SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "SECOND AMENDMENT"), dated
as of September 18, 1996, is entered into among Power-One, Inc., a Delaware
corporation (the "BORROWER"), the banks listed on the signature pages hereof
(the "LENDERS"), and NATIONSBANK OF TEXAS, N.A., as administrative agent for
the Lenders (in said capacity, the "ADMINISTRATIVE LENDER").
A. The Borrower, certain of the Lenders and the Administrative Lender are
parties to that certain Credit Agreement, dated as of September 27, 1995, as
amended by that certain First Amendment to Credit Agreement, dated as of
February 1, 1996 (said Credit Agreement, as amended, the "CREDIT AGREEMENT"; the
terms defined in the Credit Agreement and not otherwise defined herein shall be
used herein as defined in the Credit Agreement).
B. The Borrower, Lenders and the Administrative Lender desire to amend
the Credit Agreement to (i) add Sumitomo Bank of California ("SUMITOMO") as a
Lender thereto, (ii) increase the Commitments, and (iii) make certain changes
therein.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower,
Lenders and the Administrative Lender covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The definition of "REVOLVING CREDIT COMMITMENT" set forth in Section
1.1 of the Credit Agreement is hereby amended to read as follows:
"'REVOLVING CREDIT COMMITMENT' means $17,500,000.00".
(b) The definition of "TERM LOAN COMMITMENT" set forth in Section 1.1 of
the Credit Agreement is hereby amended to read as follows:
"'TERM LOAN COMMITMENT' means $32,500,000.00, as reduced from time to
time pursuant to SECTION 2.6 hereof."
(c) Section 2.6(c) of the Credit Agreement is hereby amended to read as
follows:
"(c) AMORTIZATION. The Term Loan Commitment shall be permanently
reduced on each date set forth below, beginning on the Amortization Date,
in such amounts as set forth next to each such date below:
Amount of Reduction of the
Dates Term Loan Commitment As of Each Date
----- ------------------------------------
December 31, 1995 $ 625,000
March 31, 1996 $ 625,000
June 30, 1996 $ 625,000
September 30, 1996 $ 625,000
December 31, 1996 $ 750,000
March 31, 1997 $ 750,000
June 30, 1997 $ 750,000
September 30, 1997 $ 750,000
December 31, 1997 $1,000,000
March 31, 1998 $1,000,000
June 30, 1998 $1,000,000
September 30, 1998 $1,000,000
December 31, 1998 $1,125,000
March 31, 1999 $1,125,000
June 30, 1999 $1,125,000
September 30, 1999 $1,125,000
December 31, 1999 $1,312,500
March 31, 2000 $1,312,500
June 30, 2000 $1,312,500
September 30, 2000 $1,312,500
December 31, 2000 $1,562,500
March 31, 2001 $1,562,500
June 30, 2001 $1,562,500
September 30, 2001 $1,562,500
December 31, 2001 $1,750,000
March 31, 2002 $1,750,000
June 30, 2002 $1,750,000
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September 30, 2002 $1,750,000, or if different, the
remaining amount of the Term Loan
Commitment
(d) Section 7.7 of the Credit Agreement is hereby amended to read as follows:
"Section 7.7 CAPITAL EXPENDITURES. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, make or commit to make any Capital
Expenditures (excluding any Capital Expenditures made as a result of a
Shareholder Contribution) during (i) Fiscal Year ending 1996 in excess of
$3,500,000, (ii) during Fiscal Year ending 1997 in excess of $5,000,000, and
(iii) during any Fiscal Year thereafter in excess of $3,750,000 (the "MAXIMUM
AMOUNT"); PROVIDED, HOWEVER, that the Maximum Amount for each fiscal year shall
be increased by an amount equal to the excess, if any, of the Maximum Amount for
the previous fiscal year (before making any adjustments in accordance with this
proviso) over the actual aggregate Capital Expenditures (excluding any Capital
Expenditures made as a result of a Shareholder Contribution) for such previous
fiscal year."
(e) Section 7.13 of the Credit Agreement is hereby amended to read as follows:
"Section 7.13 MINIMUM NET WORTH. At the end of each fiscal quarter
occurring during the periods indicated below, the Borrower shall not permit the
Net Worth to be less than the amount opposite the period in which such fiscal
quarter occurs:
Period Amount
------ ------
From Agreement Date to but not including Fiscal Year $15,000,000
end 1996
From and including Fiscal Year end 1996 to but not $15,000,000
including Fiscal Year end 1997
From and including Fiscal Year end 1997 to but not $17,000,000
including Fiscal Year end 1998
From and including Fiscal Year end 1998 to but not $20,000,000
including Fiscal Year end 1999
From and including Fiscal Year end 1999 to but not $26,000,000
including Fiscal Year end 2000
From and including Fiscal Year end 2000 and thereafter $30,000,000*
(f) The Specified Percentage of (i) Sumitomo is indicated beside its name
on the signature pages hereof and (ii) each other Lender is amended to be the
percentage beside each such Lender's name on the signature pages hereof.
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(g) SCHEDULE 1 to the Credit Agreement is hereby amended to be in the form
of SCHEDULE 1 attached hereto.
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Borrower represents and warrants that, as of
the date hereof and after giving effect to the amendments provided in the
foregoing Section 1:
(a) the representations and warranties contained in the Credit Agreement
are true and correct in all material respects on and as of the date hereof as if
made on and as of such date;
(b) no event has occurred and its continuing which constitutes a Default
or an Event of Default;
(c) the Borrower has full power and authority to execute and deliver
this Second Amendment and the Notes (as defined in Section 3(c) of this
Second Amendment) and to perform this Second Amendment, the Notes and the
Credit Agreement, as amended by this Second Amendment, the execution and
delivery of this Second Amendment and the Notes and the performance of this
Second Amendment, the Notes and the Credit Agreement, as amended by this
Second Amendment, has been duly authorized by all corporate action of the
Borrower, and this Second Amendment, the Notes and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable debtor relief laws and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and except as rights to indemnity may be
limited by federal or state securities laws;
(d) neither the execution and delivery of this Second Amendment and the
Notes, or the performance of this Second Amendment, the Notes or the Credit
Agreement, as amended by this Second Amendment, nor the consummation of any
transactions herein or therein, will contravene or conflict with any Applicable
Law to which the Borrower or any of its Subsidiaries is subject or any
indenture, agreement or other instrument to which the Borrower or any of its
Subsidiaries or any of their respective property is subject, except to the
extent that any such contravention or conflict could not reasonably be expected
to have a Material Adverse Effect; and
(e) no authorization, approval, consent or other action by, notice to, or
filing with, any governmental authority or other Person, is required for the (i)
execution and delivery of this Second Amendment and the Notes or performance by
the Borrower of this Second Amendment, the Notes and the Credit Agreement, as
amended by this Second Amendment, or (ii) acknowledgment of this Second
Amendment by PEI or PUM.
3. CONDITIONS OF EFFECTIVENESS. The Second Amendment shall be effective
as of September 18, 1996, subject to the following:
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(a) the Administrative Lender shall have received counterparts of this
Second Amendment executed by the Lenders;
(b) the Administrative Lender shall have received counterparts of this
Second Amendment executed by the Borrower and acknowledged by PEI and PUM;
(c) the Administrative Lender shall have received for (i) NationsBank a
$5,450,000 Revolving Credit Note and a $9,606,250 Term Loan Note, (ii) Union
Bank a $5,450,000 Revolving Credit Note and a $9,606,250 Term Loan Note, (iii)
City National Bank a $3,100,000 Revolving Credit Note and a $5,287,500 Term Loan
Note, and (iv) Sumitomo a $3,500,000 Revolving Credit Note and a $6,125,000 Term
Loan Note, each duly executed by the Borrower (collectively, the "NOTES");
(d) the Administrative Lender shall have received an Officer's Certificate
of the Borrower containing (i) corporate resolutions of the Borrower authorizing
the execution and delivery of this Second Amendment and the Notes and (ii)
signatures of titles of officers of the Borrower authorized to sign this Second
Amendment and the Notes;
(e) the representations and warranties set forth in Section 3 shall be
true and correct in all material respects; and
(f) the Administrative Lender and the Lenders shall have received in form
and substance satisfactory to the Administrative Lender and the Lenders, such
other documents, certificates and instruments as the Lenders shall reasonably
require.
4. SECTION 11.6. The parties hereto agree that (i) the provisions of
Section 11.6 of the Credit Agreement shall not be required to be complied with
for the purpose of making Sumitomo a Lender to the Credit Agreement pursuant
to this Second Amendment and (ii) by signing below, Sumitomo shall be a
Lender under the Credit Agreement and shall have all rights and obligations
of a Lender thereunder.
5. PURCHASE BY SUMITOMO. Simultaneously with the satisfaction of the
Conditions of Effectiveness set forth in Section 3 hereof, Sumitomo shall be
deemed to have purchased without recourse an amount of each other Lender's
outstanding Advances such that after giving effect to this Second Amendment, the
percentage of each Lender's Commitment which has been utilized will be equal.
6. ACKNOWLEDGEMENT. By signing below, each of PEI and PUM (i)
acknowledges and consents to the execution, delivery and performance by the
Borrower of this Second Amendment and the Notes and (ii) acknowledges and agrees
that its obligations in respect of its Subordination Agreement (A) are not
released, diminished, waived, modified, impaired or affected in any manner by
this Second Amendment or any of the provisions contemplated herein except as
expressly provided herein and (B) include the Revolving Credit Commitment and
Term Loan Commitment, as increased by this Second Amendment.
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7. RETURN OF NOTES. Promptly upon satisfaction of all the Conditions of
Effectiveness set forth in Section 3 hereof, NationsBank, Union Bank and City
National Bank shall return to the Borrower each of their respective promissory
notes which are being replaced by the Notes marked "Renewed" or "Replaced" or
with words of similar import.
8. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", or words of like import shall
mean and be a reference to the Credit Agreement, as amended by this Second
Amendment.
(b) The Credit Agreement, as amended by this Second Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
9. COSTS, EXPENSES AND TAXES. The Borrower agrees to promptly pay all
reasonable costs and expenses of the Administrative Lender in connection with
the preparation, reproduction, execution and delivery of the Second Amendment
and the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of counsel for the Administrative
Lender).
10. EXECUTION IN COUNTERPARTS. This Second 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 to be
an original and all of which when taken together shall constitute but one and
the same instrument.
11. GOVERNING LAW; BINDING EFFECT. This Second Amendment shall be
governed by and construed in accordance with the laws of the State of Texas and
shall be binding upon the Borrower and each Lender and their respective
successors and assigns.
12. HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Second Amendment for any other purpose.
13. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date first above written.
POWER-ONE, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
NATIONSBANK OF TEXAS, N.A.,
Individually and as Administrative Lender
Specified Percentage:
31.28571429%
By:
----------------------------
Name:
-----------------------
Title:
-----------------------
UNION BANK
Specified Percentage:
31.28571429%
By:
----------------------------
Name:
-----------------------
Title:
-----------------------
CITY NATIONAL BANK
Specified Percentage:
17.42857142%
By:
----------------------------
Name:
-----------------------
Title:
-----------------------
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SUMITOMO BANK OF CALIFORNIA
Specified Percentage:
20.00%
By:
----------------------------
Name:
-----------------------
Title:
-----------------------
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SCHEDULE 1
LIBOR LENDING OFFICES
NATIONSBANK OF TEXAS, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
UNION BANK
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
CITY NATIONAL BANK
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
SUMITOMO BANK OF CALIFORNIA
000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
