EXHIBIT 10.77
AMENDMENT NO. 1 TO CREDIT AGREEMENT AND WAIVER
This Amendment and Waiver dated as of April 16, 2002, by and among JPE,
Inc., a Michigan corporation ("JPE"), Dayton Parts, Inc., a Michigan corporation
("Dayton"), Starboard Industries, Inc., a Michigan corporation, Plastic Trim,
Inc., an Ohio corporation, JPE Finishing, Inc., an Ohio corporation, and Brake,
Axle and Tandem Company Canada Inc., an Alberta corporation (all of the
foregoing companies being collectively identified as "Companies" and
individually as a "Company") and Comerica Bank, a Michigan banking corporation,
of Detroit, Michigan ("Bank").
RECITALS
A. Companies and Bank entered into that certain Credit Agreement dated
as of February 7, 2001 ("Agreement").
B. Companies have advised Bank that certain defaults have occurred
under the Agreement and have asked Bank to waive the defaults. Bank agrees to do
so subject to the terms of this Amendment and Waiver.
The parties agree as follows:
1. Pursuant to the terms of Section 7.11 of the Agreement, Companies
were required to maintain a ratio of Senior Debt to EBITDA of not more than 5.0
to 1.0 as of December 31, 2001 and March 31, 2002. Companies have advised Bank
that they failed to comply with the provisions of Section 7.11 of the Agreement
as of December 31, 2001 and March 31, 2002. Companies have asked Bank to waive
the default existing under Section 10.1(b) of the Agreement as a result of
Companies' noncompliance with the provisions of Section 7.11 of the Agreement as
of December 31, 2001 and March 31, 2002. Bank hereby waives the event of default
existing under Section 10.1(b) of the Agreement as a result of Companies'
noncompliance with the provisions of Section 7.11 of the Agreement as of
December 31, 2001.
2. Pursuant to the terms of Section 7.12 of the Agreement, Companies
were required to maintain an Interest Coverage Ratio of not less than 1.35 to
1.0 as of September 30, 2001 and not less than 2.0 to 1.0 as of December 31,
2001 and March 31, 2002. Companies have advised Bank that they failed to comply
with the provisions of Section 7.12 of the Agreement as of September 30, 2001,
December 31, 2001, and March 31, 2002. Companies have asked Bank to waive the
defaults existing under Section 10.1(b) of the Agreement as a result of
Companies' noncompliance with the provisions of Section 7.12 of the Agreement as
of September 30, 2001, December 31, 2001 and March 31, 2002. Bank hereby waives
the event of defaults existing under Section 10.1(b) of the Agreement as a
result of Companies' noncompliance with the provisions of Section 7.12 of the
Agreement as of September 30, 2001, December 31, 2001 and March 31, 2002.
3. The definition of "Applicable Measuring Period" set forth in Section
1 of the Agreement is amended to read as follows:
1
"'Applicable Measuring Period' shall mean as of any date of
determination which is (i) on or prior to December 31, 2002,
the period beginning January 1, 2002 and ending on such date,
and (ii) after December 31, 2002, the four quarter period
ending on such date."
4. The definition of "Interest Coverage Ratio" set forth in Section 1
of the Agreement is amended to read as follows:
"'Interest Coverage Ratio' shall mean as of any date of
determination, a ratio the numerator of which is the sum of
Net Income of JPE and its consolidated Subsidiaries for the
Applicable Measuring Period plus, to the extent deducted in
determining Net Income, interest expense for such period and
depreciation and amortization for such period, less Capital
Expenditures made by JPE and its consolidated Subsidiaries
during such period and the denominator of which is interest
expense with respect to Senior Debt for such period, all as
determined in accordance with GAAP."
5. The definition of "Margin" set forth in Section 1 of the Agreement
is amended to read as follows:
"'Margin' shall mean, as of any date of determination, the
appropriate interest rate margin (based upon the Interest
Coverage Ratio) by reference to the appropriate columns in the
pricing matrix attached to this Agreement as Schedule 1."
6. The definition of "Net Income" set forth in Section 1 of the
Agreement is amended to read as follows:
"'Net Income' shall mean the net income (or loss), after
taxes, of JPE and its consolidated Subsidiaries for any period
determined in accordance with GAAP on a Consolidated basis."
7. The definition of "Revolving Credit Commitment Amount" set forth in
Section 1 of the Agreement is amended to read as follows:
"'Revolving Credit Commitment Amount' shall mean Thirty
Million Dollars ($30,000,000)."
8. Section 3A.(e) is added to the Agreement as follows:
"(e) From April 20, 2002 until the required date of delivery
under Section 7.1 of the Company's compliance certificates for
the fiscal quarter ending September 30, 2002, the margins and
fee
2
percentages shall be those set forth under the Level III
column of the pricing matrix annexed to this Agreement as
Schedule 1."
9. Section 7.11 of the Agreement is amended to read as follows:
"7.11 [Reserved.]"
10. Section 7.12 of the Agreement is amended to read as follows:
"7.12 Commencing June 30, 2002, maintain as of the end of each
fiscal quarter of JPE set forth below an Interest Coverage
Ratio of not less than the following amounts:
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2002 2.5 to 1.0
September 30, 2002 1.75 to 1.0
December 31, 2002 and thereafter 1.50 to 1.0"
11. Section 8.16 is added to the Agreement as follows:
"Pay or agree to pay any management fee to Person owning an
equity interest in JPE."
12. Schedule 1 (Pricing Matrix) of the Agreement is amended to read in
the form of Schedule 1 annexed hereto.
13. In consideration of the amendments and waivers set forth herein,
upon execution of this Amendment, Company shall pay Bank a nonrefundable
amendment and waiver fee of $187,500.
14. The above amendments and waivers shall be effective as of the date
set forth above, upon execution of this Amendment by the parties hereto, payment
to Bank of the amendment and waiver fee required under paragraph 13 above, and
delivery by Companies to Bank of the documents identified on the Closing Agenda
annexed hereto, duly executed by the parties thereto.
15. Except as expressly modified hereby, all the terms and conditions
of the Agreement shall remain in full force and effect. The waivers set forth
herein shall not extend to any other Event of Default or affect any obligation,
covenant, agreement or default not expressly waived herein.
16. Each of the Companies hereby represents and warrants that, after
giving effect to the amendments contained herein, (a) execution, delivery and
performance of this Amendment and any other documents and instruments required
under this Amendment or the Agreement are
3
within its corporate powers, have been duly authorized, are not in contravention
of law or the terms of its Articles of Incorporation or Bylaws, and do not
require the consent or approval of any governmental body, agency, or authority;
and this Amendment and any other documents and instruments required under this
Amendment or the Agreement, will be valid and binding in accordance with their
terms; (b) the continuing representations and warranties made by such Company
set forth in Sections 6.1 through 6.5 and 6.7 through 6.15 of the Agreement are
true and correct on and as of the date hereof with the same force and effect as
if made on and as of the date hereof; (c) the continuing representations and
warranties of Companies set forth in Section 6.6 of the Agreement are true and
correct as of the date hereof with respect to the most recent financial
statements furnished to the Bank by Companies in accordance with Section 7.1of
the Agreement; and (d) no Event of Default, or condition or event which, with
the giving of notice or the running of time, or both, would constitute an Event
of Default under the Agreement, has occurred and is continuing as of the date
hereof.
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK JPE, INC.
By: /s/ Richard S. Arceci By: /s/ David L. Treadwell
------------------------------------------ --------------------------------------------------
Its: Vice President Its: Chairman of the Board & Chief Executive Officer
------------------------------------------ --------------------------------------------------
BRAKE, AXLE AND TANDEM COMPANY CANADA INC.
By: /s/ David L. Treadwell
--------------------------------------------------
Its: Chairman of the Board & Chief Executive Officer
--------------------------------------------------
DAYTON PARTS, INC.
By: /s/ David L. Treadwell
--------------------------------------------------
Its: Chairman of the Board & Chief Executive Officer
--------------------------------------------------
PLASTIC TRIM, INC.
By: /s/ David L. Treadwell
--------------------------------------------------
Its: Chairman of the Board & Chief Executive Officer
--------------------------------------------------
STARBOARD INDUSTRIES, INC.
By: /s/ David L. Treadwell
--------------------------------------------------
Its: Chairman of the Board & Chief Executive Officer
--------------------------------------------------
4
JPE FINISHING, INC.
By: /s/ David L. Treadwell
--------------------------------------------------
Its: Chairman of the Board & Chief Executive Officer
--------------------------------------------------
5
SCHEDULE 1
APPLICABLE MARGIN GRID I
JPE, INC.
(BASIS POINTS PER ANNUM)
- -----------------------------------------------------------------------------------------------------------------------------------
Basis for Pricing LEVEL I LEVEL II LEVEL III LEVEL IV
- -----------------------------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio greater or equal to greater or equal to greater or equal to smaller than
2.75 2.0 but lesser than 2.75 1.75 but lesser than 2.0 1.75
- -----------------------------------------------------------------------------------------------------------------------------------
Unused Fee 50.00 50.00 50.00 50.00
- -----------------------------------------------------------------------------------------------------------------------------------
Eurodollar Spread 300.00 350.00 375.00 400.00
- -----------------------------------------------------------------------------------------------------------------------------------
Letter of Credit Fees 300.00 350.00 375.00 400.00
- -----------------------------------------------------------------------------------------------------------------------------------
Base Rate Spread 100.00 150.00 175.00 200.00
- -----------------------------------------------------------------------------------------------------------------------------------
6