SEVENTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.24
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”) is entered into as of December
10, 2008, but shall be effective for all purposes as of the Effective Date (defined below) among
Xxxxxx Industries, Inc., a Delaware corporation (“Parent”), Switchgear & Instrumentation Ltd., an
entity organized under the laws of England and Wales (formerly known as Inhoco 3210 Limited,
“Inhoco”), Switchgear & Instrumentation Properties Limited, an entity organized under the laws of
England and Wales (“SI Properties” and together with Inhoco,
“UK Borrower”), Bank of America,
N.A., a national banking association, as Agent, Swing Line Lender and L/C Issuer under the Credit
Agreement (in such capacity as administrative agent, together with its successors in such
capacity, “Agent”), and each lender from time to time party to the Credit Agreement
(collectively, “Lenders” and individually, a “Lender”).
Capitalized terms used but not defined in
this Amendment have the meaning given them in the Credit Agreement (defined below).
RECITALS
A. Parent, Inhoco, and SI Properties, as borrowers
(each a “Borrower” and
collectively “Borrowers”), Agent and Lenders entered into that certain Credit Agreement dated
as of June 29, 2005 (as amended by the First Amendment to Credit Agreement dated
November 7, 2005, as amended by the Second Amendment to Credit Agreement dated January
11, 2006, as amended by the Third Amendment to Credit Agreement dated August 4, 2006, as
amended by the Fourth Amendment to Credit Agreement dated December 7, 2006, as amended
by the Fifth Amendment to Credit Agreement dated December 4, 2007, Sixth Amendment to
Credit Agreement dated December 14, 2007, and as amended, restated or supplemented, the
“Credit Agreement”).
B. Borrowers,
Agent and Lenders have agreed to amend the Credit Agreement, subject to the terms and conditions of this Amendment.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the undersigned hereby agree as follows:
1. Amendment to Credit Agreement. The Credit Agreement is amended as set
forth below as of the Effective Date:
(a) The definitions of Applicable Rate, Approved Period, Designated Sublimit, Letter
of Credit Sublimit, and Termination Date in Section 1.01 of the Credit Agreement are
deleted in their entirety and are replaced with the following:
“Applicable Rate means, except as specified below, the following percentages per
annum, based upon the Consolidated Leverage Ratio as set out in the most recent
Compliance Certificate received by Agent pursuant to
Section 6.02(b):
| Pricing | Consolidated Leverage | Eurocurrency | Letter of | Commitment | ||||||||||||
| Level | Ratio | Rate | Base Rate | Credit Fee | Fee | |||||||||||
| 1 | <1,25:1.00
|
+1.25% | -0.50% | 1.25 | % | 0.25 | % | |||||||||
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| Pricing | Consolidated Leverage | Eurocurrency | Letter of | Commitment | ||||||||||||
| Level | Ratio | Rate | Base Rate | Credit Fee | Fee | |||||||||||
| 2 | >1.25:
l.00 but <1.75:1.00 |
+1.50% | -0.25% | 1.50 | % | 0.25 | % | |||||||||
| 3 | >1.75:1.00 but
<2.25:1.00 |
+1.75% | +0.00% | 1.75 | % | 0.25 | % | |||||||||
| 4 | >2.25:1.00 but
<2.75: 1.00 |
+2.00% | +0.25% | 2.00 | % | 0.375 | % | |||||||||
| 5 | >2.75:1.00 |
+2.25% | +0.50% | 2.25 | % | 0.375 | % | |||||||||
Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b); provided that, if a Compliance Certificate is not delivered when due in
accordance with such Section, then Pricing Level 4 shall apply as of the first Business
Day after the date on which such Compliance Certificate was required to have been
delivered until the first Business Day after a Compliance Certificate establishing a
lower applicable Pricing Level is delivered pursuant to
Section 6.02(b). Notwithstanding
the foregoing, the Applicable Rate in effect commencing December 10, 2008, and ending on
the first Business Day immediately following the date that a Compliance Certificate for
the period ended May 31, 2009, is delivered pursuant to
Section 6.02(b), shall not be less than Pricing Level 2 at any time.
Approved Period means
the period commencing on the Closing Date and ending on December
31, 2012 (such period may be extended if requested by UK Borrower and if the Required
Lenders agree, in their sole discretion, to an extension in writing).
Designated
Sublimit means (a) with respect to Parent, the Commitment amount then in
effect per Schedule 2.01 (C) and subject to reduction as specified in footnote 2 on
Schedule 2.01 and (b) with respect to UK. Borrower, £4,000,000.
Letter
of Credit Sublimit means (a) with respect to Parent, the Commitment amount then
in effect per Schedule 2.01 (C) and subject to reduction as specified in footnote 2 on
Schedule 2.01 and (b) with respect to UK Borrower, £4,000,000. The Letter of Credit
Sublimit is part of, and not in addition to, the Revolving Committed Amount.
Termination
Date means the earlier of (a) December 31, 2012, or (b) the effective date
that the Lenders’ commitments to make Revolving Loans and purchase participations in
L/C’s and Swing Line Loans are otherwise cancelled or terminated in accordance with
Section 8 of this Agreement, or otherwise.”
(b) Section 2.05(e)
of the Credit Agreement is deleted in its entirety and replaced
with the following:
“(e) If for any reason (i) the Outstanding Amount of Revolving Loans, L/C Obligations,
and Swing Line Loans ever exceeds the Revolving Committed Amount then in effect, (ii)
the Outstanding Amount of Revolving Loans to UK
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Borrower exceeds its Designated Sublimit, or (iii) the Outstanding Amount of
Revolving Loans to Parent exceeds its Designated Sublimit, then,
subject to Section 2.01(c),
each of the Borrowers, individually or in the aggregate, shall promptly,
and in any event no later than 3 Business Days after written notice from Agent,
prepay the Revolving Facility in an amount equal to the excess, together with all
accrued and unpaid interest on the principal amount prepaid and any additional
amounts required pursuant to Section 3.05 and/or
Cash Collateralize the L/C
Obligations; provided that, Borrower shall not be required to Cash Collateralize the
L/C Obligations pursuant to this Section 2.05(e)
unless after the prepayment in full
of the Revolving Facility the Total Outstandings exceed the Aggregate Commitments
then in effect. All such prepayments of each Borrower shall be applied ratably among
its Revolving Notes (based on the proportion of each Revolving Note’s outstanding
principal to the Outstanding Amount of all Revolving Loans).”
(c) Sections 7.03(i)
and (j) of the Credit Agreement are deleted in their entirety and replaced with the following:
“(i) during the Approved
Period, Indebtedness of UK Borrower under its HSBC Bond
Facility that does not exceed £22,500,000 at any time;
(j) during the Approved
Period, the guaranty by Parent in respect of Indebtedness
under the HSBC Bond Facility, provided that, the amount of its guaranteed obligation
does not exceed £22,500,000 at any time; and”
(d) Section 7.11(c)
of the Credit Agreement is deleted in its entirety and replaced with the following:
“(c) Minimum Tangible Net
Worth. Permit Consolidated Tangible Net Worth as of the
end of each fiscal quarter, commencing with the quarter ending December 31, 2008,
to be less than the sum of (i) $172,500,000 plus (ii) an amount equal to 50% of the
Consolidated Net Income for each fiscal quarter, commencing with the fiscal quarter
ending December 31, 2008, and for each fiscal quarter thereafter (with no deduction
for a net loss in any fiscal quarter), plus (iii) an amount equal to 100% of the
aggregate increases in Shareholders’ Equity of Parent and its Subsidiaries after
the date hereof by reason of the issuance and sale of any Equity Interests of
Parent or any Subsidiary (other than issuances to Parent or a wholly-owned
Subsidiary), including upon any conversion of debt securities of Parent into such
capital stock or other equity interests.”
2. Schedule.
The existing Schedule 2.01 to the Credit Agreement is deleted in its
entirety and replaced with Schedule 2.01 attached to this Amendment.
3. Conditions. This Amendment shall be effective as of December 10, 2008 (the
“Effective Date”) once each of the following have been delivered to Agent:
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(a) this Amendment executed by Borrowers, Agent and Lenders;
(b) Guarantors’ Consent and Agreement executed by the Guarantors;
(c) a replacement Revolving Note executed by Parent and made payable to
Bank of America, N.A., in the original principal amount of $83,500,000;
(d) payment of an amendment fee to Bank of America, N.A., as specified in
that certain Fee Letter dated December 10, 2008, among Borrowers and Bank of
America, N.A.;
(e) Officer’s Certificate of Parent certifying as to incumbency of officers,
specimen signatures, no changes to articles of incorporation and bylaws since the date
of the certificate delivered in connection with the Credit Agreement, and resolutions
adopted by the Board of Directors authorizing this Amendment; and
(f) such other documents as Agent or Lenders may reasonably request.
4. Representations and Warranties. Each Borrower represents and warrants to Agent
and Lenders that (a) it possesses all requisite power and authority to execute, deliver and
comply with the terms of this Amendment, (b) this Amendment has been duly authorized and approved
by all requisite corporate action on the part of Borrower, (c) no other consent of any Person
(other than Lenders) is required for this Amendment to be effective, (d) the execution and
delivery of this Amendment does not violate its organizational documents, (e) the
representations and warranties in each Loan Document to which it is a party are true and correct in all
material respects on and as of the date of this Amendment as though made on the date of this Amendment
(except to the extent that such representations and warranties speak to a specific date), (f)
it is in full compliance with all covenants and agreements contained in each Loan Document (as
amended by this Amendment) to which it is a party, and (g) no Default or Event of Default has
occurred and is continuing. The representations and warranties made in this Amendment shall
survive the execution and delivery of this Amendment. No investigation by Agent or Lenders is
required for Agent or Lenders to rely on the representations and warranties in this Amendment.
5. Scope
of Amendment; Reaffirmation; Release. All references to the Credit
Agreement shall refer to the Credit Agreement as amended by this Amendment. Except as
affected by this Amendment, the Loan Documents are unchanged and continue in full force and
effect. However, in the event of any inconsistency between the terms of the Credit Agreement
(as amended by this Amendment) and any other Loan Document, the terms of the Credit
Agreement shall control and such other document shall be deemed to be amended to conform to
the terms of the Credit Agreement. Borrowers hereby reaffirm their obligations under the Loan
Documents to which each is a party and agree that all Loan Documents to which they are a party
remain in full force and effect and continue to be legal, valid, and binding obligations
enforceable in accordance with their terms (as the same are affected by this Amendment).
Borrowers hereby release Agent and Lenders from any liability for actions or omissions in
connection with the Credit Agreement and the other Loan Documents prior to the date of this
Amendment.
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6. Miscellaneous.
(a) Waiver. This Amendment does not constitute (i) a waiver of, or a consent
to (A) any provision of the Credit Agreement or any other Loan Document not expressly
referred to in this Amendment, or (B) any present or future violation of, or default under,
any provision of the Loan Documents, or (ii) a waiver of Agent’s or Lenders’ right to
insist upon future compliance with each term, covenant, condition and provision of the
Loan Documents.
(b) Form. Each agreement, document, instrument or other writing to be
furnished to Lenders under any provision of this Amendment must be in form and
substance satisfactory to Agent and its counsel.
(c) Headings. The headings and captions used in this Amendment are for
convenience only and will not be deemed to limit, amplify or modify the terms of this
Amendment, the Credit Agreement, or the other Loan Documents.
(d) Costs. Expenses and Attorneys’ Fees. Borrowers agree to pay or
reimburse Agent on demand for all of their reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation, and execution of this
Amendment, including, without limitation, the reasonable fees and disbursements of
Agent’s counsel.
(e) Successors and Assigns. This Amendment shall
be binding upon and
inure to the benefit of each of the undersigned and their respective successors and
permitted assigns.
(f) Multiple Counterparts. This Amendment may be executed in any number
of counterparts with the same effect as if all signatories had signed the same document.
All counterparts must be construed together to constitute one and the same instrument.
This Amendment may be transmitted and signed by facsimile. The effectiveness of any
such documents and signatures shall, subject to applicable law, have the same force and
effect as manually-signed originals and shall be binding on Borrowers, Agent and
Lenders. Agent may also require that any such documents and signatures be confirmed
by a manually-signed original; provided that the failure to request or deliver the same
shall not limit the effectiveness of any facsimile document or signature.
(g) Governing Law.
This Amendment and the other Loan Documents must be construed, and their performance enforced, under Texas law.
(h) Entirety.
The Loan Documents (as amended hereby) Represent
the Final Agreement Among Borrowers, Agent and Lenders and May
Not Be Contradicted by Evidence
of Prior, Contemporaneous, or Subsequent Oral Agreements by the Parties. There are No
Unwritten Oral Agreements among the Parties.
[Signatures
appear on the following pages.]
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The Amendment is executed as of the date set out in the preamble to this Amendment.
| BORROWERS: XXXXXX INDUSTRIES, INC. |
||||
| By: | /s/ Xxx X. Xxxxxxx | |||
| Xxx X. Xxxxxxx | ||||
| Vice President, Secretary and Treasurer | ||||
| SWITCHGEAR & INSTRUMENTATION LTD., formerly known as Inhoco 3210 Limited |
||||
| By: | /s/ Xxx X. Xxxxxxx | |||
| Xxx X. Xxxxxxx | ||||
| Director | ||||
| SWITCHGEAR & INSTRUMENTATION PROPERTIES LIMITED |
||||
| By: | /s/ Xxx X. Xxxxxxx | |||
| Xxx X. Xxxxxxx | ||||
| Director | ||||
Signature Page to Seventh Amendment to Credit Agreement
| BANK OF AMERICA, N.A., as Agent |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Xxxxxx X. Xxxxxxx | ||||
| Senior Vice President | ||||
| BANK OF AMERICA, N.A., as a
Lender, L/C Issuer and Swing Line Lender |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Xxxxxx X. Xxxxxxx | ||||
| Senior Vice President | ||||
Signature Page to Seventh Amendment to Credit Agreement
GUARANTORS’ CONSENT AND AGREEMENT TO SEVENTH AMENDMENT
As an inducement to Agent and Lenders to execute, and in consideration of Agent’s and
Lenders’ execution of, this Amendment, the undersigned hereby consents to this Amendment and
agrees that this Amendment shall in no way release, diminish, impair, reduce or otherwise
adversely affect the obligations and liabilities of the undersigned under the Guaranty executed
by each of the undersigned in connection with the Credit Agreement, or under any Loan Documents,
agreements, documents or instruments executed by the undersigned to create liens, security
interests or charges to secure any of the Obligations (as defined in the Credit Agreement), all
of which are in full force and effect. The undersigned further represents and warrants to Agent
and Lenders that (a) the representations and warranties in each Loan Document to which it is a
party are true and correct in all material respects on and as of the date of this Amendment as
though made on the date of this Amendment (except to the extent that such representations and
warranties speak to a specific date), (b) it is in full compliance with all covenants and
agreements contained in each Loan Document to which it is a party, and (c) no Default or Event
of Default has occurred and is continuing. Guarantors hereby release Agent and Lenders from any
liability for actions or omissions in connection with the Loan Documents prior to the date of
this Amendment. This Guarantors’ Consent and Agreement shall be binding upon each of the
undersigned, and its permitted assigns, and shall inure to the benefit of Agent, Lenders, and
its successors and assigns.
GUARANTORS:
| TRANSDYN, INC., | XXXXXX INDUSTRIES ASIA, INC., | |||||||||
| a Delaware corporation | a Delaware corporation | |||||||||
By:
|
/s/ Xxx Xxxxxxx
|
By: | /s/ Xxx Xxxxxxx
|
|||||||
| Vice President, Secretary, and Treasurer | Vice President, Secretary, and Treasurer | |||||||||
| XXXXXX INDUSTRIES INTERNATIONAL, | XXXXXX ELECTRICAL SYSTEMS, INC., | |||||||||
| INC., a Delaware corporation | a Delaware corporation | |||||||||
By:
|
/s/ Xxx Xxxxxxx
|
By: | /s/ Xxx Xxxxxxx
|
|||||||
| Vice President, Secretary, and Treasurer | Vice President, Secretary, and Treasurer | |||||||||
Guarantors’ Consent and Agreement to Seventh Amendment
SCHEDULE 2.01
COMMITMENTS
AND APPLICABLE PERCENTAGES
AND APPLICABLE PERCENTAGES
A. Term Facility for UK Borrower
| Applicable | ||||||||
| Lender | Commitment | Percentage | ||||||
Bank of America, N.A. |
£ | 6,000,000 | 100 | % | ||||
Total |
£ | 6,000,000 | 100 | % | ||||
B. Revolving Facility for UK Borrower
| Applicable | ||||||||
| Lender | Commitment | Percentage | ||||||
Bank of
America, N.A. |
£ | 4,000,000 | 100 | % | ||||
Total |
£ | 4,000,000 | 1 | 100 | % | |||
C. Revolving Facility for Parent
| Applicable | ||||||||
| Lender | Commitment | Percentage | ||||||
Bank of America, N.A. |
$ | 83,500,000 | 2 | 100 | % | |||
Total |
$ | 83,500,000 | 3 | 100 | % | |||
| 1 | The Revolving Committed Amount, when determined, is the sum of the amount in
footnote 1 plus the amount in
footnote 3, as reduced pursuant to footnote 2. |
|
| 2 | This amount shall (i) reduce to $71,000,000 for the period commencing March
1, 2009 through May 31, 2009, and (ii) further reduce to
$58,500,000 for the period commencing June 1, 2009
through the Termination Date, and Borrowers covenant and agree to make the mandatory prepayments of the Revolving
Loans pursuant to Section 2.05(e). |
|
| 3 | The Revolving Committed Amount, when determined, is the sum of the amount in
footnote 1 plus the amount in footnote 3, as reduced pursuant to
footnote 2. |
Schedule 2.01 to the Seventh Amendment
