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Exhibit 4.2
Execution Copy
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of August
6, 1998 (this "Amendment"), is among AETNA INDUSTRIES, INC., a Delaware
corporation (the "Company"), the guarantors set forth on the signature pages
hereof (collectively, the "Guarantors"), the Lenders set forth on the signature
pages hereof (collectively, the "Lenders") and NBD BANK, a Michigan banking
corporation, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Company, the Guarantors, the Agent and the Lenders are
parties to an Amended and Restated Credit Agreement dated as of April 10, 1998
(as now and hereafter amended, the "Credit Agreement").
B. The Company and the Guarantors desire to amend the Credit
Agreement, and the Agent and the Lenders are willing to do so in accordance with
the terms hereof.
TERMS
In consideration of the premises and of the mutual agreements
herein contained, the parties agree as follows:
ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in Article
III hereof, the Credit Agreement shall be amended as follows:
1.1 The definition of "Change of Control " in Section 1.1 is
restated as follows:
"Change of Control" shall mean the occurrence of any
event or transaction or series of related transactions in connection
with or as a consequence of which (i) prior to a registered initial
public offering of the Common Stock of the Company, MS (directly or
indirectly) or Holdings shall cease to own 100% of the Company's
outstanding Capital Stock, clear of any Liens; (ii)(A) prior to a
registered initial public offering of the Common Stock of MS or
Holdings, the CVC Investor Group and the SOFEDIT Shareholders,
collectively, shall cease to own Common Stock of, as the case may be,
MS or Holdings, representing not less than 51% of the common equity
interest in, as the case may be, MS's or Holding's, Capital Stock
(whether voting or non-voting) on a fully-diluted basis assuming the
exercise of all securities exercisable, convertible or exchangeable for
or into common equity interests or (B) after a registered initial
public offering of the Common Stock of MS, Holdings or the Company, the
CVC Investor Group and the SOFEDIT Shareholders, collectively, shall
cease to own, free and clear of all Liens, Common Stock of, MS,
Holdings or the Company, as the case may be, representing not less than
10% of the common equity interest in MS's, Holding's or, as the case
may be, the Company's Capital Stock (whether voting or non-voting) on a
fully-diluted basis assuming the exercise of all securities
exercisable, convertible or exchangeable for or into common equity
interests; (iii) after a registered initial public offering of the
Common Stock of MS, Holdings or the Company, any Person or group of
Persons (as such term is used under the Exchange Act) shall own,
beneficially or of record, a greater percentage of the common equity
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interests or total combined voting power of all classes of Capital
Stock of MS, Holdings or the Company, as the case may be, than is so
owned by the CVC Investor Group and the SOFEDIT Shareholders; or (iv)
after a registered initial public offering of the Common Stock of MS,
Holdings or the Company, during any one year period individuals who at
the beginning of such one year period constituted the board of
directors (together with any new directors whose election by such board
of directors or whose nomination for election was approved by a vote of
a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of MS,
Holdings or the Company then in office. For purposes of this
definition, the term "CAPITAL STOCK" of any Person means any and all
shares, interests, participations, or other equivalents, (however
designated) of its capital stock and any rights (other than debt
securities convertible into capital stock), warrants or options to
acquire such capital stock and the term "COMMON STOCK" means, as
applicable, the Common Stock, par value $.01, of Holdings and the
Common Stock, par value $.01 of the Company and, collectively, the
Class A Common Stock, par value $.01 per share, and Class B Common
Stock, par value $0.01 per share, of MS, and, in each case, any Capital
Stock issued with respect thereto in a stock consolidation,
reclassification or recapitalization.
1.2 The following new definition is hereby added to Section
1.1 in appropriate alphabetical order:
"Initial Public Offering" shall mean the initial public
offering of common stock to be made by MS (and pursuant to which MS will be
changing its name) pursuant to the registration to be filed by MS with the
Securities and Exchange Commission on Form S-1 on or before August 31, 1998.
1.3 Section 3.1(f) is redesignated as Section 3.1(g) and a new
Section 3.1(f) is added as follows:
(f) In addition to all other payments of the Advances
required hereunder, the Company shall prepay the Advances by an amount equal to
100% of the net proceeds of any subordinated debt or similar obligation
incurred at any time by the Company or any Guarantor and by an amount equal to
100% of the net proceeds from the issuance or other sale of any Capital Stock
or any other equity interest of MS, Holdings, any other Guarantor or the
Company (exclusive of the proceeds to be received from the Initial Public
Offering). Such prepayments shall be applied to such Advances as determined by
the Agent, and shall also permanently reduce the Commitments related to the
Advances being prepaid by an amount equal to such prepayment.
1.4 Sections 5.2(b), (c) and (e) are restated as follows:
(b) Fixed Charge Coverage Ratio. Permit or suffer the
Fixed Charge Coverage Ratio to be less than: (i) 1.00:1.00 from and
including the Effective Date through and including July 30, 1998; (ii)
0.75:1.00 from and including July 31, 1998 through and including
August 30, 1998; (iii) 0.55:1.00 from and including August 31, 1998
through and including December 30, 1998; (iv) 0.65:1.00 from and
including December 31, 1998 through and including March 30, 1999; (v)
0.75:1.00 from and including March 31, 1999 through and including June
29, 1999; (vi) 1.10:1.00 from and including June 30, 1999 through and
including September 29, 1999; (vii) 1.30:1.00 from and including
September 30, 1999 through and including December 30, 1999; and (viii)
1.60:1.00 at any time thereafter.
(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) 3.00:1.00 from
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and including the Effective Date through and including July 30, 1998;
(ii) 4.50:1.00 from and including July 31, 1998 through and including
August 30, 1998; (iii) 5.25:1.00 from and\ including August 31, 1998
through and including September 29, 1998; (iv) 9.00:1.00 from and
including September 30, 1998 through and including October 30, 1998;
(v) 8.50:1.00 from and including October 31, 1998 through and including
December 30, 1998; (vi) 5.00:1.00 from and including December 31, 1998
through and including February 27, 1999; (vii) 4.00:1.00 from and
including February 28, 1999 to and including Xxxxx 00, 0000, (xxxx)
3.00:1.00 from and including March 31, 1999 through and including June
29, 1999, and (ix) 2.00:1.00 at any time thereafter.
(e) Net Worth. Permit or suffer the consolidated Net
Worth of the Company and its Subsidiaries to be less than the sum of:
(a)(i) $21,000,000 from the Effective Date through and including
August 30, 1998; and (ii) $19,000,000 thereafter, plus (b) 50% of Net
Income, adjusted as of the last day of the fiscal quarter of the
Company ending December 31, 1998 as calculated for the fiscal quarter
then ending and as of each fiscal year of the Company thereafter as
calculated for the fiscal year ending; provided, that if such Net
Income is negative in any fiscal quarter or any fiscal year, 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.
1.5 The periods at the end of Sections 6.1(i) and (j) are
deleted and replaced with "; or" and the following new Section 6.1(k) is hereby
added:
(k) Senior Notes. Any offer is made to repurchase,
redeem, defease or otherwise prepay, whether mandatory or otherwise,
any of the Senior Notes (including without limitation any Change of
Control Offer, as defined in the Senior Note Documents) or the Company
makes or is required to make any prepayment, redemption, repurchase or
other defeasance or any of the Senior Note Debt, whether mandatory or
otherwise, provided that an Event of Default shall not be deemed to
have occurred in connection with an offer to repurchase the Senior
Notes if either of the following two conditions is satisfied: (i) none
of the holders of any of the Senior Notes tenders the Senior Notes and
none of the Senior Notes are repurchased or (ii) if any of the Senior
Notes are tendered or otherwise requested to be repurchased, then at
least 10 days prior to the repurchase, redemption or other prepayment
thereof the Company obtains, or makes arrangements satisfactory to the
Agent to obtain, Subordinated Debt or equity sufficient to make all
such repurchases, redemptions or other prepayments.
1.6 A new Section 8.9 is hereby added to read as follows:
8.9 Aetna. MS represents and acknowledges that it
owns, directly or indirectly, all of the capital stock and other equity
and other ownership interests of the Company (the "Company Ownership
Interests") free and clear of all Liens. MS will not permit or suffer
any Lien to exist on the Company Ownership Interests and will not sell
or otherwise transfer the Company Ownership Interests. MS will take or
cause to be taken all actions necessary, to the extent possible, to
avoid the occurrence of any Event of Default.
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.
2.5 MS will be filing a registration statement with the
Securities and Exchange Commission on Form S-1 on or before August 31, 1998.
ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall
not become effective until each of the following conditions is satisfied:
3.1 The Company shall have delivered to the Agent a comfort
letter from SOFEDIT in the form attached hereto.
3.2 The Company shall have delivered to the Agent the most
recent draft of the S-1 registration statement to be filed by MS with the
Securities and Exchange Commission, provided that the Agent and each Lender
agree to hold any such draft it may receive in confidence, unless such draft
otherwise becomes public information, and except for disclosure to its
affiliates, to legal counsel, accountants and other professional advisors, to
regulatory officials, or to any person as required pursuant to law, regulation
or legal process.
3.3 The Company, the Guarantors and the Required Lenders shall
have signed this Amendment.
3.4 The Company shall have delivered to the Agent such other
documents and satisfied such other conditions, if any, as reasonably requested
by the Agent.
ARTICLE IV. MISCELLANEOUS.
4.1 References in the Credit Agreement or in any note,
certificate, instrument or other 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.
4.2 The Company agrees to pay and to save the Agent harmless
for the payment of all reasonable documented costs and expenses arising in
connection with this Amendment, including the reasonable documented fees of
counsel to the Agent in connection with preparing this Amendment and the related
documents.
4.3 The Company and each Guarantor acknowledge and agree that,
to the best of their knowledge, the Agent and the Lenders have fully performed
all of their obligations under all documents executed in connection with the
Credit Agreement. The Company and each Guarantor represent and warrant that they
are not aware of any claims or causes of action against the Agent or any Lender.
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4.4 Except as expressly amended hereby, the Company and each
Guarantor agree that the Credit Agreement, the Notes, the Security Documents and
all other documents and agreements executed by the Company in connection with
the Credit Agreement in favor of the Agent or any Lender are ratified and
confirmed, as amended hereby, and shall remain in full force and effect in
accordance with their terms and that they are not aware of any set off,
counterclaim or defense with respect to any of the foregoing. Terms used but not
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement. This Amendment may be signed upon any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument, and telecopied signatures shall be effective as originals.
4.5 The Company and the Guarantors agree to deliver to the
Agent board resolutions approving this amendment and all transactions
contemplated hereby on or before August 21, 1998, and any failure to deliver
such board resolutions shall be an Event of Default under the Credit Agreement.
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IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of the day and year first
above written.
AETNA INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxx
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Its: Vice President, Finance,
Chief Financial Officer
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Guarantor
AETNA HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxx
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Its: Vice President, Finance,
Chief Financial Officer
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Guarantor
AETNA EXPORT SALES CORP.
By: /s/ Xxxxxx Xxxxx
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Its: Secretary
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Guarantor
MS ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
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Its: Secretary
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Guarantor
AETNA MANUFACTURING CANADA LTD.
By: /s/ Xxxxxx Xxxxx
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Its Treasurer and Secretary
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NBD BANK, as a Lender and as Agent
By: /s/ Xxxxxx X. Xxxx
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Its: Vice President
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PNC BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx X. Shovner
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Its: Bank Officer
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NATIONAL BANK OF CANADA
By: /s/ Xxxxx X. Xxxxxx &
Xxxxxx Xxxxx
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Its: Vice President & Vice
President
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MICHIGAN NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
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Its: First Vice President
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