Exhibit 10.53
WAIVER AND UNDERTAKING
AGREEMENT NO. 3
TO
CREDIT AGREEMENT
WAIVER AND UNDERTAKING AGREEMENT NO. 3 dated as of February __, 2003
(this "AGREEMENT"), to that certain Credit Agreement (as amended, modified,
restated or supplemented from time to time, the "CREDIT AGREEMENT"), dated as of
June 20, 2002, made by and among Manufacturers' Services Limited, a Delaware
corporation (the "PARENT"), Manufacturers' Services Salt Lake City Operations,
Inc., a Delaware corporation ("MSSLCO"), Manufacturers' Services Western U.S.
Operations, Inc., a California corporation ("MSWUSO"), Manufacturers' Services
Central U.S. Operations, Inc., a Minnesota corporation ("MSCUSO"), MSL Xxxxxx
Operations, Inc., a Delaware corporation ("MSLLO"), MSL Midwest Operations,
Inc., a Delaware corporation ("MSLMO"; and together with the Parent, MSSLCO,
MSWUSO, MSCUSO and MSLLO, each a "BORROWER" and, collectively, the "BORROWERS"),
the financial institutions party thereto from time to time (the "LENDERS"), Bank
of America, N.A., as administrative agent (in such capacity, together with any
successor in such capacity, the "ADMINISTRATIVE AGENT"), Credit Suisse First
Boston, Cayman Islands Branch, as syndication agent, General Electric Capital
Corporation, as documentation agent, and Banc of America Securities LLC and
Credit Suisse First Boston, Cayman Islands Branch, as co-book managers and
co-lead arrangers, and the Guarantors party thereto.
The Parent intends to purchase from General Electric Capital
Corporation ("GECC") certain assets comprising the surface mount technology
manufacturing line (the "SMT ASSETS"), which are currently subject to one or
more operating leases between the Parent and GECC, for an aggregate purchase
price of approximately $4,960,132.59 (the "SMT LEASE BUYOUT").
Following the SMT Lease Buyout, the Parent intends to sell a portion
of the SMT Assets (the "SPECIFIED SMT ASSETS") to Global Manufacturers' Services
Xxxxxxxx X.X. ("MSL VALENCIA") (the "SMT INTERCOMPANY SALE").
Subsequent to the foregoing, MSL Valencia intends to sell the
Specified SMT Assets to La Caixa or another Spanish financial institution and
lease the Specified SMT Assets back from La Caixa or such other Spanish
financial institution (the "SMT SALE LEASEBACK").
Further, in a separate set of transactions, MSCUSO intends to purchase
from Comdisco and Fleet Capital Corporation ("FLEET") certain pieces of
equipment (the "LEXMARK ASSETS") that were inadvertently not included as part of
the Lexmark Acquisition (as defined in Section 5.1) and which are currently
subject to operating leases between Comdisco or Fleet and Lexmark International,
Inc. (or one or more of its affiliates), for an aggregate purchase price of
approximately $600,000 (the "LEXMARK LEASE BUYOUT").
The Borrowers, the Guarantors, the Majority Lenders, the Majority
Revolving Lenders, the Majority Term Lenders and the Administrative Agent desire
to waive certain
provisions of the Credit Agreement and add certain additional covenants to be
complied with by the Borrowers and Guarantors.
NOW, THEREFORE, subject to the conditions set forth herein, the
Borrowers, the Guarantors, the Majority Lenders, the Majority Revolving Lenders,
the Majority Term Lenders and the Administrative Agent hereby agree as follows:
SECTION 1 CAPITALIZED TERMS.
1.1 Capitalized terms used herein and not defined herein shall have the
respective meanings assigned to such terms in the Credit Agreement.
SECTION 2 WAIVERS TO THE CREDIT AGREEMENT.
2.1 The Administrative Agent, the Majority Lenders, the Majority Revolving
Lenders and the Majority Term Lenders hereby waive the provisions of
SECTIONS 7.11 and 7.17 of the Credit Agreement solely to the extent of
permitting the SMT Intercompany Sale; PROVIDED, that (i) the aggregate
net cash proceeds received by the Parent from MSL Valencia in respect
of the SMT Intercompany Sale shall be (x) no less than the amount paid
by the Parent to GECC for the Specified SMT Assets and (y) applied to
the Obligations in the order of priority set forth in SECTION 3.8 of
the Credit Agreement, (ii) MSL Valencia shall have paid to the Parent
the purchase price for the Specified SMT Assets (either in cash or,
subject to SECTION 7.15 of the Credit Agreement and clause (iii)
below, as intercompany Debt issued by MSL Valencia to the Parent)
contemporaneously with the consummation of the SMT Intercompany Sale
and (iii) to the extent any portion of the consideration paid by MSL
Valencia for the Specified SMT Assets is evidenced by Debt issued by
MSL Valencia to the Parent, such Debt shall be repaid immediately upon
the consummation of the SMT Sale Leaseback (which shall occur no later
than sixty (60) days following the consummation of the SMT
Intercompany Sale).
2.2 Except for the specific waivers set forth in this Section 2, nothing
herein shall be deemed to be a waiver of any covenant or agreement
contained in the Credit Agreement, and the Borrowers and Guarantors
hereby agree that all of the covenants and agreements contained in the
Credit Agreement are hereby ratified and confirmed in all respects.
SECTION 3 CONDITION PRECEDENT. This Agreement shall become effective on
such date as counterparts of this Agreement executed by the Borrowers, the
Guarantors, the Majority Lenders, the Majority Revolving Lenders, the Majority
Term Lenders and the Administrative Agent shall have been delivered to the
Administrative Agent.
SECTION 4 UNDERTAKINGS. Each of the Borrowers and Guarantors hereby
agree and covenant to satisfy the following items within sixty (60) days of the
date hereof (and the Borrowers and Guarantors agree that the failure to satisfy
any of such items within such sixty (60) day time period shall be an Event of
Default):
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4.1 The Administrative Agent shall have received a gratuitous bailment
agreement duly executed by each of MSL de Mexico, S.A. de C.V. ("MSL
MEXICO") and MSCUSO and such other agreements as the Administrative
Agent shall deem necessary or advisable to evidence the xxxxxx-bailee
relationship between MSL Mexico and MSCUSO with respect to all assets
that are owned by MSCUSO and in the possession of MSL Mexico for its
use in connection with the In-Bond Manufacturing Agreement dated as of
July 1, 2002 between MSL Mexico and MSCUSO.
4.2 The Administrative Agent shall have received an Equipment and
Inventory Pledge and Deposit Agreement duly executed by each of MSCUSO
and MSL Mexico in favor of the Administrative Agent and such other
documents and agreements as the Administrative Agent shall deem
necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a Lien on the assets of MSCUSO that are
located in Mexico.
4.3 MSCUSO shall have taken or caused to be taken all such other actions
under the laws of Mexico as the Administrative Agent may deem
necessary or advisable to perfect the Agent's Lien on the assets of
MSCUSO.
4.4 The Adminstrative Agent shall have received legal opinions and other
documents requested by the Administrative Agent relating to matters
described in this Section 4.
Each of the Borrowers and Guarantors agrees that all opinions and documents
delivered to the Administrative pursuant to this Section 4 shall be in form and
substance, and (in the case of legal opinions) from counsel, reasonably
satisfactory to the Administrative Agent.
SECTION 5 ADDITIONAL AGREEMENT.
5.1 The Agent, the Majority Lenders, the Majority Term Lenders, the
Majority Revolving Lenders and the Borrowers agree that for all
purposes under the Credit Agreement, the Lexmark Lease Buyout shall be
treated as part of the acquisition consummated by the Parent on or
about July 1, 2002 (the "LEXMARK ACQUISITION"), pursuant to which the
Parent acquired certain assets of Lexmark (including the capital stock
of MSL Mexico); PROVIDED, that the Borrowers have delivered to the
Administrative Agent a certificate from a Responsible Officer of the
Parent setting forth a calculation which establishes to the
Administrative Agent's satisfaction that the Borrowers have complied
with the Fixed Charge Coverage Ratio requirement set forth in clause
(C) of the proviso to the definition of "Permitted Acquisition" as if
the Lexmark Lease Buyout occurred simultaneously with the Lexmark
Acquisition.
SECTION 6. MISCELLANEOUS
6.1 Each of the Borrowers reaffirms and restates the representations and
warranties set forth in Article 6 of the Credit Agreement and all such
representations and warranties shall be true and correct on the date
hereof with the same force and
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effect as if made on such date (except insofar as such representation
and warranties relate expressly to an earlier date). Each of the
Borrowers and Guarantors represents and warrants (which
representations and warranties shall survive the execution and
delivery hereof) to the Administrative Agent and the Lenders that:
(a) It has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and
has taken or caused to be taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement;
(b) No consent of any other person (including, without
limitation, shareholders or creditors of any Borrower or Guarantor),
and no action of, or filing with any governmental or public body or
authority is required to authorize, or is otherwise required in
connection with the execution, delivery and performance of this
Agreement;
(c) This Agreement and the other instruments and documents
contemplated hereby have been duly executed and delivered by a duly
authorized officer on behalf of such party, and constitute a legal,
valid and binding obligation of such party enforceable against such
party in accordance with its terms, subject to bankruptcy,
reorganization, insolvency, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and the
exercise of judicial discretion in accordance with general principles
of equity; and
(d) The execution, delivery and performance of this Agreement
and the other instruments and documents contemplated hereby will not
violate any law, statute or regulation, or any order or decree of any
court or governmental instrumentality, or conflict with, or result in
the breach of, or constitute a default under any contractual
obligation of such party.
6.2 Except as herein expressly amended or waived nothing herein shall be
deemed to be a waiver or amendment of any covenant or agreement
contained in the Credit Agreement, and each Borrower and Guarantor
hereby agrees that all of the covenants and agreements contained in
the Credit Agreement and the other Loan Documents are hereby ratified
and confirmed in all respects and shall remain in full force and
effect in accordance with their respective terms.
6.3 MSCUSO represents and warrants to the Administrative Agent and the
Lenders that (x) the purchase price for the SMT Assets to be paid by
the Parent in connection with the SMT Lease Buyout is not in excess of
the fair market value of the SMT Assets as of the date of the
consummation of the SMT Lease Buyout and (y) the purchase price for
the Lexmark Assets to be paid by MSCUSO in connection with the Lexmark
Lease Buyout is not in excess of the fair market value of the Lexmark
Assets as of the date of the consummation of the Lexmark Lease Buyout.
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6.4 All references to the Credit Agreement in the Credit Agreement or any
other Loan Document and the other documents and instruments delivered
pursuant to or in connection therewith shall mean the Credit Agreement
as amended hereby and as each may in the future be amended, restated,
supplemented or modified from time to time.
6.5 This Agreement may be executed by the parties hereto individually or
in combination, in one or more counterparts, each of which shall be an
original and all of which shall constitute one and the same agreement.
6.6 Delivery of an executed counterpart of a signature page by telecopier
shall be effective as delivery of a manually executed counterpart.
6.7 This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
6.8 The parties hereto shall, at any time and from time to time following
the execution of this Agreement, execute and deliver all such further
instruments and take all such further action as may be reasonably
necessary or appropriate in order to carry out the provisions of this
Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
"BORROWERS"
MANUFACTURERS' SERVICES LIMITED
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MANUFACTURERS' SERVICES SALT LAKE
CITY OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MANUFACTURERS' SERVICES WESTERN
U.S. OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MANUFACTURERS' SERVICES CENTRAL
U.S. OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MSL XXXXXX OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MSL MIDWEST OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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"GUARANTORS"
MANUFACTURERS' SERVICES LIMITED
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MANUFACTURERS' SERVICES SALT LAKE
CITY OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Treasurer
-----------------------------------
MANUFACTURERS' SERVICES WESTERN
U.S. OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Treasurer
-----------------------------------
MANUFACTURERS' SERVICES CENTRAL
U.S. OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Treasurer
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MSL XXXXXX OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: Treasurer
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MSL MIDWEST OPERATIONS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MSL SPV SPAIN, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MSL HOLDINGS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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MSL INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxxx Xxxxxx
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Title: Treasurer
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"ADMINISTRATIVE AGENT"
BANK OF AMERICA, N.A., as the
Administrative Agent
By:
-----------------------------------
Title:
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"REVOLVING LENDERS"
BANK OF AMERICA, N.A.
By: /s/ Xxxxx Xxxxx
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Title: AVP
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CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH
By:
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Title:
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GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx Xxx
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Title: Vice President
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UPS CAPITAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
----------------------- ------------
Title: Sr. VP
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CONGRESS FINANCIAL CORPORATION (NEW ENGLAND)
By:
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Title:
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HSBC BUSINESS CREDIT (USA) INC
By: /s/ Xxx Xxxxx
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Title: Vice President
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ORIX FINANCIAL SERVICES, INC.
By: /s/ Xxxx Nowekowski
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Title: Vice President
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"TERM LENDERS"
XXXXXXX CAPITAL LTD.
By: Citadel Partnership, Portfolio Manager
By: GLB Partners, L.P., its General Partner
By: Citadel Investment Group, L.L.C., its
General Partner
By:
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Title:
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