EXHIBIT 10.50
FOURTH AMENDMENT TO THE SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
FOURTH AMENDMENT dated as of November 13, 2001 (this
"Amendment") with respect to the Second Amended and Restated Credit Agreement
dated as of October 29, 1999 (as amended, the "Credit Agreement") by and among
SLI, Inc., as borrower (the "Borrower"), the Guarantors party thereto, the
lenders party thereto (the "Lenders") and Fleet National Bank (formerly known
as BankBoston, N.A.), as Administrative Agent (the "Administrative Agent").
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
made Loans and other financial accommodations to the Borrower which remain
outstanding; and
WHEREAS, the Borrower has requested that the Administrative
Agent and the Lenders amend 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, in consideration of the premises and for
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. Unless otherwise defined
herein, capitalized terms used herein have the meanings assigned in the Credit
Agreement and the following terms shall have the following meanings:
"Amendment Fee" has the meaning specified in Section 6.2(b).
"Business Plan" has the meaning specified in Section 3.1(e).
"Collateral Certificate" means a Collateral Certificate in
form and substance satisfactory to the Administrative Agent, attached
hereto as Exhibit A.
"Effective Date" means the first date on which the conditions
precedent specified in Article IV of this Amendment shall have been
satisfied or the satisfaction thereof shall have been waived in
accordance with the terms hereof.
"Financial Advisor" has the meaning specified in Section
3.1(c).
"First Installment" has the meaning specified in Section
6.2(b).
"Foreign Collateral Schedule" has the meaning specified in
Section 3.1(g)(iv).
"Investment Bankers" has the meaning specified in Section
3.1(c).
"Overage Fee" has the meaning specified in Section 6.2(c).
"Target Exposure" means, as of the first Business Day of each
fiscal quarter set forth below, the amount set forth below opposite such fiscal
quarter:
Fiscal Quarter: Target Exposure:
------------------- ----------------
April 1, 2002 $315,000,000
July 1, 2002 $300,000,000
October 1, 2002 $275,000,000
January 2, 2003 and $250,000,000
thereafter
"Third Installment" has the meaning specified in Section
6.2(b).
"Total Exposure" means, as of any date of determination, the
sum of (a) the aggregate Revolving Credit Commitment as of such date
and (b) the aggregate amount outstanding under the Term Loan as of
such date, in each case after giving effect to any prepayments and
Commitment reductions made on such date.
ARTICLE II
AMENDMENTS
Section 2.1. Amendments to Section 1.1 (Definitions).
(a) Section 1.1 of the Credit Agreement is hereby
amended by (i) deleting the followings definitions: "Applicable Margin",
"Capital Expenditures", "Consolidated Fixed Charge Coverage Ratio",
"Consolidated Interest Coverage Ratio", "Consolidated Net Worth", "EBITDA",
"Leverage Ratio", "Permitted Acquisitions", "Permitted Securitization",
"Required Revolving Credit Lenders" and "Special Counsel" and (ii) inserting
the following definitions in their proper alphabetical order:
"Applicable Margin" means, for any Type of Loan, the
respective rates set forth below for such Loans of such Type opposite
the applicable Total Exposure level (with respect to Loans for which
interest is determined by reference to the Adjusted LIBO Rate,
measured as of the first day of the relevant Interest Period):
Applicable
Applicable Margin Margin for Base
Total Exposure for LIBOR Loans Rate Loans
-------------- ----------------- ---------------
> $300,000,000 3.75% 2.25%
-
$250,000,000 to 3.50% 2.00%
$299,999,999
$200,000,000 to 3.00% 1.50%
$249,999,999
< $199,999,999 2.50% 1.00%
-
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; provided, however, that, as of any date, in the event that the
Leverage Ratio as of the last day of the prior fiscal quarter shall be
greater than 3.75:1.00 (or if no Compliance Certificate has been
timely delivered for such quarter), then (i) the Applicable Margin for
Loans for which interest is determined by reference to the Adjusted
LIBO Rate shall not be less than 3.00% and (ii) the Applicable Margin
for Loans for which interest is determined by reference to the
Adjusted Base Rate shall not be less than 1.50%. For purposes hereof,
a "Payment Period" means the period commencing one Business Day after
receipt by the Lenders of the Compliance Certificate.
"Capital Expenditures" means, for any period, the World Wide
Consolidated Total amount capitalized in accordance with GAAP to
acquire, construct or materially improve fixed assets, property plant
and equipment, real property or other long lived tangible assets. The
amount capitalized shall be inclusive of all such transactions,
without regard to the means used to finance the transaction,
specifically including capitalized lease transactions, but excluding
transactions undertaken in connection with the repair or replacement
of property affected by a Casualty Event.
"Consolidated Fixed Charge Coverage Ratio" means at any date
of determination, the ratio of (a) World Wide Consolidated Total
EBITDA computed over the Relevant Covenant Period and multiplied by
the Relevant Annualization Factor to (b) World Wide Consolidated Total
Interest Expense (determined on a consolidated basis without
duplication in accordance with GAAP), plus all Required Principal
Payments, both computed over the Relevant Covenant Period and
multiplied by the Relevant Annualization Factor.
"Consolidated Interest Coverage Ratio" means at any date of
determination, the ratio of (a) World Wide Consolidated Total EBITDA
computed over the Relevant Covenant Period and multiplied by the
Relevant Annualization Factor to (b) World Wide Consolidated Total
Interest Expense (determined on a consolidated basis without
duplication in accordance with GAAP) computed over the Relevant
Covenant Period and multiplied by the Relevant Annualization Factor.
"Consolidated Net Worth" means, at any date of determination,
the sum of the World Wide Consolidated Total contributed capital and
retained earnings (determined on a consolidated basis without
duplication in accordance with GAAP). Further, for the purpose of the
Minimum Net Worth Covenant pursuant to Section 7.9(d), the above
amount shall be decreased or increased by the cumulative value of
gains and/or losses associated with Disposition(s) recognized on a
GAAP basis between the Effective Date and the Revolving Credit
Maturity Date, to the extent permitted hereunder, and without regard
to clause (b)(ii) of the definition of "Disposition".
"Debt Service" means both the principal and interest portions
of all payments required in connection with the World Wide
Consolidated Total Funded Debt (determined on a consolidated basis
without duplication in accordance with GAAP).
"EBITDA" means the sum of World Wide Consolidated Totals for
the following income statement accounts: operating income, income tax
provision, interest expense, depreciation expense and amortization
expense over the Relevant Covenant Period. EBITDA shall exclude the
historical operating results of all discontinued operations,
commencing in the quarter the disposal is recognized in the Borrower's
financial statements, non-controllable professional fees incurred in
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connection with the restructuring, gains or losses on fixed asset
dispositions recognized in accordance with GAAP, non-recurring
restructuring charges and other non-recurring, non-operating income
and/or costs. Further, the foregoing is subject to the EBITDA
adjustment in Section 7.11 hereof when used to calculate the Leverage
Ratio.
"Fourth Amendment" means the Fourth Amendment, dated as of
November 13, 2001, to the Second Amended and Restated Credit Agreement
dated as of October 29, 1999.
"Fourth Amendment Effective Date" means the Effective Date
(as defined in the Fourth Amendment).
"Leverage Ratio" means as at any date of determination, the
ratio of (a) World Wide Consolidated Total Funded Debt (determined on
a consolidated basis without duplication in accordance with GAAP) on
such date to (b) World Wide Consolidated Total EBITDA computed over
the Relevant Covenant Period and multiplied by the Relevant
Annualization Factor, and adjusted according to the provisions of
Section 7.11.
"Relevant Annualization Factor" shall mean the number of
fiscal quarters per year (4) divided by the number of quarters
included in the Relevant Covenant Period.
Relevant
Annualization
Fiscal Quarter Ended Relevant Covenant Period Factor
---------------------- -------------------------------------- -------------
September 30, 2001 July 2, 2001 to September 30, 2001 4
December 30, 2001 July 2, 2001 to December 30, 2001 2
March 31, 2002 July 2, 2001 to March 31, 2002 1.33
June 30, 2002 July 2, 2001 to June 30, 2002 1
September 29, 2002 October 1, 2001 to September 29, 2002 1
December 29, 2002 December 31, 2001 to December 29, 2002 1
March 30, 2003 April 1, 2001 to March 30, 2003 1
All Subsequent Periods Rolling four quarters ended 1
"Relevant Covenant Period" means the time period over which
all income statement and cash flow figures will be aggregated in
calculating and reporting the financial covenants.
"Required Lenders" means, at any time, Lenders having
Revolving Credit Exposure, unused Revolving Credit Commitments and
Term Loan Exposure representing at least 51% of the sum of the total
Revolving Credit Exposure, unused Revolving Credit Commitments and
Term Loan Exposure at such time.
"Required Principal Payments" means the principal portion of
all World Wide Consolidated Total Debt Service payments made in
connection with World Wide Consolidated Total Funded Debt, except to
the extent that such payment was financed by a Loan.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case
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applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Term Loan Commitment" means, with respect to any Lender at
any time, the outstanding principal amount of such Lender's Term Loan
at such time. The amount of each Lender's Term Loan Commitment as of
the Fourth Amendment Effective Date is set forth on Schedule 2.1.
"Term Loan Exposure" means, with respect to each Lender, such
Lender's Term Loan Commitment.
"Term Loan Maturity Date" means the last Business Day in
October 2004.
"Total Exposure" has the meaning assigned to such term in the
Fourth Amendment.
"Transferee" has the meaning assigned to such term in Section
10.13.
"World Wide Consolidated Total" means the consolidated value
of any financial flow or balance, as published in the Borrower's 10Q
and 10K reports filed with the Securities and Exchange Commission.
"World Wide Consolidated Total Interest Expense" means, for
any period, the sum of the World Wide Consolidated Totals (determined
on a consolidated basis without duplication in accordance with GAAP),
of the following: (a) all interest in respect of Indebtedness accrued
or capitalized during such period (whether or not actually paid during
such period) plus (b) the net amounts payable (or minus the net
amounts receivable) under Hedging Agreements and Permitted
Securitizations (to the extent such amounts are classified as interest
under GAAP) accrued during such period (whether or not actually paid
or received during such period) including fees, but excluding (i)
reimbursement of legal fees and other similar transaction costs and
(ii) payments required by reason of the early termination of Hedging
Agreements in effect on the date hereof plus (c) all fees, including
letter of credit fees and expenses, incurred hereunder after the
Effective Date.
(b) The definition of "Compliance Certificate" contained
in Section 1.1 of the Credit Agreement is hereby amended by (i) deleting the
word "and" immediately before clause (iii) contained therein, (ii) inserting
the following immediately before the period after the word "certificate":
"and (iv) stating whether the Borrower is in compliance with
Section 7.1 as at the last day of the preceding month"
and (iii) inserting at the end thereof the following:
"The Compliance Certificate shall set forth detailed
calculations demonstrating compliance with each financial
covenant and shall be in form and substance satisfactory to
the Agent."
(c) The definition of "Disposition" contained in Section
1.1 of the Credit Agreement is hereby amended by deleting clause (b) in its
entirety and inserting in lieu thereof the following:
"(b) any sale, assignment, transfer or other disposition of
(i) any property sold or disposed of in the ordinary course
of business and on ordinary business terms and (ii) any
Collateral under, and as defined in the Collateral Documents
pursuant to an exercise of remedies by the Administrative
Agent thereunder."
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(d) The definition of "Permitted Investments" contained
in Section 1.1 of the Credit Agreement is hereby amended by deleting clause (b)
thereof in its entirety and inserting in lieu thereof a new clause (b) as
follows:
"(b) Loans to employees of the Borrower or any Guarantor not
to exceed $650,000 in the aggregate outstanding at any time."
Section 2.2. Amendments to Schedule 2.1 (List of Lenders
and Revolving Credit Commitments). Schedule 2.1 of the Credit Agreement is
hereby amended by deleting said schedule in its entirety and inserting in lieu
thereof the Schedule 2.1 attached hereto as Exhibit B.
Section 2.3. Amendment to Section 1.3 (Terms Generally).
Section 1.3 of the Credit Agreement is hereby amended by inserting the
following at the end thereof:
"Immediately upon the conversion of the 364 Day Revolving
Credit Loans to a Term Loan pursuant to Section 2.19, all
references herein (except in Section 2.19) to "364 Day
Revolving Credit Commitment", "364 Day Revolving Credit
Exposure", "364 Day Revolving Credit Loan", "364 Day
Revolving Credit Maturity Date" and "Required Revolving
Credit Lenders" shall be deemed to be references to "Term
Loan Commitment", "Term Loan Exposure", "Term Loan", "Term
Loan Maturity Date" and "Required Lenders", respectively.
Section 2.4. Amendment to Section 2.6 (Interest
Elections). Section 2.6 of the Credit Agreement is hereby amended by deleting
the phrase ", at the request of the Required Revolving Credit Lenders," in
Section 2.6(e).
Section 2.5. Amendment to Section 2.12 (Interest).
Section 2.12 of the Credit Agreement is hereby amended by deleting the phrase
"for a period of 30 or more days" in Section 2.12(c).
Section 2.6. Amendment to Section 2.10 (Prepayment of
Loans). Section 2.10 of the Credit Agreement is hereby amended by inserting at
the end thereof a new Section 2.10(f) as follows:
"(f) Term Loan. Any prepayments applied to the Term Loan
pursuant to this Section 2.10 shall constitute permanent
reductions to the Term Loan Commitment of each Lender.
Prepayments to the Term Loan shall be applied to scheduled
amortization payments in direct order of maturity."
Section 2.7. Amendment to Section 6.1(d) (Financial Statements
and Other Information). Section 6.1(d) of the Credit Agreement is hereby amended
by inserting after the word "above" but before the comma the following:
"and within five Business Days after the last Business Day of
any month in respect of Section 7.1 "
Section 2.8. Amendment to Section 7.1 (Indebtedness).
Section 7.1 of the Credit Agreement is hereby amended by inserting at the end
thereof the following:
"Notwithstanding anything to the contrary set forth above,
Indebtedness of the Consolidated Group (except for
Indebtedness to the Lenders created hereunder) shall not
exceed in the aggregate $85,000,000 as of the last Business
Day of any month; provided, however, that such Indebtedness
shall not exceed in the aggregate $90,000,000 at any time."
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Section 2.9. Amendment to Section 7.2 (Liens). Section
7.2 of the Credit Agreement is hereby amended by deleting the following: "(h)
Any lien related to a Permitted Securitization.".
Section 2.10. Amendment to Section 7.4 (Fundamental
Changes). Section 7.4 of the Credit Agreement is hereby amended by deleting the
phrase "Permitted Acquisitions,".
Section 2.11. Amendment to Section 7.5 (Investments;
Hedging Agreements). Section 7.5 of the Credit Agreement is hereby amended by
(i) deleting clause (i) of paragraph (a) in its entirety and inserting in lieu
thereof the following new clause (i):
"(i) Investments by the Borrower in capital stock of a
Guarantor or Covenant Party to the extent outstanding on the
date of the financial statements of the Borrower or any
Consolidated Subsidiary referred to in Section 4.4 hereof,
advances by and among the Borrower, the Guarantors and the
Covenant Parties (provided that advances to Covenant Parties
comply with the requirements of Section 2.5(b)(iv)) in the
ordinary course of their respective businesses and capital
contributions by any of the Borrower or the Guarantors in
each other;"
and
(ii) inserting at the end of said Section 7.5 the following:
"Notwithstanding anything to the contrary set forth above, on
and after the Fourth Amendment Effective Date, additional
Investments permitted pursuant to this Section 7.5 shall not
exceed in the aggregate at any one time, without duplication,
the maximum amount of World Wide Consolidated Capital
Expenditures permitted pursuant to Section 7.9(d); provided
that, on and after the Fourth Amendment Effective Date,
additional Investments in Unrestricted Subsidiaries shall not
exceed zero."
Section 2.12. Amendment to Section 7.9 (Certain Financial
Covenants). Section 7.9 of the Credit Agreement is hereby amended by deleting
said section in its entirety and inserting in lieu thereof the following:
"(a) Maximum Leverage Ratio. The Consolidated Group shall not
permit the Leverage Ratio as of the last day of each fiscal
quarter ended on the dates set forth below to be greater than
the ratio opposite such dates:
Fiscal Quarter ended Ratio
-------------------- ----------
September 30, 2001 37.90:1.00
December 31, 20011 4.50:1.00
March 31, 2002 9.30:1.00
June 30, 2002 8.20:1.00
September 30, 2002 6.90:1.00
December 31, 2002 5.50:1.00
March 31, 2003
and thereafter 4.75:1.00
(b) Consolidated Interest Coverage Ratio. The Consolidated
Group shall not permit the Consolidated Interest Coverage
Ratio as of the last day of each fiscal quarter ended on the
dates set forth below to be less than the ratio opposite such
dates:
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Fiscal Quarter ended Ratio
-------------------- ---------
September 30, 2001 0.40:1.00
December 31, 2001 0.80:1.00
March 31, 2002 1.10:1.00
June 30, 2002 1.40:1.00
September 30, 2002 1.70:1.00
December 31, 2002 2.30:1.00
March 31, 2003
and thereafter 2.50:1.00
(c) Consolidated Fixed Charge Coverage Ratio. The
Consolidated Group shall not permit the Consolidated Fixed
Charge Coverage Ratio as of the last day of each fiscal
quarter ended on the dates set forth below to be less than
the ratio opposite such dates:
Fiscal Quarter ended Ratio
-------------------- ---------
September 30, 2001 0.30:1.00
December 31, 2001 0.50:1.00
March 31, 2002 0.60:1.00
June 30, 2002 0.70:1.00
September 30, 2002 0.80:1.00
December 31, 2002 1.00:1.00
March 31, 2003
and thereafter 1.10:1.00
(d) Minimum Net Worth. The Consolidated Group shall not
permit Consolidated Net Worth, as of the last day of any
fiscal quarter, to be less than $190,000,000.
(e) Capital Expenditures. The Consolidated Group shall not
permit World Wide Consolidated Capital Expenditures in any
fiscal quarter to be greater than the sum of (i) the amount
opposite the applicable fiscal quarter end date set forth
below and (ii) so long as no Default or Event of Default has
occurred and is continuing, the aggregate amount of unspent
permitted World Wide Capital Expenditures with respect to the
prior three fiscal quarters set forth below:
Fiscal Quarter ended Amount
-------------------- ----------
September 30, 2001 $8,250,000
December 31, 2001 $7,500,000
March 31, 2002 $4,750,000
June 30, 2002 $4,000,000
September 30, 2002 $3,500,000
December 31, 2002 $3,750,000
March 31, 2003
and thereafter $4,500,000".
Section 2.13. Amendment to Article 10 (Miscellaneous).
Article 10 of the Credit Agreement is hereby amended by inserting at the end
thereof a new Section 10.13 as follows:
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"Section 10.13 Confidentiality.
Each of the Administrative Agent, the Documentation Agent,
the Syndication Agent and each Lender agrees to keep
confidential all non-public information provided to it by the
Borrower or any Guarantor or their respective representatives
or affiliates pursuant to this Agreement and the other Loan
Documents that is designated by such party as confidential;
provided that nothing herein shall prevent the Administrative
Agent, the Documentation Agent, the Syndication Agent or any
Lender from disclosing any such information (a) to the
Administrative Agent, the Documentation Agent, the
Syndication Agent, any other Lender or any affiliate of any
Lender, (b) to any participant or assignee (each, a
"Transferee") or prospective Transferee which agrees to
comply with the provisions of this Section 10.13 and which is
not, in the reasonable judgment of the Administrative Agent,
the Documentation Agent, the Syndication Agent or such
Lender, as applicable, a competitor of the Borrower, a
Guarantor or any of their Affiliates, (c) to the employees,
directors, agents, attorneys, accountants and other
professional advisors of the Administrative Agent, the
Documentation Agent, the Syndication Agent or such Lender or
their respective affiliates, (d) upon the request or demand
of any Governmental Authority having jurisdiction over the
Administrative Agent, the Documentation Agent, the
Syndication Agent or such Lender, (e) in response to any
order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f)
if requested or required to do so in connection with any
litigation or similar proceeding (in which case prior notice
of such disclosure shall be given to the Borrower to the
extent practicable), (g) which has been publicly disclosed
other than in breach of this Section 10.13, or (h) in
connection with the exercise of any remedy hereunder or under
any other Loan Document."
Section 2.14. Amendment to Section 10.1 (Notices).
Section 10.1(b) of the Credit Agreement is hereby amended by deleting said
Section and inserting in lieu thereof the following:
"(b) if to the Administrative Agent, to Fleet National Bank,
000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention of
Xxxxxx X. Xxxxxxx (Telecopy No. 860-986-2435), with a copy to
Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention of Xxxxx Trust, Esq. (Telecopy No.
212-262-1910)."
Section 2.15. Amendment to Section 10.3 (Expenses;
Indemnity; Damage Waiver). Section 10.3(a) of the Credit Agreement is hereby
amended by (a) deleting the phrase "Special Counsel" and inserting in lieu
thereof the phrase "counsel to the Administrative Agent and any financial
advisor retained by such counsel" and (b) inserting at the end thereof the
following:
"In addition, the Borrower and each Guarantor jointly and
severally agree to pay, or reimburse the Administrative Agent
for paying, the costs and expenses associated with collateral
audits, appraisals and environmental surveys that may be
conducted at the direction of the Administrative Agent."
Section 2.16. Amendment to Section 10.4 (Successors and
Assigns). Section 10.4(b) of the Credit Agreement is hereby amended by (a)
deleting the phrase "and the Borrower" in clause (b)(i), (b) deleting the word
"their" in clause (b)(i) and inserting in lieu thereof the word "its", (c)
deleting the phrase "each of the Borrower" in clause (b)(ii), and (d) deleting
the word "consent" in clause (b)(ii) and inserting in lieu thereof the word
"consents".
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ARTICLE III
AGREEMENTS
Section 3.1. Agreements.
(a) Term Loan. Subject to Sections 2.9, 2.10 and 8.1 of
the Credit Agreement, it is understood that the Term Loan shall be repaid in
quarterly installments in an amount equal to $6,666,666.67 beginning on January
2, 2002, and on the first Business Day of each April, July, October and January
thereafter, with any balance due on the Term Loan Maturity Date.
(b) Cash Management System; Certain Debits. The Borrower
shall maintain its cash management system at the Administrative Agent or
otherwise pursuant to depositary agreements in form and substance satisfactory
to the Administrative Agent. The Administrative Agent shall be entitled to
debit any operating account of the Borrower or any Guarantor to collect costs
and expenses to which the Administrative Agent is entitled pursuant to the
Credit Agreement or this Amendment. So long as no Default or Event of Default
shall have occurred and be continuing, the Administrative Agent shall provide
the Borrower seven Business Days' notice prior to debiting any such account.
(c) Financial Advisor; Investment Bankers. The Borrower
shall (i) continue the retention of PricewaterhouseCoopers, or another
financial advisor reasonably acceptable to the Administrative Agent and the
Required Lenders (the "Financial Advisor") and (ii) (a) in the event that the
Borrower shall not have entered into a definitive purchase and sale agreement
with a bona fide third party with respect to the sale of the Borrower's Latin
American operations on or before December 31, 2001, retain on or before January
31, 2002, and thereafter continue the retention of, an investment banker to
explore strategic alternatives, including the sale of such operations and (b)
in the event that the Borrower shall have entered into a definitive purchase
and sale agreement referred to in clause (a) above, retain on or before June
30, 2002, and thereafter continue the retention of, an investment banker to
explore strategic alternatives (an investment banker retained pursuant to
either clause (a) or (b) above, an "Investment Banker"). The identity and scope
of engagement of the Financial Advisor and the Investment Banker shall be
reasonably acceptable to the Administrative Agent and the Required Lenders. The
Administrative Agent, the Lenders and their advisors shall be provided
reasonable access to the Financial Advisor and the Investment Banker and shall,
upon the Administrative Agent's reasonable request, receive copies of all
information provided to or from them.
(d) Administrative Agent's Advisors. The Administrative
Agent's counsel may retain Deloitte & Touche, or another financial advisor. The
Borrower and its Subsidiaries shall cooperate in all respects with any such
financial advisor and shall pay or reimburse the Administrative Agent for all
reasonable fees and out-of-pocket expenses incurred in connection therewith.
(e) Business Plan. The Borrower shall deliver to the
Administrative Agent and the Lenders on or before January 31, 2002 a detailed
business plan which plan shall be prepared on a "bottom-up" basis for each of
the operating divisions of the Borrower (the "Business Plan"). The Business
Plan shall be in form and substance satisfactory to the Administrative Agent,
and shall include, without limitation: (a) monthly projected income statements,
(b) balance sheets, (c) cash flow forecasts for each operating division, (d) a
summary of material planned capital expenditures along with written
explanations describing the asset, the timing of the purchase and or
disposition, and the expected value of such transactions, (e) a brief written
summary of key assumptions underlying the plan and (f) a brief narrative
assessment of the Borrower's major strategic initiatives, challenges and future
direction. The Borrower shall deliver to the Administrative
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Agent and the Lenders on or before January 31, 2003, and January 31, 2004,
similar Business Plans for fiscal years 2003 and 2004, respectively.
(f) Additional Reporting. The Borrower shall deliver to
the Administrative Agent and the Lenders (i) on or before Wednesday of each
week, a thirteen week rolling cash flow forecast which shall detail all sources
and uses of cash on a weekly basis and shall report any variances from the
prior week, and which shall be reforecast in its entirety as of the end of each
month; provided, that, during any period in which (a) the Leverage Ratio as of
the last day of the prior fiscal quarter shall be less than 3.75:1.00 and (b)
Total Exposure is less than $250,000,000, then such cash flow forecasts shall
be delivered by the Borrower on a monthly basis, and (ii) on or before the
first day of each month, a written status report as of the end of the month
immediately preceding the month just ended, in each case, in form and substance
satisfactory to the Administrative Agent and the Lenders. The Borrower, and the
Financial Advisor and, to the extent applicable, the Investment Banker, shall
(i) participate on bi-weekly (or more frequently as the Administrative Agent
shall request) conference calls with the Administrative Agent and the Lenders
and (ii) attend quarterly (or more frequently as the Administrative Agent shall
request) in-person meetings with the Administrative Agent and the Lenders.
(g) Collateral Matters.
(i) The Borrower shall deliver to the
Administrative Agent and the Lenders a completed Collateral
Certificate (i) with respect to the Borrower and its Domestic
Subsidiaries, as promptly as practicable and in no event later than 30
days after the Effective Date and (ii) with respect to the Borrower's
Foreign Subsidiaries, as promptly as practicable and in no event later
than 60 days after the Effective Date. The Borrower shall thereafter
deliver to the Administrative Agent and the Lenders an updated
Collateral Certificate with respect to the Borrower and its
Subsidiaries on or before December 31 of each year beginning December
31, 2002.
(ii) As promptly as practicable after the
Effective Date, and in no event later than December 31, 2001, the
Borrower shall deliver stock certificates and powers with respect to
100% of the capital stock of each domestic Subsidiary and 65% of the
capital stock of each foreign Subsidiary.
(iii) As promptly as practicable after the
Effective Date, and in no event later than January 15, 2002, the
Borrower and its Subsidiaries shall deliver to the Administrative
Agent for the ratable benefit of the Lenders fully executed and
notarized mortgages, deeds of trust or deeds to secure debt, together
with all related documents and instruments deemed necessary by the
Agent, including environmental surveys, appraisals and legal opinions,
in each case, in form and substance satisfactory to the Administrative
Agent and the Required Lenders, with respect to the Real Property
identified in Schedule 1 hereto.
(iv) The Borrower and its Subsidiaries shall,
together with the Administrative Agent and its advisors, engage in
extensive business and legal due diligence (including, without
limitation, an assessment of the claims and priority of local lines of
credit) with respect to the Foreign Subsidiaries to assess and explore
opportunities for such Foreign Subsidiaries to grant security
interests in their assets in favor of the Administrative Agent for the
benefit of the Lenders. Upon consideration of the foregoing, by
January 15, 2002, the Administrative Agent shall deliver to the
Borrower a schedule of security agreements, mortgages and guarantees,
among other things, required to be executed by Foreign Subsidiaries
(the "Foreign Collateral Schedule"). The Borrower shall, on or before
February 15, 2002, deliver to the Administrative Agent and the Lenders
the security agreements, mortgages and guarantees listed on the
Foreign Collateral Schedule, together with all documents and
instruments necessary to perfect the security interests granted in
such
11
security agreements and such legal opinions as the Administrative
Agent may request, in each case, in form and substance satisfactory to
the Administrative Agent and the Required Lenders.
(v) In the event that the Administrative Agent
determines to undertake an independent valuation of the consolidated
enterprise value of the Borrower and its Subsidiaries, which
undertaking may be done or updated from time to time, the Borrower and
its Subsidiaries shall cooperate in all respects with any such
valuation advisor selected by the Administrative Agent. Moreover, the
Borrower and its Subsidiaries shall furnish the Agent with any written
appraisal or valuation report received by them with respect to the
consolidated enterprise value of the Borrower and its Subsidiaries, as
soon as available and in any event within five business days of
receipt.
(vi) The Borrower and its Subsidiaries shall
permit the Administrative Agent, the Lenders and their advisors to
visit and inspect their properties (including their books and records,
accounts receivable and inventory, facilities and other business
assets) as often as requested. The Borrower and its Subsidiaries shall
authorize and direct all their accountants and auditors to deliver
copies of any of the financial statements, trial balances or other
accounting records of any sort and to disclose to the Administrative
Agent, the Lenders and their advisors any information they may have
concerning the financial status and business operation of the Borrower
and its Subsidiaries.
(vii) The Borrower, its Subsidiaries and their
advisors shall fully cooperate with the Administrative Agent and its
advisors with respect to the analysis of domestic and foreign
collateral matters, including in connection with the valuation of the
consolidated enterprise value. The Borrower shall reimburse the
Administrative Agent for all costs and out-of-pocket expenses incurred
in connection therewith.
(h) Dissolution of Certain Subsidiaries. The Borrower
hereby represents and warrants that none of Electro Fiberoptics Corp., CML
Fiberoptics, Inc., McLight Distribution, or VCH Incorporated own, directly or
indirectly, any assets or other property or conduct any business, and shall not
after the Effective Date own, directly or indirectly, any assets or other
property or conduct any business. The Borrower shall dissolve and wind up each
of Electro Fiberoptics Corp., CML Fiberoptics, Inc., McLight Distribution, and
VCH Incorporated, within 90 days of the Effective Date and shall provide the
Lenders with reasonable documentation of such dissolution within such time
period.
Section 3.2. Agreements Deemed Agreements under the
Credit Agreement. For purposes of the Credit Agreement, the agreements of the
Borrower contained in this Article III shall be deemed to be, and shall be,
agreements under the Credit Agreement. Any breach on the part of the Borrower
in respect of any agreement contained herein shall constitute an Event of
Default.
ARTICLE IV
EFFECTIVE DATE
Section 4.1. Effective Date. This Amendment shall become
effective as of the date hereof upon receipt by the Administrative Agent of the
following:
(a) counterparts of this Amendment, duly executed and
delivered by the Borrower, the Guarantors, the Administrative Agent and the
Required Lenders;
(b) payment of the First Installment;
12
(c) such legal opinions (including opinions from counsel
to the Borrower and its Subsidiaries and from such local counsel as may be
required by the Administrative Agent), documents, and instruments as are
customary for transactions of this type or as the Administrative Agent or any
Lender may reasonably request;
(d) payment in full in cash of its invoiced and unpaid
fees and out-of-pocket expenses incurred in connection with the Credit
Agreement, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent and any financial advisor retained by
counsel to the Administrative Agent.
Section 4.2. Effectiveness. Upon this Amendment becoming
effective pursuant to Section 4.1, the amendments granted in this Amendment
shall be deemed effective as of September 30, 2001.
ARTICLE V
INTERPRETATION
Section 5.1. Continuing Effect of the Credit Agreement.
The Borrower, the Administrative Agent and each Lender hereby acknowledges and
agrees that the Credit Agreement shall continue to be and shall remain
unchanged and in full force and effect in accordance with its terms, except as
expressly modified hereby. Any terms or conditions contained in this Amendment
shall control over any inconsistent terms or conditions in the Credit Agreement
or the other Loan Documents.
Section 5.2. No Waiver. Nothing contained in this
Amendment shall be construed or interpreted or is intended as a waiver of any
Default or Event of Default or of any rights, powers, privileges or remedies
that the Administrative Agent or the Lenders have or may have under the Credit
Agreement, any other related document or applicable law on account of such
Default or Event of Default.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Representations and Warranties. The
Borrower hereby represents and warrants as of the date hereof that, after
giving effect to this Amendment, (a) no Default or Event of Default has
occurred and is continuing, and (b) all representations and warranties of the
Borrower contained in the Credit Agreement are true and correct in all material
respects on and as of the date hereof (or if any such representation or
warranty is expressly stated to have been made as of a specific date, as of
such specific date).
Section 6.2. Fees and Expenses.
(a) The Borrower agrees to pay to the Administrative
Agent on demand all expenses including attorney's fees and expenses of the
Administrative Agent, incurred by the Administrative Agent, in connection with
the preparation, negotiation and execution of this Amendment.
(b) The Borrower shall pay to the Administrative Agent,
for the account of each Lender on a pro rata basis, an amendment fee (the
"Amendment Fee") payable as follows: (i) $950,000 in cash on the Effective Date
(the "First Installment"), (ii) $950,000 in cash on January 31, 2002 and (iii)
$950,000 in cash on April 1, 2002 (the "Third Installment"); provided, that the
Administrative Agent and the Lenders shall waive the Third Installment in the
event that Total Exposure is less than $325,000,000 on April 1, 2002. The
Amendment Fee shall be deemed earned in full on the Effective Date.
13
(c) The Borrower shall, on the first Business Day of
each fiscal quarter, pay to the Administrative Agent, for the account of each
Lender on a pro rata basis, a fee (the "Overage Fee") in an amount equal to (i)
0.50% multiplied by (ii) the amount by which (A) the Total Exposure as of such
day (after giving effect to any prepayments and Commitment reductions made on
such day) exceeds (B) the Target Exposure as of such day.
Section 6.3. Confirmation of Indebtedness. The Borrower
and the Guarantors hereby confirm and acknowledge that, as of the Effective
Date, (i) the Borrower is truly and justly indebted to the Lenders, without
defense, counterclaim or offset of any kind, (ii) the Borrower is liable to the
Lenders in respect of Loans made under the Credit Agreement, as of November 13,
2001, in the aggregate principal amount of $379,572,425.14 (inclusive of
Letters of Credit) and (iii) each Guarantor is contingently liable to the
Lenders in respect of such amount.
Section 6.4. Counterparts. This Amendment may be
executed by the parties hereto in any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
Section 6.5. GOVERNING LAW. THIS AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW
PRINCIPLES).
Section 6.6. Reservation of Rights. Notwithstanding
anything contained in this Amendment, the Borrower acknowledges that the
Administrative Agent and the Lenders do not waive, and expressly reserve, the
right to exercise, at any time, any and all of their rights and remedies under
the Credit Agreement, any other related document and applicable law on account
of any Default or Event of Default.
Section 6.7. Waiver. The Borrower and each of the
Guarantors hereby releases, waives, and forever relinquishs all claims,
demands, obligations, liabilities and causes of action of whatever kind or
nature, whether known or unknown, which any of them has, may have, or might
assert at the time of execution of this Amendment or in the future against the
Administrative Agent, the Lenders and/or their respective parents, affiliates,
participants, officers, directors, employees, agents, attorneys, accountants,
consultants, successors and assigns (collectively, the "Lender Group"),
directly or indirectly, which occurred, existed, was taken, permitted or begun
prior to the execution of this Amendment, 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.
Section 6.8. Joinder. To induce the Lenders to continue
to make Loans available from time to time to the Borrower, each Subsidiary
listed on the signature pages hereto hereby affirms its status as a "Guarantor"
under the Credit Agreement or, to the extent applicable, agrees to become a
"Guarantor" under the Credit Agreement with the same force and effect as if
such Subsidiary was a signatory thereto. Each such Subsidiary shall be jointly
and severally liable to each Lender, any Issuing Lender and the Administrative
Agent and their respective successors and assigns the prompt payment in full
when due (whether at stated
14
maturity, by acceleration or otherwise) of the Guarantied Obligations and each
such Subsidiary agrees that if the Guarantied Obligations are not paid in full
when due (whether at stated maturity, by acceleration or otherwise) such
Subsidiary shall promptly pay the same, without any demand or notice whatsoever
and in the case of any extension of time for payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due
(whether at stated maturity, by acceleration or otherwise) in accordance with
the terms of such extension of time for payment or renewal. Moreover, to induce
the Lenders to continue to make Loans available from time to time to the
Borrower, each Subsidiary listed on the signature pages hereto hereby affirms
its status as a "Debtor" under the Amended and Restated Security Agreement,
dated as of October 29, 1999 by and among the Borrower, certain of its
Subsidiaries parties thereto and the Administrative Agent (the "Security
Agreement") or, to the extent applicable, agrees to become a "Debtor" under the
Security Agreement with the same force and effect as if such Subsidiary was a
signatory to such agreement and was expressly named as a "Debtor" therein and
each Subsidiary hereby grants to the Administrative Agent, for itself and for
the benefit of the other Lenders a security interest in all of its Collateral
(as defined in the Security Agreement).
15
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
BORROWER
SLI, INC., as Borrower
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President & Treasurer
GUARANTORS
CHICAGO MINIATURE LAMP-SYLVANIA LIGHTING
INTERNATIONAL, INC.
CHICAGO MINIATURE OPTOELECTRONIC
TECHNOLOGIES, INC.
CML AIR, INC.
ELECTRO-MAG INTERNATIONAL, INC.
SLI LIGHTING COMPANY
SLI LIGHTING PRODUCTS, INC.
By
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
A&S ELECTRIC spol s.r.o
ALBA SPEZIALLAMPEN Gmbh
ALBA SPEZIALLAMPEN HOLDING Gmbh
ALBA TECHNOLOGY (M) Sdr. Bhd.
BADALEX LIMITED
CCC DE MEXICO, S.A. DE C.V.
CHICAGO MINIATURE LAMP-SYLVANIA LIGHTING
INTERNATIONAL I, B.V.
LIGHTHOUSE INVESTMENT HOLDINGS LIMITED
SLI MINIATURE LIGHTING Gmbh und Co. KG
X. XXXXXXXX GRUNDSTUCKSGESELLSCHAFT Gmbh
und CO. Gbr.
By
-----------------------------------------
Name:
Title:
ADMINISTRATIVE AGENT
FLEET NATIONAL BANK,
as Administrative Agent
By
-----------------------------------------
Name:
Title:
CO-AGENTS
KEYBANK NATIONAL ASSOCIATION
as Co-Agent
By
-----------------------------------------
Name:
Title:
CITICORP USA, INC.
as Co-Agent
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
BAYERISCHE HYPO UND VEREINSBANK AG,
NEW YORK BRANCH as Co-Agent
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
SYNDICATION AGENT
FIRST UNION NATIONAL BANK
as Syndication Agent
By
-----------------------------------------
Name:
Title:
DOCUMENTATION AGENT
ABN AMRO BANK N.V.
as Documentation Agent
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
The foregoing amendment is approved by the
Lenders signing below:
LENDERS
FLEET NATIONAL BANK
By
-----------------------------------------
Name:
Title:
ABN AMRO BANK N.V.
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By
-----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By
-----------------------------------------
Name:
Title:
BAYERISCHE HYPO UND VEREINSBANK AG,
NEW YORK BRANCH
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
CITICORP USA, INC.
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By
-----------------------------------------
Name:
Title:
LLOYDS TSB BANK PLC
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
BANKONE, NA (Main Office: Chicago)
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
COMERICA BANK
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
BNP PARIBAS, AS SUCCESSOR IN INTEREST TO
BANQUE NATIONALE DE PARIS
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
NATIONAL WESTMINSTER BANK PLC
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By
-----------------------------------------
Name:
Title:
NATEXIS BANQUE
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
KBC BANK, N.V.
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
BANK HAPOALIM B.M.
By
-----------------------------------------
Name:
Title:
By
-----------------------------------------
Name:
Title:
