Exhibit 4.4.6
FIFTH AMENDMENT TO
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "Fifth Amendment") is made and entered into as of the 14th day
of February, 1997, by and among AEROVOX INCORPORATED, a Delaware corporation
having its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), BHC AEROVOX, LTD., a
corporation organized under the laws of the United Kingdom (the "Guarantor"),
and THE FIRST NATIONAL BANK OF BOSTON (the "Bank"), a national banking
association having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Borrower, Aerovox Aero M, Inc., (predecessor in interest
to the Guarantor under the Loan Documents) and the Bank entered into an Amended
and Restated Revolving Credit Agreement dated as of July 8, 1993, and amended as
of August 30, 1994, December 29, 1995, May 15, 1996, and November 1, 1996 (as
further amended and in effect from time to time, the "Credit Agreement")
pursuant to which the Bank extended credit to the Borrower on the terms set
forth therein;
WHEREAS, the Bank, the Borrower and the Guarantor have agreed to amend
the Credit Agreement as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS. Capitalized terms used herein without definition
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have the meanings ascribed to them in the Credit Agreement.
2. AMENDMENT TO (S)1.1 OF THE CREDIT AGREEMENT. Section 1.1 of the
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Credit Agreement is hereby amended to add the following definitions:
"BHC REVOLVER. The Revolving Credit Facility Letter dated as of
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September 7, 1994 by and between the Guarantor and the First National
Bank of Boston, London Branch, as such agreement may be amended and in
effect from time to time."
"BORROWING BASE. At the relevant time of reference thereto, an
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amount determined by the Bank by reference to the most recent Borrowing
Base Report delivered to the Bank pursuant to (S)6.4(d), which is equal
to the sum of:
(a) 80% of Eligible Receivables owing from account debtors
located within the United States or a territory thereof less than 60
days past due under the original terms of sale; plus
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(b) 50% of Eligible Receivables owing from account debtors
located outside the United States or a territory thereof less than 30
days past due under the original terms of sale; plus
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(c) the lesser of (i) 40% of the Eligible Inventory Amount, or
(ii) $7,000,000; minus
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(d) an amount not to exceed $1,000,000 as selected by the
Borrower in the relevant Borrowing Base Report."
"Borrowing Base Report. See (S)6.4(d)."
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"Capitalized Leases. Leases under which the Borrower or any of
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its Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with generally
accepted accounting principles."
"Consolidated Operating Cash Flow. For any period, an amount
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equal to (i) the sum of (A) EBIT for such period, plus (B)
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depreciation, and amortization and all other noncash charges for such
period, less (ii) the sum of (A) cash payments for all taxes paid
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during such period, plus (B) Capital Expenditures made during such
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period to the extent permitted by (S)8.4."
"Consolidated Annual Financial Obligations. With respect to
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any fiscal year, an amount equal to the sum of all payments on
Indebtedness (including, but not limited to payments of principal and
interest) that become due and payable or that are to become due and
payable during such fiscal year pursuant to any agreement or instrument
to which the Borrower or any of its Subsidiaries is a party relating to
the borrowing of money or the obtaining of credit or in respect of
Capitalized Leases. Demand obligations shall be deemed to be due and
payable during any fiscal year during which such obligations are
outstanding."
"Eligible Finished Goods Inventory. The gross book value, as
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reflected on the books of the Borrower and its Subsidiaries other than
the Guarantor in accordance with GAAP consistently applied, of salable
products and finished goods as to which (a) the Borrower or any of its
Subsidiaries other than the Guarantor has acquired title and, except as
provided below, (b) the Bank has a valid and perfected first priority
security interest under applicable law subject only to the Permitted
Liens and (c) the Borrower has furnished reasonably detailed
information to the Bank in a Borrowing Base Report, determined after
taking into account all charges and liens of all kinds (other than
those of the Bank and carrier, warehouse, customs, and similar
statutory liens arising in the ordinary course of business) against
such finished goods and reduction in the market value thereof, all as
determined by the Bank in its reasonable discretion, which, absent
manifest error, shall be final and binding upon the Borrower and its
Subsidiaries. Finished goods inventory immediately loses the status of
Eligible Finished Goods Inventory if and when the Borrower or any of
its Subsidiaries other than the Guarantor sells it, otherwise passes
title thereto, or consumes it,
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or the Bank release or transfers its security interest therein, or if
and when an Eligible Account Receivable arises by virtue of
constituting proceeds of such inventory. Notwithstanding the foregoing,
but without duplication, Eligible Finished Goods Inventory shall be
reduced by the amount of any specific reserve established by the
Borrower or any of its Subsidiaries other than the Guarantor with
respect to any Eligible Finished Goods Inventory. Calculation of
Eligible Finished Goods Inventory will be made on a FIFO basis."
"Eligible Inventory Amount. Eligible Finished Goods Inventory
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plus Eligible Raw Materials."
"Eligible Raw Materials. An amount equal to the gross book
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value, as reflected on the books of the Borrower and its Subsidiaries
other than the Guarantor in accordance with GAAP consistently applied,
of raw material used in the production of Eligible Finished Goods
Inventory, as to which (a) the Borrower or any of its Subsidiaries
other than the Guarantor has acquired title and, except as provided
below, (b) the Bank has a valid and perfected first priority security
interest under all applicable laws subject only to have furnished
reasonable detailed information to the Bank in a Borrowing Base Report,
after taking into account all charges and liens (other than those of
the Bank and carrier, warehouse, customs and similar statutory liens
arising in the ordinary course of business) of all kinds against such
raw materials and reductions in the market value thereof, all as
determined by the Bank in its reasonable discretion, which, absent
manifest error, shall be final and binding upon Borrower and its
Subsidiaries. Raw material immediately loses the status of Eligible Raw
Material if and when the Borrower or any of its Subsidiaries other than
the Guarantor sells it, otherwise passes title thereto, consumes it, or
materially changes it in the course of processing the same, or the Bank
releases or transfers its security interest therein. Notwithstanding
the foregoing, but without duplication, Eligible Raw Materials shall be
reduced by the amount of any specific reserve established by the
Borrower or any of its Subsidiaries other than the Guarantor with
respect to any Eligible Raw Materials. Calculation of Eligible Raw
Materials will be made on a FIFO basis."
"Eligible Receivable. With respect to the Borrower and its
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Subsidiaries other than the Guarantor, the net amount, as reflected on
the books of the Borrower and its Subsidiaries other than the Guarantor
in accordance with GAAP consistently applied, of trade accounts
receivable outstanding and owed the Borrower and its Subsidiaries other
than the Guarantor by account debtors which are not Subsidiaries of the
Borrower, as to which the Bank has a valid and perfected first priority
security interest under all applicable laws and as to which the
Borrower has furnished reasonably detailed information to the Bank in a
Borrowing Base Report, determined after deducting from the aggregate
amount thereof all payments, adjustment, discounts and credits
applicable thereto, all charges and liens (other than those of the
Bank) of all kinds against such accounts receivable, all amounts due
thereon considered by the Bank to be difficult to collect or
uncollectible by reason of return, rejection, repossession, loss or
damage of or to the merchandise giving rise thereto, merchandise-
related or other disputes, insolvency of the account debtor, or any
other reason, and excluding (a) any accounts receivable arising out of
transactions with respect to which there shall exist any payables,
discounts other than prompt payment discounts in the ordinary
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course of business consistent with past practices, or other similar
offsets or reductions, (b) any accounts receivable that are due from
any single account debtor if more than twenty percent (20%) of the
aggregate amount of all accounts receivable owing to the Borrower or
any of its Subsidiaries other than the Guarantor from any distributor
that has the right to return unsold goods to the Borrower or any of its
Subsidiaries other that the Guarantor (but only to the extent of such
right), all as determined by the Bank in its reasonable discretion,
which, absent manifest error, shall be final and binding upon the
Borrower and its Subsidiaries."
3. AMENDMENT TO (S)2.1 OF THE CREDIT AGREEMENT. The first sentence
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of (S)2.1 of the Credit Agreement is hereby deleted in its entirety and the
following substituted in place thereof.
"Subject to the terms and conditions set forth in this Agreement,
the Bank agrees to lend to the Borrower and the Borrower may borrow and
reborrow from time to time between the Closing Date and the Maturity
Date, upon notice to the Bank given in accordance with (S)2.6 hereof,
such sums as are requested by the Borrower up to a maximum principal
amount outstanding (after giving effect to all amounts requested and
the amount of the Total Outstanding) at any one time not to exceed the
lesser of (a) the Borrowing Base, or (b) $14,360,000, as such amount
maybe reduced pursuant to (S)2.2 hereof (the "Total Commitment")."
4. AMENDMENT TO (S)2.12 OF THE CREDIT AGREEMENT. Section 2.12 of the
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Credit Agreement is hereby amended to add the phrase, "or (b) the Borrowing Base
then in effect" immediately following the phrase, "(whether by reduction of the
Total Commitment or otherwise)" appearing in the fourth and fifth lines thereof.
5. AMENDMENT TO (S)8.1 OF THE CREDIT AGREEMENT. Section 8.1 of the
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Credit Agreement is hereby deleted in its entirety and the following substituted
in place thereof.
"(S)8.1. DEBT TO WORTH RATIO. As at the end of any fiscal quarter
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commencing with the fiscal quarter ending December 28, 1996, the ratio
of Consolidated Total Liabilities to Consolidated Tangible Net Worth
shall be less than the stated ratio for the respective periods set
forth below:
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PERIOD RATIO
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fiscal quarters ending 1.75:1
12/28/96 and 9/30/97
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Thereafter 1.50:1"
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6. AMENDMENT TO (S)8.2 OF THE CREDIT AGREEMENT. Section 8.2 of the
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Credit Agreement is hereby deleted in its entirety and the following substituted
in place thereof:
"8.2. INTEREST COVERAGE RATIO. As of the end of any fiscal
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quarter commencing with the fiscal quarter ending December 28, 1996,
the ratio of EBIT to Consolidated Total Interest Expense (a) for the
two fiscal quarters ending on such date with respect to the fiscal
quarter ending December 28, 1996, and (b) for the fiscal year-to-date
on a cumulative basis with respect to any fiscal quarter ending after
December 28, 1996 shall not be less than the stated ratio for the
fiscal quarters ending during the respective periods set forth below:
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" PERIOD RATIO
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fiscal quarter ending 1.25:1
12/28/96
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fiscal quarter ending on or 1.80:1
about 3/31/97
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fiscal quarter ending on or 2.10:1
about 6/30/97
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fiscal quarter ending on or 2.25:1
about 9/30/97
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fiscal quarters ending 2.50:1
thereafter
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7. ADDITION OF (S)8.3 AND (S)8.4 OF THE CREDIT AGREEMENT. Sections 8.3
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and 8.4 are hereby added to the Credit Agreement immediately following (S)8.2
thereof, which "8.3 and 8.4 read as follows:
"(S)8.3. DEBT SERVICE COVERAGE. As of the end of any fiscal quarter
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commencing with the fiscal quarter ending December 31, 1997, the ratio
of (a) Consolidated Operating Cash Flow to (b) Consolidated Annual
Financial Obligations shall not be less than 1.25:1"
"(S)8.4. CAPITAL EXPENDITURES. As at the end of any fiscal year
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commencing with the fiscal year ending December 31, 1997 the total
amount of Capital Expenditures for such fiscal year shall not exceed
(a) $3,000,000 with respect to the fiscal year ending December 31,
1997, or (b) $5,000,000 with respect to any fiscal year ending
thereafter."
8. COVENANT REGARDING INVENTORY LOCATED IN MEXICO. On or before April
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1, 1997, the Borrower shall, and shall cause its Subsidiaries to, deliver to the
Bank in form and substance satisfactory to the Bank, such documents and
instruments as are necessary in the opinion of counsel to the Bank to create and
perfect a valid first-priority lien in favor of the Bank on all inventory of the
Borrower and its Subsidiaries located in Mexico. Notwithstanding the requirement
set forth in
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the definition of Eligible Raw Materials and Eligible Finished Goods Inventory
that the Bank have a valid and perfected first priority security interest in
such raw materials and inventory in order for such items to be included in the
Borrowing Base, the Borrower may include raw materials and inventory located in
Mexico as to which the Bank does not have to have a valid and perfected security
interest in the calculation of the Borrowing Base prior to April 1, 1997.
9. RATIFICATION, ETC.
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Except as expressly amended hereby, the Credit Agreement, the other
Loan Documents and all documents, instruments and agreements related thereto are
hereby ratified and confirmed in all respects and shall continue in full force
and effect. This Fifth Amendment and the Credit Agreement shall hereafter be
read and construed together as a single document, and all references in the
Credit Agreement or any related agreement or instrument to the Credit Agreement
shall refer to the Credit Agreement as amended by this Fifth Amendment. By
executing this Fifth Amendment where indicated below, the Guarantor hereby
ratifies and confirms its guaranty of the Obligations, and acknowledges and
consents to the terms of this Fifth Amendment.
10. GOVERNING LAW.
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THIS FIFTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL TAKE EFFECT AS A
SEALED INSTRUMENT IN ACCORDANCE WITH SUCH LAWS.
11. COUNTERPARTS. This Fifth Amendment may be executed in any number of
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counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
counterparts taken together shall be deemed to constitute one and the same
instrument. Complete sets of counterparts shall be lodged with the Bank.
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12. EFFECTIVENESS. This Fifth Amendment shall become effective
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upon (a) its execution and delivery by the respective parties hereto, and (b)
the execution and delivery of the Second Amendment to the BHC Revolver by the
respective parties thereto.
13. ENTIRE AGREEMENT. The Credit Agreement as amended by this
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Fifth amendment represents the final agreement between the parties and may not
be contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.
IN WITNESS WHEREOF, the undersigned have duly executed this Fifth
Amendment under seal as of the date first set forth above.
THE BORROWER:
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AEROVOX INCORPORATED
By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Sr. V.P. and CFO
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THE GUARANTOR:
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BHC AEROVOX, LTD.
By: /S/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Sr. V.P./Director
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THE BANK:
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THE FIRST NATIONAL BANK OF BOSTON
By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
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