AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT
Exhibit 10.1
AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT
This AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT (this “Amendment”), dated as of
February 11, 2010, is entered into by and among XXXX INDUSTRIES, INC., a California corporation
(“Parent”), and each of Parent’s Subsidiaries identified on the signature pages hereof
(such Subsidiaries, together with Parent are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), the lenders signatory hereto (such lenders, together with their respective
successors and permitted assigns, are referred to hereinafter each individually as a
“Lender” and collectively, the “Lenders”), and XXXXX FARGO CAPITAL FINANCE, INC.,
formerly known as Xxxxx Fargo Foothill, Inc., a California corporation, as the arranger and
administrative agent for the Lenders (in such capacity, together with its successors and assigns in
such capacity, the “Agent”). Initially capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed thereto in the Credit Agreement (as defined below).
WITNESSETH
WHEREAS, the Borrowers and the Lender Group are parties to that certain Credit Agreement,
dated as of January 31, 2007 (as amended, restated, supplemented, or otherwise modified from time
to time, the “Credit Agreement”);
WHEREAS, the Borrowers have requested that the Agent and the Lenders make certain amendments
to the Credit Agreement; and
WHEREAS, upon the terms and conditions set forth herein, Agent and Lenders are willing to
accommodate the Borrowers’ requests.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Amendments to Credit Agreement.
(a) Schedule 1.1 of the Credit Agreement is hereby amended and modified by amending
and restating, or adding (as applicable) the following definitions in the appropriate alphabetical
order:
“Availability Block” means (a) from March 1, 2009 up to and including June 30, 2009,
$4,500,000, (b) from July 1, 2009 and up to and including October 31, 2009, $3,500,000, (c) from
November 1, 2009 up to and including February 28, 2010, $6,000,000, (d) from March 1, 2010 and up
to and including June 30, 2010, $4,500,000, (e) from July 1, 2010 and up to and including October
31, 2010, $3,500,000, and (f) from and after November 1, 2010, $6,000,000.
“Base Rate Margin” means (a) from the Closing Date through and including April 30,
2008, 0.75 percentage points, (b) from May 1, 2008 up to and including March 24, 2009, 1.25
percentage points, (c) from March 25, 2009 up to and including October 31, 2009, 4.00 percentage
points, (d) from November 1, 2009 up to and including January 31, 2010, 4.25
percentage points, (e) from February 1, 2010 and up to and including October 31, 2010, 4.00
percentage points, (f) from November 1, 2010 and up to and including January 31, 2011, 4.25
percentage points, and (g) from and after February 1, 2011, 4.50 percentage points.
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“LIBOR Rate Margin” means (a) from the Closing Date through and including April 30,
2008, 2.25 percentage points, (b) from May 1, 2008 up to and including March 24, 2009, 2.75
percentage points, (c) from March 25, 2009 up to an including October 31, 2009, 4.00 percentage
points, (d) from November 1, 2009 up to and including January 31, 2010, 4.25 percentage points, (e)
from February 1, 2010 and up to and including October 31, 2010, 4.00 percentage points, (f) from
November 1, 2010 and up to and including January 31, 2011, 4.25 percentage points, and (g) from and
after February 1, 2011, 4.50 percentage points.
“Maximum Revolver Amount” means (a) from the Closing Date up to and including June 12,
2008, $30,000,000, (b) from June 13, 2008 up to and including July 14, 2010, $10,000,000, (c) from
July 15, 2010 up to and including September 14, 2010, $12,500,000, and (d) from and after September
15, 2010, $10,000,000.”
(b) Section 3.3 of the Credit Agreement is hereby amended and restated in its entirety
as follows:
“3.3 Term. This Agreement shall continue in full force and effect for a term ending
on March 31, 2011 (the “Maturity Date”). The foregoing notwithstanding, the Lender Group,
upon the election of the Required Lenders, shall have the right to terminate its obligations under
this Agreement immediately and without notice upon the occurrence and during the continuation of an
Event of Default.”
(c) Section 6.16(a) of the Credit Agreement hereby is amended and restated in its
entirety to read as follows:
“(a) Minimum Adjusted EBITDA.
Fail to achieve Adjusted EBITDA, measured on a month-end basis, of at least the required
amount set forth in the following table for the applicable period set forth opposite thereto:
| Applicable | ||||
| Amount | Applicable Period | |||
| $ | (500,000 | ) | For the 12 month period ending December 31, 2009 |
|
| $ | (1,400,000 | ) | For the 2 month period ending February 28, 2010 |
|
| $ | (1,900,000 | ) | For the 3 month period ending March 31, 2010 |
|
| $ | (2,000,000 | ) | For the 4 month period ending April 30, 2010 |
|
| $ | (1,800,000 | ) | For the 5 month period ending May 31, 2010 |
|
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| Applicable | ||||
| Amount | Applicable Period | |||
| $ | (1,400,000 | ) | For the 6 month period ending June 30, 2010 |
|
| $ | (800,000 | ) | For the 7 month period ending July 31, 2010 |
|
| $ | (400,000 | ) | For the 8 month period ending August 31, 2010 |
|
| $ | (400,000 | ) | For the 9 month period ending September 30, 2010 |
|
| $ | (400,000 | ) | For the 10 month period ending October 31, 2010 |
|
| $ | (400,000 | ) | For the 11 month period ending November 30, 2010 |
|
| $ | (400,000 | ) | For the 12 month period ending December 31, 2010 |
|
Agent, in its Permitted Discretion, shall establish the minimum Adjusted EBITDA covenant for
each trailing 12 month period after December 31, 2010, which covenant levels will be based upon
Borrowers’ projections for such trailing 12 month period delivered to Agent pursuant to Section
5.3 of this Agreement and utilizing criteria similar to the criteria that Agent used to
establish the Adjusted EBITDA covenants in the above table. Borrowers shall execute any amendment
to this Section 6.16(a) reasonably requested by Agent in order to document the inclusion of
such minimum Adjusted EBITDA covenant levels for such periods in the covenant set forth in this
Section 6.16(a). If Borrowers fail to timely deliver the projections pursuant to
Section 5.3 of this Agreement, then (i) such failure shall constitute an Event of Default;
and (ii) the Adjusted EBITDA covenant for each succeeding trailing twelve month period, measured on
a monthly basis, after December 31, 2010 shall be $1,000,000 (the “Interim Minimum
Amount”), until such time as the projections required by Section 5.3 for such periods
have been delivered to Agent and Borrowers have executed an amendment requested by Agent to
document the inclusion of new Adjusted EBITDA covenant levels (to be set in the manner set forth in
the first sentence of this paragraph) for such periods in the Adjusted EBITDA covenant set forth in
this Section 6.16(a) (it being understood that the Interim Minimum Amount shall not suggest
that Agent would agree to establish the minimum Adjusted EBITDA covenant for any of the trailing 12
month periods after December 31, 2010 at the Interim Minimum Amount).”
(d) Section 6.16(b) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
“(b) Capital Expenditures. Unless the Required Lenders, in their sole discretion, otherwise
consent thereto in advance in writing, make Capital Expenditures in any fiscal year in excess of
the amount set forth in the following table for the applicable period:
| Fiscal Year 2009 | Fiscal Year 2010 | |||
$500,000 |
$400,000 | |||
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Agent, in its Permitted Discretion, shall establish the maximum Capital Expenditures covenant
for Fiscal Year 2011, which covenant level will be based upon Borrowers’ projections for Fiscal
Year 2011 delivered to Agent pursuant to Section 5.3 of this Agreement and utilizing
criteria similar to the criteria that Agent used to establish the Capital
Expenditures covenants in
the above table. Borrowers shall execute any amendment to this Section 6.16(b) reasonably
requested by Agent in order to document the inclusion of such maximum Capital Expenditures level
for Fiscal Year 2011 in the covenant set forth in this
Section 6.16(b). If Borrowers fail to timely deliver the projections pursuant to
Section 5.3 of this Agreement, then (i) such failure shall constitute an Event of Default;
and (ii) the Capital Expenditures covenant for Fiscal Year 2011 shall be $400,000 (“Interim
Maximum CapEx Amount”) until the Projections have been delivered to Agent and Borrowers have
executed an amendment requested by Agent to document the inclusion of a new Capital Expenditures
covenant level for Fiscal Year 2011 (to be set in the manner set forth in the first sentence of
this paragraph) in the Capital Expenditures covenant set forth in this Section 6.16(b) (it
being understood that the Interim Maximum CapEx Amount shall not suggest that Agent would agree to
establish the maximum Capital Expenditures covenant for Fiscal Year 2011 at the Interim Maximum
CapEx Amount).”
(e) Schedules A-2 and C-1 to the Credit Agreement are hereby amended by (i)
deleting such Schedules in their entirety and (ii) inserting the Schedules A-2 and
C-1 attached hereto as Exhibit A in lieu thereof.
2. Conditions Precedent to Agreement. This Amendment shall become effective only upon
satisfaction in full in the reasonable judgment of the Agent of each of the following conditions:
(a) Agent shall have received an amendment to the Newcastle Note in form and substance
satisfactory to Agent, duly executed by the parties thereto, and the same shall be in full force
and effect.
(b) Agent shall have received a certificate from the Secretary of each Borrower attesting to
the incumbency and signatures of specific officers of such Borrower authorized to execute Loan
Documents.
(c) After giving effect to this Amendment, the representations and warranties herein and in
the Credit Agreement and the other Loan Documents shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof) on and as of
the date hereof, as though made on such date (except to the extent that such representations and
warranties relate solely to an earlier date, on and as of such earlier date).
(d) No injunction, writ, restraining order, or other order of any nature prohibiting, directly
or indirectly, the consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against any Borrower, Agent, or any Lender.
(e) Borrower shall pay concurrently with the closing of the transactions evidenced by this
Amendment, all Lender Group Expenses then payable pursuant to Section 17.10 of the Credit
Agreement.
(f) No Default or Event of Default shall have occurred and be continuing on the effective date
of this Amendment, nor shall either result immediately after the consummation of the transactions
contemplated herein.
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(g) Agent shall have received payment in full in immediately available funds of the Amendment
Fee described in Section 4 of this Amendment.
3. Representations and Warranties. Each Borrower hereby represents and warrants to Agent
and each Lender as follows:
(a) The execution, delivery, and performance by such Borrower of this Amendment and the Loan
Documents to which it is a party have been duly authorized by all necessary action on the part of
such Borrower.
(b) The execution, delivery, and performance by such Borrower of this Amendment and the other
Loan Documents to which it is a party do not and will not (i) violate any provision of federal,
state, or local law or regulation applicable to any Borrower, the Governing Documents of any
Borrower, or any order, judgment, or decree of any court or other Governmental Authority binding on
any Borrower, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any contract or undertaking of any Borrower, (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any properties or
assets of any Borrower, other than Permitted Liens, or (iv) require any approval of any Borrower’s
interestholders or any approval or consent of any Person under any Material Contract of any
Borrower, other than consents or approvals that have been obtained and that are still in force and
effect.
(c) This Amendment has been duly executed and delivered by each Borrower. This Amendment and
each Loan Document is the legal, valid and binding obligation of each Borrower, enforceable against
such Borrower in accordance with its terms, and is in full force and effect except as such validity
and enforceability is limited by the laws of insolvency and bankruptcy, laws affecting creditors’
rights and principles of equity applicable hereto.
(d) No injunction, writ, restraining order, or other order of any nature prohibiting, directly
or indirectly, the consummation of the transactions contemplated herein has been issued and remains
in force by any Governmental Authority against any Borrower, any Guarantor, Agent or any Lender.
(e) No Default or Event of Default has occurred and is continuing on the date hereof or as of
the date of the effectiveness of this Amendment.
(f) The representations and warranties in the Credit Agreement and the other Loan Documents
are true and correct in all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof) on and as of the date hereof, as though made on such date (except
to the extent that such representations and warranties relate solely to an earlier date).
4. Amendment Fee. The Borrowers shall pay to Agent an amendment fee in the amount of
$100,000 (“Amendment Fee”) in immediately available funds, which Amendment Fee shall be
retained by Agent (solely for its account and not for the account of any Lender). Such Amendment
Fee shall be fully earned and, non refundable on the date of this Amendment.
5. Payment of Costs and Expenses. Borrowers agree to pay all Lender Group Expenses
incurred in connection with the preparation, negotiation and execution of this Amendment and
the
review of all documents incidental thereto in accordance with the terms of the Credit Agreement.
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6. RELEASE.
Each Borrower hereby waives, releases, remises and forever discharges each member of the
Lender Group, each of their respective Affiliates, and each of their respective officers,
directors, employees, and agents (collectively, the “Releasees”), from any and all claims,
demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any
kind or character, known or unknown, past or present, liquidated or unliquidated, suspected or
unsuspected, which such Borrower ever had, now has or might hereafter have against any such
Releasee which relates, directly or indirectly, to the Credit Agreement or any other Loan Document,
or to any acts or omissions of any such Releasee with respect to the Credit Agreement or any other
Loan Document, or to the lender-borrower relationship evidenced by the Loan Documents. As to each
and every claim released hereunder, each Borrower hereby represents that it has received the advice
of legal counsel with regard to the releases contained herein, and having been so advised, each
Borrower specifically waives the benefit of the provisions of Section 1542 of the Civil Code of
California which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
As to each and every claim released hereunder, each Borrower also waives the benefit of each other
similar provision of applicable federal or state law, if any, pertaining to general releases after
having been advised by its legal counsel with respect thereto.
7. CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF
CALIFORNIA.
8. Amendments. This Amendment cannot be altered, amended, changed or modified in any
respect or particular unless each such alteration, amendment, change or modification shall have
been agreed to by each of the parties and reduced to writing in its entirety and signed and
delivered by each party.
9. Counterpart Execution. This Amendment may be executed in any number of counterparts, all
of which when taken together shall constitute one and the same instrument, and any of the parties
hereto may execute this Amendment by signing any such counterpart. Delivery of an executed
counterpart of this Amendment by telefacsimile or electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telefacsimile or electronic mail also shall deliver an original
executed counterpart of this Amendment, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability and binding effect of this Amendment.
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10. Effect on Loan Documents.
(a) The Credit Agreement, as amended hereby, and each of the other Loan Documents, as amended
as of the date hereof, shall be and remain in full force and effect in accordance with their
respective terms and hereby are ratified and confirmed in all respects. The execution, delivery,
and performance of this Amendment shall not operate, except as expressly set forth herein, as a
modification or waiver of any right, power, or remedy of Agent or any Lender under the Credit
Agreement or any other Loan Document. Except for the amendments to the Credit Agreement expressly
set forth herein, the Credit Agreement and other Loan Documents shall remain unchanged and in full
force and effect. The amendments, waivers and modifications set forth herein are limited to the
specifics hereof, shall not apply with respect to any facts or occurrences other than those on
which the same are based, shall not excuse future non-compliance with the Loan Documents, shall not
operate as a consent to any further or other matter under the Loan Documents and shall not be
construed as an indication that any future waiver of covenants or any other provision of the Credit
Agreement will be agreed to, it being understood that the granting or denying of any waiver which
may hereafter be requested by the Borrower remains in the sole and absolute discretion of the Agent
and the Lenders.
(b) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement
to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”,
“thereunder”, “therein”, “thereof” or words of like import referring to the Credit Agreement, shall
mean and be a reference to the Credit Agreement as modified and amended hereby.
(c) To the extent that any terms and conditions in any of the Loan Documents shall contradict
or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this
Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect
the terms and conditions of the Credit Agreement as modified or amended hereby.
(d) This Amendment is a Loan Document.
(e) Unless the context of this Amendment clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the terms “includes” and
“including” are not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or”.
11. Entire Agreement. This Amendment embodies the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof and supersedes any and all
prior or contemporaneous agreements or understandings with respect to the subject matter hereof,
whether express or implied, oral or written.
12. Integration. This Amendment, together with the other Loan Documents, incorporates all
negotiations of the parties hereto with respect to the subject matter hereof and is the final
expression and agreement of the parties hereto with respect to the subject matter hereof.
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13. Ratification. Each Borrower hereby restates, ratifies and reaffirms each and every term
and condition set forth in the Credit Agreement and the Loan Documents effective as of the date
hereof and as amended hereby.
14. Reaffirmation of Obligations. Each Borrower hereby reaffirms its obligations under
each Loan Document to which it is a party. Each Borrower hereby further ratifies and reaffirms the
validity and enforceability of all of the liens and security interests heretofore granted, pursuant
to and in connection with the Security Agreement or any other Loan Document to Agent, on behalf of
itself or for the benefit of the Lender Group or the Bank Product Providers, as collateral security
for the obligations under the Loan Documents in accordance with their respective terms, and
acknowledges that all of such liens and security interests, and all collateral heretofore pledged
as security for such obligations, continues to be and remain collateral for such obligations from
and after the date hereof.
15. Severability. In case any provision in this Amendment shall be invalid, illegal or
unenforceable, such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of
the date first written above.
| XXXX INDUSTRIES, INC., a California corporation, as Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
| XXXX INDUSTRIES, INC., a Minnesota corporation, as Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
| XXXX TECHLOGIX, INC., a Delaware corporation, as Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
| XXXX TECHLOGIX MOBILITY SOLUTIONS, INC.,
a Delaware corporation, as Borrower |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT]
| XXXXX FARGO CAPITAL FINANCE, INC., Formerly known as Xxxxx Fargo Foothill, Inc., a California corporation, as Agent and as a Lender |
||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Name: | Xxxx Xxxxxxx | |||
| Title: | Vice President | |||
[SIGNATURE PAGE TO AMENDMENT NUMBER SEVEN TO CREDIT AGREEMENT]
Exhibit A
Schedule A-2
Authorized Persons
Xxxxxxx X. Xxxxxxx, Chief Executive Officer
Xxxxxx Xxxxxx, Corporate Controller
Schedule C-1
Commitments
| Lender | Revolver Commitment | Total Commitment | ||
Xxxxx Fargo Capital Finance, Inc.
|
See Below* | See Below* | ||
| All Lenders | See Below* | See Below* |
| * | (1) from the Closing Date up to and including June 12, 2008, $30,000,000, (2) from June 13,
2008 up to and including July 14, 2010, $10,000,000, (3) from July 15, 2010 up to and including
September 14, 2010, $12,500,000, and (4) from and after September 15, 2010, $10,000,000.” |
