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EXHIBIT 10.2
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT, dated as of June 30, 1999
(this "Amendment"), is among AETNA INDUSTRIES, INC., a Delaware corporation (the
"Company"), the guarantors set forth on the signature pages hereof
(collectively, the "Guarantors"), the Lenders set forth on the signature pages
hereof (collectively, the "Lenders") and BANK ONE, MICHIGAN, formerly known as
NBD Bank, a Michigan banking corporation, as agent for the Lenders (in such
capacity, the "Agent").
RECITALS
A. The Company, the Guarantors, the Agent and the Lenders are parties to
an Amended and Restated Credit Agreement dated as of April 10, 1998 (as now and
hereafter amended, the "Credit Agreement").
B. The Company and the Guarantors desire to amend the Credit Agreement,
and the Agent and the Lenders are willing to do so in accordance with the terms
hereof.
TERMS
In consideration of the premises and of the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in
Article III hereof, the Credit Agreement shall be amended as follows:
1.1 The definition of "Borrowing Base " in Section 1.1 is restated
as follows:
"Borrowing Base" shall mean, as of any date, the lesser of (a)
the sum, without duplication, of (i) an amount equal to 85% of the value of
Eligible Accounts Receivable plus (ii) an amount equal to 60% of the value of
Eligible Inventory not to exceed $9,500,000, plus (iii) an amount equal to 50%
of Eligible Tooling Inventory not to exceed (A) $15,000,000 from the Effective
Date hereof to and including August 31, 1999 or (B) $5,000,000 from and
including September 1, 1999 and thereafter, plus (iv) 80% of the value of
Eligible Fixed Assets owned by the Company and Manufacturing as of the Effective
Date, which amount is equal to $20,028,860 as of the Fifth Amendment Effective
Date, or (b) the amount calculated under clause (b) of the definition of
"Permitted Indebtedness" set forth in the Senior Note Indenture; provided,
however, that the Borrowing Base shall be determined on the basis of the most
current Borrowing Base Certificate required to be delivered by the Company
hereunder.
1.2 The definition of "Fixed Charge Coverage Ratio" in Section 1.1
is amended by deleting reference therein to "four fiscal quarters of the
Company" and substituting "twelve consecutive months" in place thereof.
1.3 The following definitions are hereby added to Section 1.1 in
appropriate alphabetical order:
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"Sixth Amendment" shall mean the Sixth Amendment to this
Agreement dated as of June 30, 1999.
"Sixth Amendment Effective Date" shall mean the date the Sixth
Amendment is effective.
1.4 Section 5.2(b) is restated as follows:
(b) Fixed Charge Coverage Ratio. Permit or suffer the Fixed
Charge Coverage Ratio to be less than: (i) 0.75:1.00 from and including June 30,
1999 through and including July 30, 1999; (ii) 1.00:1.00 from and including July
31, 1999 through and including September 29, 1999; (iii) 1.10:1.00 from and
including September 30, 1999 through and including December 30, 1999; (iv)
1.30:1.00 from and including December 31, 1999 through and including June 29,
2000; or (v) 1.60:1.00 at any time thereafter.
1.5 Section 5.2(c) is restated as follows:
(c) Senior Secured Funded Debt Ratio. Permit or suffer the
Senior Secured Funded Debt Ratio of the Company and Subsidiaries to exceed at
any time: (i) 7.50:1.00 from and including June 30, 1999 through and including
August 30, 1999; (ii) 5.00:1.00 from and including August 31, 1999 through and
including September 29, 1999; (iii) 3.00:1.00 from and including September 30,
1999 through and including December 30, 1999; (iv) 2.50:1.00 from and including
December 31, 1999 through and including June 29, 2000; or (v) 2.00:1.00 at any
time thereafter.
1.6 Section 5.2(e) is restated as follows:
(e) Net Worth. Permit or suffer the consolidated Net Worth of
the Company and its Subsidiaries to be less than the sum of: (a) negative
$12,000,000, plus (b) 50% of Net Income, adjusted as of December 31, 1999 as
calculated for the two consecutive fiscal quarters then ending and as adjusted
as of the end of each fiscal year of the Company thereafter as calculated for
the fiscal year ending; provided, that if such Net Income is negative in such
two fiscal quarters ending December 31, 1999 or any fiscal year thereafter, as
the case may be, the amount added for such period shall be zero and shall not
reduce the amount added for any other period.
1.7 Each reference under the description of the Facility A
Commitment amount for each Lender on the signature page for such Lender to (a)
"June 30, 1999" shall each be deleted and "August 31, 1999" shall be substituted
in each place thereof and (b) "July 1, 1999" shall each be deleted and
"September 1, 1999" shall be substituted in each place thereof.
ARTICLE II. REPRESENTATIONS. The Company and each Guarantor represent
and warrant to the Agent and the Lenders that:
2.1 The execution, delivery and performance of this Amendment is
within its powers, has been duly authorized and is not in contravention of any
statute, law or regulation known to it or of any terms of its Articles of
Incorporation or By-laws, or of any material agreement or undertaking to which
it is a party or by which it is bound.
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2.2 This Amendment is the legal, valid and binding obligation of the
Company and each Guarantor enforceable against each in accordance with the terms
hereof.
2.3 After giving effect to the amendments contained herein, the
representations and warranties contained in Article IV of the Credit Agreement
are true on and as of the date hereof with the same force and effect as if made
on and as of the date hereof.
2.4 After giving effect to the amendments contained herein, no Event
of Default or Default exists or has occurred and is continuing on the date
hereof. Without limiting the foregoing, no event of default or event or
condition which may become an event of default under the Senior Note Documents
has occurred or will be caused by this Amendment or any of the transactions
contemplated hereby.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall not
become effective until each of the following conditions is satisfied:
3.1 The Company, the Guarantors and the Required Lenders shall have
signed this Amendment.
3.2 The Company and the Guarantors shall have delivered such
resolutions, officer's certificates and legal opinions as the Agent may
reasonably request.
3.3 The Company shall have delivered to the Agent such other
documents and satisfied such other conditions, if any, as reasonably requested
by the Agent.
ARTICLE IV. MISCELLANEOUS.
4.1 The Company has informed the Lenders and the Agent that Events
of Default have occurred due to a breach of Sections 5.2(b) and 5.2(c) (the
"Existing Defaults"), and the Company has requested that the Lenders and the
Agent waive the Existing Defaults subject to this Amendment becoming effective
pursuant to Article III hereof and the terms and conditions set forth herein.
Pursuant to such request, the Lenders and the Agent hereby waive the Existing
Defaults for the period prior to the effectiveness of this Amendment. The
Company acknowledges and agrees that the waiver contained herein is a limited
waiver, limited to the specific one time waiver described above. Such limited
waiver (a) shall not modify or waive any other term, covenant or agreement of
the Loan Documents, and (b) shall not be deemed to have prejudiced any present
or future right or rights which the Agent or the Lenders now have or may have
under the Loan documents. Without limiting the foregoing, it is acknowledged and
agreed that any breach of Sections 5.2(b) or (c) is not waived at any time after
the date hereof.
4.2 References in the Credit Agreement or in any other Loan Document
to the Credit Agreement shall be deemed to be references to the Credit Agreement
as amended hereby and as further amended from time to time.
4.3 The Company agrees to pay and to save the Agent harmless for the
payment of all reasonable documented costs and expenses arising in connection
with this Amendment, including the reasonable documented fees of counsel to the
Agent in connection with preparing this Amendment and the related documents.
4.4 The Company and each Guarantor acknowledge and agree that, to
the best of their knowledge, the Agent and the Lenders have fully performed all
of their obligations under all documents executed in
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connection with the Credit Agreement. The Company and each Guarantor represent
and warrant that they are not aware of any claims or causes of action against
the Agent or any Lender.
4.5 Except as expressly amended hereby, the Company and each
Guarantor agree that the Credit Agreement, the Notes, the Security Documents and
all other documents and agreements executed by the Company in connection with
the Credit Agreement in favor of the Agent or any Lender are ratified and
confirmed, as amended hereby, and shall remain in full force and effect in
accordance with their terms and that they are not aware of any set off,
counterclaim or defense with respect to any of the foregoing. Terms used but not
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement. This Amendment may be signed upon any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument, and telecopied signatures shall be effective as originals.
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IN WITNESS WHEREOF, the parties signing this Amendment have caused this
Amendment to be executed and delivered as of the day and year first above
written.
AETNA INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: Secretary, Vice President/
Finance and Chief Financial Officer
Guarantor
AETNA HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: Secretary, Vice President/
Finance and Chief Financial Officer
Guarantor
AETNA EXPORT SALES CORP.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: Treasurer and Secretary
Guarantor
TRIANON INDUSTRIES CORP., f/k/a MS
ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: Secretary and Vice President
North America
Guarantor
AETNA MANUFACTURING CANADA LTD.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: Treasurer and Secretary
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BANK ONE, MICHIGAN, as a Lender and as
Agent
By:
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Its:
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PNC BUSINESS CREDIT, INC.
By:
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Its:
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NATIONAL BANK OF CANADA
By:
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Its:
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And
By:
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Its:
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MICHIGAN NATIONAL BANK
By:
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Its:
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NBD Bank
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
