EXHIBIT 4.10
EIGHTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") has been executed as of the 23rd day of November, 1998 (the
"Eighth Amendment Effective Date") by STARCRAFT CORPORATION, an Indiana
corporation formerly named Starcraft Automotive Corporation ("Parent"),
STARCRAFT AUTOMOTIVE GROUP, INC., an Indiana corporation ("Starcraft"), IMPERIAL
AUTOMOTIVE GROUP, INC., an Indiana corporation ("Imperial"), and BANK ONE,
INDIANA, NATIONAL ASSOCIATION, a national banking association formerly named
Bank One, Indianapolis, National Association ("Bank").
Recitals
1. Parent, Starcraft, Imperial and Bank are parties to an Amended and
Restated Credit Agreement, dated November 30, 1994 with effect as of December 1,
1994, as amended by a First Amendment to Amended and Restated Credit Agreement,
dated with an effective date as of March 1, 1995, a Second Amendment to Amended
and Restated Credit Agreement, dated with an effective date as of January 31,
1996, a Third Amendment to Amended and Restated Credit Agreement, dated with an
effective date as of January 31, 1997, a Fourth Amendment to Amended and
Restated Credit Agreement dated with an effective date as of June 29, 1997, a
Fifth Amendment to Amended and Restated Credit Agreement dated with an effective
date as of December 31, 1997, a Sixth Amendment to Amended and Restated Credit
Agreement dated with an effective date of February 10, 1997, and a Seventh
Amendment to Amended and Restated Credit Agreement, dated with an effective date
as of February 27, 1998 (such Amended and Restated Credit Agreement, as so
amended to date, being referred to in this Amendment as the "Existing
Agreement").
2. Certain of the Companies desire to enter into a Loan Agreement,
dated as of October 30, 1998 (the "Foothill Loan Agreement"), with Foothill
Capital Corporation ("Foothill") pursuant to which Starcraft and NMC may borrow
in the aggregate up to $14,000,000 from Foothill (all of the obligations,
liabilities and indebtedness of Starcraft, National, Parent or any of the other
Companies now or hereafter existing in favor of Foothill being collectively
referred to as the "Foothill Indebtedness"), with proceeds of such borrowing on
the Eighth Amendment Effective Date to be used to fully pay all of the
Obligations other than $3,000,000 of the outstanding principal of the Starcraft
Obligations on the Starcraft Revolver (the "Remaining Balance"). In order to
fulfill conditions precedent established by Foothill to the extension of loans
and credit to Starcraft and/or National under the Foothill Loan Agreement (which
loans and advances will de of direct financial benefit and value to each of the
Companies), the Companies have requested Bank to enter into an Subordination
Agreement with Foothill (to which the Companies have already given their consent
and unconditionally confirm by their execution of this Amendment or the Consent
which accompanies this Amendment) pursuant to which: (a) payment of the
Remaining Balance and any other Starcraft Obligations hereafter arising are,
subject to certain exceptions, fully subordinated to the Foothill Indebtedness;
(b) all of the liens and security interests held by Bank as security for the
Obligations are subordinated to the liens and security interests now or
hereafter held by Foothill in the same collateral as security for payment of the
Foothill Indebtedness; (c) Bank is restricted and impaired in the exercise of
its rights and remedies, both before and after the occurrence of any Event of
Default, and (d) Bank is required to release to Foothill any stock certificates
for capital stock of the Subsidiaries of Parent pledged to Bank under or
pursuant to the Parent Pledge Agreement.
(3) So as to obtain the financing contemplated by the Foothill Loan
Agreement, the Companies have requested Bank to amend the Existing Agreement,
effective as of the Eighth Amendment Effective Date, as herein provided. Bank
has agreed to amend the Existing Agreement as set forth in this Amendment, all
subject to the terms and conditions of this Amendment, including the conditions
precedent set forth in Section 5 hereof.
Agreement
NOW, THEREFORE, in consideration of the Recitals and the mutual
covenants and agreements herein, and for other good and valuable considerations,
the receipt and sufficiency of which are acknowledged by each of the parties to
this Amendment, it is agreed as follows:
1. Definitions. Terms which are defined in the Existing Agreement shall
have the same meanings in this Amendment as are ascribed to them in the Existing
Agreement, as amended hereby, excepting only those terms which are expressly
defined in this Amendment, which shall have the meanings ascribed to them in
this Amendment.
2. Amendments to Existing Agreement.
(a) Amendments to Definitions. Each of the following definitions which
are set forth in Section 1 of the Existing Agreement are amended and restated in
their respective entireties as of the Eighth Amendment Effective Date to read as
follows:
"o Applicable Spread. "Applicable Spread" means the percentage per
annum to be taken into account in determining any Prime-based Rate at which
interest will accrue on the Revolving Loan or the Starcraft Revolver, as the
context requires, and as provided in this Agreement, which percentage per annum
shall be 2.00% per annum.
o Business Locations. "Business Locations" means those locations in
Indiana at which the property of one or more of the Companies is located, all of
which have been identified to Bank.
o Default Rate. "Default Rate" means the Prime Rate plus four percent
(4%) per annum.
o Final Maturity Date. "Final Maturity Date" means the earlier of: (a)
November 23, 2001; and (b) the date Bank accelerates the maturity of the
Starcraft Obligations pursuant to Section 8 of this Agreement.
o Revolving Loan Maturity Date. "Revolving Loan Maturity Date" means
November 23, 1998.
o Starcraft Revolver Maturity Date. "Starcraft Revolver Maturity Date"
means November 23, 1998."
(b) New Definitions. Section 1 of the Existing Agreement is amended as
of the Eighth Amendment Effective Date by adding thereto the following new
definitions:
"o Eighth Amendment. "Eighth Amendment" means the Eighth Amendment to
Amended and Restated Credit Agreement, dated as of the Eighth Amendment
Effective Date, which is executed by Bank, Parent, Starcraft and Imperial.
o Eighth Amendment Effective Date. "Eighth Amendment Effective Date"
means November 23, 1998.
o Guarantor L/C. "Guarantor L/C" means an irrevocable letter of credit
issued to Bank by Lake City Bank, in form and substance the same as the form of
irrevocable letter of credit attached as Exhibit C to the Eighth Amendment,
including after the Eighth Amendment Effective Date, any irrevocable letter of
credit accepted by the Bank in replacement of the initial Guarantor L/C
delivered and issued to the Bank by Lake City Bank as of the Eighth Amendment
Effective Date.
o Rose Guaranty. "Rose Guaranty" means a guaranty of payment of the
Starcraft Obligations by ▇▇▇▇▇ ▇. ▇▇▇▇, in form and substance the same as
Exhibit B attached to the Eighth Amendment, as the same may be amended and/or
restated from time to time and at any time.
▇ ▇▇▇▇▇▇ Guaranty. "▇▇▇▇▇▇ Guaranty" means a guaranty of payment of the
Starcraft Obligations by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in form and substance the same as
Exhibit A to the Eighth Amendment, as the same may be amended and/or restated
from time to time and at any time.
o Special Subordination Agreement. "Special Subordination Agreement"
means the Subordination Agreement, dated as of the Eighth Amendment Effective
Date, between Bank and Foothill Capital Corporation, as the same may be amended
and/or restated from time to time and at any time."
(c) Amendments to Section 2.5. (i) Section 2.5.a(iii) of the Existing
Agreement is amended as of the Eighth Amendment Effective Date to read in its
entirety as follows:
"(iii) Interest on the Starcraft Revolver. The principal
amount of the Starcraft Revolver outstanding from
time to time shall bear interest until the Final
Maturity Date at a rate per annum equal to the Prime
Rate plus the Applicable Spread. After the Final
Maturity Date and until paid in full, the unpaid
principal balance of the Starcraft Revolver
outstanding from time to time shall bear interest at
the Default Rate. Accrued interest on the Starcraft
Revolver shall be due and payable monthly on the
first day of each month prior to the Final Maturity
Date After the Final Maturity Date, interest on the
Starcraft Revolver shall be due and payable as
accrued and without demand."
Section 2.5.a(v) of the Existing Agreement is amended as of the Eighth Amendment
Effective Date to read in its entirety as follows:
"(v) Repayments of Principal On and After Starcraft
Revolver Maturity Date. The unpaid principal balance of the
Starcraft Revolver shall be reduced to not more than
$3,000,000 on the Eighth Amendment Effective Date. The unpaid
principal balance of the Starcraft Revolver (on which on and
after the Eighth Amendment Effective Date there shall no
longer be any Advances) shall be repayable in equal monthly
installments in the amount of $35,714.29 on the first day of
each successive calendar month, beginning December 1, 1998,
and continuing on the first day of each calendar month
thereafter until the Final Maturity Date, on which date the
entire remaining unpaid principal balance of the Starcraft
Revolver shall be due and payable, together with all accrued
and unpaid interest. Provided that Foothill shall have given
its prior consent under the terms of the Special Subordination
Agreement, the principal of the Starcraft Revolver from and
after the Starcraft Revolver Maturity Date may be prepaid at
any time in whole or in part, provided that any partial
prepayment shall be in an amount which is an integral multiple
of One Thousand Dollars ($1,000), and provided further that
all partial prepayments of principal shall be applied to the
scheduled installments of principal in the inverse order of
their maturities. The obligation of Starcraft to pay the
indebtedness outstanding from time to time on the Starcraft
Revolver (including after the Starcraft Revolver Maturity
Date) is evidenced by the Starcraft Note (as defined in this
Agreement). The Starcraft Note held by Bank immediately prior
to the Eighth Amendment Effective Date shall be amended and
restated by the promissory note executed and delivered to Bank
by Starcraft pursuant to the Eighth Amendment (which amended
and restated promissory note is and for all purposes shall be
deemed to be the Starcraft Note, as such term is defined in
this Agreement.)"
(d) Amendment of Section 3A. Section 3A of the Existing Agreement is
amended as of the Eighth Amendment Effective Date to add to the end thereof the
following text:
"On and after the Starcraft Revolver Maturity Date:
(1) the Starcraft Obligations shall be further secured by the
Rose Guaranty and the ▇▇▇▇▇▇ Guaranty; and (2) the obligations
of the guarantors under the Rose Guaranty and the ▇▇▇▇▇▇
Guaranty shall be secured at all times by the Guarantor L/C."
(e) Amendment of Section 3B. The first paragraph of Section 3B of the
Existing Agreement is amended as of the Eighth Amendment Effective Date by
adding at the end thereof the following text:
"On the Eighth Amendment Effective Date, the Bank,
upon all Obligations (other than not more than $3,000,000 of
principal outstanding on the Starcraft Revolver) having been
paid in full, shall execute and be bound by the Special
Subordination Agreement."
(f) Amendment of Section 4.g. As of the Eighth Amendment Effective Date
Section 4.g of the Existing Agreement is amended and restated to read in its
entirety as follows:
"g. Financial and Other Covenants. The Companies
shall at all times comply with the affirmative and negative
covenants (including the financial covenants in Section 7.20)
in the Foothill Loan Agreement, as the same may be amended
and/or restated from time to time and at any time, excepting
such compliance as shall be waived in writing from time to
time by Foothill Capital Corporation."
(g) Amendment of Exhibit. Effective as of the Eighth Amendment
Effective Date, Exhibit G to the Existing Agreement is amended and restated in
its entirety to read the same as Exhibit G attached hereto and made a part
hereof for all purposes.
(h) Amendment of Section 7. Effective as of the Eighth Amendment
Effective Date, Section 7 of the Existing Agreement is amended by deleting
therefrom subsection 7.h.
(i) Closure of Revolving Loan Facility. The Revolving Loan, having
matured as of the Eighth Amendment Effective Date, is closed and Parent shall no
longer be entitled to any Advance under the Revolving Loan.
(j) Deletion of Subsections 4.h, 4.k and 7.h. Effective as of the
Eighth Amendment Effective Date, Subsections 4.h, 4.k and 7.h are deleted, and
replaced respectively with the following text:
"h. [This subsection 4.h is intentionally blank.]"
"k. [This subsection 4.k is intentionally blank.]"
"h. [This subsection 7.h is intentionally blank.]
(k) Deletion of Special Covenant Regarding National. The special
covenant regarding National in paragraph 3 of the Sixth Amendment is hereby
deleted, effective as of the Eighth Amendment Effective Date.
(l) Starcraft Southwest and Imperial Noncompliance. Notwithstanding any
provision to the contrary in any of the Credit Documents, there shall be no
Event of Default under the Agreement or any other of the Credit Documents by
reason of the failure of Imperial or Starcraft Southwest to: (i) be in good
standing in the State of Indiana or any other state in which either are admitted
to do business; or (ii) have a negative net worth or being unable to pay its
debts as they mature. Notwithstanding any provision to the contrary in any of
the Credit Documents, there shall be no Event of Default under the Agreement by
reason of Starcraft Southwest being administratively dissolved by the Indiana
Secretary of State.
(m) Financial Reporting. Bank agrees, effective as of the Eighth
Amendment Effective Date, that the Companies shall be deemed in compliance with
the financial reporting obligations set out in Subsections 4.b(viii) and 4.b(ix)
of the Agreement so long as Bank is provided, within five(5) days of the date
delivered to Foothill Capital Corporation, copies of each financial statement,
cash flow report, borrowing base report and collateral report for each of the
Companies provided to Foothill Capital Corporation from time to time under or
pursuant to the Foothill Loan Agreement.
(n) Amendment of Section 5.j Effective as of the Eighth Amendment
Effective Date, Section 5.j of the Existing Agreement is amended by adding to
the end thereof the following subparagraph:
"(iii) a revolving line of credit in the maximum
principal amount of $2,000,000 extended by Starcraft to
Tecstar, Inc or its successor, Tecstar LLC."
3. Representations and Warranties. The Companies each represent and
warrant to Bank that:
(a)(i) The execution, delivery and performance of this Amendment and
all agreements and documents delivered pursuant hereto by each of them has been
duly authorized by all necessary action (whether corporate, partnership or
otherwise) and does not and will not violate any provision of any law, rule,
regulation, order, judgment, injunction, or award presently in effect applying
to any of them, or of their articles of incorporation, by-laws, articles of
organization or operating agreement (as applicable) or result in a breach of or
constitute a default under any material agreement, lease or instrument to which
they or any of them are a party or by which they or their properties may be
bound or affected; (ii) no authorization, consent, approval, license, exemption
or filing of a registration with any court or governmental department, agency or
instrumentality is or will be necessary to the valid execution, delivery or
performance by any of them of this Amendment and all agreements and documents
delivered pursuant hereto; and (iii) this Amendment and all agreements and
documents delivered pursuant hereto by any of them are their legal, valid and
binding obligations and enforceable against them in accordance with the terms
thereof.
(b) After giving effect to the amendments contained in this Amendment,
the representations and warranties contained in Section 3 of the Existing
Agreement are true and correct on and as of the Eighth Amendment Effective Date
with the same force and effect as if made on and as of the Eighth Amendment
Effective Date, except that the representation in Section 3.d of the Existing
Agreement shall be deemed to refer to the financial statements of Parent and its
Subsidiaries most recently delivered to Bank prior to the Eighth Amendment
Effective Date.
(c) No Event of Default or Unmatured Event of Default has occurred and
is continuing or will exist under the Existing Agreement as of the Eighth
Amendment Effective Date, excepting only defaults under Section 4.g of the
Existing Agreement.
4. Special Provision. Provided that on the Eighth Amendment Effective
Date all of the Obligations are paid in full other than a remaining unpaid
principal balance of $3,000,000 on the Starcraft Revolver, the Bank hereby
waives, as of the Eighth Amendment Effective Date, the Event of Defaults and
Unmatured Events of Default which then exist by reason of the failure of the
Companies to be in compliance with the financial covenants in Section 4.g of the
Existing Agreement. This waiver and consent by the Bank is specifically
conditioned and made in reliance upon the Companies having executed and
delivered this Eighth Amendment and the conditions in Section 6 hereof being
fully satisfied.
5. General Release. EACH OF THE COMPANIES FOR ITSELF AND ITS LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE ARELEASING PARTIES@),
HEREBY RELEASES AND DISCHARGES BANK, ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES,
ATTORNEYS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE
ARELEASED PARTIES@) FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS, DAMAGES AND
CAUSES OF ACTION WHICH ANY OF THE RELEASING PARTIES HAS ASSERTED OR CLAIMED OR
MIGHT NOW OR HEREAFTER ASSERT OR CLAIM AGAINST ALL OF ANY OF THE RELEASED
PARTIES, WHETHER KNOWN OR UNKNOWN, ARISING OUT OF, RELATED TO OR IN ANY WAY
CONNECTED WITH OR BASED UPON ANY PRIOR RELATED EVENT (AS SUCH TERM IS
HEREINAFTER DEFINED). AS USED HEREIN, THE TERM APRIOR RELATED EVENT@ SHALL MEAN
ANY ACT, OMISSION, CIRCUMSTANCE, AGREEMENT, LOAN, EXTENSION OF CREDIT,
TRANSACTION, TRANSFER, PAYMENT, EVENT, ACTION OR OCCURRENCE BETWEEN OR INVOLVING
ANY OF THE COMPANIES AND ALL OR ANY OF THE RELEASED PARTIES AND WHICH WAS MADE
OR EXTENDED OR WHICH OCCURRED AT ANY TIME OR TIMES PRIOR TO THE EXECUTION OF
THIS AGREEMENT, INCLUDING WITHOUT LIMITING IN ANY RESPECT THE GENERALITY OF THE
FOREGOING: (i) ANY ACTION TAKEN ON OR PRIOR TO THE EXECUTION OF THIS AGREEMENT
TO OBTAIN PAYMENT OF ANY OBLIGATIONS OR TO OTHERWISE ENFORCE OR EXERCISE ANY
RIGHT OR PURPORTED RIGHT OF BANK AS A CREDITOR; (ii) ANY FAILURE OR REFUSAL TO
MAKE ANY LOAN OR ADVANCE; AND (iii) ANY PAYMENT OR OTHER TRANSFER MADE TO BANK
BY OR FOR THE ACCOUNT OF ANY OF THE COMPANIES AT ANY TIME PRIOR TO THE EXECUTION
OF THIS AGREEMENT. EACH OF THE COMPANIES AGREE AND ACKNOWLEDGE THAT THIS SECTION
5 IS NOT TO BE CONSTRUED AS OR DEEMED AN ACKNOWLEDGMENT OR ADMISSION ON THE PART
OF ANY OF THE RELEASED PARTIES OF LIABILITY FOR ANY MATTER OR AS PRECEDENT UPON
WHICH ANY LIABILITY MAY BE ASSERTED.
6. Conditions. The obligation of Bank to execute and to perform this
Amendment shall be subject to full satisfaction of the following conditions
precedent:
(a) This Amendment shall have been duly executed and delivered by each
of the Companies and Starcraft shall have executed and delivered to Bank a
promissory note in the principal amount of $3,000,000 and in form and substance
the same as attached hereto as Exhibit A, which note amends and restates for all
purposes the Starcraft Note held by Bank immediately prior to the Eighth
Amendment Effective Date and is the "Starcraft Note", as such term is defined in
the Agreement, upon its execution and delivery to Bank..
(b) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have executed and delivered to the Bank a
guaranty, in form and substance the same as attached to this Amendment as
Exhibit B.
(c) ▇▇▇▇▇ ▇. ▇▇▇▇ shall have executed and delivered to the Bank a
guaranty in form and substance the same as attached to this Amendment as Exhibit
C.
(d) The Bank shall have received an irrevocable $1,000,000 letter of
credit, duly issued and executed by Lake City Bank, in form and substance the
same as attached to this Amendment as Exhibit D.
(e) Bank shall have received such additional agreements, documents and
certifications, fully executed by the Companies as may be reasonably requested
by Bank, or its counsel.
(f) Bank shall have received payment in full of all of the Obligations,
excepting only $3,000,000 of principal outstanding on the Starcraft Revolver.
(g) Bank shall have been paid by Starcraft a restructuring fee in the
amount of $15,000.
7. Guarantor Consent and Affirmation. Each of the Companies in their
respective capacities as guarantors under the Guaranty Agreements, by their
execution of this Amendment, expressly consents to the execution, delivery and
performance by the other Companies and Bank of this Amendment and each of the
other documents, instruments and agreements to be executed pursuant hereto, and
agrees that neither the provisions of this Amendment nor any action taken or not
taken in accordance with the terms of this Amendment shall constitute a
termination, extinguishment, release or discharge of any of their respective
guaranty obligations or provide a defense, set off, or counterclaim to any of
them with respect to any of their respective obligations under any of the
Guaranty Agreements or other Credit Documents. Each of the Companies affirms to
Bank that its Guaranty Agreement remains in full force and effect, is a valid
and binding obligation of it and continues to support the Obligations, the
payment of which is guaranteed by it thereunder.
8. Binding on Successors And Assigns. All of the terms and provisions
of this Amendment shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives.
9. Governing Law/Entire Agreement/Survival. This Amendment is a
contract made under, and shall be governed by and construed in accordance with,
the laws of the State of Indiana applicable to contracts made and to be
performed entirely with such state and without giving effect to the choice of
law principles of such state. This Amendment constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements and understandings,
commitments, inducements or conditions, whether express or implied, oral or
written. All covenants, agreements, undertakings, representations and warranties
made in this Amendment shall survive the execution and delivery of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Eighth
Amendment to be duly executed and delivered as of the Eighth Amendment Effective
Date.
BANK ONE, INDIANA,
NATIONAL ASSOCIATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President
STARCRAFT CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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(Print name and title)
STARCRAFT AUTOMOTIVE GROUP, INC
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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(Print name and title)
IMPERIAL AUTOMOTIVE GROUP, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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(Print name and title)
CONSENT AND AGREEMENT
Each of the undersigned join in execution of this Eighth Amendment to evidence
their consent thereto and to agree to be bound by the terms and conditions of
the Existing Agreement, as amended by this Eighth Amendment, in all regards
applicable to the undersigned and to the broadest, fullest extent possible. By
their execution of this Consent, each of the undersigned agree to and shall be
bound by the terms of Sections 5 and 7 of this Eighth Amendment. Executed and
delivered as of the Eighth Amendment Effective Date.
STARCRAFT SOUTHWEST, INC., NATIONAL MOBILITY
an Indiana corporation CORPORATION, an Indiana corporation
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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(Print name and title) (Print name and title)
