FIRST AMENDMENT TO CREDIT AGREEMENT
AND LIMITED WAIVER
This FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this
"Amendment") is dated as of February 26, 1999 and entered into by and among
Manufacturers' Services Limited, a Delaware corporation ("Company"), MSL
Overseas Finance B.V., a Netherlands private company with limited liability
("MSL Overseas"), the financial institutions listed on the signature pages
hereof ("Lenders"), Bank of America National Trust and Savings Association,
as administrative agent and as collateral agent ("Administrative Agent" and
"Collateral Agent"), and Bank of America International Limited as sub-agent
("Sub-Agent"), and is made with reference to that certain Credit Agreement
dated as of August 21, 1998 (the "Credit Agreement"), by and among Company,
MSL Overseas, Lenders, Sub-Agent, DLJ Capital Funding, Inc., as Syndication
Agent, and Bank of America National Trust and Savings Association, as
Administrative Agent, as Collateral Agent and as Issuing Lender. Capitalized
terms used herein without definition shall have the same meanings herein as
set forth in the Credit Agreement.
RECITALS
WHEREAS, Company, MSL Overseas, Lenders, Sub-Agent, DLJ Capital
Funding, Inc., as Syndication Agent, and Bank of America National Trust and
Savings Association, as Administrative Agent, as Collateral Agent and as Issuing
Lender entered into the Credit Agreement on August 21, 1998;
WHEREAS, Company and Lenders desire to amend the rates of interest
on the Revolving Loans and Term Loans contained in subsection 2.2A of the Credit
Agreement and to correct dates contained in the amortization schedule set forth
in subsection 2.4A of the Credit Agreement;
WHEREAS, subsection 4.4A of the Credit Agreement provides that
certain security interests, mortgages, pledges, related items and documentation
not delivered on the Closing Date must be delivered by Company within the time
period specified in subsection 4.4A;
WHEREAS, on September 25, 1998 and on November 25, 1998, limited
waivers were executed by the parties to the Credit Agreement, which extended the
time to obtain a perfected security interest in certain collateral;
WHEREAS, it will not be possible to deliver the pledge of stock of
MSL Ireland or MSL Malaysia, or to perfect a security interest in the Offshore
Collateral of MSL Malaysia in the time frames required by the Credit Agreement,
as modified by such limited waivers; and
WHEREAS, Company has requested and the Lenders have agreed (1) to
amend subsection 2.2A of the Credit Agreement to change the rates of interest
charged on Revolving Loans and Term Loans, (2) to amend subsection 2.4A of the
Credit Agreement to correct dates contained in the amortization schedule, (3) to
amend subsection 7.1 of the Credit Agreement to
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prohibit MSL Overseas from lending the proceeds of any Loan to MSL Malaysia,
(4) to waive the requirement that Company deliver documentation necessary to
obtain a perfected security interest in the Offshore Collateral of MSL Malaysia
and (5) to extend the period for delivery of the pledge of stock of MSL Ireland
and for the pledge of stock of MSL Malaysia to April 30, 1999.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Amendment to Subsection 2.2; Interest on the Loans.
A. Subsection 2.2A(a) of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting the following in lieu thereof:
"(a) Subject to the provisions of subsections 2.2E and 2.8, the Term
Loans shall bear interest through maturity as follows:
(I) if a Base Rate Loan, then at the sum of the Base Rate plus
2.50% per annum; or
(II) if a LIBOR Loan, then at the sum of Adjusted LIBOR plus
3.50% per annum."
B. Subsection 2.2A(b) of the Credit Agreement is hereby amended by
deleting it in its entirety and inserting the following in lieu thereof:
"(b) Subject to the provisions of subsections 2.2E and 2.8, the
Revolving Loans shall bear interest through maturity as follows:
(I) if a Base Rate Loan, then at the sum of the Base Rate plus
the Base Rate Margin set forth in the table below opposite the
Consolidated Leverage Ratio for the four-Fiscal Quarter period for
which the applicable Margin Determination Certificate has been
delivered pursuant to subsection 6.1(iv); or
(II) if a LIBOR Loan, then at the sum of the Adjusted LIBOR
plus the LIBOR Margin set forth in the table below opposite the
Consolidated Leverage Ratio for the four-Fiscal Quarter period for
which the applicable Margin Determination Certificate has been
delivered pursuant to subsection 6.1(iv):
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Consolidated Leverage Ratio Applicable LIBOR Applicable Base
--------------------------- Margin Rate Margin
------ -----------
Greater than or equal to 3.0:1.00 3.00% 2.00%
Greater than or equal to 2.5:1.00 2.75% 1.75%
but less than 3.0:1.00
Less than 2.5:1.00 2.50% 1.50%
provided that, for the period between March 1, 1999 and August 31, 1999, the
applicable margin for Revolving Loans that are LIBOR Loans shall be 3.00% per
annum and for Revolving Loans chat are Base Rate Loans shall be 2.00% per annum.
Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(iv), the applicable margins
shall automatically be adjusted in accordance with such Margin Determination
Certificate, such adjustment to become effective on the next succeeding Business
Day following the receipt by Administrative Agent of such Margin Determination
Certificate, provided that, for the period commencing on September 1, 1999, the
applicable margins shall be determined by reference to the Margin Determination
Certificate most recently received by Administrative Agent and provided further
that, if at any time a Margin Determination Certificate is not delivered at the
time required pursuant to subsection 6.1(iv), from the time such Margin
Determination Certificate was required to be delivered until delivery of such
Margin Determination Certificate, such applicable margins shall be the maximum
percentage amount for the relevant Loan set forth above."
1.2. Amendment to Subsection 2.4; Repayments, Prepayments and Reductions in
Revolving Loan Commitments; General Provisions Regarding Payments.
Subsection 2.4A is hereby amended by deleting the table set forth therein
and inserting the following in lieu thereof:
Scheduled Repayment Scheduled Repayment
Date of Term Loans of Company of Term Loans of MSL Overseas
---- ------------------------ -----------------------------
October 31, 1998 $37,500 $87,500
January 31, 1999 $37,500 $87,500
April 30, 1999 $37,500 $87,500
July 31, 1999 $37,500 $87,500
October 31, 1999 $37,500 $87,500
January 31, 2000 $37,500 $87,500
April 30, 2000 $37,500 $87,500
July 31, 2000 $37,500 $87,500
October 31, 2000 $37,500 $87,500
January 31, 2001 $37,500 $87,500
April 30, 2001 $37,500 $87,500
July 31, 2001 $37,500 $87,500
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October 31, 2001 $37,500 $87,500
January 31, 2002 $37,500 $87,500
April 30, 2002 $37,500 $87,500
July 31, 2002 $37,500 $87,500
October 31, 2002 $37,500 $87,500
January 31, 2003 $37,500 $87,500
April 30, 2003 $37,500 $87,500
July 31, 2003 $37,500 $87,500
October 31, 2003 $37,500 $87,500
January 31, 2004 $37,500 $87,500
April 30, 2004 $37,500 $87,500
July 31, 2004 $14,137,500 $32,987,500
----------- -----------
Total $15,000,000 $35,000,000
1.3. Amendment to Subsection 7.1; Indebtedness.
Subsection 7.1 is hereby amended by deleting clause (iv)(b) and inserting
the following in lieu thereof:
"(iv)(b) subject to subsection 7.17, MSL Overseas may become and
remain liable with respect to Indebtedness to Company's Foreign
Subsidiaries, and any Wholly-owned Foreign Subsidiary of Company may
become and remain liable with respect to Indebtedness to MSL
Overseas or any other Wholly-owned Foreign Subsidiary of Company,
provided that MSL Overseas may not lend the proceeds of any Loan to
MSL Malaysia,"
Section 2. WAIVER
Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Borrowers herein contained, Lenders
hereby waive compliance with the provisions of subsection 4.4A of the Credit
Agreement to the extent, and only to the extent, that subsection 4.4A, as
modified by the limited waivers executed on September 25, 1998 and November 25,
1998, requires the Collateral Agent to: (1) obtain a pledge of the stock of MSL
Malaysia and a pledge of the stock of MSL Ireland prior to April 30, 1999; and
(2) obtain a perfected security interest in the Offshore Collateral of MSL
Malaysia; provided that a pledge of stock of MSL Ireland and a pledge of the
stock of MSL Malaysia shall be obtained on or before April 30, 1999.
Section 3. LIMITATION OF WAIVER
Without limiting the generality of the provisions of subsection 12.6
of the Credit Agreement, the waiver set forth above shall be limited precisely
as written and relates solely to the noncompliance by Borrowers with the
provisions of subsection 4.4A of the Credit Agreement in the manner and to the
extent described above, and nothing in this Amendment shall be deemed to:
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(a) constitute a waiver of compliance by Borrowers with
respect to (i) subsection 4.4A of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the
Credit Agreement or any other instrument or agreement referred to
therein; or
(b) prejudice any right or remedy that Administrative Agent,
Collateral Agent or any Lender may now have (except to the extent
such right or remedy was based upon existing defaults that will not
exist after giving effect to this Amendment) or may have in the
future under or in connection with the Credit Agreement or any other
instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
Section 4. CONDITIONS TO EFFECTIVENESS
Section 1 and Section 2 of 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 "First Amendment
Effective Date"): on or before the First Amendment Effective Date, Company shall
deliver to Administrative Agent the following:
1. Resolutions of its Board of Directors approving and authorizing the
execution, delivery, and performance of this Amendment, certified as of the
First Amendment Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or amendment;
2. Signature and incumbency certificates of its officers executing this
Amendment; and
3. The opinions of counsel to Company and counsel to MSL Overseas in form
and substance satisfactory to the Agents and their counsel.
Section 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
In order to induce Lenders to enter into this Amendment, each
Borrower hereby represents, warrants and agrees that after giving effect to this
Amendment:
(a) as of the date hereof, there exists no Event of Default or
Potential Event of Default under the Credit Agreement.
(b) all representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof
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;
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(c) as of the date hereof, each Borrower has performed all
agreements to be performed on its part as set forth in the Credit
Agreement, unless performance of any such agreements has been
previously waived; and
(d) as soon as practicable after the execution of this
Amendment, Company will take all necessary action to ensure that
the Liens securing the Obligations under the Credit Agreement
remain First Priority Liens, taking into account the provisions of
this Amendment, including without limitation, the Liens granted on
the Offshore Collateral of MSL Ireland and MSL Spain.
Section 6. COUNTERPARTS; EFFECTIVENESS
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. This Amendment, subject to the provisions of Section 4 hereof, shall
become effective upon the execution of counterparts hereof by Company, MSL
Overseas, Administrative Agent, Collateral Agent, Syndication Agent, Sub-Agent
and by Lenders constituting Requisite Lenders and receipt by Company, MSL
Overseas, Administrative Agent, Collateral Agent, Syndication Agent and
Sub-Agent of written notification of such execution and authorization of
delivery thereof.
Section 7. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND OTHER LOAN
DOCUMENTS
On and after the First Amendment Effective Date:
(a) 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 Credit Agreement as amended hereby;
(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; and
(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 the Collateral Agent, the Administrative Agent, or any of
the Lenders under the Credit Agreement or any of the other Loan
Documents.
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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.
Section 9. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS
Each guarantor listed on the signature pages hereof ("Guarantors")
hereby acknowledges that it has read this Amendment and consents to the terms
thereof and further hereby confirms and agrees that, notwithstanding the
effectiveness of this Amendment, the obligations of each Guarantor under its
applicable Guaranty shall not be impaired or affected and the applicable
Guaranty is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects.
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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:
MANUFACTURERS' SERVICES LIMITED
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: EXEC. V.P.
------------------------
MSL OVERSEAS:
MSL OVERSEAS FINANCE B.V.
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: DIRECTOR
------------------------
BANK OF AMERICA NT & SA,
as Administrative Agent and as Collateral
Agent
By:
---------------------------
Title:
------------------------
BANK OF AMERICA INTERNATIONAL
LIMITED, as Sub-Agent
By:
---------------------------
Title:
------------------------
LENDERS:
BANK OF AMERICA NT & SA,
individually and as Issuing Lender
By:
---------------------------
Title:
------------------------
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GUARANTORS:
MANUFACTURERS' SERVICES LIMITED
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: EXEC. V.P.
------------------------
MANUFACTURERS' SERVICES CENTRAL
U.S. OPERATIONS, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: EXEC. V.P.
------------------------
MANUFACTURERS' SERVICES WESTERN
U.S. OPERATIONS, INC
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: EXEC. V.P.
------------------------
MANUFACTURERS' SERVICES ATHLONE
LIMITED
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: DIRECTOR
------------------------
MSL OVERSEAS FINANCE BV
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: DIRECTOR
------------------------
S-4
MANUFACTURERS' SERVICES
SINGAPORE PTE LTD
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: DIRECTOR
------------------------
GLOBAL MANUFACTURERS' SERVICES
XXXXXXXX, XX
By: /s/ Xxxx Xxxxxxx
---------------------------
Title: DIRECTOR
------------------------
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