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EXHIBIT 10.6
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of October
13, 1998 (this "Amendment"), is among AETNA INDUSTRIES, INC., a Delaware
corporation (the "Company"), the guarantors set forth on the signature pages
hereof (collectively, the "Guarantors"), the Lenders set forth on the signature
pages hereof (collectively, the "Lenders") and NBD BANK, a Michigan banking
corporation, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Company, the Guarantors, the Agent and the Lenders are
parties to an Amended and Restated Credit Agreement dated as of April 10, 1998
(as now and hereafter amended, the "Credit Agreement").
B. The Company and the Guarantors desire to amend the Credit
Agreement, and the Agent and the Lenders are willing to do so in accordance with
the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Credit Agreement shall be amended as follows:
1.1 The definition of "Borrowing Base " in Section 1.1 is restated as
follows:
"Borrowing Base" shall mean, as of any date, the lesser of (a)
the sum, without duplication, of (i) an amount equal to 85% of the value of
Eligible Accounts Receivable plus (ii) an amount equal to 60% of the value of
Eligible Inventory not to exceed $9,500,000, plus (iii) an amount equal to 50%
of Eligible Tooling Inventory not to exceed (A) $15,000,000 from the Effective
Date hereof to and including June 30, 1999 or (B) $5,000,000 from and including
July 1, 1999 and thereafter, plus (iv) 80% of the value of Eligible Fixed Assets
owned by the Company and Manufacturing as of the Effective Date, which amount is
equal to $20,028,860 as of the Third Amendment Effective Date, plus (v) if the
SOFEDIT Letter of Credit has been issued in the amount of $10,000,000 and can be
drawn upon and the proceeds applied to the Advances upon satisfaction of the
conditions to a draw thereunder, for the period from and including the Third
Amendment Effective Date to but excluding February 15, 1999 only, $10,000,000
less the amount drawn under the SOFEDIT Letter of Credit, or (b) the amount
calculated under clause (b) of the definition of "Permitted Indebtedness" set
forth in the Senior Note Indenture; provided, however, that the Borrowing Base
shall be determined on the basis of the most current Borrowing Base Certificate
required to be delivered by the Company hereunder.
1.2 The following definitions are hereby added to Section 1.1 in
appropriate alphabetical order:
"SOFEDIT Letter of Credit" shall mean the irrevocable standby
letter of credit issued for the benefit of the Agent and the Lenders in the form
of Schedule 1.1(c) hereto.
"Third Amendment" shall mean the Third Amendment to this
Agreement dated as of October 13, 1998.
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"Third Amendment Effective Date" shall mean the date the Third
Amendment is effective.
1.3 Section 2.11 is modified by adding the following to the end
thereof as a new paragraph:
The Company and the Guarantors represent, acknowledge and agree
that the SOFEDIT Letter of Credit has been issued in the face amount of
$10,000,000 for the benefit of the Agent and the Lenders, and the Agent may draw
under the SOFEDIT Letter of Credit at any time under the terms stated therein
and apply such amounts to the Advances hereunder in such order as determined by
the Agent; provided, however, notwithstanding anything to the contrary, that (i)
subject to the following clause (ii) of this paragraph, the Agent and the
Lenders agree that upon the occurrence of an Event of Default they will not draw
under the SOFEDIT Letter of Credit until the earlier of 10 days after the
occurrence of such Event of Default or February 15, 1999 and (ii) if the
aggregate Facility A Advances and Facility C Advances exceed the amount
calculated under clause (b) of the definition of "Permitted Indebtedness" set
forth in the Senior Note Indenture at any time an Event of Default shall be
deemed to have occurred and the Lenders and the Agent may immediately draw on
the SOFEDIT Letter of Credit.
1.4 The Facility A Commitment amounts for each Lender are amended to
be the amounts set forth next to the signature of each Lender on this Amendment.
1.5 Schedule 1.1(c) attached hereto is hereby added to the Credit
Agreement as Schedule 1.1(c).
ARTICLE II. REPRESENTATIONS. The Company and each Guarantor
represent and warrant to the Agent and the Lenders that:
2.1 The execution, delivery and performance of this Amendment and the
New Facility A Notes (as defined below) are within its powers, has been duly
authorized and is not in contravention of any statute, law or regulation known
to it or of any terms of its Articles of Incorporation or By-laws, or of any
material agreement or undertaking to which it is a party or by which it is
bound.
2.2 This Amendment and the New Facility A Notes are the legal, valid
and binding obligation of the Company and each Guarantor enforceable against
each in accordance with the terms hereof.
2.3 After giving effect to the amendments contained herein, the
representations and warranties contained in Article IV of the Credit Agreement
are true on and as of the date hereof with the same force and effect as if made
on and as of the date hereof.
2.4 After giving effect to the amendments contained herein, no Event
of Default or Default exists or has occurred and is continuing on the date
hereof. Without limiting the foregoing, no event of default or event or
condition which may become an event of default under the Senior Note Documents
has occurred or will be caused by this Amendment or any of the transactions
contemplated hereby.
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2.5 MS has filed a registration statement with the Securities and
Exchange Commission on Form S-1 on August 13, 1998.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not
become effective until each of the following conditions is satisfied:
3.1 The Company shall have delivered to the Agent the original
SOFEDIT Letter of Credit.
3.2 The Company shall have delivered to the Agent the final S-1
registration statement filed by MS with the Securities and Exchange Commission.
3.3 The Company, the Guarantors and the Required Lenders shall have
signed this Amendment.
3.4 The Company shall have signed and delivered to the Agent New
Facility A Notes (the "New Facility A Notes") payable to each Lender in the
maximum amount of their New Facility A Commitment.
3.5 The Company and the Guarantors shall have delivered such
resolutions, officer's certificates and legal opinions as the Agent may
reasonably request.
3.6 The Company shall have delivered to the Agent such other
documents and satisfied such other conditions, if any, as reasonably requested
by the Agent.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Credit Agreement or in any other Loan Document
to (a) the Credit Agreement shall be deemed to be references to the Credit
Agreement as amended hereby and as further amended from time to time and (b) the
Facility Note A Notes shall be deemed to be references to the New Facility A
Notes, as amended or modified from time to time and together with any promissory
note or notes issued in exchange or replacement therefore.
4.2 The Company agrees to pay and to save the Agent harmless for the
payment of all reasonable documented costs and expenses arising in connection
with this Amendment, including the reasonable documented fees of counsel to the
Agent in connection with preparing this Amendment and the related documents.
4.3 The Company and each Guarantor acknowledge and agree that, to the
best of their knowledge, the Agent and the Lenders have fully performed all of
their obligations under all documents executed in connection with the Credit
Agreement. The Company and each Guarantor represent and warrant that they are
not aware of any claims or causes of action against the Agent or any Lender.
4.4 Except as expressly amended hereby, the Company and each
Guarantor agree that the Credit Agreement, the Notes, the Security Documents and
all other documents and agreements executed by the Company in connection with
the Credit Agreement in favor of the Agent or any Lender are ratified and
confirmed, as amended hereby, and shall remain in full force and effect in
accordance with their terms and that they are not aware of any set off,
counterclaim or defense with respect to any of the foregoing.
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Terms used but not defined herein shall have the respective meanings ascribed
thereto in the Credit Agreement. This Amendment may be signed upon any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument, and telecopied signatures shall be effective as
originals.
4.5 The Company and the Guarantors agree to deliver to the Agent
board resolutions approving this amendment and all transactions contemplated
hereby on or before October 31, 1998, and any failure to deliver such board
resolutions shall be an Event of Default under the Credit Agreement.
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IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of the day and year first
above written.
AETNA INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
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Its: Secretary, Vice President, Chief Financial
Officer and Director
Guarantor
AETNA HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Its: Secretary, Vice President, Chief Financial
Officer and Director
Guarantor
AETNA EXPORT SALES CORP.
By: /s/ Xxxxxx X. Xxxxx
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Its:Treasurer, Secretary and Director
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Guarantor
MS ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxx
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Its: Secretary, Vice President North America
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Guarantor
AETNA MANUFACTURING CANADA LTD.
By: /s/ Xxxxxx X. Xxxxx
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Its: Treasurer, Secretary and Director
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NBD BANK, as a Lender and as Agent
By: /s/ Xxxxxx X. Xxxx
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Its: Vice President
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Facility A Commitment Amount during
the period from and including the Third Amendment Effective
Date to and including June 30, 1999: $22,831,858.41
Facility A Commitment Amount during
the period from and including July 1, 1999
to but excluding Termination Date A: $19,026,548.67
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PNC BUSINESS CREDIT, INC.
By: /s/ Xxxx X. Xxxx
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Its: Assistant Vice President
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Facility A Commitment Amount during
the period from and including the Third Amendment Effective
Date to and including June 30, 1999: $15,929,203.55
Facility A Commitment Amount during
the period from and including July 1, 1999
to but excluding Termination Date A: $13,274,336.29
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XXXXXXXX XXXX XX XXXXXX
By: /s/ Xxxxx Xxxxx / /s/ Xxxxx X. Bedad
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Its: Vice President / Vice President
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Facility A Commitment Amount during
the period from and including the Third Amendment Effective
Date to and including June 30, 1999: $10,619,469.02
Facility A Commitment Amount during
the period from and including July 1, 1999
to but excluding Termination Date A: $8,849,557.52
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MICHIGAN NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxx
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Its: Relationship Manager
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Facility A Commitment Amount during
the period from and including the Third Amendment Effective
Date to and including June 30, 1999: $10,619,469.02
Facility A Commitment Amount during
the period from and including July 1, 1999
to but excluding Termination Date A: $8,849,557.52
