Exhibit 10.2
THIRD AMENDMENT TO CREDIT AGREEMENT
THAT THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into as of April __, 2001, by and among ONKYO AMERICA, INC., an Indiana
corporation, as successor by merger to Onkyo Acquisition Corporation, an Indiana
corporation (the "Company"), the financial institutions that are or may from
time to time become parties to the Credit Agreement (as defined below) (together
with their respective successors and assigns, the "Lenders"), and GMAC BUSINESS
CREDIT, LLC, a Delaware limited liability company, as agent ("Agent") for the
Lenders.
BACKGROUND
A. Company, Agent and Lenders entered into a Credit Agreement dated as
of August 31, 2000 (as amended from time to time, including as amended by this
Amendment, the "Agreement").
B. The parties wish to amend the Agreement as set forth herein.
THEREFORE, in consideration of the mutual promises and agreements of
the parties hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which is acknowledged, the parties agree as
follows:
TERMS AND CONDITIONS
1. Incorporation of the Agreement. All capitalized terms which are not defined
hereunder shall have the same meanings as set forth in the Agreement, and the
Agreement, to the extent not inconsistent with this Amendment, is incorporated
into this Amendment by this reference as though the same were set forth in its
entirety. To the extent any terms and provisions of the Agreement are
inconsistent with this Amendment, such terms and provisions in the Agreement
shall be deemed superseded hereby. Except as specifically set forth in this
Amendment, the Agreement shall remain in full force and effect and its
provisions shall be binding on the parties hereto.
2. Amended Definitions. The definitions of Borrowing Base and Borrowing
Base Certificate in Section 1.1 of the Agreement are amended in their entirety
to read as follows:
Borrowing Base means an amount equal to the total of (a) 85%
of the unpaid amount, net of such reserves and allowances as the Agent
deems necessary in its reasonable discretion, of all Eligible Accounts
Receivable plus (b) the lesser of (i) 60% of all Eligible Inventory
other than Eligible Delphi Finished Goods Inventory plus the applicable
Delphi Finished Goods Allowance, and (ii) $7,500,000, in any case net
of such reserves and allowances as the Agent deems necessary in its
reasonable discretion.
Borrowing Base Certificate means a certificate substantially
in the form of Exhibit A to that certain Third Amendment to Credit
Agreement between GMACBC and the Company dated April ___, 2001.
3. New Definitions. The following definitions are added to Section 1.1
of the Agreement:
Delphi means Delphi Automotive Systems, Inc.
Delphi Finished Goods Allowance means for the applicable
period, the lesser of (a) the amount determined by applying the
applicable advance rate to the Delphi Finished Goods Inventory, and (b)
the applicable cap as set forth below:
----------------------------- ------------------------ --------------------
Period Applicable Cap
Advance Rate
----------------------------- ------------------------ --------------------
----------------------------- ------------------------ --------------------
Through - 10/31/01 85% $ 1,700,000
----------------------------- ------------------------ --------------------
----------------------------- ------------------------ --------------------
11/1/01 - 11/15/01 80% $ 1,600,000
----------------------------- ------------------------ --------------------
----------------------------- ------------------------ --------------------
11/16/01 - 11/30/01 75% $1,500,000
----------------------------- ------------------------ --------------------
----------------------------- ------------------------ --------------------
12/1/01 - 12/15/01 70% $ 1,400,000
----------------------------- ------------------------ --------------------
----------------------------- ------------------------ --------------------
12/16/01 - 12/30/01 65% $ 1,300,000
----------------------------- ------------------------ --------------------
----------------------------- ------------------------ --------------------
After 12/30/01 60% N/A
----------------------------- ------------------------ --------------------
Delphi Inventory Agreement means that certain Inventory
Purchase Agreement between GMACBC and Delphi dated March 29, 2001
Eligible Delphi Finished Goods Inventory means any otherwise
Eligible Inventory that is (a) finished goods, and (b) "useable" in
production for Delphi and "merchantable" as those terms are defined in
the Delphi Inventory Agreement.
4. Representations Regarding Delphi Finished Goods Inventory.
The following is added as Section 9.25 to the Agreement:
9.25 Delphi Finished Goods Inventory. All Delphi
Finished Goods Inventory listed on a Borrowing Base
Certificate delivered to Agent shall be "useable" and
"merchantable" as those terms are defined in the
Delphi Inventory Agreement.
5. Representations, Covenants and Warranties; No Default. Except for the
representations and warranties of Company made as of a particular date, the
representations, covenants and warranties set forth in Section 9 of the
Agreement shall be deemed remade as of the date hereof by Company; provided,
however, that any and all references to the Agreement in such representations
and warranties shall be deemed to include this Amendment. No Event of Default
has occurred and is continuing and no event has occurred and is continuing
which, with the lapse of time, the giving of notice, or both, would constitute
such an Event of Default under the Agreement.
6. Fees and Expenses. The Company agrees to pay on demand all costs and expenses
of or incurred by Agent and Lenders in connection with the evaluation,
negotiation, preparation, execution and deliver of this Amendment and the other
instruments and documents executed and delivered in connection with the
transactions described herein (including the filing or recording thereof),
including, but not limited to, the fees and expenses of counsel for the Agent
and any future amendments to the Agreement.
7. Effectuation. The amendments to the Agreement contemplated by this
Amendment shall be deemed effective immediately upon the full execution of
this Amendment and without any further action required by the parties
hereto. There are no conditions precedent or subsequent to the effectiveness
of this Amendment.
8. Continuing Effect. Except as otherwise specifically set forth herein,
the provision of the Agreement shall remain in full force and effect.
9. Counterparts. This Amendment may be executed in two or more counter-
parts, each of which shall be deemed an original, and all of which together
shall constitute one and the same instrument.
ONKYO AMERICA, INC. f/k/a
Onkyo Acquisition Corporation
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
GMAC BUSINESS CREDIT, LLC
as Agent
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
[Signatures continued on next page]
[Signatures continued from previous page]
GMAC BUSINESS CREDIT, LLC
as Lender
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
NATIONAL CITY BANK OF INDIANA
as Lender
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
OFFICERS' CERTIFICATE
The undersigned, a duly authorized officer of ONKYO AMERICA, INC. f/k/a
Onkyo Acquisition Corporation, INC. ("Company"), certifies to GMAC Business
Credit, LLC ("Agent") as follows:
1. Company has requested that Agent and Lenders amend the Credit
Agreement dated August 31, 2000 (as amended, the " Agreement") as provided in
the Third Amendment to Credit Agreement dated as of April __, 2001 (the
"Amendment").
2. No further approvals or authorizations are necessary for Company to
execute the Amendment or any notes, agreements or documents executed or
delivered in connection with the Amendment.
_______________________________
Title: _________________________
Dated: April ___, 2001
REAFFIRMATION OF GUARANTIES AND LOAN DOCUMENTS
The undersigned (the "Guarantors") hereby acknowledge and consent to
the amendment of the Agreement contained in the foregoing Second Amendment to
Credit Agreement, acknowledge and reaffirm their obligations owing to Agent and
Lenders under those certain Guaranties dated August 31, 2000 (the "Guaranties)
and any other Loan Documents to which they are a party, and agree that such
Guaranties and Loan Documents are and shall remain in full force and effect.
Although Guarantors have been informed of the matters set forth herein and have
acknowledged and agreed to the same, Guarantors understand that Lenders have no
obligation to inform Guarantors of such matters in the future or to seek the
Guarantors' acknowledgment or agreement to future amendments or waivers, and
nothing herein shall create such a duty.
GLOBAL TECHNOVATIONS, INC.
By:---------------------
Title: ----------------
ONKYO AMERICA SPECIALTY PRODUCTS, INC.
By:-----------------------
Title:--------------------
