EXHIBIT 10.19
OVERRIDE AND AMENDMENT AGREEMENT
This OVERRIDE AND AMENDMENT AGREEMENT (this "Agreement") is made and
entered into as of March 27, 1998, by and among STANDARD MOTOR PRODUCTS, INC.
(the "Company") and each of the entities set forth on the signature pages hereto
(collectively, the "1995 Noteholders"). All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Note Purchase
Agreement dated as of December 1, 1995 (as amended from time to time prior to
the date hereof, the "Existing Note Agreement", and as modified and overridden
hereby, the "Note Agreement") among the Company and the 1995 Noteholders (or
their respective predecessors in interest).
R E C I T A L S
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WHEREAS, the Company has requested that the 1995 Noteholders agree to
certain modifications to the Existing Note Agreement; and consent to the Xxxxxx
Swap, the Xxxxxx Financing, the Service Line Transaction and the Fuel Pump
Transaction; and
WHEREAS, the 1995 Noteholders are willing to make such modifications
and consent to the Xxxxxx Swap, the Xxxxxx Financing, the Service Line
Transaction and the Fuel Pump Transaction, but only upon full and complete
compliance by the Company with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the terms and conditions contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings (or the meanings set forth in the Section of this Agreement
referred to opposite such term) and the following definitions shall be equally
applicable to both the singular and plural forms of any of the terms herein
defined. Terms used herein and not defined shall have the respective meanings
ascribed to them in the Note Agreement.
ACCEPTABLE REPLACEMENT FACILITY -- shall mean, collectively, one or
more financing transactions with one or more banks, insurance companies or other
institutional investors, which transactions,
(i) constitute, in the aggregate, a legally binding commitment
to provide to the Company unsecured revolving credit and/or term debt
and/or equity financing in an aggregate amount of at least $100,000,000
and having a maturity not earlier than two years from the date the full
$100,000,000 first becomes available to the Company; and
(ii) do not (individually or in the aggregate) violate any
provision of the Note Agreement in effect at the time any of such
transactions is entered into.
AGREEMENT -- the introductory paragraph hereof.
AMENDMENT FEE -- one and one half percent (1.50%) of the outstanding
principal amount of the Notes.
BANK LOAN AGREEMENT -- the Revolving Credit and Guaranty Agreement
dated as of March 30, 1998 among the Company as borrower, certain of its
subsidiaries as guarantors, the Banks as lenders, The Chase Manhattan Bank, as
Administrative Agent, and The Bank of New York, as Documentation Agent, as in
effect on the date hereof.
BANKS -- The Chase Manhattan Bank, The Bank of New York, Fleet Bank,
National Association, NBD Bank, Comerica Bank, and Canadian Imperial Bank of
Commerce.
CIBC OTHER CREDITS -- the term loan in the outstanding principal amount
of CDN $20,000,000 extended by Canadian Imperial Bank of Commerce to SMP Motor
Products, Inc.,
and the letter of guaranty by Canadian Imperial Bank of Commerce for the account
of SMP Motor Products, Inc., in the aggregate amount of CDN $60,000 evidenced by
letter of guarantee No. T374406000 issued December 30, 1996, as in effect on the
date hereof.
CLIPPER FACILITY -- collectively, the Purchase and Sale Agreement dated
as of March 19, 1997 between the Company and SMP Credit Corp., the Receivables
Purchase Agreement dated as of March 19, 1997 among SMP Credit Corp., the
Company, Clipper Receivables Corporation, State Street Boston Capital
Corporation and State Street Bank and Trust Company and any other instrument or
agreement executed and delivered in connection therewith, in each case as in
effect on the date hereof.
COMPANY -- the introductory paragraph hereof.
XXXXXX -- collectively, Xxxxxx Industries, Inc., an Ohio corporation,
Xxxxxx Industries (Canada) Inc., Moog Automotive Company, a Delaware corporation
and Moog Automotive Products, Inc., a Missouri corporation.
XXXXXX FINANCING -- a $22,500,000 loan from Xxxxxx to the Company
substantially on the terms set forth in that certain letter from Xxxxxxx X.
Xxxxxx to Xxxx XxXxxxxxxx, dated January 28, 1998.
XXXXXX SWAP -- the proposed exchange of the assets of the Company's
brake division for the assets of Xxxxxx'x climate control division, as more
particularly described in the "Standard Motor Products, Inc. Xxxxxx Swap Deal
Summary" signed on behalf of both the Company and Xxxxxx on March 17, 1998, and
all transactions between Xxxxxx and its subsidiaries and the Company and its
Subsidiaries related to such exchange.
COSTS AND EXPENSES -- Section 10.
CREDIT EXTENSION DATE -- October 31, 1998; PROVIDED that if on October
31, 1998 the Company is in compliance with Sections 6.15 and 6.16 of the Bank
Loan Agreement, the
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Credit Extension Date shall be November 30, 1998; and PROVIDED FURTHER that if
(a) the Maturity Date (as defined in the Bank Loan Agreement) is extended beyond
November 30, 1998 and (b) the Banks receive no permanent reduction of the
Tranche A Commitment (as defined in the Bank Loan Agreement), no collateral, and
no increase in interest rates or fees as a result of such extension, the Credit
Extension Date will be extended to the earlier of the extended Maturity Date
under the Bank Loan Agreement or the date on which an Event of Default shall
exist.
EFFECTIVE DATE -- Section 6.
EVENT OF DEFAULT -- means and includes any "Event of Default" as
defined in the Note Agreement.
EXISTING NOTE AGREEMENT -- the introductory paragraph hereof.
FUEL PUMP TRANSACTION -- the proposed sale by the Company of certain
assets of its fuel, pump product line, as more particularly described on
Schedule 2 hereto.
GUARANTORS -- Reno Standard, Incorporated, a Nevada corporation,
Stanric, Inc., a Delaware corporation and Mardevco Credit Corp., a New York
corporation.
INVESTMENT GRADE RATING -- a long term unsecured debt rating (which may
be a private rating) of BBB- or better by Standard & Poor's, Duff & Xxxxxx or
Fitch IBCA, Inc., a rating of Baa3 or better by Xxxxx'x Investors Services, or
such other rating as shall be reasonably acceptable to the holders of all of the
Notes.
1989 NOTEHOLDERS -- the holders of the Company's $30,000,000 aggregate
principal amount Notes, due November 1, 2004 (the "1989 Notes") issued pursuant
to Note Agreement dated as of October 15, 1989, as amended.
1992 NOTEHOLDERS -- the holders of the Company's $46,428,572 aggregate
principal amount Notes, due December 15, 2002 (the "1992 Notes") issued pursuant
to Note Agreement dated as of December 15, 1992, as amended.
NOTE AGREEMENT -- the introductory paragraph hereof.
NOTES -- the $73,000,000 aggregate principal amount Notes due February
25, 2006 issued pursuant to the Note Agreement.
OTHER DOCUMENTS -- Section 7(a).
REQUIRED HOLDERS -- means, at any time, the holders of more than fifty
percent (50%) in aggregate principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by any one or more of the Company, any Subsidiary
or any Affiliate).
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SERVICE LINE TRANSACTION -- the proposed sale by the Company of its
Service Line division, as more particularly described on Schedule 2 hereto.
SUBSIDIARY GUARANTY -- that certain guaranty of the Notes, dated the
date hereof, executed by the Guarantors.
INTENTIONALLY OMITTED.
CONSENT TO CERTAIN TRANSACTIONS.
Subject to Section 6 of this Agreement, the 1995 Noteholders hereby
consent to the Xxxxxx Swap, the Xxxxxx Financing, the Service Line Transaction
and the Fuel Pump Transaction, provided that each such transaction is
consummated (a) substantially in accordance with the descriptions thereof set
forth in Schedule 2 hereto, and (b) the net after-tax cash proceeds, if any, of
such dispositions are utilized for nonpermanent reductions of the amounts
outstanding under the Bank Loan Agreement and for working capital. Other than
the Amendment Fee payable in connection with this Agreement, no fee shall be
payable by the Company to the holders of the Notes in connection with such
transactions.
PAYMENTS OF INTEREST.
The Company acknowledges and agrees that:
The aggregate outstanding principal amount of the
Notes on the date hereof is $73,000,000.
Prior to April 1, 1998, interest on the Notes shall
accrue in accordance with the terms of the Existing Note Agreement.
From and after April 1, 1998, interest on the outstanding principal
amount of the Notes shall accrue at the rate of 8.06% per annum, and
interest shall accrue on any overdue principal, overdue Make-Whole
Amount and (to the extent legally enforceable) on any overdue
installment of interest on the Notes at a rate per annum equal to the
greater of 10.06% or 3.25% over the prime rate of The Chase Manhattan
Bank (or its successors) from time to time in effect.
The rate of interest then payable upon the Notes shall decrease to
7.31% per annum on the first day on which the Company shall have
achieved an Investment Grade Rating and no Default or Event of Default
shall exist. Upon the first to occur of (i) the closing of an
Acceptable Replacement Facility, or (ii) the Company's being in
compliance with all covenants contained in Section 7 of the Note
Agreement at all times during the fourth fiscal quarter of 1998 and the
first fiscal quarter of 1999, and, in either event, no Default or Event
of Default shall then exist, the rate of interest then payable upon the
Notes shall decrease by 0.50% per annum; provided that the rate of
interest shall never be less than 7.31% per annum. The rate of interest
then payable upon the Notes shall increase by 0.25% per annum on
October 1, 1998 if Consolidated EBITDA (as defined in Section 3 of
Schedule 3 to this Agreement) for the first three fiscal quarters of
1998 is not at least $48,371,000 on a cumulative basis and the Company
has not earlier obtained an Investment Grade Rating.
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(c) Accrued interest on the outstanding principal balance of
the Notes shall be payable quarterly in arrears on March 31, June 30,
September 30, and December 31 of each year beginning June 30, 1998.
(d) For purposes of computing the Make-Whole Amount due at any
time with respect to the Notes, the rate of interest payable on the
Notes shall be assumed to be the rate determined in accordance with the
Existing Note Purchase Agreement rather than the rate determined in
accordance with Section 4(b) above.
(e) The provisions of this Section 4 shall override and
permanently supersede any provisions to the contrary contained in the
Existing Note Agreement and the Notes, and the Existing Note Agreement
and the Notes are hereby deemed amended to be consistent with this
Section 4.
CERTAIN COVENANTS AND AGREEMENTS.
(a) OVERRIDE OF CERTAIN COVENANTS. During the period from the
Effective Date through September 30, 1998, Sections 7.1 and 7.4 of the Existing
Note Agreement are hereby overridden and replaced by the financial covenants set
forth in Schedule 3 to this Agreement. A breach of any of the covenants set
forth on Schedule 3 shall constitute an immediate Event of Default under the
Note Agreement; provided that no acceleration of the Notes may be effected as a
result of any such breach unless the holders of a majority in aggregate
principal amount of the Notes, the 1989 Notes and the 1992 Notes (voting as a
single class) shall have consented in writing to such acceleration. On October
1, 1998, the covenants hereby overridden shall once again be in full force and
effect and the enforcement rights of the 1995 Noteholders shall be as set forth
in the Note Agreement without giving effect to this Section 5(a). The provisions
of this Section 5(a) shall override and supersede any provisions to the contrary
contained in the Existing Note Agreement and the Notes.
(b) AMENDMENT OF CERTAIN COVENANTS. During the period from the
Effective Date through September 30, 1998, certain covenants and related
definitions in the Existing Note Agreement are amended in the manner set forth
on Schedule 4 to this Agreement. A breach of any of such amended covenants shall
constitute an immediate Event of Default under the Note Agreement. On October 1,
1998, such amendments shall terminate, and the covenants and definitions hereby
amended shall once again be in full force and effect as set forth in the
Existing Note Agreement.
(c) ADDITIONAL COVENANTS. The Company covenants with the 1995
Noteholders as follows. A failure to comply with any of the covenants set forth
in this Section 5(c) shall constitute an immediate Event of Default under the
Note Agreement.
The Company shall not at any time pay any additional
consideration to any Bank, in respect of any financial accommodation
required to be made available by such Bank pursuant to the Bank Loan
Agreement as in effect on the Effective Date, without making a
proportionate payment at such time (based on relative principal
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amounts then outstanding) in respect of the Notes, the 1989 Notes and
the 1992 Notes. Additional consideration which would require a
proportionate payment to the 1995 Noteholders pursuant to this
subsection would include, without limitation, an increase in interest
rate, or an increase or imposition (as the case may be) of any
commitment fee, facility fee, or amendment fee, but would not include
the payment of fees, interest rate stepups or other amounts provided
for in the Bank Loan Agreement and usual and customary fees for
administrative matters.
On or before the Credit Extension Date, the Company
shall have entered into an Acceptable Replacement Facility.
The Company shall not at any time permit a permanent
reduction of the Tranche A Commitment under (and as defined in) the
Bank Loan Agreement (it being agreed that reductions contemplated by
Sections 6.18, 6.19 and 6.20 of the Bank Loan Agreement shall not be
deemed to constitute reductions of the Tranche A Commitment); provided
that:
(1) the Company may permit such a reduction if,
contemporaneously therewith, the Company makes a proportionate
payment (based on relative principal amounts then outstanding)
in respect of the Notes, the 1989 Notes and the 1992 Notes;
and
(2) the Company may effect such a reduction in
connection with the replacement of the Bank Loan Agreement by
an Acceptable Replacement Facility.
The Xxxxxx Swap and the Xxxxxx Financing shall be
consummated not later than April 15, 1998.
Any reserve for losses from discontinued operations
at any time established by the Company shall be applied only to losses
related to the specific discontinued operation for which such reserve
was originally established, and to no other losses.
As soon as practicable the Company shall furnish to
each holder of the Notes the Company's strategic plan, including, when
available, all material modifications thereto, and make its senior
officers available to discuss the same with the holders of the Notes.
(d) LIMITED CROSS DEFAULT TO BANK LOAN AGREEMENT.
Notwithstanding anything in the Existing Note Agreement to the contrary, a
failure to comply with any covenant contained in Section 5 or Section 6 of the
Bank Loan Agreement during the period from the Effective date through October
31, 1998 shall not constitute an Event of Default under the Note Agreement so
long as the Banks have not (i) accelerated the maturity of their indebtedness,
or (ii) taken any enforcement action against the Company, (iii) terminated or
reduced any of the Commitments (as defined in the Bank Loan Agreement), it being
agreed
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that reductions contemplated by Sections 6.18, 6.19 and 6.20 of the Bank Loan
Agreement shall not be deemed to constitute reductions of the Tranche A
Commitment, or (iv) failed to make a requested advance under the Bank Loan
Agreement.
CONDITIONS TO EFFECTIVENESS OF AGREEMENT.
The effectiveness of this Agreement shall be subject to and conditioned
upon satisfaction of all of the following conditions precedent (the date of such
satisfaction being herein referred to as the "Effective Date").
REPRESENTATIONS AND WARRANTIES TRUE. The warranties
and representations set forth in Section 7 hereof shall be true and
correct on and as of the Effective Date.
AUTHORIZATION OF TRANSACTIONS. The execution and
delivery by the Company and the Guarantors of this Agreement, the
Subsidiary Guaranty and each of the documents executed and delivered in
connection herewith and therewith, shall have been duly authorized by
all necessary corporate action.
EXECUTION AND DELIVERY OF THIS AGREEMENT. The Company
and the holders of all of the Notes shall have executed and delivered a
counterpart of this Agreement.
OTHER AMENDMENTS. The Company shall have entered into
agreements substantially to the same effect as this Agreement with the
1989 Noteholders and the 1992 Noteholders, and such agreements shall be
satisfactory to the 1995 Noteholders in all respects.
OTHER FINANCING. The transactions contemplated by the
Bank Loan Agreement shall have closed; and the 1995 Noteholders shall
have satisfied themselves that the Clipper Facility is in full force
and effect.
SUBSIDIARY GUARANTY. Each of the Guarantors shall
have unconditionally guarantied the Company's obligations under the
Note Purchase Agreement and the Notes by executing and delivering to
each 1995 Noteholder a counterpart of the Subsidiary Guaranty.
PAYMENT OF INTEREST. The Company shall have paid all
interest on the Notes accrued or accruing through March 31, 1998.
AMENDMENT FEE. The Company shall have paid the
Amendment Fee to the 1995 Noteholders.
FINANCIAL AND OPERATING INFORMATION. The 1995
Noteholders shall have received copies of such financial statements,
projections, budgets, reports, agings
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and other financial and business information relating to the Company as
they may have reasonably requested, all in form and substance
satisfactory to the 1995 Noteholders.
COMPANY COUNSEL'S OPINION. The 1995 Noteholders shall
have received from Xxxxxx Xxxx & Xxxxxx LLP, special counsel for the
Company, a closing opinion dated the Effective Date in form and
substance satisfactory to the 1995 Noteholders. The Company hereby
requests and directs such counsel to deliver such closing opinion to
the 1995 Noteholders.
PAYMENT OF EXPENSES. The Company shall have paid all
of the Costs and Expenses, including, without limitation, the fees of
Xxxx & Xxxxxx and The Xxxxxx Group billed as of the Effective Date.
PROCEEDINGS SATISFACTORY. All proceedings taken in
connection with this Agreement and the Other Documents and all
documents and papers relating thereto shall be reasonably satisfactory
to the 1995 Noteholders and their special counsel. The 1995 Noteholders
and their special counsel shall have received copies of such documents
and papers as they may reasonably request in connection therewith.
REPRESENTATIONS AND WARRANTIES.
To induce the 1995 Noteholders to enter into this Agreement, the
Company warrants and represents as follows:
ORGANIZATION, EXISTENCE AND AUTHORITY. The Company is
a corporation duly organized, validly existing and in good standing
under the laws of the State of New York, and has all requisite power
and authority (a) to execute and deliver (i) this Agreement and (ii)
each of the other documents and instruments to be executed by it as
contemplated by this Agreement (collectively referred to herein as the
"Other Documents") and (b) to perform its respective obligations under
this Agreement, the Note Agreement and the Other Documents.
LITIGATION. Except for proceedings which have been
adequately reserved for in the Company's financial statements delivered
to the holders of the Notes, there are no proceedings pending, or to
the knowledge of the Company threatened, against or affecting the
Company or any Subsidiary or any of their respective properties in any
court or before any governmental authority or arbitration board or
tribunal which, either individually or in the aggregate, could (i) have
a Material Adverse Effect, or (ii) conflict with or interfere with the
ability of the Company to execute and deliver this Agreement or any of
the Other Documents or to perform its obligations hereunder and
thereunder.
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AUTHORIZATION, EXECUTION AND ENFORCEABILITY.
THE COMPANY. The execution and delivery by
the Company of this Agreement and the Other Documents and the
performance by it of its obligations under this Agreement, the
Note Agreement and the Other Documents have been duly
authorized by all necessary action on the part of the Company.
This Agreement and the Other Documents have been duly executed
and delivered by the Company. Each of this Agreement, the Note
Agreement and the Other Documents is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its respective terms, except that the
enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforceability
of creditors' rights generally; and subject to the
availability of equitable remedies.
GUARANTORS. The execution and delivery of
the Subsidiary Guaranty by each Guarantor and the performance
by it of its obligations thereunder has been duly authorized
by all necessary action on the part of each Guarantor. The
Subsidiary Guaranty has been duly executed and delivered by
each Guarantor, and is a valid and binding obligation of each
Guarantor enforceable in accordance with its terms, except
that the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforceability
of creditors' rights generally, and subject to the
availability of equitable remedies.
NO CONFLICTS OR DEFAULTS. Neither the execution and
delivery by the Company of this Agreement and the Other Documents, nor
the performance by the Company of its obligations under this Agreement,
the Note Agreement and the Other Documents, conflicts with, results in
any breach in any of the provisions of, constitutes a default under,
violates, or results in the creation of any Lien upon any property of
the Company under the provisions of:
the certificate of incorporation of the Company;
any agreement, instrument or conveyance to which
the Company or any of its properties may be bound; or
any statute, rule or regulation or any order,
judgment or award of any court, tribunal or arbitrator by
which the Company or any of its respective properties may be
bound.
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GOVERNMENTAL CONSENT. Neither the execution and
delivery by the Company of this Agreement and the Other Documents, nor
the performance by the Company of its obligations under this Agreement,
the Note Agreement and the Other Documents, is such as to require a
consent, approval or authorization of, or filing, registration or
qualification with, any governmental authority on the part of the
Company as a condition thereto under the circumstances and conditions
contemplated by this Agreement.
DISCLOSURE OF DEFAULTS UNDER NOTE AGREEMENTS AND
OTHER AGREEMENTS. There exists no Default or Event of Default under the
Existing Note Agreement. After giving effect to this Agreement, the
similar agreements with the 1989 Noteholders and the 1992 Noteholders,
the Bank Loan Agreement, and the amendments made contemporaneously
herewith to the CIBC Other Credits, neither the Company nor any
Subsidiary shall be in default with respect to any indebtedness for
borrowed money or any contract which is material to the business of the
Company or any Subsidiary.
COMPLIANCE WITH LAW. Neither the Company nor any
Subsidiary:
is in violation of any law, ordinance,
governmental rule or regulation to which it is subject; or
has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business;
which violation or failure to obtain might, either individually or in
the aggregate, (i) have a Material Adverse Effect, or (ii) materially
adversely affect the ability of the Company to perform its obligations
under this Agreement, the Note Agreement or the Other Documents.
SOLVENCY. After giving effect to this Agreement, to
the best of the Company's knowledge, the fair saleable value of the
assets of the Company, taken as a whole, exceeds, as of the Effective
Date, the liabilities of the Company, taken as a whole as of such date.
After giving effect to this Agreement, the Company will be able to meet
its liabilities as they mature. The Company is entering into this
Agreement without any intent to hinder, delay or defraud either current
creditors or future creditors.
NO IMPLIED AMENDMENT.
The actions taken in Sections 3 and 5 hereof shall be limited precisely
as written, and neither such actions nor any other provision of this Agreement
shall, or shall be deemed or construed to:
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be a consent to any other amendment or
modification of any term, provision or condition of the
Existing Note Agreement,
impose upon any holder of Notes any obligation,
express or implied, to consent to any further amendment or
further modification of the Note Agreement, or
be a consent to any waiver of any Event of
Default.
ACKNOWLEDGEMENT OF VALIDITY AND ENFORCEABILITY OF NOTE AGREEMENT
The Company acknowledges and agrees that the Note Agreement and the
Notes constitute legal, valid and binding obligations of the Company enforceable
in accordance with their terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar law affecting creditors'
rights generally, and the Company expressly reaffirms its obligations under the
Note Agreement.
COSTS AND EXPENSES.
Without in any way limiting the duties of the Company under Section
11.1 of the Note Agreement, the Company shall pay or, if paid by any holder of
Notes reimburse such holder for, all reasonable out-of-pocket fees, costs and
expenses (including reasonable fees of Xxxx & Xxxxxx) paid or incurred by any
holder of Notes in connection with the consideration, negotiation, preparation,
drafting, implementation, amendment, modification, administration and
enforcement of this Agreement, the Note Agreement, the Notes and the Other
Documents, and for auditing, appraising, evaluating or otherwise monitoring any
collateral or other credit support which at any time may secure the Notes (all
such fees, costs and expenses, whether incurred in connection with this
Agreement, the Note Agreement, any amendment or otherwise, being "Costs and
Expenses"). All Costs and Expenses shall be due and payable by the Company
fifteen (15) days following the Company's receipt of an invoice in reasonable
detail reflecting such Costs and Expenses. Without limiting the generality of
the foregoing, on the Effective Date the Company shall pay all Costs and
Expenses for which an invoice in reasonable detail has been received, including,
but not limited to, the statement for reasonable fees and disbursements of Xxxx
& Xxxxxx, the 1995 Noteholders' special counsel, and The Xxxxxx Group, the 1995
Noteholders' financial advisor.
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AMENDMENTS; WAIVERS.
No amendment or modification of any provision of this Agreement shall
be effective without the written agreement of the Required Holders and the
Company, and no termination or waiver of any provision of this Agreement, or
consent to any departure therefrom, shall in any event be effective without the
written concurrence of the Required Holders; provided that any waiver or
amendment of Section 4 of this Agreement shall require the written consent of
the holders of all of the Notes; and any amendment of Section 5(c)(ii) of this
Agreement or the defined term "Acceptable Replacement Facility" may be effected
only with the written agreement of the holders of a majority in aggregate
principal amount of the Notes, the 1989 Notes and the 1992 Notes voting as a
single class. No notice to or demand upon the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances. Any failure, at any time or times hereafter, to require strict
performance by the Company of any provision or term of this Agreement or the
Note Agreement shall not waive, affect or diminish any right of any holder of
Notes thereafter to demand strict compliance and performance herewith or
therewith.
BENEFIT.
This Agreement shall be binding upon and shall inure to the benefit of
the 1995 Noteholders and the Company and their respective successors and
assigns. This Agreement is solely for the benefit of the parties hereto and
their respective successors and assigns, and no other Person shall have any
right, benefit or interest under or because of the existence of this Agreement.
GOVERNING LAW.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect to
conflict of law principles of such state other than General Obligations Law ss.
5-1401.
ASSIGNMENT.
This Agreement shall not be assignable by the Company without the
written consent of the 1995 Noteholders. The 1995 Noteholders may assign to one
or more Persons all or any part of, or any participation interest in, its rights
and benefits hereunder in connection with an assignment of, or sale of a
participation interest in, the Notes held by it.
SECTION HEADINGS.
The titles of the Sections and subsections hereof appear as a matter of
convenience only, do not constitute a part of this Agreement and shall not
affect the construction hereof.
COUNTERPARTS.
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This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on their behalf by a duly authorized officer or agent thereof, as the
case may be, as of the date first above written.
STANDARD MOTOR PRODUCTS, INC.
By____________________________________________
Name:
Title:
METROPOLITAN LIFE INSURANCE COMPANY
By____________________________________________
Name:
Title:
By____________________________________________
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By CIGNA Investments, Inc.
By____________________________________________
Name:
Title:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, ON
BEHALF OF ONE OR MORE
SEPARATE ACCOUNTS By CIGNA
Investments, Inc.
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By____________________________________________
Name:
Title:
CIGNA PROPERTY AND CASUALTY
INSURANCE
COMPANY
By CIGNA Investments, Inc.
By____________________________________________
Name:
Title:
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By CIGNA Investments, Inc.
By____________________________________________
Name:
Title:
THE TRAVELERS INSURANCE COMPANY
By____________________________________________
Name:
Title:
AMERICAN UNITED LIFE INSURANCE
COMPANY
By____________________________________________
Name:
Title:
SCHEDULE 1
INTENTIONALLY OMITTED
Schedule 1-1
SCHEDULE 2
DESCRIPTION OF XXXXXX SWAP, FUEL PUMP TRANSACTION AND SERVICE LINE TRANSACTION
X. Xxxxxx Financing: See definition in Section 1.
II. Xxxxxx Swap: See definition in Section 1.
Schedule 2-1
SCHEDULE 3
OVERRIDE COVENANTS
Capitalized terms used in this Schedule 3 and not defined shall have the
meanings ascribed to such terms in the Bank Loan Agreement.
1. TANGIBLE NET WORTH.
During each of the fiscal quarters set out below, the Company will not
allow the remainder of Tangible Net Worth to be less than the amount set forth
opposite such quarter:
1st Quarter 1998 $143,000,000
2nd Quarter 1998 $145,000,000
3rd Quarter 1998 $150,000,000
2. NET SALES.
During each of the fiscal quarters set out below, Net Sales of the
Company and its Subsidiaries shall be not less than the amount set forth below
opposite such period:
1st Quarter 1998 $145,000,000
2nd Quarter 1998 $167,000,000
3rd Quarter 1998 $153,000,000
3. CUMULATIVE EBITDA.
EBITDA on a cumulative basis for the periods set out below shall be not
less than the amounts set out below opposite such period:
First Quarter 1998 $ 8,300,000
First Two Quarters 1998 $22,400,000
First Three Quarters 1998 $36,300,000
4. CAPITAL EXPENDITURES.
Schedule 3-1
Capital Expenditures of the Company and its Subsidiaries on a
cumulative basis shall not be in excess of the following amounts as of the end
of the period set out below opposite such amount:
First Quarter 1998 $ 4,100,000
First Two Quarters 1998 $ 9,700,000
First Three Quarters 1998 $ 13,300,000
Schedule 3-2
SCHEDULE 4
AMENDMENTS TO EXISTING COVENANTS
1. SECTION 7.2(A) OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
7.2 INDEBTEDNESS.
(a) From and after March 31, 1998, neither the Company nor any
Subsidiary shall incur or in any manner become liable in respect of any
Funded Debt or Current Debt except:
the Notes, the 1989 Notes (as defined in the
Override Agreement) and the 1992 Notes (as defined in the
Override Agreement),
Funded Debt or Current Debt outstanding
pursuant to The Bank Loan Agreement and the Xxxxxx Financing
(as such terms are defined in the Override Agreement) (the
"Bank Loan Agreement" and the "Xxxxxx Financing"
respectively),
Funded Debt owed to the Company or a
Wholly-Owned Subsidiary,
Funded Debt secured by purchase money Liens
or Capitalized Leases, provided that the aggregate principal
amount thereof does not exceed $6,000,000,
Funded Debt and Current Debt the payment of
which is subordinated to the payment of the Notes pursuant to
subordination provisions acceptable to you in all respects,
the CIBC Other Credits (as defined in the
Override Agreement),
obligations outstanding under the Clipper
Facility (as such term is defined in the Override Agreement)
not to exceed $25,000,000,
Funded Debt or Current Debt of Intermotor
Holdings Ltd. ( a corporation organized under the laws of the
United Kingdom), provided that the principal amount thereof
does not exceed (pound) 5,000,000 over the amount such entity
is presently permitted to borrow pursuant to the terms of its
credit facility
Schedule 4-1
with The Royal Bank of Scotland, and none of such indebtedness
is guarantied by the Company or any Subsidiary (the
"Intermotor Loan"), and
indebtedness associated with a consignment
of $15,000,000 of inventory arising in connection with the
Xxxxxx Swap.
2. SECTION 7.3 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ IN
ITS ENTIRETY AS FOLLOWS:
7.3 SUBSIDIARY INDEBTEDNESS.
The Company will not permit any Subsidiary to create, assume, incur or
otherwise become liable for, directly or indirectly, any Indebtedness, other
than (i) Indebtedness of a Subsidiary to the Company or a Wholly-Owned
Subsidiary, (ii) Guaranties of the Notes, the 1989 Notes, the 1992 Notes and the
Indebtedness outstanding pursuant to the Bank Loan Agreement and the Xxxxxx
Financing , (iii) the CIBC Other Credits (as such term is defined in the
Override Agreement), (iv) the Intermotor Loan, and (v) obligations of SMPJ
Credit Corp. in respect of the Clipper Facility.
3. SECTION 7.5 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ IN
ITS ENTIRETY AS FOLLOWS:
7.5 LIENS.
The Company will not, and will not permit any Subsidiary to, permit to
exist, create, assume or incur, directly or indirectly, any Lien on its
properties or assets, whether now owned or hereafter acquired, except:
Liens existing on property or assets of the Company
or any Subsidiary as of the date of this Agreement that are described
on Schedule 3.06 of the Bank Loan Agreement;
Liens for taxes, assessments or governmental charges
not then due and delinquent or the validity of which is being contested
in good faith and as to which the Company has established adequate
reserves on its books;
Deposits or pledges in connection with or to secure
payment of workers' compensation, unemployment insurance, old-age
pensions or other social security, or in connection with the good faith
contest of any tax Lien;
Schedule 4-2
Construction, mechanics', materialmen's or
warehousemen's Liens securing obligations not due or, if overdue, being
contested in good faith by appropriate proceedings;
Liens arising in connection with court proceedings,
provided the execution of such Liens is effectively stayed, such Liens
are being contested in good faith and the Company has established
adequate reserves therefor on its books;
Liens arising in the ordinary course of business and
not incurred in connection with the borrowing of money (including
encumbrances in the nature of zoning restrictions, easements, rights
and restrictions of record on the use of real property and landlord's
and lessor's liens) that in the aggregate do not materially interfere
with the conduct of the business of the Company and its Subsidiaries
taken as a whole or materially impair the value of the property or
assets subject thereto;
Liens securing Indebtedness of a Subsidiary to the
Company or to a Wholly-Owned Subsidiary;
Liens or Capitalized Leases on fixed assets created
within twelve (12) months of the date of acquisition or improvement
thereof to secure or provide for all or a portion of the purchase price
or cost of construction or improvement of such fixed assets, PROVIDED
that such Liens do not extend to other property of the Company or any
Subsidiary, the incurrence of the Indebtedness secured by such Liens is
otherwise permitted by this Agreement, and the aggregate principal
amount of Indebtedness secured by such Liens does not exceed
$6,000,000;
Liens upon receivables sold pursuant to the Clipper
Facility (as such term is defined in the Override Agreement).
Liens securing the Intermotor Loan, provided that
such Liens encumber only the property of Intermotor Holdings Limited;
and
a consignment of $15,000,000 of inventory arising in
connection with the Xxxxxx Swap.
4. SECTION 7.6 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ IN
ITS ENTIRETY AS FOLLOWS:
7.6 RESTRICTED PAYMENTS.
Schedule 4-3
The Company will not declare or make any Restricted Payment unless,
after giving effect thereto, (a) no Default or Event of Default would exist, (b)
the Company would be in compliance with Section 6.06 of the Bank Loan Agreement.
5. SECTION 7.7 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ IN
ITS ENTIRETY AS FOLLOWS:
7.7 MERGER OR CONSOLIDATION.
Except for the Xxxxxx Swap (as defined in the Override Agreement), the
Company will not, and will not permit any Subsidiary to, merge or consolidate
with, or sell all or substantially all of its assets to, any Person, except that
any Subsidiary may (i) merge into the Company or a Wholly-Owned Subsidiary or
(ii) sell, transfer or lease all or any part of its assets to the Company or to
a Wholly-Owned Subsidiary or (iii) merge into any Person which, as a result of
such merger, becomes a Wholly-Owned Subsidiary; provided in each such instance
that immediately after giving effect thereto there shall exist no Default or
Event of Default.
6. SECTION 7.8 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ IN
ITS ENTIRETY AS FOLLOWS:
7.8 SALE OF ASSETS; SALE OF RECEIVABLES.
The Company will not, and will not permit any Subsidiary to, sell,
lease, transfer or otherwise (including by way of merger) dispose of
(collectively a "Disposition") any assets (including capital stock of
Subsidiaries) in one or a series of transactions to any Person other than the
Company or a Wholly-Owned Subsidiary other than:
sales of inventory in the ordinary course of business;
Dispositions of other properties no longer used or
useful in the business, provided that all such Dispositions shall be
for fair market value, and the aggregate fair market value of the
properties so disposed of does not exceed $5,000,000;
the Xxxxxx Swap (as such term is defined in the
Override Agreement);
the Service Line Transaction (as such term is defined
in the Override Agreement);
the Fuel Pump Transaction (as such term is defined in
the Override Agreement);
Schedule 4-4
the sale or compromise of the Borrower's claim in the
APS bankruptcy case;
sales of accounts receivable pursuant to the Clipper
Facility (as such term is defined in the Override Agreement); and
(h) dispositions of surplus or unneeded property
obtained in connection with the Xxxxxx Swap.
7. SECTION 7.9 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ IN
ITS ENTIRETY AS FOLLOWS:
7.9 DISPOSITION OF STOCK OF SUBSIDIARIES.
The Company will not, and will not permit any Subsidiary to, issue,
sell or transfer the capital stock of a Subsidiary unless (i) all shares of
capital stock of such Subsidiary and all Indebtedness of such Subsidiary owned
by the Company and by every other Subsidiary shall simultaneously be sold,
transferred or otherwise disposed of, (ii) such Subsidiary does not thereafter
own any shares of capital stock or Indebtedness of the Company or another
Subsidiary, (iii) such sale would be permitted by Section 7.8, and (iv) the
board of directors of the Company shall have made a good faith determination
that such sale or transfer is in the best interests of the Company.
8. SECTION 7.10 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
7.10 PERMITTED INVESTMENTS.
The Company will not, and will not permit any Subsidiary to, make any
Investment other than a Permitted Investment; provided that the Company shall
make no Permitted Investment of the type described in clause (vi) of the
definition of Permitted Investment.
9. SECTION 7.13 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
7.13 GUARANTIES.
The Company will not, and will not permit any Subsidiary to, become or
be liable in respect to any Guaranties of Indebtedness, except Guaranties of the
Indebtedness outstanding under the Notes, the 1989 Notes, the 1992 Notes, the
Bank Loan Agreement and the CIBC Other Credits (as such term is defined in the
Override Agreement).
Schedule 4-5
10. A NEW SECTION 7.14 IS HEREBY ADDED TO THE EXISTING NOTE AGREEMENT AS
FOLLOWS:
7.14 LIMITS ON MANAGEMENT COMPENSATION.
Make or permit any material change from the 1997 Management
Compensation Plan as approved by the Company's Board of Directors
11. SECTION 5.1 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED BY ADDING
THERETO, IN PROPER ALPHABETICAL ORDER, THE FOLLOWING DEFINED TERM:
Override Agreement -- That certain Override Amendment Agreement between
you and the Company, dated as of March 27, 1998.
Schedule 4-6
Schedule 4-7