WAIVER AND
AMENDMENT
NO. 4
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
This WAIVER AND AMENDMENT (this "Amendment") is entered into as of this
31st day of March, 2005 by and among STANDARD MOTOR PRODUCTS, INC., a New York
corporation ("SMP"), STANRIC, INC., a Delaware corporation ("SI"), MARDEVCO
CREDIT CORP., a New York corporation ("MCC"), (SMP, SI and MCC are sometimes
collectively referred to herein as "Borrowers" and individually as a
"Borrower"), the other Credit Parties signatory to the Credit Agreement (as
herein defined), lenders who are party to the Credit Agreement ("Lenders"),
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as
Agent for Lenders ("Agent"), BANK OF AMERICA, N.A., for itself, as Lender, and
as Syndication Agent, and GMAC COMMERCIAL FINANCE LLC (as successor by merger to
GMAC Commercial Credit LLC), for itself, as Lender, and as Documentation Agent.
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement
dated as of February 7, 2003, by and among Borrowers, Credit Parties, Agent,
Syndication Agent, Documentation Agent and Lenders (including all annexes,
exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), Lenders have made
Loans to, and incurred Letter of Credit Obligations on behalf of Borrowers; and
WHEREAS, SMP has informed Agent of its desire to avoid any deemed dividend
issues regarding the Guaranty by SMP Canada of the Obligations, the pledge of
the stock of SMP Canada to Agent and the security interest of Agent in the
assets of SMP Canada by terminating the SMP Canada Guaranty and the security
interest of Agent in the assets of SMP Canada and by reducing the percentage of
the voting stock of SMP Canada which is pledged from 100% to 65%; and
WHEREAS, Agent and Lenders are willing to terminate the SMP Canada
Guaranty and the security interest of Agent in the assets of SMP Canada and to
reduce the percentage of the voting stock of SMP Canada which is pledged from
100% to 65% on the terms and conditions hereafter set forth; and
WHEREAS, Borrowers have requested Agent and Lenders waive an Event of
Default existing with respect to the Fixed Charge Coverage Ratio as of December
31, 2004 and to amend such covenant for subsequent fiscal periods, and Agent and
Lenders are willing to do so on the terms and conditions hereafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in furtherance of the
Borrowers' duties to give further assurances to the Agent and Lenders pursuant
to the terms of the Credit Agreement, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Credit Agreement.
2. WAIVER. Subject to the satisfaction of the conditions precedent set
forth in Section 4 below and Borrowers and their Subsidiaries on a consolidated
basis having EBITDA of at least $30,000,000 for the 12-month period ended
December 31, 2004, Agent and Lender hereby waive the Event of Default existing
pursuant to Section 8.1(b) of the Credit Agreement solely as a result of
Borrowers' failure to comply with the Minimum Fixed Charge Coverage Ratio
contained in Annex G for the Fiscal Quarter ended on December 31, 2004.
3. AMENDMENTS TO CREDIT AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, the Credit Agreement is
hereby amended as follows:
(a) Section 1.6 of the Credit Agreement is hereby amended by
deleting "(with Accounts owned by SMP Canada being deemed, for purposes of this
Section, to be Accounts owned by SMP)" in the first sentence of Section 1.6.
(b) Section 1.7 of the Credit Agreement is hereby amended by
deleting "(with Inventory owned by SMP Canada being deemed, for purposes of this
Section, to be Inventory owned by SMP)" in the first sentence of Section 1.7.
(c) Section 6.4(b) of the Credit Agreement is hereby amended by
deleting "$500,000" and inserting "$1,000,000" in its place and stead.
(d) Sections 6.3, 6.5, 6.6, 6.7, 6.12, 6.16 and 6.18 of the Credit
Agreement are hereby amended by adding ", nor shall it permit SMP Canada to,"
after the words "No Credit Party shall".
(e) Annex A of the Credit Agreement is hereby amended by amending
the definitions of "Credit Parties", "SMP Amortizing Availability" and
"Subsidiary Guaranty" to provide as follows:
"CREDIT PARTIES" means each Borrower.
"SMP AMORTIZING AVAILABILITY" means (a) $9,252,166 less $652,785 per
Fiscal Quarter commencing with the Fiscal Quarter ending March 31,
2005, plus (B) the Additional SMP Amortizing Availability, minus (C)
an amount equal to (i) 50% of the Fair Market Value of any Eligible
Real Estate as of the Closing Date or the date it is purchased by
SMP or 85% of the Net Orderly Liquidation Value of any Eligible
Equipment as of the Closing Date or the date it is purchased by SMP,
which is the basis of SMP Amortizing Availability, and which is
subject to a loss, sale, destruction or other disposition, less (ii)
the product of one-twenty eighth of the amount determined under the
preceding clause (i) and the number of full Fiscal Quarters that
have occurred since the Closing Date or the purchase of such
Eligible Real Estate or Eligible Equipment to the date of such loss,
sale, destruction or other disposition, as the case may be."
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"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty dated the
Original Closing Date executed by each domestic Subsidiary of each
Borrower, each in favor of Agent, on behalf of itself and Lenders,
as amended, modified or supplemented from time to time.
(f) Annex G of the Credit Agreement is hereby amended by amending
Section 2(b) in its entirety to provide as follows:
(b) MINIMUM FIXED CHARGE COVERAGE RATIO. Borrowers and their
Subsidiaries on a consolidated basis shall have, at the end of each
Fiscal Quarter set forth below, a Fixed Charge Coverage Ratio for
the 12-month period then ended (or with respect to the Fiscal
Quarters ending on or before December 31, 2005, the period
commencing on January 1, 2005 and ending on the last day of such
Fiscal Quarter) of not less than the following:
Fiscal Quarter Ending Fixed Charge Coverage Ratio
--------------------- ---------------------------
March 31, 2005 1.25 to 1.00
June 30, 2005 1.25 to 1.00
September 30, 2005 1.25 to 1.00
December 31, 2005 and each 1.25 to 1.00
Fiscal Quarter ending
thereafter
4. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective as
of the date upon which Agent shall have received (i) ten (10) copies of this
Amendment executed by Borrowers, Lenders and each of the Guarantors, (ii) a
Borrowing Base Certificate as of the date of this Amendment reflecting the
exclusion from Eligible Accounts and Eligible Inventory of SMP Canada's assets,
and (iii) payment of an amendment fee of $100,000 which shall be paid to Agent
for the ratable benefit of Lenders (which fee shall be charged by Agent to the
Revolving Loan balance).
5. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and warrant
as follows:
(a) This Amendment and the Credit Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrowers and are enforceable
against Borrowers in accordance with their respective terms.
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(b) Upon the effectiveness of this Amendment, each Borrower hereby
reaffirms all covenants, representations and warranties made in the Credit
Agreement as amended hereby and agree that all such covenants, representations
and warranties shall be deemed to have been remade as of the effective date of
this Amendment.
(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment.
(d) Borrowers have no defense, counterclaim or offset with respect
to the Credit Agreement.
6. NO WAIVER. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of Agent or any
Lender, nor constitute a waiver of any provision of the Credit Agreement, or any
other documents, instruments or agreements executed and/or delivered under or in
connection therewith.
7. EFFECT ON THE CREDIT AGREEMENT. All references in the Credit Agreement
and the other Loan Documents to the Credit Agreement shall be deemed to refer to
the Credit Agreement as amended hereby.
8. CONSENT TO RELEASE OF SMP CANADA. Lenders hereby consent to Agent (i)
terminating the Guaranty of SMP Canada and the Security Agreement with SMP
Canada, and (ii) releasing thirty-five percent (35%) of the common stock of SMP
Canada from the pledge of the stock of SMP Canada by SMP so that only sixty-five
(65%) of the common stock of SMP Canada is pledged to Agent by SMP.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES).
10. 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.
11. COUNTERPARTS; FACSIMILE. This Amendment may be executed in any number
of several counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
to be executed and delivered by its duly authorized officer as of the date first
set forth above.
STANDARD MOTOR PRODUCTS, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
STANRIC, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MARDEVCO CREDIT CORP.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By:
---------------------------------
Name:
--------------------------------
Title:
-------------------------------
(SIGNATURES CONTINUED ON NEXT PAGE)
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GMAC COMMERCIAL FINANCE LLC,
as Documentation Agent and Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
BANK OF AMERICA, N.A.,
as Syndication Agent and Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
GE BUSINESS CAPITAL CORPORATION,
as Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
CONGRESS FINANCIAL CORPORATION,
as Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
(SIGNATURES CONTINUED ON NEXT PAGE)
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JP MORGAN CHASE BANK,
as Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
HSBC BANK USA, NATIONAL ASSOCIATION,
as Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
WELLS FARGO FOOTHILL,
as Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
MERRILL LYNCH CAPITAL, a Division of
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.,
as Lender
By:
---------------------------------
Name:
--------------------------------
Title:
------------------------------
(SIGNATURES CONTINUED ON NEXT PAGE)
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CONSENTED TO:
SMP MOTOR PRODUCTS LTD.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
EAGLEMOTIVE CORPORATION
By:
---------------------------
Name:
-------------------------
Title:
------------------------
MOTORTRONICS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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