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Exhibit 10(a)
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of December 23, 1998 (this "Amendment"), to
the Credit Agreement, dated as of May 6, 1997, as amended by Amendment No. 1,
dated as of January 30, 1998 ( as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among TELEX COMMUNICATIONS, INC., a
Delaware corporation ("Telex" or the "Borrower"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), XXXXXX
XXXXXXX SENIOR FUNDING, INC., as documentation agent for the Lenders (in such
capacity, the "Documentation Agent"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent for the Lenders (in such capacity,
the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Administrative
Agent and the Lenders amend certain covenants contained in the Credit Agreement;
and
WHEREAS, the Administrative Agent and the Lenders are willing
to agree to the requested amendments on the terms and conditions contained
herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
2. Amendments to Subsection 1.1. (a) Subsection 1.1 of the Credit
Agreement is hereby amended by deleting therefrom the definitions of the
following defined terms in their respective entireties and inserting in lieu
thereof the following new definitions:
""Consolidated EBITDA": for any period, Consolidated Net
Income for such period adjusted to exclude the following items (without
duplication) of income or expense to the extent that such items are
included in the calculation of Consolidated Net Income: (a)
Consolidated Interest Expense, (b) any non-cash expenses and charges,
(c) total income tax expense, (d) depreciation expense, (e) the expense
associated with amortization of intangible and other assets (including
amortization or other expense recognition of any costs
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associated with asset write-ups in accordance with APB Nos. 16 and 17),
(f) non-cash provisions for reserves for discontinued operations, (g)
any gain or loss associated with the sale or write-down of assets not
in the ordinary course of business, (h) all cash expenses relating to
the Transactions, (i) any income or loss accounted for by the equity
method of accounting (except in the case of income to the extent of the
amount of cash dividends or cash distributions paid to the Borrower or
any of its Subsidiaries by the entity accounted for by the equity
method of accounting), (j) except for purposes of calculating "Excess
Cash Flow", cash payments made to GSCP permitted by subsection 8.10(ii)
hereof for the rendering of management consulting or financial advisory
services, (k) except for purposes of calculating "Excess Cash Flow",
cash payments made to management in respect of special bonuses and a
one time severance payment of $1,900,000 associated with the departure
of Xxxx Xxxx, (to the extent not prohibited pursuant to subsection
8.18) in accordance with the terms of their respective employment
agreements or otherwise, and (l) all nonrecurring restructuring or
other charges and transaction fees relating to the Telex/EVI Mergers,
including any such nonrecurring charges which may reasonably be
classified as restructuring charges but are not classified as
restructuring charges under GAAP. For the avoidance of doubt,
Consolidated EBITDA shall be determined on a pro forma basis for any
period prior to the Telex/EVI Mergers to include in the calculation
thereof the EBITDA of EVI and its Subsidiaries.
"Consolidated Fixed Charges": for any period the sum of
(without duplication) (i) the aggregate amount of Consolidated Interest
Expense for such period plus (ii) the amount, if any, by which the
aggregate principal amount of Revolving Credit Loans outstanding at the
beginning of such period shall exceed the aggregate amount of the
Revolving Credit Commitments scheduled to be in effect at the end of
such period after giving effect to any reductions of the Revolving
Credit Commitments scheduled to occur during such period (if any) plus
(iii) scheduled principal amortization of Term Loans during such period
(whether or not such payments are made), plus (iv) the aggregate amount
of all regularly-scheduled payments of principal of any other
Indebtedness (including, without limitation, the principal component of
any obligations under Financing Leases) made during such period plus
(v) the aggregate amount paid, or required to be paid, in cash in
respect of income taxes during such period (net of tax credits and
benefits, including tax benefits from net operating losses), excluding
up to $8,400,000 in calendar year ending December 31, 1999 in
connection with the settlement of an audit by the Internal Revenue
Service plus (vi) the aggregate amount of all Capital Expenditures made
during such period;
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in each case of the Borrower and its consolidated Subsidiaries
determined on a consolidated basis in accordance with GAAP."
3. Amendments to Subsection 4.4 Subsection 4.4(c) is hereby amended by
deleting such subsection and inserting in lieu thereof the following new
subsection 4.4(c):
"(c) Commencing June 30, 1998, and on the date three months after the
end of any fiscal year of the Borrower ending thereafter (including the fiscal
year or period ending December 31, 1998), the Borrower shall prepay, in
accordance with subsection 4.4(h), the Loans and cash collateralize the L/C
Obligations in an amount equal to 75% of the Borrower's Excess Cash Flow for the
fiscal year ending March 31, or December 31, as the case may be."
4. Amendments to Subsection 7.1 (a) Subsection 7.1(c) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
inserting in lieu thereof the following new subsection 7.1(c):
7.1 Financial Statements. Furnish to the Administrative Agent
for delivery to each Lender (and the Administrative Agent agrees to make and so
deliver such copies):
"(c) as soon as available, but in any event not later than the 30th day
following the end of each fiscal month of each fiscal year of the Borrower (or
the 45th day in the case of any such month ending on the last day of a fiscal
quarter), an unaudited consolidated balance sheet for Borrower and its
consolidated Subsidiaries as at the end of such month, a statement of cash
flows, and a related unaudited consolidated income statement for such month and
for the portion of the fiscal year through the end of such month, setting forth
in comparative form the budgeted figures (as adjusted consistent with past
practice) for the relevant periods and the figures as at the end of the
corresponding fiscal month of the previous fiscal year and, in the case of such
income statement, in comparative form the figures for the corresponding periods
of the previous fiscal year; all such financial statements delivered pursuant to
subsection 7.1(a) or (b) to be (and, in the case of any financial statements
delivered pursuant to subsection 7.1(b) shall be certified by a Responsible
Officer of the Borrower as being) complete and correct in all material respects
in conformity with GAAP and to be (and, in the case of any financial statements
delivered pursuant to subsection 7.1(b) shall be certified by a Responsible
Officer of the Borrower as being) prepared in reasonable detail in accordance
with GAAP applied consistently throughout the periods reflected
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therein and with prior periods that began on or after the Effective Date (except
as approved by such accountants or officer, as the case may be, and disclosed
therein, and except, in the case of any financial statements delivered pursuant
to subsection 7.1(b), for the absence of certain notes)."
5. Amendments to Subsection 7.2
(a) Subsection 7.2(b) is hereby amended by deleting "and" at
the end of paragraph (i), inserting "and" at the end of paragraph (ii), and
inserting the new paragraph (iii) at the end of paragraph(ii):
"(iii) setting forth the calculations required to determine
Borrower's Excess Cash Flow for the fiscal year or period ending on the
preceding March 31, or December 31, as the case may be"
(b) Subsection 7.2 is hereby amended by inserting the
following new clause (g) at the end thereof:
"(g) concurrently with the delivery of the financial statements and
reports referred to in subsections 7.1(a), (b), and (c) above, a narrative
discussion and analysis of the financial condition and results of operations of
the Borrower and its Subsidiaries for such period covered by such financial
documents, as compared to the portion of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower and its Subsidiaries for
the then current fiscal year covering such period and to the comparable period
of the previous year."
6. Amendments to Subsection 8.1. (a) Subsection 8.1 of the Credit
Agreement is hereby amended by (x) deleting the table set forth at the end of
paragraph (a) applicable to the periods after December 30, 1998 and substituting
in place thereof the following:
"Date Amount
----- ------
December 31, 1998 $45,000,000
March 31, 1999 $45,000,000
June 30, 1999 $46,000,000
September 30, 1999 $46,000,000
December 31, 1999 $49,000,000
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March 31, 2000 $50,000,000
June 30, 2000 $52,000,000
September 30, 2000 $54,000,000
December 31, 2000 $56,000,000
March 31, 2001 $58,000,000
June 30, 2001 $60,000,000
September 30, 2001 $62,000,000
December 31, 2001 $64,000,000
March 31, 2002 $66,000,000
June 30, 2002 $68,000,000
September 30, 2002 $70,000,000
December 31, 2002 $72,000,000
March 31, 2003 $74,000,000
June 30, 2003 $76,000,000
September 30, 2003 $78,000,000
December 31, 2003 $80,000,000
March 31, 2004 $82,000,000
June 30, 2004 $84,000,000
September 30, 2004 $86,000,000
December 31, 2004 $88,000,000"
(y) deleting the portion of the table at the end of paragraph (b)
applicable to the periods after December 30, 1998 and substituting in place
thereof the following:
"Date Ratio
----- -----
December 31, 1998 0.85 to 1
March 31, 1999 0.85 to 1
June 30, 1999 0.85 to 1
September 30, 1999 0.85 to 1
December 31, 1999 0.90 to 1
March 31, 2000 0.90 to 1
June 30, 2000 0.95 to 1
September 30, 2000 0.95 to 1
December 31, 2000 1.00 to 1
March 31, 2001 1.00 to 1
June 30, 2001 1.00 to 1
September 30, 2001 1.00 to 1
December 31, 2001 1.00 to 1
March 31, 2002 1.00 to 1
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June 30, 2002 1.00 to 1
September 30, 2002 1.00 to 1
December 31, 2002 1.00 to 1
March 31, 2003 1.05 to 1
June 30, 2003 1.05 to 1
September 30, 2003 1.05 to 1
December 31, 2003 1.05 to 1
March 31, 2004 1.05 to 1
June 30, 2004 1.05 to 1
September 30, 2004 1.05 to 1
December 31, 2004 1.05 to 1
(z) deleting the portion of the table at the end of paragraph (c)
applicable to the periods after December 30, 1998 and substituting in place
thereof the following:
"Date Ratio
----- -----
December 31, 1998 7.50 to 1
March 31, 1999 7.50 to 1
June 30, 1999 7.25 to 1
September 30, 1999 7.25 to 1
December 31, 1999 6.50 to 1
March 31, 2000 6.50 to 1
June 30, 2000 6.25 to 1
September 30, 2000 6.00 to 1
December 31, 2000 5.75 to 1
March 31, 2001 5.50 to 1
June 30, 2001 5.25 to 1
September 30, 2001 5.25 to 1
December 31, 2001 5.25 to 1
March 31, 2002 5.00 to 1
June 30, 2002 5.00 to 1
September 30, 2002 5.00 to 1
December 31, 2002 5.00 to 1
March 31, 2003 4.50 to 1
June 30, 2003 4.50 to 1
September 30, 2003 4.50 to 1
December 31, 2003 4.50 to 1
March 31, 2004 4.00 to 1
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June 30, 2004 4.00 to 1
September 30, 2004 4.00 to 1
December 31, 2004 4.00 to 1"
7. Amendments to Subsection 8.8. Subsection 8.8 of the Credit Agreement
is hereby amended by deleting the table set forth in its entirety and
substituting in place thereof the following:
"Test Period Amount
------------ ------
January 1, 1998 - December 31, 1998 $11,000,000
January 1, 1999 - December 31, 1999 $13,000,000
January 1, 2000 - December 31, 2000 $13,000,000
January 1, 2001 - December 31, 2001 $14,000,000
January 1, 2002 - December 31, 2002 $15,000,000
January 1, 2003 - December 31, 2003 $16,000,000
January 1, 2004 - December 31, 2004 $17,000,000
8. Amendment to Subsection 8.13 Subsection 8.13 is hereby amended by
deleting it in its entirety, and inserting the following new subsection 8.13:
"8.13 Limitations on Changes in Fiscal Year. Permit the fiscal
year of the Borrower to end on a day other than March 31 until March 31, 1998 or
December 31 thereafter."
9. Amendments to Schedule II. Schedule II to the Credit Agreement is
hereby amended by deleting the table set forth in its entirety, and inserting in
lieu thereof the table attached hereto as Schedule II.
10. Conditions to Effectiveness. Except as provided in clause (a)
below, this Amendment shall become effective on the date (the "Amendment
Effective Date") on which all of the following conditions have been satisfied or
waived:
(a) Execution and Delivery. Telex, the Administrative Agent and the
Required Lenders shall have executed and delivered to the Administrative Agent
this Amendment.
(b) Borrowing Certificate. The Administrative Agent shall have
received, with a photocopy for each Lender, a Borrowing Base Certificate setting
forth the Borrower's calculation of the Borrowing Base as of November 30, 1998,
substantially in the form of Exhibit J to the Credit Agreement, with appropriate
insertions and
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attachments, reasonably satisfactory in form and substance to the Administrative
Agent, executed by a Responsible Officer and the Secretary or any Assistant
Secretary of the Borrower.
11. General.
(a) Representation and Warranties. In order to induce the
Administrative Agent and the Lenders to enter into this Amendment, the Borrower
hereby represents and warrants to the Administrative Agent and the Lenders that
the representations and warranties of the Borrower contained in the Loan
Documents are true and correct in all material respects on and as of the
Amendment Effective Date (after giving effect hereto) as if made on and as of
the Amendment Effective Date (except where such representations and warranties
expressly relate to an earlier date in which case such representations and
warranties were true and correct in all material respects as of such earlier
date); provided that all references to the "Credit Agreement" in any Loan
Document shall be and are deemed to mean the Credit Agreement as amended hereby.
(b) Affirmation of Guarantees. Each Guarantor party hereto hereby
consents to the execution, delivery and effectiveness of this Amendment and
reaffirms its obligations under the Guarantee and Collateral Agreement.
(c) Payment of Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with this Amendment, any other documents prepared in
connection herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
(d) Counterparts. This Amendment may be executed in two or more
counterparts (including by facsimile transmission), each of which shall
constitute an original, but all of which when taken together shall constitute
but one instrument.
(e) Headings. Section headings used in this Amendment are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.
(f) Continuing Effect of Loan Documents. This Amendment shall not
constitute an amendment or waiver of any other provision of the Credit Agreement
not expressly referred to herein and shall not be construed as a waiver or
consent to any further or future action on the part of the Borrower that would
require a waiver or
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consent of the Required Lenders or Lenders, as the case may be, or the
Administrative Agent. Except as expressly amended, modified and supplemented
hereby, the provisions of the Credit Agreement and the other Loan Documents are
and shall remain in full force and effect.
(g) GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
TELEX COMMUNICATIONS, INC.
By:
--------------------------------------------
Title:
TELEX COMMUNICATIONS GROUP, INC.
By:
--------------------------------------------
Title:
TELEX COMMUNICATIONS
INTERNATIONAL, LTD.
By:
--------------------------------------------
Title:
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THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By:
--------------------------------------------
Title:
XXXXXX XXXXXXX SENIOR FUNDING, INC.
as Documentation Agent and as a Lender
By:
--------------------------------------------
Title:
THE TRAVELERS INSURANCE COMPANY
By:
--------------------------------------------
Title:
BANKBOSTON, N.A.
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By:
---------------------------------------------
Title:
THE BANK OF NEW YORK
By:
---------------------------------------------
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
-----------------------------------------------
Title:
XXXXXX FINANCIAL, INC.
By:
---------------------------------------------
Title:
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00
XXX XXXX XX XXXX XXXXXX
By:
---------------------------------------------
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By:
---------------------------------------------
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
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By:
---------------------------------------------
Title:
THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P.
BY: ING CAPITAL ADVISORS, INC., as
Investment Advisor
By:
---------------------------------------------
Title:
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By:
---------------------------------------------
Title:
CRESCENT/MACH I PARTNERS, L.P.
by: TCW ASSET MANAGEMENT
COMPANY
ITS INVESTMENT MANAGER
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By:
-----------------------------------------------
Title:
DEEPROCK & COMPANY
By: XXXXX XXXXX MANAGEMENT,
AS INVESTMENT ADVISOR
By:
---------------------------------------------
Title:
KZH-ING-1 LLC (formerly known as KZH
HOLDING CORPORATION II)
By:
---------------------------------------------
Title:
KZH PAMCO LLC
By:
---------------------------------------------
Title:
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INDOSUEZ CAPITAL FUNDING III, LIMITED
BY: INDOSUEZ CAPITAL, AS PORTFOLIO
ADVISOR
By:
---------------------------------------------
Title:
PAMCO CAYMAN LTD.
BY: HIGHLAND ASSET MANAGEMENT
COMPANY
AS COLLATERAL MANAGER
By:
---------------------------------------------
Title:
KZH-CRESCENT LLC
By:
-----------------------------------------------
Title:
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KZH-SOLEIL LLC
By:
---------------------------------------------
Title:
SENIOR DEBT PORTFOLIO
By: BOSTON MANAGEMENT &
RESEARCH, AS INVESTMENT
ADVISOR
By:
---------------------------------------------
Title:
ML CBO IV (CAYMAN) LTD.
BY: HIGHLAND CAPITAL MANAGEMENT L.P.
AS COLLATERAL MANAGER
By:
---------------------------------------------
Title:
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NATEXIS BANQUE BFCE
By:
---------------------------------------------
Title:
By:
---------------------------------------------
Title:
XXX CAPITAL FUNDING LP
BY: HIGHLAND CAPITAL MANAGEMENT L.P.
AS COLLATERAL MANAGER
By:
---------------------------------------------
Title:
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Schedule II
Applicable Margin and Commitment Fee Step-Downs
Step-Downs for Revolving Credit Loans, Tranche A Term Loans and
Commitment Fees
======================================================================================================================
Leverage Eurodollar Applicable ABR
Ratio Margin Applicable Margin Commitment Fee
----------------------------------------------------------------------------------------------------------------------
>=5.00 to 1 3.00% 2.00% 0.500%
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>=4.50 to 1 2.75% 1.75% 0.500%
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>=4.00 to 1 2.50% 1.50% 0.375%
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>=3.50 to 1 2.25% 1.25% 0.375%
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<3.50 to 1 2.00% 1.00% 0.375%
======================================================================================================================
Step-Down for Tranche B Term Loans
======================================================================================================================
Eurodollar Applicable
Leverage Ratio Margin ABR Applicable Margin
----------------------------------------------------------------------------------------------------------------------
>=4.00 to 1 3.50% 2.50%
----------------------------------------------------------------------------------------------------------------------
<4.00 to 1 3.25% 2.25%
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