FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment") is made
and entered into as of this 26th day of February, 1998 by and among XXXXXXXX
INDUSTRIES ("Xxxxxxxx"), STERLING ELECTRONICS CORPORATION ("Sterling" and
collectively with Xxxxxxxx, the "Borrower"), the Lenders party to the Credit
Agreement referenced below (the "Lenders") and FIRST UNION NATIONAL BANK , as
Administrative Agent for the Lenders (the "Administrative Agent").
STATEMENT OF PURPOSE
The Lenders agreed to extend certain credit facilities to the Borrower
pursuant to the Credit Agreement dated as of January 16, 1998 by and among the
Borrower, the Lenders and the Administrative Agent (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
The parties now desire to amend the Credit Agreement in certain respects on
the terms and conditions set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
1. EFFECT OF AMENDMENT. Except as expressly amended hereby, the Credit
Agreement and Loan Documents shall be and remain in full force and effect. This
First Amendment shall not be deemed (i) to be a waiver of, or consent to, a
modification or amendment of, any other term or condition of the Credit
Agreement or (ii) to prejudice any other right or rights which the
Administrative Agent or the Lenders may now have or may have in the future under
or in connection with the Credit Agreement or the Loan Documents or any of the
instruments or agreements referred to therein, as the same may be amended or
modified from time to time.
2. CAPITALIZED TERMS. All capitalized undefined terms used in this First
Amendment shall have the meanings assigned thereto in the Credit Agreement.
3. MODIFICATION OF CREDIT AGREEMENT. The Credit Agreement is hereby
modified as follows:
(a) ADDITIONAL DEFINED TERMS. Section 1.1 of the Credit Agreement is
hereby amended by the addition of the following defined terms (in alphabetical
order):
"SWINGLINE COMMITMENT" means Twenty Million Dollars ($20,000,000).
"SWINGLINE LENDER" means First Union in its capacity as swingline
lender hereunder.
"SWINGLINE LOAN" means any swingline loan made by the Swingline Lender
to the Borrower pursuant to Section 2.9 and all such swingline loans
collectively as the context requires.
"SWINGLINE NOTE" means the Swingline Note made by the Borrower payable
to the order of the Swingline Lender, substantially in the form of EXHIBIT
A-1 hereto, evidencing the Swingline Loans, and any amendments and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part.
"SWINGLINE TERMINATION DATE" means the earlier to occur of (a)
forty-five (45) days after First Union notifies the Borrower of its
intention to resign as Administrative Agent in accordance with Section 13.9
and (b) the Revolving Credit Termination Date.
(b) AMENDMENTS TO DEFINED TERMS.
(i) Section 1.1 of the Credit Agreement is hereby amended by deleting
the definition of "Extensions of Credit" and inserting in its place the
following definition:
"EXTENSIONS OF CREDIT" means (a) with respect to all Lenders, the
aggregate principal amount of all outstanding Loans and L/C Obligations and
(b) with respect to each Lender, the sum of (i) such Lender's Revolving
Credit Commitment Percentage of the outstanding Revolving Credit Loans, L/C
Obligations and Swingline Loans and (ii) such Lender's Term Loan Percentage
of the Term Loans.
(ii) Section 1.1 of the Credit Agreement is hereby amended by deleting
the definition of "Loan" and inserting in its place the following definition:
"LOAN" means any Revolving Credit Loan, any Swingline Loan or any Term
Loan made to the Borrower pursuant to Articles II and IV, and all such
Loans collectively as the context requires.
(iii) Section 1.1 of the Credit Agreement is hereby amended by
deleting the definition of "Notes" and inserting in its place the following
definition:
"NOTES" means the collective reference to the Revolving Credit Notes,
the Swingline Note and the Term Notes; "Note" means any of such Notes.
(c) AMENDMENT TO SECTION 2.1. Section 2.1 of the Credit Agreement is
hereby amended by deleting the phrase "LESS the L/C Obligations" in the sixth
line thereof and inserting in its place the following:
2
LESS the sum of the outstanding principal balance of all outstanding
Swingline Loans and the L/C Obligations.
(d) AMENDMENT TO SECTION 2.2. Section 2.2 of the Credit Agreement is
hereby amended by deleting such Section in its entirety and inserting in its
place the following Section 2.2:
SECTION 2.2. PROCEDURE FOR ADVANCES OF REVOLVING CREDIT LOANS
AND SWINGLINE LOANS
(a) REQUESTS FOR BORROWING. The Borrower shall give the
Administrative Agent a Notice of Revolving Credit Borrowing (i) not later
than 1:30 p.m. (Charlotte time) on the same Business Day as each Swingline
Loan, (ii) not later than 2:30 p.m. (Charlotte time) at least one (1)
Business Day before each Base Rate Loan, and (iii) not later than 2:30
p.m. (Charlotte time) at least three (3) Business Days before each LIBOR
Rate Loan, of its intention to borrow, specifying (A) the date of such
borrowing, which shall be a Business Day, (B) the amount of such borrowing,
which shall be (x) with respect to Base Rate Loans, other than borrowings
pursuant to Section 3.5, in an aggregate principal amount of $1,000,000 or
a whole multiple of $500,000 in excess thereof, (y) with respect to LIBOR
Rate Loans in an aggregate principal amount of $3,000,000 or a whole
multiple of $1,000,000 in excess thereof and (z) with respect to Swingline
Loans in an aggregate principal amount of $300,000 or a whole multiple of
$100,000 in excess thereof (except, in each case, the amount of such
borrowing may be in the aggregate amount available to the Borrower), (C)
whether the Revolving Credit Loans are to be LIBOR Rate Loans or Base Rate
Loans, and (D) in the case of a LIBOR Rate Loan, the duration of the
Interest Period applicable thereto. Notices received after 2:30 p.m.
(Charlotte time) (or 1:30 p.m. in the case of Swingline Loans) shall be
deemed received on the next Business Day. The Administrative Agent shall
promptly notify the Lenders of each Notice of Revolving Credit Borrowing.
(b) DISBURSEMENT OF REVOLVING CREDIT LOANS AND SWINGLINE LOANS. Not
later than 2:30 p.m. (Charlotte time) on the proposed borrowing date, (i)
each Lender will make available to the Administrative Agent, for the
account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, such Lender's Revolving
Credit Commitment Percentage of the Revolving Credit Loans to be made on
such borrowing date and (ii) the Swingline Lender will make available to
the Administrative Agent, for the account of the Borrower, at the office of
the Administrative Agent in funds immediately available to the
Administrative Agent, the Swingline Loans to be made on such borrowing
date. The Borrower hereby irrevocably authorizes the Administrative Agent
to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by transferring such proceeds to
the deposit account designated by the Borrower in the Notice of Account
Designation delivered on the Closing Date or any date thereafter (any such
subsequent notice to supersede any prior notice). Subject to Section 5.7,
to the extent that any Lender has not made
3
available to the Administrative Agent its Revolving Credit Commitment
Percentage of any Revolving Credit Loan requested pursuant to this Section
2.2, the Administrative Agent shall not be obligated to disburse such
portion of the proceeds of such Revolving Credit Loan. Revolving Credit
Loans to be made for the purpose of refunding Swingline Loans shall be made
by the Lenders as provided in Section 2.9(b).
(e) AMENDMENT TO SECTION 2.3. Section 2.3 of the Credit Agreement is
hereby amended by deleting such Section in its entirety and inserting in its
place the following Section 2.3:
SECTION 2.3. REPAYMENT OF LOANS.
(a) REPAYMENT ON TERMINATION DATE. The Borrower shall repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on
the Revolving Credit Termination Date, and (ii) all Swingline Loans in
accordance with Section 2.9(b), together, in each case, with all accrued
but unpaid interest thereon.
(b) MANDATORY REPAYMENTS.
(i) If at any time the outstanding principal amount of all
Revolving Credit Loans exceeds the Revolving Credit Commitment LESS the sum
of the outstanding principal balance of all outstanding Swingline Loans and
the L/C Obligations, the Borrower shall repay immediately upon notice from
the Administrative Agent, by payment to the Administrative Agent for the
account of the Lenders, the Revolving Credit Loans in an amount equal to
such excess with each such repayment applied FIRST to the principal amount
of outstanding Swingline Loans and SECOND to the principal amount of
outstanding Revolving Credit Loans. Each such repayment shall be
accompanied by any amount required to be paid pursuant to Section 5.9.
(ii) The Borrower shall repay the outstanding principal balance
of the Revolving Credit Loans pursuant to Section 2.5(c) in connection with
any corresponding reduction in the Revolving Credit Commitment.
(c) OPTIONAL REPAYMENTS. The Borrower may at any time and from time
to time repay the Revolving Credit Loans and/or Swingline Loans, in whole
or in part, upon at least three (3) Business Days' irrevocable notice to
the Administrative Agent with respect to LIBOR Rate Loans, one (1) Business
Day irrevocable notice with respect to Base Rate Loans and irrevocable
notice by 1:30 p.m. (Charlotte time) the same Business Day with respect to
Swingline Loans, in the form attached hereto as EXHIBIT D (a "Notice of
Prepayment") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a
combination thereof, and, if of a combination thereof, the amount allocable
to each. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender. If any such notice is given, the amount
specified
4
in such notice shall be due and payable on the date set forth in such
notice. Partial repayments shall be in an aggregate amount of $1,000,000
or a whole multiple of $500,000 in excess thereof with respect to Base Rate
Loans, $3,000,000 or a whole multiple of $1,000,000 in excess thereof with
respect to LIBOR Rate Loans and $300,000 or a whole multiple of $100,000 in
excess thereof with respect to Swingline Loans. Each such repayment shall
be accompanied by any amount required to be paid pursuant to Section 5.9.
(f) AMENDMENT TO SECTION 2.4. Section 2.4 of the Credit Agreement is
hereby amended by deleting such Section in its entirety and inserting in its
place the following Section 2.4:
SECTION 2.4. NOTES.
(a) REVOLVING CREDIT NOTES. Each Lender's Revolving Credit Loans and
the obligation of the Borrower to repay such Revolving Credit Loans shall
be evidenced by a separate Revolving Credit Note executed by the Borrower
payable to the order of such Lender representing the Borrower's obligation
to pay such Lender's Revolving Credit Loans in accordance with the terms
hereof. Each Revolving Credit Note shall be dated the date hereof and
shall bear interest on the unpaid principal amount thereof at the
applicable interest rate per annum specified in Section 5.1.
(b) SWINGLINE NOTES. The Swingline Loans and the obligations of
the Borrower to repay such Swingline Loans shall be evidenced by a
Swingline Note executed by the Borrower payable to the order of the
Swingline Lender representing the Borrower's obligation to pay the
Swingline Loans in accordance with the terms hereof. The Swingline Note
shall be dated the date hereof and shall bear interest on the unpaid
principal amount thereof at the applicable interest rate per annum
specified in Section 5.1.
(g) AMENDMENT TO SECTION 2.6. Section 2.6 of the Credit Agreement is
hereby amended by inserting the following parenthetical phrase immediately after
the phrase "Revolving Credit Facility" in the second line thereof:
(subject to Section 2.9(a) with respect to Swingline Loans)
(h) ADDITION OF SECTION 2.9. The Credit Agreement is hereby amended by
the addition of the following Section 2.9:
SECTION 2.9. SWINGLINE LOANS .
(a) AVAILABILITY. Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time from the Closing Date through, but not
including, the Swingline Termination Date; PROVIDED, that the aggregate
principal amount of all outstanding Swingline
5
Loans (after giving effect to any amount requested), shall not exceed the
lesser of (i) the Revolving Credit Commitment less the sum of all
outstanding Revolving Credit Loans and the L/C Obligations and (ii) the
Swingline Commitment.
(b) REFUNDING.
(i) Swingline Loans shall be refunded by the Lenders on demand
by the Swingline Lender. Such refundings shall be made by the Lenders in
accordance with their respective Revolving Credit Commitment Percentages
and shall thereafter be reflected as Revolving Credit Loans of the Lenders
on the books and records of the Administrative Agent. Each Lender shall
fund its respective Revolving Credit Commitment Percentage of Revolving
Credit Loans as required to repay Swingline Loans outstanding to the
Swingline Lender upon demand by the Swingline Lender but in no event later
than 2:00 p.m. (Charlotte time) on the next succeeding Business Day after
such demand is made. No Lender's obligation to fund its respective
Revolving Credit Commitment Percentage of a Swingline Loan shall be
affected by any other Lender's failure to fund its Revolving Credit
Commitment Percentage of a Swingline Loan, nor shall any Lender's Revolving
Credit Commitment Percentage be increased as a result of any such failure
of any other Lender to fund its Revolving Credit Commitment Percentage.
(ii) The Borrower shall pay to the Swingline Lender within one
Business Day of the receipt by the Borrower of demand therefor (provided
that such notice is received prior to 12:00 p.m. (Charlotte time)) the
amount of such Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. In addition, the Borrower hereby
authorizes the Administrative Agent to charge any account maintained with
the Swingline Lender (up to the amount available therein) in order to
immediately pay the Swingline Lender the amount of such Swingline Loans to
the extent amounts received from the Lenders are not sufficient to repay in
full the outstanding Swingline Loans requested or required to be refunded.
If any portion of any such amount paid to the Swingline Lender shall be
recovered by or on behalf of the Borrower from the Swingline Lender in
bankruptcy or otherwise, the loss of the amount so recovered shall be
ratably shared among all the Lenders in accordance with their respective
Revolving Credit Commitment Percentages (unless the amounts so recovered by
or on behalf of the Borrower pertain to a Swingline Loan extended after the
occurrence and during the continuance of an Event of Default of which the
Administrative Agent has received actual notice and which such Event of
Default has not been waived by the Required Lenders or the Lenders, as
applicable).
(iii) Each Lender acknowledges and agrees that its obligation to
refund Swingline Loans in accordance with the terms of this Section 2.9 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the
conditions set forth in Article VI. Further, each Lender agrees and
acknowledges that if prior to the refunding of
6
any outstanding Swingline Loans pursuant to this Section 2.9, one of the
events described in Section 12.1(j) or (k) shall have occurred, each Lender
will, on the date the applicable Revolving Credit Loan would have been
made, purchase an undivided participating interest in the Swingline Loan to
be refunded in an amount equal to its Revolving Credit Commitment
Percentage of the aggregate amount of such Swingline Loan. Each Lender
will immediately transfer to the Swingline Lender, in immediately available
funds, the amount of its participation and upon receipt thereof the
Swingline Lender will deliver to such Lender a certificate evidencing such
participation dated the date of receipt of such funds and for such amount.
Whenever, at any time after the Swingline Lender has received from any
Lender such Lender's participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline
Lender will distribute to such Lender its participating interest in such
amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating
interest was outstanding and funded).
(i) AMENDMENT TO SECTION 5.1(a). Section 5.1(a) of the Credit Agreement
is hereby amended by inserting the following sentence as the second to last
sentence of such Section:
Each Swingline Loan shall bear interest at the Base Rate.
(j) AMENDMENTS TO SECTION 5.2.
(i) Section 5.2 of the Credit Agreement is hereby amended by
inserting the following parenthetical phrase immediately after the phrase "Base
Rate Loans" in the second line thereof:
(other than Swingline Loans)
(ii) Section 5.2 of the Credit Agreement is further amended by
deleting the phrase "11:00 a.m." in the ninth line thereof and inserting in its
place the following phrase:
1:30 p.m.
(k) AMENDMENT TO SECTION 5.3. Section 5.3 of the Credit Agreement is
hereby amended by inserting the following proviso at the end of each of the
first two sentences of such Section:
; PROVIDED, that the amount of outstanding Swingline Loans shall not be
considered usage of the Revolving Credit Commitment for the purpose of
calculating such commitment fee.
(l) AMENDMENTS TO SECTION 5.5.
7
(i) Section 5.5 of the Credit Agreement is hereby amended by
inserting the following phrases immediately after the phrase "then to all
commitment and other fees and commissions then due and payable" in the eighth
line thereof:
, then to accrued and unpaid interest on the Swingline Note to the
Swingline Lender, then to the principal amount outstanding under the
Swingline Note to the Swingline Lender,
(ii) Section 5.5 is further amended by inserting the following
parenthetical phrase immediately after the word "Notes" in the eighth and
eleventh lines thereof:
(other than the Swingline Note).
4. CONDITIONS TO EFFECTIVENESS. This First Amendment shall be deemed
effective as of February __, 1998 (the "Effective Date") upon satisfaction of
the following conditions:
(a) receipt by the Administrative Agent of a fully executed original
hereof;
(b) receipt by the Administrative Agent of the Swingline Note for the
account of the Swingline Lender executed by Xxxxxxxx and Sterling in the amount
and maturity and otherwise as provided in this First Amendment and the Credit
Agreement substantially in the form of EXHIBIT A attached hereto;
(c) receipt by the Administrative Agent, on behalf of the Lenders, of a
favorable opinion of counsel to Xxxxxxxx and Sterling addressed to the
Administrative Agent and the Lenders with respect to the First Amendment, the
other Loan Documents and such other matters as the Administrative Agent may
request;
(d) receipt by the Administrative Agent of a copy of resolutions of the
Board of Directors of Xxxxxxxx and the Board of Directors of Sterling
authorizing the First Amendment and all other documents executed in connection
with the First Amendment certified as such by an officer of Xxxxxxxx or
Sterling, as applicable;
(e) receipt by the Administrative Agent of all reasonable costs, fees and
expenses of the Administrative Agent, including, without limitation, reasonable
legal fees and expenses of counsel to the Administrative Agent in connection
with the preparation, execution and delivery of this First Amendment; and
(f) receipt by the Administrative Agent of any other agreement or
document reasonably requested by the Administrative Agent in connection with
the transactions contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES/NO DEFAULT.
8
(a) By its execution hereof, the Borrower hereby certifies that each of
the representations and warranties set forth in the Credit Agreement and the
other Loan Documents is true and correct in all material respects as of the date
hereof (except for such representations and warranties made as of a certain date
which shall remain true and correct as of such earlier date) as if fully set
forth herein and that as of the date hereof no Default or Event of Default has
occurred and is continuing.
(b) By its execution hereof, Xxxxxxxx and Sterling, as applicable, hereby
represents and warrant that each of Xxxxxxxx and Sterling, as the case may be,
has the right, power and authority and has taken all necessary corporate and
other action to authorize the execution, delivery and performance of this First
Amendment and each other document executed in connection herewith in accordance
with their respective terms. This First Amendment and the Swingline Note have
been duly executed and delivered by the duly authorized officers of Xxxxxxxx and
Sterling party thereto, and each such document constitutes the legal, valid and
binding obligation of Xxxxxxxx and Sterling, enforceable in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally.
6. EXPENSES. Xxxxxxxx shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this First Amendment, including without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent.
7. GOVERNING LAW. This First Amendment shall be governed by and
construed in accordance with the laws of the State of North Carolina.
8. COUNTERPARTS. This First Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
9. FAX TRANSMISSION. A facsimile, telecopy or other reproduction of
this First Amendment may be executed by one or more parties hereto, and an
executed copy of this First Amendment may be delivered by one or more parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen,
and such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
hereto agree to execute an original of this First Amendment as well as any
facsimile, telecopy or other reproduction hereof.
9
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed as of the date and year first above written.
BORROWER:
XXXXXXXX INDUSTRIES
BY: /s/ XXXXX X. XXXX
---------------------
Name: Xxxxx X. Xxxx
---------------
Title Vice President, Finance and Chief Financial
-------------------------------------------
Officer
-------
STERLING ELECTRONICS CORPORATION
BY: /s/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
-------------
Title Vice President, Finance and Chief Financial
-------------------------------------------
Officer
-------
LENDERS:
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
BY: /s/ XXXXXX X. XXXXXXX
----------------------
Name: Xxxxxx X. Xxxxxxx
-----------------
Title Vice President
--------------
ABN AMRO BANK, N.V.
BY: /s/ XXXX X. XXXXXXX
-------------------
Name: Xxxx X. Xxxxxxx
---------------
Title Vice President
--------------
By: /s/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
-----------------
Title Vice President
--------------
THE BANK OF NEW YORK
BY: /s/ XXXXXXXX XXXXXXX
--------------------
Name: Xxxxxxxx Xxxxxxx
----------------
Title Assistant Vice President
------------------------
COMERICA BANK
BY: /s/ XXXXXXXX X. XXXXXXXXXX
--------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
----------------------
Title Assistant Vice President
------------------------
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ XXXX X. XXXXX
-----------------
Name: Xxxx X. Xxxxx
-------------
Title First Vice President
--------------------
NATIONSBANK OF TEXAS, N.A.
BY: /s/ XXXXXX X. XXXXXXX
---------------------
Name: Xxxxxx X. Xxxxxxx
-----------------
Title Vice President
--------------
UNION BANK OF CALIFORNIA, N.A.
BY: /s/ XXX X. XXXXXX
-----------------
Name: Xxx X. Xxxxxx
-------------
Title Vice President
--------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION
BY: /s/ XXXXX X. XXXXXXXXX
----------------------
Name: Xxxxx X. Xxxxxxxxx
------------------
Title Vice President
--------------
BANQUE NATIONALE DE PARIS
By: /s/ XXXXX XXXXXXX
-----------------
Name: Xxxxx Xxxxxxx
-------------
Title Senior Vice President
---------------------
By: /s/ XXXXXXX X. XXXX
-------------------
Name: Xxxxxxx X. Xxxx
---------------
Title Vice President
--------------
BANK OF MONTREAL
By: /s/ XXXXXX X. PEER
------------------
Name: Xxxxxx X. Peer
--------------
Title Director
--------
