Exhibit (99.4)
SECOND AMENDMENT AND WAIVER
THIS SECOND AMENDMENT AND WAIVER (this "Amendment") dated as of January
31, 2002, is entered into among REGAL-BELOIT CORPORATION (the "Company"), the
financial institutions listed on the signature pages hereof (collectively, the
"Banks"), BANK OF AMERICA, N.A., as Documentation and Syndication Agent, and M&I
XXXXXXXX & XXXXXX BANK, as Administrative Agent.
W I T N E S S E T H :
WHEREAS, the Company, the Banks, the Documentation and Syndication
Agent and the Administrative Agent are parties to a Credit Agreement, dated as
of September 28, 2000 (as previously amended, the "Credit Agreement";
capitalized terms used but not defined herein have the respective meanings
ascribed thereto in the Credit Agreement); and
WHEREAS, the parties hereto desire to amend, and the Required Banks are
willing to waive, certain provisions of the Credit Agreement as hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1 AMENDMENTS TO CREDIT AGREEMENT. Effective on the Amendment
Effective Date (as defined below), the Credit Agreement shall be amended as set
forth below.
1.1. Addition of Definition. The following definition is added to
Section 1.1 in proper alphabetical sequence:
Equity Issuance means any issuance (or series of related
issuances) of equity securities by the Company after January 31, 2002
which results in Net Cash Proceeds of $5,000,000 or more.
1.2. Additional Mandatory Reduction of the Commitments. Section 6.1.2
is amended by (a) designating the existing text thereof as clause "(a)"; and (b)
adding the following clause (b) thereto:
(b) Concurrently with the receipt by the Company of the
proceeds of any Equity Issuance, the Commitment Amounts shall be
reduced by the amount of the Net Cash Proceeds of such Equity Issuance;
provided that the aggregate amount of all reductions of the Commitment
Amount made pursuant to this clause (b) shall not exceed $25,000,000.
SECTION 2 WAIVERS. The Required Banks hereby waive through May 30, 2002
any failure by the Company to comply with Section 10.6.2 of the Credit Agreement
(maximum Funded Debt to EBITDA Ratio) for the Computation Period ending March
31, 2002 so long as the Funded Debt to EBITDA Ratio does not exceed 4.5 to 1.0
as of the end of such
Computation Period. The foregoing waiver shall expire on May 30, 2002 and, upon
such expiration, an immediate Event of Default shall exist under the Credit
Agreement unless (a) the Company is in compliance with Section 10.6.2 of the
Credit Agreement as of March 31, 2002; or (b) on May 30, 2002, the pro forma
Funded Debt to EBITDA Ratio as of March 31, 2002, calculated after giving effect
to any Equity Issuance (as defined in the Amended Credit Agreement (as defined
below)) completed after March 31, 2002 and the use of the proceeds thereof, is
less than 4.00 to 1.0 (in which event the waivers set forth above of Section
10.6.2 of the Credit Agreement for the period ending March 31, 2002 shall become
permanent); or (c) the Required Banks, in their sole and complete discretion,
agree to a further waiver of, or an amendment to, Section 10.6.2 of the Credit
Agreement for the period ending March 31, 2002.
SECTION 3 REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Banks and the Administrative Agent that:
3.1. Authorization; No Conflict. The execution and delivery by the
Company of this Amendment and the performance by the Company of its obligations
under the Credit Agreement, as amended hereby (as so amended, the "Amended
Credit Agreement") have been duly authorized by all necessary corporate action
(including any necessary shareholder action), have received all necessary
governmental approval (if any shall be required), and do not and will not (a)
violate any provision of law or any order, decree or judgment of any court or
other government agency which is binding on the Company or any Guarantor, (b)
contravene or conflict with, or result in a breach of, any provision of the
certificate of incorporation, partnership agreement, by-laws or other
organizational documents of the Company or any Guarantor or of any agreement,
indenture, instrument or other document which is binding on the Company, any
Guarantor or any other Subsidiary, or (c) result in, or require, the creation or
imposition of any Lien on any property of the Company, any Guarantor or any
other Subsidiary (other than Liens under the Pledge Agreement).
3.2. Validity and Binding Nature. This Amendment has been duly executed
and delivered by the Company, and this Amendment and the Amended Credit
Agreement are legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to
bankruptcy, insolvency and similar laws affecting the enforceability of
creditors' rights generally and to general principles of equity.
3.3. Reaffirmation of Warranties. The warranties contained in Section 9
of the Amended Credit Agreement (excluding Sections 9.8 and 9.17) are true and
correct on the date of this Amendment, except to the extent that such warranties
(a) solely relate to an earlier date or (b) are changed by circumstances or
events that do not constitute a breach of any covenant set forth in Section 10
of the Amended Credit Agreement.
SECTION 4 CONDITIONS PRECEDENT. This Amendment shall become effective
as of January 31, 2002 on the date (the "Amendment Effective Date") on which all
of the following conditions precedent have been satisfied:
4.1. Receipt of Counterparts. The Administrative Agent shall have
received counterpart originals of this Amendment, duly executed by the Company,
the Required Banks
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and the Administrative Agent. For purposes hereof, a facsimile executed copy
shall be treated as an original.
4.2. Payment of Fees. The Company shall have paid to the Administrative
Agent, for the account of each Bank which has delivered (by facsimile or
otherwise) an executed counterpart hereof to the Administrative Agent prior to
5:00 p.m., Chicago time, on January 31, 2002, an amendment fee equal to 0.025%
of the amount of such Bank's Commitment after giving effect hereto.
4.3. Confirmation. A confirmation, substantially in the form of
Attachment A hereto, signed by each Guarantor.
4.4. No Default. No Event of Default or Unmatured Event of Default
shall have occurred and be continuing.
4.5. Certificate. The Administrative Agent shall have received a
certificate, dated such date as shall be acceptable to the Administrative Agent
and signed by an Executive Officer, as to the matters set forth in Sections 3.3
and 4.4.
SECTION 5 MISCELLANEOUS.
5.1. Expenses. The Company agrees to pay on demand all reasonable costs
and expenses of the Administrative Agent and the Documentation and Syndication
Agent (including fees, charges and expenses of counsel for the Administrative
Agent and the Documentation and Syndication Agent) in connection with the
preparation, negotiation, execution, delivery and administration of this
Amendment and all other instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith. All
obligations provided in this Section 5.1 shall survive any termination of this
Amendment and the Amended Credit Agreement.
5.2. Captions. Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.
5.3. Governing Law. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. Wherever possible each provision of
this Amendment shall be interpreted in such manner as to be effective and valid
under applicable laws, but if any provision of this Amendment shall be
prohibited by or invalid under such laws, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Amendment.
5.4. Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered (including by facsimile),
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Amendment.
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5.5. References to Credit Agreement. Except as herein amended or
waived, the Credit Agreement shall remain in full force and effect and is hereby
ratified in all respects. On and after the effectiveness of the amendments to,
and waivers under, the Credit Agreement accomplished hereby, each reference in
the Amended Credit Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference to the Credit Agreement in
any Note in any other agreement, document or other instrument executed and
delivered pursuant to the Amended Credit Agreement, shall mean and be a
reference to the Amended Credit Agreement.
5.6. Successors and Assigns. This Amendment shall be binding upon the
parties hereto and their respective successors and assigns, and shall inure to
the sole benefit of the parties hereto and the successors and assigns of the
Administrative Agent and the Banks.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the day and year first above written.
REGAL-BELOIT CORPORATION
By:
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Title: Vice President, Chief
Financial Officer and
Secretary
M&I XXXXXXXX & ILSLEY BANK,
as Administrative Agent, Issuing Bank,
Swing Line Bank and as a Bank
By:
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Title:
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By:
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Title:
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BANK OF AMERICA, N.A.,
as Documentation and Syndication Agent
and as a Bank
By:
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Title:
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BANK ONE, N.A. (Main Office Chicago)
By:
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Title:
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FIRSTAR BANK, N.A.
By:
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Title:
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THE FUJI BANK, LIMITED
By:
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Title:
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FLEET NATIONAL BANK
By:
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Title:
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XXXXXX TRUST AND SAVINGS BANK
By:
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Title:
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THE BANK OF TOKYO-MITSUBISHI, LTD.
By:
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Title:
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LASALLE BANK NATIONAL ASSOCIATION
By:
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Title:
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NORTHERN TRUST COMPANY
By:
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Title:
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WACHOVIA BANK, N.A.
By:
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Title:
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THE GOVERNOR AND COMPANY OF
THE BANK OF IRELAND
By:
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Title:
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BANCA NAZIONALE DEL LAVORO, S.P.A.,-
New York Branch
By:
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Title:
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THE INDUSTRIAL BANK OF JAPAN, LIMITED
By:
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Title:
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SUMITOMO MITSUI BANKING CORPORATION
By:
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Title:
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By:
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Title:
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XXXXXXXX XXXX XXXX XX XXXXXXXX/
XXXXXXXX
By:
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Title:
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ST. XXXXXXX BANK, F.S.B.
By:
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Title:
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BANCO ESPIRITO SANTO, N.A.,
New York Branch
By:
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Title:
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By:
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Title:
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ATTACHMENT A
CONFIRMATION BY GUARANTORS
To the Agents and the Banks under
and as defined in the Credit Agreement
referred to below
Re: Regal-Beloit Corporation
Ladies and Gentlemen:
Please refer to the Second Amendment and Waiver dated as of January 31,
2002 (the "Amendment") to the Credit Agreement dated as of September 28, 2000
(the "Credit Agreement") among Regal-Beloit Corporation, various financial
institutions, Bank of America, N.A., as Documentation and Syndication Agent, and
M&I Xxxxxxxx & Xxxxxx Bank, as Administrative Agent. Capitalized terms not
defined herein are used as defined in the Credit Agreement.
Each of the undersigned hereby confirms to the Agents and the Banks
that, after giving effect to the Amendment, the Guaranty continues in full force
and effect and is the legal, valid and binding obligation of such undersigned,
enforceable against such undersigned in accordance with its terms, subject to
bankruptcy, insolvency and similar laws affecting the enforceability of
creditors' rights generally and to general principles of equity.
IN WITNESS WHEREOF, each of the undersigned has caused this
Confirmation to be executed and delivered by its duly authorized representative
as of January 31, 2002.
XXXXXX ELECTRIC CORPORATION
By:
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Name:
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Title:
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HUB CITY, INC.
By:
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Name:
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Title:
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MARATHON ELECTRIC MANUFACTURING
CORPORATION
By:
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Name:
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Title:
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