EXHIBIT 10.2
AMENDMENT NO. 5
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Amendment No. 5 ("Amendment") to the Amended and Restated
Revolving Credit Agreement is made as of June 27, 2002 by and among Pemstar
Inc., duly organized under the laws of the State of Minnesota ("Customer"),
Turtle Mountain Corporation, duly organized under the laws of the State of North
Dakota ("Turtle Mountain") and Pemstar Pacific Consultants Inc., duly organized
under the laws of the State of California ("Pemstar Pacific Consultants")
(Customer, Turtle Mountain and Pemstar Pacific Consultants, collectively the
"Credit Parties", individually a "Credit Party") and IBM Credit Corporation, a
Delaware corporation ("IBM Credit").
RECITALS:
A. The Credit Parties have entered into that certain Amended and
Restated Revolving Credit Agreement dated as of June 29, 2001 (as heretofore
amended, modified and supplemented from time to time, the "Agreement").
B. The parties have agreed to modify the Agreement as more specifically
set forth below, upon and subject to the terms and conditions set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Credit Parties and IBM Credit hereby agree as follows:
Section 1. Definitions. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Agreement, as amended hereby.
Section 2. Amendment. The Agreement and Attachment C are hereby amended as
follows:
A. The following new definitions are added:
"Amendment No. 5": means Amendment No. 5 to the Amended and Restated Revolving
Credit Agreement dated June 26, 2002 among IBM Credit and the Credit Parties.
"Pemstar Singapore": shall mean Pemstar Singapore Pte Ltd.
"Pemstar Thailand": shall mean Pemstar (Thailand) Co. Ltd.
"Proposed Sale Leaseback": as defined in Amendment No. 5.
"Thai Closing Date": shall mean the date all of the Thai Documents have been
executed and delivered by the parties thereto and all the conditions precedent
to funding have been satisfied.
"Thai Documents": shall mean, collectively, the Thai Loan Agreement, the Thai
Mortgage and the Thai Guaranty.
"Thai Guaranty:" shall mean the guaranty from the Customer to Thai Farmers Bank
dated June 25, 2002 guaranteeing certain obligations of Pemstar Thailand under
the Thai Loan Agreement.
"Thai Farmers Bank": shall mean the Thai Farmers Bank Limited.
"Thai Mortgage:" shall mean the mortgage agreement between Pemstar Thailand and
Thai Farmers Bank dated June 27, 2002.
"Thai Loan Agreement": shall mean the Loan Agreement dated June 27, 2002 by and
between Pemstar Thailand and Thai Farmers Bank.
B. The definition of Unrestricted Foreign Subsidiary is amended in its
entirety to read as follows:
"Unrestricted Foreign Subsidiary": means a direct or indirect Subsidiary of a
Credit Party (x) that is borrowing money in the form of a loan, note or similar
instrument from a financial institution other than IBM Credit and (y) is owned
directly or indirectly by the Customer or a Subsidiary of the Customer for which
the shares (one share less than two-thirds of the Subsidiary) have been pledged
to IBM Credit. As of June 27, 2002, the Unrestricted Foreign Subsidiaries are
Pemstar (Tianjin) Enterprise Ltd., Pemstar B.V Pemstar Thailand and Pemstar
Singapore."
C. Section 7.16. of the Agreement is amended in its entirety to read as
follows:
"7.16. Additional Collateral. (A) With respect to any property acquired after
the Closing Date by any Credit Party or its Domestic Subsidiary, such Credit
Party or its Domestic Subsidiary shall promptly (i) execute and deliver to IBM
Credit such amendments such other documents as IBM Credit deems necessary or
advisable to grant to IBM Credit, a security interest in such property, (ii) in
the case of Investment Property, Deposit Accounts, and any other relevant
Collateral, take any actions requested by IBM Credit to enable IBM Credit to
obtain control (within the meaning of U.C.C.) with respect thereto, (iii) cause
IBM Credit's name to be noted as secured party on any certificate of title for a
titled good if such notation is deemed necessary or advisable by IBM Credit for
the attachment, perfection or priority of, or the ability of IBM Credit to
enforce or realize on, IBM Credit's security interest in such Collateral, (iv)
comply with any material Requirement of Law as to any Collateral if such
compliance is deemed necessary or advisable by IBM Credit for the attachment,
perfection or priority of, or the ability of IBM Credit to enforce, IBM Credit's
security interest in such Collateral, (v) obtain consents and approvals from any
Governmental Authority or other Person, including without limitation any consent
of licensor, lessor or other Person obligated on Collateral, (vi) execute and
deliver such documents, agreements, and instruments as may be required by IBM
Credit to further evidence and perfect its security interests in all
Intellectual Property, (vii) obtain waivers from mortgagees and landlords in
form and substance satisfactory to IBM Credit, and (viii) take all actions
necessary or advisable to grant to IBM Credit a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by law or as
may be requested by IBM Credit.
(B) If any Credit Party shall at any time hold or acquire a Commercial Tort
Claim, then Customer shall immediately notify IBM Credit in a writing signed by
such Credit Party of the details thereof and grant to IBM in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
IBM Credit.
(C) Each Credit Party will permit IBM Credit, or its designee, to inspect the
Collateral at any reasonable time or times, wherever located.
(D) With respect to any new Domestic Subsidiary created or acquired after the
Closing Date by a Credit Party or its Domestic Subsidiary, such Credit Party or
such Domestic Subsidiary shall promptly (i) execute and deliver to IBM Credit
such amendments to this Agreement, and execute such other documents, instruments
and agreements, as IBM Credit deems necessary or advisable to grant to IBM
Credit a perfected first priority security interest in the capital stock of such
new Subsidiary that is owned by such Credit Party or its Domestic Subsidiary,
(ii) deliver to IBM Credit the certificates representing such capital stock,
together with undated stock powers, in blank, executed and delivered by
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a duly authorized officer of such Credit Party or the relevant Domestic
Subsidiary, (iii) cause such new Domestic Subsidiary (A) to become a party to
this Agreement or such other agreements, documents or Instruments, as IBM Credit
deems necessary or advisable (B) to take such actions necessary or advisable to
grant to IBM Credit a perfected first priority lien in all of the personal
property of such new Domestic Subsidiary including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required or
by law or as may be requested by IBM Credit and (iv) if requested by IBM Credit,
deliver to the IBM Credit legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to IBM Credit.
(E) Notwithstanding the foregoing, if a Credit Party or its Domestic Subsidiary
acquires a Domestic Subsidiary (and such acquisition is not financed by IBM
Credit) such Credit Party or such Subsidiary can request that IBM Credit
subordinate its lien in the assets of the new Subsidiary in favor of the lender
who financed the acquisition ("Other Lender") and IBM Credit shall not
unreasonably withhold its consent to such request provided that (i) the
Borrowing Base exceeds the Revolving A Credit Facility, (ii) no Default or Event
of Default shall have occurred and be continuing at the time of or after giving
effect to such acquisition and (iii) IBM Credit and the Other Lender shall have
entered into an intercreditor agreement in form and substance satisfactory to
IBM Credit.
(F) Notwithstanding anything herein to the contrary, no Credit Party nor any
Subsidiary of a Credit Party shall at any time (i) provide a guarantee of any
Indebtedness of any Unrestricted Domestic Subsidiary (if any) or Foreign
Subsidiary except that (x) the Customer may, pursuant to the Thai Guaranty,
guarantee the obligations of Pemstar Thailand in connection with the Thai Loan
Agreement provided that the aggregate amount of Customer's liability under such
guaranty shall not exceed the lesser of (i) Two Million Five Hundred Thousand
Dollars ($2,500,000) and (ii) the amounts due under the Thai Loan Agreement and
(y) the Customer may provide guaranties to support Foreign Subsidiaries
obligations under operating leases provided that the obligations under all such
guaranties do not exceed Fourteen Million Dollars ($14,000,000) in the
aggregate, (ii) be liable for any other Indebtedness of any Unrestricted
Domestic Subsidiary (if any) or Foreign Subsidiary, or (iii) be liable for any
other Indebtedness (other than Indebtedness to U.S. Bank) which provides that
the holder thereof may (upon notice, lapse of time or both) declare a default
therein (or cause such Indebtedness or the payment thereof to be accelerated,
payable or subject to repurchase prior to its final scheduled maturities) upon
the occurrence of a default with respect to any Indebtedness of an Unrestricted
Domestic Subsidiary (if any) or Foreign Subsidiary, (iv) make loans, advances,
payment of money or goods to an Unrestricted Domestic Subsidiary (if any) or
Foreign Subsidiary except as otherwise provided in Section 8.15 hereof, (v) make
Restricted Payments to an Unrestricted Domestic Subsidiary (if any) or Foreign
Subsidiary or (vi) make any Investment or equity contribution in an Unrestricted
Domestic Subsidiary (if any) or Foreign Subsidiary except that a Credit Party
may make an equity contribution in (x) the Unrestricted Foreign Subsidiaries
(other than Pemstar Thailand) provided that the aggregate amount of all such
Investments and equity contributions in all the Unrestricted Foreign
Subsidiaries (other than Pemstar Thailand) do not exceed Twenty-two Million
Dollars ($22,000,000) in the aggregate (y) Foreign Subsidiaries (other than
Unrestricted Foreign Subsidiaries) provided that the aggregate amount of all
equity investments made by the Credit Parties in any Foreign Subsidiary (other
than Unrestricted Foreign Subsidiaries) shall not exceed One Million Five
Hundred Thousand Dollars ($1,500,000) in the aggregate per such Foreign
Subsidiary and (z) Pemstar Thailand provided that the aggregate amount of all
such Investments and equity investments in Pemstar Thailand shall not exceed
Three Million Six Hundred Thousand Dollars ($3,600,000) in the aggregate. No
Unrestricted Domestic Subsidiary (if any) or Foreign Subsidiary may be merged
into the Customer or any Credit Party or liquidate into or transfer
substantially all of its assets to the Customer or any other Subsidiary (other
than an Unrestricted Subsidiary) without the prior written consent of IBM
Credit. The Credit Parties acknowledge that Unrestricted Domestic Subsidiaries
are not permitted without the prior written consent of IBM Credit."
(b) Section 8.4.(iv) of the Agreement is hereby deleted in its entirety and
restated as follows:
"(iv) guaranty to suppliers of the Credit Parties' subsidiaries' obligations in
the aggregate less than One Million Dollars ($1,000,000)."
(c) Section 8.15.(b) of the Agreement is hereby deleted in its entirety to read
as follows:
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"(b) Credit Parties may make loans and advances either individually or jointly
and otherwise make payment of money to Unrestricted Foreign Subsidiaries
provided that after giving effect to such loan or advance or payment of money,
the aggregate amount of all loans, advances and other payment of money made by
all of the Credit Parties to all Unrestricted Foreign Subsidiaries does not
exceed, in the aggregate, the following amounts for the period specified:
(i) as of March 31, 2002, the aggregate amount of all loans, advances
and other payment of money made by all of the Credit Parties to all Unrestricted
Foreign Subsidiaries does not exceed $51,000,000;
(ii) from April 1, 2002 through and including June 30, 2002, the
aggregate amount of all loans, advances and other payment of money made by all
of the Credit Parties to all Unrestricted Foreign Subsidiaries does not exceed
$39,000,000; and
(iii) from July 1, 2002 and thereafter, the aggregate amount of all
loans, advances and other payment of money made by all of the Credit Parties to
all Unrestricted Foreign Subsidiaries does not exceed $32,000,000."
(O) Section 8.15.(c) of the Agreement is hereby deleted in its entirety and
restated as follows:
"(c) Credit Parties may make loans and advances individually or jointly and
payment of money to Foreign Subsidiaries (other than Unrestricted Foreign
Subsidiaries) provided that after giving effect to such loan or advance or
payment of money, the aggregate amount of all loans, advances and other payment
of money made to all such Foreign Subsidiaries (excluding Unrestricted Foreign
Subsidiaries pursuant to clause (b) hereof) shall not be greater than
($10,000,000) (negative Ten Million Dollars) in the aggregate."
(P) Attachment C is amended by deleting such Attachment C in its entirety and
substituting, in lieu thereof, the Attachment C attached hereto.
Section 3. Consents. Subject to the terms and conditions of this Amendment,
including without limitation the conditions to effectiveness set forth in
Section 9 hereof, IBM Credit consents to the following:
(a) Pemstar Thailand's execution of the Thai Loan Agreement and the
Thai Mortgage provided that (i) the Thai Loan Agreement is in an amount not to
exceed 300 Million Thai Baht (approximately U.S. $7,180,000) and (ii) the Thai
Loan Agreement and the Thai Mortgage are otherwise in form and substance
satisfactory to IBM Credit in all respects; (iii) all of the proceeds of the
Thai Loan Agreement (which may be disbursed in two tranches, the aggregate
principal of which will be 300 million Thai Baht) (approximately U.S.
$7,180,000) shall be wired in immediately available funds in U.S. dollars to the
IBM Credit account referred to on Schedule II attached hereto ("IBM Credit
Account"); (iv) the first tranche of debt under the Thai Loan Agreement in an
amount equal to 200 Million Thai Baht (approximately U.S. $4,700,000) shall be
wired in immediately available funds in U.S. dollars to the IBM Credit Account
and received by IBM Credit no later than the earlier of (x) 10 Business Days
after the Thai Closing Date and (y) July 12, 2002; and (v) the second tranche of
debt under the Thai Loan Agreement in an amount equal to 100 million Thai Baht
(approximately U.S. $2,400,000) shall be wired in immediately available funds in
U.S. dollars to the IBM Credit Account and received by IBM Credit on the earlier
of (x) 13 Business Days after the Thai Closing Date and (y) July 15, 2002.
(b) Customer's execution of the Thai Guaranty provided that (i)
Customer's obligations under such guaranty does not exceed the lesser of (x) Two
Million Five Hundred Thousand Dollars ($2,500,000) and (y) the amounts due under
the Thai Loan Agreement, (ii) the Guaranty is unsecured and (iii) such guaranty
is otherwise in form and substance satisfactory to IBM Credit; and
(c) Customer's sale-leaseback of the Equipment listed on Schedule I
hereto ("Proposed Sale Leaseback") with X.X Xxxx Corp. provided that (i) the
documentation relating to the Proposed Sale
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Leaseback is in form and substance satisfactory to IBM Credit, and (ii) all of
the proceeds from the Proposed Sale Leaseback in an amount not less than Eight
Hundred Twenty-three Thousand Five Hundred Dollars ($823,500.00) are wired in
immediately available funds directly to the IBM Credit Account on the earlier of
(x) within 1 Business Day the closing of the Proposed Sale Leaseback and (y)
June 28, 2002.
Section 4. Representations and Warranties. Each Credit Party makes to IBM Credit
the following representations and warranties all of which are material and are
made to induce IBM Credit to enter into this Amendment.
Section 4.1 Accuracy and Completeness of Warranties and Representations. All
representations made by each Credit Party in the Agreement were true and
accurate and complete in every respect as of the date made, and, as amended by
this Amendment, all representations made by each Credit Party in the Agreement
are true, accurate and complete in every material respect as of the date hereof,
and do not fail to disclose any material fact necessary to make representations
not misleading.
Section 4.2 Violation of Other Agreements. The execution and delivery of this
Amendment and the performance and observance of the covenants to be performed
and observed hereunder do not violate or cause any Credit Party not to be in
compliance with the terms of any agreement to which any Credit Party is a party.
Section 4.3 Litigation. Except as has been disclosed by the Credit Parties to
IBM Credit in writing, there is no litigation, proceeding, investigation or
labor dispute pending or threatened against any Credit Party, which, if
adversely determined, would materially adversely affect any Credit Party's
ability to perform any Credit Party's obligations under the Agreement and the
other documents, instruments and agreements executed in connection therewith or
pursuant hereto.
Section 4.4 Enforceability of Amendment. This Amendment has been duly
authorized, executed and delivered by the Credit Parties and is enforceable
against each Credit Party in accordance with its terms.
Section 4.5 Consent of Other Lender. The Credit Parties acknowledge and agree
that the execution and delivery of the Thai Documents and documents relating to
the Proposed Sale Leaseback and this Amendment do not require the consent of the
holders of the Subordinated Debt (2002) under the terms of the Subordinated Debt
(2002) and that the execution and delivery of these documents will not trigger
an event of default , default or Triggering Event (as defined in the
Subordinated Convertible Notes) under the terms of the Subordinated Debt (2002).
Section 5. Ratification of Agreement. Except as specifically amended hereby, all
of the provisions of the Agreement shall remain unamended and in full force and
effect. Nothing herein shall be deemed a waiver of any default or consent. Each
Credit Party hereby ratifies, confirms and agrees that the Agreement, as amended
hereby, represents a valid and enforceable obligation of each Credit Party, and
is not subject to any claims, offsets or defenses. The consent contained herein
shall be effective only with respect to the matters referred to herein and shall
not be deemed a consent for any other purpose whatsoever.
Section 6. Governing Law. This Amendment shall be governed by and interpreted in
accordance with the laws which govern the Agreement.
Section 7. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.
Section 8. Additional Requirements. (a) The Agreement is hereby amended by
inserting therein the following new covenants:
Additional Covenants.
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(i) The Customer agrees that the Customer shall arrange for a wire (in U.S.
dollars) of all of the proceeds of the Thai Loan Agreement (in amounts not less
than 300 Million Thai Baht (approximately U.S. $7,180,000)) directly to the IBM
Credit Account for receipt by IBM Credit (in accordance with Section 3 (a) of
Amendment No. 5). The Customer hereby represents that the foregoing use of
proceeds from the Thai Loan Agreement does not violate the terms and conditions
of the Thai Loan Agreement;
(ii) The Customer agrees that it shall direct X.X. Xxxx Corp. to remit the
purchase price (in an amount not less than $823,500) for the Proposed Sale
Leaseback to the IBM Credit Account for receipt by IBM Credit no later than the
earlier of (x) 1 Business Day after the closing of the Proposed Sale Leaseback
and (y) June 28, 2002;
(iii) The Customer agrees that the that prior to making any payment under the
Thai Guaranty it will notify Thai Farmers Bank that the purpose of the payment
is for the purpose of liquidating the Customer's liability under the Thai
Mortgage; and
(iv) The Customer agrees that it will not amend, modify or alter the Thai
Documents without the prior written consent of IBM Credit.
The failure by any of the Credit Parties to comply with any of the above
covenants or the failure of the above requirements to be satisfied (within the
above time frames) or the breach of any of the above representations in IBM
Credit's determination in its sole discretion shall constitute an immediate
Event of Default under the Agreement.
(b) The Agreement is amended by adding the following new Events of Default:
(i) The failure by IBM Credit to receive (in immediately available
funds) all of the proceeds from the Thai Loan Agreement (in an amount not less
than 300 Million Thai Baht (approximately U.S. $7,180,000 by the dates required
by and in accordance with Section 3 (a) of Amendment No. 5).
(ii) The failure by IBM Credit to receive (in immediately available
funds) all of the proceeds for the Proposed Sale Leaseback (in an amount not
less than Eight Hundred Twenty-three Thousand Five Hundred Dollars $823,500)) by
the earlier of (x) 1 Business Day after the closing of the Proposed Sale
Leaseback and (y) June 28, 2002.
Section 9. Conditions to Effectiveness. This Amendment and the consent contained
in Section 3 hereof, shall only become effective upon the fulfillment of the
following conditions precedent to the satisfaction of IBM Credit:
1. This Amendment shall have been executed by all the parties hereto;
2. Before and after giving effect to this Amendment, the
representations and warranties in Section 6 of the Financing Agreement shall be
true and correct as though made on the date hereof. The execution by the Credit
Parties of this Amendment shall be deemed a representation that the Credit
Parties have complied with the foregoing condition;
3. US Bank shall have given its written consent to the transactions
described in Section 3 of this Amendment (and the Credit Parties shall have
obtained any other consents required in connection with the transactions
contemplated hereby) and the foregoing consents shall be in form and substance
satisfactory to IBM Credit;
4. IBM Credit shall have received fully executed copies of the Thai
Documents and documents relating to the Proposed Sale Leaseback all in form and
substance satisfactory to IBM Credit; and
5. The Credit Parties acknowledging and agreeing (as indicated by their
signature hereto) that (i) the Customer is in default of certain provisions of
the Agreement and accordingly certain Events of Default exist (ii) whether any
existing Events of Default shall be waived or amended is under discussion, but
IBM Credit has not waived, or committed to waive, any non-compliance, (iii)
nothing herein shall be deemed a waiver or consent to any existing defaults or
events of default and (iv) IBM Credit reserves all of its rights and remedies
with respect to such defaults and events of default.
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IN WITNESS WHEREOF, this Amendment has been executed by duly authorized
officers of the undersigned as of the day and year first above written.
Pemstar Inc. Turtle Mountain Corporation
By: /s/ Xx Xxxxxxx By: /s/ X.X. Xxxxx
----------------------------------- ----------------------------------
Print Name: Xx Xxxxxxx Print Name: X.X. Xxxxx
--------------------------- --------------------------
Title: CEO Title: Secretary
-------------------------------- -------------------------------
Date: June 26, 2002 Date: June 26, 2002
--------------------------------- --------------------------------
ATTEST: ATTEST:
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxxx
-------------------------------------- -------------------------------------
Print Name: Xxxxxx Xxxxxxxxx Print Name: Xxxxxx Xxxxxxxxx
--------------------------- --------------------------
Pemstar Pacific Consultants Inc. IBM Credit Corporation
By: /s/ Xx Xxxxxxx By: /s/ Xxxxxxxxx Xxxxxx
----------------------------------- ----------------------------------
Print Name: Xx Xxxxxxx Print Name: Xxxxxxxxx Xxxxxx
--------------------------- --------------------------
Title: Director Title: Manager of Credit
-------------------------------- -------------------------------
Date: June 26, 2002 Date: June 27, 2002
--------------------------------- --------------------------------
ATTEST: ATTEST:
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxxx
-------------------------------------- -------------------------------------
Print Name: Xxxxxx Xxxxxxxxx Print Name; Xxxxxx Xxxxxxxxx
--------------------------- --------------------------
Turtle Mountain Corporation
By: /s/ Xx Xxxxxxx
-----------------------------------
Print Name: Xx Xxxxxxx
---------------------------
Title: Director
--------------------------------
Date: June 26, 2002
---------------------------------
ATTEST:
/s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Print Name: Xxxxxx Xxxxxxxxx
---------------------------
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SCHEDULE II TO
AMENDMENT NO. 5
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Bank One, NA
Xxxxxxxx, XX 00000
ABA # 000000000
Acct. # 00-00000
Contact: Xxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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ATTACHMENT C
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
("AGREEMENT")
COMPLIANCE CERTIFICATE
TO: IBM CREDIT CORPORATION
______________________
______________________
The undersigned authorized officers of Pemstar, Inc., Turtle Mountain
Corporation and Pemstar Pacific Consultants Inc.(the "Credit Parties"), hereby
certify on behalf of the Credit Parties, with respect to the Amended and
Restated Revolving Credit Agreement executed by and between the Credit Parties
and IBM Credit Corporation ("IBM Credit") on June 29, 2001, as amended from time
to time (the "Agreement"),that (A) each of the Credit Parties has been in
compliance for the period from __________, 20__ to _______, 20__ with the
financial covenants set forth in Attachment A to the Agreement, as demonstrated
below, and (B) no Default has occurred and is continuing as of the date hereof,
except, in either case, as set forth below. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them in the
Agreement.
I. Financial Covenants:
On a consolidated basis:
Covenant Covenant Requirement
-------- --------------------
(a) Net Profit after Tax Equal to or Greater than 0.75 percent
to Revenue quarterly for the fiscal quarter ending
September 30, 2002 and all fiscal quarters
thereafter and Equal to or Greater than
.6 percent for the fiscal year ending
March 31, 2003 and 1.25 percent for all
fiscal year ends thereafter
(b) Total Liabilities to Greater than Zero and
Tangible Net Worth Equal to or Less than 1.6:1.0
(c) Current Assets to Greater than 2.0:1.0
Current Liabilities
(d) Fixed Charge Equal to or Greater than 1.0 0:1.0 for each
Coverage Ratio fiscal month beginning December 31, 2002,
including the fiscal months ending January
31, 2003 and February 28, 2003, and 1.30:1.
for each fiscal month beginning March 31,
2003 and for all fiscal months thereafter
9
(e) Maximum Capital Less than or equal to
Expenditures $40,000,000 for the fiscal year ending March
31, 2002 and $18,000,000 for the fiscal year
ending March 31, 2003 and all fiscal year
ends thereafter
(g) Net Profit After Equal to or greater
Tax to Revenue than 0.1 percent for the fiscal
(U.S. Credit Parties quarter ending December 31, 2002
operations only) and all fiscal quarters thereafter
(h) EBITDA Equal to or Greater than ($7,300,000) for
(U.S. Credit Parties fiscal quarter ending March 31, 2002 and
operations only) ($9,100,000) for the six months ending
June 30, 2002
(i) EBITDA Equal to or Greater than ($12,300,000) for
fiscal quarter ending March 31, 2002 and
($8,850,000) for the six months ending
June 30, 2002
For U.S. Credit Parties operations only:
(i) Net Profit after Tax
to Revenue Equal to or Greater than 0.1 percent
II. Calculation of Tangible Net Worth:
Total Assets MINUS Total Liabilities
LESS: goodwill
organizational expenses
prepaid expenses
deferred charges, etc.
leasehold expenses
all other
callable/redeemable preferred stock
officer, employee, director, stockholder
and affiliate receivables
Total Tangible Net Worth
10
III. Permitted Baskets:
In accordance with sections 7.16, 8.4, 8.5, 8.6 and 8.15 of the Agreement, the
following are Pemstar Inc.'s attainment of the affirmative and negative
covenants:
----------------------------------------------------------------------------------------------------------------
Agreement Reference Actual Aggregate Amount Permitted
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Guaranties to Pemstar Thailand in $2,500,000.00
connection with the Credit Facility
(Section 7.16)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Guaranties to Foreign Subsidiaries $14,000,000
under operating leases
(Section 7.16)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Equity contributions in Unrestricted Investments and equity contributions
Foreign Subsidiaries (other than do not exceed $22,000,000
Pemstar Thailand)
(Section 7.16)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Equity Contributions in Foreign $1,500,000
Subsidiaries (other than Unrestricted
Foreign Subsidiaries) (Section 7.16)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Equity Contributions in Pemstar Thailand $3,600,000.00
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Guaranties to suppliers of the Credit Less than $1,000,000
Parties Subsidiaries
(Section 8.4)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Optional payments or prepayments, $250,000
redemption or repurchases of
Indebtedness
(Section 8.5)
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
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----------------------------------------------------------------------------------------------------------------
Agreement Reference Actual Aggregate Amount Permitted
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Loans, advances and payment of money to The aggregate amount of all loans
Unrestricted Foreign Subsidiaries and advances and other payment of
(Section 8.15) money by all the Credit Parties to
all Unrestricted Foreign
Subsidiaries:
From the date hereof through and
including March 31, 2002, $51,000,000
----------------------------------------------------------------------------------------------------------------
From April 1, 2002 through and
including June 30, 2002 $39,000,000
----------------------------------------------------------------------------------------------------------------
From July 1, 2003 and thereafter
$32,000,000
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Loans, advances and payment of money to ($10,000,000)
Foreign Subsidiaries (excluding (Negative Ten Million Dollars)
Unrestricted Foreign Subsidiaries, but
including Pemstar Thailand)
(Section 8.15)
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Capital Expenditures made by Credit Less than or equal to $18,000,000
Parties and Subsidiaries for the fiscal year ending
(Section 8.6) March 31, 2003 and all fiscal years
thereafter
---------------------------------------------------------------------------------------------------------------
Attached hereto are Financial Statements as of and for the end of the
fiscal ____________ ended on the applicable date, as required by Section 7.1 of
the Amended and Restated Revolving Credit Agreement.
Submitted by:
PEMSTAR INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Print Name: Xxxxx Xxxxxxx
-------------------------
Title: Chief Executive Officer
-----------------------------
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TURTLE MOUNTAIN CORPORATION TURTLE MOUNTAIN CORPORATION
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxx
----------------------------------- ------------------------------------
Print Name: Xxxxx X. Xxxxx Print Name: Xxxxx Xxxxxxx
--------------------------- ----------------------------
Title: Secretary Title: Director
-------------------------------- ---------------------------------
PEMSTAR PACIFIC CONSULTANTS INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Print Name: Xxxxx Xxxxxxx
---------------------------
Title: Director
--------------------------------
13
