Exhibit 2.1
[EXECUTION COPY]
EIGHTH AMENDMENT AND LIMITED WAIVER
EIGHTH AMENDMENT AND LIMITED WAIVER, dated as of March 22, 2002 (this
"Eighth Amendment"), to the Amended and Restated Credit Agreement, dated as of
June 13, 2000 (as amended, restated or otherwise modified from time to time,
the "Credit Agreement"), among WEIGH-TRONIX, LLC, ("Holdings"), SWT FINANCE
B.V., (the "Borrower"), WEIGH-TRONIX CANADA, ULC, collectively with the
Borrower, the "Borrowers"), the several banks and other financial institutions
or entities from time to time parties thereto (the "Lenders"), FLEET NATIONAL
BANK, as administrative agent (in such capacity, the "Administrative Agent"),
and FLEET NATIONAL BANK, as security agent (in such capacity, the "Security
Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have made certain
Loans and other financial accommodations to the Borrowers which remain
outstanding; and
WHEREAS, Holdings and the Borrowers have requested that the Administrative
Agent and the Lenders amend the Credit Agreement as set forth herein, and waive
certain events of default under the Credit Agreement, and the Administrative
Agent and the Lenders are willing to do so, but only on the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 General. Terms defined in the Credit Agreement and used herein shall,
unless otherwise indicated, have the meanings given to them in the Credit
Agreement. Terms defined and used in this Eighth Amendment shall have the
meanings given to them in this Eighth Amendment.
1.2 Amendments to Definitions. Section 1.1 of the Credit Agreement is hereby
amended by inserting the following new definitions in alphabetical order.
"Cash Collateral Account" means an account to be (i) established and
maintained at Fleet National Bank in Boston, Massachusetts as a restricted
cash collateral account in the name of the Administrative Agent, and under
the sole dominion and control of the Administrative Agent, designated as
"Fleet National Bank-SWT Finance B.V. Collateral Account" and (ii) subject
to a control account agreement, or similar agreement, in form and substance
satisfactory to the Administrative Agent.
"Deferred Eighth Amendment Fee" has the meaning specified in Section 4.4 of
the Eighth Amendment.
"Eighth Amendment" means the Eighth Amendment and Limited Waiver to the
Credit Agreement, dated as of March 22, 2002.
"Eighth Amendment Effective Date" has the meaning specified in Article V of
the Eighth Amendment.
"Eighth Amendment Fee" has the meaning specified in Section 4.4 of the
Eighth Amendment.
"Eighth Amendment Specified Events of Default" has the meaning specified in
Article II of the Eighth Amendment.
"Eighth Amendment Waiver Period" means the period from and including March
22, 2002 through and including May 17, 2002.
"Preliminary Business Plan" has the meaning specified in Section 4.2 of the
Eighth Amendment.
"Proposed Final Business Plan" has the meaning specified in Section 4.2 of
the Eighth Amendment.
"Restructuring Amendment" has the meaning specified in Section 4.1 of the
Eighth Amendment.
"Revised Loan Restructuring Date" has the meaning specified in Section 4.1
of the Eighth Amendment.
ARTICLE 2
WAIVER
Subject to the terms and conditions hereof, the Administrative Agent and the
Lenders hereby agree to waive, during the Eighth Amendment Waiver Period, any
Events of Default arising through the end of the Eighth Amendment Waiver Period
in respect of Section 8(c) of the Credit Agreement as a result of a failure by
the Borrowers to comply with the financial covenants contained in Section 7.1
of the Credit Agreement (collectively, "Eighth Amendment Specified Events of
Default").
ARTICLE 3
AMENDMENTS
3.1 Amendment to Section 1.1 (Defined Terms). Section 1.1 of the Credit
Agreement is hereby amended by modifying certain definitions contained
therein, as follows:
(a) by inserting in the definition of "Borrowing Base" (i) in clause (b)
after the phrase "of Eligible Inventory;" the word "plus" and (ii) the
following as clause (c):
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(c) 100% of the cash balance on deposit (excluding, for the avoidance of
doubt, any provisional credits) in the Cash Collateral Account.
(b) by inserting in the definition of "Waiver Period Revolving Credit
Loans" after the words "the Seventh Amendment Waiver Period" the words
"or the Eighth Amendment Wavier Period".
(c) by inserting in the definition of "Wavier Period Sublimit after the
words "the Seventh Amendment Wavier Period", in both instances where
these words are used, the words "or the Eighth Amendment Wavier
Period".
3.2 Amendment to Section 2.4 (Revolving Credit Commitments). Section 2.4 of the
Credit Agreement is hereby amended by inserting after the words "would not
exceed the Borrowing Base" the phrase "(determined immediately prior to the
making of any such Revolving Credit Loan)".
3.3 Amendment to Section 2.6 (Change in the Borrowing Base). Section 2.6 of the
Credit Agreement is hereby amended by inserting after the words "the
Seventh Amendment Waiver Period" the words "or the Eighth Amendment Wavier
Period".
3.4 Amendment to Article II (Amount and Terms of Commitments). Article II of
the Credit Agreement is hereby amended by adding the following new section:
2.29 Withdrawals from Cash Collateral Account. Notwithstanding
anything to the contrary contained herein, in the other Loan Documents or
in any prior or subsequent agreement to which the Borrower is a party, the
Borrower shall not be entitled to withdraw any funds from the Cash
Collateral Account unless (i) the Borrower shall have delivered a Borrowing
Base Report to the Administrative Agent, inform and substance satisfactory
to the Administrative Agent, two Business Days prior to the requested
withdrawal, (ii) after giving effect to said requested withdrawal, the
Total Revolving Extensions of Credit will not exceed the Borrowing Base,
(iii) no Default or Event of Default shall have occurred and be continuing
on the date of such withdrawal or after giving effect to such withdrawal
and (iv) the conditions contained in Section 5.2(a) of the Credit Agreement
have been satisfied. Each withdrawal by the Borrower from the Cash
Collateral Account shall constitute a representation and warranty by
Holdings and the Borrowers as of the date of such withdrawal that (i) no
Default or Event of Default shall have occurred and be continuing on the
date of such withdrawal or after giving effect to such withdrawal and (ii)
the conditions contained in Section 5.2(a) of the Credit Agreement have
been satisfied.
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3.5 Amendment to Section 6.7 (Notices). Section 6.7 of the Credit Agreement is
hereby amended by (i) changing the period at the end of subclause (e) to a
semi-colon, (ii) adding the word "and" thereafter and (iii) adding the
following new subsection:
(f) any payment to be made by, or on behalf of, the Borrower in respect of
the Senior Subordinated Notes, with such notice to be given at least three
Business Days prior to any such payment.
ARTICLE 4
AGREEMENTS
4.1 Loan Restructuring Date. On or before May 17, 2002 (the "Revised Loan
Restructuring Date"), Holdings, the Borrowers, the Administrative Agent and
the Required Lenders shall have agreed in writing to satisfactory
amendments to the Credit Agreement with respect to repayment in full of the
Loans, including but not limited to amendments to the covenants contained
in Section 7 of the Credit Agreement (the "Restructuring Amendment").
Anything in the Credit Agreement or any other Loan Document to the contrary
notwithstanding, all terms and conditions of the Restructuring Amendment
shall be satisfactory to the Administrative Agent and the Required Lenders
in their absolute and sole discretion. In the event that Holdings, the
Borrowers, the Administrative Agent and the Required Lenders fail to
consummate the Restructuring Amendment on or before the Revised Loan
Restructuring Date, then, automatically and without the requirement of
notice or further action by any party, such failure shall immediately
constitute an Event of Default. In furtherance but not in limitation of the
foregoing, the parties hereto agree that this Section 4.1 replaces in its
entirety Section 4.1 of the Seventh Amendment, and that such clause shall
no longer have any force or effect.
4.2 Business Plan. On or before April 12, 2002, Holdings and the Borrowers
shall deliver to the Agent and the Lenders a preliminary, bottoms-up
business plan (the "Preliminary Business Plan"), in form and substance
satisfactory to the Agent and the Required Lenders, which shall (a)
include, on a monthly basis for the period beginning March 1, 2002 and
ending on March 31, 2004, (i) consolidated forecasts detailing all sources
and uses of cash, projected usage and availability under the Total
Revolving Credit Commitments and projected principal outstanding amounts of
the Term Loans (including, without limitation, any projected payments or
prepayments of any Loans), (ii) consolidated profit and loss statements and
(iii) consolidated balance sheets and (b) identify (i) all sources of
revenue and expenses, including without limitation, intended executive
compensation, (ii) the nature of all proposed Capital Expenditures, and
(iii) compliance with the negative covenants contained in Section 7 of the
Credit Agreement and, in the case of the financial covenants contained in
Section 7.1 of the Credit Agreement, detailed calculations with respect to
the proposed revision of such financial covenants. On or before April 22,
2002, Holdings and the Borrowers shall deliver to the Agent and the Lenders
a proposed final, bottoms-up business plan (the "Proposed Final Business
Plan") in form and substance satisfactory to the Agent and the Required
Lenders, which shall (a) include and identify the same type of information
as required with respect to the Preliminary Business Plan and (b) be
accompanied by an opinion of the Consultant stating that the Proposed Final
Business Plan is based on reasonable estimates, information and assumptions
and that such Consultant has no reason to believe that such Proposed Final
Business Plan is incorrect or misleading in any material respect.
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4.3 Financial Consultant Report. On or before May 1, 2002, Holdings and the
Borrowers shall deliver to the Administrative Agent and the Lenders a
written report and restructuring proposal prepared and approved by the
Financial Consultant, in form and substance satisfactory to the
Administrative Agent and the Required Lenders.
4.4 Fees. Holdings and the Borrowers shall pay to the Administrative Agent,
for the ratable benefit of the Lenders, (a) a fee in cash equal to $150,000
(the "Eighth Amendment Fee"), payable on the Eighth Amendment Effective
Date, the payment of which shall be deemed to constitute payment in full
satisfaction of the "Deferred Seventh Amendment Fee" (as defined in Section
4.6 of the Seventh Amendment), and (b) a fee equal to $150,000 (the
"Deferred Eighth Amendment Fee"), payable in full in cash on the earliest
to occur of (i) the date of consummation of the Restructuring Amendment,
(ii) the date any Default or Event of Default occurs (unless otherwise
waived pursuant to Article II of the Eighth Amendment), and (iii) May 16,
2002, provided that if the Restructuring Amendment is consummated pursuant
to the terms of Section 4.1 hereof on or prior to the Revised Loan
Restructuring Date, the amount of any amendment fee due and payable in
connection with the Restructuring Amendment shall be reduced by the lesser
of (x) the amount of such amendment fee due and payable in connection with
the Restructuring Amendment and (y) the amount of the Deferred Eighth
Amendment Fee. Anything contained herein to the contrary notwithstanding,
the Eighth Amendment Fee and the Deferred Eighth Amendment Fee shall be
deemed earned in full on the Eighth Amendment Effective Date.
4.5 Further Assurances. In connection with the Administrative Agent's review
of the Collateral and the Collateral Certificate provided by Holdings and
the Borrowers, the Borrowers and the other Loan Parties shall execute,
within three Business Days of receipt thereof, such further instruments and
documents as the Administrative Agent shall reasonably request in order to
further perfect and secure the Administrative Agent's Liens on the
Collateral, including but not limited to account control agreements and
other instruments and documents necessary to enable the Administrative
Agent to obtain "control" (as defined in the applicable Uniform Commercial
Code) of such Collateral, including but not limited to Collateral in the
form of deposit accounts.
ARTICLE 5
EFFECTIVE DATE
This Eighth Amendment shall become effective as of the date first written
above (the "Eighth Amendment Effective Date") when each of the following has
been satisfied or waived in accordance with the terms hereof:
1. Receipt by the Administrative Agent of counterparts of this Eighth
Amendment, duly executed and delivered by Holdings, the Borrowers and the other
Loan Parties;
(b) Receipt by the Administrative Agent of executed Consent Letters (in the
form attached hereto as Annex A) from the Required Lenders (or facsimile
transmissions thereof) consenting to the execution of this Eighth Amendment by
the Administrative Agent;
(c) Receipt by the Administrative Agent of Acknowledgement and Consents in
the form attached hereto as Annex B, duly executed and delivered from each
Guarantor;
(d) Receipt by the Administrative Agent of counterparts of the third
amendment to Sponsor Guarantee, duly executed and delivered by the Sponsors, in
the form attached hereto as Annex C;
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(e) Receipt by the Administrative Agent of the Eighth Amendment Fee; and
(f) Receipt by the Administrative Agent of payment in full in cash of its
invoiced and unpaid fees and disbursements incurred in connection with the
preparation and execution of this Eighth Amendment and Waiver, any documents
prepared in connection herewith, the Credit Agreement and any amendments or
other modifications thereto, including, without limitation, the reasonable fees
and disbursements of the Administrative Agent's counsel and financial advisor.
ARTICLE 6
INTERPRETATION
6.1 Continuing Effect of the Credit Agreement. Holdings, Borrower, the other
Loan Parties, the Administrative Agent and the Lender hereby acknowledge
and agree that the Credit Agreement and the other Loan Documents shall
continue to be and shall remain unchanged and in full force and effect in
accordance with their terms, except as expressly modified hereby. Any terms
or conditions contained in this Eighth Amendment shall control over any
inconsistent terms or conditions in the Credit Agreement or the other Loan
Documents.
6.2 No Waiver; Other Defaults or Events of Default. Nothing contained in this
Eighth Amendment shall be construed or interpreted or is intended as a
waiver of or limitation on any rights, powers, privileges or remedies that
the Administrative Agent or the Lenders have or may have under the Credit
Agreement or any other Loan Document or applicable law on account of any
Default or Event of Default other than the Eighth Amendment Specified
Events of Default.
ARTICLE 7
MISCELLANEOUS
7.1 Representations and Warranties. Holdings and the Borrowers hereby
represent and warrant as of the date hereof that, after giving effect to
this Eighth Amendment, (a) no Default or Event of Default has occurred and
is continuing, except the Eighth Amendment Specified Events of Default, and
(b) all representations and warranties of Holdings and the Borrowers
contained in the Loan Documents (with such term being deemed to include
this Eighth Amendment and the Credit Agreement) are true and correct in all
material respects with the same effect as if made on and as of such date,
except (i) to the extent any of such representations and warranties relate
to a specific date, in which case such representations and warranties shall
be deemed true and correct on and as of such date, (ii) that Section 4.7 of
the Credit Agreement shall be deemed to exclude the Eighth Amendment
Specified Events of Default, and (iii) that the representation in Section
4.2 of the Credit Agreement is qualified to the extent that Holdings and
its Subsidiaries have experienced a material and continuing downturn in the
level of business of their North American operations.
7.2 Reaffirmation of Covenants. Holdings and the Borrowers hereby expressly
reaffirm each of the covenants made by them in Section 6 of the Credit
Agreement, including without limitation, the covenants contained in Section
6.9 (Additional Collateral, etc.) and Section 6.10 (Further Assurances).
7.3 Release. Holdings, the Borrowers and the other Loan Parties hereby
release, waive, and forever relinquish all claims, demands, obligations,
liabilities and causes of action of whatever kind or nature, whether known
or unknown, which any of them have, may have, or might assert at the time
of execution of this Eighth Amendment or in the future against the
Administrative Agent, the Lenders and/or their respective parents,
affiliates, participants, officers, directors, employees,
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agents, attorneys, accountants, consultants, successors and assigns,
directly or indirectly, which occurred, existed, was taken, permitted or
begun from the beginning of time through the date hereof, arising out of,
based upon, or in any manner connected with (i) any transaction, event,
circumstance, action, failure to act or occurrence of any sort or type,
whether known or unknown, with respect to the Credit Agreement, any other
Loan Document and/or the administration thereof or the Obligations created
thereby, (ii) any discussions, commitments, negotiations, conversations or
communications with respect to the refinancing, restructuring or collection
of any Obligations related to the Credit Agreement, any other Loan Document
and/or the administration thereof or the Obligations created thereby, or
(iii) any matter related to the foregoing.
7.4 Consents of Guarantors. Each Domestic Guarantor and each Foreign Guarantor
hereby, to the extent necessary, (i) consents to the transactions
contemplated hereby and (ii) acknowledges and agrees that the guarantees
(and all security therefor) contained in the Guarantee and Collateral
Agreement or Foreign Guarantee, as applicable, previously executed by it
is, and shall remain, in full force and effect after giving effect to this
Eighth Amendment and all other prior modifications to the Credit Agreement.
7.5 Payment of Expenses. Holdings and the Borrowers jointly and severally
agree to pay or reimburse the Administrative Agent for all of their
out-of-pocket costs and expenses incurred in connection with this Eighth
Amendment, any other documents prepared in connection herewith and the
transactions contemplated hereby, including, without limitation, the
reasonable fees and disbursements of the Administrative Agent's counsel and
financial advisor.
7.6 Reference to and Effect on the Loan Documents; Limited Effect. On and
after the date hereof and the satisfaction of the conditions contained in
Article V of this Eighth Amendment, each reference in the Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of
like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby. For purposes of the
Credit Agreement, all of the agreements of Holdings and the Borrowers
contained in this Eighth Amendment shall be deemed to be, and shall be,
agreements under the Credit Agreement. The execution, delivery and
effectiveness of this Eighth Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any
Lender or any Agent under any of the Loan Documents, nor constitute a
waiver of any provisions of any of the Loan Documents. Except as expressly
amended or waived herein, all of the provisions and covenants of the Credit
Agreement and the other Loan Documents are and shall continue to remain in
full force and effect in accordance with the terms thereof and are hereby
in all respects ratified and confirmed.
7.7 Reservation of Rights. Notwithstanding anything contained in this Eighth
Amendment to the contrary, Holdings and the Borrowers and each Loan Party
acknowledge that the Administrative Agent and the Lenders do not waive, and
expressly reserve, the right to exercise any and all of their rights and
remedies under (a) the Credit Agreement, any other Loan Document and
applicable law in respect of the Specified Event of Default against any
Person other than Holdings, the Borrowers or any Loan Party, including such
rights and remedies as are set forth in the Sponsor Guarantee, and (b) the
Credit Agreement, any other Loan Document and applicable law in respect of
any Default or Event of Default other than the Specified Event of Default.
7.8 Counterparts. This Eighth Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts (which may include
counterparts delivered by facsimile transmission) and all of said
counterparts taken together shall be deemed to constitute one and the
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same instrument. Any executed counterpart delivered by facsimile
transmission shall be effective for all purposes hereof.
7.9 GOVERNING LAW. THIS EIGHTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS EIGHTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the date first written above.
WEIGH-TRONIX, LLC
By: /s/ XXXX X. XXXXXX III
----------------------------------
Name:
Title:
SWT FINANCE B.V.
By: /s/ XXXX X. XXXXXX III
----------------------------------
Name:
Title:
WEIGH-TRONIX CANADA, ULC
By: /s/ XXXX X. XXXXXX III
----------------------------------
Name:
Title:
FLEET NATIONAL BANK,
as Administrative Agent,
as Security Agent and as Fronting
Lender
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name:
Title:
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