EXHIBIT 10.9
EXECUTION COPY
BUDGET AND FUNDING AGREEMENT
This BUDGET AND FUNDING AGREEMENT, dated as of August 1, 2003 (the
"Agreement"), by and among, (i) DDi Corp. ("DDi"), (ii) DDi Capital Corp.,
formerly known as Details Capital Corp. (the "DDi Capital"); (ii) Dynamic
Details, Incorporated, formerly known as Details, Inc. ("Details"); (iii)
Dynamic Details Incorporated, Silicon Valley, formerly known as Dynamic
Circuits, Inc. ("DDISV", and collectively with Details, the "Borrowers"); (iv)
each Subsidiary Guarantor (together with DDi Capital and the Borrowers, the
"Grantors"); (v) the Consenting Lenders (as defined below); (vi) the
Administrative Agent (as defined below) and (vii) the Professionals (as defined
below) signatory hereto, entered into in connection with (a) the Amended and
Restated Credit Agreement, dated as of July 23, 1998 and as amended and restated
as of August 28, 1998, and as amended by the First Amendment, dated as of March
10, 1999, the Second Amendment, dated as of March 22, 2000, the Third Amendment,
dated as of October 10, 2000, the Fourth Amendment, dated as of February 13,
2001, the Fifth Amendment, dated as of December 31, 2001, the Sixth Amendment,
dated as of June 28, 2002, the Seventh Amendment, dated as of June 27, 2003 and
the Eighth Amendment, dated as of August 1, 2003 (as amended, supplemented or
otherwise modified, the "Credit Agreement") among (i) DDi Capital; (ii) the
Borrowers; (iii) the several banks and other financial institutions from time to
time parties thereto, (individually, a "Lender," and collectively, the
"Lenders"); (iv) Bankers Trust Company, as documentation and co-syndication
agent; and (v) JPMorgan Chase Bank, as collateral, co-syndication and
administrative agent (in such capacity, the "Administrative Agent"), and all
collateral and ancillary documentation executed in connection therewith,
including, without limitation, the hedge agreement (the "Hedge Agreement")
entered into by Details with JPMorgan Chase Bank (collectively, the "Loan
Documents") and (b) that certain Restructuring Support Agreement dated as of
August 1, 2003 (the "RSA") by and among the DDi Group (as defined in the RSA)
and the Consenting Lenders (as defined in the RSA).
W I T N E S S E T H:
WHEREAS, pursuant to the RSA, the Consenting Lenders have consented to,
inter alia, the Restructuring Terms subject to certain terms and conditions set
forth in the RSA.
WHEREAS, pursuant to the RSA, DDi and DDi Capital (collectively, the
"Filing Entities") will file voluntary petitions (the "Chapter 11 Cases") for
relief under Chapter 11 of Title 11, United States Code (the "Bankruptcy Code")
and will file a Conforming Chapter 11 Plan and enter into the Conforming
Restructuring Loan Documents in each case to implement the Restructuring Terms.
WHEREAS, pursuant to the Loan Documents, the Lenders have a lien on all or
substantially all of the assets of the Borrowers and their subsidiaries,
including without limitation, all cash and proceeds of collateral held by such
persons (the "Cash Collateral").
WHEREAS, the Restructuring Terms provide for a budget and cash funding
mechanism (the "Budget and Funding Mechanism") relating to the use of the Cash
Collateral in connection with the Restructuring as more fully described below,
and it is a condition to the RSA that the parties enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to such terms in the RSA.
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2. Budget.
(a) The Consenting Lenders hereby agree to permit the Borrowers to use
the Cash Collateral solely as provided in this Agreement. Each of the Borrowers
hereby agrees not to use the Cash Collateral except for the payment of the costs
and expenses associated with the operation of the Borrowers' business during the
Chapter 11 Cases and the costs and expenses associated with the conduct of the
Chapter 11 Cases of the types specified in and in accordance with the Budget
delivered pursuant to this Agreement (the "Budget", which term shall include the
Initial Budget, the Second Interim Budget and the Third Interim Budget (each as
defined below), as applicable). A copy of the initial Budget (the "Initial
Budget") for the period commencing August 1, 2003 and ending on October 26, 2003
is annexed hereto as Exhibit A. No later than September 22, 2003, the Borrowers
shall provide the Administrative Agent with a revised Budget for the period
commencing September 29, 2003 and ending on January 4, 2003 (in form and
substance approved by the Administrative Agent, the "Second Interim Budget") and
no later than December 1, 2003, the Borrowers shall provide the Administrative
Agent with a revised Budget for the period commencing December 8, 2003 and
ending on February 1, 2003 (in form and substance approved by the Administrative
Agent, the "Third Interim Budget"). The Budget may be amended, modified or
supplemented from time to time with the written consent of the Required Lenders
or, in the event of non-material amendments, with the written consent of the
Administrative Agent; provided, however, that no such amendment, modification or
supplement to the Budget shall reduce the amounts budgeted for each month for
Advisor Fees without the prior written consent of each Professional (as defined
below) whose fees are affected thereby.
(b) The parties acknowledge that, under the Budget, amounts authorized
to be spent in any given week (or in the case of the Professionals, in any given
month) and not so expended may be carried forward and spent in any succeeding
week (or in the case of the Professionals, in any succeeding month) until the
Expiration Date. If amounts authorized to be spent on a Professional's Advisor
Fees (as defined below) are greater than the amount set forth for such
Professional's Advisor Fees in any given month, then such Professional's Advisor
Fees shall be paid out of the amount set forth for the subsequent month;
provided, further that upon the Expiration Date, if such Professional's Advisor
Fees exceed the aggregate amount of the Budget during the Budget and Funding
Period, then such Professional will have an allowed administrative expense claim
for such excess amount, which amount shall be subject to Bankruptcy Court
approval, at the termination of the Chapter 11 Cases. With respect to any
approval or disapproval of expenditures set forth in the Budget or in any
proposed budget, the Administrative Agent and the Consenting Lenders shall not
owe any fiduciary duty to the Professionals, the Borrowers or any of the Filing
Entities or their respective creditors, shareholders or estates.
3. Implementation of Budget and Funding Mechanism. On or before August 1,
2003, each of the Borrowers and the Filing Entities agree to do the following:
(a) The Borrowers shall enter into an amendment to the account control
agreement with respect to the Reserved Cash Account (as defined in the Eighth
Amendment) in a form and substance acceptable to the Administrative Agent.
(b) The Borrowers shall open and fund the JPM Controlled Account (as
defined in the Eighth Amendment).
(c) The JPM Controlled Account will be subject to a deposit account
control agreement in form and substance satisfactory to the Administrative
Agent.
(d) The Borrowers shall transfer all funds on deposit in Account
#209-14469 established with Bank of America and shall deposit such funds into
the JPM Controlled Account.
(e) On or before August 1, 2003, the Filing Entities shall open and
maintain an account at JPM, from which account disbursements shall be made for
the payment of Advisor Fees and other specified costs and expenses incurred in
connection with the Chapter 11 Cases (the "Restructuring
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Account"), and the Restructuring Account will be subject to a deposit account
control agreement in form and substance acceptable to the Administrative Agent.
f. Except as otherwise provided herein, the Borrowers' and their
subsidiaries' other cash management and accounts receivable collection system,
including the banks associated therewith, shall be maintained, and the Borrowers
agree not to, and cause their subsidiaries not to, modify this cash management
system or establish any new bank accounts without the Administrative Agent's
prior written consent.
4. Retainers. Subject to all of the terms and conditions hereof, the
Initial Budget shall provide for the payment of retainers for the professionals
identified therein (the FE Professionals (as defined below) and the Non-FE
Professionals (as defined below), collectively, the "Professionals") in the
aggregate amounts set forth below (collectively, the "Retainers"; and for each
Professional, a "Retainer") to provide for the payment of a portion of the
reasonable fees ("Fees") and expenses ("Expenses", and together with the Fees,
the "Advisor Fees") incurred by such Professionals in connection with the
Chapter 11 Cases; provided, however, that notwithstanding the foregoing, the
aggregate amount of the Retainers shall in no event exceed $1,773,333.00.
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Retained by Filing Entities Amount equal to three times (3x) the
(collectively, the "FE Professionals"; monthly amount provided for such
individually, a "FE Professional") Professional in the Budget
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Not retained by Filing Entities Amount equal to two times (2x) the
(excluding any professionals retained monthly amount provide for such
by the Administrative Agent or the Professional in the Budget
Lenders, collectively, the "Non-FE
Professionals"; individually, a "Non-FE
Professional")
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The Retainers set forth in this Section 4 shall be payable no earlier than
August 8, 2003 (but in any event prior to the Petition Date) so long as the PSA
shall be effective on or before August 8, 2003. If (x) an Official Committee of
Unsecured Creditors (the "Creditors' Committee") is appointed in the Chapter 11
Cases, and (y) a Professional receives a Retainer, and such Professional's
retention is not approved by the Bankruptcy Court, such Professional shall (i)
no longer be entitled any additional Advisor Fees pursuant to this Agreement,
provided, however, that any Advisor Fees incurred through the date that the
Creditors' Committee selects its professionals shall be payable pursuant to the
Budget, and (ii) immediately remit the unused portion of such Retainer to the
Filing Entities for deposit into the Restructuring Account (it being understood
that such remitted funds must be used before the Borrowers deposit additional
funds into the Restructuring Account).
5. Filing Entities' Restructuring Fees. Subject to the PSA's having become
effective on or before August 8, 2003, for the period (the "Budget and Funding
Period") commencing on August 8, 2003 to the Expiration Date (as defined below),
the Consenting Lenders agree, subject to the terms and conditions of this
Agreement and the Budget, to permit the Borrowers to pay the Advisor Fees, the
Retainers and the fees payable to the Bankruptcy Court and the Office of the
United States Trustee (the "United States Trustee") in connection with the
Chapter 11 Cases (excluding any fees incurred in connection with DDi Europe and
its European subsidiaries)(collectively, the "Filing Entities' Restructuring
Fees"). The following procedures shall apply to the payment of the Filing
Entities' Restructuring Fees:
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(a) No later than the last business day of each month immediately
succeeding the month for which compensation is sought (but in no event later
than January 25, 2004), each Professional will deliver a monthly statement (the
"Monthly Statement") of its Advisor Fees, which statement shall include (i)
detailed daily time entries and summaries of time (redacted as may be necessary
and appropriate) (except in the case of any Professional that does not maintain
such time records in the ordinary course) and (ii) a detailed summary of all
disbursements and expenses for which the Professional is seeking reimbursement
to the following: (i) Xxxx Xxxxxx, Chief Financial Officer, Dynamic Details,
Inc., 0000 Xxxxx Xxxxxx Xxxxxxx, XX 00000, with a copy to Xxxxxxxx & Xxxxx LLP,
000 Xxxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (Attn. Xxxxxx Xxxxxx,
Esq.), (ii) Administrative Agent, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (Attn:
Xxxxxxxx X. Xxxx), (iii) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000 (Attn: Xxxxxxxx X. XxXxxxxx, Esq.), (iv) counsel to any
statutory committee of creditors of the Filing Entities appointed by the United
States Trustee and (iv) the United States Trustee.
(b) Provided that the Interim Compensation Motion and the Funding
Motion have been approved by the Bankruptcy Court pursuant to final orders,
within five (5) calendar days of the submission of the Monthly Statements by a
Professional, the Consenting Lenders shall permit the Borrowers to deposit an
amount of the Cash Collateral equal to 80% of such Professional's Fees and 100%
of such Professional's Expenses into the Restructuring Account. Immediately upon
receipt of such funds, subject to the Budget and this Agreement, the Filing
Entities shall pay such Professional (i) 80% of its Fees and (ii) 100% of its
Expenses.
(c) If a Professional's Advisor Fees are less than the amount provided
for in the Budget, the excess availability shall roll over into the next period;
if a Professional's Advisor Fees are greater than the amount provided for in the
Budget, such Professional's excess Advisor Fees shall be paid out of the next
period's availability.
(d) If the PSA becomes effective on or before August 8, 2003, all
Filing Entities' Restructuring Fees (excluding the Retainers) paid out of the
Cash Collateral after August 8, 2003 shall constitute an allowed administrative
expense claim of the Lenders pursuant to Sections 503(b)(1), 507(a) and 507(b)
of the Bankruptcy Code with priority in payment over any and all administrative
expenses of the kinds specified or ordered pursuant to any provision of the
Bankruptcy Code including, without limitation, Sections 105, 326, 328, 330, 331
and 726 of the Bankruptcy Code, and shall at all times be senior to the rights
of the Filing Entities, and any successor trustee or any creditor in the Chapter
11 Cases or any subsequent proceedings under the Bankruptcy Code (such claim of
the Lenders in either case, the "Allowed Superpriority Administrative Expense
Claim"), subject to Section 8(c) below.
(e) Upon entry of a final order by the Bankruptcy Court approving both
the Funding Motion and the Interim Compensation Motion, the FE Professionals
shall agree to consent to apply a maximum of two-thirds (2/3) of the amount of
each of their respective Retainers to the first 80% of their respective Fees and
100% of their respective Expenses until such portion of their Retainers has been
fully utilized and the Non-FE Professionals shall agree to consent to apply a
maximum of one-half (1/2) of the amount of each of their respective Retainers to
80% of their respective Fees and 100% of their respective Expenses until such
portion of their Retainers has been fully utilized.
(f) If the Bankruptcy Court does not approve the Interim Compensation
Motion, then the Consenting Lenders shall permit the Borrowers to deposit into
the Restructuring Account, on a monthly basis, an amount of the Cash Collateral
equal to the amount of the Filing Entities' Restructuring Fees for one (1) month
under the Budget, and the Filing Entities shall pay such Filing Entities'
Restructuring Fees upon compliance with the orders of the Bankruptcy Court.
(g) The payment of all Filing Entities' Restructuring Fees shall be
subject to the Budget, the terms and conditions of this Agreement and orders of
the Bankruptcy Court that have been approved in form and substance by the
Administrative Agent.
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(h) The total aggregate amount of the Filing Entities' Restructuring
Fees permitted to be paid pursuant to this Agreement shall not exceed the
amounts provided for in the Budget for, and only during, the Budget and Funding
Period. Each Filing Entity agrees that in the event any such Professional's
Advisor Fees exceed the aggregate budgeted amount for such Professional, that
such Professional will have an allowed administrative expense claim for such
excess amount that is approved by the Bankruptcy Court at the termination of the
Bankruptcy Cases (it being understood that all Filing Entities' Restructuring
Fees accrued during the Budget and Funding Period will be paid by the Borrowers
from the Cash Collateral, subject to the Budget).
6. Agreements of the Filing Entities.
(a) No later than one (1) business day after the commencement of the
Chapter 11 Cases (the "Petition Date"), the Filing Entities acknowledge and
agree that the Filing Entities shall file a Motion for Interim Monthly
Compensation (in form and substance satisfactory to the Administrative Agent,
the "Interim Compensation Motion") pursuant to the Bankruptcy Court's
Administrative Order M-219, dated January 24, 2000 and the terms and conditions
of this Agreement seeking entry of an order approving the monthly interim
compensation of the Professionals (in form and substance satisfactory to the
Administrative Agent, the "Interim Compensation Order").
(b) No later than one (1) business day after the Petition Date, the
Filing Entities acknowledge and agree that the Filing Entities and the Borrowers
shall file a Joint Motion (in form and substance acceptable to the
Administrative Agent, the "Funding Motion") seeking entry of an order (in form
an substance satisfactory to the Administrative Agent, the "Funding Order")
permitting the Borrowers to continue payment of the Filing Entities'
Restructuring Fees relating to the Restructuring Transaction pursuant to the
terms of the Budget and this Agreement.
(c) Each of the Filing Entities acknowledges and agrees that any funds
deposited in the Restructuring Account shall be used solely for payment of the
Filing Entities' Restructuring Fees and as otherwise provided in this Agreement
and the Budget.
(d) Each of the Filing Entities acknowledges and agrees that the
Allowed Superpriority Administrative Expense Claim shall be an allowed claim
under the Funding Order, subject to the terms of Section 7(g) and Section 8(c).
(e) Each of the Filing Entities shall perform all of the terms and
conditions hereunder.
(f) Each of the Filing Entities acknowledges and agrees that (i)
neither the Consenting Lenders nor the Borrowers shall have any obligation,
implicit or otherwise, to pay the Retainers and the remainder of the Filing
Entities' Restructuring Fees, except as set forth herein, and only through the
Expiration Date (as defined below), (ii) payment of such Filing Entities'
Restructuring Fees does not and will not give rise to any liability on the part
of the Consenting Lenders, (iii) payment of such Filing Entities' Restructuring
Fees (other than the Advisor Fees) does not and will not give rise to any
liability on the part of the Borrowers and (iv) the Consenting Lenders have not
agreed to the use of the Cash Collateral for payment of any obligation that the
Borrowers may have (if any) to such Professionals.
(g) Each of the Filing Entities shall permit the Administrative Agent
and its representatives, in the Administrative Agent's reasonable discretion, to
inspect and copy the Filing Entities' books and records during normal business
hours.
(h) Each of the Filing Entities acknowledges and agrees that in the
event any such Professional's respective Advisor Fees exceed the budgeted amount
for such Professional in the aggregate, that such Professional will have an
allowed administrative expense claim for such excess amount that is approved by
the Bankruptcy Court at the termination of the Bankruptcy Cases.
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7. Agreements of the Borrowers.
(a) No later than one (1) business day after the Petition Date, the
Borrowers and the Filing Entities shall file the Funding Motion.
(b) Each of the Borrowers acknowledges and agrees that they shall only
use the Cash Collateral as provided in this Agreement and pursuant to the
Budget.
(c) Each of the Borrowers acknowledges and agrees that any funds
deposited in the Restructuring Account shall solely be used to pay the Filing
Entities' Restructuring Fees and as otherwise provided in this Agreement and the
Budget.
(d) Each of the Borrowers agree to perform all of the terms and
conditions hereunder.
(e) Each of the Borrowers acknowledges and agrees that the Consenting
Lenders do not have any obligation to pay the Filing Entities' Restructuring
Fees and that the payment of the Filing Entities' Restructuring Fees does not
give rise to any liability to the Professionals.
(f) Each of the Borrowers acknowledges and agrees that if the
Bankruptcy Court does not approve the Interim Compensation Motion and/or
requires the Professionals to exhaust their respective Retainers prior to
receiving payment directly from the Filing Entities, then the Consenting Lenders
agree to permit the Borrowers to, each month, deposit an amount of the Cash
Collateral equal to one month of Advisor Fees (excluding the Retainers) for each
Professional (provided, however, that each respective Professional's Retainers
must be applied pursuant to Section 5(e) herein before any such amounts are
deposited into such the Restructuring Account for such Professional) under the
Budget into the Restructuring Account.
(g) Each of the Borrowers acknowledges and agrees that the Allowed
Superpriority Administrative Expense Claim shall be a claim of the Lenders and
not of the Borrowers.
(h) Each of the Borrowers acknowledges and agrees that the Borrowers
shall jointly provide the following reports (the "Reporting Requirements") to
the Administrative Agent (which may be further transmitted to the Administrative
Agent's advisors and the Consenting Lenders): (x) commencing on Wednesday,
August 6, 2003, and on every Wednesday thereafter, the Borrowers shall prepare
and deliver, as of the week ending the preceding Friday, a weekly report of the
actual cash balances as compared to the Budget, with a report of any material
variances and the reasons therefore, in each case in a form reasonably
satisfactory to the Administrative Agent; (y) no later than the fourteenth (14)
day following the last calendar day of each calendar month (commencing with the
month of August), the Borrowers shall prepare (i) a monthly report of the actual
Cash Collected (as defined in the Budget), actual Cash Disbursements (as defined
in the Budget) and actual Advisor Fees (as defined in the Budget) for such
immediately preceding month as compared to the Budget for such calendar month on
a line item basis with key assumptions and supporting detail; and (ii) a report
of the actual Ending Cash Balance (as defined in the Budget) for such
immediately preceding month as compared to the Budget for such calendar month,
in each case in a form reasonably satisfactory to the Administrative Agent; and
(z) all reports required under the terms of the Credit Agreement, when required
to be provided thereunder and such other reports and information as may be
reasonably requested by the Administrative Agent from time to time. A Default
(as defined below) shall occur under this Agreement if: (a) with respect to the
weekly Reporting Requirements set forth in clause (x), if the actual Ending Cash
Balance is 15% less than the amount set forth in the Budget for such week, or
(b) with respect to the monthly Reporting Requirements set forth in clause (y),
if (i) the actual Total Cash Collected (as defined in the Budget) is 20% less
than the amount set forth in the Budget for such calendar month, (ii) the actual
Total Operating Disbursements (as defined in the Budget) exceeds 20% of the
amount set forth for such Total Operating Disbursements in the Budget for such
calendar month or (iii) the actual Ending Cash Balance is 10% less than the
amount set forth in the Budget for such calendar month. A chart outlining the
deadlines for the filing of such reports and the Interim Budgets is annexed
hereto as Schedule I.
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8. Agreements of the Consenting Lenders.
(a) Each Consenting Lender hereby consents to and shall not object to
the filing of the Interim Compensation Motion and the Funding Motion.
(b) Each Consenting Lender agrees to permit the Filing Entities and
the Borrowers to use the Cash Collateral, subject to the Budget and the terms
and conditions provided herein for the period commencing on August 8, 2003 up to
and including the Expiration Date.
(c) Each Consenting Lender hereby agrees to waive the Allowed
Superpriority Administrative Expense Claim if the Restructuring Transaction is
consummated on or before January 30, 2004.
(d) If the Bankruptcy Court does not approve the Interim Compensation
Motion, then the Consenting Lenders agree to permit the Borrowers to deposit
into the Restructuring Account, on a monthly basis, an amount of the Cash
Collateral equal to the amount of the Filing Entities' Restructuring Fees for
one (1) month under the Budget, and the Filing Entities shall pay such Filing
Entities' Restructuring Fees upon compliance with the orders of the Bankruptcy
Court.
9. Agreements of the Professionals.
(a) Each of the Professionals agrees that the Consenting Lenders shall
not have any obligation, implicit or otherwise, to pay the Retainers and the
remainder of the Filing Entities' Restructuring Fees (which include the Advisor
Fees), except as set forth in, and only through the Expiration Date, of this
Agreement, and that payment of such Filing Entities' Restructuring Fees does not
and will not give rise to any liability on the part of the Consenting Lenders.
The Professionals further agree that, except as set forth in, and only through
the Expiration Date, of this Agreement: (i) the Borrowers' shall not have any
obligation, implicit or otherwise, to pay the Filing Entities' Restructuring
Fees (other than Advisor Fees), and (ii) the Consenting Lenders have not agreed
to the use of the Cash Collateral for payment of any obligation that the
Borrowers may have (if any) to such Professionals.
(b) Upon entry of a final order by the Bankruptcy Court approving both
the Funding Motion and the Interim Compensation Motion, the FE Professionals
agree to apply a maximum of two-thirds (2/3) of the amount of each of their
respective Retainers to 80% of their respective Fees and 100% of their
respective Expenses and the Non-FE Professionals agree to apply a maximum of
one-half (1/2) of the amount of each of their respective Retainers to 80% of
their respective Fees and 100% of their respective Expenses. It being understood
that the Filing Entities shall not pay any Professional for its Advisor Fees
unless and until such amounts are so applied.
(c) Each of the Professionals acknowledges and agrees that if its
Advisor Fees exceed the budgeted amount in aggregate, that such Professional
will have an Allowed (as defined in the Conforming Plan) administrative expense
claim for such excess amount at the termination of the Bankruptcy Cases.
(d) Each of the Professionals acknowledges and agrees that (i) if a
Professional's Advisor Fees are less than the amount provided for in the Budget,
the excess availability shall roll over into the next period and (ii) if a
Professional's Advisor Fees are greater than the amount provided for in the
Budget, such Professional's excess Advisor Fees shall be paid out of the next
period's availability.
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10. Representations and Warranties. Each Professional, Filing Entity and
Borrower, severally (and not jointly) represents and warrants to the Consenting
Lenders that the following statements are true, correct and complete as the date
hereof:
(a) it is duly organized, validly existing, and in good standing under
the laws of the state of its organization, and has all requisite corporate,
partnership, limited liability company or similar authority to enter into this
Agreement and carry out the transactions contemplated hereby and perform its
obligations contemplated hereunder; and the execution and delivery of this
Agreement and the performance of such Party's obligations hereunder have been
duly authorized by all necessary corporate, limited liability, partnership or
other similar action on its part;
(b) the execution, delivery, and performance by such Party of this
Agreement does not and shall not (i) violate any provision of law, rule or
regulation applicable to it or any of its subsidiaries or its certificate of
incorporation or bylaws or other organizational documents or those of any of its
subsidiaries, or (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation to which it or any of its subsidiaries is a party; and
(c) this Agreement is a good faith agreement.
11. Termination. This Agreement shall be in full force and effect from
August 1, 2003 through and including the Expiration Date (as defined below);
provided, however, that the agreement to fund the Filing Entities' Restructuring
Fees is contingent upon the effectiveness of the PSA. Unless the Required
Lenders have otherwise agreed in writing, the Filing Entities' and the
Borrowers' use of the Cash Collateral under this Agreement shall terminate on
the date (the "Expiration Date") that is the earlier to occur of (x) August 8,
2003, which date shall automatically be extended to January 30, 2004 if the PSA
becomes effective on or before August 8, 2003; (y) on the date any foreclosure
proceeding is commenced against, or any bankruptcy case is commenced by or
against, Details or DDISV; or (z) three (3) business days following the receipt
by the Filing Entities, the Borrowers, the Ad Hoc Committee, any statutory
committee appointed in the Chapter 11 Cases and the United States Trustee of
written notice from the Administrative Agent of the occurrence and continuance
of any of the following defaults (the "Defaults") under this Agreement: (i) the
Bankruptcy Court shall not enter an order approving this Agreement or any court
shall enter an order reversing, amending, supplementing, staying, vacating or
otherwise modifying the order approving this Agreement; (ii) any of the Filing
Entities and the Borrowers shall otherwise fail to comply in any material
respect with the terms hereof, including without limitation, failing to comply
with the Reporting Requirements for making types of payments not set forth in
the Budget; (iii) any representation or warranty made by the Borrowers in
connection with the Reporting Requirements shall prove to have been incorrect in
any material respect when made; (iv) a Termination Event shall have occurred
under the RSA; and (v) the Filing Entities shall fail to make a payment to the
Professionals as required under this Agreement. In the event of a termination of
this Agreement, the Filing Entities' Restructuring Fees accrued to the date of
termination shall be paid by the Borrowers and the Filing Entities' in
accordance with the Budget and the other applicable terms hereof. Subject to the
immediately preceding sentence, on the Expiration Date, (i) the Borrowers' right
to use the Cash Collateral under this Agreement shall terminate and the
Borrowers shall immediately cease using the Cash Collateral pursuant to this
Agreement, (ii) the Filing Entities' right to use the Cash Collateral shall
terminate and the Filing Entities' shall immediately cease using the Cash
Collateral (and, in the event any amounts remain in the Restructuring Account
after payment of Filing Entities' Restructuring Fees accrued to the Expiration
Date shall immediately be transferred to the Borrowers for deposit into the JPM
Controlled Account) and (iii) the Administrative Agent and each Consenting
Lender shall have all their rights and remedies under the Loan Documents,
including the right to setoff amounts in any account of the Borrowers and the
Filing Entities maintained with any such party. Notwithstanding the occurrence
of the Expiration Date or anything herein, all of the rights, remedies, benefits
and protections provided to the Administrative Agent and the Consenting Lenders
under this Agreement shall survive the Expiration Date.
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12. Limited Effect. The provisions of this Agreement shall be effective
solely for the purposes set forth herein, shall be limited precisely as written
and shall not be deemed to (a) waive any Default or Event of Default (each as
defined in the Loan Documents) under the Loan Documents or (b) otherwise
prejudice any right or remedy which the Consenting Lenders or the Administrative
Agent may now have or may have in the future under or in connection with the
Loan Documents.
14. Reservation of Rights; No Waiver; Cumulative Remedies. Each of the
Filing Entities and the Borrowers jointly and severally acknowledges and agrees
that, except as otherwise provided herein, the Consenting Lenders shall preserve
all rights, remedies, powers or privileges under the Credit Agreement and the
other Loan Documents and under applicable law. Nothing contained herein shall in
any way (i) limit or otherwise prejudice any right, remedy, power or privilege
which the Consenting Lenders or the Administrative Agent may now have or may
have in the future under or in connection with the Credit Agreement or any other
Loan Document, or diminish any of the obligations of the Filing Entities and the
Borrowers or any of their respective Subsidiaries contained in the Credit
Agreement or any other Loan Document, (ii) waive any Default (as defined in the
Loan Documents) or Event of Default (as defined in the Loan Documents), or (iii)
waive, modify, consent to or amend any term or condition of the Credit Agreement
or any other Loan Document. The rights, remedies, powers and privileges of the
Administrative Agent and the Consenting Lenders provided under this Agreement
and the Loan Documents are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.
15. Full Force and Effect; No Change. Except as expressly stated herein,
the Credit Agreement shall continue to be, and shall remain, in full force and
effect. This Agreement shall not be deemed to be a waiver of, or consent to, or
a modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document or to prejudice any other right or rights
which the Consenting Lenders may now have or may have in the future under or in
connection with the Credit Agreement or any of the instruments or agreements
referred to therein, as the same may be amended from time to time. Except as
expressly provided herein, no term or provision of the Credit Agreement shall be
amended, waived, modified or supplemented, and each term and provision of the
Credit Agreement shall remain in full force and effect.
16. Counterparts. This Agreement may be executed by the parties hereto in
any number of separate counterparts by facsimile with originals to follow, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
17. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS FORBEARANCE AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY) AND FOR ANY COUNTERCLAIM THEREIN.
18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered by their respective proper and duly authorized officers as of the
day and year first above written.
DDi CAPITAL CORP.
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Title: VP
DYNAMIC DETAILS, INCORPORATED
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Title: VP
DYNAMIC DETAILS, INCORPORATED, SILICON
VALLEY
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Title: VP
DDi Corp.
By: /s/ XXXXXXX XXXXXXXX
------------------------------------
Title: VP
11
JPMORGAN CHASE BANK, as
Administrative Agent, Collateral Agent,
Co-Syndication Agent
By: /s/ Illegible
------------------------------------
Title: Vice-President
JPMORGAN CHASE BANK, on behalf of the
Consenting Lenders
By: /s/ Illegible
------------------------------------
Title: Vice-President
12
XXXXXXXX & XXXXX LLP
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Title: Senior Associate
PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
By: /s/ XXXX X. XXXXX XXXXXX
------------------------------------
Title: Partner
XXXXXXXX XXXXX XXXXXX & XXXXX
By: /s/ XXXX XXXXXXXX
------------------------------------
Title: Vice President
XXXXXXX XXXXXXXX & XXXXX PROFESSIONAL
CORPORATION
By: /s/ Illegible
------------------------------------
Title: Illegible
AKIN GUMP XXXXXXX XXXXX & XXXX LLP
By: /s/ Illegible
------------------------------------
Title: Partner
XXXXXXXXX GROUP INC.
By: /s/ Illegible
------------------------------------
Title:
EXECUTION COPY
EXHIBIT A
[Interim Budget]
EXECUTION COPY
Schedule I
Deadlines for Filing Reports and Interim Budgets
--------------------------------------------------------------------------------------------------------
WEEK PERIOD WEEKLY REPORT MONTHLY REPORT BUDGET MAINTENANCE
--------------------------------------------------------------------------------------------------------
1 July 29 - August 3
--------------------------------------------------------------------------------------------------------
2 August 4 - August 10 06-Aug
--------------------------------------------------------------------------------------------------------
3 August 11 - August 17 13-Aug
--------------------------------------------------------------------------------------------------------
4 August 18 - August 24 20-Aug
--------------------------------------------------------------------------------------------------------
5 August 25 - August 31 27-Aug
--------------------------------------------------------------------------------------------------------
6 September 1 - September 7 03-Sep
--------------------------------------------------------------------------------------------------------
7 September 8 - September 14 10-Sep 14-Sep
--------------------------------------------------------------------------------------------------------
8 September 15 - September 21 17-Sep
--------------------------------------------------------------------------------------------------------
9 September 22 - September 28 24-Sep PROVIDE 2nd Interim Budget to A.A.
--------------------------------------------------------------------------------------------------------
10 September 29 - October 5 01-Oct COMMENCE 2nd Interim Budget
--------------------------------------------------------------------------------------------------------
11 October 6 - October 12 08-Oct 14-Oct
--------------------------------------------------------------------------------------------------------
12 October 13 - October 19 15-Oct
--------------------------------------------------------------------------------------------------------
13 October 20 - October 26 22-Oct
--------------------------------------------------------------------------------------------------------
14 October 27 - November 2 29-Oct
--------------------------------------------------------------------------------------------------------
15 November 3 - November 9 05-Nov
--------------------------------------------------------------------------------------------------------
16 November 10 - November 00 00-Xxx 00-Xxx
--------------------------------------------------------------------------------------------------------
17 November 17 - November 23 19-Nov
--------------------------------------------------------------------------------------------------------
18 November 24 - November 30 26-Nov PROVIDE 3rd Interim Budget to A.A.
--------------------------------------------------------------------------------------------------------
19 December 1 - December 7 03-Dec COMMENCE 3rd Interim Budget
--------------------------------------------------------------------------------------------------------
20 December 8 - December 14 10-Dec 14-Dec
--------------------------------------------------------------------------------------------------------
21 December 15 - December 21 17-Dec
--------------------------------------------------------------------------------------------------------
22 December 22 - December 28 24-Dec
--------------------------------------------------------------------------------------------------------
23 December 29 - January 4 31-Dec
--------------------------------------------------------------------------------------------------------
24 January 5 - January 11 07-Jan 14-Jan
--------------------------------------------------------------------------------------------------------
25 January 12 - January 18 14-Jan
--------------------------------------------------------------------------------------------------------
26 January 19 - January 25 21-Jan
--------------------------------------------------------------------------------------------------------
27 January 26 - February 1 28-Jan END of 3rd Interim Budget
--------------------------------------------------------------------------------------------------------
14-Feb
--------------------------------------------------------------------------------------------------------
