EXHIBIT 4.14
AMENDMENT NO. 10 TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment No. 10 to Amended and Restated Credit Agreement (this
"AMENDMENT"), dated as of February 4, 2005 but effective as of December 31,
2004, is entered into by and between SIFCO INDUSTRIES, INC. (the "BORROWER") and
NATIONAL CITY BANK (the "BANK") for the purposes amending and supplementing the
documents and instruments referred to below.
WITNESSETH:
WHEREAS, Borrower and Bank are parties to an Amended and Restated Credit
Agreement made as of April 30, 2002, as amended from time to time (as amended,
the "CREDIT AGREEMENT" providing for $6,000,000 of revolving credits; all terms
used in the Credit Agreement being used herein with the same meaning); and
WHEREAS, Borrower and Bank desire to further amend certain provisions of the
Credit Agreement to, among other things, (a) amend and/or waive certain
financial covenants applicable thereto, and (b) supplement certain of the
covenants therein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
SECTION I - AMENDMENTS TO CREDIT AGREEMENT
A. Subsection 2B.16 of the Credit Agreement is hereby amended in its
entirety to read as follows:
2B.16 BORROWING BASE - (i) Borrower and Bank agree that the granting
of Subject Loans shall be subject to a Borrowing Base (defined
below) pursuant to a borrowing base report, to be in form and
substance satisfactory to Bank, and submitted to Bank on a monthly
basis, along with a receivables and payables report, by the 20th day
of each month. No Subject Loan shall be made if, after giving effect
thereto, the aggregate unpaid principal balance of the Subject Loans
would exceed the lesser of the amount of the Subject Commitment then
in effect or the amount of the Borrowing Base then in effect.
(ii) The borrowing base ("Borrowing Base") shall be an amount equal
to eighty percent (80%) of eligible accounts receivable of Borrower
and the Domestic Subsidiaries plus fifty percent (50%) of eligible
finished goods inventory of Borrower and the Domestic Subsidiaries.
B. Subsection 3B.01 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following subsections 3B.01 and
3B.02:
3B.01 TANGIBLE NET WORTH - Borrower shall not suffer or permit the
Tangible Net Worth of the Reporting Group, as of the end of any
month, to be less than the required minimum amount. The required
minimum amount shall be $27,000,000 effective as of the date of this
Amendment. The required minimum amount shall increase as of the last
day of each fiscal year of Borrower, commencing with fiscal year
ending September 30, 2005, by an amount equal to 50% of the
consolidated Net Income of the Reporting Group for such fiscal year
as measured by Borrower's annual audited financial statements for
such fiscal year. If Net Income is less than $0 for any fiscal year,
the required minimum amount shall not be reduced as of the end of
that fiscal year.
3B.02 FIXED CHARGE COVERAGE - If the aggregate outstanding principal
amount of the Subject Loans exceeds $2,500,000.00 during any fiscal
quarter of Borrower, Borrower shall not, as of the end of such
quarter, suffer or permit the ratio of the aggregate of
(a) the Domestic Group's Net Income for the Fixed Charge
Coverage Measurement Period, plus
(b) the Domestic Group's interest expense for that period,
plus
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(c) the Domestic Group's federal, state, and local income tax
expense, if any, for that period, plus
(d) the Domestic Group's depreciation and amortization charges
for that period,
to the aggregate of
(i) the Domestic Group's interest expense for the Fixed Charge
Coverage Measurement Period, plus
(ii) the Domestic Group's federal, state and local income
taxes, if any, actually paid for that period, plus
(iii) an amount equal to the aggregate of all scheduled
principal payments made on Indebtedness for Borrowed Money by
members of the Domestic Group during that period, plus
(iv) the Domestic Group's aggregate investments (net after
trade-ins, sales or liquidations, if any) in fixed or capital
assets and leasehold improvements during that period, plus
(v) all Distributions paid by members of the Domestic Group
during that period
to be less than 1.0 to 1.0. Each "FIXED CHARGE COVERAGE MEASUREMENT
PERIOD" shall be a period of four (4) consecutive quarter-annual
fiscal periods of Borrower ending on the last day of any
quarter-annual fiscal period during which the aggregate outstanding
principal amount of the Subject Loans exceeds $2,500,000.00; except
that the period ending on March 31, 2005 shall consist of the one
quarter-annual period ending on that date, the period ending on June
30, 2005 shall consist of the two consecutive quarter-annual periods
ending on that date and the period ending on September 30, 2005
shall consist of the three consecutive quarter-annual periods ending
on that date.
C. The following new definitions are hereby added to section 9 of the
Credit Agreement:
"DISTRIBUTION" means a payment made, liability incurred, or other
consideration given by any member of the Domestic Group (other than
any stock dividend or stock split payable solely in capital stock of
that member of the Domestic Group) for the purchase, acquisition,
redemption or retirement of any capital stock of that entity or as a
dividend, return of capital, or other distribution in respect of the
capital stock of that member of the Domestic Group.
"DOMESTIC GROUP" means Borrower and all of its Domestic
Subsidiaries.
"DOMESTIC SUBSIDIARY" means any Subsidiary of Borrower which is
organized under the laws of any state or commonwealth of the United
States of America.
"GAAP" means generally accepted accounting principles applied in a
manner consistent with those used in preparation of the most recent
annual financial statements delivered to Bank under the Credit
Agreement.
"INDEBTEDNESS FOR BORROWED MONEY" means all indebtedness for
borrowed money, purchase money indebtedness and with respect to
capitalized lease obligations, including each renewal or extension,
if any, in whole or in part.
"NET INCOME" means net income as determined in accordance with GAAP,
after taxes, if any, and after extraordinary items, but without
giving effect to any gain resulting from any reappraisal or write-up
of any asset.
"REPORTING GROUP" means Borrower and all Subsidiaries of Borrower.
"SUBSIDIARY" means a corporation or other business entity if shares
constituting a majority of its outstanding capital stock (or other
form of ownership) or constituting a majority of the voting power in
any election of directors (or shares constituting both majorities)
are (or upon the exercise of any outstanding warrants, options or
other rights would be) owned directly or indirectly at the time in
question by the corporation in question or another Subsidiary of
that corporation or any combination of the foregoing.
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"TANGIBLE NET WORTH" means the excess (as determined in accordance
with GAAP) of the net book value (after deducting all applicable
valuation reserves and without consideration to any re-appraisal or
write-up of assets) of all of the Reporting Group's tangible assets
(i.e., all assets other than intangibles such as patents, costs of
businesses over net assets acquired, goodwill, and treasury shares)
over the Reporting Group's Debt.
SECTION II - REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to Bank, to the best of Borrower's
knowledge, that
A. None of the representations and warranties made in the Credit
Agreement or any Related Writing, (collectively, the "Loan
Documents") has ceased to be true and complete in any material
respect as of the date hereof; and
B. As of the date hereof no "Default" has occurred that is continuing
under the Loan Documents.
SECTION III - ACKNOWLEDGMENTS CONCERNING OUTSTANDING LOANS
Borrower acknowledges and agrees that, as of the date hereof, all of
Borrower's outstanding loan obligations to Bank are owed without any offset,
deduction, defense, claim or counterclaim of any nature whatsoever. Borrower
authorizes Bank to share all credit and financial information relating to
Borrower with each of Bank's parent company and with any subsidiary or affiliate
company of such Bank or of such Bank's parent company.
SECTION IV - REFERENCES
On and after the effective date of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", or words of like
import referring to the Credit Agreement shall mean and refer to the Credit
Agreement as amended hereby. The Loan Documents, as amended by this Amendment,
are and shall continue to be in full force and effect and are hereby ratified
and confirmed in all respects. The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of Bank
under the Loan Documents or constitute a waiver of any provision of the Loan
Documents except as specifically set forth herein.
SECTION V - COUNTERPARTS AND GOVERNING LAW
This Amendment may be executed in any number of counterparts, each
counterpart to be executed by one or more of the parties but, when taken
together, all counterparts shall constitute one agreement. This Amendment, and
the respective rights and obligations of the parties hereto, shall be construed
in accordance with and governed by Ohio law.
IN WITNESS WHEREOF, the Borrower and the Bank have caused this Amendment to
be executed by their authorized officers as of the date and year first above
written.
SIFCO INDUSTRIES, INC. NATIONAL CITY BANK
/s/ Xxxxxxxxx X. Xxxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
---------------------------- ------------------------
Name: Xxxxxxxxx X. Xxxxxxxxxx Name: Xxxxxx X. Xxxxxxxxx
Title: Corporate Controller Title: Assistant Vice President
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