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Exhibit 10.7
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),
dated as of this 21st day of November, 1996, between BLACK BOX CORPORATION OF
PENNSYLVANIA, a Delaware corporation formerly known as Black Box Corporation
(the "Borrower"), and MELLON BANK, N.A., a national banking association (the
"Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have entered into that
certain Credit Agreement, dated as of May 6, 1994, as amended by that certain
First Amendment to Credit Agreement, dated as of March 30, 1995, by that
certain Second Amendment to Credit Agreement, dated as of August 1, 1995, by
that certain Third Amendment to Credit Agreement, dated as of April 1, 1996,
and by that certain Fourth Amendment to Credit Agreement, dated as of November
21, 1996 (as amended, the "Credit Agreement"); and
WHEREAS, the Borrower and the Lender have agreed to further
amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Section 1.01 of the Credit Agreement is hereby amended by
adding the following defined terms thereto:
"Holding Company Guarantor" shall mean BBox Holding Company,
a Delaware corporation.
"Holding Company Guaranty" shall mean that certain Guaranty
and Suretyship Agreement, dated as of November 21, 1996, made by the
Holding Company Guarantor in favor of the Lender, as amended, modified
or supplemented from time to time.
2. Section 1.01 of the Credit Agreement is hereby amended by
deleting the definitions of "License Agreement", "Loan Documents" and "Loan
Party" appearing therein and inserting the following definitions in lieu
thereof:
"License Agreement" shall mean that certain Trademark/Service
Xxxx License Agreement, dated as of October 1, 1992, between BB
Technologies, Inc. and the Borrower, as amended by Amendment No. 1 to
the Trademark/Service Xxxx License Agreement, dated as of December 21,
1993, by Amendment No. 2 to the Trademark/Service Xxxx License
Agreement, dated as of May 6, 1994, and by Amendment No. 3 to the
Trademark/Service Xxxx License Agreement, dated as of July 1, 1995, in
substantially the form attached hereto as Exhibit E, and, subject to
Section 7.14, as amended, modified or supplemented from time to time
hereafter.
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"Loan Documents" shall mean this Agreement, the Revolving
Credit Note, the Guaranty, the Holding Company Guaranty and all other
agreements and instruments extending, renewing, refinancing or
refunding any indebtedness, obligation or liability arising under any
of the foregoing, in each case as the same may be amended, modified or
supplemented from time to time hereafter.
"Loan Party" shall mean the Borrower, the Guarantor and the
Holding Company Guarantor.
3. In order to correct a typographical error in the Third
Amendment to Credit Agreement between the Borrower and the Lender (which
mistakenly referenced Section 2.02 of the Credit Agreement), Section 2.03 of
the Credit Agreement is hereby amended by deleting clause (c) in its entirety
and inserting the following cause in lieu thereof:
(c) The interest rate Option or Options selected in
accordance with Section 2.04(a) hereof and the principal amounts
selected in accordance with Section 2.04(c) hereof of the Base Rate
Portion and the ABS Rate Portion and each Funding Segment of the
Euro-Rate Portion of such proposed Revolving Credit Loan; and
4. Section 4.15 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
4.15. OWNERSHIP AND CONTROL. Schedule 4.15 hereof
states as of the date hereof the authorized capitalization of
each Loan Party and the number of shares of each class of
capital stock issued and outstanding of each Loan Party. All
of the issued and outstanding shares of capital stock of the
Borrower are owned beneficially and of record by the Holding
Company Guarantor. All of the issued and outstanding shares
of capital stock of the Holding Company Guarantor are owned
beneficially and of record by the Guarantor. The outstanding
shares of capital stock of each Loan Party have been duly
authorized and validly issued and are fully paid and
nonassessable. There are no options, warrants, calls,
subscriptions, conversion rights, exchange rights, preemptive
rights or other rights, agreements or arrangements
(contingent or otherwise) which may in any circumstances now
or hereafter obligate the Borrower to issue any shares of its
capital stock.
5. Section 4.26 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
4.26. REGULATORY STATUS. Neither the Borrower, the
Holding Company Guarantor, the Guarantor nor any
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Subsidiary of the Borrower, the Holding Company Guarantor or
the Guarantor is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, (ii) a
"holding company" or a "subsidiary company" or an "affiliate"
of a "holding company" or a "subsidiary company" of a
"holding company", within the meaning of the Public Utility
Act of 1935, as amended, or (iii) a "public utility" within
the meaning of the Federal Power Act, as amended.
6. Section 6.11 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
6.11. CONSOLIDATED TAX RETURN. The Borrower shall
not, and shall not suffer any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return
with any Person other than the Guarantor, the Holding Company
Guarantor, the Borrower and their respective Subsidiaries.
7. Section 7.02 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.02. CASH FLOW OF THE GUARANTOR. As of the last day
of each fiscal quarter, the ratio of (a) the Consolidated Net
Income of the Guarantor, plus the amortization expense
related to intangible assets of the Guarantor, the Holding
Company Guarantor and the Borrower (without duplication),
without giving effect, in the case of the Guarantor and its
Subsidiaries, to reductions in income attributable to
amortization of original issue discount with respect to the
promissory notes of the Guarantor delivered pursuant to the
Senior Subordinated Indenture, for the four (4) most recently
completed fiscal quarters to (b) the aggregate Indebtedness
of the Guarantor, the Holding Company Guarantor and the
Borrower determined in accordance with GAAP (exclusive of
principles of consolidation) shall not be less than .25 to 1.
8. Section 7.04 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.04. INDEBTEDNESS. The Borrower shall not, and
shall not permit any Subsidiary of the Borrower to, at any
time create, incur, assume or suffer to exist any
Indebtedness, except:
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(a) Indebtedness to the Lender pursuant to this
Agreement and the other Loan Documents and Indebtedness
pursuant to the Term Loan Documents;
(b) Indebtedness of the Borrower and its
Subsidiaries existing on the date hereof and listed in
Schedule 7.04 hereof, but not any extensions, renewals or
refinancings thereof;
(c) Indebtedness for borrowed money incurred by the
Borrower and its Subsidiaries from time to time; PROVIDED,
that the aggregate principal amount of such Indebtedness
shall not exceed $3,000,000 at any time;
(d) Capitalized Lease Obligations of the Borrower
and its Subsidiaries in an aggregate amount not in excess of
$5,000,000 at any one time, provided such Capitalized Leases
are otherwise permitted by Section 7.12;
(e) Indebtedness for borrowed money incurred by the
Borrower and the Japanese Joint Venture in connection with
the acquisition by the Borrower of the interest in the
Japanese Joint Venture that the Borrower does not currently
own; PROVIDED, that such Indebtedness shall not exceed an
amount equal to $4,000,000, less the amount of any loans or
advances to or investments in the Japanese Joint Venture as
permitted by Section 7.06(f) hereof; and
(f) Indebtedness for borrowed money in the form of a
note or notes payable by the Borrower to the order of the
Holding Company Guarantor issued in connection with a Stock
Payment made to the Holding Company Guarantor to the extent
permitted by Section 7.07 or in connection with the payment
of interest with respect to any such note or notes, which
note or notes (i) shall be in substantially the form attached
hereto as Exhibit L or otherwise in form and substance
satisfactory to the Lender and the Borrower, the Lender
hereby agreeing that any such note or notes may have a stated
term of seven (7) years, but be payable on demand and require
the payment of interest on an annual basis, and (ii) shall be
subordinated to the Revolving Credit Note on the terms
identified in Exhibit J attached hereto;
PROVIDED, HOWEVER, that in no event shall the aggregate
amount of the Indebtedness of the Subsidiaries of the
Borrower exceed $3,000,000 at any time; PROVIDED, FURTHER,
however, that, Indebtedness borrowed by the Borrower from any
Affiliate shall be subordinated to the Revolving Credit Note
on the terms identified in Exhibit J attached hereto.
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9. Section 7.06 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.06. LOANS, ADVANCES AND INVESTMENTS. The Borrower
shall not, and shall not permit any Subsidiary of the
Borrower to, at any time make or suffer to exist or remain
outstanding any loan or advance to, OR purchase, acquire or
own (beneficially or of record) any stock, bonds, notes or
securities of, or any partnership interest (whether general
or limited) in, or any other interest in, OR make any capital
contribution to or other investment in, any other Person,
except:
(a) The capital stock of a Subsidiary of the
Borrower owned on the date hereof and listed on Schedule 4.13
hereto and the matters set forth on Schedule 4.14 hereto;
(b) Loans or advances (i) so long as no Event of
Default or Potential Default shall have occurred and be
continuing or shall occur after giving effect thereto, to
Subsidiaries of the Borrower in an aggregate amount not in
excess at any time of an amount equal to $10,000,000, or (ii)
to the Guarantor for the purposes of paying in full the
Indebtedness secured by the Senior Subordinated Indenture,
and so long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving
effect thereto, paying reasonable administrative costs and
salaries of the Guarantor's employees, paying taxes and
paying expenses incurred in the ordinary course of business
and to the Holding Company Guarantor, so long as no Event of
Default or Potential Default shall have occurred and be
continuing or shall occur after giving effect thereto, for
the purposes of paying reasonable administrative costs and
salaries of the Holding Company Guarantor's employees, paying
taxes and paying expenses incurred in the ordinary course of
business; PROVIDED, that no loans or advances may be made
pursuant to clause (ii) of this Section 7.06(b) (other than
to the Guarantor for the purpose of paying in full the
Indebtedness secured by the Senior Subordinated Indenture)
if, after giving effect to such loan or advance, the
aggregate amount of loans or advances made during any fiscal
year of the Borrower, together with any Stock Payments made
pursuant to Section 7.07(a) during such fiscal year, would
exceed $1,500,000;
(c) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, additional capital stock of any
of the Subsidiaries listed on Schedule 4.13 hereto and
additional interests with respect to those
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matters set forth on Schedule 4.14 hereto; PROVIDED, that the
acquisition of such additional interests shall not require
the expenditure of more than $4,000,000 in the aggregate;
(d) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, investments in any other Person;
provided, that (i) such Person is in the same or a similar
line of business as the Borrower, (ii) the Borrower acquires
all or substantially all of the assets of such Person
(whether by acquisition of such assets or the stock of such
Person) and (iii) the investment in any one (1) Person shall
not exceed $5,000,000;
(e) Cash Equivalent Investments; and
(f) Loans or advances to or investments in a
Subsidiary of the Borrower or the Japanese Joint Venture in
connection with the acquisition by the Borrower of the
interest in the Japanese Joint Venture that the Borrower does
not currently own; provided, that such loans, advances and
investments shall not exceed in the aggregate an amount equal
to $4,000,000, less the amount of any Indebtedness incurred
in connection with such acquisition as permitted by Section
7.04(e).
10. Section 7.07 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.07. DIVIDENDS AND RELATED DISTRIBUTIONS. The
Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, declare, or make any Stock Payment, except
as follows:
(a) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, Stock Payments to the Holding
Company Guarantor for the purposes of paying reasonable
administrative costs and salaries of the Holding Company
Guarantor's employees, paying taxes and paying expenses
incurred in the ordinary course of business and of making
Stock Payments to the Guarantor for the purposes of paying
reasonable administrative costs and salaries of the
Guarantor's employees, paying taxes and paying expenses
incurred in the ordinary course of business; provided, that
no Stock Payment pursuant to this Section 7.07(a) may be made
if, after giving effect to such Stock Payment, the aggregate
amount of Stock Payments made during any fiscal year of the
Borrower, together with any loans and advances made pursuant
to Section 7.06(b)(ii) (other than to the
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Guarantor for the purpose of paying in full the Indebtedness
secured by the Senior Subordinated Indenture) during such
fiscal year, would exceed $1,500,000;
(b) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, Stock Payments to the Holding
Company Guarantor for the purpose of making Stock Payments to
the Guarantor for the purpose of making Stock Payments to the
extent permitted by Section 5.03 of the Guaranty;
(c) Stock Payments to the Holding Company Guarantor
for the purpose of making Stock Payments to the Guarantor for
the purpose of repaying certain Indebtedness of the Guarantor
to the Borrower in the principal amount of $43,670,000;
(d) Stock Payments to the Holding Company Guarantor
so long as the proceeds thereof shall be loaned to the
Borrower as permitted by Section 7.04 hereof; and
(e) A Subsidiary of the Borrower may declare and
make Stock Payments if all of the capital stock of such
Subsidiary is owned by the Borrower or by a direct or
indirect wholly-owned Subsidiary of the Borrower.
11. Section 7.12 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.12. CAPITAL EXPENDITURES. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, make
any Capital Expenditures on or after the date hereof, except
for Capital Expenditures not in excess of $3,500,000 in the
aggregate by the Guarantor, the Holding Company Guarantor,
the Borrower and their respective Subsidiaries in any fiscal
year.
12. Section 8.01 of the Credit Agreement is hereby amended by
deleting clause (c) in its entirety and inserting the following clause in lieu
thereof:
(c) Any Loan Party shall default in the performance
or observance of any material covenant, agreement or duty
under this Agreement, the Guaranty, the Holding Company
Guaranty or any other Loan Document.
13. Section 8.01 of the Credit Agreement is hereby amended by
deleting clause (l) in its entirety and inserting the following clause in lieu
thereof:
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(l) The Guaranty, the Holding Company Guaranty or
any provision of either thereof shall cease to be in full
force and effect, the Guarantor shall deny or disaffirm its
obligations under the Guaranty, or the Holding Company
Guarantor shall deny or disaffirm its obligations under the
Holding Company Guaranty.
14. Section 8.01 of the Credit Agreement is hereby amended by
deleting clause (m) in its entirety and inserting the following clause in lieu
thereof:
(m) The Guarantor shall cease to own one hundred
percent (100%) of the outstanding capital stock of the
Holding Company Guarantor or the Holding Company Guarantor
shall cease to own one hundred percent (100%) of the
outstanding capital stock of the Borrower.
15. Section 9.13 of the Credit Agreement is hereby amended by
deleting clause (b)(iv) in its entirety and inserting the following clause in
lieu thereof:
(iv) the Lender may enter into any amendment to this
Agreement or to any of the other Loan Documents without the
prior consent of any such Participant, except any amendment
which would (A) increase the Revolving Credit Committed
Amount, (B) extend the maturity of the principal of or any
interest on any amount owed to the Lender by the Borrower
under this Agreement or any of the other Loan Documents, (C)
reduce the principal amount of or the rate of interest on any
amount owed to the Lender by the Borrower under this
Agreement or any of the other Loan Documents, (D) waive any
Event of Default under this Agreement, (E) release the
Guarantor from any obligation under the Guaranty, or (F)
release the Holding Company Guarantor from any obligation
under the Holding Company Guaranty.
16. Schedules 4.01, 4.13 and 4.15 to the Credit Agreement are
hereby replaced by Schedules 4.01, 4.13 and 4.15 attached hereto.
17. This Amendment and the Second Amendment to Guaranty of
even date herewith between Guarantor (as defined in the Credit Agreement) and
Lender are subject to the satisfaction of each of the following conditions
precedent:
(a) HOLDING COMPANY GUARANTY. The Lender shall have
received from the Holding Company Guarantor (as defined in
the Amendment), the Holding Company Guaranty (as defined in
the Amendment) substantially in the form of Exhibit A hereto,
duly executed on behalf of the Holding Company Guarantor.
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(b) CAPITALIZATION, ETC. The corporate and capital
structure of the Holding Company Guarantor, the articles of
incorporation and by-laws of the Holding Company Guarantor,
and the terms, conditions, amounts and holders of all equity,
debt and other indebtedness, obligations and liabilities of
the Holding Company Guarantor, shall be satisfactory to the
Lender.
(c) CORPORATE PROCEEDINGS. The Lender shall have
received a certificate executed by the Secretary or Assistant
Secretary of the Holding Company Guarantor dated as of the
date of this Amendment as to (i) true copies of the articles
of incorporation and by-laws of the Holding Company Guarantor
in effect on such date, (ii) true copies of all corporate
action taken by the Holding Company Guarantor relative to the
Holding Company Guaranty and (iii) the incumbency and
signature of the officers of the Holding Company Guarantor
executing the Holding Company Guaranty, together with
satisfactory evidence of the incumbency of such Secretary or
Assistant Secretary. The Lender shall have received a
certificate from the Secretary of State of the State of
Delaware dated not more than thirty (30) days before the date
of this Amendment showing the good standing of the Holding
Company Guarantor in the State of Delaware.
(d) LEGAL OPINION OF COUNSEL TO THE HOLDING COMPANY
GUARANTOR. The Lender shall have received an opinion
addressed to the Lender, dated the date of the Amendment, of
counsel to the Holding Company Guarantor as to such matters
as may be requested by the Lender and in form and substance
satisfactory to the Lender.
(e) FEES, EXPENSES, ETC. The Borrower shall have
paid all out-of-pocket costs and expenses incurred by the
Lender in connection with the preparation, execution and
delivery of the Amendment, the Holding Company Guaranty and
the other documents executed in connection with the
transactions contemplated thereby, including without
limitation attorney's fees and costs.
18. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
19. Except as specifically amended by this Amendment, the
terms and conditions of the Credit Agreement shall remain in full force and
effect and shall be binding upon the parties hereto and their respective
successors and assigns.
20. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ XXXXXXXXX X. XXXXX
---------------------------
Title: Vice President
MELLON BANK, N.A.
By: /s/ XXXX XXXXXXXXX
--------------------------
Title: Asst. Vice President
[Signatures to Fifth Amendment to Credit Agreement]
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CONSENT OF GUARANTOR
BLACK BOX CORPORATION, a Delaware corporation formerly known
as MB Communications, Inc., the Guarantor under that certain Guaranty and
Suretyship Agreement (the "Guaranty"), dated as of May 6, 1994, made by the
Guarantor in favor of Mellon Bank, N.A., hereby consents to the within Fifth
Amendment to Credit Agreement and confirms and reaffirms its obligations under
the Guaranty.
BLACK BOX CORPORATION
By: /s/ XXXXXXXXX X. XXXXX
--------------------------
Title: Vice President
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