April 13, 2005
Exhibit
4(b)(4)
April 13,
2005
|
Raybestos
Products Company
0000
Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxxxx,
XX 00000
|
|
|
Raytech
Automotive Components Company
00000
Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxxx, XX 00000 |
Re: Seventh
Amendment to Loan and Security Agreement
Gentlemen:
Reference
is made to the Loan and Security Agreement dated
September 28, 2000 by and
between
Raybestos Products Company, Raytech Automotive Components Company, and
Automotive Composites Company
(collectively
the “Borrowers”) and
Wachovia
Capital Finance Corporation (New England) f/k/a Congress Financial Corporation
(New England) (the
“Lender”),
as amended by that
certain Amendment to Loan and Security Agreement dated March 31, 2003, that
certain Second Amendment to Loan and Security Agreement dated August 12,
2003, that certain Third Amendment to Loan and Security Agreement dated November
12, 2003, that certain Fourth Amendment to Loan and Security Agreement dated
April 5, 2004, that certain Waiver and Fifth Amendment to Loan and Security
Agreement dated May 10, 2004 and that certain Sixth Amendment to Loan and
Security Agreement dated October 12, 2004 (as so amended, the “Loan
Agreement”). All
capitalized terms used but not otherwise defined herein shall have the meanings
given such terms in the Loan Agreement. This agreement is hereby referred to as
the “Seventh Amendment” or “this Letter Agreement.”
(1) Background.
Borrowers have requested that Lender waive certain existing Events of Default
and amend certain provisions of the Loan Agreement. Lender has agreed to the
foregoing subject to the terms and conditions hereof.
(2) Waiver. Subject
to the terms and conditions hereof, Lender hereby waives the Borrowers’
noncompliance with the following: (i) Section 9.6(a)(ii) of the Loan Agreement
(Financial Statements and Other Information) based on the Borrowers’ failure to
timely deliver to Lender audited consolidated financial statements and audited
consolidating financial statements of Parent and its subsidiaries including each
Borrower, together with other required information, for the Borrowers’ fiscal
year ending January 2, 2005 and (ii) Section 9.15 of the Loan Agreement (Fixed
Charge Coverage Ratio) based on the Borrowers’ failure to comply with the
applicable Fixed Charge Coverage Ratio covenant for the twelve-month period
ending January 2, 2005. This waiver is limited to and enforceable only to the
extent specifically set forth herein and shall not be construed as a bar to or
waiver of any right, power and/or remedy which Lender would have on any future
occasion, whether similar in kind or otherwise.
April 13,
2005
Page 2
(3) Amendment
to Section 9.15 of the Loan Agreement (Fixed Charge Coverage
Ratio). Subject
to the terms and conditions hereof, Section 9.15 of the Loan Agreement (Fixed
Charge Coverage Ratio) is hereby deleted in its entirety and replaced with the
following:
“9.15.
Fixed
Charge Coverage Ratio.
Borrowers shall maintain a ratio of (a) Adjusted EBITDA of Borrowers to (b) the
sum of mandatory and voluntary payments on all indebtedness of Borrowers
(including, without limitation, capitalized leases, but excluding payments on
the Revolving Loans unless there is a corresponding permanent reduction in the
Revolver Ceiling), plus the
total interest expense with respect to all outstanding indebtedness of the
Borrowers, plus non-financed capital expenditures, for each of the periods set
forth below:
|
Period |
Fixed
Charge Coverage Ratio |
|
Three
months ended 4/2/05 |
1.00:1.00 |
|
Six
months ended 7/2/05 |
1.00:1.00 |
|
Nine
months ended 9/1/05 |
1.00:1.00 |
|
Twelve
months ended 12/31/05 |
1.00:1.00 |
|
Twelve
months ended on each fiscal quarter thereafter |
1.00:1.00 |
For
purposes of this Section 9.15, the following terms shall have the meanings set
forth below:
“Adjusted
EBITDA” shall
mean for Borrowers, on a consolidated basis, for any period earnings (exclusive
of: (a) extraordinary and nonrecurring items and (b) the amount of the Raybestos
(UK) Limited Loss) before items of interest, taxes, depreciation and
amortization deducted in determining earnings, as determined in accordance with
GAAP.
“Raybestos
(UK) Limited Receivable Loss” means,
for any period, the loss incurred during such period in connection with the
write-off of the Raybestos (UK) Limited Receivable.
“Raybestos
(UK) Limited Receivable” means
that certain receivable in the amount of $3,619,000 at January 2, 2005 owed by
Raybestos (UK) Limited to the Borrowers.
Notwithstanding
anything to the contrary set forth in this Seventh Amendment or any other
Financing Agreement, if Borrowers shall fail to perform, observe or comply with
the foregoing covenant during any applicable period, no Event of Default shall
exist based on such failure, if within fifteen (15) days of Lender’s demand of
Borrowers, Parent makes an irrevocable cash investment in Borrowers, in a form
reasonably acceptable to Lender, in an amount equal to the amount that is
required to increase the Borrowers’ Adjusted EBITDA such that the Borrowers’
Fixed Charge Coverage Ratio shall comply with the applicable ratio corresponding
to such period in the table above; provided,
however, that
if: (i) Borrowers fail to deliver to Lender the financial statements and other
information as required pursuant to Section 9.6 of the Loan Agreement on or
before the expiry of any applicable grace period; or (ii) Parent fails to timely
make the cash payment in accordance with this Section 9.15, then there shall
automatically occur an Event of Default under the Loan Agreement and the other
Financing Agreements, without further action by Lender, and without the
requirement of notice, grace, delay, declaration or demand of any
kind.”
April 13,
2005
Page 3
(4) Closure
of Sterling Heights Facility. As of
the date hereof, the Borrowers maintain various locations including, without
limitation, at 00000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 (the
“Sterling Heights Facility”); provided, however, the Borrowers hereby covenant
and agree with Lender that on or before January 31, 2006, the Borrowers shall:
(i) close the Sterling Heights Facility; and (ii) account for all Collateral
previously maintained at the Sterling Heights Facility by (a) moving all or part
of the Collateral therefrom to one or more of Borrowers’ locations maintained at
0000 Xxxxxxxxxx, Xxxxxxxxxxxxxx, XX 00000, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx, XX
00000 and/or any other location approved by Lender in writing in advance in its
sole discretion (each of the foregoing, an “Approved Location”); and/or (b)
selling all or part of the Collateral therefrom on commercially reasonably terms
and in a commercially reasonably manner (subject, in each case, to the prior
approval of Lender), and delivering to Lender one hundred percent (100%) of the
proceeds from any Collateral that is sold for application by Lender as a
permanent reduction of the Obligations in such order and manner as may be
determined by Lender in its sole discretion. Subject to the terms and conditions
hereof, the Lender hereby consents to the closure of the Sterling Heights
Facility and the Borrowers’ noncompliance with Section 10.1(l) of the Loan
Agreement (Material Adverse Change), solely as it relates to the Borrowers’
closure of the Sterling Heights Facility; provided,
however, that
(a) the Sterling Heights Facility is closed by the Borrowers on or before
January 31, 2006; and (b) within three (3) days of such closure, all Collateral
previously maintained at the Sterling Heights Facility is: (i) relocated to an
Approved Location; and/or (ii) sold by Borrowers in a commercially reasonable
manner on commercially reasonable terms (subject, in each case, to the prior
approval of Lender), and Borrowers shall have delivered to Lender one hundred
percent (100%) of the proceeds from any Collateral that is sold for application
by Lender as a permanent reduction of the Obligations in such order and manner
as may be determined by Lender in its sole discretion. This consent and waiver
is limited to and enforceable only to the extent specifically set forth herein
and shall not be construed as a bar to or waiver of any right, power and/or
remedy which Lender would have on any future occasion, whether similar in kind
or otherwise.
(5) Delivery
of January 2, 2005 Audited Financial Statements. On or
before April 29, 2005, Borrowers shall deliver to Lender audited consolidated
financial statements and audited consolidating financial statements of Parent
and its subsidiaries including each Borrower, together with all other
information required by Section 9.6(a)(ii) of the Loan Agreement with respect to
the fiscal year ending January 2, 2005, and which shall conform to Section
9.6(a)(ii) of the Loan Agreement in all respects.
April 13,
2005
Page 4
(6) Amendment
Fee. Upon
the execution of this Seventh Amendment, Borrowers shall pay a $20,000 fee, in
cash, to Lender (the “Seventh Amendment Fee”). The Seventh Amendment Fee shall
be fully earned and non-refundable as of the execution date of this Seventh
Amendment.
(7) Representations
and Warranties. Each
Borrower hereby represents, warrants and covenants that (a) the representations
and warranties of Borrowers in the Financing Agreements, as modified by the
updated and revised Schedules to the Information Certificate attached to the
Third Amendment, are and remain accurate and complete in all material respects
and (b) no Default or Event of Default exists or has occurred and is continuing
as of the date hereof (after giving effect to this Letter
Agreement).
(8) Enforceability
of Obligations; Waiver. Each
Borrower hereby agrees that (i) the Financing Agreements are in full force and
effect, and enforceable against each Borrower in accordance with their
respective terms, and (ii) each Borrower has no offsets, claims or defenses to
or in connection with the Obligations, or the terms of the Financing Agreements,
all of which offsets, claims or defenses are hereby waived. Each Borrower hereby
waives and affirmatively agrees not to challenge or otherwise pursue any and all
defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs
or other rights that it may have relating to the Obligations, the Financing
Agreements, or the Collateral therefore, including, but not limited to, any
right to contest the Existing Events of Default under the Financing Agreements
or any other Defaults or Events of Default, the liens and security interests in
favor of Lender, or the conduct of Lender in administering any such Obligations
or agreements.
(9) Miscellaneous. Each
Borrower hereby confirms that the Financing Agreements remain in full force and
effect without amendment or modification of any kind, except for the amendments
and modifications set forth herein. The execution and delivery of this Letter
Amendment by Lender shall not be construed as a waiver by Lender of any other
term, covenant, condition or agreement under the Financing Agreements. This
Letter Agreement shall be deemed to be a Financing Agreement and, together with
the other Financing Agreements, constitute the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
dealings, correspondence, conversations or communications between the parties
with respect to the subject matter hereof. This Letter Agreement may be executed
in counterparts and/or by facsimile, and each such counterpart and facsimile
shall be as valid as if an original signature.
[Remainder
of Page Intentionally Left Blank]
Signature
Page to Waiver and Seventh Amendment to Loan and Security
Agreement
| Very truly yours, | |
|
WACHOVIA
CAPITAL FINANCE
CORPORATION
(NEW ENGLAND) F/K/A
CONGRESS
FINANCIAL CORPORATION
(NEW
ENGLAND)
By:
___________________________________
Name:
_____________________________
Title:
______________________________ |
AGREED:RAYBESTOS
PRODUCTS COMPANY
By:
________________________________
Name:
Title:
RAYTECH
AUTOMOTIVE COMPONENTS COMPANY
By:
_________________________________
Name:
Title:
