AMENDMENT NO. 2
and CONSENT
to
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 26, 1996
THIS AMENDMENT NO. 2 and CONSENT ("Amendment") is entered into
as of February 21, 1997 by and among Fairchild Holding Corp., a
Delaware corporation (the "U.S. Borrower"), Fairchild Finance
Company (f/k/a Kaysel), a private unlimited liability company formed
under the laws of The Republic of Ireland (the "U.K. Borrower"), and
the institutions identified on the signature pages hereof as
Lenders. Capitalized terms used herein but not defined herein shall
have the meanings provided in the Credit Agreement (as defined
below).
W I T N E S S E T H:
WHEREAS, the U.S. Borrower, the U.K. Borrower, and the Lenders
are parties to that certain Amended and Restated Credit Agreement
dated as of July 26, 1996 (together with the Exhibits and Schedules
thereto, the "Credit Agreement"), pursuant to which the Lenders have
agreed to provide certain financial accommodations to the Borrowers;
WHEREAS, the U.S. Borrower has informed the Administrative
Agent and Lenders of its desire to acquire 100% of the Capital Stock
of ▇▇▇▇▇▇▇▇ ▇.▇., a corporation formed under the laws of France, and
in connection therewith, to form a new Subsidiary under the laws of
France which would be owned in partnership by two Wholly-Owned
Subsidiaries of the U.S. Borrower, Meow, Inc., a Delaware
corporation, and Fairchild Fasteners Corp., a Delaware corporation,
with Meow, Inc. having a 90% interest and Fairchild Fasteners Corp.
having a 10% interest; and
WHEREAS, the U.S. Borrower has requested certain consents in
connection with the aforesaid proposed acquisition and a further
amendment of Section 10.01 of the Credit Agreement and an amendment
of the Borrowing Base Certificate with respect to calculation of the
EBITDA Borrowing Base;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Amendment to Credit Agreement. Effective as of February
21, 1997, upon satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement is hereby amended as follows:
1.1 Article I is amended to (a) delete the definitions of
"Base Rate Margin" and "Eurocurrency Rate Margin" in their entirety
and substitute the following therefor:
"Base Rate Margin" means (i) with respect to Obligations of the
U.S. Borrower, a rate equal to one and one-half percent (1.50%) per
annum and (ii) with respect to Obligations of the U.K. Borrower, a
rate equal to two and one-half percent (2.50%) per annum; provided,
however, that in the event the Loans and other financial
accommodations provided for in this Agreement are not restructured
or refinanced by September 30, 1997, the aforesaid per annum rates
shall be increased, effective as of September 30, 1997, by one-
quarter of one percent (0.25%) per annum and provided further that
in the event the Loans and other financial accommodations provided
for in this Agreement are not restructured or refinanced by December
31, 1997, the aforesaid per annum rates shall be further increased,
effective as of December 31, 1997, by an additional one-quarter of
one percent (0.25%) per annum.
"Eurocurrency Rate Margin" means (i) with respect to
Obligations of the U.S. Borrower, a rate equal to two and three-
quarters percent (2.75%) per annum and (ii) with respect to
Obligations of the U.K. Borrower, a rate equal to two and one-half
percent (2.50%) per annum; provided, however, that in the event the
Loans and other financial accommodation provided for in this
Agreement are not restructured or refinanced by September 30, 1997,
the aforesaid per annum rates shall be increased, effective as of
September 30, 1997, by one-quarter of one percent (0.25%) per annum
and provided further that in the event the Loans and other financial
accommodations provided for in this Agreement are not restructured
or refinanced by December 31, 1997, the aforesaid per annum rates
shall be further increased, effective as of December 31, 1997, by an
additional one-quarter of one percent (0.25%) per annum.
and (b) add the following definitions:
"▇▇▇▇▇▇▇▇ ▇.▇." means ▇▇▇▇▇▇▇▇ ▇.▇., a corporation formed under
the laws of France.
"Support Agreement" means the written agreement executed and
delivered to the Administrative Agent for the benefit of the Holders
by RHI described in Section 3 of that certain Amendment No. 2 and
Consent dated as of February 21, 1997 and delivered with respect to
this Agreement.
1.2 Section 10.01 is amended to delete the provisions of
Section 10.01(g) in their entirety and substitute the following
therefor:
(g) Indebtedness arising from (i) intercompany loans from the
U.S. Borrower to any of its Subsidiaries which is a Guarantor (other
than Fairchild Technologies USA, Inc.) or from any such Subsidiary
to the U.S. Borrower or any other such Subsidiary, (ii) those
certain intercompany loans identified on Schedule 10.01-G attached
hereto and made a part hereof incurred on or before February 21,
1997 or under promissory notes identified on Schedule 10.01-G
evidencing Indebtedness owing (A) between the U.S. Borrower and
Fairchild Retiree Medical Services, Inc. and (B) by the U.K.
Borrower to the U.S. Borrower upon the assignment by the U.S.
Borrower of the promissory note executed on February 20, 1997 by
▇▇▇▇▇▇▇▇ Holding to the U.K. Borrower as referenced on Schedule
10.01-G, (iii) Indebtedness incurred after February 21, 1997 in
addition to that permitted under clause (i) above, in an amount not
to exceed $12,000,000 in the aggregate, exclusive of fees and
interest with respect thereto, arising from intercompany loans (A)
from the U.S. Borrower to Fairchild Technologies USA, Inc. and any
of the U.S. Borrower's Subsidiaries which are not Guarantors or from
any such Subsidiary of the U.S. Borrower to the U.S. Borrower or any
other such Subsidiary, (B) from the U.K. Borrower to any Subsidiary
of the U.S. Borrower, and (iv) from RHI to the U.S. Borrower;
provided that such loans are subordinated to the payment and
performance of the Obligations and are evidenced by promissory notes
in form and substance satisfactory to the Administrative Agent,
which terms of such promissory notes executed with respect to loans
from RHI to the U.S. Borrower on or after February 21, 1997, the
proceeds of which are used, directly or indirectly, to effect the
acquisition of Capital Stock and convertible bonds of ▇▇▇▇▇▇▇▇, ▇.▇.
and compliance with the requirements of the Support Agreement, shall
include, without limitation, provisions stating that such loans are
not payable until the Obligations are satisfied in full, in cash,
and that interest payable with respect thereto shall not be payable
in cash, but only in kind, and provided further that the amount of
Indebtedness permitted in clause (iii) hereof shall be in addition
to the amount of proceeds of loans permitted in clause (iv) hereof
which are in turn loaned by the U.S. Borrower to a Subsidiary of the
U.S. Borrower or by such a Subsidiary to another such Subsidiary;
1.3 Exhibit B is amended, under the heading "II. Calculation
of EBITDA Borrowing Base", at line 14 to read as follows:
14. EBITDA for most recent four fiscal quarters $______
x 3.5
2. Consents. The Lenders signatory hereto hereby consent to:
2.1 the formation by Meow, Inc. and Fairchild Fasteners Corp.,
Wholly-Owned Subsidiaries of the U.S. Borrower, under the laws of
France, of a new Subsidiary to be named Fairchild Fasteners Europe -
▇▇▇▇▇▇▇▇ S.A.R.L. ("▇▇▇▇▇▇▇▇ Holding Corp.") solely for the purpose
of acquiring 100% of the Capital Stock of ▇▇▇▇▇▇▇▇ ▇.▇., a
corporation organized under the laws of France ("▇▇▇▇▇▇▇▇ ▇.▇."),
provided that 65% of the Capital Stock of ▇▇▇▇▇▇▇▇ Holding Corp. is
pledged to the Administrative Agent on terms and conditions and
subject to agreements satisfactory to the Administrative Agent;
2.2 the exercise by ▇▇▇▇▇▇▇▇ Holding Corp., as assignee of
Fairchild France, Inc., of the option to purchase Capital Stock and
convertible bonds of ▇▇▇▇▇▇▇▇ ▇.▇. evidenced by that certain Call
Option dated January 23, 1997 executed by Fairchild France, Inc., a
Subsidiary of RHI and Mines de Kali Sainte ▇▇▇▇▇▇▇ S.A.("KST"), a
translation of which is attached hereto as Exhibit 1 (the "Call
Option") in accordance with the terms of the Call Option;
2.3 the consummation of the acquisition, by ▇▇▇▇▇▇▇▇ Holding
Corp., of (a) the Capital Stock of ▇▇▇▇▇▇▇▇ ▇.▇. and, indirectly,
the Subsidiaries and Investments of ▇▇▇▇▇▇▇▇ ▇.▇. identified on
Exhibit 2 attached hereto and made a part hereof, and (b)
Indebtedness in the form of bonds convertible into Capital Stock of
▇▇▇▇▇▇▇▇ ▇.▇., in each instance, on the terms and conditions set
forth in the Call Option; provided that
(i) proceeds of Loans under the Credit Agreement and cash from
operations of the U.S. Borrower and its Subsidiaries used, directly
or indirectly, to effect such acquisition do not exceed $30,000,000
in the aggregate;
(ii) the sources and uses with respect to the aforesaid
acquisition consist of:
Sources
U.S. Borrower Cash FF165,000,000
Borrowing from RHI 64,456,080
Indebtedness on Books 101,890,218
of ▇▇▇▇▇▇▇▇ ▇.▇. &
its Subsidiaries
Total FF 331,346,298
Uses
Purchase of 87.58% of FF 69,364,000
▇▇▇▇▇▇▇▇ ▇.▇. Capital
Stock from Related Parties
Purchase of 12.42% of 9,836,000
▇▇▇▇▇▇▇▇ ▇.▇. Capital
Stock from Public
Purchase of Convertible 47,301,000
Bonds from Related Parties
Purchase of Convertible 12,099,000
Bonds from Public
Repayment of Indebtedness 45,149,730
to KST
Repayment of Indebtedness 40,706,350
to Bank Rivaud
Indebtedness on Books 101,890,218
of ▇▇▇▇▇▇▇▇ ▇.▇. &
its Subsidiaries
Transaction Costs 5,000,000
Total FF 331,346,298
(iii) there shall exist no contractual restriction of any kind
on the ability of ▇▇▇▇▇▇▇▇ ▇.▇. to pay dividends to ▇▇▇▇▇▇▇▇ Holding
Corp. or for ▇▇▇▇▇▇▇▇ Holding Corp. to pay dividends to Meow, Inc.
or Fairchild Fasteners Corp.
2.4 the continuation, from and after the consummation of the
acquisition described in Section 2.3 above, of Indebtedness in the
aggregate amount of Fr 101,890,218 owing by ▇▇▇▇▇▇▇▇ ▇.▇. and its
Subsidiaries to the Persons identified on Exhibit 3 attached hereto
and made a part hereof, approximately FF 11,250,000 of which is
owing to Credit Nationale and secured by a Lien against 29,000
shares of the Capital Stock of Transfix S.A.;
2.5 incurrence by ▇▇▇▇▇▇▇▇ Holding Corp. of Indebtedness to
the U.S. Borrower or U.K. Borrower (directly or by assignment of the
promissory note evidencing the same originally payable to the U.S.
Borrower) in the aggregate principal amount of approximately FF
85,856,080 subject to agreements in form and substance satisfactory
to the Administrative Agent to refinance Indebtedness in the amount
of FF 45,149,730 owing by ▇▇▇▇▇▇▇▇ ▇.▇. and Mecaero S.A. to KST and
Indebtedness in the amount of approximately FF 40,706,350 owing by
▇▇▇▇▇▇▇▇ ▇.▇. to Bank Rivaud, which Indebtedness shall be in
addition to that permitted under Section 10.01(g)(iii), as amended
by this Amendment;
2.6 in the event the assignment referenced in Section 2.5
above is effected, incurrence by the U.K. Borrower of Indebtedness
to the U.S. Borrower in the aggregate principal amount of the
Indebtedness referenced in Section 2.5 above subject to a
promissory note in form and substance satisfactory to the
Administrative Agent representing the consideration paid for such
assignment, which Indebtedness shall be in addition to that
permitted under Section 10.01(g)(iii), as amended by this Amendment;
2.7 the acquisition by the U.S. Borrower of 99.99% of the
Capital Stock of ▇▇▇▇▇▇▇▇ Mecaero Fasteners, Inc., a Delaware
corporation ("Mecaero US"), from ▇▇▇▇▇▇▇▇ ▇.▇. for an amount equal
to the book value thereof approximating $1,500,000 and the
subsequent liquidation of Mecaero US into the U.S. Borrower,
provided that promptly following such acquisition and liquidation,
the U.S. Borrower executes and delivers to the Administrative Agent
such Loan Documents as are requested by the Administrative Agent to
perfect Liens on the assets theretofore owned by Mecaero US as part
of the Collateral and, in the event the purchase price is paid by
promissory note rather than in cash, such promissory note shall be
on terms and conditions satisfactory in form and substance to the
Administrative Agent;
2.8 the incurrence by ▇▇▇▇▇▇▇▇ Holding Corp. of Indebtedness
to the U.S. Borrower in the amount of FF 143,550,000 in connection
with the capitalization of ▇▇▇▇▇▇▇▇ Holding Corp.; provided that (i)
the U.S. Borrower's claims with respect to such Indebtedness may be
assigned to the U.K. Borrower in exchange for a promissory note in
the amount of FF 143,550,000 and (ii) the terms and conditions of
such Indebtedness of ▇▇▇▇▇▇▇▇ Holding Corp. and the U.K. Borrower
are subject to agreements in form and substance satisfactory to the
Administrative Agent, which Indebtedness, in each case, shall be in
addition to that permitted under Section 10.01(g)(iii), as amended
by this Amendment;
2.9 dissolution of Mecair, a Canadian Subsidiary of Mecaero,
S.A.;
2.10 further amendment of the Tax Allocation Agreement, in a
manner consistent with substantially similar amendments previously
made, solely to reflect the acquisition of ▇▇▇▇▇▇▇▇ ▇.▇. and its
Subsidiaries; and
2.11 maintenance by ▇▇▇▇▇▇▇▇ Holding Corp. and ▇▇▇▇▇▇▇▇ ▇.▇.
of a fiscal year end as September 30.
3. Conditions to Effectiveness.
3.1 The provisions of this Amendment set forth in Section 2.1
and Section 2.2 shall become effective as of February 21, 1997 upon
receipt by the Administrative Agent, by no later than 5:00 p.m. (New
York time) on February 21, 1997, of (a) executed counterparts of
this Amendment signed on behalf of the Borrowers and the Requisite
Lenders, (b) the written agreement of RHI in the form attached
hereto as Exhibit 4 to provide (i) Technologies and Fairchild
Technologies USA, Inc., directly, with all financial support
required in excess of that permitted under Section 10.01(g)(iii) of
the Credit Agreement, as amended hereby, and (ii) the Administrative
Agent and the Lenders with written notice of the provision of such
support contemporaneously with such provision of support to
Technologies and Fairchild Technologies USA, Inc., and (c) payment,
for the account of the Lenders executing and delivering a
counterpart of this Amendment by February 21, 1997, of an amendment
fee in the amount of one-quarter of one percent (0.25%) of the
Commitments of such Lenders.
3.2 Provided that the conditions set forth in Section 3.1
above are satisfied as and when specified therein, all other
provisions of this Amendment shall be become effective as of
February 21, 1997 upon receipt by the Administrative Agent of a
certificate of the U.S. Borrower that the exercise of the option
described in Section 2.2 above has been effected by ▇▇▇▇▇▇▇▇ Holding
Corp. in conformance with the provisions of the Call Option.
4. Representations, Warranties and Covenants.
4.1 The Borrowers hereby represent and warrant that this
Amendment and the Credit Agreement, as amended hereby, constitute
the legal, valid and binding obligations of the Borrowers and are
enforceable against the Borrowers in accordance with their terms.
4.2 The Borrowers hereby represent and warrant that, before
and after giving effect to this Amendment, no Event of Default or
Potential Event of Default has occurred and is continuing except
under Section 9.13 with respect to execution of the Tenth Amended
Tax Allocation Agreement the Lenders' rights and remedies with
respect to which were waived as of January 21, 1997.
4.3 Each Borrower hereby reaffirms all agreements, covenants,
representations and warranties made in the Credit Agreement, to the
extent the same are not amended hereby, and made in the other Loan
Documents to which it is a party; and agrees that all such
agreements, covenants, representations and warranties shall be
deemed to have been remade as of the effective date of this
Amendment. To the extent the Credit Agreement is amended hereby to
modify or add agreements, covenants and/or representations and
warranties, such agreements, covenants and/or representations and
warranties are made as of the date on which this Amendment becomes
effective with respect thereto.
5. Reference to and Effect on the Credit Agreement.
5.1 Upon the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import shall mean and be a reference to
the Credit Agreement as amended hereby.
5.2 Except as specifically amended above, the Credit Agreement
shall remain in full force and effect, and is hereby ratified and
confirmed.
5.3 The execution, delivery, and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as
a waiver of any right, power or remedy of the Administrative Agent
or Lenders, or constitute a waiver of any provision of any of the
Loan Documents.
6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
7. 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.
8. Counterparts. This Amendment may be executed by one or
more of the parties hereto on any number of separate counterparts,
each of which shall be deemed an original and all of which, taken
together, shall be deemed to constitute one and the same instrument.
Delivery of an executed counterpart of this Amendment by facsimile
transmission shall be effective as delivery of a manually executed
counterpart hereof.
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the day and year first above written.
FAIRCHILD HOLDING CORP.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Vice President & Treasurer
FAIRCHILD FINANCE COMPANY (f/k/a
KAYSEL)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Attorney
CITICORP USA, INC.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attorney-in-Fact
NATIONSBANK, N.A.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
▇▇▇▇▇ ▇▇▇▇▇, F.V.P.
Head of Corporate Banking, Chicago
UNION BANK OF CALIFORNIA
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Credit Officer
▇▇▇▇ ▇▇▇▇▇
Vice President
SCHEDULE 10.01-G
to
Amended and Restated Credit Agreement
Dated as of July 26, 1996
Intercompany Indebtedness Outstanding as of February 21,
1997
Indebtedness Owing by U.S. Borrower to a Subsidiary of U.S.
Borrower:
Principal
Subsidiary Amount Evidenced By
U.K. Borrower $1,450,000 Promissory Note dated
February 12, 1997
Fairchild Retiree $1,500,000 Promissory Note dated
Medical Services, December 31, 1996
Inc.
Fairchild $2,000,000 Promissory Note dated
Retiree Medical December 31, 1996
Services, Inc.
Indebtedness Owing by Subsidiaries of U.S. Borrower to U.S.
Borrower:
Principal
Subsidiary Amount Evidenced By
Fairchild Tech- DM15,370,956.69 Books & records
nologies GmbH
Fairchild Tech- $1,485,512 Books & records
nologies GmbH
Fairchild Retiree $2,000,000 Promissory Note dated
Medical Services, December 31, 1996
Inc.
Fairchild Fasteners Fr45,100,000 Promissory Note dated
Europe-▇▇▇▇▇▇▇▇ February 20, 1997
S.A.R.L.
Indebtedness Owing by a Subsidiary of the U.S. Borrower to Another
Subsidiary of the U.S. Borrower:
Principal
Obligor Obligee Amount Evidenced By
VSI Holdings, Fairchild $35,600,000 Promissory
Note
Inc. Retiree Medical dated
December 31,
Services, Inc. 1996
Fairchild Camloc DM13,569,000 Share
Purchase
Technologies Holdings, Inc. Agreement
dated
GmbH July 1, 1992
Fairchild Fairchild DM716,684 Books and
records
Technologies Technologies
USA, Inc. GmbH
Voi-Shan VSI Holdings, DM1,860,000 Promissory
Note
Diessel GmbH Inc. dated March
1, 1994
Voi-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ DM231,428 Promissory
Note
Diessel GmbH Technologies dated March
1, 1994
GmbH
Voi-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $281,814.01 Promissory
Note
Diessel GmbH Technologies dated October
30,
GmbH 1996
Voi-Shan
Camloc GmbH DM1,800,000 Loan
Agreement dated
Diessel GmbH May 24, 1996
Voi-▇▇▇▇ ▇▇▇▇▇▇▇▇▇ DM738,397.90 Promissory
Note
Diessel GmbH Fasteners dated
December 9,
France S.A.R.L. 1996
Camloc GmbH Fairchild DM300,000 Loan
Agreement dated
Fasteners May 29, 1996
France S.A.R.L.
Banner JJS Limited GBP2,070,314 Books and
records
Investments
(UK) PLC
EXHIBIT 1
to
Amendment No. 2 and Consent
dated as of February 21, 1997
Call Option Agreement
Translation Attached
EXHIBIT 2
to
Amendment No. 2 and Consent
dated as of February 21, 1997
Subsidiaries and Investments of ▇▇▇▇▇▇▇▇ ▇.▇.
Subsidiaries:
▇▇▇▇▇▇▇▇ Mecaero Fasteners Inc., a Delaware corporation, 99.9%
owned by ▇▇▇▇▇▇▇▇ ▇.▇.
Mecaero S.A., a French corporation, 59.5% owned by ▇▇▇▇▇▇▇▇
▇.▇., 36.5% owned by Transfix S.A., and 4% owned by Tofinso S.A. (a
bank)
Transfix S.A., a French corporation, 99.98% owned by ▇▇▇▇▇▇▇▇
▇.▇.
Euroism, a Portuguese corporation, 99.98% owned by ▇▇▇▇▇▇▇▇
▇.▇.
Other Equity Investments:
Conforma SRL, an Italian corporation, 50% owned by ▇▇▇▇▇▇▇▇
▇.▇. (inactive)
0.185% in S.E.M. Circuit 24h du Mans, a Societe d'Economie
Mixte incorporated under the laws of France (inactive)
13.16% interest in G.I.E. Mecafaster, a Groupement d'Interet
Economique incorporated under the laws of France
EXHIBIT 3
to
Amendment No. 2 and Consent
dated as of February 21, 1997
Debt of ▇▇▇▇▇▇▇▇ ▇.▇. and its Subsidiaries
Attached
EXHIBIT 4
to
Amendment No. 2 and Consent
dated as of February 21, 1997
Form of Support Agreement
Attached
