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CONFORMED COPY
FIRST AMENDMENT AND WAIVER (this "Amendment") dated as
of November 13, 1998 under the Credit Agreement dated as of
January 21, 1998 (the "Credit Agreement"), among XXXXXX
SCIENTIFIC INTERNATIONAL INC. (the "Company"), certain
Subsidiaries of the Company, the lenders from time to time
party thereto, THE CHASE MANHATTAN BANK, as administrative
agent, XXX XXXXX XXXXXXXXX XXXX XX XXXXXX, as Canadian
Administrative Agent, CHASE MANHATTAN INTERNATIONAL LIMITED,
as U.K. Administrative Agent, XXXXXXX XXXXX CAPITAL
CORPORATION, as Syndication Agent and DLJ CAPITAL FUNDING,
INC. as Documentation Agent.
A. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.
B. Pursuant to the Credit Agreement, the Banks have extended credit
to the Borrowers, and have agreed to extend credit to the Borrowers, in each
case pursuant to the terms and subject to the conditions set forth therein.
C. The Company intends to issue new Senior Subordinated Notes in an
aggregate principal amount not in excess of $200,000,000. The proceeds of such
issuance of Senior Subordinated Notes will be used to repay all Revolving Loans
outstanding on the Amendment Effective Date and to fund working capital needs
which would historically have been funded through Permitted Receivables
Financings. It is anticipated that the Company will use its increased
availability under the Revolving Credit Facility and the Permitted Receivables
Financings to finance the Acquisition described below as well as to acquire
corporations which will become Wholly-Owned Subsidiaries.
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D. The Company intends to acquire on or prior to December 31, 1998,
either directly or through Wholly-Owned Subsidiaries, a majority of the common
stock of a certain European corporation (the "European Target") from the
European Target's current majority owners. Following such acquisition, the
Company intends to acquire the remaining outstanding shares of common stock in
the European Target through a tender offer and a squeeze out merger. The
transactions described in this paragraph D are collectively referred to herein
as the "Acquisition".
E. The Company has requested that the Banks amend the Credit
Agreement and waive certain provisions of the Credit Agreement, in each case as
set forth below.
F. The Required Banks are willing to agree to such amendments and
grant such waivers, in each case subject to the terms and conditions set forth
herein.
Accordingly, the parties hereto agree as follows:
SECTION 1. AMENDMENTS.
(a) Clause (a) of Section 3.02 is hereby amended by deleting the last
sentence thereof and substituting therefor the following sentence:
"If, on any date, the Total Revolving Credit Commitment (as it may be
reduced under this Section 3.02) is less than the Local Currency Sublimit,
the Local Currency Sublimit for such date shall be deemed to be equal to
the Total Revolving Credit Commitment as of such date."
(b) Clause (e) of Section 4.02(A) is hereby amended by:
(i) inserting, after the words "PROVIDED, HOWEVER," in the fifteenth
line thereof, "(i)"; and
(ii) inserting immediately following "$5,000,000" in the fourth line
from the bottom thereof the following:
"and (ii) so long as no Default or Event of Default then exists, such
net proceeds shall not
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be required to be so applied on such Business Day to the extent that
the Company has delivered a certificate to the Administrative Agent on
or prior to such Business Day stating that such net proceeds shall be
used to finance a Permitted Acquisition or Permitted Acquisitions
within 360 days of the date of such issuance or sale of equity
securities, and PROVIDED FURTHER, that (1) if all or any portion of
such net proceeds not required to be applied to the repayment of Term
Loans pursuant to the preceding proviso are not used (or contractually
committed to be used) to finance a Permitted Acquisition or Permitted
Acquisitions within 360 days, 50% of such remaining portion shall be
applied on the last day of such period as a mandatory repayment of
principal of outstanding Term Loans as provided above in this Section
4.02(A)(e) and (2) if all or any portion of such proceeds are not
required to be applied on the 360th day referred to in clause (1) above
because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without
such portion being so used, 50% of such remaining portion shall be
applied on the date of such termination or expiration as a mandatory
repayment of principal of outstanding Term Loans as provided in this
Section 4.02(A)(e)"
(c) Section 7 is hereby amended by inserting at the end thereof, the
following new Section 7.13:
"7.13 EUROPEAN TARGET. Within 90 days of the European Target becoming a
Wholly-Owned Subsidiary of the Company, the Company shall cause the
European Target or any successor entity to become a direct Wholly-Owned
Subsidiary of the Company or of a Wholly-Owned Domestic Subsidiary of the
Company."
(d) clause (o) of Section 8.02 of the Credit Agreement is hereby
amended by inserting immediately following the words "prior to the date of this
Agreement" in the tenth line thereof, ", those assets and properties owned by
SourceSys on October 31, 1998."
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(e) Clause (c) of Section 8.04 of the Credit Agreement is hereby
amended by deleting "$400,000,000" in the third line from the bottom thereof and
substituting therefor "$600,000,000".
(f) Section 8.06 of the Credit Agreement is hereby amended by:
(i) inserting the words "and investments permitted by clause (p)
below" immediately following the words "Initial Borrowing Date" and
within the parenthetical in the fifth line of clause (l) thereof;
(ii) deleting at the end of clause (n) thereof the word "and";
(iii) deleting the period at the end of clause (o) thereof and
substituting therefor "(determined for each such investment as of the
date of such investment);"; and
(iv) inserting at the end thereof the following new clauses (p),
(q) and (r):
"(p) the Company and/or its Wholly-Owned Subsidiaries may
acquire and own the capital stock of the European Target,
PROVIDED that the aggregate amount of investments in the capital
stock of the European Target (as determined for each such
investment as of the date of such investment) under this clause
(p) shall not exceed $160,000,000, PROVIDED, FURTHER that (i) the
European Target was, immediately prior to such acquisition,
engaged primarily in the business permitted pursuant to Section
8.01, (ii) any Liens or Indebtedness assumed or issued in
connection with such acquisition are otherwise permitted under
Section 8.03 or 8.04, as the case may be, and (iii) the Company
and its Subsidiaries are in compliance, on a pro forma basis
after giving effect to such acquisition, with the covenants
contained in Sections 8.09, 8.10, 8.11 and 8.12;
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(q) the Company may make intercompany loans and advances to
any Subsidiary of the Company, PROVIDED that (w) at no time shall
the aggregate outstanding principal amount of all intercompany
loans and advances made pursuant to this clause (q) exceed
$160,000,000 (determined without regard to any write-downs or
write-offs of such loans and advances), (x) the proceeds of all
such intercompany loans and advances shall be used solely to
purchase capital stock of the European Target pursuant to the
requirements of clause (p) above, (y) each such intercompany loan
shall be evidenced by an Intercompany Note and (z) each such
Intercompany Note shall be pledged to the Collateral Agent
pursuant to the Pledge Agreement to the extent provided in
Section 7.12; and
(r) the Company or any Subsidiary may acquire and hold a
note of Xxxxxx Technology Group (or any successor thereto) in a
principal amount not in excess of $10,000,000 and may hold any
equity interest in the Xxxxxx Technology Group (or any successor
thereto) arising from such note (provided no additional
consideration is paid by the Company and its Subsidiaries in
exchange for such equity interest)."
(g) Section 8.07 of the Credit Agreement is hereby amended by:
(i) deleting at the end of clause (e) thereof the word "and";
(ii) deleting the period at the end of clause (f) thereof and
substituting therefor "; and"; and
(iii) inserting immediately following clause (f) thereof the
following new clause (g):
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"(g) the Company and its Subsidiaries will be permitted to
make payments in respect of the purchase or redemption of
publicly held shares of the European Target in an aggregate
amount not in excess of $60,000,000."
(h) Section 10(A) is hereby amended by:
(i) deleting the definition of "Local Currency Sublimit" in its
entirety and substituting therefor the following new definition:
"'Local Currency Sublimit' shall mean, as of any date, the
sum (a) of $80,000,000 and (b) the aggregate principal amount,
not in excess of $95,000,000, of all Local Currency Loans
outstanding or made on such date the proceeds of which were, or
will be on such date, used to finance the purchase of the capital
stock of the European Target or to refinance such Local Currency
Loans."
(ii) inserting ", SourceSys" after the words "a Wholly-Owned
Subsidiary" in the penultimate line of the definition of "Xxxxxx
Technology Group"; and
(iii) inserting in the appropriate alphabetical order the
following definitions:
"'European Target' shall mean a certain corporation
organized under the laws of a member country of the European
Economic Community and previously identified to the
Administrative Agent."
"'SourceSys' means SourceSys, Inc., a Delaware corporation."
SECTION 2. WAIVERS. (a) The Required Banks hereby waive the provisions of
Section 8.02 and 8.15 to the extent and only to the extent necessary to permit
the Company and its Wholly-Owned Subsidiaries to acquire capital
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stock of the European Target pursuant to the Acquisition; and
(b) The Required Banks hereby waive the provisions of Section 8.06 to
the extent and only to the extent necessary to permit the European Target to
hold from the date the European Target becomes a Subsidiary of the Company to a
date one week thereafter, investments in marketable securities which the
European Target holds on the date on which it becomes a Subsidiary of the
Company (the "Target Investments"); PROVIDED THAT if (i) the aggregate market
value of the Target Investments, determined as of the date that is one week
after the European Target becomes a Subsidiary, is less than (ii) 90% of the
aggregate market value for the Target Investments, determined as of November 10,
1998, the European Target may hold the Target Investments through the date that
is one year after it becomes a Subsidiary of the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers
hereby represents and warrants to each Bank, on and as of the date hereof, that:
(a) This Amendment has been duly authorized, executed and delivered
by each Borrower, and each of this Amendment and the Credit Agreement as amended
by this Amendment constitutes a legal, valid and binding obligation of each
Borrower, enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
(b) The representations and warranties of the Borrowers contained in
the Credit Agreement are true and correct in all material respects on and as of
the date hereof.
(c) After giving effect to this Amendment, no Default has occurred
and is continuing.
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SECTION 4. EFFECTIVENESS. This Amendment shall become effective on
the date (the "Amendment Effective Date") that each of the following conditions
is met:
(a) The Administrative Agent shall have received counterparts hereof
signed by each of the Borrower and the Required Banks.
(b) The Company shall have received at least $150,000,000 in gross
cash proceeds (other than the gross cash proceeds received by the Company on the
Initial Borrowing Date) from the issuance of Senior Subordinated Notes pursuant
to a Senior Subordinated Note Indenture conforming to the requirements of
Section 8.04(c) of the Credit Agreement as amended hereby.
(c) There shall be no Revolving Loans outstanding.
(d) The Administrative Agent shall have received interest, fees and
other amounts due and payable under this Amendment and the Credit Agreement on
or prior to the Amendment Effective Date including, to the extent invoiced, all
reasonable out of pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees of Cravath, Swaine & Xxxxx,
counsel for the Administrative Agent).
SECTION 5. EXPENSES. The Company acknowledges that Section 12.01 of
the Credit Agreement applies to this Amendment and hereby agrees to pay all
out-of-pocket expenses reasonably incurred by the Administrative Agent,
including the reasonable fees, charges and disbursements of Cravath, Swaine &
Xxxxx, counsel for the Administrative Agent, in connection with the preparation,
execution and delivery of this Amendment.
SECTION 6. MISCELLANEOUS. (a) This Amendment constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
(b) Section headings used herein are for convenience of reference
only and are not to affect the
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construction of, or to be taken into consideration in interpreting, this
Amendment.
(c) THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
(d) Each reference to a party hereto shall be deemed to include its
successors and assigns, all of whom shall be bound by this Amendment and to
whose benefit the provisions of this Amendment shall inure.
(e) This Amendment may be executed in any number of counterparts,
each of which shall be an original but all of which, when taken together, shall
constitute but one instrument.
(f) Except as specifically amended or modified hereby, the Credit
Agreement shall continue in full force and effect in accordance with the
provisions thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the date first above
written.
XXXXXX SCIENTIFIC INTERNATIONAL INC.,
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President, General Counsel,
Secretary
XXXXXX SCIENTIFIC U.K., LIMITED,
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Administrateur
XXXXXX SCIENTIFIC LIMITED,
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President, General Counsel,
Secretary
ACROS ORGANICS N.V.,
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Administrateur
XXXXXX SCIENTIFIC S.A.,
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Xxxxxxxxxxxxxx
00
XXXXXX XXXXXXXXXX GmbH,
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
XXXXXX SCIENTIFIC KOREA LTD.,
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
XXXXXX SCIENTIFIC B.V.,
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
CASA ROCAS S.A. DE C.V.,
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Administrateur
XXXXXX GENERAL SCIENTIFIC(S) Pte Ltd.,
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
STRATEGIC SOURCING AND PROCUREMENT
SERVICES Pte Ltd.,
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
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XXXXXX SCIENTIFIC ASIAWIDE Pte Ltd.,
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Administrateur
GENERAL SCIENTIFIC COMPANY (S) Sdn Bhd,
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
XXXXXXX XX,
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Administrateur
