AMENDMENT NO. 3 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT (this "Amendment") is dated as
of September 26, 2006, among:
XXXXXX CORPORATION, a Delaware corporation (hereinafter referred to as
the "Borrower");
THE LENDERS PARTY HERETO; and
THE BANK OF NEW YORK, as administrative agent for the Lenders referred
to below (in such capacity, the "Administrative Agent").
RECITALS
A. The Borrower, the Lenders party thereto (the "Lenders"), and The
Bank of New York, as Issuing Lender, Swingline Lender and Administrative Agent
have entered into a Credit Agreement, dated as of October 29, 2004 (as amended
pursuant to (i) a certain Amendment No. 1 and Consent, dated as of July 1, 2005,
and (ii) a certain Amendment No. 2 to Credit Agreement, dated as of May 9, 2006,
and, as in effect on the date hereof, the "Credit Agreement").
B. The Borrower has advised the Administrative Agent and the Lenders
that it intends to enter into an Agreement and Plan of Merger (the "Catalyst
Merger Agreement"), dated as of September 29, 2006, among the Borrower, 2006
Franklin Congress Corporation, a California corporation and wholly-owned
subsidiary of the Borrower ("Catalyst Merger Sub"), Catalyst Enterprises, Inc.,
a California corporation ("Catalyst"), and Xxxxx Xxxxx ("Xxxxx"), acting in his
capacity as equityholder representative and the sole stockholder of Catalyst,
pursuant to which, among other things, the Catalyst Merger Sub and Catalyst will
merge (the "Catalyst Merger"), Catalyst shall continue as the surviving
corporation and as a wholly owned Subsidiary of the Borrower, and the separate
corporate existence of Catalyst Merger Sub shall cease .
C. As consideration for the Catalyst Merger, the Borrower has agreed to
pay Saleh $33,500,000, a portion of which in the amount of $30,000,000 is
payable to Saleh in cash upon the consummation of the Catalyst Merger, and the
balance of which, in the amount of $3,500,000, is payable to the Saleh on
January 2, 2008, pursuant to a subordinated promissory note (the "Saleh Note").
D. The Borrower has requested that the Lenders agree to amend the
Credit Agreement, in certain respects, in order to permit the Catalyst Merger
and the transactions contemplated thereby.
NOW, THEREFORE, in consideration of the agreements and provisions
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein that are defined in the
Credit Agreement and not otherwise defined herein shall have the meanings
ascribed thereto therein.
2. AMENDMENT TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended, as follows:
2.1 Section 1.01 (Defined Terms) of the Credit Agreement is hereby
amended to add the following defined terms in the appropriate alphabetical
order:
"Amendment No. 3" means Amendment No. 3 to Credit Agreement, dated as
of September 26, 2006.
"Catalyst" has the meaning ascribed to such term in Recital B of
Amendment No. 3.
"Catalyst Loan" means, collectively, the Revolving Loans to be made
under the Credit Agreement, the proceeds of which shall be used by the
Borrower to pay the cash portion of the purchase price payable under the
Catalyst Merger Agreement and the transaction costs related thereto.
"Catalyst Merger" has the meaning ascribed to such term in Recital B of
Amendment No. 3.
"Catalyst Merger Agreement" has the meaning ascribed to such term in
Recital B of Amendment No. 3.
"Catalyst Merger Date" means the date on which the Catalyst Merger is
consummated in accordance with the terms of the Catalyst Merger Agreement.
"Catalyst Merger Sub" has the meaning ascribed to such term in Recital
B of Amendment No. 3.
"Saleh " has the meaning ascribed to such term in Recital B of
Amendment No. 3.
"Saleh Note" has the meaning ascribed to such term in Recital C of
Amendment No. 3.
2.2 The definition of "Indebtedness" in Section 1.01 (Defined Terms) is
hereby amended to add the following sentence at the end of such definition:
"For the purpose of any calculation or determination of "Indebtedness"
of the Borrower and its Subsidiaries, such Indebtedness shall include in
the indebtedness evidenced by the Saleh Note.
2.3 Section 7.01 (Indebtedness) of the Credit Agreement is hereby
amended by deleting in its entirety the text of Section 7.01(a)(vii) and
substituting therefor the following:
"(vii) (A) unsecured Indebtedness evidenced by the Saleh Note,
provided that principal amount thereof is not greater than $3,500,000
and the repayment thereof by the Borrower to the Saleh is subordinated
to the obligations of the Borrower to the Administrative Agent and the
Lenders on terms and conditions satisfactory to the Administrative
Agent, and (B) other unsecured Indebtedness of the Borrower and the
Subsidiary Guarantors in an aggregate principal amount not exceeding
$1,000,000 at any time outstanding."
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2.4 Section 7.04 (Investments, Loans, Advances, Guarantees and
Acquisitions) of the Credit Agreement is hereby amended by deleting in its
entirety the text of Section 7.04(e) and substituting therefor the following:
"(e) (i) Acquisitions consummated prior to the effective date of
Amendment No. 3;
(ii) the Catalyst Merger provided that (i) all conditions set forth
in Section 3 of Amendment No. 3 shall have been satisfied and (ii) the
aggregate consideration paid by the Borrower for the Catalyst Merger does
not exceed the amounts set forth in the Catalyst Merger Agreement as in
effect on the date of Amendment No. 3; and
(iii) any other Acquisition approved in writing by the Required
Lenders."
2.5 Section 8.01 (Events of Default) of the Credit Agreement is hereby amended
by deleting the ";" at the end of clause (o) and substituting therefor "; or"
and adding the following clause (p):
"(p) not later than thirty (30) days after the Catalyst Merger Date,
(i) the Borrower shall fail, pursuant the Security Agreement, to have
granted to the Administrative Agent a first security interest in all of the
Capital Stock of Catalyst, and (ii) Catalyst shall have failed to execute
and/or deliver such documents as the Administrative Agent may reasonably
require (consistent with the requirements of this Agreement) to cause
Catalyst to become a party to the Guarantee Agreement and to the Security
Agreement in order for Catalyst to grant to the Administrative Agent a
first security interest in its assets, subject to the Permitted
Encumbrances and such certifications, opinions, and resolutions as the
Administrative Agent may reasonably request with respect thereto;"
3. CONDITIONS PRECEDENT TO EFFECTIVENESS.
Upon the fulfillment of the following conditions precedent, this
Amendment and the amendments contained in Section 2 hereof shall become
effective as of September 26, 2006:
3.1 Amendment. The Administrative Agent shall have received this
Amendment, duly executed by a duly authorized officer or officers of the
Borrower, the Administrative Agent and the Lenders.
3.2 Secretary's Certificate. The Administrative Agent shall have
received a certificate, dated the date hereof, duly executed by the Secretary,
Assistant Secretary, or other analogous counterpart of the Borrower:
(a) attaching a true and complete copy of the resolutions of its
Managing Person and of all other documents evidencing all necessary corporate
action (in form and substance satisfactory to the Administrative Agent) taken to
authorize this Amendment and the other transactions contemplated hereby;
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(b) certifying that no amendment or modification of its
Organizational Documents has occurred since the date of delivery thereof to the
Administrative Agent in connection with the Credit Agreement; and
(c) setting forth the incumbency of its officer or officers (or
other analogous counterpart) who may sign this Amendment and the other documents
to be executed by it in connection herewith, including therein a signature
specimen of such officer or officers (or other analogous counterpart).
3.3 Catalyst Merger Agreement. The Administrative Agent shall have
received a copy of the definitive Catalyst Merger Agreement, which shall provide
for the merger of Catalyst and the Catalyst Merger Sub for an aggregate purchase
price not in excess of $33,500,000, and shall not have been amended or modified
except with the prior written consent of the Administrative Agent, and evidence
satisfactory to the Administrative Agent that an Agreement of Merger with
respect to the Catalyst Merger has been filed with the Secretary of State of the
State of California together with a certificate signed on behalf of the Borrower
by the Borrower's chief executive officer, chief financial officer or treasurer,
dated as of the Catalyst Merger Date, stating that:
(a) Catalyst's directors and shareholders have approved the
Catalyst Merger Agreement;
(b) all regulatory consents and approvals for the Catalyst Merger
have been obtained and all waiting periods with respect thereto have expired and
all consents set forth in Schedule 4.17 to the Catalyst Merger Agreement have
been obtained;
(c) there exists no injunction or temporary restraining order which
would prohibit the Catalyst Merger or the making of the Catalyst Loan; and there
exists no litigation which would reasonably be expected to result in a Material
Adverse Effect (after giving effect to the Catalyst Merger) taken as a whole;
and
(d) all conditions to the Catalyst Merger in accordance with the
Catalyst Merger Agreement have been satisfied other than the payment of the cash
consideration for the shares of Catalyst.
3.4 Saleh Note. The Administrative Agent shall have received a copy of
the Saleh Note which shall be in form and substance satisfactory to it.
3.5 Catalyst's Agreements. The Administrative Agent shall have received
and reviewed copies of Catalyst's agreements with its principal distributors and
received confirmation that such agreements are not subject to termination as a
result of the Catalyst Merger.
3.6 Lien Searches. Results of a search of (i) the Uniform Commercial
Code (or equivalent) filings made with respect to Catalyst in the State of
California [and any other relevant jurisdictions], and (ii) the United States
Patent and Trademark Office and any other relevant offices with respect to
Catalyst's Intellectual Property, and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably satisfactory
to the Administrative Agent that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 7.02 or have been
released.
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3.7 Capital Structure. After giving effect to the Catalyst Merger the
capital structure of the Borrower and the incurrence of the Catalyst Loan and
Saleh Note shall be reasonably satisfactory to the Administrative Agent.
3.8 Catalyst Financial Statements. The Administrative Agent shall have
received copies of the unaudited, modified cash-basis balance sheets of Catalyst
as of the fiscal year ended December 31, 2005 and the period ended August 31,
2006 and the profit and loss statement of Catalyst for the twelve month period
ended June 30, 2006.
3.9 Solvency Certificate. The Administrative Agent shall have received
a Solvency Certificate, dated the Catalyst Merger Date, from the chief financial
officer of the Borrower in substantially the form annexed to the Credit
Agreement as Exhibit F (with conforming changes with respect to the Catalyst
Merger and with the designated exhibits attached).
3.10 Financial Covenant Compliance Certificate. The Administrative
Agent shall have received a certificate, dated the Catalyst Merger Date and
signed by a Financial Officer of the Borrower, setting forth reasonably detailed
calculations demonstrating that, on a pro forma basis, after giving effect to
the Catalyst Merger, the Borrower is and will be in compliance with Sections
7.12 (such covenant to be determined as if the Catalyst Merger had been
consummated on the first day of the period for which such covenants are being
calculated).
3.11 Financial Officer's Certificate. The Administrative Agent shall
have received a certificate signed by a Financial Officer of the Borrower, in
such Financial Officer's capacity as an officer of the Borrower, in all respects
reasonably satisfactory to the Administrative Agent, dated the date hereof,
certifying that the representations and warranties contained in the Loan
Documents that are qualified as to materiality are true and correct in all
respects, that the representations and warranties contained in the Loan
Documents that are not so qualified are true and correct in all material
respects, and that, immediately before and after giving effect to this Amendment
and the consummation of the Catalyst Merger, no Default exists or will exist.
3.12 Fees. The Administrative Agent shall have received (a) an
amendment fee for the pro rata benefit of each Lender that executes Amendment
No. 3 and (b) all other fees and other amounts due and payable to the
Administrative Agent and the Lenders under the Loan Documents on or prior to the
date hereof, including, to the extent invoiced, reimbursement or payment of the
fees and disbursements of Special Counsel and all other out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
3.13 Other Documents. The Administrative Agent shall have received all
other documents that the Administrative Agent may reasonably request with
respect to any matter relevant to this Amendment.
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4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to
the Lenders and the Administrative Agent that:
4.1 No Default. After giving effect to this Amendment, no Default or
Event of Default shall have occurred or be continuing.
4.2 Existing Representations and Warranties. As of the date hereof and
after giving effect to this Amendment, each and every one of the representations
and warranties set forth in the Loan Documents is true, accurate and complete in
all respects and with the same effect as though made on the date hereof, and
each is hereby incorporated herein in full by reference as if restated herein in
its entirety, except for any representation or warranty limited by its terms to
a specific date and except for changes in the ordinary course of business which
are not prohibited by the Credit Agreement (as amended hereby) or changes which
do not, either singly or in the aggregate, have a Material Adverse Effect.
4.3 Authority; Enforceability. (i) The execution, delivery and
performance by the Borrower of this Amendment are within its corporate powers
and have been duly authorized by all necessary corporate action, (ii) this
Amendment is the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and (iii) this Amendment and the
execution, delivery and performance by the Borrower thereof does not: (A)
contravene the terms of the Borrower's organizational documents; (B) conflict
with or result in any breach or contravention of, or the creation of any Lien
(other than Liens under the Loan Documents) under, any document evidencing any
contractual obligation to which the Borrower is a party or any order,
injunction, writ or decree to which it or its respective property is subject; or
(C) violate any requirement of law.
4.4 The Catalyst Merger. The Borrower has heretofore delivered to the
Administrative Agent a true, correct and complete copy of the Catalyst Merger
Agreement. The Catalyst Merger Agreement has not been amended or modified and
sets forth the entire agreement among the parties thereto with respect to the
subject matter thereof. No party to the Catalyst Merger Agreement has waived the
fulfillment of any material condition precedent set forth therein to the
consummation of the Catalyst Merger Agreement, no party has failed to perform
any of its material obligations thereunder or under any instrument or document
executed and delivered in connection therewith, and nothing has come to the
attention of the Borrower that would cause it to believe that any of the
representations or warranties of Catalyst or Saleh contained in the Catalyst
Merger Agreement were false or misleading in any material respect when made or
when reaffirmed on the date hereof. Except as set forth on Schedule 4.17 to the
Catalyst Merger Agreement, no consent or approval, authorization or declaration
of any governmental authority, bureau or agency, is or will be required in
connection with the Catalyst Merger Agreement. Except as set forth on Schedule
4.17 to the Catalyst Merger Agreement, neither the execution and delivery of the
Catalyst Merger Agreement, nor the performance by the Borrower or Catalyst
Merger Sub's obligations thereunder, will violate any provision of law or will
conflict with or result in a breach of, or create (with or without the giving of
notice or lapse of time, or both) a default under, any agreement to which the
Borrower or any of its Subsidiaries are a party or by which it is bound or any
of its properties is affected other than breaches or violations that
individually or collectively could not reasonably be expected to have a Material
Adverse Effect. The Borrower will acquire upon the consummation of the Catalyst
Merger Agreement valid, legal and marketable title to all the assets to be
transferred pursuant thereto and heretofore owned by Catalyst, free and clear of
any Lien, except for the Liens created and granted by the Security Documents and
Permitted Encumbrances.
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5. REFERENCE TO AND EFFECT UPON THE CREDIT AGREEMENT.
5.1 Effect. Except as specifically amended hereby, the Credit Agreement
and the other Loan Documents shall remain in full force and effect in accordance
with their terms and are hereby ratified and confirmed.
5.2 No Waiver; References. The execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any right, power or remedy of
the Administrative Agent or any Lender under the Credit Agreement, or constitute
a waiver of any provision of the Credit Agreement, except as specifically set
forth herein. Upon the effectiveness of this Amendment, each reference in:
(i) the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of similar import shall mean and be a reference
to the Credit Agreement as amended hereby;
(ii) the other Loan Documents to the term "the Credit Agreement"
shall mean and be a reference to the Credit Agreement as amended hereby;
and
(iii) the Loan Documents to the term "the Loan Documents" shall be
deemed to include this Amendment.
6. MISCELLANEOUS.
6.1 Expenses. The Borrower agrees to pay the Administrative Agent upon
demand for all reasonable expenses, including reasonable attorneys' fees and
expenses of the Administrative Agent, incurred by the Administrative Agent in
connection with the preparation, negotiation and execution of this Amendment.
6.2 Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
6.3 Law; Waiver of Trial by Jury. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LOANS. THE PARTIES HERETO HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF OR IN ANY WAY CONNECTED TO THIS AMENDMENT.
6.4 Successors. This Amendment shall be binding upon the Borrower, the
Lenders and the Administrative Agent and their respective successors and
assigns, and shall inure to the benefit of the Borrower, the Lenders and the
Administrative Agent and the successors and assigns of the Lenders and the
Administrative Agent.
6.5 Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
including counterparts executed and delivered by facsimile each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
[Signature Page to Follow]
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Amendment No. 3 to XxXxxx Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers on the date
first written above.
XXXXXX CORPORATION
By:
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Name: Xxxx X. X'Xxxxxx
Title: Vice President and
Chief Financial Officer
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THE BANK OF NEW YORK,
as Administrative Agent, as Issuing Lender
and as a Lender
By:
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
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XXXXXXX BANK, NATIONAL ASSOCIATION, as a Lender
By:
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Name:
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Title:
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LASALLE BANK NATIONAL ASSOCIATION, as a Lender
By:
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Name:
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Title:
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MANUFACTURERS AND TRADERS TRUST
COMPANY, as a Lender
By:
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Name:
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Title:
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GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By:
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Name:
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Title:
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