLDINGS MEXICO (DE), INC.
ASCI HOLDINGS U.K (DE), INC.
ASCI HOLDINGS ASIA (DE), INC.
VALENTEC SYSTEMS, INC.
GALION, INC.
VALENTEC INTERNATIONAL
CORPORATION, LLC
SAFETY COMPONENTS FABRIC
TECHNOLOGIES, INC.
CSSC, INC.
ASCI HOLDINGS POLAND (DE), INC.
ASCI HOLDINGS BRAZIL (DE), INC.
By: /s/Xxxxxxx X. Xxxxxx
----------------------------
Executive Vice President
of each of the above
1
SAFETY COMPONENTS INTERNATIONAL, INC.
AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL GmbH & CO. K.G.
AUTOMOTIVE SAFETY COMPONENTS INTERNATIONAL LIMITED
as Borrowers
And
THE LENDERS NAMED HEREIN
as Lenders
And
KEYBANK NATIONAL ASSOCIATION
as Administrative Agent
---------------------
AMENDMENT NO. 6
dated as of
June 23, 1999
to
CREDIT AGREEMENT
dated as of
May 21, 1997
---------------------
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