FOURTH AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AND LIMITED WAIVER
FOURTH AMENDMENT, dated as of March 3, 2000 (the "AMENDMENT"), to the
CREDIT AGREEMENT, dated as of November 30, 1998, among STANDARD MOTOR PRODUCTS,
INC., a New York corporation (the "BORROWER"), the Lenders party thereto, THE
CHASE MANHATTAN BANK, as administrative agent (in such capacity, the
"ADMINISTRATIVE AGENT") for the Lenders and CANADIAN IMPERIAL BANK OF COMMERCE,
as documentation agent (in such capacity, the "DOCUMENTATION AGENT") for the
Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the
Documentation Agent are parties to that certain Credit Agreement, dated as of
November 30, 1998, as amended by that certain First Amendment to Revolving
Credit Agreement, dated as of December 8, 1998, that certain Second Amendment to
Revolving Credit Agreement, dated as of July 16, 1999 and that certain Third
Amendment to Revolving Credit Agreement, dated as of October 18, 1999 (as the
same may be further amended, modified or supplemented from time to time, the
"CREDIT AGREEMENT");
WHEREAS, terms defined in the Credit Agreement shall have their
defined meanings when used herein unless otherwise defined herein; and
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the
Documentation Agent have agreed to amend the Credit Agreement subject to and
upon the conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT.
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1.1. (a) Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical order:
"CLEAN-UP PERIOD" has the meaning assigned to
such term in Section 2.10(b) hereof.
"JDEDWARDS ERP CAPITAL LEASE OBLIGATION" means the obligation
of the Borrower under the capital lease agreement entered into in respect of the
financing of the JDEdwards ERP project, which obligation shall not exceed
$4,000,000 in the aggregate.
(b) Section 1.01 of the Credit Agreement is hereby further amended by
amending and restating, in its entirety, the following definitions:
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date of
determination, the sum of all amounts which would be included under
shareholders' equity on a consolidated balance sheet of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP as at
such date, PLUS proceeds of a high yield or convertible issue to the extent used
to re-purchase stock of the Borrower through fiscal quarter ended March 31, 2000
in an amount not to exceed $18,000,000, PLUS the amount, up to $8,000,000 in the
aggregate, used to re-purchase stock of the Borrower as permitted by Section
6.06(a)(v) hereof, MINUS all intangible assets of the Borrower and its
Subsidiaries on a consolidated basis as at of such date, including, without
limitation, unamortized debt discount and expense, unamortized deferred charges,
goodwill, customer acquisition costs, patents, trademarks, service marks, trade
names, copyrights and organization or developmental expenses.
"INVENTORY TURNOVER RATIO" means, at the end of any fiscal
year, the ratio of
(i) the cost of goods sold as set forth on the income
statement of the Borrower and its Subsidiaries for the fiscal
year ending on such date, to (ii) the value of all inventory
(determined on a first in first out basis) of the Borrower
and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP as at such date; provided that in the
event the Borrower acquires another entity in accordance with
the terms of this Credit Agreement, the cost of goods sold
related to the inventory acquired by the Borrower in
connection with such acquisition shall be calculated on an
annualized basis.
1.2. Section 2.10(b) is hereby amended in its entirety to read as follows:
"(b) During the period from September 1st through
December 31st of each calendar year, the Borrower shall (i)
repay the aggregate principal amounts of all Revolving Loans
so as to reduce, and maintain for a period of 30 consecutive
days, the outstanding aggregate Loans at an amount equal to
zero dollars ($0.00) (the "CLEAN-UP PERIOD") and (ii) for the
30 day period immediately prior to or immediately following
the Clean-Up Period, repay the aggregate principal amount of
all Revolving Loans so as to reduce the outstanding aggregate
Loans during such 30 consecutive day period to an amount not
greater than $10,000,000."
1.3. Section 6.01(e) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(e) Indebtedness of the Borrower or any Subsidiary
incurred to finance (x) the acquisition, construction or
improvement of any fixed or capital assets, including Capital
Lease Obligations (other than the JDEdwards ERP Capital Lease
Obligation) and any Indebtedness assumed in connection with
the acquisition of any such assets or secured by a Lien on
any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal
amount thereof; provided that (i) such Indebtedness is
incurred prior to or within 120 days after such acquisition
or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted
by this clause (e)(x) shall not exceed $3,000,000 at any time
outstanding and (y) the JDEdwards ERP Capital Lease
Obligation;"
1.4. Section 6.04(g) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(g) acquisitions of the capital stock or assets of
other Persons in an amount not in excess of $25,000,000 in
the aggregate during the period from and after October 18,
1999 through the Maturity Date, PROVIDED, that promptly
following the execution of definitive purchase documentation
regarding any such acquisition the purchase price of which is
in excess of $10,000,000, the Borrower shall deliver to the
Lenders a brief description and financial overview, in such
detail as may be reasonably acceptable to the Lenders, of
such acquisition transaction;"
1.5. Section 6.05 of the Credit Agreement is hereby amended by replacing
the dollar amount "$2,000,000" contained therein with "$65,000,000."
1.6. Section 6.06(a) of the Credit Agreement is hereby amended by (x)
deleting the word "and" after the comma in subsection (iii), (y) deleting the
period at the end of subsection (iv) and substituting in lieu thereof ", and"
and (z) adding the following new subsection (v) immediately after subsection
(iv):
"(v) payments in an amount not to exceed $8,000,000 in
the aggregate through December 31, 2000 in connection with
the re-purchase of the Borrower's capital stock."
1.7. Section 6.06(b)(iii) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(iii) the pre-payment in full no later than April 15,
2000 of the then outstanding principal balance of the
$30,000,000 Note Agreement described in item (iii) of the
definition of "Note Agreement Indebtedness" which principal
balance shall not exceed $14,000,000, together with accrued
interest thereon, and a prepayment penalty; and"
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1.8. Section 6.13 of the Credit Agreement is hereby amended by replacing
the chart contained therein with the following:
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FISCAL QUARTER ENDING LEVERAGE RATIO
------------------------------------------------------ -----------------------
December 31, 1999 3.50 to 1
March 31, 2000 3.75 to 1
June 30, 2000 3.75 to 1
September 30, 2000 through Maturity Date 3.50 to 1
------------------------------------------------------ ------------------------
1.9. Section 6.16 of the Credit Agreement is hereby amended by replacing
the chart contained therein with the following:
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FISCAL QUARTER ENDING INTEREST COVERAGE RATIO
------------------------------------------------------ ------------------------
December 31, 1999 3.0 to 1
March 31, 2000 3.0 to 1
June 30, 2000 3.0 to 1
September 30, 2000 3.5 to 1
December 31, 2000 through Maturity Date 3.75 to 1
------------------------------------------------------ ------------------------
1.10. Section 6.18 of the Credit Agreement is hereby amended by replacing
the chart contained therein with the following:
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FISCAL YEAR ENDING INVENTORY TURNOVER RATIO
------------------------------------------------------- ------------------------
December 31, 1999 through the Maturity Date 2.35 to 1
------------------------------------------------------- ------------------------
SECTION 2. LIMITED WAIVERS.
---------------
Subject to the terms and provisions of this Amemdment, the Administrative
Agent and the Lenders hereby waive compliance with (i) the provisions of Section
6.15 of the Credit Agreement for the Borrower's fiscal quarter ended March 31,
2000, provided that Consolidated Tangible Net Worth for such fiscal quarter
shall not be less than $146,000,000 and (ii) the provisions of Section 6.18 of
the Credit Agreement for the Borrower's fiscal year ended December 31, 1999.
SECTION 3. EFFECTIVENESS.
--------------
This Amendment shall not become effective until the date (the "EFFECTIVE
DATE") on which (i) this Amendment shall have been executed by the Borrower,
Lenders representing the Required Lenders and the Administrative Agent, the
Guarantors shall have acknowledged and agreed to the
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terms hereof, and the Administrative Agent shall have received evidence
satisfactory to it of such execution and acknowledgment and (ii) the
Administrative Agent shall have received by wire transfer of immediately
available funds all fees and other amounts due and payable on or prior to the
Effective Date, including, without limitation, the Amendment Fee referred to in
Section 4.1 hereof and to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower under
the Credit Agreement or any other Loan Document.
SECTION 4. MISCELLANEOUS.
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4.1. AMENDMENT FEE. The Borrower agrees to pay on the Effective Date to the
Administrative Agent for the ratable benefit of the Lenders an amendment fee in
the aggregate amount of $110,000 (the "AMENDMENT FEE"). -------------
4.2. EXPENSES. The Borrower agrees that its obligations set forth in
Section 9.03 of the Credit Agreement shall extend to the preparation, execution
and delivery of this Amendment.
4.3. REFERENCES. This Amendment shall be limited precisely as written and
shall not be deemed (i) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Credit Agreement or any of
the instruments or agreements referred to therein, (ii) to prejudice any right
or rights which the Administrative Agent, the Documentation Agent or the Lenders
may now have or have in the future under or in connection with the Credit
Agreement or any of the instruments or agreements referred to therein or (iii)
to create on the part of the Administrative Agent or any Lender any obligation
to renew or extend the waivers contained herein. Whenever the Credit Agreement
is referred to in the Credit Agreement or any of the instruments, agreements or
other documents or papers executed or delivered in connection therewith, such
reference shall be deemed to mean the Credit Agreement as modified by this
Amendment.
4.4. RATIFICATION. Except as expressly set forth herein, the terms,
provisions and conditions of the Credit Agreement and the other Loan Documents
shall remain in full force and effect and in all other respects are hereby
ratified and confirmed.
4.5. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Amendment by
facsimile shall be effective as delivery of a manually executed counterpart of
this Amendment.
4.6. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose or be given any substantive effect.
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4.7. GOVERNING LAW. THIS AMENDMENT SHALL IN ALL RESPECTS BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and the year
first above written.
STANDARD MOTOR PRODUCTS, INC.
BY
------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
Individually and as Administrative Agent
BY
------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
Individually and as Documentation Agent
BY
---------------------------------
Name:
Title:
BANKBOSTON, N.A.
BY
----------------------------------
Name:
Title:
BANK LEUMI USA
By
---------------------------------
Name:
Title:
HSBC USA
By
---------------------------------
Name:
Title:
COMERICA BANK
By
---------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By
---------------------------------
Name:
Title:
BANCO POPULAR NORTH AMERICA
By
---------------------------------
Name:
Title:
ACKNOWLEDGMENT OF GUARANTORS
----------------------------
Each of the undersigned hereby acknowledges and agrees to the terms of, and to
the execution, delivery and performance by each of the parties to, this
Amendment, and irrevocably and unconditionally ratifies and confirms that the
Subsidiary Guaranty to which it is a party shall remain in full force and effect
in accordance with its terms.
RENO STANDARD INCORPORATED
By:
---------------------------------
Name:
Title:
MARDEVCO CREDIT CORP.
By:
---------------------------------
Name:
Title:
STANRIC, INC.
By:
---------------------------------
Name:
Title:
INDUSTRIAL & AUTOMOTIVE
ASSOCIATES, INC.
By:
---------------------------------
Name:
Title:
MARATHON AUTO PARTS AND
PRODUCTS, INC.
By:
---------------------------------
Name:
Title:
MOTORTRONICS, INC.
By:
---------------------------------
Name:
Title:
EAGLEMOTIVE CORPORATION
By:
---------------------------------
Name:
Title: