THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "THIRD AMENDMENT"), dated as
of August 18, 1997 (but effective as of September 30, 1995), 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, as amended by that certain Second Amendment to Credit
Agreement, dated as of September 18, 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 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 "EBIT" set forth in Section 1.1 of the Credit
Agreement is hereby amended to read as follows:
"EBIT" means, determined in accordance with GAAP on a consolidated
basics for the Borrower and its Subsidiaries, without duplication, the sum
of (a) for any period, Pretax Net Income (excluding therefrom, to the extent
in determining Pretax Net Income, any items of extraordinary gain,
including net gains on the sale of assets other than asset sales in the
ordinary course of business, and adding thereto, to the extent included in
determining Pretax Net Income, any items of extraordinary loss, including
net losses on the sale of assets other than asset sales in the ordinary
course of business), plus (ii) interest expense and (b) for the period of
four consecutive fiscal quarters ending on September 29, 1996, $2,261,081
(which amount was allocated to inventory as part of the Power-One
Acquisition).
(b) Section 5.12 of the Credit Agreement is hereby amended by adding the
following language at the end thereof:
"The Borrower, the Lenders and the Administrative Lender acknowledge
that as an accommodation to the Borrower the Lenders have not filed any
Collateral Documents in Mexico covering assets of the Borrower located in
Mexico (all assets of the Borrower now or hereafter located in Mexico being
herein called the "Mexican Collateral"). The Borrower acknowledges and
agrees that upon the request of the Determining Lenders, the Borrower shall
(i) execute and deliver such further documents and do such other acts and
things as the Administrative Lender may reasonably request to properly and
adequately register and perfect the Lien of the Lenders in the Mexican
Collateral under Mexican Law and (ii) pay all recording and other similar
fees, taxes and expenses related to registering and perfecting the Lien of
the Lenders in the Mexican Collateral."
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 is continuing which constitutes a Default or
an Event of Default;
(c) the Borrower has full power and authority to execute and deliver
this Third Amendment and to perform this Third Amendment and the Credit
Agreement, as amended by this Third Amendment, the execution and delivery of
this Third Amendment and the performance of this Third Amendment and the
Credit Agreement, as amended by this Third Amendment, has been duly
authorized by all corporate action of the Borrower, and this Third Amendment
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 Third Amendment, or the
performance of this Third Amendment or the Credit Agreement, as amended by
this Third 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 Third Amendment or performance by the
Borrower of this Third Amendment and the Credit
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Agreement, as amended by this Third Amendment, or (ii) acknowledgment of this
Third Amendment by PEI or PUM.
3. CONDITIONS OF EFFECTIVENESS. Notwithstanding the date of this Third
Amendment, this Third Amendment shall be effective as of September 30, 1995,
subject to the following:
(a) the Administrative Lender shall have received counterparts of this
Third Amendment executed by the Lenders;
(b) the Administrative Lender shall have received counterparts of this
Third Amendment executed by the Borrower and acknowledged by PEI and PUM;
(c) the representations and warranties set forth in Section 3 shall be
true and correct in all material respects; and
(d) 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. ACKNOWLEDGEMENT. By signing below, each of PEI and PUM (i)
acknowledges and consents to the execution, delivery and performance by the
Borrower of this Third Amendment and (ii) acknowledges and agrees that its
obligations in respect of its Subordination Agreement are not released,
diminished, waived, modified, impaired or affected in any manner by this Third
Amendment or any of the provisions contemplated herein except as expressly
provided herein.
5. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Third 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 Third
Amendment.
(b) The Credit Agreement, as amended by this Third Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
6. 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 Third 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).
7. EXECUTION IN COUNTERPARTS. This Third Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of
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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.
8. GOVERNING LAW; BINDING EFFECT. This Third 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.
9. HEADINGS. Section headings in this Third Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Third Amendment for any other purpose.
10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS THIRD
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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IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
as of the date first above-written.
POWER-ONE, INC.
By:
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Name:
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Title:
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NATIONSBANK OF TEXAS, N.A.,
Individually and as Administrative Lender
By:
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Name:
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Title:
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UNION BANK
By:
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Name:
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Title:
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CITY NATIONAL BANK
By:
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Name:
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Title:
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SUMITOMO BANK OF CALIFORNIA
By:
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Name:
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Title:
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ACKNOWLEDGED AND AGREED:
POWER ELECTRONICS, INC.
By:
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Name:
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Title:
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PODER UNO de MEXICO, S.A. de C.V.
By:
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Name:
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Title:
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