EXHIBIT 10.24
▇▇▇▇▇▇▇ ELECTRONICS HOLDINGS, INC.
LIMITED WAIVER AND FIFTH AMENDMENT TO CREDIT
AGREEMENT
This LIMITED WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT (this
"AMENDMENT") is dated as of March 25, 2003 and entered into by and among ▇▇▇▇▇▇▇
ELECTRONICS HOLDINGS, INC. (f/k/a ▇▇▇▇▇▇▇ Electronics, Inc.), a Delaware
corporation ("PARENT BORROWER"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF ("LENDERS"), JPMORGAN CHASE BANK (successor to The Chase
Manhattan Bank), as agent for Lenders ("ADMINISTRATIVE AGENT"), and, for
purposes of Section 3.9 and Section 6 hereof, the Loan Parties (as defined in
Section 6 hereof) listed on the signature pages hereof, and is made with
reference to that certain Credit Agreement dated as of June 28, 1999, as amended
and restated as of July 21, 1999 (as amended, restated, supplemented or
otherwise modified as of the date hereof, the "CREDIT AGREEMENT"), by and among
Parent Borrower, Lenders and JPMorgan Chase Bank, as administrative agent for
the Lenders. Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Parent Borrower and Lenders desire to amend the Credit
Agreement to (i) convert outstanding Tranche A Term Loans to, and fund, Tranche
C Term Loans in an aggregate principal amount of $35,000,000, and thus refinance
Tranche A Term Loans with Tranche C Term Loans and (ii) to amend the Credit
Agreement in certain other respects, all as more specifically set forth below.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. WAIVER
1.1 Subject to the terms and conditions set forth herein and in reliance on
the representations and warranties of Parent Borrower herein contained, Lenders
hereby waive, for the period from January 1, 2003 through the earlier of (x) the
Fifth Amendment Effective Date and (y) April 10, 2003 (the "WAIVER PERIOD"), the
defaults specified in clauses (ii) through (iv) of Section 4.H hereof; provided,
that during the Waiver Period, (A) Parent Borrower shall not submit or transmit
a Borrowing Request for a Borrowing of Revolving Loans and (B) Parent Borrower
shall not, and shall not permit any Subsidiary to, make or agree to pay or make
any payment or other distribution of or in respect of any Indebtedness
outstanding under the agreements referred to in Section 4.D(i) and (ii) hereof.
SECTION 2. LIMITATION OF WAIVER
2.1 Without limiting the generality of the provisions of Section 9.02 of
the Credit Agreement, the waiver set forth above shall be limited precisely as
written and relates solely
to the defaults described in Section 1.1 above, and nothing in this Amendment
shall be deemed to:
A. constitute a waiver of compliance by Parent Borrower with respect to
(i) the Credit Agreement in any other instance or (ii) any other term, provision
or condition of the Credit Agreement or any other instrument or agreement
referred to therein; or
B. prejudice any right or remedy that Administrative Agent or any
Lender may now have (except to the extent such right or remedy was based upon
existing defaults that will not exist after giving effect to this Amendment) or
may have in the future under or in connection with the Credit Agreement or any
other instrument or agreement referred to therein.
2.2 Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 3. AMENDMENTS TO THE CREDIT AGREEMENT
3.1 AMENDMENTS TO ARTICLE I: DEFINITIONS
A. Section 1.01 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"FIFTH AMENDMENT" means the Limited Waiver and Fifth Amendment to
Credit Agreement, dated as of March 25, 2003, among Parent Borrower,
the Lenders, Administrative Agent and the other Loan Parties party
thereto.
"FIFTH AMENDMENT EFFECTIVE DATE" has the meaning set forth in the Fifth
Amendment.
"FIXED RATE" means 18.5% per annum.
"FIXED RATE LOAN" when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Fixed
Rate.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement, dated as
of March 28, 2003, among the Parent Borrower, the Subsidiaries of the
Parent Borrower listed on the signature pages thereto, JPMorgan Chase
Bank, as Administrative Agent and collateral agent, and the Tranche C
Lender, attached as Annex C to the Fifth Amendment.
"REVOLVING BORROWING" means a Revolving Loan Borrowing.
"SUCCESS FEE PRINCIPAL AMOUNT" has the meaning set forth in Section
2.12(e).
"TERM BORROWING" means a Tranche A Term Loan Borrowing, a Tranche B
Term loan Borrowing or a Tranche C Term Loan Borrowing.
2
"TRANCHE C COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to fund amounts to either make a
Tranche C Term Loan or convert a Tranche A Term Loan to a Tranche C
Term Loan, as the case may be, on the Fifth Amendment Effective Date,
expressed as an amount representing the maximum principal amount of the
Tranche C Term Loan to be held by such Lender hereunder immediately
after funding such amounts, as such commitment may be (a) reduced from
time to time pursuant to Section 2.08 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Tranche C Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche C
Commitment, as applicable. The initial aggregate amount of the Lenders'
Tranche C Commitments is $35,000,000.
"TRANCHE C LENDER" means a Lender with a Tranche C Commitment or an
outstanding Tranche C Term Loan.
"TRANCHE C MATURITY DATE" means June 29, 2007, or if such day is not a
Business Day, the next preceding Business Day.
"TRANCHE C TERM LOAN" means a Loan made (or converted from an
outstanding Tranche A Term Loan) pursuant to clause (d) of Section
2.01.
B. Section 1.01 of the Credit Agreement is hereby further amended by
deleting each of the definitions of "Chase", "Class", "Commitment", "Domestic
Revolving Commitment", "Interest Payment Date", "Parent Borrower", "Revolving
Maturity Date", "Security Documents", "Term Loans", "Tranche A Lender" and
"Type" in their entirety and substituting therefor the following:
"CHASE" means JPMorgan Chase Bank, a New York banking corporation.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Domestic
Revolving Loans, Multicurrency Revolving Loans, Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans or Swingline Loans and, when
used in reference to any Commitment, refers to whether such Commitment
is a Domestic Revolving Commitment, Multicurrency Revolving Commitment,
Tranche A Commitment, Tranche B Commitment or Tranche C Commitment.
"COMMITMENT" means a Domestic Revolving Commitment, Multicurrency
Revolving Commitment, Tranche A Commitment, Tranche B Commitment or
Tranche C Commitment, or any combination thereof (as the context
requires).
"DOMESTIC REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make Domestic Revolving Loans and
to acquire participations in Domestic Letters of Credit and Domestic
Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Domestic Revolving Exposure
hereunder, as such commitment may be
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(a) reduced from time to time pursuant to Section 2.08 or 2.20 and (b)
reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 9.04. The amount of each Lender's
Domestic Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have
assumed its Domestic Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Domestic Revolving Commitments was
$25,000,000.
"INTEREST PAYMENT DATE" means, on and after the Fifth Amendment
Effective Date, (a) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than one month's duration, each day prior to the last
day of such Interest Period that occurs at intervals of one month's
duration after the first day of such Interest Period, (b) with respect
to any Swingline Loan, the day that such Loan is required to be repaid,
and (c) with respect to any ABR Loan (other than a Swingline Loan) and
any Tranche C Term Loan, the last day of each calendar month.
"PARENT BORROWER" means ▇▇▇▇▇▇▇ Electronics Holdings, Inc., a Delaware
corporation (formerly known as ▇▇▇▇▇▇▇ Electronics, Inc.).
"REVOLVING MATURITY DATE" means, subject to extension pursuant to
Section 2.20, the earlier of (a) June 30, 2006 or if such day is not a
Business Day, the next preceding Business Day and (b) the date on which
the Tranche B Term Loans are repaid, refinanced or replaced in full.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge
Agreement, the Mortgages, the Intercreditor Agreement and each other
security agreement or other instrument or document executed and
delivered pursuant to Section 5.12 or 5.13 to secure any of the
Obligations or the Foreign Borrower Obligations.
"TERM LOANS" means Tranche A Term Loans, Tranche B Term Loans and,
after the Fifth Amendment Effective Date, Tranche C Term Loans.
"TRANCHE A LENDER" means a Lender with a Tranche A Commitment or an
outstanding Tranche A Term Loan; provided, however, that on and after
the Fifth Amendment Effective Date, each reference to "Tranche A
Lender" shall be deemed to be a reference solely to "Tranche C Lender".
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate,
the Alternative Base Rate, or, with respect to Tranche C Term Loans,
the Fixed Rate.
C. Section 1.01 of the Credit Agreement is hereby further amended by
deleting the table contained in the definition of "Applicable Rate" and
substituting therefor the following:
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ABR Eurodollar Eurodollar
Revolving Revolving ABR Tranche Tranche B Commitment
Leverage Ratio: Spread Spread B Spread Spread Fee Rate
---------------------------------------------------------------------------------------------------------
Category 1 3.00% 4.00% 4.00% 5.00% 0.50%
Greater than or equal
to 4:50 to 1:00
---------------------------------------------------------------------------------------------------------
Category 2 2.75% 3.75% 4.00% 5.00% 0.375%
Greater than or equal
to 3.75 to 1.00 and
less than 4.50 to 1.00
---------------------------------------------------------------------------------------------------------
Category 3 2.50% 3.50% 4.00% 5.00% 0.375%
Greater than or equal
to 3.00 to 1.00 and
less than 3.75 to 1.00
---------------------------------------------------------------------------------------------------------
Category 4 2.25% 3.25% 4.00% 5.00% 0.375%
Greater than or equal
to 2.25 to 1.00 and
less than 3.00 to 1.00
---------------------------------------------------------------------------------------------------------
Category 5 2.00% 3.00% 4.00% 5.00% 0.375%
Less than 2.25 to 1.00
---------------------------------------------------------------------------------------------------------
3.2 AMENDMENTS TO ARTICLE II: THE CREDITS
A. Section 2.01 of the Credit Agreement is hereby amended by (i)
deleting the "and" at the end of clause (b) thereof and substituting therefor
"," and (ii) adding at the end of clause (c) thereof the following:
"and (d) to fund an amount for the making of, or for the conversion
from Tranche A Term Loans to (as the case may be in accordance with the
immediately following sentence), Tranche C Term Loans on the Fifth
Amendment Effective Date equal to its Tranche C Commitment.
Notwithstanding anything to the contrary herein, immediately upon the
funding of such amounts as described in Section 5.11 on the Fifth
Amendment Effective Date, (x) all Tranche A Term Loans outstanding
immediately prior to such funding shall be continued as and converted
to, and shall thereafter be deemed to be, Tranche C Term Loans (in an
aggregate principal amount equal to the aggregate principal amount of
all outstanding Tranche A Term Loans) hereunder, and shall be subject
to the terms and provisions of the Tranche C Term Loans (and not the
Tranche A Term Loans) set forth in this Agreement, and (y) each Tranche
C Lender shall be deemed to have made additional Tranche C Term Loans
in the aggregate amount of all amounts funded by such Tranche C Lender
on such date less the aggregate principal amount of all Tranche A Term
Loans converted pursuant to clause (x), so that the aggregate principal
amount of Tranche C Term Loans on the Fifth Amendment Effective Date
after giving effect to clauses (x) and (y) shall be $35,000,000.
Interest shall begin to accrue on the Tranche C Term Loans as of the
5
Fifth Amendment Effective Date. It is the intent of the parties hereto
that this conversion of the Tranche A Term Loans and continuation of
the Tranche A Term Loans as Tranche C Term Loans not constitute a
novation of the obligations and liabilities of the parties under the
Credit Agreement or be deemed to be evidence or constitute repayment of
all or any portion of such obligations and liabilities. On the Fifth
Amendment Effective Date, concurrently with the conversion referred to
in this Section 2.01, the Tranche C Lender, without executing an
Assignment and Acceptance Agreement, shall be deemed to have
automatically purchased assignments from each Tranche A Lender of all
such Tranche A Lenders' rights and obligations under this Agreement
(including all outstanding Tranche A Term Loans of such Tranche A
Lenders) and the other Loan Documents with respect to the Tranche A
Loans (collectively, except as set forth below, the "ASSIGNED RIGHTS
AND OBLIGATIONS"), and each Tranche A Lender shall be deemed to have
automatically assigned and sold such Tranche A Loans to the Tranche C
Lender. Each such purchase hereunder shall be at par for a purchase
price equal to the principal amount of the purchased Tranche A Term
Loans plus accrued and unpaid interest thereon and shall be without
recourse, representation or warranty, except that each Tranche A Lender
shall be deemed to represent and warrant to the Tranche C Lender that
the Assigned Rights and Obligations of such Tranche A Lender are not
subject to any Liens created by that Lender. Upon such deemed
assignment, the Tranche A Lenders, in such capacity as Tranche A
Lenders, shall no longer be deemed to be parties to this Agreement. On
the Fifth Amendment Effective Date, Administrative Agent shall
distribute the amounts funded in accordance with Section 2.01(d) to the
Tranche A Lenders entitled to receive payments, pro rata in proportion
to the amount each such Lender is entitled to receive."
B. Section 2.02(b) of the Credit Agreement is hereby amended by adding
at the end thereof the following new sentence:
"Notwithstanding the foregoing, each Tranche C Term Loan shall be a
Fixed Rate Loan."
C. Section 2.03(b) of the Credit Agreement is hereby amended by
deleting the words "in the case of an ABR Borrowing" therefrom and substituting
therefor the following:
"in the case of an ABR Borrowing or a Tranche C Term Loan Borrowing".
D. Section 2.03 of the Credit Agreement is hereby further amended by
deleting clauses (i) and (iv) from the third sentence thereof and substituting
therefor the following:
"(i) whether the requested Borrowing is to be a Domestic Revolving
Borrowing, Tranche A Term Loan Borrowing, Tranche B Term Loan Borrowing
or Tranche C Term Loan Borrowing;"
"(iv) in the case of any Borrowing other than a Tranche C Term Loan
Borrowing, whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing".
6
E. Section 2.07(a) of the Credit Agreement is hereby amended inserting
the following immediately after the first sentence thereof:
"All Additional Tranche B Principal (as defined in Section 2.12(e))
shall constitute ABR Loans."
F. Section 2.07(a) of the Credit Agreement is hereby further amended by
deleting the concluding sentence therefrom and substituting therefor the
following:
"This Section shall not apply to Swingline Borrowings or to Tranche C
Term Loan Borrowings, which may not be converted or continued."
G. Section 2.08(a) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(a) Unless previously terminated, (i) the Tranche A Commitments and
Tranche B Commitments shall terminate at 5:00 p.m., New York City time,
on the Effective Date, (ii) the Tranche C Commitments shall terminate
at 5:00 p.m., New York City time, on the Fifth Amendment Effective Date
and (iii) the Revolving Commitments shall terminate on the Revolving
Maturity Date."
H. Section 2.10(b) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(b) Subject to adjustment pursuant to paragraph (d) of this Section,
the Parent Borrower shall repay Tranche B Term Borrowings on each date in the
table set forth below (or if such date is not a Business Day, the next preceding
Business Day) in the aggregate principal amount set forth opposite such date.
For the avoidance of doubt, the aggregate principal amount of Tranche B Term
Loans outstanding on March 20, 2003 is $144,998,148.15.
Date Amount
---- ------
---------------------------------------------------------------
September 30, 2000 $ 375,000
---------------------------------------------------------------
December 31, 2000 375,000
---------------------------------------------------------------
March 31, 2001 375,000
---------------------------------------------------------------
June 30, 2001 375,000
---------------------------------------------------------------
September 30, 2001 375,000
---------------------------------------------------------------
December 31, 2001 375,000
---------------------------------------------------------------
March 31, 2002 375,000
---------------------------------------------------------------
June 30, 2002 375,000
---------------------------------------------------------------
September 30, 2002 375,000
---------------------------------------------------------------
December 31, 2002 371,790.12
---------------------------------------------------------------
7
March 31, 2003 371,790.12
------------------------------------------------------------------
June 30, 2003 743,580.25
------------------------------------------------------------------
September 30, 2003 743,580.25
------------------------------------------------------------------
December 31, 2003 743,580.25
------------------------------------------------------------------
March 31, 2004 743,580.25
------------------------------------------------------------------
June 30, 2004 743,580.25
------------------------------------------------------------------
September 30, 2004 743,580.25
------------------------------------------------------------------
December 31, 2004 743,580.25
------------------------------------------------------------------
March 31, 2005 743,580.25
------------------------------------------------------------------
June 30, 2005 743,580.25
------------------------------------------------------------------
September 30, 2005 743,580.25
------------------------------------------------------------------
December 31, 2005 743,580.25
------------------------------------------------------------------
March 31, 2006 743,580.25
------------------------------------------------------------------
June 30, 2006 743,580.25
------------------------------------------------------------------
September 30, 2006 33,739,953.70
------------------------------------------------------------------
December 31, 2006 33,739,953.70
------------------------------------------------------------------
March 31, 2007 33,739,953.70
------------------------------------------------------------------
June 29, 2007 33,739,953.70
------------------------------------------------------------------
I. Section 2.10(c) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(c) To the extent not previously paid, (i) all Tranche A Term Loans
shall be due and payable on the Tranche A Maturity Date, (ii) all
Tranche B Term Loans shall be due and payable on the Tranche B Maturity
Date and (iii) all Tranche C Term Loans shall be due and payable on the
Tranche C Maturity Date."
J. Section 2.10(e) of the Credit Agreement is hereby amended by adding
the following at the end of the last sentence thereof:
"(it being understood that the application of proceeds of the Tranche C
Term Loans pursuant to Section 5.11 and Section 2.01(d) shall not be
considered a repayment of Term Borrowings)".
K. Section 2.11(e) of the Credit Agreement is hereby amended by
deleting the second sentence therefrom in its entirety and substituting therefor
the following:
8
"In the event of any optional or mandatory prepayment of Term
Borrowings made after the Fifth Amendment Effective Date pursuant to
Section 2.11 at a time when Tranche B Term Loans and Tranche C Term
Loans remain outstanding, the aggregate amount of such prepayment shall
be applied first to the prepayment of Tranche B Term Loans to the full
extent thereof and second to the prepayment of Tranche C Term Loans to
the full extent thereof, provided that any Tranche B Lender may elect,
by notice to the Administrative Agent by telephone (confirmed by
telecopy) at least one Business Day prior to the prepayment date, to
decline all or any portion of any prepayment of its Tranche B Term
Loans pursuant to this Section (other than an optional prepayment
pursuant to paragraph (a) of this Section, which may not be declined),
in which case the aggregate amount of the prepayment that would have
been applied to prepay Tranche B Term Loans but was so declined shall,
subject to Section 2.11(h), be applied to the prepayment of Tranche B
Term Loans of those Tranche B Lenders that have not declined their
portion of such prepayment prorata based on the aggregate principal
amount of outstanding Tranche B Term Loans of each such Tranche B
Lender. To the extent that all Tranche B Lenders elect to decline
prepayment of the Tranche B Term Loans, the aggregate amount of the
prepayment that would have been applied to prepay Tranche B Term Loans
but was so declined shall, subject to Section 2.11(h), be applied to
the prepayment of Tranche C Term Loans. Any optional or mandatory
prepayment of Tranche B Term Loans made pursuant to Section 2.11 shall
be applied first to the prepayment of the outstanding portion of the
Success Fee Principal Amount and second to the prepayment of the
remaining outstanding portion of Tranche B Term Loans. Any conversion
of Tranche A Term Borrowings to Tranche C Term Borrowings made with
proceeds from the Tranche C Term Loans shall not be considered a
prepayment of Tranche A Term Loans pursuant to paragraph (a) of this
Section. Notwithstanding the foregoing, nothing in this provision shall
be construed to apply to the allocation of payments if the Loans are
accelerated pursuant to the terms of this Agreement."
L. Section 2.11(f) of the Credit Agreement is hereby amended by
deleting clause (ii) in its entirety and substituting therefor the following:
"(ii) in the case of prepayment of any ABR Borrowing or a Tranche C
Term Loan, not later than 11:00 a.m., New York City time, one Business
Day before the date of prepayment or".
M. Section 2.11 of the Credit Agreement is hereby further amended by
adding at the end thereof the following new subparagraph (h):
"(h) Notwithstanding the foregoing, Parent Borrower shall not have the
right or obligation to prepay any Tranche C Term Loan from the Fifth
Amendment Effective Date through and including the first anniversary of
the Fifth Amendment Effective Date. The aggregate amount of any
prepayment pursuant to Section 2.11(a), (c) or (d) that, but for this
Section 2.11(h), would be applied by Parent Borrower to prepay Tranche
C Term Loans, shall be applied instead to prepay Tranche B Term Loans.
If any Tranche B Lender elects to decline all or any portion of any
such prepayment of
9
its Tranche B Terms Loans in accordance with Section 2.11(e), the
aggregate amount of the prepayment that would have been applied to
prepay Tranche B Term Loans but was so declined may be applied by
Parent Borrower to any other purpose otherwise permitted under this
Agreement. If any portion of the Tranche C Term Loans is prepaid
pursuant to Section 2.11(a) or pursuant to Section 2.11(c) as a result
of a Prepayment Event occurring upon either of the events described in
clause (c) of the definition of "Prepayment Event" or any issuance of
Equity Securities described in clause (d) of the definition of
"Prepayment Event" (i) after the first anniversary of the Fifth
Amendment Effective Date and on or prior to the second anniversary of
the Fifth Amendment Effective Date, Parent Borrower shall pay to
Administrative Agent, for ratable distribution to the Tranche C
Lenders, a fee equal to 3% of the Tranche C Term Loans so prepaid,
(ii) after the second anniversary of the Fifth Amendment Effective Date
and on or prior to the third anniversary of the Fifth Amendment
Effective Date, Parent Borrower shall pay to Administrative Agent, for
ratable distribution to the Tranche C Lenders, a fee equal to 2.5% of
the Tranche C Term Loans so prepaid and (iii) after the third
anniversary of the Fifth Amendment Effective Date and on or prior to
the fourth anniversary of the Fifth Amendment Effective Date, Parent
Borrower shall pay to Administrative Agent, for ratable distribution to
the Tranche C Lenders, a fee equal to 2% of the Tranche C Term Loans so
prepaid."
N. Section 2.12(a) of the Credit Agreement is hereby amended by adding
the following at the end of the first sentence thereof:
"provided that, no such fee shall be payable in respect of any Tranche
C Commitment".
O. Section 2.12 of the Credit Agreement is hereby further amended by
inserting the following new clause (e) at the end thereof:
"(e) Commencing on March 31, 2004 and ending on the earlier of (x)
March 31, 2007 and (y) the payment in full of the Success Fee Principal
Amount, the Parent Borrower agrees to pay to the Administrative Agent
on March 31 of each year (the "Success Fee Payment Date"), for the
account of the Tranche B Lenders, a success fee in an amount equal to
1.50% of $28,000,000 of Tranche B Term Loans outstanding on the Fifth
Amendment Effective Date (or of such lower amount to which such
principal amount is reduced from time to time in accordance with the
terms of this Agreement) (the "Success Fee Principal Amount"), such fee
shall be payable to the Tranche B Lenders in accordance with each such
Lender's pro rata share of the Tranche B Term Loans outstanding as of
the applicable Success Fee Payment Date. The success fee shall be
payable pursuant to an increase in the principal amount of Tranche B
Term Loans of each Lender ratably in an aggregate amount equal to the
amount of such accrued and unpaid success fee (the amount of such
increase being "Additional Tranche B Principal" with respect to the
Tranche B Term Loans), and upon such increase in principal amount of
the Tranche B Term Loans such accrued and unpaid success fee shall
cease to be due and payable at such
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time and such Additional Tranche B Principal shall instead be due and
payable at maturity (whether by acceleration or otherwise) of the
Tranche B Term Loans; provided, that, on each anniversary of the Fifth
Amendment Effective Date, if Consolidated EBITDA for the fiscal year
ended immediately prior to such Success Fee Payment Date equals or
exceeds the target amount set forth below opposite such fiscal year,
Parent Borrower shall pay the corresponding success fee in full in cash
on the Success Fee Payment Date:
---------------------------------------------------------------
Fiscal Year Ending December 31, Target
------------------------------ ------
---------------------------------------------------------------
2003 $53,200,000
---------------------------------------------------------------
2004 $57,900,000
---------------------------------------------------------------
2005 $62,700,000
---------------------------------------------------------------
2006 $64,800,000"
---------------------------------------------------------------
P. Section 2.13(a) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(a) Subject to Section 2.13(c), (i) the Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the
Alternate Base Rate plus the Applicable Rate and (ii) the Tranche C
Term Loans shall bear interest at the Fixed Rate."
Q. Section 2.13(c) of the Credit Agreement is hereby amended by adding
at the end thereof the following new sentence:
"Upon the occurrence and during the continuance of an Event of Default,
(A) the provisions of the immediately preceding sentence shall not
apply with respect to any overdue amounts in respect of the Tranche B
Term Loans, the Tranche C Term Loans or the Revolving Loans, (B) the
per annum interest rate otherwise applicable to the Tranche B Term
Loans and the Revolving Loans shall increase by 2% and the per annum
interest rate otherwise applicable to the Tranche C Term Loans shall
increase by 3% and (C) the portion of such interest attributable to
such increase shall be payable in cash (it being understood that the
foregoing shall not affect the terms of payment of interest added to
the outstanding principal of the Tranche B Term Loans or the Tranche C
Term Loans pursuant to Section 2.12(e) or Section 2.13(d),
respectively, prior to the time of any relevant Event of Default)."
R. Section 2.13(d) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
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"(d) Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and, in the case of
Revolving Loans, upon termination of the applicable Revolving
Commitments, provided that (i) interest accrued pursuant to paragraph
(c) of this Section 2.13 shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Revolving Availability
Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment (it being
understood that the application of the proceeds of the Tranche C Term
Loans pursuant to Section 5.11 and Section 2.01(d) shall not be
considered a prepayment or repayment), (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion, and (iv) interest on
Tranche C Term Loan Borrowings shall be payable as follows (a) 13.0%
per annum in cash and (b) the remainder payable in cash or, at the
Parent Borrower's option, in lieu of paying such interest in cash, on
the date payment of such interest would otherwise be due, Parent
Borrower shall increase the principal amount of Tranche C Term Loans of
each Lender ratably in an aggregate amount equal to the amount of such
accrued and unpaid interest thereon (the amount of such increase being
"Additional Tranche C Principal" with respect to the Tranche C Term
Loans), and upon such increase in principal amount of the Tranche C
Term Loans such accrued and unpaid interest shall cease to be due and
payable at such time and such Additional Tranche C Principal shall
instead be due and payable at maturity (whether by acceleration or
otherwise) of the Tranche C Term Loans. Commencing on the first
anniversary of the Fifth Amendment Effective Date and on each
anniversary of the Fifth Amendment Effective Date thereafter, the
Tranche C Term Loans shall continue to bear interest at the Fixed Rate
but the cash portion of interest payable on Tranche C Term Loan
Borrowings pursuant to clause (iv)(a) of this Section 2.13(d) shall
increase by 1.0% per annum."
3.3 AMENDMENT TO ARTICLE III: REPRESENTATIONS AND WARRANTIES
A. Section 3.04(d) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(d) Since December 31, 2002, nothing has occurred which would have a
Material Adverse Effect."
B. Section 3.10 of the Credit Agreement is hereby amended by deleting
each reference to "$2,000,000" contained therein and substituting therefor
"$12,000,000".
3.4 AMENDMENT TO ARTICLE IV: CONDITIONS
A. Section 4.01 of the Credit Agreement is hereby amended by adding at
the end of the first sentence thereof, prior to the ";", the following:
"(it being understood that this Section 4.01 shall not apply to the
obligation of the Tranche C Lenders to make the Tranche C Term Loans)".
12
B. Section 4.02 of the Credit Agreement is hereby amended by adding at
the end of the first sentence thereof, prior to the ":", the following:
"(it being understood that this Section 4.02 shall not apply to the
obligation of the Tranche C Lenders to make the Tranche C Term Loans)".
3.5 AMENDMENT TO ARTICLE V: AFFIRMATIVE COVENANTS
A. Section 5.09 of the Credit Agreement is hereby amended by adding
immediately prior to the "." at the end thereof the following new proviso:
"; provided further, however, that with respect to the initial Tranche
C Lender as of the Fifth Amendment Effective Date, the foregoing
limitation on the number of visits or inspections in any fiscal year
shall be increased to twelve".
B. Section 5.11 of the Credit Agreement is hereby amended by deleting
the first sentence therefrom and substituting therefor the following:
"The proceeds of the Term Loans (other than Tranche C Term Loans),
together with the proceeds of the Equity Financing and the Subordinated
Bridge Debt, will be used only for the payment of (a) amounts payable
under the Recapitalization Agreement as consideration for the
Recapitalization and (b) fees and expenses payable in connection with
the Transactions. The proceeds of the Tranche C Term Loans will be used
only for the conversion of the Tranche A Term Loans on the Fifth
Amendment Effective Date as set forth in Section 2.01 and the payment
of fees and expenses payable in connection therewith; provided, that in
the event the total proceeds of the Tranche C Term Loans exceed those
required for such conversion and payment of such fees and expenses,
Parent Borrower may use such excess proceeds for general corporate
purposes."
3.6 AMENDMENT TO ARTICLE VI: NEGATIVE COVENANTS
A. Section 6.12 of the Credit Agreement is hereby amended by deleting
the table contained therein in its entirety and substituting therefor the
following:
--------------------------------------------------------------------------------
Fifth Amendment Effective Date - This Section 6.12 shall not apply
June 29, 2003 during this period
--------------------------------------------------------------------------------
June 30, 2003 - September 29, 1.25:1.00
2003
--------------------------------------------------------------------------------
September 30, 2003 - December 1.30:1.00
30, 2003
--------------------------------------------------------------------------------
December 31, 2003-December 30, 1.35:1.00
2004
--------------------------------------------------------------------------------
13
--------------------------------------------------------------------------------
2004
--------------------------------------------------------------------------------
December 31, 2004 - December 1.45:1.00
30, 2005
--------------------------------------------------------------------------------
December 31, 2005 - December 1.55:1.00
30, 2006
--------------------------------------------------------------------------------
December 31, 2006 and thereafter 1.65:1.00
--------------------------------------------------------------------------------
B. Section 6.13 of the Credit Agreement is hereby amended by deleting
the row of the table contained therein containing the reference to "March 31,
2003" and each subsequent row in their entirety and substituting therefor the
following:
--------------------------------------------------------------------------------
Fifth Amendment Effective Date - This Section 6.13 shall not apply
June 29, 2003 during this period
--------------------------------------------------------------------------------
June 30, 2003 - September 29, 6.95:1.00
2003
--------------------------------------------------------------------------------
September 30, 2003-December 30, 6.75:1.00
2003
--------------------------------------------------------------------------------
December 31, 2003 - December 6.50:1.00
30, 2004
--------------------------------------------------------------------------------
December 31, 2004 - December 6.00:1.00
30, 2005
--------------------------------------------------------------------------------
December 31, 2005 - December 5.50:1.00
30, 2006
--------------------------------------------------------------------------------
December 31, 2006 and thereafter 5.00:1.00
--------------------------------------------------------------------------------
3.7 AMENDMENT TO ARTICLE VIII: THE ADMINISTRATIVE AGENT
A. Article VIII of the Credit Agreement is hereby amended by adding at
the end of the first sentence thereof, prior to the ".", the following:
"including, without limitation, the execution and delivery of the
Intercreditor Agreement"
3.8 MODIFICATION AND SUBSTITUTION OF SCHEDULE
14
A. Schedule 2.01 of the Credit Agreement is hereby amended by deleting
the column labeled "Domestic Revolving Loan Commitment" from said Schedule 2.01
in its entirety and substituting in place thereof columns in the form of Annex A
to this Amendment.
B. Section 1 of Schedule 6.01 of the Credit Agreement is hereby amended
by deleting said section in its entirety and substituting in place thereof a new
Section 1 of Schedule 6.01 in the form of Annex B to this Amendment.
3.9 AMENDMENTS TO SECURITY DOCUMENTS
A. Section 6.02 of the Security Agreement, Section 7 of the Pledge
Agreement and Section 2.08 of each Mortgage are each hereby amended by inserting
the following new sentence at the end thereof:
"Notwithstanding the foregoing, on and after the Fifth Amendment
Effective Date, the application of proceeds of any collection or sale
of Collateral shall be governed by the Intercreditor Agreement until
such agreement is terminated in accordance with its terms."
SECTION 4. CONDITIONS TO EFFECTIVENESS
Section 3 of this Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIFTH
AMENDMENT EFFECTIVE DATE"); provided that the Fifth Amendment Effective Date
shall occur on or prior to April 10, 2003:
A. On or before the Fifth Amendment Effective Date, Parent Borrower
shall deliver to Tranche C Lender and to the Administrative Agent the following,
each, unless otherwise noted, dated the Fifth Amendment Effective Date:
1. Certified copies of its organizational documents, together
with a good standing certificate from the appropriate official
of its jurisdiction of organization, each dated a recent date
prior to the Fifth Amendment Effective Date;
2. Copies of its Bylaws, certified as of the Fifth Amendment
Effective Date by its corporate secretary or an assistant
secretary;
3. Resolutions of its Board of Directors approving and
authorizing the execution, delivery, and performance of this
Amendment, certified as of the Fifth Amendment Effective Date
by its corporate secretary or an assistant secretary as being
in full force and effect without modification or amendment;
4. Signature and incumbency certificates of its officers
executing this Amendment; and
15
5. Counterparts of this Amendment executed by the parties
referred to in Section 7.E hereof.
B. All reasonable costs, fees and expenses due and owing to the Tranche
C Lender, as agreed to by Parent Borrower in writing, and all other amounts due
and owing to the Administrative Agent or the Lenders under the Credit Agreement
shall have been paid in full to the extent invoiced to the Parent Borrower prior
to the Fifth Amendment Effective Date.
C. Administrative Agent, the Lenders party to the Amended Agreement (as
hereinafter defined) and their respective counsel shall have received one or
more favorable written opinions of ▇▇▇▇▇ ▇▇▇▇▇, counsel for Parent Borrower and
the other Loan Parties signatory hereto, in form and substance reasonably
satisfactory to Administrative Agent, the Tranche C Lenders and their respective
counsel, dated as of the Fifth Amendment Effective Date and with respect to the
existence and good standing of the Loan Parties signatory hereto and due
authorization and execution of the Amendment by the Loan Parties signatory
hereto.
D. Administrative Agent, the Lenders party to the Amended Agreement (as
hereinafter defined) and their respective counsel shall have received one or
more favorable written opinions of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
for Parent Borrower and the other Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent, the Tranche C Lenders and their respective
counsel, dated as of the Fifth Amendment Effective Date, with respect to
enforceability of this Amendment and no conflict between the Amended Agreement
(as hereinafter defined) and each of (i) the Indenture dated as of October 1,
1999, among the Parent Borrower, the Subsidiaries of Parent Borrower party
thereto and The Bank of New York, as trustee, and (ii) the Note Purchase
Agreement dated as of August 28, 2002, among Parent Borrower the Subsidiaries of
Parent Borrower party thereto and Key Acquisition, LLC).
E. The Tranche C Lenders shall have received a fully executed or
conformed copy of each of the Loan Documents and all amendments thereto, and
each Loan Document shall be in full force and effect and no provision thereof
shall have been modified or waived in any respect (except by this Amendment and
by such other amendments delivered by Parent Borrower hereunder), and the
Tranche C Lenders shall have received a certificate of a duly authorized officer
of Parent Borrower to such effect.
F. All governmental and third party consents, approvals or withholding
of objections or necessary to implement the transactions contemplated by this
Amendment and to establish the Tranche C Term Loan facility, shall have been
obtained and be in full force and effect, and the Tranche C Lenders shall have
received any available evidence thereof reasonably satisfactory to them.
G. As of the Fifth Amendment Effective Date, since December 31, 2002,
there shall have been: (i) no material adverse change in the business,
operations, financial condition or prospects of the Loan Parties; (ii) no
litigation shall have been commenced which, if successful, would reasonably be
expected to have any such material adverse effect or would challenge any of the
transactions contemplated by this Amendment, (iii) no dividends or
16
other distributions to stockholders of the Parent Borrower, and (iv) no material
increase in liabilities, liquidated or contingent, and no material decrease in
assets, of the Loan Parties.
H. Before and after giving effect to this Amendment, no Default or
Event of Default (except for a default described in this paragraph) shall have
occurred and be continuing and the Tranche C Lenders shall have received a
certificate of a duly authorized officer of Parent Borrower to such effect;
provided, that so long as the Tranche C Lenders and the Parent Borrower are
working in good faith to consummate the transactions contemplated by this
Amendment (the "CONVERSION TRANSACTION") on the terms set forth in the
commitment letter dated as of February 26, 2003, between the Tranche C Lender
and the Parent Borrower, this condition shall not fail to be satisfied solely as
a result of (i) a payment default under the Credit Agreement, (ii) a default
under Section 6.12 or Section 6.13 of the Credit Agreement occurring on or about
April 1, 2003 (so long as the Leverage Ratio as of the relevant measurement date
shall in no event exceed 7.50:1 and the ratio of (x) Consolidated EBITDA to (y)
Consolidated Cash Interest Expense for the relevant measurement period shall in
no event be less than 1.25:1), (iii) a default under Section 5.01(a) of the
Credit Agreement with respect to the delivery of financial statements for the
fiscal year ending December 31, 2002 and/or (iv) a default under the Credit
Agreement, the Subordinated Debt Documents or the Parent Borrower's 10% Senior
Subordinated Notes due October 15, 2009, in each case arising solely as a result
of any default described in the preceding clauses (i) through (iii), if such
default would not have occurred had the Conversion Transaction been completed
immediately prior to the occurrence of such default.
I. On or before the Fifth Amendment Effective Date, the Parent Borrower
shall provide to the Administrative Agent and the Tranche C Lender the results
of a recent search by a person reasonably satisfactory to the Tranche C Lender,
of all effective personal property financing statements, fixture filings or
other similar filings and all judgment and tax lien filings which may have been
made with respect to any personal or mixed property of any Loan Party, together
with copies of all such filings disclosed by such search. The Parent Borrower
will, and will cause each Subsidiary to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including amendments to the Security Documents and the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), which the Tranche C Lender or its counsel may reasonably
request in writing in order to cause the Collateral and Guarantee Requirement to
be and remain satisfied, all at the expense of the Loan Parties.
J. On or before the Fifth Amendment Effective Date, the Intercreditor
Agreement shall have been executed by the parties thereto.
K. On or prior to the Fifth Amendment Effective Date, Administrative
Agent shall have received from the Parent Borrower, for distribution to the
Tranche B Lenders executing a copy of this Amendment on or prior to 5:00 p.m.
(New York City time) on March 24, 2003, a fee in an amount equal to 0.25% of the
sum of such Tranche B Lenders' outstanding Tranche B Terms Loans as of the Fifth
Amendment Effective Date.
17
L. On or before the Fifth Amendment Effective Date, all corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
reasonably acceptable by Administrative Agent, acting on behalf of Lenders, and
its counsel shall be satisfactory in form and substance to Administrative Agent
and such counsel, and Administrative Agent and such counsel shall have received
all such counterpart originals or certified copies of such documents as
Administrative Agent may reasonably request.
SECTION 5. PARENT BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, Parent Borrower represents
and warrants to each Lender that the following statements are true, correct and
complete as of the Fifth Amendment Effective Date:
A. CORPORATE POWER AND AUTHORITY. Parent Borrower and each other Loan
Party has all requisite corporate power and authority to carry on its business
as now conducted, to enter into this Amendment and to carry out the transactions
contemplated by, and perform its obligations under, the Credit Agreement as
amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment, and the performance of the Amended Agreement have been duly
authorized by all necessary corporate and, if required, stockholder action on
the part of Parent Borrower and each other Loan Party signatory hereto.
C. NO CONFLICT. The execution and delivery by Parent Borrower and each
other Loan Party signatory hereto of this Amendment, the performance by Parent
Borrower and each other Loan Party signatory hereto of the Amended Agreement and
the consummation of the transactions contemplated thereby do not and will not
(i) violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Parent Borrower or any of the Subsidiaries or
any order of any Governmental Authority, (ii) conflict with, result in a default
under any material indenture, agreement or other instrument binding upon the
Parent Borrower or any of the Subsidiaries or any of their assets, or give right
to a right thereunder to require any material payment to be made by the Parent
Borrower or any of the Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Parent Borrower
or any of its Subsidiaries (other than Liens created under any of the Loan
Documents), or (iv) require any approval or consent of any Person under any
contractual obligation of Parent Borrower or any of the Subsidiaries, except for
such approvals or consents which have been obtained on or before the Fifth
Amendment Effective Date and disclosed in writing to Lenders.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Parent Borrower
and each other Loan Party of this Amendment and the performance by Parent
Borrower and each other Loan Party of the Amended Agreement do not require any
consent or approval of, registration or filing with, or any other action by or
before, any Governmental Authority,
18
except such as have been obtained or made and are in full force and effect prior
to the Fifth Amendment Effective Date and disclosed in writing to the Lenders.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by Parent Borrower and each other Loan Party
signatory hereto and are the legally valid and binding obligations of Parent
Borrower and each other Loan Party signatory hereto, enforceable against Parent
Borrower and each other Loan Party signatory hereto in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability,
regardless of whether considered in a proceeding in equity or at law.
F. SOLVENCY. Immediately after the consummation of the transactions to
occur on the Fifth Amendment Effective Date and immediately following the making
of each Tranche C Term Loan made on the Fifth Amendment Effective Date and after
giving effect to the application of the proceeds of such Loans, (a) the fair
value of the assets of each Loan Party, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be able
to pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) no Loan Party will
have unreasonably small capital with which to conduct the business in which it
is engaged as such business is now conducted and is proposed to be conducted
following the Fifth Amendment Effective Date.
G. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Article III of the
Credit Agreement (considered as if already amended by this Amendment) are and
will be true, correct and complete in all material respects on and as of the
Fifth Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
H. ANNUAL REPORT. The Parent Borrower has heretofore furnished to the
Administrative Agent and the Lenders its unaudited consolidated balance sheet
and statement of income and cash flows as of and for the fiscal year ended
December 31, 2002. Such unaudited financial statements were prepared in
accordance with GAAP applied on a consistent basis, and on that basis, present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Parent Borrower and its consolidated
subsidiaries as of such date and for such period. The Parent Borrower has
heretofore furnished to the Administrative Agent and the Lenders a draft of its
Annual Report for the fiscal year ended December 31, 2002. Such draft Annual
Report does not contain any material misstatement of fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
19
I. NO MATERIAL ADVERSE CHANGE. Except for a default of the type
described in Section 4.H of this Amendment, since December 31, 2002, nothing has
occurred which would have a Material Adverse Effect.
J. ABSENCE OF DEFAULT. Except for a default of the type described in
Section 4.H of this Amendment, no event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute a Default or an Event of Default.
K. RELEASE AND AFFIRMATION. Parent Borrower on and as of the Fifth
Amendment Effective Date (1) has no (and it permanently and irrevocably waives
and releases Administrative Agent and Lenders from any, to the extent arising on
or prior to the Fifth Amendment Effective Date) defense, set off, claim or
counterclaim against Administrative Agent or any Lender in regard to its
obligations in respect of the Tranche A Term Loans being converted to Tranche C
Term Loans on such date, the Tranche B Loans and the Revolving Loans and (2)
reaffirms its obligations to pay such Tranche A Term Loans (considered in their
converted form to Tranche C Term Loans, by virtue of payment of the Tranche C
Term Loans into which such Loans are being converted), the Tranche B Loans and
the Revolving Loans and any amounts owed with respect thereto (whether or not
presently due and payable) in accordance with the terms and conditions of the
Credit Agreement and the other Loan Documents.
SECTION 6. ACKNOWLEDGEMENT AND CONSENT
Parent Borrower is a party to the Parent Guarantee Agreement, the
Security Agreement, the Pledge Agreement and certain Mortgages, each as amended
through the Fifth Amendment Effective Date, pursuant to which, and in accordance
with the terms of which, Parent Borrower has (i) guaranteed the Foreign Borrower
Obligations (as defined in the Parent Guarantee Agreement), (ii) granted Liens
in favor of Administrative Agent on certain Collateral to secure the Obligations
and (iii) mortgaged to the Administrative Agent certain real and personal
property to secure the Obligations. Synchro-Start Products, Inc. ("SYNCHRO") is
a party to a certain Mortgage, as amended through the Fifth Amendment Effective
Date, pursuant to which Synchro has mortgaged to the Administrative Agent
certain real and personal property to secure the Obligations. Each of ▇▇▇▇▇▇▇
Electronics LLC ("KE"), ▇▇▇▇▇▇▇ Intermediate Holding, Inc. ("KIH"), Emkay
Innovative Products, Inc. ("EMKAY"), ▇▇▇▇▇▇▇ Manufacturing Ltd. ("KML") and
Synchro is a party to the Subsidiary Guarantee Agreement, the Security Agreement
and the Pledge Agreement, each as amended through the Fifth Amendment Effective
Date, pursuant to which KE, KIH, Emkay, KML and Synchro have (i) guaranteed the
Obligations and (ii) granted Liens in favor of Administrative Agent on certain
Collateral to secure the Obligations. Parent Borrower, KE, KIH, Emkay, KML and
Synchro are collectively referred to herein as the "LOAN PARTIES", and the
Parent Guarantee Agreement, the Subsidiary Guarantee Agreement, the Security
Agreement, the Pledge Agreement and the Mortgages are collectively referred to
herein as the "CREDIT SUPPORT DOCUMENTS".
Each Loan Party hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment and consents to the
amendment of the Credit
20
Agreement effected pursuant to this Amendment. Each Loan Party hereby confirms
that each Credit Support Document to which it is a party or otherwise bound and
all Collateral encumbered thereby will continue to guaranty or secure, as
the case may be, to the fullest extent provided in the Credit Support Documents
the payment and performance of all Obligations and Foreign Borrower Obligations,
as applicable, including without limitation the payment and performance of all
such Obligations and Foreign Borrower Obligations in respect of the Obligations
of Parent Borrower and Foreign Borrower Obligations, as applicable, now or
hereafter existing under or in respect of the Amended Agreement.
Each Loan Party acknowledges and agrees that any of the Credit Support
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Loan Party represents and warrants that
all representations and warranties contained in the Amended Agreement and the
Credit Support Documents (considered as if already amended by this Amendment) to
which it is a party or otherwise bound are true, correct and complete in all
material respects on and as of the Fifth Amendment Effective Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.
Each Loan Party acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in this Amendment, such Loan Party is not
required by the terms of the Credit Agreement or any other Loan Document to
consent to the amendments to the Credit Agreement effected pursuant to Section
3.1 through Section 3.8 of this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Loan Document shall be deemed to require
the consent of such Loan Party (excluding the Parent Borrower) to any future
amendments to the Credit Agreement, as amended by this Amendment.
SECTION 7. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a
21
waiver of any right, power or remedy of Administrative Agent or any
Lender under, the Credit Agreement or any of the other Loan Documents.
B. FEES AND EXPENSES. Parent Borrower acknowledges that all costs, fees
and expenses as described in subsection 9.03 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Parent Borrower.
C. HEADINGS. Section and subsection 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 or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 3
hereof, the effectiveness of which is governed by Section 4 hereof) shall become
effective upon the execution of a counterpart hereof by Parent Borrower,
Required Lenders, Tranche B Lenders holding a majority of the outstanding
Tranche B Loans, the Tranche A Lenders, the Tranche C Lender, and each of the
Loan Parties and receipt by Parent Borrower and Administrative Agent of written
notification of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
22
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWER:
▇▇▇▇▇▇▇ ELECTRONICS HOLDINGS,
INC.
By:_________________________
Name:
Title:
S-1
LOAN
PARTIES: ▇▇▇▇▇▇▇ ELECTRONICS LLC, (for
purposes of Section 3.9 and Section 6
only) as a Loan Party
By:______________________________
Name:
Title:
▇▇▇▇▇▇▇ INTERMEDIATE
HOLDINGS, INC., (for purposes of
Section 3.9 and Section 6
only) as a Loan Party
By:______________________________
Name:
Title:
EMKAY INNOVATIVE PRODUCTS, INC.,
(for purposes of Section 3.9 and Section 6 only)
as a Loan Party
By:______________________________
Name:
Title:
▇▇▇▇▇▇▇ MANUFACTURING LTD., (for
purposes of Section 3.9 and Section 6 only) as a
Loan Party
By:______________________________
Name:
Title:
SYNCHRO-START PRODUCTS, INC., (for
purposes of Section 3.9 and Section 6 only) as a
Loan Party
By:______________________________
Name:
Title:
S-2
JPMORGAN CHASE BANK, Individually
and as Administrative Agent
By:______________________________
Name:
Title:
S-3
[_____], as Lender
By:______________________________
Name:
Title:
S-4
ANNEX A
SCHEDULE 2.01
Domestic Revolving Loan
Lenders Tranche C Commitment Commitment
---------------------------------------------------------------------------------------------------
Silver Oak Capital LLC $ 35,000,000.00 $ 0.00
---------------------------------------------------------------------------------------------------
Bank of Nova Scotia $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
Fleet Bank $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
Fuji Bank, Limited $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Trust & Savings Bank $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
Lloyds TSB Bank, PLC $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
JPMorgan Chase Bank $ 0.00 $ 2,250,000.00
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. $ 0.00 $ 1,200,000.00
---------------------------------------------------------------------------------------------------
National City Bank $ 0.00 $ 2,100,000.00
---------------------------------------------------------------------------------------------------
Northern Trust Company $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Capital Limited $ 0.00 $ 1,350,000.00
---------------------------------------------------------------------------------------------------
Aggregate Commitments $ 35,000,000 $15,000,000.00
---------------------------------------------------------------------------------------------------
A-1
ANNEX B
Schedule 6.01
Existing Indebtedness
1. Ruwido Indebtedness with:
a. Erste Bank der Oesterreichischen Sparkassen AG
-----------------------------------------------------------------------------------------
Line Amount: ATS 35,000,000 or Euro 2,543,549 (@13.7603)
-----------------------------------------------------------------------------------------
Outstanding at 12/31/02: Euro 2,019,054
-----------------------------------------------------------------------------------------
Expiration: 10/15/06
-----------------------------------------------------------------------------------------
Interest Rate: 6.00%
-----------------------------------------------------------------------------------------
Interest Payment: Interest paid quarterly
-----------------------------------------------------------------------------------------
Principal Payment: At expiration
-----------------------------------------------------------------------------------------
b. Investkredit Bank AG
--------------------------------------------------------------------------------------------
Principal Amount: Euro 1,090,092
--------------------------------------------------------------------------------------------
Outstanding at 12/31/02: Euro 1,090,092
--------------------------------------------------------------------------------------------
Maturity: 9/30/06
--------------------------------------------------------------------------------------------
Interest Rate: 4.95% fixed rate
--------------------------------------------------------------------------------------------
Interest Payment: Interest paid quarterly
--------------------------------------------------------------------------------------------
Principal Payment: Principal paid semi-annually beginning 3/31/03
--------------------------------------------------------------------------------------------
c. Investkredit Bank AG
--------------------------------------------------------------------------------------------
Principal Amount: ATS 10,000,000 or Euro 726,728 (@13.7603)
--------------------------------------------------------------------------------------------
Outstanding at 12/31/02: Euro 565,234
--------------------------------------------------------------------------------------------
Maturity: 6/30/06
--------------------------------------------------------------------------------------------
Interest Rate: 4.75% fixed rate
--------------------------------------------------------------------------------------------
Interest Payment: Interest paid quarterly
--------------------------------------------------------------------------------------------
Principal Payment: Principal paid semiannually beginning 6/28/02
--------------------------------------------------------------------------------------------
B-1
ANNEX C
INTERCREDITOR AGREEMENT dated as of March, 2003, among
▇▇▇▇▇▇▇ ELECTRONICS HOLDINGS, INC. (formerly known as ▇▇▇▇▇▇▇
Electronics, Inc.), a Delaware corporation (the "Parent Borrower"),
each Subsidiary of the Parent Borrower listed on the signature pages
hereto (each such Subsidiary, individually, a "Subsidiary Guarantor"
and, collectively, the "Subsidiary Guarantors"; the Borrower and the
Subsidiary Guarantors are referred to collectively herein as the
"Grantors"), JPMORGAN CHASE BANK, a New York banking corporation
(formerly known as The Chase Manhattan Bank) ("JPMCB"), as
Administrative Agent for the Lenders under the Existing Credit
Agreement (as defined below) and the other Loan Documents, and SILVER
OAK CAPITAL LLC (the "Tranche C Lender").
Reference is made to (a) the Credit Agreement dated as of June 28,
1999, as amended and restated as of July 21, 1999, and as further amended as of
December 23, 1999, April 10, 2000, December 12, 2001 and May 10, 2002 (as
further amended, supplemented or otherwise modified from time to time, including
pursuant to the Fifth Amendment referred to herein, the "Existing Credit
Agreement"), among the Parent Borrower, the several lenders from time to time
parties thereto (the "Lenders") and JPMCB, as administrative agent and (b) the
Security Documents (as defined in the Existing Credit Agreement). Capitalized
terms used herein have the meanings specified in Section 10 hereof.
Pursuant to the Security Documents, the Grantors have granted to the
Administrative Agent for the ratable benefit of the Secured Parties security
interests in the Collateral to secure the payment and performance of the
Obligations. To induce the Tranche B Lenders and Revolving Lenders to approve
the Fifth Amendment (and as a condition to the effectiveness thereof), each of
the Grantors and the Tranche C Lender have agreed to enter into this Agreement
to provide for certain rights and obligations with respect to the Collateral. In
approving the Fifth Amendment, each of the Tranche B Lenders and Revolving
Lenders that is a party thereto is relying on the undertakings of each of the
Grantors and the Tranche C Lender as set forth herein.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the Grantors, JPMCB, in its capacity as Administrative
Agent, on behalf of itself and the First Priority Secured Parties, and the
Tranche C Lender, on behalf of itself and the other Second Priority Secured
Parties, hereby agree as follows:
SECTION 1. Priority of Liens. (a) Notwithstanding that the Security
Documents provide for the grant by the Grantors of Liens on the Collateral to
the Administrative Agent to secure all the Obligations for the ratable benefit
of the Secured Parties, each of the parties hereto and, by acceptance of the
benefits of this Agreement and the Security Documents, each Secured Party agrees
that (i) the parties intend that the Security Documents shall be construed to
create, and shall be deemed to create as between the Lenders, first-priority
Liens securing the First Priority Secured Obligations and second-priority Liens
securing the Second Priority Secured Obligations, and, accordingly, (ii) all
Liens on the Collateral (A) securing the First Priority Secured Obligations
shall be and remain first-priority Liens, senior in all respects and prior to
all Liens on the Collateral securing the Second Priority Secured Obligations and
(B) securing the Second Priority Secured Obligations shall be and remain
second-priority Liens, junior in all respects to all Liens on the Collateral
securing the First Priority Secured Obligations, in each case whether or not any
such Liens are subordinated to any other Lien securing any obligation of the
Parent Borrower or any Subsidiary Guarantor. In that connection, and
2
notwithstanding the date, manner or order of grant, attachment or perfection of
any financing statement or any Liens granted to the Administrative Agent or the
Secured Parties under, or any other provision of, the Security Documents or the
Existing Credit Agreement (or any actual or alleged defect or deficiency in any
of the foregoing) and notwithstanding any provision of the Uniform Commercial
Code as enacted by any state or any applicable law or any other circumstance
whatsoever, each Second Priority Secured Party hereby agrees that (x) any Lien
on the Collateral securing any First Priority Secured Obligations now or
hereafter held by or on behalf of the Administrative Agent or any First Priority
Secured Party shall be senior in all respects and shall be a first-priority
Lien, prior to any Lien on the Collateral securing any of the Second Priority
Secured Obligations, and (y) any Lien on the Collateral securing any Second
Priority Secured Obligations now or hereafter held by or on behalf of the
Administrative Agent or any Second Priority Secured Party shall be junior in all
respects to the Liens on the Collateral securing the First Priority Secured
Obligations and shall be a second-priority Lien.
(b) The Second Priority Secured Parties acknowledge that a portion
of the First Priority Secured Obligations represent Indebtedness that is
revolving in nature and that the amount thereof that may be outstanding at any
time or from time to time may be increased or reduced and subsequently
reborrowed, and that the terms of the First Priority Secured Obligations may be
modified, extended or amended from time to time, and the aggregate amount of the
First Priority Secured Obligations may be increased, replaced or refinanced, all
without notice to or consent by the Second Priority Secured Parties (other than
as expressly provided in the Existing Credit Agreement) and without affecting
the provisions hereof. The priorities provided in Section 1(a) shall not be
altered or otherwise affected by any amendment, modification, supplement,
extension, increase, replacement, renewal, restatement or refinancing of either
the First Priority Secured Obligations or the Second Priority Secured
Obligations, or any portion thereof, nor by any action that the First Priority
Secured Parties or the Second Priority Secured Parties may take or fail to take
in respect of the Collateral.
SECTION 2. Exercise of Remedies; Determinations Relative to Collateral.
(a) The Administrative Agent shall have the exclusive right to enforce rights,
exercise remedies and make determinations regarding the release, disposition or
restrictions, in each case, with respect to the Collateral, pursuant to the
Security Documents, as instructed by the Required Lenders; provided that the
foregoing shall not be construed to prohibit the exercise by the Administrative
Agent of rights and remedies under the Security Documents that it is entitled to
and elects to exercise. In exercising rights and remedies with respect to the
Collateral, the Administrative Agent may enforce the provisions of the Security
Documents and exercise remedies thereunder, all in such order and in such manner
as it may determine or as instructed by the Required Lenders. Such exercise and
enforcement shall include the rights of an agent appointed by the Administrative
Agent to sell or otherwise dispose of the Collateral upon foreclosure, to incur
expenses in connection with such sale or disposition, and to exercise all the
rights and remedies of a secured lender under the Uniform Commercial Code of any
applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any
applicable jurisdiction. The Administrative Agent shall not have any liability
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or, if the consent of all Lenders is required under the
Loan Documents, all Lenders). The Administrative Agent shall not be obligated to
take any action under this Agreement or any Security Document except for the
performance of such duties as are specifically set forth herein or therein.
Subject to the provisions of this Agreement, the Administrative Agent shall take
any action under or with respect to the Security Documents that is requested by
the Required Lenders and that is not inconsistent with or contrary to the
provisions of this Agreement or the Security Documents. The Administrative Agent
may take, but shall have no obligation to take, any and all such actions under
the Security Documents or any
3
of them, or otherwise as it shall deem to be in the best interests of the
Secured Parties in order to maintain the Collateral and protect and preserve the
Collateral and the rights of the Secured Parties.
(b) (i) Each Second Priority Secured Party agrees that in the
event a proceeding under Chapter 11 of Title 11 of the U.S. Code (the
"Bankruptcy Code") or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law (collectively, "Bankruptcy Laws") shall
be commenced by or against any Grantor, and a Second Priority Secured Party
shall, upon seeking adequate protection as provided in Section 363 of the
Bankruptcy Code, realize any payment in respect of the Collateral as a result of
such adequate protection, such Second Priority Secured Party agrees, prior to
the payment and satisfaction in full of the First Priority Secured Obligations,
to (i) hold such payment in trust and in escrow and (ii) transfer such payment
(other than additional Liens with respect to the Collateral) to the
Administrative Agent upon the earlier to occur of (A) the conclusion of such
proceeding and (B) the sale or liquidation of all or substantially all the
assets of the Parent Borrower and the distribution of the proceeds therefrom, to
be applied by the Administrative Agent in accordance with this Agreement. All
payments received as a result of such adequate protection, including additional
assets subject to additional or replacement Liens, shall be deemed to be
Collateral or proceeds of Collateral for purposes of this Agreement and the
Security Documents to be held in trust in accordance with this Section 2(b).
(ii) The Secured Parties hereby further agree that upon the
conversion of any such proceeding under Chapter 11 of the Bankruptcy Code to a
proceeding under Chapter 7 of the Bankruptcy Code, the Second Priority Secured
Parties will transfer any payments held in escrow pursuant to Section 2(b)(i) to
the Administrative Agent, for distribution to the First Priority Secured
Parties, and the Administrative Agent will hold such payments in trust until
distribution in accordance with this Section 2(b)(ii). Upon receipt of an
Assignment and Acceptance described in the next sentence, the Administrative
Agent shall distribute such payments ratably among the First Priority Secured
Parties, and each First Priority Secured Party receiving any portion of such
payment shall apply the payment as the purchase price payable by the Second
Priority Secured Parties for the purchase of an assignment of a corresponding
amount of First Priority Secured Obligations then due and owing to that First
Priority Secured Party under the Loan Documents. The First Priority Secured
Parties and the Second Priority Secured Parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, with such
changes as are necessary, and upon the delivery of such Assignment and
Acceptance (which shall have an effective date as of the date of receipt by a
First Priority Secured Party of its portion of such transferred payment), the
Administrative Agent shall accept such Assignment and Acceptance and promptly
record the information contained therein in the Register. No assignment shall be
effective unless it has been recorded in the Register as provided in this
Section 2(b)(ii). Upon the assignment of such First Priority Secured Obligations
to the Second Priority Secured Parties, such First Priority Secured Obligations
shall be continued as and converted to, and shall thereafter be deemed for all
purposes of this Agreement (but not for any purpose under the Existing Credit
Agreement) to be, Second Priority Secured Obligations. The Parent Borrower
expressly consents to the foregoing arrangement and agrees that any purchaser of
an assignment so purchased may, subject to the terms of this Agreement, exercise
any and all rights of a Lender as to such assignment as fully as if that Lender
had complied with the provisions of Section 9.04 of the Existing Credit
Agreement with respect to such assignment.
SECTION 3. Application of Proceeds; Payments Over. (a) Prior to the
payment and satisfaction in full of the First Priority Secured Obligations, if
an Event of Default has occurred and is continuing, the Administrative Agent
shall apply the Collateral or proceeds
4
thereof received in connection with the sale or other disposition of, or
collection on, such Collateral in the following order of priority:
FIRST, to the payment in full of all amounts owed to the Administrative
Agent pursuant to this Agreement or the Security Documents, to the extent not
previously paid;
SECOND, to the payment in full of the First Priority Secured
Obligations (the amounts to be distributed among the First Priority Secured
Parties pro rata in accordance with the amount of the First Priority Secured
Obligations owed to them on the date of any such distribution), until the First
Priority Secured Obligations have been paid and satisfied in full;
THIRD, to the payment in full of the Second Priority Secured
Obligations (the amounts to be distributed among the Second Priority Secured
Parties pro rata in accordance with the amount of the Second Priority Secured
Obligations owed to them on the date of any such distribution), until the Second
Priority Secured Obligations have been paid and satisfied in full; and
FOURTH, the balance, if any, to the Grantors, their successors or
assigns, or as a court of competent jurisdiction may otherwise direct.
(b) Each Second Priority Secured Party hereby agrees that if at
any time that an Event of Default has occurred and is continuing it shall obtain
possession of any of the Collateral, or shall realize any payment in respect of
the Collateral or the proceeds thereof, in either case prior to the time when
the First Priority Secured Obligations have been paid and satisfied in full,
then it shall hold such Collateral or payment in trust for the First Priority
Secured Parties and transfer such Collateral or payment, as the case may be, to
the Administrative Agent, at its request; provided that the Second Priority
Secured Parties shall not be required to transfer interest payments in respect
of the Tranche C Term Loans prior to acceleration of the Loans or the occurrence
of an Event of Default pursuant to 7.01(h) or (i) of the Existing Credit
Agreement. If, at any time, all or part of any payment with respect to the First
Priority Secured Obligations previously made is rescinded for any reason
whatsoever, the Second Priority Secured Parties shall promptly pay over to the
Administrative Agent any payment received by any of them in respect of the
Collateral and shall promptly turn any Collateral then held by any of them over
to the Administrative Agent, and the provisions set forth in this Agreement
shall be reinstated as if such payment had not been made, until the payment and
satisfaction in full of the First Priority Secured Obligations.
SECTION 4. Information Concerning Financial Condition of Parent
Borrower and the Subsidiary Guarantors. The First Priority Secured Parties, on
the one hand, and the Second Priority Secured Parties, on the other hand, shall
each be responsible for keeping themselves informed of (a) the financial
condition of the Parent Borrower and the Subsidiary Guarantors and all endorsers
and/or guarantors of the Obligations and (b) all other circumstances bearing
upon the risk of nonpayment of the Obligations. The Administrative Agent and the
First Priority Secured Parties shall have no duty to advise the Second Priority
Secured Parties of information known to it or them regarding such condition or
any such circumstances or otherwise. In the event the Administrative Agent or
any of the First Priority Secured Parties, in its or their sole discretion,
undertakes at any time or from time to time to provide any such information to
the Second Priority Secured Parties, it or they shall be under no obligation (w)
to make, and the Administrative Agent, and the First Priority Secured Parties
shall not make, any express or implied representation or warranty, including
with respect to the accuracy, completeness, truthfulness or validity of any such
information so provided, (x) to provide any
5
additional information or to provide any such information on any subsequent
occasion, (y) to undertake any investigation or (z) to disclose any information
which, pursuant to accepted or reasonable commercial finance practices, such
party wishes to maintain confidential or is otherwise required to maintain
confidential.
SECTION 5. Reliance. The consent by the Tranche B Lenders and Revolving
Lenders to the execution and delivery of the Fifth Amendment to permit the
Second Priority Secured Obligations to be secured by the Liens on the Collateral
granted under the Security Documents, and all loans and other extensions of
credit made or deemed made on and after the date hereof by the First Priority
Secured Parties to the Parent Borrower or any other Grantor, shall be deemed to
have been given and made in reliance upon this Agreement. Each Second Priority
Secured Party, acknowledges that it has, independently and without reliance on
the Administrative Agent or any First Priority Secured Party, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into the Fifth Amendment, this Agreement and the
transactions contemplated hereby and thereby and they will continue to make
their own credit decision in taking or not taking any action under the Existing
Credit Agreement or this Agreement.
SECTION 6. No Warranties or Liability. Each Second Priority Secured
Party acknowledges and agrees that each of the Administrative Agent and the
First Priority Secured Parties has made no express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Security Documents,
the ownership of any Collateral or the perfection or priority of any Liens
thereon. The First Priority Secured Parties will be entitled to manage and
supervise their respective loans and extensions of credit under the Loan
Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate, and the First Priority Secured Parties may manage
their loans and extensions of credit without regard to any rights or interests
that the Second Priority Secured Parties have in the Collateral or otherwise, in
each case except as otherwise provided in this Agreement and the Security
Documents.
SECTION 7. Obligations Unconditional. All rights, interests, agreements
and obligations of the Administrative Agent and the Secured Parties hereunder
shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Loan Documents;
(b) any change in the time, manner or place of payment of, or in
any other terms of, all or any of the First Priority Secured Obligations or the
Second Priority Secured Obligations, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of the Existing Credit Agreement or any other
Loan Document;
(c) any exchange of any security interest in any Collateral or any
other collateral, or any amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all or any of the First
Priority Secured Obligations or the Second Priority Secured Obligations or any
guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding
in respect of the Parent Borrower or any other Grantor; or
6
(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, the Parent Borrower or any other
Grantor in respect of the First Priority Secured Obligations or of the Second
Priority Secured Parties in respect of this Agreement.
SECTION 8. Set-offs. (a) Notwithstanding Section 2.18 of the Existing
Credit Agreement, if, prior to the payment and satisfaction in full of the First
Priority Secured Obligations, any First Priority Secured Party shall, by
exercising any right of set-off, counterclaim or similar right in respect of
Collateral, obtain payment in respect any principal of or interest on any of its
Revolving Loans, Term Loans or participations in LC Disbursements and Swingline
Loans and accrued interest thereon greater than the proportion received by any
other Lender, then such First Priority Secured Party shall only be required to
purchase participations in the Revolving Loans, Term Loans or participations in
LC Disbursements or Swingline Loans of the other First Priority Secured Parties
to the extent necessary so that the benefit of all such payments in respect of
Collateral shall be shared by the First Priority Secured Parties ratably in
accordance with the aggregate amount principal of and accrued interest on their
respective Revolving Loans, Term Loans and participations in LC Disbursements
and Swingline Loans, and no sharing of such payments shall be required with any
Second Priority Secured Party in respect of the Second Priority Secured
Obligations.
(b) If any Second Priority Secured Party shall, by exercising any right
of set-off, counterclaim or similar right in respect of Collateral, obtain
payment in respect of any principal of or interest on any of its Second Priority
Secured Obligations and accrued interest thereon prior to the payment and
satisfaction in full of the First Priority Secured Obligations, such Second
Priority Secured Party shall promptly cause such amounts to be delivered to or
put in the custody, possession or control of the Administrative Agent for
disposition or distribution in accordance with the provisions of Section 3(a).
(c) For the avoidance of doubt, for purposes of the Security Documents,
the parties acknowledge and agree that cash and cash accounts (including Notice
Deposit Accounts and the Collection Deposit Accounts, as such terms are defined
in the Security Agreement) shall be deemed to be Collateral.
SECTION 9. Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of the Security Documents, the
provisions of this Agreement shall govern.
SECTION 10. Definitions. Capitalized terms used but not defined herein
shall have the meaning assigned to them in the Existing Credit Agreement. As
used herein, the following terms shall have the meanings set forth below:
"Bankruptcy Code" has the meaning given to such term in Section 2(b) of
this Agreement.
"Bankruptcy Laws" has the meaning given to such term in Section 2(b) of
this Agreement.
"Credit Agreement" means the Existing Credit Agreement and all other
Loan Documents (as defined therein) and any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
indentures or credit facilities or commercial paper facilities with banks or
other institutional lenders that replace, refund or refinance any part
7
of the loans, notes, other credit facilities or commitments thereunder,
including any such replacement, refunding or refinancing facility or indenture
that increases the amount borrowable thereunder or alters the maturity thereof.
"Credit Facilities" means one or more debt facilities (including the
Credit Agreement) or commercial paper facilities providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to lenders or to special purpose entities formed to borrow from
lenders against such receivables) or letters of credit, or any debt securities
or other form of debt financing (including convertible or exchangeable debt
instruments), in each case, as amended, supplemented, modified, extended,
renewed, restated or refunded in whole or in part from time to time.
"Fifth Amendment" means the Limited Waiver and Fifth Amendment to the
Existing Credit Agreement dated as of March 25, 2003.
"First-Lien Credit Facilities" means (a) the Credit Facilities provided
pursuant to the Credit Agreement and (b) any other Credit Facility that
refinances, replaces, renews or refunds the Credit Agreement.
"First Priority Secured Obligations" means the Obligations payable
under or in respect of the Credit Agreement, any other First-Lien Credit
Facility and all Future Other First Priority Obligations, in each case other
than the Second Priority Secured Obligations.
"First Priority Secured Parties" means all the Secured Parties other
than the Second Priority Secured Parties.
"Future Other First Priority Obligations" means all obligations of any
Grantor to a First Priority Secured Party in respect of a Hedging Agreement
entered into with any counterparty that is a First Priority Secured Party (or an
Affiliate of a First Priority Secured Party) at the time such Hedging Agreement
is entered into.
"Insolvency or Liquidation Proceeding" means (a) any voluntary or
involuntary case or proceeding under any Bankruptcy Law with respect to any
Grantor, (b) any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to any of their respective assets, (c) any liquidation, dissolution,
reorganization or winding up of any Grantor whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of any
Grantor.
"Second Priority Secured Obligations" means (i) Obligations in respect
of the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding) on the Tranche C Term Loans, when and as due, whether
at maturity or by acceleration and (ii) all other Obligations owed to any of the
Second Priority Secured Parties arising out of their holding the Tranche C Term
Loans or otherwise in their capacity as a Second Priority Secured Party.
"Second Priority Secured Parties" means (i) the Tranche C Lender, (ii)
each counterparty to a Hedging Agreement entered into with any Borrower or other
Loan Party if such counterparty was the Tranche C Lender (or an Affiliate of the
Tranche C Lender) at the time such Hedging Agreement was entered into, (iii) the
Tranche C Lender and each of its Related Parties,
8
in each case in respect of their rights to indemnification and reimbursement of
expenses under any Loan Document (in their capacity as Tranche C Lender or by
reason of being a Related Party of the Tranche C Lender in its capacity as such,
as applicable) and (iv) the successors and assigns of the foregoing. If and so
long as the Person that is the Tranche C Lender is also a Tranche B Lender or a
Revolving Lender, (a) references in this definition shall be construed to refer
to such Person only in its capacity as the holder of the Tranche C Term Loan and
(b) references in clause (ii) of this definition to a Hedging Agreement shall be
construed to refer only to Hedging Agreements that hedge interest rates in
respect of the Tranche C Term Loan.
SECTION 11. Status of Agreement. This Agreement shall constitute a
Security Document for all purposes under the Credit Agreement. This Agreement
shall terminate upon the payment and satisfaction in full of the First Priority
Secured Obligations.
SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 13. Further Assurances. Each of the parties hereto agrees to
execute such further documentation and take such further action as shall be
reasonably necessary to fully effectuate the provisions of this Agreement.
SECTION 14. Amendments, Waivers, etc. Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by each Grantor, the
Administrative Agent, Lenders holding two-thirds of the Secured Obligations and
the Tranche C Lender. Neither this Agreement nor any provision hereof may be
waived, discharged or terminated orally, but only by a statement or instrument
in writing signed by the party or parties against which enforcement of the
waiver, discharge or termination shall be sought.
SECTION 15. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, each Secured Party and
their respective successors and assigns. Each Secured Party, by accepting the
benefits of this Agreement, the Existing Credit Agreement and the Security
Documents, shall be deemed to have agreed to be bound by the provisions of this
Agreement.
SECTION 16. Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
SECTION 17. Counterparts. This Agreement may be executed in more than
one counterpart, each of which shall constitute an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart hereof.
SECTION 18. Headings. The section headings of this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
or construction of any provisions hereof.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers, all as
of the day and year first above written.
▇▇▇▇▇▇▇ ELECTRONICS HOLDINGS,
INC.,
by
__________________________
Name:
Title:
▇▇▇▇▇▇▇ ELECTRONICS LLC,
by
__________________________
Name:
Title:
▇▇▇▇▇▇▇ INTERMEDIATE HOLDINGS,
INC.,
by
__________________________
Name:
Title:
EMKAY INNOVATIVE PRODUCTS, INC.,
by
__________________________
Name:
Title:
▇▇▇▇▇▇▇ MANUFACTURING LTD.,
by
__________________________
Name:
Title:
10
SYNCHRO-START PRODUCTS, INC.,
by
__________________________
Name:
Title:
JPMORGAN CHASE BANK, as
Administrative Agent,
by
__________________________
Name:
Title:
SILVER OAK CAPITAL LLC, as
Tranche C Lender,
by
__________________________
Name:
Title: