EXECUTION VERSION
WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT
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THIS WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT ("Second Waiver and
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Amendment"), dated as of December 3, 2001, is entered into by and among ARTESYN
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TECHNOLOGIES, INC., a Florida corporation (the "Company"), as a borrower,
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ARTESYN CAYMAN LP, a Cayman Islands exempted limited partnership, ARTESYN NORTH
AMERICA, INC., a Delaware corporation and ARTESYN TECHNOLOGIES COMMUNICATION
PRODUCTS, INC., a Wisconsin corporation, as the initial Subsidiary Borrowers,
the financial institutions party to the Credit Agreement, as Lenders and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.
RECITALS
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A. The Company, certain Subsidiary Borrowers, the Guarantors, the Lenders,
and the Administrative Agent are parties to a Credit Agreement dated as of
January 23, 2001, as amended and modified by the Waiver and First Amendment to
Credit Agreement dated as of October 12, 2001 (the "First Waiver and Amendment",
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and as it may be further amended, modified or supplemented from time to time the
"Credit Agreement") pursuant to which the Administrative Agent and the Lenders
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have extended certain credit facilities to the Company and certain of its
Subsidiaries.
B. The Company has requested that the Lenders further waive on a temporary
basis certain provisions of the Credit Agreement and agree to certain amendments
of the Credit Agreement.
C. The Required Lenders are willing to grant such temporary waivers and to
amend the Credit Agreement, subject to the terms and conditions of this Second
Waiver and Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms used
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herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Waiver.
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(a) Subject to and upon the terms and conditions hereof, the Lenders
hereby waive (i) performance or observance of the covenants set forth in
Sections 6.11, 6.12 and 6.13 of the Credit Agreement solely with respect to the
fiscal quarters and Test Periods ending on or nearest September 30, 2001 and
December 31, 2001 and (ii) any Default or Event of Default arising pursuant to
Section 8.01(b) solely due to the representation set forth in the last sentence
of Section 5.05 being remade during the Waiver Period in respect of an event or
circumstance which constitutes a Material Adverse Effect under clause (a) or (b)
of the definition thereof in the
1.
Credit Agreement and which Default or Event of Default is a consequence of
events or circumstances that occurred prior to the beginning of the Waiver
Period (collectively, the "Waived Defaults").
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(b) Nothing contained herein shall be deemed a waiver of (or otherwise
affect the Administrative Agent's or the Lenders' ability to enforce) any
Default or Event of Default (other than the Waived Defaults), including without
limitation any Default or Event of Default that may now or hereafter exist and
arise from or otherwise be related to the Waived Defaults (including without
limitation any cross-default arising under the Credit Agreement by virtue of any
matters resulting from the Waived Defaults).
(c) Notwithstanding any provision set forth in this Second Waiver and
Amendment, the waivers set forth in Section 2(a) in respect of any of Waived
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Defaults arising under the Credit Agreement shall immediately and automatically
cease to be in effect, and any Default or Event of Default which had been waived
thereby shall automatically be reinstated on the earlier to occur of (i) January
15, 2002, (ii) the date any of the representations and warranties of any party
to this Second Waiver and Amendment, other than the Administrative Agent and the
Lenders (such parties being collectively referred to herein as the "Artesyn
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Parties"), set forth in this Second Waiver and Amendment are determined to be
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incorrect, (iii) the date there occurs any Default or Event of Default under the
Credit Agreement (other than as waived hereby) or (iv) the date of the breach or
nonobservance of any covenant set forth in this Second Waiver and Amendment (the
period beginning on the Effective Date and terminating on the earliest to occur
of the dates described in clauses (i) through (iv) preceding being referred to
herein as the "Waiver Period").
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3. Amendments to Credit Agreement.
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(a) Section 1.01 of the Credit Agreement shall be amended
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(i) by deleting the definition of "Default Rate" in its entirety
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and replacing it with the definition set forth in Exhibit A hereto; and
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(ii) by inserting the following additional defined term
immediately after the definition of "Same Day Funds":
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"'Second Amendment' means the Waiver and Second Amendment to
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Credit Agreement dated as of December 3, 2001 among the parties
hereto."
(b) Section 8.01(c) of the Credit Agreement shall be amended by
inserting in clause (i) of Section 8.01(c) the phrase "or Section 4(b), (c),
(d), (e) or (f) of the Second Amendment" immediately after the phrase "of the
First Amendment".
4. Waiver Covenants. (a) Each Borrower jointly and severally reaffirms its
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obligations under each of the covenants set forth in clauses (a) through (f) of
Section 4 of the First Waiver and Amendment as if fully set forth herein and
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acknowledges that its obligations under each of the covenants set forth in
clauses (a) through (f) of Section 4 of the First Waiver and Amendment remain in
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full force and effect until the Commitments and all Letters of Credit have
terminated, and the Loans, any Unreimbursed Amounts and the Notes, together with
2.
interest, any commitment, utilization or other fees, and all other obligations
incurred hereunder and thereunder, are paid in full.
(b) Notwithstanding the waiver of the Waived Defaults in accordance
with Section 2(a), the Borrowers agree that for the period beginning at the
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start of the Waiver Period and ending on January 15, 2002, unless an Event of
Default has occurred on or prior to January 15, 2002 which is not waived by the
Second Amendment, in which case such period shall not end on January 15, 2002
but shall instead continue for so long as such Event of Default continues to
exist (such period being referred to herein as the "Specified Period"), each
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Borrower shall pay interest on the principal amount of all of its respective
outstanding Obligations at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Law.
(c) The Company agrees that for the Specified Period the Company shall,
in addition to the commitment fee required under Section 2.09(a) of the Credit
Agreement, pay to the Administrative Agent for the account of each Lender in
accordance with its Pro Rata Share, a supplemental commitment fee in Dollars
equal to the rate specified in the table below times the actual daily amount by
which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of
Committed Loans and (ii) the Outstanding Amount of L/C Obligations.
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Ratio of Consolidated Total Supplemental
Indebtedness to Commitment
Consolidated EBITDA Fee
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Less than or equal to 0.300%
1.00 to 1.00
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Less than or equal to 1.50 0.275%
to 1.00 but greater than
1.00 to 1.00
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Less than or equal to 2.00 0.225%
to 1.00 but greater than
1.50 to 1.00
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Less than or equal to 2.50 0.175%
to 1.00 but greater than
2.00 to 1.00
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Greater than 2.50 to 1.00 0.125%
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The supplemental commitment fee shall accrue at all times during the Specified
Period and shall be due and payable quarterly in arrears on the last Business
Day of each March, June, September and December, commencing with the first such
date to occur after the Closing Date, and on the Maturity Date. The
supplemental commitment fee shall be calculated quarterly in arrears, and if
there is any change in the rate specified in the table above during any quarter,
the actual daily amount shall be computed and multiplied by the rate specified
in the table below separately for each period during such quarter that such rate
was in effect. The supplemental commitment fee shall accrue at all times during
the Specified Period, including at any time during which one or more of the
conditions in Article IV of the Credit Agreement is not met or during any time
when
3.
Credit Extensions are restricted in accordance with Section 4(j). Nothing
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contained herein shall be deemed to create any express or implied obligation on
the part of the Lenders to extend the Waiver Period beyond January 15, 2002.
(d) The Company and its Subsidiaries will not make, during the Specified
Period, capital expenditures (as defined in accordance with GAAP) in excess of
$3,000,000 in the aggregate for all such Persons on a consolidated basis.
(e) The Company shall, promptly upon its receipt thereof, deposit the
Net Cash Proceeds of any Asset Disposition constituting a sale of substantially
all of the capital stock or assets of Artesyn Solutions, Inc., a Guarantor under
the Credit Agreement (which Net Cash Proceeds shall not be reduced by any
payments on account of any tax liability to the Company or any other Borrower of
or any Guarantor or any of their respective Subsidiaries arising on account of
such Asset Disposition), in an account maintained by the Company at First Union
National Bank, with a direction to First Union National Bank to deliver such Net
Cash Proceeds to the Administrative Agent on the fifth Business Day following
First Union National Bank's receipt of such Net Cash Proceeds, and upon delivery
of such Net Cash Proceeds by First Union National Bank to the Administrative
Agent, then pursuant to Sections 2.05 and 2.06A of the Credit Agreement, (i) the
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Committed Loans shall be prepaid and the Aggregate Commitments shall be
automatically and permanently reduced in an amount of such Net Cash Proceeds of
$24,000,000, and (ii) the remainder of such Net Cash Proceeds shall be
maintained in escrow with the Administrative Agent pursuant to an escrow and
cash collateral agreement in form and substance satisfactory to the
Administrative Agent in its sole discretion providing, among other things, that
such escrowed Net Cash Proceeds shall be released to the Company upon the
Company's good faith determination of the cash amount, if any, of any tax
liability to the Company or any other Borrower or any Guarantor or any of their
respective Subsidiaries arising on account of such Asset Disposition, but only
to the extent of such determined cash liability, and shall otherwise be released
to the Administrative Agent and applied in full in prepayment of the Committed
Loans and permanent reduction of the Aggregate Commitments.
(f) Notwithstanding any other term or provision of this Second Waiver
and Amendment or the Credit Agreement to the contrary, neither the Company nor
any other Borrower shall request a Credit Extension at any time during the
Specified Period, unless agreed in advance by the Required Lenders in their sole
discretion.
5. Representations and Warranties. The Company and each of the other
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Artesyn Parties hereby represent and warrant to the Administrative Agent and the
Lenders as follows:
(a) No Default or Event of Default (other than the Waived Defaults) has
occurred and is continuing.
(b) The execution, delivery and performance by the Company and the other
Artesyn Parties of this Second Waiver and Amendment has been duly authorized by
all necessary corporate and other action and do not and will not require any
registration with, consent or approval of, notice to or action by, any Person
(including any Governmental Authority) in order to be effective and enforceable.
This Second Waiver and Amendment and the Credit Agreement as amended by the
First Waiver and Amendment and as modified by this
4.
Second Waiver and Amendment each constitute the legal, valid and binding
obligation of the Company and each of the other Artesyn Parties which are
parties thereto, respectively, enforceable against them in accordance with their
respective terms, without defense, counterclaim or offset.
(c) None of the Organization Documents of the Company or any of the
other Artesyn Parties has been amended or modified since January 23, 2001.
(d) Other than the last sentence of Section 5.05 of the Credit
Agreement, all representations and warranties of the Company and each of the
other Artesyn Parties contained in the Credit Agreement and the First Waiver and
Amendment are true and correct in all material respects as of the Effective
Date.
(e) There are no Subsidiary Borrowers other than those Artesyn Parties
executing this Second Waiver and Amendment as Subsidiary Borrowers.
(f) The Outstanding Amount of all Loans and L/C Obligations together is
equal to or less than $150,000,000.
(g) Neither the Company nor any of its Subsidiaries has entered into or
incurred any Contractual Obligation which consists of or contains a negative
pledge (as defined in Section 4(f) of the First Waiver and Amendment).
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(h) The Company and each of the other Artesyn Parties is entering into
this Second Waiver and Amendment on the basis of its own investigation and for
its own reasons, without reliance upon the Administrative Agent, the Lenders,
any of their respective Affiliates or any other Person and hereby acknowledge
and agree that they are not aware (i) of any claim or cause of action against
the Administrative Agent, any Lender or any of their respective Affiliates,
directors, officers, agents or employees, arising from or in connection with the
Loan Documents or otherwise and (ii) that there are any claims, demands, offsets
or defenses at law or in equity that would defeat or diminish the rights and
remedies of Administrative Agent or the Lenders under the Loan Documents.
6. Effective Date. This Second Waiver and Amendment will become effective
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upon the date not earlier than the date hereof when each of the following
conditions precedent is satisfied (the "Effective Date"):
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(a) The Administrative Agent has received from the Company, the
Subsidiaries of the Company party hereto and each of the Required Lenders a duly
executed original (or, if elected by the Administrative Agent, an executed
facsimile copy) of this Second Waiver and Amendment by no later than 5:00 PM
(New York time) on December 3, 2001.
(b) The Administrative Agent has received from the Company, each of the
other Artesyn Parties and each Guarantor a copy of a resolution passed by the
board of directors of such corporation (or other evidence satisfactory to the
Administrative Agent in the case of such a Person which is not a corporation),
certified by the secretary or an Assistant Secretary of such corporation (or
such other Person satisfactory to the Administrative Agent in the case of such a
Person which is not a corporation) as being in full force and effect on the date
hereof,
5.
authorizing the execution, delivery and performance of this Second Waiver and
Amendment and/or the Guarantors' Consent, as the case may be.
(c) The Administrative Agent shall have received from the Company a
certificate of a Responsible Officer of the Company dated as of the Effective
Date stating that all representations and warranties contained herein are true
and correct on and as of the Effective Date as though made on and as of such
date.
(d) The Administrative Agent shall have received from each of the
Guarantors a duly executed original (or, if elected by the Agent, an executed
facsimile copy) of a Guarantors' Acknowledgment and Consent in the form attached
hereto as Exhibit B (the "Guarantors' Consent").
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(e) The Administrative Agent shall have received from the Company the
completed Collateral Questionnaire previously delivered to the Company, in form
and substance satisfactory to the Administrative Agent.
(f) The Company shall have paid the expenses of the Administrative
Agent, its attorneys and the Consultant (as hereinafter defined) payable under
Section 8(h) or Section 8(i) of this Agreement as to which expenses the
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Borrowers shall have received invoices from the Administrative Agent.
7. Reservation of Rights. The Company, on behalf of itself and each of its
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Subsidiaries, acknowledges and agrees that neither the Administrative Agent's
nor the Lenders' forbearance during the Waiver Period in exercising their rights
and remedies in connection with the Waived Defaults, nor the execution and
delivery by the Administrative Agent and the Lenders of this Waiver and
Amendment, shall be deemed (i) to create a course of dealing or otherwise
obligate the Administrative Agent or the Lenders, or any of their respective
Affiliates or Subsidiaries, to forbear or execute similar waivers under the same
or similar circumstances in the future, (ii) to waive, relinquish or impair any
right of the Administrative Agent or the Lenders to receive any indemnity or
similar payment from any Person or entity as a result of any matter arising from
or relating to the Waived Defaults (other than the Obligation of the Guarantors
to make during the Waiver Period any payment under a Guaranty to the extent
resulting from the Waived Defaults), (iii) a commitment or agreement by the
Administrative Agent or the Lenders, or any of their respective Affiliates or
Subsidiaries, to provide financing or credit to the Company or any of its
Subsidiaries, other than as expressly set forth in the Credit Agreement as
amended by this Amendment and Waiver or (iv) to create any obligation to extend
the Waiver Period beyond its termination, as determined in accordance with
Section 2(c) of this Second Waiver and Amendment (and the Company and the other
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Artesyn Parties hereby acknowledge that time is of the essence in the
determination of the termination of the Waiver Period).
8. Miscellaneous.
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Except as herein expressly amended, all terms, covenants and provisions
of the Credit Agreement are and shall remain in full force and effect and all
references therein to such Credit Agreement and the First Waiver and Amendment
shall henceforth refer to the Credit
6.
Agreement and the First Waiver and Amendment as amended by this Second Waiver
and Amendment. This Second Waiver and Amendment shall be deemed to be a "Loan
Document" for all purposes of the Credit Agreement, the First Waiver and
Amendment and all other Loan Documents.
(b) This Second Waiver and Amendment shall be binding upon and inure to the
benefit of the parties hereto and thereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Second Waiver and Amendment.
(c) THIS SECOND WAIVER AND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE
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AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(d) This Second Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Each of
the parties hereto understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either in the
form of an executed original or an executed original sent by facsimile
transmission to be followed promptly by mailing of a hard copy original, and
that receipt by the Administrative Agent of a facsimile transmitted document
purportedly bearing the signature of a party hereto shall bind such party with
the same force and effect as the delivery of a hard copy original. Any failure
by the Administrative Agent to receive the hard copy executed original of such
document shall not diminish the binding effect of receipt of the facsimile
transmitted executed original of such document of the party whose hard copy page
was not received by the Administrative Agent.
(e) This Second Waiver and Amendment, together with the Credit Agreement
and the First Waiver and Amendment, contains the entire and exclusive agreement
of the parties hereto with reference to the matters discussed herein and
therein. This Second Waiver and Amendment supersedes all prior drafts and
communications with respect thereto. This Second Waiver and Amendment may not
be amended except in accordance with the provisions of Section 11.01 of the
Credit Agreement.
(f) If any term or provision of this Second Waiver and Amendment shall be
deemed prohibited by or invalid under any applicable law, such provision shall
be invalidated without affecting the remaining provisions of this Second Waiver
and Amendment or the Credit Agreement or the First Waiver and Amendment,
respectively.
(g) No Artesyn Party shall include any reference (written or oral) to the
Administrative Agent, any Lender or any Loan Document in any public statement,
disclosure, filing or press release unless the inclusion of such reference is
required by applicable Law (in the reasonable opinion of the Company and its
counsel). To the extent any such reference is made none of the Administrative
Agent or any Lender shall be deemed to have approved, consented to
7.
or otherwise authorized the same, unless such approval, consent or authorization
shall be in writing executed by the Administrative Agent and each Lender
referred to therein.
(h) The Company covenants to pay to or reimburse the Administrative Agent
and the Lenders, upon demand, for all costs and expenses (including reasonable
attorneys' fees and allocated costs of in-house counsel) (i) incurred in
connection with the development, preparation, negotiation, execution and
delivery of this Second Waiver and Amendment and the administration of the
Waived Defaults or potential Default, including without limitation appraisal,
audit, search and filing fees incurred in connection therewith, (ii) incurred in
connection with the retention of the Consultant and representing fees and
expenses for services rendered by the Consultant and (iii) any and all other
accrued but unpaid amounts due and owing in accordance with Section 11.04 of the
Credit Agreement.
(i) (a) The Company acknowledges that the Administrative Agent has
engaged PricewaterhouseCoopers LLP (the "Consultant") on behalf of the
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Lenders to, among other things, (i) evaluate and verify financial
information prepared by the Company and its Subsidiaries and Affiliates,
(ii) investigate, evaluate and advise the Lenders and the Administrative
Agent concerning certain financial and operational issues relating to the
cash flow projections of the Company and the business plan, inventory and
other material balance sheet items of the Company and its Subsidiaries, and
(iii) meet periodically with and report to the Lenders and the
Administrative Agent concerning it's findings and recommendations. The
Company further acknowledges that the scope of the services to be provided
to the Administrative Agent by the Consultant shall be as is from time to
time agreed upon between the Administrative Agent and the Consultant (after
consultation by the Administrative Agent with the Company, as to which
consultation the Company shall make itself readily available). In
connection with the foregoing, the Company agrees to provide the Consultant
with reasonable access to the books and records of the Company and its
Subsidiaries during such time as the Consultant remains engaged by the
Administrative Agent on behalf of the Lenders and there exists any
outstanding Obligation.
(b) Neither the Company nor any other Loan Party shall have a right to
receive any report, statement or other work product of the Consultant
("Consultant Work Product"), or if received, to rely on the same.
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Furthermore, if received, the Company and any other Loan Party agrees to
maintain the confidentiality of any Consultant Work Product and agrees that
neither the Administrative Agent nor any Lender (or any of their respective
officers, directors, employees, agents or attorneys) (i) makes any
representation or warranty regarding the accuracy of the Consultant Work
Product or (ii) shall have any liability for any Consultant Work Product.
8.
IN WITNESS WHEREOF, the Company and the other Artesyn Parties hereto have
caused this Second Waiver and Amendment to be duly executed in the City of New
York, New York and the other parties hereto have caused this Second Waiver and
Amendment to be duly executed, each as of the date first above written.
ARTESYN TECHNOLOGIES, INC., as a
Borrower
By:_____________________________________
Name:
Title:
ARTESYN NORTH AMERICA, INC., as a
Subsidiary Borrower
By:_____________________________________
Name:
Title:
ARTESYN CAYMAN LP, as a Subsidiary
Borrower
By: ARTESYN NORTH AMERICA, INC.
General Partner
By:________________________________
Name:
Title:
By: ARTESYN DELAWARE LLC
General Partner
By:________________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-1
ARTESYN TECHNOLOGIES
COMMUNICATION PRODUCTS, INC.,
as a Subsidiary Borrower
By:_____________________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-2
BANK OF AMERICA, N.A., as
Administrative Agent, Lender, L/C Issuer and
Swing Line Lender
By:_______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-3
BNP PARIBAS, as a Lender
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title
[Signature Page to Waiver and Amendment]
S-4
THE BANK OF NEW YORK, as a Lender
By:________________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
X-0
XXX XXXX XX XXXX XXXXXX, as a Lender
By:_________________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-6
COMERICA BANK, as a Lender
By:_________________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-7
DZ BANK DEUTSCHE ZENTRAL-
GENOSSENSCHAFTSBANK AG,
FRANKFURT AM MAIN,
NEW YORK BRANCH (successor by merger
to DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG), as a Lender
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-8
FIRST UNION NATIONAL BANK, as a Lender
By:______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-9
FLEET NATIONAL BANK, as a Lender
By:______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-10
KEYBANK NATIONAL ASSOCIATION, as a Lender
By:______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
X-00
XXXXX XXXX XX XXXXX, as a Lender
By:______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-12
SUNTRUST BANK, as a Lender
By:______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-13
WACHOVIA BANK, N.A., as a Lender
By:______________________________
Name:
Title:
[Signature Page to Waiver and Amendment]
S-14
