EXHIBIT 10.17
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 "1989 Noteholders"). All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Note Agreement
dated as of October 15, 1989 (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 1989 Noteholders (or their
respective predecessors in interest).
R E C I T A L S
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WHEREAS, various Events of Default under the Existing Note Agreement
presently exist, as more particularly set forth on Schedule 1 of this Agreement
(collectively referred to herein as the "Current Events of Default"); and
WHEREAS, as a result of the Current Events of Default, the 1989
Noteholders are entitled, among other things, to enforce their rights and
remedies provided for in the Existing Note Agreement, including without
limitation, the right to accelerate and immediately demand payment in full of
the Notes; and
WHEREAS, the Company has requested that the 1989 Noteholders waive the
Current Events of Default and agree to certain modifications to the Existing
Note Agreement; and
WHEREAS, the 1989 Noteholders are willing to waive the Current Events
of Default and make such modifications, 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:
1. 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,
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(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
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"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 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.
CURRENT EVENTS OF DEFAULT -- the recitals hereof.
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.
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.
1995 NOTEHOLDERS -- the holders of the Company's $73,000,000 aggregate
principal amount Notes, due February 25, 2006 (the "1995 Notes") issued pursuant
to Note Purchase Agreement dated as of December 1, 1995, as amended.
NOTE AGREEMENT -- the introductory paragraph hereof.
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NOTES -- the $30,000,000 aggregate principal amount Notes due November
1, 2004 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).
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.
2. WAIVER OF EXISTING EVENTS OF DEFAULT.
Subject to Section 6 of this Agreement, the 1989 Noteholders hereby
waive the Current Events of Default.
3. CONSENT TO CERTAIN TRANSACTIONS.
Subject to Section 6 of this Agreement, the 1989 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.
4. PAYMENTS OF INTEREST.
The Company acknowledges and agrees that:
(a) The aggregate outstanding principal amount of the Notes on the
date hereof is $30,000,000.
(b) 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 10.72% 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
12.72% 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 9.97% per annum
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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 5 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 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
9.97% 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.
(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.
5. CERTAIN COVENANTS AND AGREEMENTS.
(a) OVERRIDE OF CERTAIN COVENANTS. During the period from the
Effective Date through September 30, 1998, Sections 5.7 and 5.9 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 1992 Notes and the 1995 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 1989 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
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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 1989
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.
(i) 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 amounts
then outstanding) in respect of the Notes, the 1992 Notes and the 1995
Notes. Additional consideration which would require a proportionate
payment to the 1989 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.
(ii) On or before the Credit Extension Date, the Company shall have
entered into an Acceptable Replacement Facility.
(iii) 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 1992 Notes and the 1995 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.
(iv) The Xxxxxx Swap and the Xxxxxx Financing shall be consummated
not later than April 15, 1998.
(v) 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 operations for which such reserve was
originally established, and to no other losses.
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(vi) 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 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.
6. 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").
(a) 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.
(b) 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.
(c) 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.
(d) OTHER AMENDMENTS. The Company shall have entered into
agreements substantially to the same effect as this Agreement with the
1992 Noteholders and the 1995 Noteholders, and such agreements shall be
satisfactory to the 1989 Noteholders in all respects.
(e) OTHER FINANCING. The transactions contemplated by the Bank Loan
Agreement shall have closed; and the 1989 Noteholders shall have
satisfied themselves that the Clipper Facility is in full force and
effect.
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(f) 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
1989 Noteholder a counterpart of the Subsidiary Guaranty.
(g) PAYMENT OF INTEREST. The Company shall have paid all interest
on the Notes accrued or accruing through March 31, 1998.
(h) AMENDMENT FEE. The Company shall have paid the Amendment Fee to
the 1989 Noteholders.
(i) FINANCIAL AND OPERATING INFORMATION. The 1989 Noteholders shall
have received copies of such financial statements, projections,
budgets, reports, agings and other financial and business information
relating to the Company as they may have reasonably requested, all in
form and substance satisfactory to the 1989 Noteholders.
(j) COMPANY COUNSEL'S OPINION. The 1989 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 1989 Noteholders. The Company hereby
requests and directs such counsel to deliver such closing opinion to
the 1989 Noteholders.
(k) 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.
(l) 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 1989
Noteholders and their special counsel. The 1989 Noteholders and their
special counsel shall have received copies of such documents and papers
as they may reasonably request in connection therewith.
7. REPRESENTATIONS AND WARRANTIES.
To induce the 1989 Noteholders to enter into this Agreement, the
Company warrants and represents as follows:
(a) 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.
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(b) 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.
(c) AUTHORIZATION, EXECUTION AND ENFORCEABILITY.
(i) 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.
(ii) 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.
(d) 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:
(i) the certificate of incorporation of the Company;
(ii) any agreement, instrument or conveyance to which the
Company or any of its properties may be bound; or
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(iii) 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.
(e) 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.
(f) DISCLOSURE OF DEFAULTS UNDER NOTE AGREEMENTS AND OTHER
AGREEMENTS. Except for the Current Events of Default listed on Schedule
1 of this Agreement, there exists no Default or Event of Default under
the Existing Note Agreement. After giving effect to this Agreement, the
similar agreements with the 1992 Noteholders and the 1995 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.
(g) COMPLIANCE WITH LAW. Neither the Company nor any Subsidiary:
(i) is in violation of any law, ordinance, governmental rule or
regulation to which it is subject; or
(ii) 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.
(h) 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.
8. NO IMPLIED AMENDMENT.
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The actions taken in Sections 2, 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:
(a) be a consent to any other waiver, amendment or modification of
any term, provision or condition of the Existing Note Agreement,
(b) 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
(c) be a consent to any waiver of any future Event of Default.
9. 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.
10. COSTS AND EXPENSES.
Without in any way limiting the duties of the Company under Section 9.4
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 1989
Noteholders' special counsel, and The Xxxxxx Group, the 1989 Noteholders'
financial advisor.
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11. 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 1992 Notes and the 1995 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.
12. BENEFIT.
This Agreement shall be binding upon and shall inure to the benefit of
the 1989 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.
13. 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.
14. ASSIGNMENT.
This Agreement shall not be assignable by the Company without the
written consent of the 1989 Noteholders. The 1989 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.
15. 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.
16. 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.
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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:
AMERICAN UNITED LIFE INSURANCE COMPANY
By____________________________________________
Name:
Title:
GENERAL AMERICAN LIFE INSURANCE COMPANY
By____________________________________________
Name:
Title:
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By____________________________________________
Name:
Title:
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By____________________________________________
Name:
Title:
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CROWN LIFE INSURANCE COMPANY
By____________________________________________
Name:
Title:
GREAT-WEST LIFE AND ANNUITY INSURANCE COMPANY
By____________________________________________
Name:
Title:
THE SECURITY MUTUAL LIFE INSURANCE COMPANY OF LINCOLN
By____________________________________________
Name:
Title:
WOODMEN ACCIDENT AND LIFE COMPANY
By____________________________________________
Name:
Title:
NOMURA HOLDING AMERICA, INC.
By____________________________________________
Name:
Title:
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Schedule 1-1
SCHEDULE 1
CURRENT EVENTS OF DEFAULT
Section 5.7 Consolidated Tangible Net Worth
Section 5.9 Fixed Charge Ratio
Schedule 2-1
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 3-2
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.
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 4-6
SCHEDULE 4
AMENDMENTS TO EXISTING COVENANTS
1. SECTION 5.8(A) OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
5.8(A) 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:
(i) the Notes, the 1992 Notes (as defined in the Override
Agreement) and the 1995 Notes (as defined in the Override Agreement),
(ii) 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),
(iii) Funded Debt owed to the Company or a Wholly-Owned
Subsidiary,
(iv) Funded Debt secured by purchase money Liens or Capitalized
Leases, provided that the aggregate principal amount thereof does not
exceed $6,000,000.
(v) 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,
(vi) the CIBC Other Credits (as defined in the Override
Agreement),
(vii) obligations outstanding under the Clipper Facility (as
such term is defined in the Override Agreement) not to exceed
$25,000,000,
(viii) 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 with The Royal Bank of Scotland, and none
of such indebtedness is guarantied by the Company or any Subsidiary
(the "Intermotor Loan"), and
(ix) indebtedness associated with a consignment of $15,000,000
of inventory arising in connection with the Xxxxxx Swap.
2. SECTION 5.8 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO ADD
THERETO A NEW SUBSECTION (E) WHICH WILL READ IN ITS ENTIRETY AS
FOLLOWS:
(e) 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 1992 Notes (as defined in the
Override Agreement), the 1995 Notes (as defined in the Override Agreement) 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 SMP Credit
Corp. in respect of the Clipper Facility.
3. SECTION 5.10 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
5.10 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:
(b) 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;
(c) 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;
(d) 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;
(e) Construction, mechanics', materialmen's or warehousemen's
Liens securing obligations not due or, if overdue, being contested in
good faith by appropriate proceedings;
(f) 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;
(g) 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;
(h) Liens securing Indebtedness of a Subsidiary to the Company
or to a Wholly-Owned Subsidiary;
(i) 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;
(j) Liens upon receivables sold pursuant to the Clipper Facility
(as such term is defined in the Override Agreement);
(k) Liens securing the Intermotor Loan provided that such Liens
encumber only the property of Intermotor Holdings, Limited; and
(l) a consignment of $15,000,000 of inventory arising in
connection with the Xxxxxx Swap.
4. SECTION 5.11 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
5.11 DIVIDENDS; STOCK PURCHASES.
The Company will not declare or make any dividend or redemption on or
of any of its capital stock 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 5.13 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
(a) 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.
(b) 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:
(m) sales of inventory in the ordinary course of business;
(n) 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;
(o) the Xxxxxx Swap (as such term is defined in the Override
Agreement);
(p) the Service Line Transaction (as such term is defined in the
Override Agreement);
(q) the Fuel Pump Transaction (as such term is defined in the
Override Agreement);
(r) the sale or compromise of the Borrower's claim in the APS
bankruptcy case;
(s) 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.
(C) 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 5.13(b), 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.
6. SECTION 5.12 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
5.12 PERMITTED INVESTMENTS.
The Company will not, and will not permit any Subsidiary to, make any
Investment other than Investments of the type described in clauses (i) through
(v) of the definition of Restricted Investment in Section 8.1.
7. SECTION 5.14 OF THE EXISTING NOTE AGREEMENT IS HEREBY AMENDED TO READ
IN ITS ENTIRETY AS FOLLOWS:
5.14 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 1992 Notes, the 1995 Notes, the
Bank Loan Agreement and the CIBC Other Credits (as such terms are defined in the
Override Agreement).
8. A NEW SECTION 5.22 IS HEREBY ADDED TO THE EXISTING NOTE AGREEMENT AS
FOLLOWS:
5.22 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
9. SECTION 8.1 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.
