EXHIBIT 10.2
AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT ("Amendment No. 3"), dated
as of July 10, 2003, by and among PEMSTAR Inc., a Minnesota corporation
("Parent"), Turtle Mountain Corporation, a North Dakota Corporation ("Turtle
Mountain"), PEMSTAR Pacific Consultants Inc., a California corporation ("PPC",
and together with Parent and Turtle Mountain, each individually a "Borrower" and
collectively, "Borrowers"), Gentlelife, Inc., a California corporation, formerly
known as Kinderlife Instruments Inc. ("Guarantor") and Congress Financial
Corporation (Central), an Illinois corporation, in its capacity as
administrative and collateral agent pursuant to the Loan Agreement (as
hereinafter defined) acting for and on behalf of the parties thereto as lenders
(in such capacity "Agent").
W I T N E S S E T H :
WHEREAS, Agent, Borrowers, Guarantor, Fleet Capital Corporation, a Rhode
Island corporation, in its capacity as Documentation Agent for Lenders (in such
capacity, "Documentation Agent"), and the parties to the Loan Agreement as
lenders, whether by execution of the Loan Agreement or an Assignment and
Acceptance (individually, each a "Lender" and collectively, "Lenders"), have
entered into financing arrangements pursuant to which Lenders (or Agent on
behalf of Lenders) have made, and may make, loans and advances and provide other
financial accommodations to Borrowers as set forth in the Loan and Security
Agreement, dated April 25, 2003, by and among Agent, Borrowers, Guarantor,
Documentation Agent and Lenders (as amended by Amendment No. 1 to Loan and
Security Agreement, dated April 25, 2003, Amendment No. 2 to Loan and Security
Agreement, dated as of June 30, 2003, as amended hereby and as the same may
hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced, the "Loan Agreement", and together with all agreements,
documents and instruments at any time executed and/or delivered in connection
therewith or related thereto, as from time to time amended and supplemented,
collectively, the "Financing Agreements");
WHEREAS, Borrowers and Guarantor have requested that Agent and Lenders
agree to amend the Loan Agreement to change the financial covenant contained
therein;
WHEREAS, Agent and Lenders are willing to agree to such amendments, subject
to the terms and conditions herein; and
WHEREAS, by this Amendment Xx. 0, Xxxxx, Xxxxxxx, Borrowers and Guarantor
desire and intend to evidence such consent and amendments.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
and covenants contained herein, the parties hereto agree as follows:
1. Definitions.
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(a) Additional Definition. As used herein, the term "Amendment No. 3"
shall mean this Amendment No. 3 to Loan and Security Agreement by and among
Agent, Lenders, Borrowers and Guarantor, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced and
the Loan Agreement and the other Financing Agreements are hereby amended to
include, in addition to and not in limitation of, such definition.
(b) Interpretation. For purposes of this Amendment No. 3, unless
otherwise defined herein, all terms used herein, including, but not limited to,
those terms used and/or defined in the recitals above, shall have the respective
meanings assigned to such terms in the Loan Agreement.
2. Minimum EBITDA.
(b) Section 9.17(c) of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"(c) In calculating EBITDA for purposes of this Section 9.17,
notwithstanding anything to the contrary contained herein, the
restructuring charges taken in the quarters ending June 30, 2003 and
September 30, 2003 up to the amount of $9,000,000 shall be excluded from
such calculation and the gains from the sale of the Rochester Real Property
in accordance with Section 9.7hereof shall be excluded in such
calculation."
(c) Schedules 9.17(a) and 9.17(b) of the Loan Agreement are each
hereby deleted in their entirety and replaced with the Second Amended Schedule
9.17(a) and Second Amended Schedule 9.17(b) included with this Amendment No. 3.
3. Additional Representations, Warranties and Covenants. Each Borrower and
Guarantor represents, warrants and covenants with and to Agent and Lenders as
follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof:
(d) This Amendment No. 3 has been duly executed and delivered by each
Borrower and Guarantor and is in full force and effect as of the date hereof and
the agreements and obligations of each Borrower and Guarantor contained herein
constitute legal, valid and binding obligations of each Borrower and Guarantor
enforceable against each of them in accordance with their respective terms.
(e) No action of, or filing with, or consent or any governmental or
public body or authority, and no approval or consent of any other party, is or
will be required to authorize, or is or will be otherwise required in connection
with, the execution, delivery and performance of this Amendment No. 3 other than
such filings with the Securities and Exchange Commission as Borrowers may deem
advisable to comply with applicable law.
(f) After giving effect to the provisions of this Amendment No. 3, no
Event of Default exists or has occurred as of the date of this Amendment No. 3.
4. Conditions Precedent. The effectiveness of the amendments contained
herein shall be subject to: (a) the receipt by Agent of this Amendment No. 3
duly authorized, executed and delivered by the parties hereto and (b) the
receipt by Agent of the approval of Required Lenders, in form and substance
satisfactory to Agent, to the terms and conditions of this Amendment No. 3.
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5. Effect of this Amendment. Except as expressly set forth herein, no other
amendments, consents, changes or modifications to the Financing Agreements are
intended or implied, and in all other respects the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof and Borrowers shall not be entitled to any other or
further amendment or consent by virtue of the provisions of this Amendment No. 3
or with respect to the subject matter of this Amendment No. 3. To the extent of
conflict between the terms of this Amendment No. 3 and the other Financing
Agreements, the terms of this Amendment No. 3 shall control. The Loan Agreement
and this Amendment No. 3 shall be read and construed as one agreement.
6. Governing Law. The validity, interpretation and enforcement of this
Amendment No. 3 and the other Financing Agreements and any dispute arising out
of the relationship between the parties hereto whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the State of Illinois
but excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of Illinois.
7. Binding Effect. This Amendment No. 3 shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
8. Headings. The headings listed herein are for convenience only and do not
constitute matters to be construed in interpreting this Amendment No. 3.
9. Counterparts. This Amendment No. 3 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 3, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto. Delivery of an executed counterpart of this
Amendment No. 3 by telefacsimile shall have the same force and effect as
delivery of an original executed counterpart of this Amendment No. 3. Any party
delivering an executed counterpart of this Amendment No. 3 by telefacsimile also
shall deliver an original executed counterpart of this Amendment No. 3, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment No. 3 as to such
party or any other party.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
be duly executed and delivered by their authorized officers as of the day and
year first above written.
AGENT BORROWERS
CONGRESS FINANCIAL CORPORATION PEMSTAR INC.
(CENTRAL), as Agent
By: /s/ Xxxxx Xxxxx By: /s/ Xx Xxxxxxx
--------------------------- ----------------------------
Title: Vice President Title: Chief Executive Officer
------------------------
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TURTLE MOUNTAIN CORPORATION PEMSTAR PACIFIC CONSULTANTS INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------- -------------------------------
Title: Secretary Title: Secretary
GUARANTOR
GENTLELIFE, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Title: President
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SECOND AMENDED SCHEDULE 9.17
TO
LOAN AND SECURITY AGREEMENT
Second Amended Schedule 9.17(a)
For the three (3) immediately preceding consecutive month period ended:
June 30, 2003 $ 0
July 31, 2003 $ 3,100,000
August 31, 2003 $ 6,500.000
September 30, 2003 $ 6,700,000
October 31, 2003 $ 7,700,000
November 30, 2003 $ 8,100,000
December 31, 2003 $10,700,000
January 31, 2004 $10,500,000
February 28, 2004 $10,600,000
March 30, 2004 $ 9,300,000
As of the
last day of each month
thereafter $ 8,175,000
Second Amended Schedule 9.17(b)
For the three (3) immediately preceding consecutive month period ended:
June 30, 2003 ($2,103,000)
July 31, 2003 ($202,000)
August 31, 2003 $ 1,474,000
September 30, 2003 $ 2,300,000
October 31, 2003 $ 2,200,000
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November 30, 2003 $ 3,300,000
December 31, 2003 $ 2,800,000
January 31, 2004 $ 4,400,000
February 28, 2004 $ 4,000,000
March 30, 2004 $ 2,100,000
As of the
last day of each month
thereafter $ 2,550,000
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