EXHIBIT 10.5
FIRST AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT
AND POST-CLOSING MATTERS AGREEMENT
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This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND
POST-CLOSING MATTERS AGREEMENT (this "Amendment"), dated as of March 15, 2001,
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is among CELLSTAR CORPORATION, a Delaware corporation (the "Borrower"), each of
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the banks or other lending institutions which is or may from time to time become
a party to the Agreement (hereinafter defined) (each a "Bank" and collectively,
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the "Banks"), BANK ONE, NA (formerly known as The First National Bank of
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Chicago), as syndication agent (the "Syndication Agent"), NATIONAL CITY BANK, as
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documentation agent (the "Documentation Agent"), THE CHASE MANHATTAN BANK
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(successor by merger to Chase Bank of Texas, National Association, formerly
known as Texas Commerce Bank National Association), a New York banking
corporation ("Chase"), as agent for itself and the other Banks and as issuer of
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Letters of Credit under the Agreement (in such capacity, together with its
successors in such capacity, the "Agent").
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RECITALS:
A. The Borrower, the Banks, the Syndication Agent, the Documentation
Agent and the Agent have entered into that certain Second Amended and Restated
Credit Agreement dated as of February 27, 2001 (the "Credit Agreement").
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B. In connection with the Credit Agreement, the Borrower, the Banks, the
Syndication Agent, the Documentation Agent and the Agent have entered into that
certain Post-Closing Matters Agreement dated as of February 27, 2001 (the "PC
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Agreement" and together with the Credit Agreement, the "Agreements").
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C. The parties hereto now desire to amend the Agreements as provided
herein.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
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1.1 Definitions. Capitalized terms used in this Amendment, to the extent
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not otherwise defined herein, shall have the same meanings as in the Credit
Agreement, as amended hereby.
ARTICLE II
Amendments
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2.1 Definition of "Availability Block". Effective as of the date hereof,
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Section 1.1 of the Credit Agreement is hereby amended to add the following
definition of "Availability Block", such definition to read in its entirety as
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follows:
"Availability Block" shall mean $10,000,000.
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2.2 Definition of "Availability". Effective as of the date hereof, the
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definition of "Availability" set forth in Section 1.1 of the Credit Agreement is
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hereby amended to read in its entirety as follows:
"Availability" shall mean at any time (a) the lesser at such time of
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(i) the Borrowing Base minus the Availability Block and (ii) the Total
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Commitment (as such amount may be reduced in accordance with the
provisions of this Agreement), less (b) the sum of (i) the aggregate
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amount of each Bank's Current Sum at such time, (ii) the aggregate amount
of accrued interest outstanding under the Advances at such time, (iii) the
aggregate amount of all net liabilities of the Borrower or any of its
Subsidiaries or Foreign Affiliates in respect of all Hedging Obligations of
the Borrower or any of its Subsidiaries or Foreign Affiliates to Agent,
Chase or any other Bank (which net liabilities shall be calculated on a
basis satisfactory to the Agent and in accordance with accepted practice),
provided that such other Bank notifies the Agent of the amount of such net
liabilities in respect of its Hedging Obligations, (iv) all other
outstanding Obligations, including without limitation Commitment Fees, fees
related to any Letters of Credit, fees payable to the Agent under any fee
letter, legal fees and other amounts payable under Section 10.10 hereof,
and (v) Reserves; provided however that for purposes of Sections 6.3(f) and
(i) hereof, Availability shall be calculated based on the Borrowing Base
without subtracting the Availability Block and regardless of the amount of
the Total Commitment.
2.3 Definition of Security Agreements. Effective as of the date hereof,
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clause (c) of the definition of "Security Agreements" set forth in Section 1.1
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of the Credit Agreement is hereby amended to read as follows:
(c) all pledge agreements executed or to be executed by the Borrower and
the Domestic Subsidiaries in favor of the Agent, for the ratable benefit of
the Banks, pursuant to which the Borrower and the Domestic Subsidiaries
have granted or shall grant a security interest in 100% of the Stock of the
Domestic Subsidiaries and 65% of the voting Stock and 100% of the non-
voting preferred Stock of each Foreign Subsidiary and Foreign Affiliate, to
the extent owned by the Domestic Subsidiaries, or any of them
(collectively, the "Pledge Agreements"),
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2.4 Amendment to Section 6.10. Effective as of the date hereof, the
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proviso appearing at the end of Section 6.10 of the Credit Agreement is hereby
amended to read as follows:
provided, however, that any Foreign Subsidiary shall not be required to
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become a Guarantor or grant any Liens hereunder.
2.5 New Section 6.20. Effective as of the date hereof, Article VI of the
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Credit Agreement is hereby amended to add Section 6.20 to the end thereof, which
section shall read in its entirety as follows:
6.20 Mexico Cash. In the event the Foreign Subsidiaries domiciled or
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organized in Mexico (the "Mexico Subsidiaries"), or any of them, have
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cash or cash equivalent investments in an aggregate amount in excess of
$10,000,000 as of the end of any calendar month, the Borrower shall cause
cash in the amount of such excess to be transferred from such Mexico
Subsidiaries to the Borrower or any of the Domestic Subsidiaries on or
before the immediately following Business Day; provided, however, that such
transfer shall not be required if (a) all loans and accounts payable owing
or previously owing directly or indirectly by the Mexico Subsidiaries, or
any of them, to the Borrower or any of the Domestic Subsidiaries have been
previously paid in full and are no longer outstanding, and (b) such payment
in full was made in cash and not by
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transfer of product, except for any reductions of such accounts payable for
product returned to vendors for credit in the ordinary course of business.
If any loan or account payable is then owing by any of the Mexico
Subsidiaries directly or indirectly to the Borrowers or any of the Domestic
Subsidiaries, such cash shall be applied to reduce such loan or account
payable. In any event, such cash transferred to the Borrower or any of the
Domestic Subsidiaries shall be paid to the Agent in accordance with Section
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6.15 for application to reduce outstanding Advances. So long as any loan or
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account payable is owing by any of Mexico Subsidiaries directly or
indirectly to the Borrower or any of the Domestic Subsidiaries, no loans or
advances shall be made by the Borrower or any of the Domestic Subsidiaries
to any of the Mexico Subsidiaries notwithstanding any amount otherwise
available for such loans or advances under the $40,000,000 limit provided
in Section 7.7(g). None of the Mexico Subsidiaries shall make any
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investments of cash, except cash equivalent investments that would permit
any transfer and payment required by this Section to be made when and as
required hereby.
2.6 Borrowing Base Certificate. Effective as of the date hereof, Exhibit
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"F" to the Credit Agreement is hereby amended to read in its entirety as set
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forth on Annex 1 hereto.
2.7 Amendments to PC Agreement. Effective as of the date hereof the PC
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Agreement is hereby amended as follows:
(a) Schedule II to the PC Agreement is amended to delete any and all
requirements relating to pledges of stock of any Sub-Tier Foreign
Subsidiary (hereinafter defined) and, accordingly, to delete endnote 6 set
forth in such Schedule II. As used herein, "Sub-Tier Foreign Subsidiary"
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means each Foreign Subsidiary the Stock of which is owned by another
Foreign Subsidiary.
(b) Schedule II to the PC Agreement is further amended to extend the
respective deadlines for each of the requirements specified in endnotes 1
through 5 and 7 set forth in such Schedule II to March 31, 2001; provided,
however, that failure to satisfy any requirement specified in any of such
endnotes solely due to any delay, action or inaction of any registry or
Governmental Authority shall not be an Event of Default so long as all such
requirements are completed on or before May 15, 2001.
ARTICLE III
Conditions Precedent
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3.1 Conditions. The effectiveness of this Amendment is subject to the
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satisfaction of the following conditions precedent:
(a) Amendment Fee. Borrower shall have paid to the Agent, for the
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account of each Bank that executes and delivers this Amendment, an
amendment fee in an amount equal to the Commitment of each such Bank
multiplied by 12.5 basis points.
(b) Representations and Warranties. The representations and
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warranties contained herein and in all other Loan Documents, as amended
hereby, shall be true and correct as of the date hereof as if made on the
date hereof.
(c) No Default. No Default shall have occurred and be continuing.
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(d) Corporate Matters. All corporate proceedings taken in
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connection with the transactions contemplated by this Amendment and all
documents, instruments, and other legal matters incident thereto shall be
satisfactory to the Agent and its legal counsel, ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
(e) Additional Documentation. The Agent shall have received such
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additional approvals, opinions, or documents as the Agent or its legal
counsel, ▇▇▇▇▇ Liddell & ▇▇▇▇ LLP, may reasonably request.
ARTICLE IV
Ratifications, Representations and Warranties
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4.1 Ratifications. The terms and provisions set forth in this Amendment
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shall modify and supersede all inconsistent terms and provisions set forth in
the Agreements and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreements and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Borrower agrees that the Agreements, as amended hereby, and the other
Loan Documents shall continue to be legal, valid, binding and enforceable in
accordance with their respective terms.
4.2 Representations and Warranties. Borrower hereby represents and
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warrants to the Agent and the Banks that (1) the execution, delivery, and
performance by the Borrower and the Guarantors of this Amendment and compliance
with the terms and provisions hereof have been duly authorized by all requisite
action on the part of each such Person and do not and will not (a) violate or
conflict with, or result in a breach of, or require any consent under (i) the
articles of incorporation, certificate of incorporation, bylaws, partnership
agreement or other organizational documents of any such Person, (ii) any
applicable law, rule, or regulation or any order, writ, injunction, or decree of
any Governmental Authority or arbitrator, or (iii) any material agreement or
instrument to which any such Person is a party or by which any of them or any of
their property is bound or subject, (2) the representations and warranties
contained in the Agreements, as amended hereby, and any other Loan Document are
true and correct on and as of the date hereof as though made on and as of the
date hereof, and (3) no Default has occurred and is continuing.
ARTICLE V
Miscellaneous
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5.1 Survival of Representations and Warranties. All representations and
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warranties made in this Amendment or any other Loan Document shall survive the
execution and delivery of this Amendment, and no investigation by the Agent or
any Bank or any closing shall affect the representations and warranties or the
right of the Agent or any Bank to rely upon them.
5.2 Reference to Agreement. Each of the Loan Documents, including the
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Agreements and any and all other agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the respective Agreements as amended hereby, are hereby amended so that
any reference in such Loan Documents to the respective Agreements shall mean a
reference to the respective Agreements as amended hereby.
5.3 Expenses of the Agent. Borrower agrees to pay on demand all costs and
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expenses incurred by the Agent in connection with the preparation, negotiation,
and execution of this Amendment
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and any and all amendments, modifications, and supplements thereto, including
without limitation the costs and fees of the Agent's legal counsel, and all
costs and expenses incurred by the Agent in connection with the enforcement or
preservation of any rights under the Agreements, as amended hereby, or any other
Loan Document, including without limitation the costs and fees of the Agent's
legal counsel.
5.4 Severability. Any provision of this Amendment held by a court of
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competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
5.5 APPLICABLE LAW. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
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THE OTHER LOAN DOCUMENTS, THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS SHALL BE
DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS.
5.6 Successors and Assigns. This Amendment is binding upon and shall
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inure to the benefit of the Borrower, the Banks, the Syndication Agent, the
Documentation Agent and the Agent and their respective successors and assigns,
except the Borrower shall not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Agent.
5.7 Counterparts. This Amendment may be executed in one or more
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counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument. This Amendment shall not be effective unless and until the Agent,
the requisite Banks, the Borrower and the Guarantors have each executed and
delivered a counterpart hereof; provided, however that execution and delivery by
Holdings shall not be required for effectiveness of this Amendment, but Holdings
shall execute and deliver this Amendment no later than April 15, 2001, and
failure to do so by such date shall constitute an Event of Default under the
Agreement.
5.8 Headings. The headings, captions, and arrangements used in this
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Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
5.9 Release of Claims. The Borrower and the Guarantors each hereby
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acknowledge and agree that none of them has any and there are no defenses,
counterclaims, offsets, cross-complaints, claims or demands of any kind or
nature whatsoever to or against the Agent, the Syndication Agent, the
Documentation Agent, any of the Banks or the terms and provisions of or the
obligations of the Borrower, any Guarantor or any Subsidiary created or
evidenced by the Agreements or any of the other Loan Documents, and that neither
the Borrower nor any of the Guarantors has any right to seek affirmative relief
or damages of any kind or nature from the Agent, the Syndication Agent, the
Documentation Agent or any of the Banks. To the extent any such defenses,
counterclaims, offsets, cross-complaints, claims, demands or rights exist,
Borrower and the Guarantors each hereby waives, and hereby knowingly and
voluntarily releases and forever discharges the Agent, the Syndication Agent,
the Documentation Agent, each of the Banks and their respective predecessors,
officers, directors, agents, attorneys, employees, successors and assigns, from
all possible claims, demands, actions, causes of action, defenses,
counterclaims, offsets, cross-complaints, damages, costs, expenses and
liabilities whatsoever, whether known or unknown, such waiver and release being
with full knowledge and understanding of the circumstances and effects of such
waiver and release and after having consulted legal counsel with respect
thereto.
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5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS
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AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY
THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO REGARDING THIS AMENDMENT
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
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Executed as of the date first written above.
BORROWER:
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CELLSTAR CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
AGENTS AND BANKS:
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THE CHASE MANHATTAN BANK (successor by
merger to Chase Bank of Texas, National
Association, formerly known as Texas
Commerce Bank National Association), as
Agent and as a Bank
By: /s/ R. ▇▇▇▇ ▇▇▇▇▇
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R. ▇▇▇▇ ▇▇▇▇▇
Vice President
BANK ONE, NA (formerly known as The
First National Bank of Chicago), as
Syndication Agent and as a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: First Vice President
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NATIONAL CITY BANK,
as Documentation Agent and as a Bank
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ FARGO BANK TEXAS,
NATIONAL ASSOCIATION (formerly known as
▇▇▇▇▇ Fargo Bank (Texas), National
Association)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Each of the undersigned Guarantors hereby (a) consents and agrees to this
Amendment, and (b) agrees that its Guaranty shall continue to be the legal,
valid and binding obligation of such Guarantor enforceable against such
Guarantor in accordance with its terms.
NATIONAL AUTO CENTER, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
CELLSTAR, LTD.
By: National Auto Center, Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
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CELLSTAR FULFILLMENT, LTD.
By: CellStar Fulfillment, Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
CELLSTAR FINANCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
CELLSTAR FULFILLMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
NAC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
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CELLSTAR INTERNATIONAL
CORPORATION/ASIA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
AUDIOMEX EXPORT CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
CELLSTAR INTERNATIONAL
CORPORATION/SA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
CELLSTAR AIR SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
A & S AIR SERVICE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
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CELLSTAR TELECOM, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
FLORIDA PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
CELLSTAR GLOBAL SATELLITE
SERVICE, LTD.
By: National Auto Center, Inc.,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sr. Vice President
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