EXHIBIT 10.4F
EXECUTION
MITEL CORPORATION
FIFTH AMENDMENT TO CREDIT AGREEMENT
This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
dated as of May 19, 1999, and entered into by and among Mitel Corporation, a
corporation organized under the laws of Canada ("Company"), the financial
institutions listed on the signature pages hereof ("Lenders"), Xxxxxxx Xxxxx
Credit Partners L.P. ("GSCP") as arranger, advisor and syndication agent (in
such capacity, the "Syndication Agent") and Canadian Imperial Bank of Commerce
("CIBC"), as Administrative Agent, and for purposes of Section 9 hereof, the
Subsidiary Guarantors listed on the signature pages hereto (collectively the
"Credit Support Parties"), and is made with reference to that certain Credit
Agreement dated as of February 12, 1998, by and among Company, Lenders, GSCP, as
Syndication Agent, and CIBC, as Administrative Agent (as amended through the
date hereof, the "Credit Agreement"). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, the Company has requested that Requisite Lenders
amend Subsection 7.5 of the Credit Agreement to permit Company to purchase
Company common shares in the open market subject to certain limitations as more
fully set forth below.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
Section 1. AMENDMENT TO CREDIT AGREEMENT
Subject to the terms and conditions hereof and in reliance on the
representations and warranties contained herein, Company and Lenders hereby
agree as follows:
A. Amendment to Section 1.
1. Section 1 of the Credit Agreement is hereby amended by
inserting a new definition of "Company Common Stock" therein in alphabetical
order as follows:
"Company Common Stock" means common shares of Company, without
par value.
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2. Section 1 of the Credit Agreement is hereby further amended
by amending and restating the definition of "Consolidated Excess Cash Flow"
appearing therein in its entirety as follows:
`"Consolidated Excess Cash Flow" means, for any
period, an amount (if positive) equal to (i) the sum, without
duplication, of the amounts for such period of (a) Consolidated
Adjusted EBITDA and (b) the Consolidated Working Capital Adjustment
minus (ii) the sum, without duplication, of the amounts for such period
of (u) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the
Revolving Loan Commitments are permanently reduced in connection with
such repayments), (v) Consolidated Capital Expenditures (net of any
proceeds of any related financings with respect to such expenditures),
(w) Consolidated Cash Interest Expense, (x) cash dividends and other
cash distributions on any shares of Company Preferred Stock but only to
the extent actually made and only to the extent such dividends or other
distributions are permitted pursuant to subsection 7.5, (y) the
provision for current taxes based on income of Company and its
Subsidiaries and payable in cash with respect to such period and (z)
cash payments actually made by Company during such period to purchase
or repurchase Company Common Stock pursuant to and subject to the
limitations of subsection 7.5."
B. Amendment to Section 7. Subsection 7.5 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that so
long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, Company may (a)
make scheduled dividend payments to the holders of the Company
Preferred Stock pursuant to the terms of the Company Certificate of
Designations in an aggregate amount not to exceed Cdn$3,250,000 in any
Fiscal Year, (b) make scheduled repurchases of shares of Company
Preferred Stock pursuant to the Company Certificate of Designations for
an aggregate consideration not to exceed Cdn$2,250,000 in any Fiscal
Year, (c) redeem or repurchase options to purchase shares of Company
Common Stock granted to Company's employees in lieu of such employees
exercising such options and (d) from and after May 20, 1999, purchase
or repurchase through the open market shares of Company Common Stock
held by Persons other than Company for an aggregate cumulative
consideration not to exceed Cdn $117,000,000; provided that (i)
purchases or repurchases under this clause (d) shall be made pursuant
to and shall comply in all respects with the Toronto Stock Exchange's
Policy Statement for Normal Course Issuer Bids and (ii) immediately
after giving effect to any such
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purchase or repurchase, Company shall be in compliance on a pro forma
basis with the covenants set forth in Sections 6 and 7 of this
Agreement."
Section 2. CONDITIONS TO EFFECTIVENESS
Notwithstanding anything to the contrary herein, this
Amendment shall become effective only upon the satisfaction of the following
conditions precedent (the date of satisfaction of such conditions being referred
to herein as the "Fifth Amendment Effective Date"):
A. Company and each Credit Support Party shall have delivered
to Administrative Agent sufficient originally executed copies for each
Lender and its counsel of this Amendment;
B. Requisite Lenders shall each have executed a counterpart of
this Amendment;
C. Company and Administrative Agent shall have received
written notification of such execution by such Lenders and
authorization of delivery thereof; and
D. Agent shall have received, for the ratable benefit of
Lenders executing a counterpart hereof on or before 5:00 p.m. (EDT) on
May 19, 1999 (the "Consenting Lenders"), an amendment fee equal to 0.1%
of the sum as of such date of (i) the Revolving Loan Commitments of the
Consenting Lenders, (ii) the aggregate outstanding principal amount of
Tranche A Term Loans of the Consenting Lenders and (iii) the aggregate
outstanding principal amount of AXELs Series B of the Consenting
Lenders.
Section 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company hereby
represents and warrants that after giving effect to this Amendment:
A. Corporate Power and Authority. Each of Company and each
Credit Support Party has all requisite corporate power and authority to enter
into this Amendment, and each of Company and each Credit Support Party has all
requisite corporate power and authority to carry out the transactions
contemplated by, and perform its obligations under, the Credit Agreement, as
amended by this Amendment.
B. Authorization of Agreements. The execution and delivery of
this Amendment and the performance of the Credit Agreement as amended by this
Amendment (as so amended, the "Amended Agreement") have been duly authorized by
all necessary corporate action on the part of Company.
C. No Conflict. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will
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not (i) violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws (or comparable organizational documents) of Company or
any of its Subsidiaries or any order, judgment or decree of any court or other
agency or government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries (other than, with respect to the exercise of certain remedies
under the U.K. Guarantee and Debenture, as such remedies may be affected by
certain government contracts in the United Kingdom), (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
Company or any of its Subsidiaries (other than Liens created under any of the
Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries.
D. Governmental Consents. The execution and delivery by
Company of this Amendment and the performance by Company of the Amended
Agreement do not and will not require any registration with, consent or approval
of or notice to, or other action to, with or by, any multi-national, federal,
provincial, state, municipal, local or other governmental authority or
regulatory body.
E. Binding Obligation. This Amendment and the Amended
Agreement have been duly executed and delivered by Company and are the legally
valid and binding obligations of Company, enforceable against Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Fifth Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. Absence of Default. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
H. No Change to Organizational Documents. Neither the
Certificate of Incorporation nor the Bylaws of Company has been amended,
supplemented or otherwise modified since the Closing Date.
Section 4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
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A. On and after the Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" 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 Amended Agreement.
B. Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
C. The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of any Agent
or any Lender under, the Credit Agreement or any of the other Loan Documents.
D. This Amendment supercedes any prior correspondence
concerning the subject matter hereof.
Section 5. FEES AND EXPENSES.
Company acknowledges that all costs, fees and expenses as
described in subsection 10.2 of the Credit Agreement incurred by Agents and
their respective counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
Section 6. HEADINGS.
Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.
Section 7. COUNTERPARTS
This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
Section 8. GOVERNING LAW
THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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Section 9. ACKNOWLEDGEMENT AND CONSENT BY CREDIT SUPPORT PARTIES
Each undersigned Credit Support Party is a party to one or more of the
Subsidiary Security Agreement (U.S.), the Subsidiary Pledge Agreement (U.S.),
the Subsidiary Patent and Trademark Security Agreement (U.S.), the U.K. Pledge
Agreement, the U.K. Guarantee and Debenture, the Copyright Security Agreement
and certain other Collateral Documents delivered pursuant to the Credit
Agreement (collectively, the "Subsidiary Collateral Documents") and either the
Subsidiary Guaranty or the U.K. Guarantee and Debenture in each case as amended
through the Fifth Amendment Effective Date, pursuant to which each Credit
Support Party has (a) guarantied the Obligations and (b) created Liens in favor
of Administrative Agent on certain Collateral and pledged certain Collateral to
Administrative Agent to secure the obligations of such Credit Support Parties
under the Guaranties. The Subsidiary Guaranty, U.K. Guarantee and Debenture and
the other Subsidiary Collateral Documents are collectively referred to herein as
the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the fullest
extent possible the payment and performance of all "Guarantied Obligations" and
"Secured Obligations", as the case may be (in each case as such terms are
defined in the applicable Credit Support Document) and "Indebtedness" (as
defined in the U.K. Guarantee and Debenture), including without limitation the
payment and performance of all such "Guarantied Obligations", "Secured
Obligations" or "Indebtedness", as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties made by it
contained in the Credit Support Documents to which it is a party or otherwise
bound are true, correct and complete in all material respects on and as of the
Fifth Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to
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require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
MITEL CORPORATION
----------------------------------
Name:
Title
LENDERS:
XXXXXXX SACHS CANADA CREDIT PARTNERS CO.,
as a Lender
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Authorized Signatory
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Lender and as Administrative Agent
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Executive Director
FIFTH AMENDMENT
S-1
CREDIT SUPPORT PARTIES:
MITEL TELECOM LIMITED
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Name:
Title:
MITEL SEMICONDUCTOR LIMITED
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Name:
Title:
MITEL, INC.
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Name:
Title:
MITEL TELECOMMUNICATIONS SYSTEMS, INC.
----------------------------------
Name:
Title:
MITEL (BARBADOS) LTD.
----------------------------------
Name:
Title:
FIFTH AMENDMENT
S-2
LENDERS:.
----------------------------------
[Insert name of Lender]
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Name:
Title:
FIFTH AMENDMENT
S-3
Exhibit 21
SUBSIDIARY AND PRINCIPAL INVESTMENTS
Subsidiaries*
Mitel, Inc.
U.S.A.
Mitel Communications Solutions, Inc.
U.S.A.
Mitel Telecom Limited
Great Britain
Mitel Semiconductor Limited
Great Britain
Mitel (Far East) Limited
Hong Kong
Mitel Semiconductor AB
Sweden
Mitel (Barbados) Limited
Barbados
Principal Investments
Mitel de Mexico S.A. de C.V. Mexico
Tianchi-Mitel Telecommunications Corporation
* All subsidiaries are 100% owned, directly or indirectly, by Mitel Corporation.
EXHIBIT 23
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We consent to the use in this Annual Report on Form 10-K of Mitel
Corporation of our report with respect to the Company's consolidated financial
statements for the year ended March 26, 1999.
We consent to the incorporation by reference in the Registration
Statements (Forms S-8 numbers 2-74833, 2-78545, 2-84711, 2-86511, 2-92200,
2-92201, 2-92494, 33-1371, 33-9682, 33-45716, 33-98946 and 333-66315) pertaining
to the Stock Purchase Plan for Eligible U.S. Employees, the Stock Option Plan
for Key Employees, the Basic Stock Option Plan, The Stock Option Plan for Key
Employees, the 1984 Stock Option Plan, the Basic Stock Option Plan, the United
Kingdom Savings Related Share Option Scheme, the 1985 Stock Option/Stock
Purchase Plan, the Preferred Share Purchase Plan, the 1991 Stock Option Plan for
Key Employees and Stock Option Grant to Xxxxxxx X. Xxxxxxxxx and the 1991 Stock
Option Plan for Key Employees and Non-Employee Directors respectively, and in
the Registration Statements (Forms S-3 numbers 2-81989, 2-82262, 2-88432,
2-91496 and 2-96412) of Mitel Corporation, and in the related prospectuses, of
our report dated May 6, 1999 with respect to the consolidated financial
statements of Mitel Corporation incorporated by reference in the Annual Report
(Form 10-K) for the year ended March 26, 1999.
Our audit also included the financial statement schedule of Mitel
Corporation listed in Item 14(a)2. This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audit. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Ottawa, Canada,
/s/ ERNST & YOUNG LLP
June 24, 1999. ERNST & YOUNG LLP
