SECOND AMENDMENT dated as of October 6, 1997 (this "Second Amendment"),
to the Credit Agreement referred to below among OAK INDUSTRIES INC., a
Delaware corporation (the "Borrower"), the lenders party hereto and THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent").
A. The parties hereto have entered into a Credit Agreement dated as of
November 1, 1996 (as amended, the "Credit Agreement").
B. The Borrower has requested that certain terms of the Credit
Agreement be amended to the extent necessary to allow the Borrower to issue
up to $110 million in aggregate principal amount of subordinated notes, and
the Required Lenders are willing, on the terms and subject to the
conditions set forth below, to agree to amend the Credit Agreement as
provided herein.
C. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Credit Agreement.
In consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto hereby agree, on the terms
and subject to the conditions set forth herein, as follows:
SECTION 1. Amendment of Article I.
(a) Article I of the Credit Agreement is hereby amended by inserting
therein the following definitions in the proper alphabetical order:
"Second Amendment Effective Date" shall mean the date on which all
conditions to effectiveness in Section 7 of the Second Amendment dated as
of October 6, 1997 to the Credit Agreement have been satisfied.
"Subordinated Notes" shall mean up to $110 million in aggregate
principal amount of subordinated notes issued by the Borrower and
subordinated in right of payment to the Obligations and other Senior Debt
pursuant to documentation containing interest rates, payment terms,
maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions, overallocation provisions and other material
terms in form and substance satisfactory to the Required Lenders and the
Administrative Agent.
"Senior Debt" shall mean all Indebtedness other than the Subordinated
Notes.
"Senior Debt Leverage Ratio" shall mean, with respect to the Borrower
and Subsidiaries on a consolidated basis, on any date, the ratio of (a)
Senior Debt as of such date minus Indebtedness of the type referred to in
clause (i) of the definition of the term "Indebtedness" or Indebtedness of
the type referred to in clauses (f) and (g) of such definition to the
extent that the Indebtedness of the other person referred to in such
clauses (f) and (g) is Indebtedness of the type referred to in clause (i)
of the Borrower and the Subsidiaries at such time, to (b) EBITDA for the
four fiscal quarters most recently ended on such date (including, to the
extent necessary, fiscal quarters that shall have ended prior to the Second
Amendment Effective Date). For purposes of computing the Senior Debt
Leverage Ratio on any date, if the Borrower shall have acquired any person
or business during the period of four fiscal quarters most recently ended
as of such date, EBITDA shall be determined on a pro forma basis as if such
acquisition had occurred on the first day of such period.
(b) The definition of "Applicable Percentage" in Article I of the
Credit Agreement is hereby restated in its entirety as follows:
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan, or with respect to the Commitment Fees, as the case may
be, the applicable percentage set forth below under the caption "Eurodollar
Spread" or "Commitment Fee Percentage", as the case may be, based upon the
Leverage Ratio and Interest Coverage Ratio for the Borrower and the
Subsidiaries as of the relevant Determination Date:
Eurodollar Commitment Fee
Spread Percentage
----------- ---------------
CATEGORY 1
Leverage Ratio less than or equal to
1.25 to 1.00 AND Interest Coverage
Ratio greater than or equal to 5.0 to 1.0........... 0.500% 0.175%
CATEGORY 2
Leverage Ratio less than or equal to
1.75 to 1.0 AND Interest Coverage Ratio
greater than or equal to 4.5 to 1.0................. 0.625% 0.200%
CATEGORY 3
Leverage Ratio less than or equal to
2.25 to 1.00 AND Interest Coverage Ratio
greater than or equal to 4.0 to 1.0................. 0.750% 0.250%
CATEGORY 4
Leverage Ratio greater than 2.25 to 1.00 OR
Interest Coverage Ratio less than 4.0 to 1.0........ 1.000% 0.300%
; provided that, notwithstanding the foregoing, if on any day the Leverage
Ratio shall exceed 3.75 to 1.00, (a) the Eurodollar Spread for the
applicable Category then in effect shall be 1.250%, and (b) the Commitment
Fee Percentage for the applicable Category then in effect shall be 0.350%.
The applicable Category shall be the one with the lowest spreads for
which both the Leverage Ratio and the Interest Coverage Ratio requirements
are satisfied. Each change in the Applicable Percentage resulting from a
change in the Leverage Ratio or Interest Coverage Ratio shall be effective
with respect to all Revolving Loans, Commitments and Letters of Credit
outstanding on and after the date on which the financial statements and
certificates required by Section 5.04(a) or 5.04(b) and Section 5.04(c) are
delivered to the Administrative Agent indicating such change until the date
immediately preceding the next due date for the delivery of such financial
statements and certificates. Notwithstanding the foregoing, at any time
during which the Borrower has failed to deliver the financial statements
and certificates required by Section 5.04(a) or 5.04(b) and Section
5.04(c), the Leverage Ratio and Interest Coverage Ratio shall be deemed to
be in Category 4 for purposes of determining the Applicable Percentage.
SECTION 2. Amendment to Section 6.01.
Section 6.01 of the Credit Agreement is hereby amended by (a) deleting the
word "and" at the end of clause (i) thereof, (b) deleting the period at the
end of clause (k) thereof and substituting "; and" therefor and (c)
inserting after clause (k) thereof the following:
"(l) the Subordinated Notes."
SECTION 3. Amendment to Section 6.10.
Section 6.10 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
SECTION 6.10. Leverage Ratio.
Permit the Leverage Ratio as of the last day of any fiscal quarter, which
last day occurs in any period set forth below, to be greater than the ratio
set forth below for such period:
From and Including To and Including Leverage Ratio
------------------ ---------------- --------------
The earlier of January 1, 1998
and the date of the issuance of
the Subordinated Notes............. December 30, 1998 5.00 to 1.0
December 31, 1998.................... December 30, 1999 4.75 to 1.0
December 31, 1999.................... December 30, 2000 4.50 to 1.0
December 31, 2000.................... Thereafter 4.25 to 1.0
SECTION 4. Amendment to Section 6.11.
Section 6.11 is hereby amended and restated in its entirety as follows:
SECTION 6.11. Interest Coverage Ratio.
Permit the Interest Coverage Ratio of the Borrower and the Subsidiaries as
of the last day of each fiscal quarter, which last day occurs in any period
set forth below, to be less than the ratio set forth below for such period:
From and Including To and Including Interest Coverage
Ratio
------------------ ---------------- -----------------
Second Amendment Effective
Date................................. December 30, 1998 2.25 to 1.00
December 31, 1998....................... December 30, 1999 2.25 to 1.00
December 31, 1999....................... December 30, 2000 2.50 to 1.00
December 31, 2000....................... Thereafter 2.75 to 1.00
SECTION 5. Amendment of Article VI.
Article VI is hereby amended by inserting at the end thereof the following
new Section 6.13:
SECTION 6.13 Senior Debt Leverage Ratio.
Permit the Senior Debt Leverage Ratio on or at any time after the earlier
of January 1, 1998 and the date of the issuance of the Subordinated Notes
to be greater than 3.50 to 1.00.
SECTION 6. Representations and Warranties.
The Borrower represents and warrants to each of the Lenders and the
Administrative Agent that:
(i) Before and after giving effect to this Second Amendment, the
representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects with the same
effect as if made on the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date.
(ii) Before and after giving effect to this Second Amendment, no
Event of Default or Default has occurred and is continuing.
SECTION 7. Conditions to Effectiveness.
This Second Amendment shall become effective upon the Second Amendment
Effective Date when the Administrative Agent shall have received
counterparts of this Second Amendment that, when taken together, bear the
signatures of the Borrower, the Guarantors and the Required Lenders.
SECTION 8. Credit Agreement.
Except as specifically stated herein, the provisions of the Credit
Agreement are and shall remain in full force and effect.
SECTION 9. Applicable Law.
THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. Counterparts.
This Second Amendment may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together
shall constitute but one contract.
SECTION 11. Expenses.
The Borrower agrees to reimburse the Administrative Agent for its out-of-
pocket expenses in connection with this Second Amendment, including the
reasonable fees, charges and disbursements of Cravath, Swaine and Xxxxx,
counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed by their respective authorized officers as of the day
and year first written above.
OAK INDUSTRIES INC.,
by
/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President,
Corporate Development and Treasurer
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
/s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: Vice President
ABN AMRO BANK N.V., Boston Branch,
by: ABN AMRO North America, Inc.,
as Agent
by
/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
by
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Group Vice President
NATIONSBANK OF TEXAS, N.A.,
by
/s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
LTCB TRUST CO.,
by
/s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
THE ROYAL BANK OF SCOTLAND PLC -
NEW YORK BRANCH,
by
/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President and
Deputy Mananger
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Director
BHF-BANK AG,
by
/s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Vice President
by
/s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Assistant Vice President
MELLON BANK, N.A.,
by
/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: AVP
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
by
/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
FLEET NATIONAL BANK,
by
/s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
by
Name:
Title:
