THIRD AMENDMENT TO CREDIT AGREEMENT
BRIGHTPOINT, INC., a Delaware corporation, (the "Company"), the banks
listed on the signature pages hereof (each individually a "Bank" and
collectively the "Banks") and BANK ONE, INDIANAPOLIS, NATIONAL ASSOCIATION, a
national banking association with its principal office in Indianapolis, Indiana,
as agent for the Banks (in such capacity the "Agent" and in its individual
capacity "Bank One") agree as follows:
1. CONTEXT. This agreement is made in the context of the following
agreed state of facts:
a. The Company, the Banks and the Agent are parties to a Credit
Agreement dated June 13, 1995, as amended by First Amendment to
Credit Agreement dated as of September 15, 1995, and Second
Amendment to Credit Agreement dated as of January 19, 1996
(collectively, the Agreement").
b. The Company has requested that the Banks increase to
$75,000,000.00 the maximum amount available to the Company under
the terms of the Agreement and extend the Revolving Loan Maturity
Date from May 29, 1998, to May 28, 1999.
c. The Company has further requested that the Banks waive the
Company's noncompliance with the terms of the Agreement related
to the creation of a wholly-owned Subsidiary, Brightpoint
Acquisition, Inc., a Delaware corporation ("Acquisition"), as an
incident of the acquisition to which the Banks consented in that
certain letter dated February 1, 1996 (the "Allied transaction."
d. The Company has further requested that the Banks waive the
Company's noncompliance with the provisions of the Agreement
including, but not limited to Section 6.e, related to the
creation of a wholly-owned Subsidiary, Brightpoint International
Ltd., a Delaware corporation ("International"), and that the
Banks consent to the acquisition of certain assets and properties
of Marriott Investment & Trade Inc., a British Virgin Island
company, Safkong Holdings Limited, a private company limited by
shares organized in Hong Kong under The Companies Ordinance,
Technology Resources International Limited, a private company
limited by shares organized in Hong Kong under The Companies
Ordinance, and each of Xxxx Xxxxxx and Xxxx Xxxxxxx
Xxxxxxx-Xxxxxx, individuals residing in Hong Kong, pursuant to
the terms of the Shareholder and Asset Purchase Agreement, a copy
of which agreement is attached as Exhibit "A" to this Third
Amendment.
e. The Banks have agreed to such requests, subject to certain terms
and conditions, and the parties have executed this document (this
"Third Amendment") to give effect to their agreement.
2. DEFINITIONS. Terms used in this Third Amendment with their initial
letters capitalized are used as defined in the Agreement, unless otherwise
defined herein. Section 1 of the Agreement is amended, as follows:
a. Amended Definitions. The definitions of the following terms set
out in Section 1 are hereby amended and restated in their
entireties as follows:
o "Applicable Rate" means any of the Applicable Unused Fee
Rate, the Applicable Commission Rate, the Applicable Prime
Spread or the Applicable LIBOR Spread, as the context
requires, and when used in the plural form refers
collectively to all of the Applicable Unused Fee Rate, the
Applicable Commission Rate, the Applicable Prime Spread and
the Applicable LIBOR Spread. The Applicable Rate shall be
determined by reference to the ratio of the Company's Funded
Debt to Capital in accordance with the following tables:
Ratio of Funded Applicable Applicable
Debt to Capital Prime Spread LIBOR Spread
--------------- ------------ ------------
.55 to 1.0 or greater 0.00% 1.75%
.45 to 1.0 or
greater but less
than .55 to 1.0 (.25%) 1.50%
.40 to 1.0 or
greater but less
than .45 to 1.0 (.50%) 1.25%
.35 to 1.0 or
greater but less
than .40 to 1.0 (.75%) 1.00%
less than .35 to 1.0 (1.00%) .75%
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Applicable
Ratio of Funded Applicable Commission
Debt to Capital Unused Fee Rate Rate
--------------- --------------- -----------
.55 to 1.0 or greater .25% 1.00%
.45 to 1.0 or
greater but less
than .55 to 1.0 .20% .875%
.40 to 1.0 or
greater but less
than .45 to 1.0 .15% .75%
.35 to 1.0 or
greater but less
than .40 to 1.0 .15% .75%
less than .35 to 1.0 .125% .75%
The initial Applicable Rates shall be as shown in the bottom
spread of the foregoing tables. Hereafter, the Applicable
Rates shall be determined on the basis of the financial
statements of the Company dated as of the month ending each
fiscal quarter furnished to the Banks pursuant to the
requirements of Section 5.b(ii), with prospective effect for
the following fiscal quarter. Interest will accrue and be
payable, and fees and commissions will be calculated and be
payable, in any fiscal quarter on the basis of the
Applicable Rates in effect during the preceding fiscal
quarter until an adjustment is made under the provisions of
this subsection. The Applicable Rates shall be adjusted on
the first interest payment date which follows receipt by the
Banks of the financial statements upon which such adjustment
is based, but such adjustment shall not be effective as to
any LIBOR-based Rate elected prior to the date of such
adjustment until the expiration of the period of time for
which such LIBOR-based Rate shall have been elected by the
Company. In the event that the Company fails to deliver the
financial statements required under Section 5.b(ii) for any
month which ends a fiscal quarter, interest shall accrue on
the Loan at the Prime Rate and the Applicable Commission
Rate and the Applicable Unused Fee shall be at the highest
level shown in the foregoing tables from the date such
financial statements were required to be delivered until the
first interest payment date which follows receipt by the
Banks of such financial statements. For the avoidance of
doubt, it is noted that it is the intent of the parties that
the Banks shall be free to exercise all remedies otherwise
provided in this Agreement in the event of the violation by
the Company of the covenants stated in Section 5.b(ii) or
5.g(ii) notwithstanding the accrual of interest upon any
Loan or the calculation of fees and commissions at a rate
determined in accordance with this definition.
o "Funded Debt" means (a) all consolidated obligations of the
Company and its Subsidiaries (including without limitation,
all fees, costs or unpaid accrued interest) for or with
respect to borrowed money or for the deferred purchase price
of property or services except current accounts payable
arising in the ordinary course of business, (b) all
consolidated obligations of the Company and its Subsidiaries
created or arising under any conditional sale or other title
retention agreement with respect to any property acquired by
the Company and its Subsidiaries and all consolidated
obligations created or arising under such agreement even
though the rights and remedies of the seller or lender
thereunder are limited to repossession or sale of such
property in the event of default, (c) all consolidated
obligations of the Company and its Subsidiaries under leases
which shall have been or should be recorded as capitalized
leases in accordance with generally accepted accounting
principles, (d) all guarantees and other obligations
(contingent or otherwise) of the Company and its
Subsidiaries, calculated on a consolidated basis, to assure
a creditor against loss (including, without limitation,
letters of responsibility or comfort letters, arrangements
to purchase or repurchase property or obligations, to pay
for property, goods or services whether or not delivered or
rendered, to maintain working capital, equity capital or
other financial statement condition of, or to lend or
contribute to or invest in a third party) in respect of
obligations of such third party, (e) all consolidated
obligations of the Company and its Subsidiaries for
extensions of credit including the face amount of letters of
credit issued for the account of the Company or any
Subsidiary, whether or not representing obligations for
borrowed money, (f) consolidated Rate Hedging Obligations of
the Company and its Subsidiaries, and (g) all consolidated
obligations or indebtedness described in clauses (a) through
(f) secured by a lien on any property owned by the Company
or any Subsidiary, whether or not the Company or such
Subsidiary has assumed or become liable for the payment
thereof except, with respect to this clause (g), obligations
or indebtedness secured by a lien which has been
subordinated to the lien of the Agent under the terms of a
Subordination Agreement satisfactory to the Agent and
substantially in the form of Exhibit "G" attached to the
Credit Agreement.
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o "Loan Document" means any of this Agreement, any of the
Revolving Notes, the Security Agreement, the Pledge
Agreement, the Guaranty Agreements, the Guarantor
Security Agreement, any and all Subordination
Agreements, any and all Reimbursement Agreements and any
other instrument or document which evidences or secures
the Loan or which expresses an agreement as to terms
applicable to the Loan, and when used in the plural form
means any two or more of the Loan Documents, as the
context requires.
o "Note" means any of the Revolving Notes and when used in
the plural form means all of the Revolving Notes.
o "Revolving Loan Maturity Date" means initially May 28,
1999, and hereafter any other date to which the
Aggregate Commitment may be extended by the Banks
pursuant to the terms of Section 2.a(iv).
o "Subsidiary" means any corporation, partnership, joint
venture or other business entity over which the Company
exercises control; provided that it shall be
conclusively presumed that the Company exercises control
over any such entity 51% or more of the equity interest
in which is owned by the Company, directly or
indirectly, and provided further that International
shall be deemed a Subsidiary of the Company for all
purposes under this Agreement, but any and all
subsidiaries of International shall not be deemed
Subsidiaries of the Company for purposes of this
Agreement.
o "Tangible Net Worth" means the consolidated
shareholders' equity of the Company and its Subsidiaries
less any allowance for goodwill, patents, trademarks,
trade secrets, officer or employee loans or advances and
any other assets which would be classified as intangible
assets under generally accepted accounting principles.
b. New Definition. A new definition is added to Section 1 of the
Agreement to read as follows:
o Acquisition. "Acquisition" means Brightpoint Acquisition,
Inc., a Delaware corporation.
o International. "International means Brightpoint
International, Ltd., a Delaware corporation.
o Third Amendment. "Third Amendment" means the written
amendment to this Agreement entitled "Third Amendment to
Credit Agreement" and dated with effect as of May 31, 1996.
c. Deleted Definitions. The definitions of the following terms are
deleted from Section 1 of the Agreement: Borrowing Base and Borrowing
Base Certificate.
3. THE REVOLVING LOAN. Section 2.a(i) and the first sentence of Section
2.a(ii) of the Agreement are amended and restated in their respective entireties
as follows:
(i) The Aggregate Commitment -- Use of Proceeds. From the date
of the Third Amendment and until the Revolving Loan Maturity
Date, each Bank agrees to make its Percentage of Advances
(all such Advances by all such Banks are collectively
referred to as the "Revolving Loan") under a revolving line
of credit from time to time to the Company of an aggregate
amount not in excess at any time outstanding of Seventy-Five
Million and 00/100 Dollars ($75,000,000.00), provided that
all of the conditions of lending stated in Section 7 of this
Agreement as being applicable to Advances have been
fulfilled at the time of each Advance. Proceeds of the
Revolving Loan may be used by the Company only to fund
working capital requirements and for general corporate
purposes of the Company, Acquisition and International,
provided, however, that portion of the proceeds used for
International shall not exceed the aggregate principal
amount of Twenty Million Dollars ($20,000,000.00).
(ii) The Revolving Notes. The obligation of the Company to repay
the Revolving Loan shall be evidenced by the promissory
notes (the "Revolving Notes") of the Company payable to the
order of each Bank and in an amount equal to each Bank's
Percentage of the Aggregate Commitment, which Revolving
Notes shall be in the form of Exhibit "B" attached to the
Third Amendment.
4. SUBLIMIT FOR LETTERS OF CREDIT. To evidence an increase in the amount
available for the issuance of standby letters of credit under the Agreement, the
first sentence of Section 2.a(v) is hereby amended in its entirety to read as
follows:
(v) Standby Letters of Credit. At any time that the Company is
entitled to an Advance under the Revolving Loan, Bank One
shall, upon the application of the Company and after notice
to the Banks, issue for the account of the Company, a
standby letter of credit (each a "Letter of Credit") in an
amount not in excess of the maximum Advance that the Company
would then be entitled to obtain under the Revolving Loan,
provided that (A) the total amount of Letters of Credit
which are outstanding at any time shall not exceed Thirty
Million and 00/100 Dollars ($30,000,000.00), (B) the
issuance of any Letter of Credit with a maturity date beyond
the Revolving Loan Maturity Date shall be entirely at the
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discretion of the Banks, (C) the form of the requested
Letter of Credit shall be satisfactory to Bank One in the
reasonable exercise of Bank One's discretion, and (D) the
Company shall have executed an application and reimbursement
agreement for the Letter of Credit (a "Reimbursement
Agreement") in Bank One's standard form.
5. COLLATERAL. New Sections 4.c, 4.d and 4.e are added to the Agreement to
read as follows:
c. Pledge Agreement. The Obligations will be further secured by a pledge
of fifty percent (50%) of the stock owned by the Company of
International, which pledge shall be evidenced by a Pledge Agreement
(the "Pledge Agreement") in the form of Exhibit "C" to the Third
Amendment.
d. Guaranty. The Obligations will be further supported by the
unconditional guaranty of prompt payment of all of the Company's U. S.
Subsidiaries (collectively, the "Guarantors"), each of which guaranty
shall be evidenced by a Guaranty Agreement (each a "Guaranty
Agreement" and collectively, the "Guaranty Agreements") substantially
in the form of Exhibit "D" to the Third Amendment.
e. Guarantor Security Agreements. The obligations of Acquisition under
its Guaranty Agreement will be secured by a security interest in all
equipment, inventory, accounts receivable, chattel paper and general
intangibles of Acquisition now owned and hereafter acquired and in the
proceeds thereof, which security interest will be created by a
Security Agreement (a "Guarantor Security Agreement") in the form
attached as Exhibit "E" to the Third Amendment. Each Guarantor
Security Agreement will provide a first-priority security interest in
the collateral described therein, subject only to liens and security
interests of the type described in the exceptions enumerated in
Section 6.b.
6. AMENDMENTS TO FINANCIAL COVENANTS. The Company acknowledges that
compliance with the financial covenants set forth in Section 5.g shall be
computed on the basis of the consolidated financial statements of the Company
and its Subsidiaries. Section 5.b(i), Section 5.b(ii), Section 5.b(vii), Section
5.g, 5.g(i) and Section 5.g(iii) of the Agreement are amended and restated in
their respective entireties to read as follows:
b. (i) Annual Statements. As soon as available and in any event within
ninety (90) days after the close of each fiscal year, consolidated
financial statements of the Company and its Subsidiaries, including a
statement of income, a balance sheet as of the end of such fiscal
year, a statement of cash flows and a reconciliation of shareholders'
equity, for such fiscal year prepared and presented in accordance with
generally accepted accounting principles, applied in a manner
consistent with that used in preparing the financial statements
referred to in Section 3.d (except for changes in which the
independent accountants of the Company concur), in each case setting
forth in comparative form corresponding figures for the preceding
fiscal year, together with the audit report, unqualified as to scope,
of independent certified public accountants approved by the Agent,
which approval shall not be unreasonably withheld, and similarly
presented consolidating financial statements for the same period
prepared by the Company all in reasonable detail and accompanied by
the written representation of the chief financial officer of the
Company that such financial statements have been prepared in
accordance with generally accepted accounting principles (except that
they need not include footnotes and need not reflect adjustments
normally made at year end, if such adjustments are not material in
amount), consistently applied, (except for changes in which the
independent accountants of the Company concur) and present fairly the
financial position of the Company and the results of its operation as
of the dates of such statements and for the fiscal periods then ended.
(ii) Interim Statements. As soon as available and in any event within
thirty (30) days after the end of each month, a copy of the interim
consolidated and consolidating financial statements of the Company and
its Subsidiaries, consisting at a minimum of:
A. the balance sheet as of the end of the month,
B. a statement of income for the month and for the partial or full
fiscal year ended as of the end of the month, and
C. a statement of cash flows,
all in reasonable detail and accompanied by the written
representation of the chief financial officer of the Company that
such financial statements have been prepared in accordance with
generally accepted accounting principles (except that they need
not include footnotes and need not reflect adjustments normally
made at year end, if such adjustments are not material in
amount), consistently applied, (except for changes in which the
independent accountants of the Company concur) and present fairly
the financial position of the Company and the results of its
operation as of the dates of such statements and for the fiscal
periods then ended.
(vii) Compliance Certificates. Within thirty (30) days following each month
end and within ninety (90) days following each fiscal year end, a
certificate of the Chief Financial
4
Officer or other appropriate officer of the Company demonstrating
compliance with the financial covenants stated in Section 5.g and with
the purchase-money lien covenant stated in Section 6.b(viii). Such
certificate shall relate the covenants to the month-end figures and
shall otherwise be in such form and provide such detail as may be
reasonably satisfactory to the Agent.
g. Financial Covenants. The Company shall observe, on a consolidated
basis, each of the following financial covenants:
(i) Tangible Net Worth. The Company shall maintain its Tangible Net
Worth as of the date of execution of the Third Amendment and at
all times until June 30, 1996, at a level not less than
$60,000,000.00; at June 30, 1996, and at all times until December
30, 1996, at a level not less than $70,000,000.00; at December
31, 1996, and at all times until December 30, 1997, at a level
not less than the sum of $70,000,000.00 plus 50% of the net
income reported during the fiscal period July 1, 1996, through
December 31, 1996; and at each fiscal year end thereafter, and at
all times during the fiscal year immediately following, at a
level equal to the sum of 50% of the net income reported during
the fiscal year for which the Tangible Net Worth is being
determined (exclusive of any loss) plus the Tangible Net Worth
reported at the immediately preceding fiscal year end.
(ii) Ratio of Liabilities to Tangible Net Worth. At the end of each
month, the Company shall maintain the ratio of its consolidated
total liabilities to the Tangible Net Worth at a level not
greater than 2.0 to 1.0. For purposes of testing compliance with
this covenant, the term "liabilities" shall include the present
value of all consolidated capital lease obligations of the
Company and its Subsidiaries, determined as of any date the ratio
is to be tested.
(iii)Fixed Charge Coverage. At the end of each fiscal quarter, for
the four consecutive fiscal quarters ending as of such fiscal
quarter end, from the date of the Third Amendment and until
December 30, 1996, the Company shall maintain a fixed charge
coverage ratio of not less than 1.25 to 1.0. At December 31,
1996, and at each fiscal quarter thereafter, the Company shall
maintain a fixed charge coverage ratio of not less than 1.50 to
1.0. For purposes of this covenant, the phrase "fixed charge
coverage ratio" means, for any relevant period, the ratio of the
sum of net income plus depreciation, amortization and interest
expense plus cash taxes paid over the sum of payments made on
term debt during the period for which the ratio is being
calculated, including current capital lease payments but
excluding any payments made on account of the Loan, plus interest
expense, plus expenditures for fixed assets not funded with
borrowed funds, plus dividends paid, plus cash taxes paid.
7. AMENDMENTS TO NEGATIVE COVENANTS. Section 6 of the Agreement is amended
as follows:
a. Restricted Payments. The last sentence of Section 6.a of the Agreement
is amended and restated in its entirety to read as follows:
The Company shall not permit any Subsidiary to purchase or redeem
any shares of the capital stock of such Subsidiary, declare or
pay any dividends thereon except for dividends payable entirely
in capital stock and dividends and distributions payable to the
Company or make any distribution to shareholders or redeem any
subordinated indebtedness of such Subsidiary; provided, however
that International may pay dividends or distributions to its
shareholders so long as International has retained earnings in
excess of $2,000.000.00 and so long as such dividends or
distributions do not exceed 25% of net income computed on a
cumulative basis for any period for which such dividend or
distribution is being determined and provided that such
cumulative amount is first reduced by any net losses incurred
during such period.
b. Liens. Subsection (viii) of Section 6.b is amended and restated in its
entirety and a new subsection (ix) is added to Section 6.b as follows:
(viii) purchase-money liens on any inventory hereafter acquired;
provided that (A) any such inventory is acquired by the
Company or any Subsidiary in the ordinary course of its
business, (B) the lien attaches only to the inventory so
acquired, and (C) the total amount of outstanding
indebtedness secured by all such liens shall not exceed the
aggregate sum of $5,000,000.00; and
(ix) those specific liens now existing described on the "Schedule
of Exceptions" attached as Exhibit "D."
c. Guaranties. Subsection (iii) of Section 6.c is amended and restated in
its entirety and a new subsection (iv) is added to Section 6.c as
follows:
(iii) guaranties by International in favor of its subsidiaries;
and
(iv) those specific existing guaranties listed in the "Schedule
of Exceptions" attached
5
as Exhibit "D."
d. Loans or Advances. Subsection (iv) of Section 6.d is amended and
restated in its entirety and new subsections (v), (vi) and (vii) are
added to the Agreement as follows:
(iv) loans and advances from the Company to International not in
excess of the aggregate principal amount of $20,000,000.00,
provided that any Letters of Credit issued for the account of the
Company but on behalf of International shall be included in the
amount of loans or advances for purposes of this subsection;
(v) loans and advances from any Subsidiary to the Company;
(vi) loans and advances from International to any of the subsidiaries
of International; and
(vii)the specific items listed in the "Schedule of Exceptions"
attached as Exhibit "D."
e. Merger, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. Section 6.e of the Agreement is amended and restated in
its entirety to read as follows:
e. Merger, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. The Company shall not be, and shall not permit any
Subsidiary to be, a party to any consolidation or to any merger and
shall not purchase the capital stock of or otherwise acquire any
equity interest in any other business entity; provided, however that,
upon prior written notice to the Banks, a Subsidiary of the Company
may merge into the Company so long as the Company is the surviving
entity. The Company shall not acquire, and shall not permit any
Subsidiary to acquire, any material part of the assets of any other
business entity which exceed the aggregate amount of Two Million
Dollars ($2,000,000.00). Except as provided in the Security Agreement,
the Company shall not, and shall not permit any Subsidiary to, sell,
transfer, convey or lease all or a Substantial Portion of the
consolidated assets of the Company and its Subsidiaries, except in the
ordinary course of business, or sell or assign with or without
recourse any receivables. The Company shall not cause to be created or
otherwise acquire any Subsidiaries nor permit any Subsidiary to cause
to be created or otherwise acquire any Subsidiaries; provided,
however, that International may create subsidiaries of International
so long as the Company provides written notice to the Banks.
8. MODIFICATIONS TO EVENTS OF DEFAULT. Section 8.c of the Agreement is
amended to include "or any Subsidiary" in the last line and new Sections 8.h and
8.i are added to the Agreement, as follows:
c. Bankruptcy, Insolvency, etc. The Company or any Subsidiary admitting
in writing its inability to pay its debts as they mature or an
administrative or judicial order of dissolution or determination of
insolvency being entered against the Company or any Subsidiary; or the
Company or any Subsidiary applying for, consenting to, or acquiescing
in the appointment of a trustee or receiver for the Company or any
Subsidiary or any property thereof, or the Company or any Subsidiary
making a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee or
receiver being appointed for the Company or any Subsidiary or for a
substantial part of its property and not being discharged within sixty
(60) days; or any bankruptcy, reorganization, debt arrangement, or
other proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding being instituted by or against
the Company or any Subsidiary, and, if involuntary, being consented to
or acquiesced in by the Company or any Subsidiary or remaining for
sixty (60) days undismissed.
h. Guaranty Agreement. Any Guaranty Agreement shall fail to remain in
full force and effect or any action shall be taken to discontinue or
to assert the invalidity or unenforceability of any Guaranty
Agreement, or any Guarantor shall fail to comply with any of the terms
or provisions of any Guaranty Agreement to which it is a party, or any
Guarantor denies that it has any further liability, except as
otherwise provided in such Guaranty Agreement, under any Guaranty
Agreement to which it is a party, or gives notice to such effect.
i. Collateral Document. Any Security Agreement or Pledge Agreement or
other document purporting to grant a security interest to the Agent or
the Banks (each a "Collateral Document") shall for any reason (other
than action or inaction by the Banks) fail to create a valid and
perfected first priority security interest in any collateral purported
to be covered thereby, except as otherwise permitted under the
Agreement or any Loan Document, or any Collateral Document shall fail
to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any
Collateral Document, or the Company or any Subsidiary shall fail to
comply with any of the terms or provisions of any Collateral Document.
6
9. BORROWING BASE. The Banks agree that the Aggregate Commitment will not
be limited by a Borrowing Base after the date of this Third Amendment. Section
2.c(iii), Section 5.b(iv), Section 8.f and Section 10.s(xi) are hereby deleted
from the Agreement. All other references in the Agreement to the term "Borrowing
Base" and "Borrowing Base Certificate" shall be deemed void and of no effect.
10. FORBEARANCE FOR LIENS ACQUIRED IN THE ALLIED TRANSACTION. The Banks
agree to forbear from exercising any remedies available under the Agreement with
respect to liens of creditors on the assets acquired in the Allied transaction
which liens have priority over the liens granted to the Agent on behalf of the
Banks under the Loan Documents so long as such liens are terminated or released
on or before July 8, 1996. The Company acknowledges that if such liens are not
terminated or released by July 8, 1996, the Company will not be in compliance
with the terms of the Agreement and the Agent on behalf of the Banks may
exercise any rights or remedies available under the Agreement for such
noncompliance.
11. CONSENT TO CREATION OF INTERNATIONAL AND THE ACQUISITION OF CERTAIN
ASSETS. The Banks waive the remedies available under the Agreement for the
failure of the Company to comply with the provisions of Section 6.e in the
creation of Brightpoint International, Ltd. The Banks consent to the acquisition
by International of certain assets and properties as more particularly set forth
in the copy of the Shareholder and Asset Purchase Agreement attached to this
Third Amendment as Exhibit "A," (the "Purchase Agreement"). The consent provided
in this Third Amendment does not constitute a waiver of or a consent to any
violation of or noncompliance by the Company or any of its Subsidiaries with any
financial or other covenants, representations or warranties contained in the
Agreement or in any other Loan Document to which the Company or any Subsidiary
is a party, except the provisions of Section 6.e of the Agreement as applied to
International. This consent is subject to the condition that immediately after
giving effect to the acquisition, no event shall occur or shall have occurred
and be continuing which constitutes an Event of Default or Unmatured Event of
Default under the Agreement, except the provisions of Section 6.e of the
Agreement as applied to International and except as otherwise provided herein.
The Company agrees to advise the Agent prior to finalizing the acquisition if
the terms thereof differ materially from those set forth in the Purchase
Agreement. In such event, the Banks reserve the right to revoke this consent in
their discretion.
12. NONCOMPLIANCE WITH SECTION 5. The Banks waive the remedies available
under the Agreement for the failure of the Company to comply with the provisions
of Section 5.g(iii) of the Agreement with respect to the required fixed charge
coverage ratio at April 30, 1996. This waiver shall not be construed as a
commitment on the part of the Banks to grant any similar or other waiver in the
future.
13. CONDITIONS PRECEDENT. As conditions precedent to the effectiveness of
this Third Amendment, the Agent shall have received, each duly executed and in
form and substance satisfactory to the Banks the following:
a. This Third Amendment.
b. The Revolving Notes.
c. The Guaranty Agreements.
d. The Guarantor Security Agreements.
e. A certified copy of resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Third Amendment
and any other document required under this Third Amendment.
f. A certificate signed by the Secretary of the Company certifying the
name of the officer or officers authorized to sign this Third
Amendment and any other document required under this Third Amendment,
together with a sample of the true signature of each such officer.
g. A certified copy of resolutions of the Board of Directors of each of
the Guarantors authorizing the execution and delivery of its
respective Guaranty Agreement, its respective Guarantor Security
Agreement and any other document required under this Third Amendment
to which such Guarantor may be a party.
h. A certificate signed by the Secretary of each Guarantor certifying the
name of the officer or officers authorized to sign the documents to
which such Guarantor is to be a party as required under this Third
Amendment, together with a sample of the true signature of each such
officer.
i. The opinion or opinions of counsel for the Company and each Guarantor
addressed to the Banks to the effect that the representations stated
in Sections 3.a, 3.b and 3.c and 3.l of the Agreement with respect to
the Company, and in Sections 11.a, 11.b, 11,c and 11.k of each
Guaranty Agreement with respect to the Guarantors, are correct. Such
opinion or opinions shall be in such form as may be reasonably
acceptable to the Banks.
j. A copy of the file-marked Articles of Incorporation of each of the
Subsidiaries, certified as complete and correct by the Secretary of
State of the state of each such Subsidiary's incorporation, and a copy
of the By-Laws of each such Subsidiary, certified as complete and
correct by the Secretary of such Subsidiary.
k. A currently dated certificate of existence or certificate of good
standing, as applicable, of each of the Subsidiaries issued by the
Secretary of State each such Subsidiary's incorporation.
7
l. Such other documents as may be reasonably required by the Agent or the
Banks.
14. REPRESENTATIONS AND WARRANTIES. To induce the Banks and the Agent to
enter into this Third Amendment, the Company represents and warrants, as of the
date of this Third Amendment and except as otherwise provided in this Third
Amendment, that no Event of Default or Unmatured Event of Default has occurred
and is continuing and that the representations and warranties contained in
Section 3 of the Agreement are true and correct, except that the representations
contained in Section 3.d refer to the latest financial statements furnished to
the Banks by the Company pursuant to the requirements of the Agreement and the
representation contained in Section 3.l is amended and restated in its entirety
to read as follows:
l. Subsidiaries. The only Subsidiaries of the Company as of the date of
the Third Amendment are Brightpoint Acquisition, Inc., a Delaware
corporation which is wholly owned by the Company, Brightpoint FSC,
Inc., a foreign sales corporation organized under the laws of Barbados
which is wholly owned by the Company, and Brightpoint International,
Ltd., a Delaware corporation, which is wholly owned by the Company as
of the date of the Third Amendment, but will be fifty percent (50%)
owned after execution of the Purchase Agreement, but which shall be
deemed a Subsidiary for all purposes under the terms of this Agreement
and the other Loan Documents.
15. REAFFIRMATION OF THE AGREEMENT. Except as amended by this Third
Amendment, all terms and conditions of the Agreement shall continue unchanged
and in full force and effect and the Obligations of the Company shall continue
to be secured and guaranteed as therein provided until payment and performance
in full of all Obligations.
16. COUNTERPARTS. This Third Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, the Agent and the Banks, by their
respective duly authorized officers, have executed this Third Amendment to
Credit Agreement with effect as of June 7, 1996.
BRIGHTPOINT, INC.
By: /s/J. Xxxx Xxxxxx
-------------------------------------------
J. Xxxx Xxxxxx, Executive Vice President
and Chief Financial Officer
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Executive Vice President
and Chief Financial Officer
Fax: (000) 000-0000
BANK ONE, INDIANAPOLIS,
NATIONAL ASSOCIATION
Individually and as Agent
By:
-------------------------------------------
-------------------------------------------
(printed name and title)
PERCENTAGE: 41.5%
Address: Bank One Center/Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
P. O. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Manager, Metropolitan Department B
Fax: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------------------
-------------------------------------------
PERCENTAGE: 26.0%
8
Address: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Fax: (000) 000-0000
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:
-------------------------------------------
-------------------------------------------
(printed name and title)
PERCENTAGE: 19.0%
Address: SunTrust Bank, Central Florida, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention:
------------------------------------
Fax: (000) 000-0000
CORESTATES BANK, N.A.
By:
-------------------------------------------
-------------------------------------------
(printed name and title)
PERCENTAGE: 13.5%
Address: CoreStates Bank, N.A.
0000 Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention:
------------------------------------
Fax: (000) 000-0000
9
FOURTH AMENDMENT TO CREDIT AGREEMENT
BRIGHTPOINT, INC., a Delaware corporation, (the "Company"), the banks
listed on the signature pages hereof (each individually a "Bank" and
collectively the "Banks") and BANK ONE, INDIANAPOLIS, NATIONAL ASSOCIATION, a
national banking association with its principal office in Indianapolis, Indiana,
as agent for the Banks (in such capacity the "Agent" and in its individual
capacity "Bank One") agree as follows:
1. CONTEXT. This agreement is made in the context of the following agreed
state of facts:
a. The Company, the Banks and the Agent are parties to a Credit Agreement
dated June 13, 1995, as amended by First Amendment to Credit Agreement
dated as of September 15, 1995, Second Amendment to Credit Agreement
dated as of January 19, 1996, and the Third Amendment to Credit
Agreement dated as of June 7, 1996 (collectively, the Agreement").
b. The Company has requested that the Banks (i) modify certain financial
covenants on account of adjustments related to the Allied transaction
and (ii) waive the requirement for the consolidating financial
statements of Brightpoint Acquisition, Inc.
c. The Banks have agreed to such requests, subject to certain terms and
conditions, and the parties have executed this document (this "Fourth
Amendment") to give effect to their agreement.
2. DEFINITIONS. Terms used in this Fourth Amendment with their initial
letters capitalized are used as defined in the Agreement, unless otherwise
defined herein. A new definition is added to Section 1 of the Agreement to read
as follows:
o Fourth Amendment. "Fourth Amendment" means the written amendment
to this Agreement entitled "Fourth Amendment to Credit Agreement"
and dated with effect as of June 28, 1996.
3. AMENDMENTS TO FINANCIAL COVENANTS. Section 5.g(i) and Section 5.g(iii)
of the Agreement are amended and restated in their entireties to read as
follows:
(i) Tangible Net Worth. The Company shall maintain its Tangible Net
Worth as of the date of execution of the Fourth Amendment and at
all times until December 30, 1996, at a level not less than
$67,500,000.00; at December 31, 1996, and at all times until
December 30, 1997, at a level not less than the sum of
$67,500,000.00 plus 50% of the net income reported during the
fiscal period July 1, 1996, through December 31, 1996; and at
each fiscal year end thereafter, and at all times during the
fiscal year immediately following, at a level equal to the sum of
50% of the net income reported during the fiscal year for which
the Tangible Net Worth is being determined (exclusive of any
loss) plus the Tangible Net Worth reported at the
1
immediately preceding fiscal year end.
(iii)Fixed Charge Coverage. At the end of each fiscal quarter, for
the four consecutive fiscal quarters ending as of such fiscal
quarter end, from the date of the Fourth Amendment and until
December 30, 1996, the Company shall maintain a fixed charge
coverage ratio of not less than 1.25 to 1.0. At December 31,
1996, and at each fiscal quarter thereafter, the Company shall
maintain a fixed charge coverage ratio of not less than 1.50 to
1.0. For purposes of this covenant, the phrase "fixed charge
coverage ratio" means, for any relevant period, the ratio of the
sum of net income plus depreciation, amortization and interest
expense plus cash taxes paid over the sum of payments made on
term debt during the period for which the ratio is being
calculated, including current capital lease payments but
excluding any payments made on account of the Loan, plus interest
expense, plus expenditures for fixed assets not funded with
borrowed funds, plus dividends paid, plus cash taxes paid;
provided that for purposes of this covenant, net income shall not
be reduced by the expenses of the Company related to the Allied
transaction in a maximum sum of $2,500,000.00.
4. WAIVER OF CONSOLIDATING FINANCIAL STATEMENTS OF ACQUISITION. The Company
has informed the Banks that the assets and liabilities of Acquisition have been
or will be transferred to the books and records of the Company and that, as of
June 30, 1996, there will be no separate books and records of Acquisition. The
Banks waive the remedies available under the Agreement for the failure of the
Company to comply with the provisions of Section 5.b(ii) with respect to
furnishing the consolidating financial statements of Acquisition for the months
ending June 30, 1996, July 31, 1996, and August 31, 1996; provided that the
Company agrees to take all action necessary to effect the merger of Acquisition
into the Company on or before September 30, 1996, and provided further that the
Company will provide (A) a written certification to the Banks that Acquisition
has no assets or business operations which are not reflected in the financial
statements of the Company, which certification will accompany each of the
financial statements furnished to the Banks pursuant to the Agreement prior to
the merger of Acquisition into the Company, and (B) written notice to the Banks
when the merger has been completed accompanied by copies of the Articles of
Merger, or comparable appropriate documents, certified by the Secretary of State
of Delaware. The Company acknowledges that if the merger of Acquisition into the
Company is not completed by September 30, 1996, the Company shall comply with
the provisions of Section 5.b(ii) which provisions require the consolidating
financial statements of Acquisition.
5. CONDITIONS PRECEDENT. As conditions precedent to the effectiveness of
this Fourth Amendment, the Agent shall have received, each duly executed and in
form and substance satisfactory to the Banks the following:
2
a. This Fourth Amendment.
b. Such other documents as may be reasonably required by the Agent or the
Banks.
6. REPRESENTATIONS AND WARRANTIES. To induce the Banks and the Agent to
enter into this Fourth Amendment, the Company represents and warrants, as of the
date of this Fourth Amendment and except as otherwise provided in this Fourth
Amendment, that no Event of Default or Unmatured Event of Default has occurred
and is continuing and that the representations and warranties contained in
Section 3 of the Agreement are true and correct, except that the representations
contained in Section 3.d refer to the latest financial statements furnished to
the Banks by the Company pursuant to the requirements of the Agreement.
7. REAFFIRMATION OF THE AGREEMENT. Except as amended by this Fourth
Amendment, all terms and conditions of the Agreement shall continue unchanged
and in full force and effect and the Obligations of the Company shall continue
to be secured and guaranteed as therein provided until payment and performance
in full of all Obligations.
8. COUNTERPARTS. This Fourth Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, the Agent and the Banks, by their
respective duly authorized officers, have executed this Fourth Amendment to
Credit Agreement with effect as of June 28, 1996.
BRIGHTPOINT, INC.
By: /s/J. Xxxx Xxxxxx
-----------------------------------------
J. Xxxx Xxxxxx, Executive Vice
President and Chief Financial Officer
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Executive Vice President
and Chief Financial Officer
Fax: (000) 000-0000
BALANCE OF PAGE LEFT INTENTIONALLY BLANK
3
BANK ONE, INDIANAPOLIS,
NATIONAL ASSOCIATION
Individually and as Agent
By: /s/Xxxxx X. Xxxxx
-------------------------------------------
Xxxxx X. Xxxxx, Vice President and Senior
Relationship Manager
PERCENTAGE: 41.5%
Address: Bank One Center/Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
P. O. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Manager, Metropolitan Department B
Fax: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------------------
-------------------------------------------
(printed name and title)
PERCENTAGE: 26.0%
Address: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Fax: (000) 000-0000
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:
-------------------------------------------
-------------------------------------------
(printed name and title)
PERCENTAGE: 19.0%
Address: SunTrust Bank, Central Florida, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx, Vice President
Fax: (000) 000-0000
4
CORESTATES BANK, N.A.
By:
-------------------------------------------
-------------------------------------------
(printed name and title)
PERCENTAGE: 13.5%
Address: CoreStates Bank, N.A.
0000 Xxxxxx Xxxx
Plymouth Meeting, Pennsylvania 19462
Attention: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
5
FIFTH AMENDMENT TO CREDIT AGREEMENT
BRIGHTPOINT, INC., a Delaware corporation (the "Company"), the banks listed
on the signature pages hereof (each individually a "Bank" and collectively the
"Banks") and BANK ONE, INDIANAPOLIS, NATIONAL ASSOCIATION, a national banking
association with its principal office in Indianapolis, Indiana, as agent for the
Banks (in such capacity the "Agent" and in its individual capacity "Bank One")
agree as follows:
1. CONTEXT. This Fifth Amendment is made in the context of the following agreed
statement of facts:
a. The Company, the Banks and the Agent are parties to a Credit
Agreement dated June 13, 1995, as amended by a First Amendment to
Credit Agreement dated as of September 15, 1995, a Second Amendment to
Credit Agreement dated as of January 19, 1996, a Third Amendment to
Credit Agreement dated as of June 7, 1996, and a Fourth Amendment to
Credit Agreement dated as of June 28, 1996 (collectively, the
"Agreement").
b. The Company has requested that the Banks (i) modify certain
affirmative and negative covenants to permit the Company to guarantee
certain indebtedness and to permit the Company's Subsidiary,
International, to enter into certain indebtedness, and (ii) to waive
the Company's noncompliance with its Fixed Charge Coverage Covenant,
and other covenants, as of September 30, 1996.
c. The Banks have agreed to such requests, subject to certain terms and
conditions, and the parties have executed this document (this "Fifth
Amendment") to give effect to their agreement.
2. DEFINITIONS. Terms used in this Fifth Amendment with their initial letters
capitalized are used as defined in the Agreement, unless otherwise defined
herein.
a. Amended Definition. The definition of "Funded Debt" in Section 1 of
the Agreement is hereby amended to restate clauses (d) and (e) of such
definition as follows:
"(d) to the extent not already included in clause (a) above,
all guaranties and other obligations (contingent or otherwise)
of the Company and its Subsidiaries, calculated on a
consolidated basis, to assure a creditor against loss
(including, without limitation, letters of responsibility or
comfort letters, arrangements to purchase or repurchase
property or obligations, to pay for
property, goods or services whether or not delivered or
rendered, to maintain working capital, equity capital or other
financial statement condition of, or to lend or contribute to
or invest in a third party) in respect of obligations of such
third party, provided however, that the guaranty by the
Company of the line of credit obligations of International
shall be included in the calculation of Funded Debt at the
principal amount of the debt outstanding on the date of
calculation and not at the face amount of the guaranty; (e) to
the extent not already included in clauses (a) or (d) above,
all consolidated obligations of the Company and its
Subsidiaries for extensions of credit including the face
amount of letters of credit issued for the account of the
Company or any Subsidiary, whether or not representing
obligations for borrowed money (for purposes of this clause
(e), Subsidiary shall include subsidiaries of International),"
b. New Definition. A new definition is added to Section 1 of the
Agreement to read as follows:
o Fifth Amendment. "Fifth Amendment" means the written
amendment to this Agreement entitled "Fifth Amendment to
Credit Agreement" and dated effective as of October 11,
1996.
3. AMENDMENT TO FINANCIAL COVENANTS. Section 5.g(iii) of the Agreement
is hereby amended and restated in its entirety as follows:
(iii) Fixed Charge Coverage. At the end of each fiscal quarter, for the
four consecutive fiscal quarters ending as of such fiscal quarter end,
from the date of the Fifth Amendment and until December 30, 1996, the
Company shall maintain a fixed charge coverage ratio of not less than
1.25 to 1.0. At December 31, 1996, and at each fiscal quarter
thereafter until December 30, 1997, the Company shall maintain a fixed
charge coverage ratio of not less than 1.35 to 1.0. At December 31,
1997, and at each fiscal quarter thereafter, the Company shall maintain
a fixed charge coverage ratio of not less than 1.50 to 1.0. For
purposes of this covenant, the phrase "fixed charge coverage ratio"
means, for any relevant period, the ratio of the sum of net income plus
depreciation, amortization and interest expense plus cash taxes paid
over the sum of payments made on term debt during the period for which
the ratio is being calculated, including current capital lease payments
but excluding any payments made on account of the Loan, plus interest
expense, plus expenditures for fixed assets not funded with borrowed
funds, plus dividends paid, plus cash taxes paid; provided that for
purposes of this covenant, net income shall not be reduced by the
expenses incurred by the Company related to the Allied transaction in a
maximum sum of $2,500,000.00.
-2-
4. AMENDMENTS TO NEGATIVE COVENANTS. Section 6 of the Agreement is
amended as follows:
a. Section 6.c. of the Agreement is hereby amended and restated in its
entirety as follows:
c. Guaranties. The Company shall not be, and shall not permit
any Subsidiary to be, a guarantor or surety of, or otherwise
be responsible in any manner with respect to any undertaking
of any other person or entity, whether by guaranty agreement
or by agreement to purchase any obligations, stock, assets,
goods or services, or to supply or advance any funds, assets,
goods or services or otherwise except for:
(i) guaranties in favor of the Banks or the Agent on behalf
of the Banks;
(ii) the guaranty by the Company of certain debt of
International or a subsidiary of International, in an
aggregate amount not to exceed $25,000,000 plus
interest and costs of collection;
(iii) guaranties by endorsement of instruments for deposit
made in the ordinary course of business;
(iv) guaranties by International in favor of its
subsidiaries; and
(v) those specific existing guaranties listed on the
"Schedule of Exceptions" attached as Exhibit "D".
b. Subsections (iv) and (vi) of Section 6.d. of the Agreement are
amended and restated in their entirety as follows:
(iv) loans, advances or guaranties from the Company to or
on behalf of International not in excess of the
aggregate principal amount of $30,000,000.00,
including any guaranty by the Company for
indebtedness of any subsidiary of International and
provided that any Letters of Credit issued for the
account of the Company but on behalf of International
shall be included in the amount of loans, advances or
guaranties for purposes of this subsection;
(vi) loans and advances from International to any
subsidiaries of International and a Shareholder Note
dated July 1, 1996 owed to International from Xxxx
Xxxxxx and Xxxx X. Xxxxxxx-Xxxxxx, with a present
principal balance of $1,106,000.00;
-3-
c. Section 6.e. of the Agreement is hereby amended to increase the
amount of Two Million Dollars in the second sentence of such
Subsection to "Five Million Dollars ($5,000,000.00)", which amount
shall exclude the acquisition of Hatadicorp Pty. Ltd of Australia by a
subsidiary of International, which acquisition is specifically
consented to by the Banks.
d. Section 6.k. of the Agreement is hereby amended and restated in its
entirety as follows:
k. Lease Obligations. The Company shall not incur, and shall
not permit any Subsidiary to incur, obligations under any
operating leases if as a result, the aggregate payment
obligations of the Company and its Subsidiaries under all such
leases in any fiscal year would exceed $1,000,000; except:
(i) an operating lease for computer equipment, software,
and certain furniture and fixtures in a total
aggregate amount not to exceed $5,000,000 to be
entered into prior to December 31, 1996; and
(ii) those existing obligations disclosed on the "Schedule
of Exceptions" attached as Exhibit "D".
e. Section 6.l. of the Agreement is hereby amended and restated in its
entirety as follows:
l. Debt. The Company shall not incur or permit to exist, and
shall not permit any Subsidiary to incur or permit to exist, any
Indebtedness in excess of the aggregate amount of $2,000,000.00
at any time outstanding, except for:
(i) Indebtedness owed to the Banks under this Agreement;
(ii) Rate Hedging Obligations with any Bank;
(iii) Indebtedness of International or a subsidiary of
International in an aggregate amount not to exceed
$25,000,000.00 under a revolving line of credit or
for the purchase of Hatadicorp Pty. Ltd;
(iv) the Company's guaranties of the Indebtedness of
International or a subsidiary of International, which
guaranties shall not exceed in the aggregate
$25,000,000.00 plus interest and costs of collection;
(v) the operating lease obligations permitted to be
incurred under Section 6.k. hereof;
-4-
(vi) to the extent not already included above, the
Indebtedness permitted under Section 6.d. hereof; and
(vii) those existing obligations disclosed on the "Schedule
of Exceptions" attached as Exhibit "D".
5. WAIVER OF NONCOMPLIANCE WITH FINANCIAL COVENANT. The Banks acknowledge that
the Company was not in compliance with the Fixed Charge Coverage Ratio set forth
in Section 5.g.(iii) at September 30, 1996. The Banks hereby waive such
noncompliance at such date and waive their right to exercise remedies available
under the Agreement as the result of the Company's failure to maintain its Fixed
Charge Coverage Ratio at required levels. Such waiver shall not constitute any
agreement or waiver on the part of the Banks to any further or other default or
noncompliance on the part of the Company or any Subsidiary.
6. WAIVER OF CONSOLIDATING FINANCIAL STATEMENTS OF ACQUISITION.
The Company has informed the Banks that the assets and liabilities of
Acquisition have been or will be transferred to the books and records of the
Company and that, as of September 30, 1996, there will be no separate books and
records of Acquisition. The Banks waive the remedies available under the
Agreement for the failure of the Company to comply with the provisions of
Section 5.b(ii) with respect to furnishing the consolidating financial
statements of Acquisition for the months ending September 30, 1996, October 31,
1996 and November 30, 1996; provided that the Company agrees to take all action
necessary to effect the merger of Acquisition into the Company on or before
December 31, 1996, and provided further that the Company will provide (A) a
written certification to the Banks that Acquisition has no assets or business
operations which are not reflected in the financial statements of the Company,
which certification will accompany each of the financial statements furnished to
the Banks pursuant to the Agreement prior to the merger of Acquisition into the
Company, and (B) written notice to the Banks when the merger has been completed
accompanied by copies of the Articles of Merger, or comparable appropriate
documents, certified by the Secretary of State of Delaware. The Company
acknowledges that if the merger of Acquisition into the Company is not completed
by December 31, 1996, the Company shall comply with the provisions of Section
5.b(ii) which provisions require the consolidating financial statements of
Acquisition.
7. CONDITIONS PRECEDENT. As conditions precedent to the effectiveness of this
Fifth Amendment, the Agent shall have received, each duly executed and in form
and substance satisfactory to the Banks, the following:
a. This Fifth Amendment, and
-5-
b. Such other documents as may be reasonably required by the
Agent or the Banks.
8. REPRESENTATIONS AND WARRANTIES. To induce the Banks and the Agent to enter
into this Fifth Amendment, the Company represents and warrants, as of the date
of this Fifth Amendment, and except as otherwise provided in this Fifth
Amendment, that no Event of Default or Unmatured Event of Default has occurred
or is continuing and that the representations and warranties contained in
Section 3 of the Agreement are true and correct, except that the representations
contained in Section 3.d. refer to the latest financial statements furnished to
the Banks by the Company pursuant to the requirements of the Agreement.
9. REAFFIRMATION OF THE AGREEMENT. Except as amended by this Fifth Amendment,
all terms and conditions of the Agreement shall remain unchanged and in full
force and effect and the Obligations of the Company shall continue to be secured
and guaranteed as therein provided until payment and performance in full of all
Obligations.
10. COUNTERPARTS. This Fifth Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, the Agent and the Banks, by their
respective duly authorized officers, have executed this Fifth Amendment to
Credit Agreement with effect as of October 11, 1996.
BRIGHTPOINT, INC.
By
-------------------------------------------
J. Xxxx Xxxxxx, President and
Chief Operating Officer
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: President and Chief Operating
Officer
Fax: (000) 000-0000
-6-
[BALANCE OF PAGE INTENTIONALLY BLANK]
-7-
BANK ONE, INDIANAPOLIS, NATIONAL
ASSOCIATION Individually and as Agent
By _________________________________________
Xxxxx X. Xxxxx, Vice President and
Senior Relationship Manager
PERCENTAGE: 41.5%
Address: Bank One Center/Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Manager, Metropolitan Department
Fax: (000) 000-0000
THE FIRST NATIONAL BANK OF CHICAGO
By _________________________________________
_________________________________________
Printed Name & Title
PERCENTAGE: 26.0%
Address: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Fax: (000) 000-0000
-0-
XXXXXXXX XXXX, XXXXXXX XXXXXXX, N.A.
By _________________________________________
_________________________________________
Printed Name & Title
PERCENTAGE: 19.0%
Address: SunTrust Bank, Central Florida, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, Vice President
Fax: (000) 000-0000
CORESTATES BANK, N.A.
By _________________________________________
_________________________________________
Printed Name & Title
PERCENTAGE: 13.5%
Address: CoreStates Bank, N.A.
0000 Xxxxxx Xxxx
Plymouth Meeting, Pennsylvania 19462
Attn: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
-9-
SIXTH AMENDMENT TO CREDIT AGREEMENT
BRIGHTPOINT, INC., a Delaware corporation (the "Company"), the banks listed
on the signature pages hereof (each individually, a "Bank" and collectively, the
"Banks") and BANK ONE, INDIANAPOLIS, NATIONAL ASSOCIATION, a national banking
association with its principal office in Indianapolis, Indiana, as agent for the
Banks (in such capacity, the "Agent" and in its individual capacity, "Bank One")
agree as follows:
1. CONTEXT. This Sixth Amendment is made in the context of the following
agreed statement of facts:
a. The Company, the Banks and the Agent are parties to a Credit
Agreement dated June 13, 1995, as amended by a First Amendment to
Credit Agreement dated as of September 15, 1995, a Second Amendment to
Credit Agreement dated as of January 19, 1996, a Third Amendment to
Credit Agreement dated as of June 7, 1996, a Fourth Amendment to Credit
Agreement dated as of June 28, 1996 and a Fifth Amendment to Credit
Agreement dated effective as of October 11, 1996 (collectively, the
"Agreement").
b. The Company has requested that the Banks (i) increase the Company's
line of credit from $75,000,000 to $100,000,000 until April 30, 1997;
(ii) modify certain financial covenants of the Company to permit the
additional indebtedness, and (iii) to waive the Company's noncompliance
with its Ratio of Liabilities to Tangible Net Worth Covenant and its
Lease Obligations Covenant.
c. The Banks have agreed to such requests, subject to certain terms and
conditions, and the parties have executed this Sixth Amendment (the
"Sixth Amendment") to give effect to their agreement.
2. DEFINITIONS. Terms used in this Sixth Amendment with their initial
letters capitalized are used as defined in the Agreement, unless otherwise
specifically defined herein. The definition of "Applicable Rate" in Section
1 of the Agreement is hereby amended and restated in its entirety as
follows:
"Applicable Rate" means any of the Applicable Unused Fee Rate, the
Applicable Commission Rate, the Applicable Prime Spread or the
Applicable LIBOR Spread, as the context requires, and when used in the
plural form refers collectively to all of the Applicable Unused Fee
Rate, the Applicable Commission Rate, the Applicable Prime Spread and
the Applicable LIBOR Spread. The Applicable Rate shall be determined by
reference to the ratio of the Company's Funded Debt to Capital in
accordance with the following tables:
Applicable Applicable LIBOR
Ratio of Funded Debt to Capital Prime Spread Spread
------------------------------- ------------ ------
.60 to 1.0 or greater .25% 2.00%
.55 to 1.0 or greater but less than .60 to 1.0 0.00% 1.75%
.45 to 1.0 or greater but less than .55 to 1.0 (.25%) 1.50%
.40 to 1.0 or greater but less than .45 to 1.0 (.50%) 1.25%
.35 to 1.0 or greater but less than .40 to 1.0 (.75%) 1.00%
less than .35 to 1.0 (1.00%) .75%
Applicable
Unused Fee Applicable
Ratio of Funded Debt to Capital Rate Commission Rate
------------------------------- ---- ---------------
.60 to 1.0 or greater .30% 1.125%
.55 to 1.0 or greater but less than .60 to 1.0 .25% 1.00%
.45 to 1.0 or greater but less than .55 to 1.0 .20% .875%
.40 to 1.0 or greater but less than .45 to 1.0 .15% .75%
.35 to 1.0 or greater but less than .40 to 1.0 .15% .75%
.35 to 1.0 .125% .75%
Effective with the date of closing, the Applicable Rates shall be
determined on the basis of the financial statements of the Company
dated as of the month ending each fiscal quarter furnished to the Banks
pursuant to the requirements of Section 5.b(ii), with prospective
effect for the following fiscal quarter. Interest will accrue and be
payable, and fees and commissions will be calculated and be payable, in
any fiscal quarter on the basis of the Applicable Rates in effect
during the preceding fiscal quarter until an adjustment is made under
the provisions of this subsection. The Applicable Rates shall be
adjusted on the first interest payment date which follows receipt by
the Banks of the financial statements upon which such adjustment is
based, but such adjustment shall not be effective as to any LIBOR-based
Rate elected prior to the date of such adjustment until the expiration
of the period of time for which such LIBOR-based Rate shall have been
elected by the Company. In the event that the Company fails to deliver
the financial statements required under Section 5.b(ii) for any month
which ends a fiscal quarter, interest shall accrue on the Loan at the
Prime Rate and the Applicable Commission Rate and the Applicable Unused
Fee shall be at the highest level shown in the foregoing tables
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from the date such financial statements were required to be delivered
until the first interest payment date which follows receipt by the
Banks of such financial statements. For the avoidance of doubt, it is
noted that it is the intent of the parties that the Banks shall be free
to exercise all remedies otherwise provided in this Agreement in the
event of the violation by the Company of the covenants stated in
Section 5.b(ii) or 5.g(ii) notwithstanding the accrual of interest upon
any Loan or the calculation of fees and commissions at a rate
determined in accordance with this definition.
3. REVOLVING LOAN INCREASE. (a) From the date of this Sixth Amendment, and until
April 30, 1997, each Bank agrees to make its Percentage of Advances (all such
Advances by all such Banks are collectively referred to as the "Revolving Loan")
under a revolving line of credit from time to time to the Company of an
aggregate amount not exceeding One Hundred Million and No/100 Dollars
($100,000,000.00), provided that all of the conditions of lending stated in
Section 7 of the Agreement as being applicable to Advances have been fulfilled
at the time of each Advance. On April 30, 1997, the Aggregate Commitment shall
automatically reduce to Seventy-Five Million and No/100 Dollars ($75,000,000.00)
and the Company shall repay to the Banks the principal outstanding in excess of
such amount in accordance with each Bank's Percentage, immediately and without
demand. Each Bank's Percentage of Advances for the temporary increase in the
Aggregate Commitment and after reduction on April 30, 1997 shall be as set forth
in Schedule "A" attached hereto.
(b) The obligation of the Company to repay the Revolving Loan shall be
evidenced by the promissory notes (the "Revolving Notes") of the Company payable
to the order of each Bank and in an amount equal to each Bank's Percentage of
the Aggregate Commitment, which Revolving Notes shall be in the form of Exhibit
"A" attached to this Sixth Amendment.
4. AMENDMENTS TO FINANCIAL COVENANTS. Sections 5.g.(ii) and (iv) of the
Agreement are hereby amended and restated in their entirety as follows:
(ii) Ratio of Liabilities to Tangible Net Worth. At the end of each
month, and through February 27, 1997, the Company shall maintain the
ratio of its consolidated total liabilities to its Tangible Net Worth
at a level not greater than 2.75 to 1.0, at a level not greater than
2.50 on February 28, 1997 through April 30, 1997, and after April 30,
1997, at a level not greater than 2.0 to 1.0. For purposes of testing
compliance with this covenant, the term "liabilities" shall include the
present value of all consolidated capital lease obligations of the
Company and its Subsidiaries, determined as of any date the ratio is to
be tested.
(iv) Ratio of Funded Debt to Capital. The Company shall maintain the
ratio of its Funded Debt to Capital at a level not greater than .625 to
1.0 from the date hereof through April 30, 1997 and at not greater than
.55 to 1.0 at May 1, 1997 and at all times thereafter.
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5. AMENDMENT TO NEGATIVE COVENANTS. Section 6.k. of the Agreement is
hereby amended and restated in its entirety as follows:
k. Lease Obligations. The Company shall not incur, and shall not permit
any Subsidiary to incur, obligations under any operating leases if as
a result, the aggregate payment obligations of the Company and its
Subsidiaries under all such leases in any fiscal year would exceed
$2,500,000.00; except:
(i) The existing operating lease for computer equipment and other
items entered into with Banc One Leasing Corp. not to exceed
$5,000,000.00; and
(ii) Those existing obligations disclosed in the "Schedule of
Exceptions" attached as Exhibit "D" to the Agreement.
6. WAIVER OF NONCOMPLIANCE WITH CERTAIN COVENANTS. The Banks
acknowledge that the Company was not in compliance with the Ratio of Liabilities
to Tangible Net Worth covenant set forth in Section 5.g.(ii) of the Agreement or
the Lease Obligations covenant set forth in Section 6.k. of the Agreement at
December 31, 1996. The Banks hereby waive their right to exercise remedies
available under the Agreement as a result of the Company's failure to maintain
its Ratio of Liabilities to Tangible Net Worth or its Lease Obligations at
required levels. Such waiver shall not constitute any agreement or waiver on the
part of the Banks to any further or other default or noncompliance on the part
of the Company or any Subsidiary.
7. CONDITIONS PRECEDENT. As conditions precedent to the effectiveness of this
Sixth Amendment, the Agent shall have received, each duly executed and in form
and substance satisfactory to the Banks, the following:
a. This Sixth Amendment;
b. The Revolving Notes;
c. Certified Resolutions of the Board of Directors authorizing the
execution and delivery of the Sixth Amendment, together with an
Officers' Certificate, in form and substance acceptable to the Banks;
and
d. Such other documents as may be reasonably required by the Agent or the
Bank.
8. REPRESENTATIONS AND WARRANTIES. To induce the Banks and the Agent to enter
into this Sixth Amendment, the Company represents and warrants, as of the date
of this Sixth Amendment, and except as otherwise provided in this Sixth
Amendment, that no Event of Default or Unmatured Event of Default has occurred
or is continuing and that the representations and warranties contained in
Section 3 of the Agreement are true and correct, except that the
4
representations contained in Section 3.d. refer to the latest financial
statements furnished to the Banks by the Company pursuant to the requirements of
the Agreement.
9. REAFFIRMATION OF THE AGREEMENT. Except as amended by this Sixth Amendment,
all terms and conditions of the Agreement shall remain unchanged and in full
force and effect and the Obligations of the Company shall continue to be secured
and guaranteed as therein provided until payment and performance in full of all
Obligations.
10. COUNTERPARTS. This Sixth Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the Company, the Agent and the Banks, by their
respective duly authorized officers, have executed this Sixth Amendment to
Credit Agreement with effect as of January 29, 1997.
BRIGHTPOINT, INC.
By _____________________________________________
Xxxxxxx X. Xxxxxxxx, Executive Vice President
and Chief Financial Officer
Address: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Executive Vice President and Chief
Financial Officer
Fax: (000) 000-0000
BANK ONE, INDIANAPOLIS, NATIONAL
ASSOCIATION Individually and as Agent
By _____________________________________________
Xxxxx X. Xxxxx, Vice President and
Senior Relationship Manager
Address: Bank One Center/Tower
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Manager, Metropolitan Department B
Fax: (000) 000-0000
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THE FIRST NATIONAL BANK OF CHICAGO
By _____________________________________________
_____________________________________________
Printed Name & Title
Address: One First Xxxxxxxx Xxxxx
Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Fax: (000) 000-0000
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By _____________________________________________
_____________________________________________
Printed Name & Title
Address: SunTrust Bank, Central Florida, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, Vice President
Fax: (000) 000-0000
CORESTATES BANK, N.A.
By _____________________________________________
_____________________________________________
Printed Name & Title
Address: CoreStates Bank, N.A.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
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