EXHIBIT 4.4
WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT ("Waiver
and Amendment"), dated as of January 8, 1999, effective as of
October 31, 1998, is entered into by and among OPTICAL COATING
LABORATORY, INC. (the "Company"), the several financial
institutions party to the Credit Agreement (collectively, the
"Banks"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as agent for itself and the Banks (the "Agent") and
as letter of credit issuing bank.
RECITALS
A. The Company, Banks, and Agent are parties to a Credit
Agreement dated as of July 31, 1998 (the "Credit Agreement")
pursuant to which the Banks have extended certain credit
facilities to the Company.
B. The Company has reported to the Agent and the Banks the
existence of a certain default under the Credit Agreement. The
Company has requested that the Banks waive such default and agree
to certain amendments of the Credit Agreement.
C. The Banks are willing to waive such default under the
Credit Agreement, and to amend the Credit Agreement, subject to
the terms and conditions of this Waiver and Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings, if any,
assigned to them in the Credit Agreement.
2. Defaults and Waiver.
(a) For purposes of this Waiver and Amendment, the
"Existing Default" shall mean the default existing on this date
under Section 9.01(c) of the Credit Agreement, solely as a
consequence of a breach of the negative covenant set forth at
Section 8.16 of the Credit Agreement for the fiscal quarter ended
October 31, 1998 and solely to the extent such default may have
arisen from the loss incurred by the Company on the sale of the
assets of the MMG Division of its Subsidiary, OCLI Optical
Coating Laboratory GmbH.
(b) Subject to and upon the terms and conditions
hereof, the Banks hereby waive the Existing Default.
(c) Nothing contained herein shall be deemed a waiver
of (or otherwise affect the Agent's or the Banks' ability to
enforce) any other default or Event of Default, including without
limitation (i) any default or Event of Default as may now or
hereafter exist and arise from or otherwise be related to the
Existing Default (including without limitation any cross-default
arising under the Credit Agreement by virtue of any matters
resulting from the Existing Default), and (ii) any default or
Event of Default arising at any time after the Effective Date and
which is the same as any of the Existing Default.
3. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement shall be
amended by adding the following defined term thereto in
appropriate alphabetical order:
"MMG Loss" means the loss in the amount of
$9,214,000 (comprised of an impairment charge of
$8,628,000 and a restructuring charge of $586,000)
incurred by the Company during the fiscal quarter
ended October 31, 1998 in connection with the sale of
the assets of the MMG Division of its Subsidiary OCLI
Optical Coating Laboratory GmbH.
(b) Section 1.01 of the Credit Agreement shall be
amended by amending the defined term "Fixed Charge Coverage
Ratio" in its entirety to read as follows:
"Fixed Charge Coverage Ratio" means, for the
date of determination, the ratio of the Company's (i)
EBIT for the four quarter period ending on such date
to (ii) the sum of its consolidated (x) net interest
expense for the four quarter period ending on such
date plus (y) current portion of long term debt,
calculated on a prospective basis for the four quarter
period beginning on such date of determination. In
calculating the Fixed Charge Coverage Ratio, (a)
Indebtedness of Flex Products covered by Section
8.06(j) to the extent it is owed to SICPA or to a
third person who is making the credit extension in
lieu of SICPA and the interest expense allocated to
such Indebtedness shall be excluded, and (b) for the
fiscal quarters ending on January 31, 1999, April 30,
1999 and July 31, 1999, the MMG Loss shall be excluded
from the determination of EBIT.
(c) Section 1.01 of the Credit Agreement shall be
amended by amending the defined term "Leverage Ratio" in its
entirety to read as follows:
"Leverage Ratio" means, for the date of
determination, the ratio of Funded Debt as such date
to the Company's EBITDA for the four quarter period
ending on such date. In calculating the Leverage
Ratio,
(a) Indebtedness of Flex Products covered by
Section 8.06(j) to the extent it is owed to SICPA or
to a third person who is making the credit extension
in lieu of SICPA and the interest expense allocated to
such Indebtedness shall be excluded, and (b) for the
fiscal quarters ending on January 31, 1999, April 30,
1999 and July 31, 1999, the MMG Loss shall be excluded
from the determination of EBITDA.
4. Representations and Warranties. The Company hereby
represents and warrants to the Agent and the Banks as follows:
(a) Other than the Existing Default, no Default or
Event of Default has occurred and is continuing.
(b) The execution, delivery and performance by the
Company of this Waiver and Amendment have been duly authorized by
all necessary corporate and other action and do not and will not
require any registration with, consent or approval of, notice to
or action by, any Person (including any Governmental Authority)
in order to be effective and enforceable. The Credit Agreement
as amended by this Waiver and Amendment constitutes the legal,
valid and binding obligations of the Company, enforceable against
it in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating
to enforceability, without defense, counterclaim or offset.
(c) Subject to the Existing Default, all
representations and warranties of the Company contained in the
Credit Agreement are true and correct on and as of the Effective
Date and the date hereof, except to the extent such
representations and warranties expressly refer to an earlier
date, in which case they are true and correct as of such earlier
date.
(d) The Company is entering into this Waiver and
Amendment on the basis of its own investigation and for its own
reasons, without reliance upon the Agent and the Banks or any
other Person.
5. Effective Date. This Waiver and Amendment will become
effective as of October 31, 1998 (the "Effective Date"), provided
that each of the following conditions precedent is satisfied on
or before January 8, 1999:
(a) The Agent has received from the Company and the
Majority Banks a duly executed original (or, if elected by the
Agent, an executed facsimile copy) of this Waiver and Amendment.
(b) All representations and warranties contained
herein are true and correct on and as of the date hereof.
6. Reservation of Rights. The Company acknowledges and
agrees that neither the Agent's nor the Banks' forbearance in
exercising their rights and remedies in connection with the
Existing Default, nor the execution and delivery by the Agent and
the Banks of this Waiver and Amendment, shall be deemed (i) to
create a course of dealing or otherwise obligate the Agent or the
Banks to forbear or enter into waivers under the same, similar or
any other circumstances in the future, or (ii) to waive,
relinquish or impair any right of the Agent or the Banks to
receive any indemnity or similar payment from any Person or
entity as a result of any matter arising from or relating to the
Existing Default.
7. Miscellaneous.
(a) Except as herein expressly amended, all terms,
covenants and provisions of the Credit Agreement are and shall
remain in full force and effect and all references therein and in
the other Loan Documents to such Credit Agreement shall
henceforth refer to the Credit Agreement as amended by this
Waiver and Amendment. This Waiver and Amendment shall be deemed
incorporated into, and a part of, the Credit Agreement. This
Waiver and Amendment is a Loan Document.
(b) This Waiver and Amendment shall be binding upon
and inure to the benefit of the parties hereto and to the Credit
Agreement and their respective successors and assigns. No third
party beneficiaries are intended in connection with this Waiver
and Amendment.
(c) This Waiver and Amendment shall be governed by and
construed in accordance with the law of the State of California.
(d) This Waiver and Amendment may be executed in any
number of counterparts, each of which shall be deemed an
original, but all such counterparts together shall constitute but
one and the same instrument. Each of the parties hereto
understands and agrees that this document (and any other document
required herein) may be delivered by any party thereto either in
the form of an executed original or an executed original sent by
facsimile transmission to be followed promptly by mailing of a
hard copy original, and that receipt by the Agent of a facsimile
transmitted document purportedly bearing the signature of a Bank
or the Company shall bind such Bank or the Company, respectively,
with the same force and effect as the delivery of a hard copy
original. Any failure by the Agent to receive the hard copy
executed original of such document shall not diminish the binding
effect of receipt of the facsimile transmitted executed original
of such document of the party whose hard copy page was not
received by the Agent, and the Agent is hereby authorized to make
sufficient photocopies thereof to assemble complete counterparty
documents.
(e) This Waiver and Amendment, together with the
Credit Agreement, contains the entire and exclusive agreement of
the parties hereto with reference to the matters discussed herein
and therein. This Waiver and Amendment supersedes all prior
drafts and communications with respect thereto. This Waiver and
Amendment may not be amended except in accordance with the
provisions of Section 11.01 of the Credit Agreement.
(f) If any term or provision of this Waiver and
Amendment shall be deemed prohibited by or invalid under any
applicable law, such provision shall be invalidated without
affecting the remaining provisions of this Waiver and Amendment
or the Credit Agreement, respectively.
(g) The Company covenants to pay to or reimburse the
Agent, within five Business Days after demand, for all costs and
expenses (including reasonable Attorney Costs) incurred in
connection with the development, preparation, negotiation,
execution and delivery of this Waiver and Amendment.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Waiver and Amendment as of the date first above
written.
OPTICAL COATING LABORATORY, INC.
By: /S/XXXXXXX X. XXXX
Title: Assistant Treasurer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
By: /S/XXXXX X. XXXXXXX
Title: Managing Director
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Issuing Bank and as a Bank
By: /S/XXXXX X. XXXXXXX
Title: Managing Director
ABN AMRO BANK N.V.
By: /S/XXXXXX XXXXXX
Title: Vice President
By: /S/XXX X. XXXXXX
Title: Assistant Vice President
