FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT, CONSENT AND LIMITED WAIVER TO AMENDED AND
RESTATED CREDIT AGREEMENT dated as of December 17, 1996 (this "FIRST
AMENDMENT") is entered into between Kaynar Technologies Inc., a Delaware
corporation (the "BORROWER") and General Electric Capital Corporation, a New
York corporation (the "LENDER") and relates to that certain Amended and
Restated Credit Agreement dated as of August 12, 1996, between the Borrower
and the Lender (as supplemented or otherwise modified from time to time
through the date hereof, the "CREDIT AGREEMENT").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have entered into the Credit
Agreement;
WHEREAS, the Borrower has requested that the Lender amend the Credit
Agreement (i) to increase the Revolving Credit Commitment from $9,500,000 to
$15,000,000, (ii) to make an additional Term Loan in a principal amount of
$6,000,000, the proceeds of which will be used to reduce the outstanding
principal balance of the Revolving Loans and (iii) to effect other
amendments, all as more fully described herein; and
WHEREAS, the Borrower has also requested that (i) the Lender consent
to an amendment to the Recoil Acquisition Agreements and (ii) the Lender
waive certain Events of Default under the Credit Agreement, in each case as
more fully described herein;
NOW, THEREFORE, in consideration of the above premises, the Borrower
and the Lender agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined
herein have the meanings assigned to them in the Credit Agreement.
2. AMENDMENTS TO THE CREDIT AGREEMENT. Upon the "Effective Date"
(as defined in SECTION 6 below), the Credit Agreement is hereby amended as
follows:
2.1 AMENDMENTS TO SECTION 1.01. Section 1.01 of the Credit
Agreement is amended as follows:
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(a) The following definition of "Fourth Supplemental Term Loan"
is added in proper alphabetical order:
"FOURTH SUPPLEMENTAL TERM LOAN" is defined in SECTION
2.01(a).
(b) The following definition of "New First Amendment" is added
in proper alphabetical order:
"NEW FIRST AMENDMENT" means the First Amendment, Consent and
Limited Waiver to Amended and Restated Credit Agreement dated as of
December 17, 1996, between the Borrower and the Lender.
(c) The following definition of "New First Amendment Effective
Date" is added in proper alphabetical order:
"NEW FIRST AMENDMENT EFFECTIVE DATE" means the "Effective
Date" under (and as defined in) the New First Amendment.
(d) The definition of "Revolving Credit Commitment" is hereby
amended and restated in its entirety to read as follows:
"REVOLVING CREDIT COMMITMENT" means the obligation of the
Lender to make Revolving Loans and to issue, or cause to be issued,
Letters of Credit pursuant to the terms and conditions of this
Agreement (and, for the applicable period, the Existing Credit
Agreement), in an aggregate amount (including all Letter of Credit
Obligations and the principal amount of all Revolving Loans) which
shall not exceed (i) from the Initial Closing Date through and
including December 31, 1994, $6,500,000, (ii) from January 1, 1995
until the Third Amendment Effective Date, $5,000,000, (iii) from the
Third Amendment Effective Date until the New First Amendment Effective
Date, $9,500,000 and (iv) from the New First Amendment Effective Date
until the Revolving Credit Termination Date, $15,000,000, as
permanently reduced from time to time pursuant to SECTION 3.01.
(e) The definition of "Term Loan Commitment" is hereby amended
and restated in its entirety to read as follows:
"TERM LOAN COMMITMENT" means the obligation of the Lender to
make its Term Loan pursuant to the terms and conditions of this
Agreement (and, for the
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applicable period, the Existing Credit Agreement), which shall be in
an aggregate principal amount of (i) from the Initial Closing Date
until the First Amendment Effective Date, $15,800,000, (ii) from the
First Amendment Effective Date until the Third Amendment Effective
Date, $17,800,000, (iii) from the Third Amendment Effective Date
until the Amendment and Restatement Effective Date, $19,425,000,
(iv) from the Amendment and Restatement Effective Date until the New
First Amendment Effective Date, $22,425,000 and (v) from and after the
New First Amendment Effective Date, $28,225,000, as permanently reduced
from time to time by payments or prepayments on the Term Loan made
pursuant to SECTION 2.01(d) or SECTION 3.01.
2.2 AMENDMENTS TO SECTION 2.01. Section 2.01 of the Credit
Agreement is hereby amended as follows:
(a) Section 2.01(a) is hereby amended and restated in its
entirety to read as follows:
(a) AMOUNT OF TERM LOAN. The Lender (i) has made a term loan,
in Dollars, to the Borrower on the Initial Closing Date in an
aggregate amount equal to $15,800,000 (the "Initial Term Loan"), (ii)
has made a term loan, in Dollars, to the Borrower on the First
Amendment Effective Date, in an aggregate amount equal to $2,000,000
(the "Supplemental Term Loan"), (iii) has made a term loan, in
Dollars, to the Borrower on the Third Amendment Effective Date, in an
aggregate amount equal to $2,000,000 (the "Second Supplemental Term
Loan"), (iv) has made a term loan, in Dollars, to the Borrower on the
Amendment and Restatement Effective Date, in an aggregate amount equal
to $4,000,000 (the "Third Supplemental Term Loan") and (v) subject to
the terms and conditions set forth in this Agreement and the New First
Amendment, hereby agrees to make a term loan, in Dollars, to the
Borrower on the New First Amendment Effective Date, in an aggregate
amount equal to $6,000,000 (the "Fourth Supplemental Term Loan" and
together with the Initial Term Loan, the Supplemental Term Loan, the
Second Supplemental Term Loan and the Third Supplemental Term Loan,
the "Term Loan"). After giving effect to the advance of the Fourth
Supplemental Term Loan, the outstanding principal balance of the Term
Loan will be $28,225,000.
(b) Section 2.01(c) is hereby amended and restated in its
entirety to read as follows:
(c) MAKING OF TERM LOANS. (i) Promptly after receipt of a
Notice of Borrowing under SECTION 2.01(b)
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(or telephonic notice in lieu thereof), the Lender shall deposit an
amount equal to the amount requested by the Borrower to be made in
respect of the Third Supplemental Term Loan under this SECTION
2.01(c), in immediately available funds, not later than 1:00 p.m.
(Chicago time) on the Amendment and Restatement Effective Date.
Subject to the fulfillment of the conditions precedent set forth in
SECTION 4.01, the Lender shall make the proceeds of such amounts
available to the Borrower by disbursing such proceeds on the
Amendment and Restatement Effective Date to an account specified in
a written notice from the Lender to the Borrower or in accordance
with the Borrower's disbursement instructions set forth in such
Notice of Borrowing.
(ii) Upon the New First Amendment Effective Date, the Lender
shall be deemed to have advanced the proceeds of the Fourth
Supplemental Term Loan to the Borrower to reduce the outstanding
principal balance of the Revolving Loans by an amount equal to
$6,000,000, it being agreed and understood that such amount shall be a
transfer on the books of the Lender from one loan account of the
Borrower to another and that no proceeds of the Fourth Supplemental
Term Loan shall otherwise be made available to the Borrower.
(c) Section 2.01(d)(i) is hereby amended by deleting the fourth
sentence thereof in its entirety and substituting the following sentences
in lieu thereof:
On the Amendment and Restatement Effective Date, the Borrower executed
and delivered to the Lender a third substitute promissory note, in
substantially the form of EXHIBIT I attached hereto and made a part
hereof, evidencing the Initial Term Loan, the Supplemental Term Loan,
the Second Supplemental Term Loan and the Third Supplemental Term
Loan. On the New First Amendment Effective Date, the Borrower shall
execute and deliver to the Lender a fourth substitute promissory note,
in substantially the form of EXHIBIT I-A attached hereto and made a
part hereof, evidencing the Term Loan (the "Term Note").
(e) Section 2.01(e) is hereby amended and restated in its
entirety to read as follows:
(e) USE OF PROCEEDS OF TERM LOANS. (i) The proceeds of the
Third Supplemental Term Loan shall be used (A) to pay the "Purchase
Price" under (and as defined in) the Recoil U.S. Acquisition
Agreement, (B) to pay (and enable Kaynar U.K. to pay) that portion of
the "Purchase Price" under (and as defined in) the Recoil Australia
Acquisition Agreement attributable to the Capital Stock of Recoil
Belgium and Recoil U.K., (C) to make capital contributions to Recoil
Holdings and Recoil Australia Holdings, the proceeds of which will be
contributed to the capital of RCL (and the Borrower shall cause RCL to
use the proceeds of such capital contributions for the purposes set
forth in Section 2.01(e) of the RCL Loan Agreement) and (D) for
working capital in the ordinary course of the Borrower's business and
for other lawful general corporate purposes.
(ii) The proceeds of the Fourth Supplemental Term Loan shall be
used to reduce the outstanding principal balance of the Revolving
Loans by an amount equal to $6,000,000.
2.3 AMENDMENT TO SECTION 2.02. Section 2.02(e)(i) is hereby
amended by deleting the second sentence thereof in its entirety and substituting
the following sentences in lieu thereof:
On the Third Amendment Effective Date, the Borrower executed and
delivered to the Lender a substitute promissory note in the form of
EXHIBIT J attached hereto and made a part hereof, evidencing the then
existing Revolving Credit Commitment. On the New First Amendment
Effective Date, the Borrower shall execute and deliver to the Lender a
second substitute promissory note, in substantially the form of
EXHIBIT X-X attached hereto and made a part hereof, evidencing the
Revolving Loans and the Revolving Credit Commitment (the "Revolving
Credit Note").
2.4 AMENDMENT TO SECTION 2.05. Section 2.05 is hereby amended
by inserting immediately following Section 2.05(c) the following new Section
2.05(d):
(d) NEW FIRST AMENDMENT FEE. In addition to any fees paid
pursuant to SECTION 2.05(a) or 2.05(b), the Borrower shall pay to the
Lender, upon execution of the New First Amendment, a fee of $60,000.
2.5 AMENDMENT TO SECTION 6.01. Section 6.01(f)(iii) of the
Credit Agreement is hereby amended by amending and restating clause (C) thereof
in its entirety to read as follows:
(C) a budget in reasonable detail of the types and amounts of Capital
Expenditures to be made during such
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Fiscal Years and the amount of forecasted Excess Cash Flow for such
Fiscal Years, and
2.6 AMENDMENT TO SECTION 9.05. Section 9.05 of the Credit
Agreement is hereby amended by deleting in its entirety the table of Fiscal
Years and Maximum Amounts therein and inserting in lieu thereof the following
table of Fiscal Years and Maximum Amounts:
Fiscal Year Maximum Amount
----------- --------------
1996 $6,000,000
1997 $7,500,000
1998 $8,000,000
2.7 AMENDMENTS TO EXHIBITS.
(a) A new Exhibit I-A is hereby added to the Credit Agreement in
the form of ANNEX A attached hereto and made a part hereof.
(b) A new Exhibit X-X is hereby added to the Credit Agreement in
the form of ANNEX B attached hereto and made a part hereof.
3. LENDER CONSENT. As of the Effective Date, the Lender hereby
approves the agreement to amend the Recoil Acquisition Agreements in
substantially the form of ANNEX C attached hereto and made a part hereof (the
"RECOIL AMENDMENT"); PROVIDED, HOWEVER, that if material additions or deletions
to the text of the Recoil Amendment attached hereto are made, a new consent from
the Lender shall be required. Upon the effectiveness of the Recoil Amendment,
the Borrower shall promptly deliver to the Lender a fully executed copy of the
Recoil Amendment.
4. LIMITED WAIVER. As of the Effective Date, the Lender hereby
(a) waives the provisions of the letter agreement dated August 12, 1996 (the
"POST-CLOSING LETTER") between the Borrower and the Lender with respect to
the obligation of the Borrower to deliver the documents set forth on ANNEX D
attached hereto and made a part hereof (the "POST-CLOSING DOCUMENTS") within
the time periods specified in the Post-Closing Letter and extends the time
period for the delivery of such documents to December 30, 1996 and (b) waives
the Events of Default under Sections 10.01(c) and 10.01(d) of the Credit
Agreement resulting from the Borrower's failure to deliver the Post-Closing
Documents within the time periods specified in the Post-Closing Letter;
PROVIDED, HOWEVER, that, if such Post-Closing Documents are not delivered on
or before March 5, 1997 (the "EXPIRATION DATE"), (x) the limited waiver under
this SECTION 4 shall expire, (y) the
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Borrower shall pay to the Lender on the Expiration Date a fee in the amount
of $25,000, and the Borrower hereby irrevocably authorizes the Lender to make
a Revolving Loan on the Expiration Date to pay such fee without regard to the
notice requirements set forth in Section 3.02(b)(iii) of the Credit
Agreement, and (z) notwithstanding any payment of the fee described in CLAUSE
(y), the Events of Default arising from the Borrower's failure to deliver the
Post-Closing Documents prior to the Expiration Date shall remain in effect
until all of the Post-Closing Documents, in form and substance satisfactory
to the Lender, are delivered to the Lender, and the Lender reserves all
rights and remedies available to it as a result of the continued existence of
such Events of Default.
5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to the Lender that, as of the Effective Date and after giving
effect to this First Amendment:
(a) All of the representations and warranties of the Borrower
contained in this First Amendment, the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of the
Effective Date, as if then made (other than representations and warranties
which expressly speak as of a different date, which shall be true and
correct in all material respects as of that date);
(b) No Potential Event of Default or Event of Default has occurred or
is continuing or will result after giving effect to this First Amendment;
and
(c) The Borrower has not voluntarily, by operation of law or
otherwise, assigned, conveyed, transferred or encumbered, either directly
or indirectly, in whole or in part, any right to or interest in any of the
"Released Claims" (as defined in SECTION 7 below) purported to be released
by this First Amendment.
6. EFFECTIVE DATE. This First Amendment shall become effective as
of the date first written above (the "EFFECTIVE DATE") upon the satisfaction of
each of the following conditions:
(a) the Lender shall have received each of the following documents,
in each case in form and substance satisfactory to the Lender:
(i) counterparts hereof executed by the Borrower and the Lender;
(ii) a Revolving Credit Note substantially in the form of
EXHIBIT I-A to the Credit Agreement (as added by this First
Amendment), duly executed by the Borrower;
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(iii) a Term Note substantially in the form of EXHIBIT X-X to
the Credit Agreement (as added by this First Amendment), duly executed
by the Borrower;
(iv) Modification Agreements with respect to the leasehold deeds
of trust executed by the Borrower in favor of the Lender with respect
to the Property located in Fullerton, California and Placentia,
California, substantially in the forms of ANNEXES E and F attached
hereto and made a part hereof, respectively;
(v) Loan Modification Title Insurance Endorsements with respect
to the title insurance policies issued to the Lender in connection
with the Modification Agreements described in CLAUSE (iv) above;
(vi) an opinion of counsel to the Borrower with respect to the
Loan Documents described in CLAUSES (i) through (iv) above;
(vii) a certificate of the chief financial officer of the
Borrower certifying that all conditions precedent to the effectiveness
of this First Amendment have been satisfied;
(viii) a certificate of the Secretary or Assistant Secretary of
the Borrower dated the Effective Date certifying (A) the names and
true signatures of the incumbent officers of the Borrower authorized
to sign this First Amendment and the other Transaction Documents
executed in connection with this First Amendment to which it is a
party, (B) that the By-laws of the Borrower have not been amended or
otherwise modified since the Amendment and Restatement Effective Date
and remain in full force and effect as of the Effective Date, (C) that
the Articles of Incorporation of the Borrower have not been amended or
otherwise modified since the date of the most recent certification
thereof by the Secretary of State of Delaware delivered to the Lender
and remain in full force and effect as of the Effective Date and (D)
the resolutions of the Borrower's board of directors approving and
authorizing the execution, delivery and performance of this First
Amendment and the other Transaction Documents executed in connection
with this First Amendment to which the Borrower is a party; and
(ix) such additional documentation as the Lender may reasonably
request;
(b) the Borrower shall have paid to the Lender the New First
Amendment Fee described in SECTION 2.4 above;
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(c) no law, regulation, order, judgment or decree of any Governmental
Authority shall, and the Lender shall not have received any notice that
litigation is pending or threatened which is likely to, enjoin, prohibit or
restrain the consummation of the transactions contemplated by this First
Amendment, except for such laws, regulations, orders or decrees, or pending
or threatened litigation that in the aggregate could not reasonably be
expected to result in a Material Adverse Effect;
(d) all of the representations and warranties of the Borrower
contained in this First Amendment, the Credit Agreement and the other Loan
Documents shall be true and correct in all material respects on and as of
the Effective Date, as if then made (other than representations and
warranties which expressly speak as of a different date, which shall be
true and correct in all material respects as of that date);
(e) all corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this First Amendment shall be satisfactory in all respects
in form and substance to the Lender; and
(f) no Event of Default or Potential Event of Default shall have
occurred and be continuing on the Effective Date or will result after
giving effect to this First Amendment.
7. OUTSTANDING INDEBTEDNESS. The Borrower hereby acknowledges and
agrees that as of November 29, 1996 the aggregate outstanding principal amount
of the Revolving Loans under the Credit Agreement was $7,520,861.27 and that the
aggregate outstanding principal amount of the Term Loan under the Credit
Agreement was $22,225,000 and that such principal amounts are payable pursuant
to the Credit Agreement, as amended hereby, without offset, withholding,
counterclaim or deduction of any kind. The Borrower, for itself and on behalf
of its officers and directors, and its respective predecessors, successors and
assigns (collectively, the "RELEASORS"), hereby waives, releases and forever
discharges the Lender, and its parent corporation, Subsidiaries and Affiliates,
officers, directors, shareholders employees, attorneys, agents and servants, and
its respective predecessors, successors, heirs and assigns (collectively, the
"LENDER PARTIES"), from any and all claims of every type, kind, nature,
description or character, known and unknown, whensoever arising out of any
actions or omissions of the Lender Parties, except all such claims of Affiliates
of Lender arising out of sales of inventory in the ordinary course of business,
occurring any time up to and including the date hereof, which in any way arise
out of, are connected with or relate to the Credit Agreement or any other Loan
Documents (the "RELEASED CLAIMS") and
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agrees not to bring any action in any judicial, administrative or other
proceeding against the Lender Parties, alleging any such Released Claim or
otherwise in connection with any such Released Claim.
8. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.
(a) Upon the Effective Date, each reference in the Credit Agreement
to "this Agreement", "hereunder", "hereof" or words of like import, and each
reference in the other Loan Documents to the Credit Agreement, shall mean and be
a reference to the Credit Agreement as amended hereby.
(b) This First Amendment shall be limited solely to the matters
expressly set forth herein and shall not (i) constitute an amendment of any
other term or condition of the Credit Agreement or any other Loan Document, (ii)
prejudice any right or rights which the Lender or Lender Parties may now have or
may have in the future under or in connection with the Credit Agreement or any
other Loan Document, (iii) require the Lender to agree to a similar transaction
on a future occasion, (iv) be deemed or construed as an admission of liability
with respect to the Released Claims or otherwise by the Lender Parties or (v)
create any rights herein to another Person or other beneficiary or otherwise,
except to the extent specifically provided herein.
(c) Except to the extent specifically consented to herein, the
respective provisions of the Credit Agreement and the other Loan Documents shall
not be amended, modified, impaired or otherwise affected hereby, and such
documents and the Obligations under each of them are hereby confirmed in full
force and effect.
9. MISCELLANEOUS. This First Amendment is a Loan Document. The
headings herein are for convenience of reference only and shall not alter or
otherwise affect the meaning hereof.
10. COUNTERPARTS. This First Amendment may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
11. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Borrower and the Lender have caused this First
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
KAYNAR TECHNOLOGIES INC.
By: /s/ X.X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ P.C. Xxxxxx
----------------------------------
Name: P.C. Xxxxxx
Title: Authorized Signatory
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ANNEX A
TO
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
FORM OF AMENDED AND RESTATED REVOLVING CREDIT NOTE
Attached.
ANNEX B
TO
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
FORM OF AMENDED AND RESTATED TERM NOTE
Attached.
ANNEX C
TO
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
FORM OF RECOIL AMENDMENT
Attached.
ANNEX D
TO
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
POST-CLOSING DOCUMENTS
1. Replacement stock certificate for 650 shares of the Capital Stock
of Kaynar International owned by the Borrower.
2. Landlord Waiver with respect to the lease of the Property located
at Stamford Road, Oakleigh, Victoria.
3. Amended Articles of Association of Kaynar International deleting
the provisions regarding recognition of stock transfers.
4. Evidence of perfection of pledge by the Borrower of 65% of the
Capital Stock of Recoil Femipari.
ANNEX E
TO
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
FORM OF MODIFICATION AGREEMENT (FULLERTON)
Attached.
ANNEX F
TO
FIRST AMENDMENT, CONSENT AND LIMITED WAIVER
FORM OF MODIFICATION AGREEMENT (PLACENTIA)
Attached.
