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EXHIBIT 99.16
E X E C U T I O N C O P Y
THE CERPLEX GROUP, INC.
SEVENTH AMENDMENT
TO CREDIT AGREEMENT AND LIMITED WAIVER
This SEVENTH AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER
(this "AMENDMENT") is dated as of January 30, 1998 and entered into by and among
THE CERPLEX GROUP, INC., a Delaware corporation ("COMPANY"), the FINANCIAL
INSTITUTION LISTED ON THE SIGNATURE PAGES HEREOF ("LENDER") and CITIBANK, N.A.,
as successor to 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. and Modcomp Joint Venture, Inc. (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, that
certain Fourth Amendment to Credit Agreement and Limited Waiver dated as of May
30, 1997, that certain Fifth Amendment to Credit Agreement and Limited Waiver
dated as of June 30, 1997 and that certain Sixth Amendment to Credit Agreement
and Consent dated as of August 6, 1997 (as so amended, the "CREDIT AGREEMENT"),
by and among Company, Lender and Administrative Agent. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, Company and Lender have agreed to amend certain
provisions of the Credit Agreement.
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 1: DEFINITIONS.
A. Subsection 1.1 of the Credit Agreement is hereby amended by adding the
following definition in appropriate alphabetical order:
"'CONSOLIDATED ADJUSTED EBITDA' means, for any period, the sum of
the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) the provision for taxes based on
income, (iv) total depreciation expense, and (v) total amortization
expense, all of the foregoing as determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP."
SECTION 1.2 AMENDMENTS TO SECTION 7: COMPANY'S NEGATIVE COVENANTS.
A. Subsection 7.5 of the Credit Agreement is hereby amended to read in
its entirety as follows:
"Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any
sum for any Restricted Junior Payment; provided that Subsidiaries of
Company may declare and pay dividends to Company."
B. Subsection 7.6 of the Credit Agreement is hereby amended by adding the
following as new subsection 7.6G thereof:
"G. MINIMUM EBITDA. Company shall not permit Consolidated Adjusted
EBITDA for any period set forth below to be less than the correlative
amount indicated:
Minimum Consolidated
Month Adjusted EBITDA
----- ---------------
January 1, 1998 through January 31, 1998 $ 300,000
January 1, 1998 through February 28, 1998 $ 900,000
January 1, 1998 through March 31, 1998 $1,900,000"
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SECTION 1.3 AMENDMENTS TO SECTION 8: EVENTS OF DEFAULT.
A. Section 8 of the Credit Agreement is hereby amended by adding the word
"or" at the end of subsection 8.14 thereof and adding the following as new
subsection 8.15 thereof:
"8.15 MERGER.
(i) Company shall fail to file preliminary proxy
materials with the Securities and Exchange Commission regarding
the proposed merger with Xxxxx Acquisition Corp., a Delaware
corporation ("XXXXX"), on or prior to Xxxxx 0, 0000, (xx) Company
shall fail to mail definitive proxy materials to its stockholders
regarding the proposed merger with Xxxxx or prior to Xxxxx 00,
0000, (xxx) Company, Xxxxx or Aurora Electronics, Inc., a Delaware
corporation, shall terminate the agreement with respect to the
proposed merger or (iv) Company shall fail to make the required
Xxxx Xxxxx Xxxxxx filing on or prior to April 1, 1998; or"
SECTION 1.4 AMENDMENTS TO EXHIBITS AND SCHEDULES.
A. Exhibit V of the Credit Agreement is hereby amended by adding
the following thereto:
"K. CONSOLIDATED ADJUSTED EBITDA
1. Consolidated Net Income: $_________
2. Consolidated Interest
Expense: $_________
3. The provision for taxes based
on income: $_________
4. Total depreciation expense: $_________
5. Total amortization expense: $_________
6. Consolidated Adjusted EBITDA
(1+2+3+4+5): $_________
7. Minimum Consolidated Adjusted EBITDA required under
subsection 7.6G: $_________"
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SECTION 2. WAIVER
Subject to the terms and conditions set forth herein and in
reliance on the representations of Company herein contained:
(i) Lender hereby waives compliance with the provisions of subsection 7.1
of the Credit Agreement to the extent necessary to permit Company to incur
unsecured Subordinated Indebtedness to Aurora Electronics, Inc., a Delaware
corporation ("Aurora"), in an amount not to exceed $10,000,000; provided such
Subordinated Indebtedness provides for no current cash payments of interest,
principal or any other amounts and is subordinated in right of payment to the
Obligations in full in cash pursuant to documentation containing maturities,
subordination provisions and other terms in form and substance satisfactory to
Administrative Agent and Lender.
(ii) Lender hereby waives compliance with the provisions of subsections
7.6A, 7.6B, 7.6D, 7.6E and 7.6F of the Credit Agreement for the fiscal quarter
of Company ended December 31, 1997 and subsection 7.6C of the Credit Agreement
for the period from and including December 31, 1997 to and excluding April 30,
1998; provided, however, that such waiver shall be of no further force and
effect in the event that (a) the Merger Agreement is terminated, (b) the holders
of any Subordinated Indebtedness of Company or any of its Subsidiaries demand
payment of any amount in respect of such Subordinated Indebtedness or (c) any
payment of principal, interest or any other amount is made by Company in respect
of any Subordinated Indebtedness of Company or any of its Subsidiaries.
(iii) Lender hereby waives compliance with the provisions of subsection
7.7 of the Credit Agreement to the extent necessary to (a) permit Company to
execute an Agreement and Plan of Merger among Company, Aurora and Xxxxx
Acquisition Corp. in form and substance satisfactory to Lender (the "MERGER
AGREEMENT") and (b) permit Company to consummate the merger contemplated thereby
provided that simultaneously with the consummation of such merger all principal,
interest, fees, expenses and other amounts owing to Lender are paid in full in
accordance with the terms of the Credit Agreement or that certain Repayment
Agreement dated as of January 30, 1998 among Company, Aurora and Citibank, N.A.,
as the case may be.
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 "SEVENTH AMENDMENT EFFECTIVE DATE"):
A. On or before the Seventh Amendment Effective Date, Administrative
Agent shall have received for Lender counterparts hereof duly executed on behalf
of Company, Administrative Agent, Lender and each Guarantor.
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B. Administrative Agent shall have received:
1. Resolutions of Company's Board of Directors approving and
authorizing the execution, delivery, and performance of this Amendment,
certified as of the Seventh Amendment Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect
without modification or amendment; and
2. Signature and incumbency certificates of the officers of
Company executing this Amendment.
C. On or before the Seventh Amendment Effective Date, Lender and its
counsel shall have received duly executed copies of an agreement, in form and
substance reasonably satisfactory to Lender, providing that no interest on the
Subordinated Notes shall be made in cash until all principal, interest, fees,
expenses and other amounts are paid under the Credit Agreement.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company represents and
warrants to 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 Lender), 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.
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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 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 subsection 5.14, are and will be true, correct and
complete in all material respects on and as of the Seventh 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.
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.
H. SUBORDINATED NOTES. As of the date hereof, the Subordinated Notes are
owned beneficially and of record by Welsh, Carson, Xxxxxxxx & Xxxxx VII,
L.P.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Company Collateral Documents, in each
case as amended through the Seventh 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 First
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
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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 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 Seventh 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 Seventh 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 herein shall be
limited precisely as written and relates solely to the noncompliance by
Company with the provisions of subsections 7.1, 7.6A, 7.6B, 7.6C, 7.6D,
7.6E, 7.6F and 7.7 of the Credit
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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 7.1, 7.6A, 7.6B, 7.6C, 7.6D, 7.6E, 7.6F
or 7.7 of the Credit Agreement in any 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:________________________________________
Title:_____________________________________
CERTECH TECHNOLOGY, INC. (for purposes of
Section 5 only) as a Credit Support Party
By:________________________________________
Title:_____________________________________
CERPLEX MASS., INC. (for purposes of
Section 5 only) as a Credit Support Party
By:________________________________________
Title:_____________________________________
CERPLEX LIMITED (for purposes of Section 5
only) as a Credit Support Party
By:________________________________________
Title:_____________________________________
APEX COMPUTER COMPANY (for purposes of
Section 5 only) as a Credit Support Party
By:________________________________________
Title:_____________________________________
CITIBANK, N.A., INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
By:________________________________________
Title:_____________________________________
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