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Exhibit 10.1
STANDARD MOTOR PRODUCTS, INC.
NOTE AGREEMENT
Dated as of October 15, 1989
Re: $30,000,000 9.47% Senior Notes
Due November 1, 2004
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STANDARD MOTOR PRODUCTS, INC..
00-00 XXXXXXXX XXXXXXXXX
XXXX XXXXXX, XXX XXXX 00000
NOTE AGREEMENT
RE: $30,000,000 9.47% SENIOR NOTES
DUE NOVEMBER 1, 2004
Dated as of
October 15, 1989
To the Purchaser named in
Schedule I which is a signatory
to this Agreement
Gentlemen:
The undersigned, STANDARD MOTOR PRODUCTS, INC., a New York
corporation (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
1.1. Description of Notes. The Company will authorize the
issue and sale of $30,000,000 aggregate principal amount of its 9.47% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from such
date at the rate of 9.47% per annum, payable semiannually on the first day of
each May, and November in each year (commencing May 1, 1990) and at maturity and
to bear interest on overdue principal (including any overdue required or
optional prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest at the rate of
10.47% per annum after maturity, whether by acceleration or otherwise, until
paid, to be expressed to mature on November 1, 2004, and to be substantially in
the form attached hereto as Exhibit A. Interest on the Notes shall be computed
on the basis of a 360-day year of twelve 30-day months. The Notes are not
subject to prepayment or redemption, at the option of the Company prior to their
expressed maturity dates except on the terms and conditions and in the amounts
and with the premium, if any, set forth in Section 2 of this Agreement. The term
"Notes" as used herein shall include each Note delivered pursuant to this
Agreement and the separate agreements with the other purchasers named in
Schedule I. You and the other purchasers named in Schedule I are hereinafter
sometimes referred to as the "Purchasers".
1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes of the Company in the aggregate
principal amount set forth opposite your name in Schedule I, at a price of 100%
of the principal amount thereof on the Closing Date hereinafter mentioned.
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Standard Motor Products, Inc. Note Agreement
Delivery of the Notes will be made at the offices of Xxxxx &
Xxxxxxx, 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, against payment therefor
in Federal or other funds current and immediately available at the principal
office of Bankers Trust Company, One Bankers Trust Plaza, New York, New York,
ABA #000-000-000, for credit to Standard Motor Products, Inc., Account No.
00000000, in the amount of the purchase price at 11:00 A.M., New York time, on
December 12, 1989 or such later date (not later than December 21, 1989) as shall
be mutually agreed upon by the Company and the Purchasers (the "Closing Date").
The Notes delivered to you on the Closing Date will be delivered to you in the
form of a single registered Note for the full amount of your purchase (unless
different denominations are specified by you), registered in your name or in the
name of such nominee as you may specified and in substantially the form attached
hereto as Exhibit A, all as you may specify at any time prior to the date fixed
for delivery.
1.3. Other Agreements. Simultaneously, with the execution and
delivery of this Agreement, the Company is entering into similar agreements with
the other Purchasers under which such other Purchasers agree to purchase from
the Company the principal amount of Notes set opposite such Purchasers' names in
Schedule 1, and your obligation and the obligations of the Company hereunder are
subject to the execution and delivery of the similar agreements by the other
Purchasers. The obligations of each Purchaser shall be several and not joint and
no Purchaser shall be liable or responsible for the acts of any other Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
2.1. Required Prepayments. The Company agrees that on the
first day of November in each year, commencing November 1, 1998 and ending
November 1, 2003, both inclusive (herein called "Fixed Payment Dates"), it will
prepay and apply and there shall become due and payable the sum of $4,250,000 on
the principal indebtedness evidenced by the Notes. The entire unpaid principal
amount of the Notes shall become due and payable on November 1, 2004. No premium
shall be payable in connection with any required prepayment made pursuant to
this Section2.1. For the purposes of this Section2.1, any prepayment of less
than all of the outstanding Notes (i) if made pursuant to Section2.2 shall be
deemed to be applied first, to the amount of principal scheduled to remain
unpaid on November 1, 2004, and then to the remaining scheduled principal
payments in inverse chronological order or (ii) if made pursuant to
SectionSection2.3, 2.4 or 5.13 shall be deemed to be applied to the payment at
maturity and all remaining principal payments required by this Section2.1 on a
pro raTA basis so that each such remaining payment of principal shall thereupon
be reduced in the same proportion that the principal amount of Notes outstanding
immediately preceding the payment pursuant to SectionSection2.3, 2.4 or 5.13 was
reduced by such repayment.
2.2. Optional Prepayment. In addition to the payments required
by Section2.1, upon compliance with Section2.5, and subject to the following
limitations:
(a) Without Premium. The Company shall have the privilege
(which shall be non-cumulative), of prepaying, outstanding Notes on any Fixed
Payment Date (in units of $100,000 or an integral multiple of $10,000 in excess
thereof), by payment of the principal amount of the Notes to be prepaid and
accrued interest thereon to the date of such prepayment and without premium;
provided, however, that (i) the principal amount of Notes prepaid pursuant to
this Section2.2(a) on any one Fixed Payment Date shall not exceed the principal
amount of Notes
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Standard Motor Products, Inc. Note Agreement
required to be prepaid pursuant to Section2.1 on such Fixed Payment Date, and
(ii) the aggregate principal amount of all Notes prepaid pursuant to this
Section2.2(a) shall not exceed $7,500,000; AND
(b) With Premium. In addition to the prepayments required by
Section2.1 and the right of prepayment set forth in Section2.2(a), the Company
shall have the privilege, at any time and from time to time, of prepaying the
outstanding Notes, either in whole or in part (but if in part then in units of
$100,000 or an integral multiple of $10,000 in excess thereof) by payment of the
principal amount of the Notes, or portion thereof to be prepaid, and accrued
interest thereon to the date of such prepayment, together with a premium
determined as follows:
(1) In the event of a prepayment made pursuant to the
provisions of this Section2.2(b) occurring on or prior to
September 30, 2001, the premium shall be an amount equal to
the Make Whole Premium Amount, determined as of five business
days prior to the date of such prepayment; and
(2) In the event of a prepayment made pursuant to the
provisions of this Section2.2(b) occurring on or after
November 1, 2001, the premium shall be an amount equal to the
applicable percentage of such principal amount of the Notes
then to be prepaid, as follows:
If Prepaid During the
12-Month Period Percentage of
Beginning: Principal Amount
November 1, 2001 1.3529%
November 1, 2002 0.6764%
November 1, 2003 Zero
"Make-Whole Premium Amount" shall mean, in connection with any
prepayment, the excess, if any, of (i) the aggregate present value as of the
date of such prepayment of each dollar of principal being prepaid (taking into
account the application of such prepayment required by Section2.1) and the
amount of interest (excluding interest accrued through the date of prepayment)
that would have been payable in respect of such dollar if such prepayment had
not been made, determined by discounting such amounts (on a semiannual basis) at
the Reinvestment Rate from the respective dates on which they would have been
payable, over (ii) 100% of the principal amount of the outstanding Notes being
prepaid. If the Reinvestment Rate is equal to or higher than 9.47%, the
Make-Whole Premium Amount shall be zero.
"Reinvestment Rate" shall mean 0.50% plus the arithmetic mean
of the yields listed under the respective headings "This Week" and "Last Week"
published in the Statistical Release under the caption "Treasury Constant
Maturities" for the maturity (rounded to the nearest month) corresponding to the
Weighted Average Life to Maturity of the principal being prepaid (taking into
account the application of such prepayment required by Section2.1). If no
maturity exactly corresponds to such Weighted Average Life to Maturity, yields
for the two published maturities most closely corresponding to such Weighted
Average Life to Maturity
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Standard Motor Products, Inc. Note Agreement
shall be calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding in each of such relevant periods to the nearest
month. For the purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the Make
Whole Premium Amount hereunder shall be used.
"Statistical Release" shall mean the statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Federal Reserve System and which establishes yields on actively traded U.S.
Government Securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination hereunder, then such
other reasonably comparable index which shall be designated by the holders of
66-2/3% in aggregate principal amount of the outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid shall mean, as of the time of any determination thereof,
the number of years obtained by dividing the then Remaining Dollar-Years of such
principal by the aggregate amount of such principal. The term "Remaining
Dollar-Years" of such principal shall mean the amount obtained by (i)
multiplying for each scheduled payment date of the Notes (1) the remainder of
(A) the amount of principal that would have become due on each scheduled payment
date if the subject prepayment had not been made, less (B) the amount of
principal on the Notes scheduled to become due on each such corresponding date,
after giving effect to the subject prepayment and the application thereof in
accordance with the provisions of Section2.1, by (2) the number of years
(calculated to the nearest one-twelfth) which will elapse between the date of
determination and such scheduled payment date, and (ii) totaling the products
obtained in (i).
2.3. Prepayment on Failure of Holders to Consent to Sale and
Leaseback. At least ninety (90) days in advance of any date on which the Company
proposes to enter (and does in fact enter) into a lease of the nature to which
Section5.10(b) relates, the Company shall give written notice to each holder of
Notes, stating (i) that the Company proposes to enter into a lease of that
nature, (ii) the essential terms of the proposed lease and of the preceding sale
of the property proposed to be leased, (iii) that such notice constitutes the
Company's offer to prepay all or any portion of the Notes held by such holder at
the principal amount thereof plus accrued interest to the date of prepayment,
and (iv) that such offer may be accepted by such holder giving written notice to
the Company (an "Acceptance") not later than thirty (30) days after the date of
receipt of the Company's notice (the "30-Day Period"), specifying in such
Acceptance the principal amount of Notes such holder wishes to have prepaid. The
Company shall then (x) give written notice of prepayment of the aggregate
principal amount of Notes so specified to each holder of Notes fixing the time
of prepayment, which shall be the time when such lease is entered into, and
setting forth the pro forma holdings of each holder of the Notes after giving
effect the subject prepayment of the Notes, and (y) make such prepayment in
accordance with such notice, without premium but together with all interest
accrued thereon to the date of prepayment.
2.4. Prepayment on Change of Control. In the event a Change of
Control shall occur, the Company will, within ten business days after such
Change of Control, give written notice (the "Company Notice") of such event to
all holders of the Notes. Any Company Notice pursuant to this Section2.4 shall
set forth, to the best knowledge and belief of the Company, (a) a summary in
reasonable detail of the transaction or transactions causing the Change of
Control
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Standard Motor Products, Inc. Note Agreement
and (b) the date set for prepayment of the Notes. Forty-five (45) days after the
date of the Company Notice, the Company will prepay all Notes held by all
holders that have requested prepayment in writing at least ten business days
prior to the date specified for prepayment, by payment of the principal amount
thereof, plus accrued interest thereon to the date of prepayment, but without
premium.
"Change of Control" shall mean any event which results in the
legal or beneficial ownership of less than 20% of the outstanding shares of
Voting Stock of the Company being owned of record and beneficially by (i)
Xxxxxxx Xxxx and Xxxxxxxxx Xxxxx, (ii) their respective spouses or lineal
descendants, (iii) the estate of any such individual and/or (iv) any trust
exclusively for the benefit of any such individual.
2.5. Notice of Prepayments. The Company will give notice of
any prepayment of the Notes pursuant to Section2.2 to each holder thereof not
less than 30 days nor more than 60 days before the date fixed for such optional
prepayment specifying (i) such date set for prepayment, (ii) the section of this
Agreement under which the prepayment is to be made, (iii) the principal amount
of the holder's Notes to be prepaid on such date, (iv) whether a premium is or
may be payable, (v) if there is or may be a premium payable, the amount of the
premium or, if not determinable on the date of the giving of notice, the date
when such premium will be calculated, and (vi) the accrued interest applicable
to the prepayment. Such notice of prepayment shall also certify all facts which
are conditions precedent to any such prepayment. Notice of prepayment having
been so given, the aggregate principal amount of the Notes specified in such
notice, together with the premium, if any, and accrued interest thereon shall
become due and payable on the prepayment date. A computation of the amount, if
any, of the premium payable in connection with a prepayment shall be furnished
in writing by telecopy or other same-day written communication to each of the
holders of the Notes to be prepaid as soon as practicable after determination of
such premium and, in any event, at least three days prior to the date fixed for
such prepayment.
2.6. Allocation of Prepayments. All partial prepayments shall
be applied on all outstanding Notes ratably in accordance with the unpaid
principal amounts thereof but only in units of $1,000, and to the extent that
such ratable application shall not result in an even multiple of $10,000,
adjustment may be made by the Company to the end that successive applications
shall result in substantially ratable payments.
2.7. Direct Payment. Notwithstanding anything to the contrary
in this Agreement or the Notes, in the case of any Note owned by a Purchaser or
its nominee or owned by any other institutional holder who has given written
notice to the Company requesting that the provisions of this Section shall
apply, the Company will, by 11 A.M. New York time, punctually pay when due the
principal thereof and premium, if any, and interest thereon, without any
presentment thereof, directly to such Purchaser or such subsequent holder at the
address of' such Purchaser set forth in Schedule I or at such other address as
such Purchaser or such subsequent holder may from time to time designate in
writing to the Company (not less than five (5) days prior to the next payment)
or, if a bank account is designated for such Purchaser on Schedule I hereto or
in any written notice to the Company from such Purchaser or any such subsequent
holder (not less than five (5) days prior to the next payment), the Company will
make such payments in immediately available funds to such bank account, marked
for attention as
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Standard Motor Products, Inc. Note Agreement
indicated, or in such other manner or to such other account of such Purchaser or
such holder in any bank in the United States as the Purchaser or any such
subsequent holder may from time to time direct in writing (not less than five
(5) days prior to the next payment). The holder of any Notes to which this
Section applies agrees that in the event it shall sell or transfer any such
Notes (i) it will, prior to the delivery of such Notes (unless it has already
done so), make a notation thereon of all principal, if any, prepaid on such
Notes and will also note thereon the date to which interest has been paid on
such Notes, and (ii) it will promptly notify the Company of the name and address
of the transferee of any Notes so transferred. With respect to Notes to which
this Section applies, the Company shall be entitled to presume conclusively that
the original or such subsequent institutional holder as shall have requested the
provisions hereof to apply to its Notes remains the holder of such Notes until
(y) the Company shall have received written notice of the transfer of such
Notes, and of the name and address of the transferee, or (z) such Notes shall
have been presented to the Company as evidence of the transfer, whichever shall
occur earlier.
SECTION 3. REPRESENTATIONS.
3.1. Representations of the Company. The Company represents
and warrants that all representations set forth in the form of certificate
attached hereto as Exhibit B are true and correct as of the date hereof (except
as affected by the transactions contemplated by this Agreement) and are
incorporated herein by reference with the same force and effect as though herein
set forth in full.
3.2. Representations of the Purchasers. You represent, and in
entering into this Agreement the Company understands, that you are acquiring the
Notes for the purpose of investment and not with a view to the resale or
distribution thereof, and that you have no present intention of selling,
negotiating or otherwise disposing of the Notes; provided that the disposition
of your property shall at all times be and remain within your control. You
further represent that either (i) you are acquiring the Notes for your own
account and with your general corporate assets and not with the assets of any
separate account in which any employee benefit plan has any interest or (ii) if
any of the funds being used by you to purchase the Notes shall come from assets
allocated to such a separate account, you represent that no part of the funds to
be used by you to acquire the Notes constitutes assets allocated to any separate
account maintained by you with respect to which the assets of any employee
benefit plan (other than any employee benefit plan or plans disclosed to the
Company in writing) exceed five percent (5%) of the total of all assets in such
separate account. The Company acknowledges that your representation set forth in
clause (ii) of the preceding sentence is made in reliance upon and subject to
the accuracy of the representations of the Company set forth in paragraph 16 of
Exhibit B hereto. As used in this Section, the terms "separate account" and
"employee benefit plan" shall have the respective meanings assigned to them in
the Employee Retirement Income Security Act of 1974.
SECTION 4. CLOSING CONDITIONS.
Your obligation to purchase the Notes on the Closing Date
shall be subject to the performance by the Company of its agreements hereunder
which by the terms hereof are to be performed at or prior to the time of
delivery of the Notes and to the following further conditions precedent:
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Standard Motor Products, Inc. Note Agreement
4.1. Closing Certificate. Concurrently with the delivery of
Notes to you on the Closing Date, you shall have received a certificate dated
the Closing Date, signed by the President or a Vice President of the Company
substantially in the form attached hereto as Exhibit B, the truth and accuracy
of which shall be a condition to your obligation to purchase the Notes proposed
to be sold to you.
4.2. Legal Opinions. Concurrently with the delivery of Notes
to you on the Closing Date, you shall have received from Xxxxxxx and Xxxxxx, who
are acting as your special counsel in this transaction, and from Xxxxx &
Schloss, counsel for the Company, their respective opinions dated the Closing
Date, in form and substance satisfactory to you, and covering the matters set
forth in Exhibits C and D, respectively, hereto.
4.3. Related Transactions. Prior to or concurrently with the
issuance and sale of Notes to you, the Company shall have consummated the sale
of the entire principal amount of the Notes scheduled to be sold on the Closing
Date pursuant to this Agreement and the other agreements referred to in
Section1.3.
4.4. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in form
and substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
4.5. Legality. The Notes shall qualify as a legal investment
for you under the laws and regulations of each jurisdiction to which you are
subject (without reference to any so-called "basket" provision which permits the
making of an investment without restrictions as to the character of the
particular Investment being made) and you shall have received such information
as you shall reasonably request from the Company to establish such fact.
4.6. Waiver of Conditions. If on the Closing Date the Company
falls to tender to you the Notes to be issued to you on such date or if the
conditions specified in this Section4 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement. Without
limiting the foregoing, if the conditions specified in this Section4 have not
been fulfilled, you may waive compliance by the Company with any such condition
to such extent as you may in your sole discretion determine. Nothing in this
Section4.6 shall operate to relieve the Company of any of its obligations
hereunder or to waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any
amount remains unpaid on any Note:
5.1. Corporate Existence, etc. The Company will preserve and
keep in force and effect, and will cause each Restricted Subsidiary to preserve
and keep in force and effect, its corporate existence, rights and franchises
necessary to the proper conduct of its business, provided that the foregoing
shall not prevent (i) any transaction permitted by Section5.11 or (ii) the
abandonment or termination of the rights or franchises of the Company or of the
corporate existence, rights and franchises of any Restricted Subsidiary if, in
the opinion of the Board of
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Standard Motor Products, Inc. Note Agreement
Directors of the Company, such abandonment or termination is in the best
interest of the Company and of the holders of the Notes, and if such abandonment
or termination does not in any way constitute a Default or Event of Default
hereunder.
5.2. Insurance. The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties.
5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments, judgments and governmental charges or levies imposed upon the
Company or such Restricted Subsidiary, respectively, or upon or in respect of
all or any part of the property or business of the Company or such Restricted
Subsidiary, all trade accounts payable in accordance with usual and customary
business terms, and all claims for work, labor or materials, which if unpaid
might become a lien or charge upon any property of the Company or such
Restricted Subsidiary; provided the Company or such Restricted Subsidiary shall
not be required to pay any such tax, assessment, charge, levy, account payable
or claim if (i) the validity, applicability or amount thereof is being contested
in good faith by appropriate actions or proceedings which will prevent the
forfeiture or sale of any property of the Company or such Restricted Subsidiary
or any material interference with the use thereof by the Company or such
Restricted Subsidiary, and (ii) the Company or such Restricted Subsidiary shall
set aside on its books, reserves deemed by it to be adequate with respect
thereto. The Company will promptly comply and will cause each Subsidiary to
comply with all laws, ordinances or governmental rules and regulations to which
it is subject including, without limitation, the Occupational Safety and Health
Act of 1970, the Employee Retirement Income Security Act of 1974 and all laws,
ordinances, governmental rules and regulations relating to environmental
protection in all applicable jurisdictions, the violation of which would
materially and adversely affect the properties, business, prospects, profits or
condition of the Company and its Subsidiaries or would result in any lien or
charge upon any property of the Company or any Subsidiary which would materially
and adversely affect the properties, business, prospects, profits or condition
of the Company and its Subsidiaries.
5.4. Maintenance, etc. The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order (normal
wear and tear excepted) and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency thereof
shall be maintained, provided, that nothing contained in this Section5.4 shall
be construed to require the Company or any Restricted Subsidiary to keep or
maintain any building, structure, machinery or other equipment the retention or
maintenance of which is determined by the Board of Directors of the Company or
of such Restricted Subsidiary not to be in the Company's or such Restricted
Subsidiary's best interest in the conduct of its business, if and so long as the
failure to so retain or maintain such building, structure, machinery or other
equipment would not constitute a Default or Event of Default hereunder.
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Standard Motor Products, Inc. Note Agreement
5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would than be
engaged in by the Company and its Restricted Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Company and
its Restricted Subsidiaries on the date of this Agreement.
5.6. Consolidated Working Capital. The Company will at all
times keep and maintain Consolidated Working Capital in an amount not less than
50% of Consolidated Funded Debt.
5.7. Limitations on Indebtedness.
(a) The Company will not and will not permit any Restricted
Subsidiary to create, assume or incur or in any manner be or become liable in
respect of any Current Debt or Funded Debt, except:
(1) the Notes;
(2) Funded Debt of the Company and its Restricted
Subsidiaries outstanding as of the date of this Agreement and
reflected on the consolidated balance sheet of the Company and
its Restricted Subsidiaries as at June 30, 1989;
(3) unsecured Senior Funded Debt of the Company and
unsecured Funded Debt of Restricted Subsidiaries, provided
that at the time of issuance thereof and after giving effect
thereto and to the application of the proceeds thereof:
(i) Consolidated Net Tangible Assets shall
not be less than 190% of Consolidated Senior Funded
Debt,
(ii) Consolidated Net Tangible Assets shall
not be less than 170% of Consolidated Funded Debt,
(iii) the total of Consolidated Net Tangible
Assets plus Average Daily Current Debt in excess of
$15,000,000 shall not be less than 175% of the total
of Consolidated Senior Funded Debt plus Average Daily
Current Debt in excess of $15,000,000; and
(iv) the aggregate outstanding amount of (a)
Funded Debt of Restricted Subsidiaries plus (b)
Current Debt of Restricted Subsidiaries shall not
exceed 7.5% of Consolidated Net Tangible Assets;
(4) Subordinated Debt of the Company, provided that
at the time of issuance thereof and after giving effect
thereto and to the application of the proceeds thereof,
Consolidated Net Tangible Assets plus Average Daily Current
Debt in excess of $15,000,000 shall not be less than 170% of
the total of Consolidated Funded Debt plus Average Daily
Current Debt in excess of $15,000,000;
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Standard Motor Products, Inc. Note Agreement
(5) unsecured Current Debt of the Company and its Restricted
Subsidiaries, provided that
(i) either (x) during the period of the
twelve (12) calendar months then most recently ended,
there shall have been a period of at least 45
consecutive days in which the Company and its
Restricted Subsidiaries shall have had no Current
Debt (excluding current maturities of Funded Debt
otherwise included therein) outstanding in excess of
$15,000,000, or (y) the Company and its Restricted
Subsidiaries would have been permitted
underSection5.7(a)(3)(iii) hereof to incur additional
Senior Funded Debt during each and every day of the
most recent Designated Period, in an amount equal to
the amount by which the Average Daily Current Debt of
the Company and its Restricted Subsidiaries during
such Designated Period exceeds $15,000,000 (and for
all other purposes under this Agreement, the Company
shall be deemed to have remained liable with respect
to said amount of additional Senior Funded Debt for
the entire Designated Period); and
(ii) after giving effect to the principal
amount of Current Debt proposed to be incurred, (x)
the aggregate amount of Current Debt (excluding
current maturities of Funded Debt otherwise included
therein) of Restricted Subsidiaries shall not exceed
2.5% of Consolidated Net Tangible Assets, and (y) the
aggregate amount of Current Debt and Funded Debt of
Restricted Subsidiaries, outstanding as of such date,
shall not exceed 7.5% of Consolidated Net Tangible
Assets;
(6) Current Debt and Funded Debt of the Company and its
Restricted Subsidiaries secured by liens permitted by Sections5.8(a) (vi),
(vii) or (viii), provided that at the time of issuance thereof AND after giving
effect thereto and to the application of the proceeds thereof:
(i) the aggregate amount of (a) Current Debt
and Funded Debt of Restricted Subsidiaries plus (b)
all Current Debt and Funded Debt of the Company
secured by liens permitted by Sections5.8(A) (vi),
(vii) or (viii) shall not exceed 10% of Consolidated
Net Tangible Assets; and
(ii) the Company could incur $1.00 of
additional unsecured Senior Funded Debt pursuant to
the provisions of Section5.7(a) (3);
and
(7) Current Debt or Funded Debt of a Restricted Subsidiary to
the Company or to a Restricted Subsidiary.
(b) Any corporation which becomes a Restricted Subsidiary
after the date hereof shall for all purposes of this Section5.7 be deemed to
have created, assumed or incurred at the time it becomes a Restricted SubsidiarY
all Funded Debt and Current Debt of such corporation existing immediately after
it becomes a Restricted Subsidiary.
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Standard Motor Products, Inc. Note Agreement
5.8. Limitation on Liens. (a) The Company will not, and will
not permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention devices,
except:
(i) liens for property taxes and assessments
or governmental charges or levies, provided that
payment thereof is not at the time required by
Section5.3;
(ii) liens of or resulting from any judgment
or award, the time for the appeal or petition for
rehearing of which shall not have expired, or in
respect of which the Company or a Restricted
Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for a review and
in respect of which a stay of execution pending such
appeal or proceeding for review shall have been
secured;
(iii) liens, charges, encumbrances and
priority claims incidental to the conduct of business
or the ownership of properties and assets (including
warehousemen's and attorneys' liens and statutory
landlords' liens), liens securing claims and demands
of mechanics and materialmen, and deposits, pledges
or liens to secure the performance of bids, tenders
or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other liens of
like general nature incurred in the ordinary course
of business and not in connection with the borrowing
of money, provided in each case, the obligation
secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or
proceedings;
(iv) minor survey exceptions or minor
encumbrances, easements or reservations, or rights of
others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the
use of real properties, which are necessary for the
conduct of the activities of the Company and its
Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar
activities and similarly situated and which do not in
any event materially impair their current use in the
operation of the business of the Company and its
Restricted Subsidiaries;
(v) mortgages, liens or security interests
securing Indebtedness of a Restricted Subsidiary to
the Company;
(vi) mortgages, conditional sale contracts,
security interests or other arrangements for the
retention of title (including Capitalized Leases)
existing as of June 30, 1989, securing Current or
Funded Debt of the
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Standard Motor Products, Inc. Note Agreement
Company or any Restricted Subsidiary outstanding on
such date (including any renewals, extensions or
replacements thereof, provided that there is no
increase in the aggregate principal amount of Funded
Debt secured thereby and no additional property is
encumbered); and
(vii) mortgages, conditional sale contracts,
security interests or other arrangements for the
retention of title (including Capitalized Leases)
incurred after the date hereof (including any
renewals, extensions or replacements thereof,
provided that there is no increase in the aggregate
principal amount of Funded or Current Debt secured
thereby and no additional property is encumbered)
given to secure the payment of the purchase price
incurred in connection with the acquisition or
construction of, or incurred to secure obligations in
respect of the financing or refinancing of, and
incurred within 180 days of the acquisition or
completion of construction of, fixed assets useful
and intended to be used in carrying on the business
of the Company or a Restricted Subsidiary, including
liens existing on such fixed assets at the time of
acquisition thereof or at the time of acquisition by
the Company or a Restricted Subsidiary of any
business entity then owning such fixed assets,
whether or not such existing liens were given to
secure the payment of the purchase price of the fixed
assets to which they attach so long as they were not
incurred, extended or renewed in contemplation of
such acquisition, provided that (i) the lien or
charge shall be created within 180 days of the
acquisition or completion of construction of such
property and shall attach solely to the property
acquired, purchased or constructed, (ii) at the time
of acquisition or construction of such fixed assets,
the aggregate amount remaining unpaid on all
Indebtedness secured by liens on such fixed assets
whether or not assumed by the Company or a Restricted
Subsidiary shall not exceed an amount equal to 100%
of the lesser of the total purchase price or fair
market value at the time of acquisition or
construction of such fixed assets (as determined in
good faith by the Board of Directors of the Company),
and (iii) all such Indebtedness shall have been
incurred within the applicable limitations provided
inSection5.7; and
(viii) liens securing Current Debt or Funded
Debt of the Company or any Restricted Subsidiary not
otherwise permitted by this Section5.8(a), provided
that the incurrence of such Current Debt oR Funded
Debt is permitted by the Applicable provisions of
Section5.7.
(b) Any corporation which becomes a Restricted Subsidiary
after the date hereof shall, for purposes of Section5.8(a)(vii), be deemed to
have been acquired at the time it becomes a Restricted Subsidiary.
(c) In the event that any property of the Company or its
Restricted Subsidiaries is subjected to a lien in violation of Section5.8(a)
(the Indebtedness secured by such lien being referred to as "Prohibited Secured
Indebtedness"), such violation of Section 5.8(a) shall not constitute an Event
of Default hereunder if the Company substantially simultaneously with the
incurrence of such lien,
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Standard Motor Products, Inc. Note Agreement
makes or causes to be made a provision whereby the Notes will be secured equally
and ratably with all Prohibited Secured Indebtedness pursuant to security
arrangements satisfactory in form, scope and substance to the holder or holders
of not less than 66-2/3% in aggregate principal amount of the Notes then
outstanding, and, in any case, the Notes shall have the benefit, to the full
extent that, and with such priority as, the holders of the Notes may be entitled
thereto under applicable law, of an equitable lien to secure the Notes on such
property of the Company or its Restricted Subsidiaries that secures Prohibited
Secured Indebtedness.
5.9. Dividends, Stock Purchases. The Company will not except
as hereinafter provided:
(a) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of capital stock of the Company); or
(b) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its capital
stock (other than in exchange for or out of the net cash proceeds to the Company
from the substantially concurrent issue or sale of other shares of capital stock
of the Company or warrants, rights or options to purchase or acquire any shares
of its capital stock); or
(c) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock; or
(d) make, directly or indirectly, or through any Subsidiary or
Affiliate, any voluntary or optional payment, prepayment, redemption or
repurchase in respect of the principal amount of any Subordinated Debt of the
Company (except with the proceeds derived from the substantially concurrent
issuance of additional Subordinated Debt); or
(e) make or permit any Restricted Subsidiary to make any
Restricted Investment;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, and all such other
distributions , payments, prepayments, redemptions or repurchases in respect of
Subordinated Debt and the making or authorization of Restricted Investments
being herein collectively called "Restricted Payments"), if after giving effect
thereto (A) the aggregate amount of Restricted Payments made during the period
from and after December 31, 1988 to and including the date of the making of the
Restricted Payment in question, would exceed the sum of (i) $36,000,000 plus
(ii) 100% of Consolidated Net Income for such period, computed on a cumulative
basis for said entire period (or if such Consolidated Net Income is a deficit
figure, then minus 100% of such deficit) and (B) the Company would be permitted
to incur at least $1.00 of additional Senior Funded Debt pursuant to the
provisions of Section5.7(a)(3).
The Company will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after the date of declaration
thereof.
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Standard Motor Products, Inc. Note Agreement
For the purposes of this Section5.9 the amount of any
Restricted Payment declared, paid or distributed in property of the Company
shall be deemed to be the net book value (as determined by the Company's regular
independent public accounts in accordance with generally accepted accounting
principles consistently applied) of such property at the time of the making of
the Restricted Payment in question.
In valuing any investments, loans and advances for the purpose
of applying the limitations set forth in this Section5.9, such investments,
loans and advances shall be taken at the original cost thereof, without
allowance for any subsequent write-offs or appreciation or depreciation therein,
but less any amount repaid or recovered on account of capital or principal.
5.10. Limitation on Long-Term Leases, Sale and Leasebacks.
(a) The Company will not and will not permit any Restricted
Subsidiary to become obligated, as lessee, under any Long-Term Lease if at the
time of entering into any such Long-Term Lease and after giving effect thereto,
the aggregate Rentals payable by the Company and all of its Restricted
Subsidiaries on a consolidated basis in any one fiscal year thereafter under all
Long-Term Leases would exceed 10% of Consolidated Net Tangible Assets. For
purposes of this Section5.10, any Long-Term Lease, the lease payments of which
are, directly or indirectly, guaranteed by the Company or any Restricted
Subsidiary shall be deemed to be a Long-Term Lease entered into by the Company
or such Restricted Subsidiary.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, enter into any arrangement whereby the Company or any Restricted
Subsidiary shall sell or transfer any property owned by the Company or any
Restricted Subsidiary to any Person other than the Company or a Restricted
Subsidiary and thereupon the Company or any Restricted Subsidiary shall lease or
intend to lease, as lessee, the same property where the aggregate book value of
all such assets then subject to any such arrangement shall exceed 10% of
Consolidated Net Tangible Assets, provided, however, the Company or any
Restricted Subsidiary may enter into such arrangements if both of the following
conditions are met:
(i) the net proceeds of the sale are not
less than the fair market value of the property sold,
as determined by the Board of Directors of the
Company; and
(ii) the Company complies with the
provisions of Section2.3.
5.11. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any Restricted
Subsidiary to (i) consolidate with or be a party to a merger with any other
corporation or (ii) sell, lease or otherwise dispose of all or any substantial
part (as defined in paragraph (d) of this Section5.11) of the assets of the
Company and its RestricTED Subsidiaries, provided, however, that:
(1) any Restricted Subsidiary may merge or
consolidate with or into the Company or any Wholly-owned
Restricted Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the
surviving or continuing corporation;
-14-
16
(2) the Company may consolidate or merge with any
other corporation if (i) the Company shall be the surviving or
continuing corporation, (ii) at the time of such consolidation
or merger and after giving effect thereto no Default or Event
of Default shall have occurred and be continuing, (iii) after
giving effect to such consolidation or merger the Company
would be permitted to incur at least $1.00 of additional
Senior Funded Debt under the provisions of Section5.7(a)(3)
and (iv) at the time such merger or consolidation is effected,
the Company shall deliver to each holder of the Notes a
certificate indicating that after giving effect to the subject
transaction, there has been no violation of Section5.5 or this
Section5.11; and
(3) any Restricted Subsidiary may sell, lease or
otherwise dispose of all or any substantial part of its assets
to the Company or any Wholly-owned Restricted Subsidiary.
(b) Except in connection with a merger or consolidation
permitted by the provisions of Section5.11(a), the Company will not permit any
Restricted Subsidiary to issue or sell any shares of stock of any class
(including as "stock" for the purposes of this Section5.11, any warrants, rights
or options to purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of Such Restricted Subsidiary to any
Person other than the Company or a Restricted Subsidiary, except for the purpose
of qualifying directors, or except in satisfaction of the validly pre-existing
preemptive rights of minority shareholders in connection with the simultaneous
issuance of stock to the Company and/or a Restricted Subsidiary whereby the
Company and/or such Restricted Subsidiary maintain their same proportionate
interest in such Restricted Subsidiary, provided, in the case of shares issued
for the purpose of qualifying directors, such shares are subject to a written
agreement between the Company and each of such directors requiring the resale of
the shares to the Company at the time any such director ceases to be a director.
(c) The Company will not sell, transfer or otherwise dispose
of any shares of stock in any Restricted Subsidiary (except to qualify
directors, provided, such shares issued for the purpose of qualifying directors
are subject to a written agreement between the Company and each of such
directors requiring the resale of the shares to the Company at the time any such
director ceases to be a director) or any Indebtedness of any Restricted
Subsidiary, and will not permit any Restricted Subsidiary to sell, transfer or
otherwise dispose of (except to the Company or a Restricted Subsidiary) any
shares of stock or any Indebtedness of any other Restricted Subsidiary, unless:
(1) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of such
Restricted Subsidiary at the time owned by the Company and by
every other Subsidiary shall be sold, transferred or disposed
of as an entirety;
(2) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
retention of such stock and Indebtedness is no longer in the
best interests of the Company;
-15-
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(3) such stock and Indebtedness is sold, transferred
or otherwise disposed of to a Person, for a cash consideration
and on terms reasonably deemed by the Board of Directors to be
adequate and satisfactory, provided, such stock and
Indebtedness may be sold, transferred or otherwise disposed of
for (i) shares of stock of another corporation if, after
giving effect to such transaction, the corporation whose stock
is given as consideration shall be a Restricted Subsidiary of
which the Company and its Restricted Subsidiaries own a
percentage of the outstanding shares of capital stock at least
equal to that which they owned in the Restricted Subsidiary
that was sold, transferred or otherwise disposed of or (ii)
Indebtedness of another Person if such Indebtedness shall be
secured by a pledge of or lien upon all Securities of the
Restricted Subsidiary being sold, transferred or otherwise
disposed of and such pledge or lien shall rank prior to all
other pledges thereof or liens thereon;
(4) the Restricted Subsidiary being disposed of shall
not have any continuing investment in the Company or any other
Subsidiary not being simultaneously disposed of;
(5) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets of the
Company and its Restricted Subsidiaries; and
(6) immediately after giving effect to such sale,
transfer or disposal of such stock or Indebtedness, no Default
or Event of Default shall have occurred and be continuing and
the Company would be permitted to incur at least $1.00 of
additional Senior Funded Debt under the provisions of
Section5.7(a)(3).
(d) As used in this Section5.11, a sale, lease or other
disposition of assets shall be deemed to be a "substantial part" of the assets
of the Company and its Restricted Subsidiaries only if the aggregate net book
value of such assets, when added to the aggregate net book value of all other
assets sold, leased or otherwise disposed of by the Company and its Restricted
Subsidiaries (other than in the ordinary course of business and as provided in
Section5.11(e)) hereof during the same fiscal year, exceeds 15% of the
Consolidated Net Tangible Assets of the Company and its Restricted Subsidiaries
determined as of the end of the immediately preceding fiscal year.
(e) Notwithstanding the foregoing provisions of this
Section5.11, the Company and its Restricted Subsidiaries may discount (without
recourse to the Company or its Restricted Subsidiaries), hypothecate or sell to
any commercial banking institution its trade accounts receivable arising in the
ordinary course of the Company's business; provided, that the Company and its
Restricted Subsidiaries shall receive no less than the greater of fair market
value or 80% of face value of such trade accounts receivable being discounted,
hypothecated or sold.
5.12. Guaranties. The Company will not and will not permit any
Restricted Subsidiary to become or be liable in respect of any Guaranty except
Guaranties of the Company or any Restricted Subsidiary which are limited in
amount to a stated maximum dollar exposure and included in Current Debt or
Consolidated Senior Funded Debt.
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18
5.13. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes, or portion thereof, unless the offer has
been made to repurchase Notes, pro rata, from all holders of the Notes at the
same time and upon the same terms. In case the Company repurchases any Notes,
such Notes shall thereafter be cancelled and no Notes shall be issued in
substitution therefor and the Company shall give prompt written notice of such
repurchases to all remaining holders of the Notes.
5.14. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course of and pursuant
to the reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would be obtained in a comparable arm's-length
transaction with a Person other than an Affiliate.
5.15. Restricted and Unrestricted Subsidiaries.
(a) The Company may designate each Subsidiary either a
Restricted Subsidiary or an Unrestricted Subsidiary. Any Subsidiary which is not
designated an Unrestricted Subsidiary within 60 days of its organization or
acquisition shall be a Restricted Subsidiary if such Subsidiary (i) is organized
under the laws of one of the United States or the District of Columbia, or
Canada, or a Canadian province, (ii) has a major part of its properties located
in, and does substantially all of its business in, the United States, Canada, or
Puerto Rico and (iii) has all of its voting capital stock or other Voting Stock,
other than directors' qualifying shares, owned by the Company or a Restricted
Subsidiary.
(b) The Board of Directors may at any time designate or
redesignate any Restricted Subsidiary as an Unrestricted Subsidiary if all of
the following conditions are met: (i) such Subsidiary does not own, directly or
indirectly, any capital stock or Indebtedness of the Company or any Restricted
Subsidiary; (ii) after giving effect to the proposed redesignation, the Company
would be permitted to incur at least $1.00 of additional Senior Funded Debt
pursuant to the provisions of Section5.7(a)(3); and (iii) immediately following
the proposed redesignation, there shall exist no condition constituting, or
which, after notice, lapse of time, or both could constitute, an Event of
Default. For purposes of this Section5.15(b), capital stock (or other Voting
Stock) of a corporation shall be deemed an asset not located in the United
States or Canada (regardless of location of the certificate evidencing the
same).
(c) The Board of Directors may at any time designate or
redesignate any Unrestricted Subsidiary as a Restricted Subsidiary if all of the
following conditions are met: (i) after giving effect to the proposed
redesignation, the Company would be permitted to incur at least $1.00 of
additional Senior Funded Debt pursuant to the provisions of Section5.7(a)(3);
(ii) immediately following the proposed redesignation, there shall exist no
condition constituting, or which, after notice, lapse of time, or both could
constitute, an Event of Default and (iii) such Subsidiary, while an Unrestricted
Subsidiary, has taken no action that it would have been
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prohibited by the terms of this Agreement from taking had it been a Restricted
Subsidiary at the time it took such action.
5.16. Termination of Pension Plans. The Company will not and
will not permit any Subsidiary to permit any employee benefit plan maintained by
it to be terminated in a manner which could result in the imposition of a lien
on any property of the Company or any Subsidiary pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974, as amended.
5.17. Reports and Rights of Inspection. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with generally accepted principles of accounting consistently
maintained (except for changes disclosed in the financial statements furnished
to you pursuant to this Section5.17 and concurred in by the independent public
accountants referred to in Section5.17(b) hereof), and will furnish to you so
long as you are the holder of any Note and to each other institutional holder of
the then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fisca1 period (except the
last) of each fiscal year, duplicate copies of:
(1) consolidated and consolidating balance sheets of
the Company and its Restricted Subsidiaries as of the close of
such quarter setting forth in comparative form the
consolidated figures for the end of the preceding fiscal year,
(2) consolidated and consolidating statements of
income and retained earnings of the Company and its Restricted
Subsidiaries for such quarterly period, setting forth in
comparative form the consolidated figures for the
corresponding period of the preceding fiscal year, and
(3) consolidated and consolidating statements of cash
flows of the Company and its Restricted Subsidiaries for the
portion of the fiscal year ending with such quarter, setting
forth in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct, by an authorized
financial officer of the Company;
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company, duplicate
copies of:
(1) consolidated and consolidating balance sheets of
the Company and its Restricted Subsidiaries as of the close of
such fiscal year, and
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20
(2) consolidated and consolidating Statements of
income and retained earnings and of cash flows of the Company
and its Restricted Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures for the
preceding fiscal year, all in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants of recognized national
standing selected by the Company to the effect that the consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and present fairly, in all material respects, the financial condition
of the Company and its Restricted Subsidiaries and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards and accordingly includes
such tests of the accounting records and such other auditing procedures as were
considered necessary in the circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the books of
the Company or any Restricted Subsidiary;
(d) SEC and Other Reports. Promptly, upon their becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by the Company to stockholders generally and of each regular or
periodic report, and any registration statement or prospectus filed by the
Company or any Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency, and copies of any orders in any
proceedings to which the Company or any of its Subsidiaries is a party, issued
by any governmental agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) Requested Information. With reasonable promptness, such
other data and information as may be reasonably requested from (i) you or (ii)
any Person holding 10% or more in aggregate principal amount of the Notes or
(iii) any Person holding 100% of the Notes originally issued to any Purchaser
that are, on the date of such request, then outstanding;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial officer
of the Company stating that such officer has reviewed the provisions of this
Agreement and setting forth: (i) the information and computations (in sufficient
detail) required in order to establish whether the Company was in compliance
with the requirements of Section5.6 through Section5.11, inclusive, at the end
of the period covered by the financial statements then being furnished, (ii)
whether there existed as of the date of such financial statements and whether,
to the best of such officer's knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such financial
statements any Default or Event of Default and, if any such condition or event
exists on the date of the certificate, specifying the nature and period of
existence thereof and the action the Company is taking and proposes to take with
respect thereto, (iii) one of the following (as appropriate): (x) the period
within the most recent year during which the Company and its Restricted
Subsidiaries had no Current Debt exceeding $15,000,000 or (y) the Designated
Period and the amount of Current Debt deemed to be Senior Funded Debt pursuant
to Section 5.7(a)(5).
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(g) Accountants' Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an opinion with
respect to such financial statements, stating (i) that they have reviewed this
Agreement, (ii) whether, in making their audit, such accountants have become
aware of any Default or Event of Default under any of the terms or provisions of
this Agreement insofar as any such terms or provisions pertain to or involve
accounting matters or determinations, and if any such condition or event then
exists, specifying the nature and period of existence thereof, (iii) specifying
the amount available as at the end of such period for Restricted Payments in
compliance with Section5.9, and showing in reasonable detaIL the calculation of
such amount, (iv) demonstrating compliance during such period with clause (x) of
Section5.7(a)(5)(i) by specifying the period within the most recent year during
which the Company and its Restricted Subsidiaries had no Current Debt exceeding
$15,000,000 or, alternatively, specifying the amount of Current Debt deemed to
be Senior Funded Debt pursuant to Section5.7(5)(i)(y) and the period during
which this was deemed to be the case, and (v) demonstrating in reasonable detail
compliance, during and as at the end of such period, with Section5.5,
Section5.7(a)(3), Section5.7(a)(4), Section5.10 and Section5.11; and
(h) Unrestricted Subsidiaries. Within the respective periods
provided in paragraph (b) above, financial statement of the character and for
the dates and periods as in said paragraph (b) provided covering each
Unrestricted Subsidiary (or groups of Unrestricted Subsidiaries on a
consolidated basis).
Without limiting the foregoing, the Company will permit (i) you, so long as you
are the holder of any Note, and (ii) each institutional holder of not less than
5% in aggregate of the then outstanding Notes and (iii) each institutional
holder holding 100% of the outstanding Notes originally issued to any Purchaser
that are, as of the date of such proposed inspection, then outstanding (or such
Persons as you or any such holder may designate), to visit and inspect, under
the Company's guidance, any of the properties of the Company or any Subsidiary,
to examine all their books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees, and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss with you the finances and affairs of the Company and its
Subsidiaries) all at such reasonable times and as often as may be reasonably
requested. Notwithstanding the foregoing, any holder of Notes who is a
Competitor shall have no rights of inspection pursuant to this paragraph so long
as it is a Competitor. If (and only if) an Event of Default shall at the time
have occurred and be continuing, the Company shall be required to pay or
reimburse you or any such holder for expenses which you or any such holder may
incur in connection with any such visitation or inspection.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for more
than ten days; or
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(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in Section2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or the premium thereon at the expressed or any
accelerated maturity date or at any date fixed for Prepayment; or
(d) Default shall be made in the payment of the principal of
or interest on any Material Indebtedness of the Company or any Restricted
Subsidiary for borrowed money, as and when the same shall become due and payable
by the lapse of time, by declaration, by call for redemption or otherwise, and
such default shall continue beyond the period of grace, if any, allowed with
respect thereto; or
(e) Default or the happening of any event shall occur under
any indenture, agreement, or other instrument under which any Material
Indebtedness of the Company or any Restricted Subsidiary for borrowed money may
be issued and such default or event shall continue for a period of time
sufficient to permit the acceleration of the maturity of any Material
Indebtedness of the Company or any Restricted Subsidiary outstanding thereunder;
or
(f) Default shall occur in the observance or performance of
any covenant or agreement contained in Section5.6 through Section5.15, hereof;
or
(g) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied within 30 days after
notice thereof to the Company by the holder of any Note; or
(h) Any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by the Company
in connection with the consummation of the issuance and delivery of the Notes or
furnished by the Company pursuant hereto, is untrue in any material respect as
of the date of the issuance or making thereof; or
(i) The Company or any Restricted Subsidiary becomes insolvent
or bankrupt, is generally not paying its debts as they become due or makes an
assignment for the benefit of creditors, or the Company or any Restricted
Subsidiary applies for or consents to the appointment of a custodian, trustee or
receiver for the Company or such Restricted Subsidiary or for the major part of
the property of either; or
(j) A custodian, trustee or receiver is appointed for the
Company or any Restricted Subsidiary or for the major part of the property of
either and is not discharged within 60 days after such appointment; or
(k) Final judgment or judgments for the payment of money
aggregating in excess of $500,000 is or are outstanding against the Company or
any Restricted Subsidiary or against any property or assets of either and any
one of such judgments has remained unpaid, unvacated, unbonded or unstayed by
appeal or otherwise for a period of 60 days from the date of its entry; or
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(l) Bankruptcy reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or similar law
or laws for the relief of debtors, are instituted by or against the Company or
any Restricted Subsidiary and, if instituted against the Company or any
Restricted Subsidiary, are consented to or are not dismissed within 60 days
after such institution.
6.2. Notice to Holders. When any Event of Default described in
the foregoing Section6.1 has occurred, or if the holder of any Note or of any
other evidence of Indebtedness of the Company gives any notice or takes any
other action with respect to a claimed default, the Company agrees to give
notice within three business days of such event to all holders of the Notes then
outstanding, such notice to be in writing and sent by registered or certified
mail, by telegram or by telecopy (with a return telecopied confirmation of
receipt).
6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section6.1 has happened and is
continuing, any holder of any Note may, and when any Event of Default described
in paragraphs (d) through (k), inclusive, of said Section6.1 has happened and is
continuing, the holder or holders of 25% or more of the principal amount of
Notes at the time outstanding may, by notice in writing sent by registered or
certified mail to the Company, declare the entire principal and all interest
accrued on all Notes to be, and all Notes shall thereupon become, forthwith due
and payable, without any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived. When any Event of Default
described in paragraph (i), (j) and (l) of Section6.1 has occurred, then all
outstanding Notes shall immediately become due and payable without presentment,
demand or notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will forthwith pay to
the holders of the Notes the entire principle and interest accrued on the Notes
and, to the extent permitted by law, a premium in the amount, if any, which
would be payable if the Company then had elected to prepay the Notes pursuant to
Section2.2(b). No course of dealing on the part of any Noteholder nor any delay
or failure on the part of any Noteholder to exercise any right shall operate as
a waiver of such right or otherwise prejudice such holder's rights, powers and
remedies. The Company further agrees, to the extent permitted by law, to pay to
the holder or holders of the Notes all costs and expenses incurred by them in
the collection of any Notes upon any default hereunder or thereon, including
reasonable compensation to such holder's or holders' attorneys for all services
rendered in connection therewith.
6.4. Rescission of Acceleration. The provisions of Section6.3
are subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (h) and (k), inclusive, of Section6.1, the holders of 66-2/3% in
aggregate principal amount of the Notes then outstanding may, by written
instrument filed with the Company, rescind and annul such declaration and the
consequences thereof, provided that at the time such declaration is annulled and
rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of principal and interest upon all the Notes
and all other sums payable under the Notes and under this Agreement (except any
principal, interest or premium on
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the Notes which has become due and payable solely by reason of such declaration
under Section6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default, or Event of Default or impair any right
consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 66-2/3% in aggregate principal
amount of outstanding Notes; provided that without the written consent of the
holders of all of the Notes then outstanding, no such waiver, modification,
alteration or amendment shall be effective (i) which will change the time of
payment (including any prepayment required by Section2.1) of the principal of or
the interest on any Note or reduce the principal amount thereof or change the
rate of interest thereon, or (ii) which will change any of the provisions with
respect to optional prepayments, or (iii) which will change the percentage of
holders of the Notes required to consent to any such amendment, alteration or
modification or any of the provisions of Section6 or this Section7.
7.2. Solicitation of Noteholders. The Company will not
solicit, request or negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of this Agreement or the Notes unless each
holder of the Notes (irrespective of the amount of Notes then owned by it) shall
be informed thereof by the Company and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent effected pursuant
to the provisions of this Section7 shall be delivered by the Company to each
holder of outstanding Notes forthwith following the date on which the same shall
have been executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any holder of the Notes for any waiver
or amendment of any of the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms, ratably to the holders of
all of the Notes then outstanding.
7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon.
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SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (i) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the Company,
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock of the Company or (iii) 5% or more of the Voting Stock (or in the case of
a Person which is not a corporation, 5% or more of the equity interest) of which
is beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Average Daily Current Debt" shall mean, with respect to any
Designated Period, the sum of the aggregate amounts of Current Debt (excluding
current maturities of Funded Debt otherwise included therein) of the Company and
its Restricted Subsidiaries outstanding at the close of each day of such
Designated Period, divided by 45.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a balance sheet
of the lessee in accordance with generally accepted accounting principles.
"Capitalized Rentals" shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become due
under all Capitalized Leases under which the Company or any Restricted
Subsidiary is a lessee would be reflected as a liability on a consolidated
balance sheet of the Company and its Restricted Subsidiaries.
"Competitor" shall mean any Person (and any Affiliate of such
Person) which, at the time it owns and holds any Notes, in the ordinary course
of its business offers to furnish substantially the same merchandise or render
substantially the same services as the Company and its Subsidiaries taken as a
whole furnish or render at such time in the ordinary course of their business
taken as a whole provided, that, neither any Purchaser or any Affiliate or
subsidiary thereof shall be deemed to be a Competitor and, provided further,
that no Person (or any Affiliate of such Person) which is substantially in the
business of insurance and/or financial services (and financial activities
reasonably related thereto) and is not in the business of manufacturing
automobile parts shall be deemed to be a Competitor.
"Consolidated Current Assets" and "Consolidated Current
Liabilities" shall mean such assets and liabilities of the Company and its
Restricted Subsidiaries on a consolidated basis as shall be determined in
accordance with generally accepted accounting principles to constitute current
assets and current liabilities, respectively.
"Consolidated Net Income" for any period shall mean the gross
revenues of the Company and its Restricted Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined on a
consolidated basis in accordance with
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Standard Motor Products, Inc. Note Agreement
generally accepted accounting principles consistently applied and after
eliminating earnings or losses attributable to outstanding Minority Interests,
but excluding in any event:
(a) any gains or losses on the sale or other disposition of
investments or fixed or capital assets (excluding any Consolidated Current
Assets), and any taxes on such excluded gains and any tax deductions or credits
on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been acquired
in any manner, realized by such other corporation prior to the date of such
acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted Subsidiary shall
have consolidated or which shall have merged into or with the Company or a
Restricted Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been received by
the Company or such Restricted Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends to the
Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraised, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Restricted Subsidiary;
(k) extraordinary gains and losses (including, without
limitation, capital gains or losses in aggregate amounts exceeding $100,000 in
any one fiscal year, and extraordinary charges or credits) and any taxes on such
excluded gains and any tax deductions or credits on account of any such excluded
losses; and
(l) any amounts paid or payable in any currency that at the
time of determination of Consolidated Net Income is not fully convertible into
United States dollars.
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Standard Motor Products, Inc. Note Agreement
"Consolidated Net Tangible Assets" shall mean as of the date
of any determination thereof the total amount of all Tangible Assets of the
Company and its Restricted Subsidiaries after deducting (i) all investments in
and loans, advances and extensions of credit to Unrestricted Subsidiaries (ii)
Restricted Investments (other than the Limited Dividend Rollover Investments)
(iii) Minority Interests, and (iv) all items which in accordance with generally
accepted accounting principles would be included on the liability side of a
consolidated balance sheet, except deferred income taxes, deferred investment
tax credits, capital stock of any class, surplus, and Funded Debt.
"Consolidated Working Capital" shall mean the excess of
Consolidated Current Assets over Consolidated Current Liabilities of the Company
and its Restricted Subsidiaries.
"Current Debt" shall mean, as of the date of any determination
thereof, (i) all Indebtedness for money borrowed other than Funded Debt and (ii)
Guaranties of Current Debt of others.
"Default" shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default as defined in Section 6.1.
"Designated Period" shall mean, at any time, a period of 45
consecutive days (i) all of which are included within the period of the twelve
calendar months then most recently ended, and (ii) specified by the Company.
"Funded Debt" of any Person shall mean (i) all indebtedness
for borrowed money or which has been incurred in connection with the acquisition
of assets in each case having a final maturity of one or more than one year from
the date of determination thereof (or which is renewable or extendible at the
option of the obligor for a period or periods more than one year from the date
of determination), (ii) all Capitalized Rentals, and (iii) all Guaranties of
Funded Debt of others. "Consolidated" when used as a prefix to any Funded Debt
shall mean the aggregate amount of all such Funded Debt of the Company and its
Restricted Subsidiaries on a consolidated basis eliminating intercompany items.
"Guaranties" by any Person shall mean all obligations (other
than endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect guaranteeing
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, or (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against
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Standard Motor Products, Inc. Note Agreement
loss in respect thereof. For the purposes of all computations made under this
Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be
deemed to be Indebtedness equal to the principal amount of such Indebtedness for
borrowed money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with generally accepted
accounting principles shall be classified upon a balance sheet of such Person as
liabilities of such Person, and in Any event shall include all (i) obligations
of such Person for borrowed money or which has been incurred in connection with
the acquisition of property or assets, (ii) obligations secured by any lien or
other charge upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, and (iv) Capitalized Rentals under any Capitalized Lease.
For the purpose of computing the "Indebtedness" of any Person, there shall be
excluded any particular Indebtedness to the extent that, upon or prior to the
maturity thereof, there shall have been deposited with the proper depositary in
trust the necessary funds (or evidences of such Indebtedness, if permitted by
the instrument creating such Indebtedness) for the payment, redemption or
satisfaction of such Indebtedness; and thereafter such funds and evidences of
Indebtedness so deposited shall not be included in any computation of the assets
of such Person.
"Limited Dividend Rollover Investments" shall mean all amounts
invested by the Company and/or Mardevco Credit Corp. in dividend rollover
programs managed by independent professional investment managers of recognized
national standing, but only to the extent the aggregate amount of all such
investments does not exceed $15,000,000.
"Long-Term Lease" shall mean any lease of real or personal
property (other than a Capitalized Lease) having an original term, including any
period for which the lease may be renewed or extended at the option of the
lessor, of more than three years.
"Material Indebtedness" shall mean at any time one or more
obligations of the Company or any Restricted Subsidiary for borrowed money or in
respect of interest rate swaps, interest rate exchange agreements, currency
swaps or currency exchange agreements (however denominated) which, individually
or in the aggregate, have or relate to an unpaid principal amount of more than
$250,000.
"Minority Interests" shall mean any shares of stock of any
class of a Restricted Subsidiary (other than directors' qualifying shares as
required by law) that are not owned by the Company and/or one or more of its
Restricted Subsidiaries. Minority Interests shall be valued by valuing Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if
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Standard Motor Products, Inc. Note Agreement
necessary, to reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in preferred
stock.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency or political
subdivision thereof.
"Rentals" shall mean and include all fixed rents (including as
such all payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by the Company or
a Restricted Subsidiary, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required to be paid by
the Company or a Restricted Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
"Restricted Investment" shall mean any investment in any
Person or property, whether directly or indirectly made, and whether by purchase
or other acquisition of shares or Indebtedness or other securities or by loan,
advance, extension of credit, capital contribution or otherwise, other, than:
(i) investments made by the Company or a Restricted
Subsidiary in any Restricted Subsidiary after the Closing
Date;
(ii) investments in direct obligations of the United
States of America or any agency thereof, or obligations
guaranteed or insured by the United States of America or any
agency thereof, provided that such obligations shall mature
within one (1) year from the date of acquisition thereof;
(iii) investments in commercial paper of issuers
organized under the laws of the United States of America or
any state thereof which is given a rating of at least P-2 by
Xxxxx'x Investor Services, Inc. or A-2 by Standard and Poor's
Inc. and which matures not more than two hundred seventy (270)
days from the date of creation thereof;
(iv) investments in certificates of deposit maturing
within one (1) year from the date of acquisition thereof by
the Company or a Restricted Subsidiary which are issued by a
commercial bank or trust company (i) organized and doing
business under the laws of the United States of America or any
state thereof, (ii) having combined capital, surplus and
undivided profits aggregating at least One Hundred Million
Dollars ($100,000,000) and (iii) which is a member of the
Federal Deposit Insurance Corporation;
(v) investments in so called auction rate or money
market preferred stock (a) which is rated A or the equivalent
to A or higher by a credit rating agency of recognized
national standing and (b) the issuer of
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Standard Motor Products, Inc. Note Agreement
which was, at the time of the issuance of such preferred
stock, subject to and in compliance with, and is, at the time
of the investment in such preferred stock, subject to and in
compliance with, all applicable guidelines and regulations of
the Federal Deposit Insurance Corporation;
(vi) investments in tax-exempt, floating rate, tender
option bonds rated A (or the equivalent of A) or higher by a
credit rating agency of recognized national standing and which
are backed by a letter of credit issued by a commercial bank
which would qualify as an issuer under clause (iv) above;
(vii) investments in Eurodollar deposits in a
commercial bank given a rating of P-1 by Xxxxx'x Investor
Services Inc. or A-1 by Standard and Poor's Inc., provided
that (i) such Investments are purchased in the United States
of America and mature within ninety (90) days of the date of
the acquisition thereof, (ii) the aggregate amount of such
Investments in any one bank shall not at any time exceed Three
Million Dollars ($3,000,000), and (iii) the aggregate amount
of all such Investments shall not at any time exceed Five
Million Dollars ($5,000,000);
(viii) other investments provided that the funds used
to acquire such investment have been obtained from the
concurrent sale of capital stock of the Company;
(ix) advances to suppliers in the ordinary course of
business in connection with the purchase of machinery,
equipment or other supplies, not in excess of $500,000 in the
aggregate; and
(x) investments in property to be used in the
ordinary course of business.
"Restricted Subsidiary" shall mean:
(i) any Subsidiary so designated on Annex A to
Exhibit B hereto,
(ii) any other Subsidiary designated as a Restricted
Subsidiary pursuant to and in accordance with the provisions
of Section 5.15.
"Security" shall have the same meaning as in Section 2(l) of
the Securities Act of 1933, as amended.
"Senior Funded Debt" shall mean all Funded Debt other than
Subordinated Debt.
"Subordinated Debt" shall mean all unsecured Current Debt or
Funded Debt of the Company (a) which shall have (i) a final maturity later than
November 1, 2004 and (ii) an Average Life as at the date of issuance that is
greater than the Average Life of Notes at such date
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Standard Motor Products, Inc. Note Agreement
and (b) which shall contain or have applicable thereto subordination provisions
substantially in the form set forth in Exhibit E attached hereto or such other
provisions as may be approved in writing by the holders of not less than 66-2/3%
in aggregate principal amount of the outstanding Notes, "Average Life" of any
Indebtedness, as used in this definition of "Subordinated Debt," shall mean the
number obtained by dividing the then Remaining Dollar-Years of such Indebtedness
by the then outstanding principal amount of such Indebtedness; "Remaining Dollar
Years" being the sum of the individual products obtained by multiplying the
amount of each required payment and prepayment of the principal amount of such
Indebtedness by the number of years (to the nearest one-twelfth) between the
date of any determination and the date on which such payment or prepayment is
required to be made.
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation. The
term "Subsidiary" shall mean a subsidiary of the Company.
"Tangible Assets" shall mean, as of the date of any
determination thereof, the total amount of all assets of the Company and its
Restricted Subsidiaries (less depreciation, depletion and other properly
deductible valuation reserves) after deducting good will, patents, trade names,
trademarks, copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, write-ups to the book value of assets
occurring after December 31, 1975 relating to assets owned on December 31, 1975,
write-ups to the book value of assets acquired by the Company or its Restricted
Subsidiaries after December 31, 1975 in excess of the cost thereof, deferred
assets other than prepaid insurance and prepaid taxes, the excess of cost of
shares acquired over book value of related assets and such other assets as are
properly classified as "intangible assets" in accordance with generally accepted
accounting principles.
"Unrestricted Subsidiary" shall mean:
(i) any Subsidiary so designated on Annex A to
Exhibit B hereto, and
(ii) any other Subsidiary designated as an
Unrestricted Subsidiary pursuant to and in accordance with the
provisions of Section 5.15.
"Voting Stock" shall mean Securities of any class or classes
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary
shall mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) and all
Indebtedness for borrowed money shall be owned by the Company and/or one or more
of its Wholly-owned Subsidiaries.
8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same
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Standard Motor Products, Inc. Note Agreement
shall be done in accordance with generally accepted accounting principles, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the Notes
(hereinafter called the "Note Register"), and the Company will register or
transfer or cause to be registered or transferred, as hereinafter provided and
under such reasonable regulations as it may prescribe, any Note issued pursuant
to this Agreement.
At any time and from time to time the registered holder of any
Note which has been duly registered as hereinabove provided may transfer such
Note upon surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal, premium,
if any, and interest on any registered Note shall be made to or upon the written
order of such registered holder.
9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to Section
9.1, this Section 9.2 or Section 9.3, and, upon surrender of such Note at its
office, THE Company will deliver in exchange therefor, without expense to the
holder, except as set forth below, Notes for the same aggregate principal amount
as the then unpaid principal amount of the Note so surrendered, in the
denomination of $100,000 or any amount in excess thereof as such holder shall
specify, dated as of the date to which interest has been paid on the Note so
surrendered or, if such surrender is prior to the payment of any interest
thereon, then dated as of the date of issue, payable to such Person or Persons,
or registered assigns, as may be designated by such holder, and otherwise of the
same form and tenor as the Notes so surrendered for exchange. The Company may
require the payment of a sum sufficient to cover any stamp tax or governmental
charge imposed upon such exchange or transfer.
9.3. Loss, Theft, etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent institutional holder is the
owner of any such lost, stolen or
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Standard Motor Products, Inc. Note Agreement
destroyed Note, then the affidavit of an authorized officer of such owner,
setting forth the fact of loss, theft or destruction and of its ownership of the
Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to the reasonable charges and disbursements of
Xxxxxxx and Xxxxxx, your special counsel, costs incurred in obtaining a Private
Placement Number, from Standard and Poor's, duplicating and printing costs and
charges for shipping the Notes, adequately insured to you at your home office or
at such other place as you may designate, and all such expenses relating to any
amendment, waivers or consents pursuant to the provisions hereof, including,
without limitation, any amendments, waivers or consents resulting from any
work-out, restructuring or similar proceedings relating to the performance by
the Company of its obligations under this Agreement and the Notes. Without
limiting the provisions of the last sentence of Section 9.2, the Company also
agrees that it will pay and save you harmless against any and all liability with
respect to stamp and other taxes, if any, which may be payable or which may be
determined to be playable in connection with the execution and delivery of this
Agreement or the Notes, whether or not any Notes are then outstanding. The
Company agrees to protect and indemnify you against any liability for any and
all brokerage fees and commissions payable or claimed to be payable to any
Person engaged by the Company in connection with the transactions contemplated
by this Agreement.
9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to and are not exclusive of any rights or
remedies any such holder would otherwise have, and no waiver or consent, given
or extended pursuant to Section 7 hereof, shall extend to or affect any
obligation or right not expressly waived or consented to.
9.6. Notices. All communications provided for hereunder shall
be in writing and, if to you, delivered or mailed by registered or certified
mail or by overnight air courier, in each case prepaid and addressed to you at
your address appearing on Schedule I to this Agreement or such other address as
you or the subsequent holder of any Note initially issued to you may designate
to the Company in writing, and if to the Company, delivered or mailed by
registered or certified mail or by overnight air courier, in each case prepaid
and addressed to the Company at 00-00 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxxx, Xxx Xxxx
00000, Attention: Xxxx X. Xxxxxx, Vice President, or to such other address as
the Company may in writing designate to you or to a subsequent holder of the
Note initially issued to you.
9.7. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to your benefit
and to the benefit of your successors and assigns, including each successive
holder or holders of any Notes.
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Standard Motor Products, Inc. Note Agreement
9.8. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
9.9. Severability. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated
and it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including therein
any such part, parts, or portion which may, for any reason, be hereafter
declared invalid.
9.10. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with New York
law.
9.11. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this Agreement
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
STANDARD MOTOR PRODUCTS, INC.
By________________________________
Its
Accepted as of October 15, 1989.
[VARIATION]
By________________________________
Its
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TABLE OF CONTENTS
(NOT A PART OF THE AGREEMENT)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT............................................................1
1.1. Description of Notes...........................................................................1
1.2. Commitment, Closing Date.......................................................................1
1.3. Other Agreements...............................................................................2
SECTION 2. PREPAYMENT OF NOTES............................................................................2
2.1. Required Prepayments...........................................................................2
2.2. Optional Prepayment............................................................................2
2.3. Prepayment on Failure of Holder to Consent to Sale and Leaseback...............................4
2.4. Prepayment on Change of Control................................................................4
2.5. Notice of Prepayments..........................................................................5
2.6. Allocation of Prepayments......................................................................5
2.7. Direct Payment.................................................................................5
SECTION 3. REPRESENTATIONS................................................................................6
3.1. Representations of the Company.................................................................6
3.2. Representations of the Purchasers..............................................................6
SECTION 4. CLOSING CONDITIONS.............................................................................6
4.1. Closing Certificate............................................................................7
4.2. Legal Opinions.................................................................................7
4.3. Related Transactions...........................................................................7
4.4. Satisfactory Proceedings.......................................................................7
4.5. Legality.......................................................................................7
4.6. Waiver of Conditions...........................................................................7
SECTION 5. COMPANY COVENANTS..............................................................................7
5.1. Corporate Existence, etc.......................................................................7
5.2. Insurance......................................................................................8
5.3. Taxes, Claims for Labor and Materials, Compliance with Laws....................................8
5.4. Maintenance, etc...............................................................................8
5.5. Nature of Business.............................................................................9
5.6. Consolidated Working Capital...................................................................9
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SECTION HEADING PAGE
5.7. Limitations on Indebtedness....................................................................9
5.8. Limitation on Liens...........................................................................11
5.9. Dividends, Stock Purchases....................................................................13
5.10. Limitation on Long-Term Leases, Sale and Leasebacks...........................................14
5.11. Mergers, Consolidations and Sales of' Assets..................................................14
5.12. Guaranties....................................................................................16
5.13. Repurchase of Notes...........................................................................17
5.14. Transactions with Affiliates..................................................................17
5.15. Restricted and Unrestricted Subsidiaries......................................................17
5.16. Termination of Pension Plans..................................................................18
5.17. Reports and Rights of Inspection..............................................................18
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.......................................................20
6.1. Events of Default.............................................................................20
6.2. Notice to Holders.............................................................................22
6.3. Acceleration of Maturities....................................................................22
6.4. Rescission of Acceleration....................................................................22
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS..............................................................23
7.1. Consent Required..............................................................................23
7.2. Solicitation of Noteholders...................................................................23
7.3. Effect of Amendment or Waiver.................................................................23
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS......................................................23
8.1. Definitions...................................................................................24
8.2. Accounting Principles.........................................................................30
8.3. Directly or Indirectly........................................................................31
SECTION 9. MISCELLANEOUS.................................................................................31
9.1. Registered Notes..............................................................................31
9.2. Exchange of Notes.............................................................................31
9.3. Loss, Theft, etc. of Notes....................................................................31
9.4. Expenses, Stamp Tax Indemnity.................................................................32
9.5. Powers and Rights Not Waived; Remedies Cumulative.............................................32
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SECTION HEADING PAGE
9.6. Notices.......................................................................................32
9.7. Successors and Assigns........................................................................32
9.8. Survival of Covenants and Representations.....................................................33
9.9. Severability..................................................................................33
9.10. Governing Law.................................................................................33
9.11. Captions......................................................................................33
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An extra section break has been inserted above this paragraph.
Do not delete this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
