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EXHIBIT 10.35
EXECUTION COPY
THE CERPLEX GROUP, INC.
FIFTH AMENDMENT
TO CREDIT AGREEMENT AND LIMITED WAIVER
This FIFTH AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER
(this "AMENDMENT") is dated as of June 30, 1997 and entered into by and among
THE CERPLEX GROUP, INC., a Delaware corporation ("COMPANY"), the FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF ("LENDERS") and XXXXX FARGO
BANK, NATIONAL ASSOCIATION, as administrative agent for Lenders
("ADMINISTRATIVE AGENT"), and, for purposes of Section 5 hereof, CERTECH
Technology, Inc., Cerplex Mass., Inc., Cerplex Limited, Apex Computer Company,
Cerplex Subsidiary, Inc., Modcomp/Cerplex L.P., Modcomp Joint Venture, Inc.,
Modular Computer Services, Inc., Modular Computer Systems GmbH and Modcomp
France S.A. (collectively, "GUARANTORS"), and is made with reference to that
certain Credit Agreement dated as of October 12, 1994, as amended by that
certain First Amendment to Credit Agreement and Limited Waiver dated as of
April 15, 1996, that certain Second Amendment to Credit Agreement and Limited
Waiver dated as of November 30, 1996, that certain Third Amendment to Credit
Agreement dated as of April 9, 1997 (the "THIRD AMENDMENT") and that certain
Fourth Amendment to Credit Agreement and Limited Waiver dated as of May 30,
1997 (as so amended, the "CREDIT AGREEMENT"), by and among Company, Lenders,
Administrative Agent and Guarantors. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, Company has notified Lenders that it is in default of
certain provisions of the Credit Agreement; and
WHEREAS, Lenders have agreed to amend certain provisions of
the Credit Agreement and to waive certain provisions of the Credit Agreement
until July 10, 1997;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
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SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
SECTION 1.1 AMENDMENTS TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND
LOANS.
A. Subsection 2.4A(iii)(d) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(d) [INTENTIONALLY OMITTED]"
B. Subsection 2.4A(iii)(i) of the Credit Agreement is hereby
amended by deleting the phrase "subsections 2.4A(iii)(a)-(f)" contained therein
and substituting the phrase "subsections 2.4A(iii)(a)-(c), (e) and (f)"
therefor.
C. Subsection 2.4A(iv)(b) of the Credit Agreement is hereby
amended by deleting the phrase "subsections 2.4A(iii)(a)-(d)" contained therein
and substituting the phrase "subsections 2.4A(iii)(a)-(c)" therefor.
SECTION 1.2 AMENDMENTS TO SECTION 6: COMPANY'S AFFIRMATIVE COVENANTS.
A. Subsection 6.16 of the Credit Agreement is hereby amended to
read in its entirety as follows:
"6.16 NEW LEADERSHIP; FINANCIAL ADVISOR. Company shall hire a new
chief executive officer no later than July 3, 1997 and shall continue to retain
the services of such chief executive officer through the Commitment Termination
Date. In addition, Company shall continue to retain the services of a
financial advisor, satisfactory to Lenders, through the Commitment Termination
Date."
SECTION 2. WAIVER
Subject to the terms and conditions set forth herein and in
reliance on the representations of Company herein contained, Lenders hereby
waive compliance with the provisions of (i) subsection 4.2B(i) of the Credit
Agreement to the extent necessary to exclude the representations in subsection
5.14 of the Credit Agreement for the purpose of permitting Company to borrow an
amount equal to $386,984.14 on June 30, 1997; provided that such amount shall
be applied directly by Administrative Agent to pay interest due and payable to
Lenders on that date and the second installment of the Third Amendment
restructure fee due on that date without being first credited to an account of
Company; (ii) subsection 7.6 of the Credit Agreement for the period commencing
June 30, 1997 and ending July 10, 1997; and (iii) subsection 8.14 of the Credit
Agreement to the extent necessary to permit Company to consummate the sale of
the Pen Interconnect stock held by Company on or prior to July 10, 1997.
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Company hereby agrees that it shall have no right to borrow
under the Credit Agreement prior to July 11, 1997, other than as provided in
the preceding paragraph. The waiver set forth herein shall be of no further
force and effect in the event that (i) Company submits a Notice of Borrowing
under the Credit Agreement prior to July 11, 1997, other than in connection
with the borrowing permitted under the preceding paragraph, or (ii) Company
makes any payment on or sets apart any sum for any payment on any Subordinated
Indebtedness.
SECTION 3. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIFTH
AMENDMENT EFFECTIVE DATE"):
A. On or before the Fifth Amendment Effective Date, Administrative
Agent shall have received for each Lender counterparts hereof duly executed on
behalf of Company, Administrative Agent, Lenders and each Guarantor.
B. Administrative Agent shall have received:
1. A certificate from the corporate secretary or an
assistant secretary of Company certifying that there have been no
amendments to the Certificate of Incorporation or Bylaws of Company
since _____, 199_;
2. Resolutions of Company's Board of Directors approving
and authorizing the execution, delivery, and performance of this
Amendment, certified as of the Fifth Amendment Effective Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment; and
3. Signature and incumbency certificates of the officers
of Company and of the Subsidiaries of Company executing this Amendment.
C. Lenders and their respective counsel shall have received
originally executed copies of one or more favorable written opinions of
Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for Company, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of
the Fifth Amendment Effective Date.
D. On or before the Fifth Amendment Effective Date, all corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Administrative Agent and
such counsel, and Administrative Agent and such counsel shall have received all
such counterpart
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originals or certified copies of such documents as Administrative Agent may
reasonably request.
E. Company shall deliver to Administrative Agent a waiver, in form
and substance satisfactory to Lenders, of the Note Purchase Agreement duly
executed by the parties to the Note Purchase Agreement required to execute such
waiver.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company represents
and warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company, as the
case may be.
C. NO CONFLICT. The execution and delivery by Company of this
Amendment and the performance of the Amended Agreement do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, the Certificate or Articles
of Incorporation or Bylaws of Company or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on
Company or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of Company or any of its
Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Company
of this Amendment and the performance by Company of the Amended Agreement do
not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement
have been duly executed and delivered by Company and are the legally valid and
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binding obligations of Company, enforceable against Company in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement, other than representations contained in subsection 5.14 of
the Credit Agreement, are and will be true, correct and complete in all
material respects on and as of the Fifth Amendment Effective Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date. As of the date hereof, Company is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in the Note Purchase Agreement and no condition exists
that, with the giving of notice or the lapse of time or both, would constitute
such a default.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Company Collateral Documents, in each
case as amended through the Fifth Amendment Effective Date, pursuant to which
Company has created Liens in favor of Administrative Agent on certain
Collateral to secure the Obligations. Guarantors are a party to the Guaranty
and the Subsidiary Collateral Documents, in each case as amended through the
Fifth Amendment Effective Date, pursuant to which each Guarantor has (i)
guarantied the Obligations and (ii) created Liens in favor of Administrative
Agent on certain Collateral to secure the obligations of such Guarantor under
the Guaranty. Company and Guarantors are collectively referred to herein as
the "CREDIT SUPPORT PARTIES", and the Guaranty, the Company Collateral
Documents and the Subsidiary Collateral Documents are collectively referred to
herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment
and consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be, to
the fullest extent possible the payment and performance of all "Obligations,"
"Guarantied Obligations" and "Secured Obligations," as the case may be (in each
case as such terms are defined in the applicable Credit Support Document),
including, without limitation, the payment and performance of all such
"Obligations," "Guarantied Obligations" or "Secured Obligations," as the case
may
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be, in respect of the Obligations of Company now or hereafter existing under or
in respect of the Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in
the Amended Agreement and the Credit Support Documents to which it is a party
or otherwise bound are true, correct and complete in all material respects on
and as of the Fifth Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party (other than Company) acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to
the Credit Agreement.
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
1. On and after the Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
2. Without limiting the generality of the provisions of
subsection 10.6 of the Credit Agreement, the waiver set forth shall be
limited precisely as written and relates solely to the noncompliance by
Company with the provisions of subsections 4.2B(i), 7.6 and 8.14 of the
Credit Agreement in the manner and to the extent described above.
Nothing in this Amendment shall be deemed to:
(a) constitute a waiver of compliance by Company
with respect to (i) subsection 4.2B(i), 7.6 or 8.14 of the
Credit Agreement in any
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other instance or (ii) any other term, provision or condition
of the Credit Agreement or any other instrument or agreement
referred to therein; or
(b) prejudice any right or remedy that
Administrative Agent or any Lender may now have (except to the
extent such right or remedy was based upon existing defaults
that will not exist after giving effect to this Amendment) or
may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to
therein.
3. Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees
and expenses as described in subsection 10.2 of the Credit Agreement incurred
by Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose or be given any substantive
effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
THE CERPLEX GROUP, INC.
By: /s/
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Title:
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CERTECH TECHNOLOGY, INC. (for purposes of
Section 5 only) as a Credit Support Party
By: /s/
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Title:
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CERPLEX MASS., INC. (for purposes of Section
5 only) as a Credit Support Party
By: /s/
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Title:
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CERPLEX LIMITED (for purposes of Section 5
only) as a Credit Support Party
By: /s/
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Title:
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APEX COMPUTER COMPANY (for purposes of
Section 5 only) as a Credit Support Party
By: /s/
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Title:
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CERPLEX SUBSIDIARY, INC. (for purposes of
Section 5 only) as a Credit Support Party
By: /s/
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Title:
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MODCOMP/CERPLEX L.P. (for purposes of
Section 5 only) as a Credit Support Party
By: Cerplex Subsidiary, Inc., as general
partner
By: /s/
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Title:
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MODCOMP JOINT VENTURE, INC. (for purposes of
Section 5 only) as a Credit Support Party
By: /s/
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Title:
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MODULAR COMPUTER SERVICES, INC. (for
purposes of Section 5 only) as a Credit
Party
By: /s/
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Title:
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MODULAR COMPUTER SYSTEMS GMBH (for purposes
of Section 5 only) as a Credit Support Party
By: /s/
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Title:
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X-0
00
XXXXXXX XXXXXX S.A. (for purposes of Section
5 only) as a Credit Support Party
By: /s/
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Title:
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XXXXX FARGO BANK, NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT
By: /s/
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Title:
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BHF-BANK AKTIENGESELLSCHAFT, AS A LENDER
By: /s/
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Title:
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By: /s/
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Title:
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CITIBANK, N.A., AS A LENDER
By: /s/
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Title:
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