Exhibit 10.9
Execution Version
SECOND AMENDMENT TO CREDIT AGREEMENT, WAIVER AND RELEASE OF
EUROPEAN INVESTMENT COLLATERAL
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, WAIVER AND RELEASE OF EUROPEAN
INVESTMENT COLLATERAL (this "Amendment") is made and entered into as of this 7th
day of January, 2005 by and among COMPX INTERNATIONAL INC., a Delaware
corporation (the "Borrower"), the banks and lending institutions party to the
Credit Agreement referred to below (the "Lenders"), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, in its capacity as administrative
agent for the Lenders (the "Administrative Agent").
The Lenders have extended certain credit facilities to the Borrower
pursuant to the Credit Agreement dated as of January 22, 2003, by and among the
Borrower, the Lenders and the Administrative Agent (as amended by the First
Amendment to Credit Agreement dated as of October 20, 2003, and as otherwise
amended, restated, supplemented or modified from time to time, the "Credit
Agreement").
The Borrower desires to dispose of its European subsidiaries (the "European
Subsidiary Sale") through a sale of all of the capital stock of CompX Europe
B.V., a Netherlands corporation ("CompX Europe").
The Borrower has requested that the Administrative Agent and the Lenders:
(i) waive the asset sale prohibition in the Credit Agreement to the extent
necessary to permit the European Subsidiary Sale, (ii) waive the mandatory
commitment reduction requirements in the Credit Agreement as it pertains to the
European Subsidiary Sale, (iii) waive the investment restriction covenant in the
Credit Agreement to the extent necessary to permit the Borrower to receive
partial payment for the European Subsidiary Sale in the form of a subordinated
note from the purchaser thereof (the "Subordinated Note"); (iv) delete CompX
Europe and each of its direct and indirect subsidiaries from the subsidiary
schedule to the Credit Agreement, and (v) release that portion of the capital
stock of CompX Europe which is pledged to the Administrative Agent for the
benefit of the Lenders pursuant to the Collateral Agreement (as defined in the
Credit Agreement).
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. Capitalized Terms. All capitalized undefined terms used in this
Amendment shall have the meanings assigned thereto in the Credit Agreement.
2. Waivers under Credit Agreement. So long as (a) immediately before and
after giving effect hereto there shall exist no Default or Event of Default
under the Credit Agreement, (b) the proceeds to Borrower represented by cash and
the principal amount of any note issued by the purchaser of CompX Europe
(including but not limited to the Subordinated Note) from the European
Subsidiary Sale shall be at least US$20,000,000, and (c) the European Subsidiary
Sale shall be consummated pursuant to a sale agreement in substantially the form
and on substantially the terms furnished to the Administrative Agent and
approved by it in its reasonable discretion, the Lenders hereby waive: (i) the
provisions of Section 10.5 of the Credit Agreement (Limitations on Sale of
Assets) to the extent necessary to permit the European Subsidiary Sale; (ii) the
provisions of Section 2.7 of the Credit Agreement (Permanent Reduction of the
Aggregate Commitment and the Alternative Currency Commitment) to eliminate the
requirement that the Aggregate Commitment be reduced by the proceeds of the
European Subsidiary Sale, it being agreed that the Aggregate Commitment will be
unchanged thereby; and (iii) the provisions of Section 10.3 of the Credit
Agreement (Limitation on Loans, Advances, Investments and Acquisitions) to the
extent necessary to permit the Borrower to accept non-cash consideration for the
European Subsidiary Sale in the form of a subordinated note from the purchaser
of CompX Europe in an aggregate principal amount not to exceed (euro)4,000,000;
each of such foregoing waivers to take effect as of the Effective Time (as
defined below).
3. Amendment to Schedule 6.1(b) to Credit Agreement. Effective as of the
Effective Time (as defined below), Schedule 6.1(b) to the Credit Agreement
(Subsidiaries) is hereby amended to delete the references to CompX Europe B.V.,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Holding B.V., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Nederland B.V., ▇▇▇▇▇▇ ▇▇▇▇▇▇ B.V. and
▇▇▇▇▇▇ ▇▇▇▇▇▇ International B.V.
4. Release of Pledged Stock. Effective as of the Effective Time (as defined
below), the Administrative Agent and the Lenders hereby release their lien and
security interest in the capital stock of CompX Europe pledged pursuant to the
Collateral Agreement.
5. Effective Time of this Amendment; Deadline for European Subsidiary Sale
Permissions. This Amendment shall become effective (the "Effective Time")
simultaneously with the closing of the European Subsidiary Sale, subject to
fulfillment of the following conditions:
(a) Amendment Documents. The Administrative Agent shall have received
this Amendment executed by the Borrower, each of the Subsidiary Guarantors
and each of the Lenders.
(b) Amendment Fee. The Administrative Agent shall have received, for
the account of each Lender on or prior to the date of execution hereof, an
amendment fee in an amount equal to 0.05% of the aggregate amount of each
Lender's Commitment, which amendment fee shall be nonrefundable whether or
not the European Subsidiary Sale is consummated and whether or not this
Amendment ever becomes effective.
(c) European Subsidiary Sale Conditions; Deadline for European
Subsidiary Sale. Each of the conditions set forth in clauses (a), (b) and
(c) of Section 2 hereof shall have been satisfied and the European
Subsidiary Sale shall have closed no later than the first anniversary of
the date hereof (as set forth in the preamble hereto).
(d) Sale Agreement; Other Documents. The Administrative Agent shall
have received a true and correct copy of the sale agreement and any other
relevant associated agreements effecting the European Subsidiary Sale in
substantially the final form thereof and shall have received any other
documents, certificates or instruments reasonably requested thereby.
If any of the foregoing conditions to the effectiveness of this Amendment shall
remain unsatisfied at the closing of the European Subsidiary Sale, then
notwithstanding the prior execution hereof by the parties hereto, this Amendment
and the waivers, amendment and release otherwise effected hereby shall become
null and void and of no further force and effect, without any further action on
the part of any party hereto, and the Credit Agreement, Loan Documents and
Collateral shall continue as in effect without giving effect to any of the
waiver, amendment or release provisions hereof; provided, however, that ,
notwithstanding the foregoing, Borrower shall remain obligated for the amendment
fee and all costs and expense reimbursements provided for herein.
6. Effect of the Amendment. Except as expressly modified hereby, the Credit
Agreement and the other Loan Documents shall be and remain in full force and
effect. This Amendment shall not be deemed (a) to be a waiver of, or consent to,
a modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document or (b) to prejudice any other right or
rights which the Administrative Agent or the Lenders may now have or may have in
the future under or in connection with the Credit Agreement or the other Loan
Documents or any of the instruments or agreements referred to therein, as the
same may be amended or modified from time to time.
7. Representations and Warranties/No Default.
(a) By its execution hereof, the Borrower hereby certifies that (i)
each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct as of the date
hereof (before and after giving effect to the European Subsidiary Sale and
the waivers hereunder) as if fully set forth herein unless such
representations and warranties relate to a specific date, in which case
such representations and warranties shall be true and correct as of such
specific date and (ii) no Default or Event of Default has occurred and is
continuing as of the date hereof nor will such Default or Event of Default
exist under the Credit Agreement (including without limitation, Article IX
(Financial Covenants) thereof) after giving effect to this Amendment and to
the European Subsidiary Sale.
(b) By its execution hereof, the Borrower represents and warrants that
as of the date hereof there are no claims or offsets against or defenses or
counterclaims to any of the obligations of the Borrower or any Subsidiary
Guarantor under the Credit Agreement or any other Loan Document.
(c) By its execution hereof, the Borrower hereby represents and
warrants that the Borrower and each Subsidiary Guarantor has the right,
power and authority and has taken all necessary corporate and other action
to authorize the execution, delivery and performance of this Amendment and
each other document executed in connection herewith to which it is a party
in accordance with their respective terms. This Amendment and each other
document executed in connection herewith has been duly executed and
delivered by the duly authorized officers of the Borrower and each
Subsidiary Guarantor, and each such document constitutes the legal, valid
and binding obligation of the Borrower and each Subsidiary Guarantor,
enforceable in accordance with its terms.
8. Acknowledgement by Subsidiary Guarantors. By their execution hereof,
each of the Subsidiary Guarantors hereby expressly (a) consents to the waivers,
release, modifications and amendments set forth in this Amendment, (b) reaffirms
all of its respective covenants, representations, warranties and other
obligations set forth in the Subsidiary Guaranty Agreement and the other Loan
Documents to which it is a party and (c) acknowledges, represents and agrees
that its respective covenants, representations, warranties and other obligations
set forth in the Subsidiary Guaranty Agreement and the other Loan Documents to
which it is a party remain in full force and effect.
9. Costs and Expenses. The Borrower shall pay all reasonable out-of-pocket
costs and expenses of the Administrative Agent invoiced to the Borrower in
connection with the preparation, execution and delivery of this Amendment,
including, without limitation, the reasonable fees and disbursements of counsel
for the Administrative Agent.
10. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS
OR CHOICE OF LAW PRINCIPLES THEREOF.
11. Counterparts. This Amendment may be executed in separate counterparts,
each of which when executed and delivered is an original but all of which taken
together constitute one and the same instrument.
12. Fax Transmission. A facsimile, telecopy or other reproduction of this
Amendment may be executed by one or more parties hereto, and an executed copy of
this Amendment may be delivered by one or more parties hereto by facsimile or
similar instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Amendment as well as any facsimile, telecopy or other reproduction
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date and year first above written.
BORROWER:
COMPX INTERNATIONAL INC., as Borrower
By:
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Name:
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Title:
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SUBSIDIARY GUARANTORS:
COMPX SECURITY PRODUCTS, INC.
By:
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Name:
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Title:
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▇▇▇▇▇▇ ▇▇▇▇▇▇ USA, INC.
By:
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Name:
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Title:
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AGENT AND LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Lender
By:
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Name:
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Title:
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COMPASS BANK, as Lender
By:
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Name:
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Title:
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COMERICA BANK, as Lender
By:
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Name:
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Title:
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