AMENDMENT TO CREDIT AGREEMENT
EXHIBIT 10.1
EXECUTION COPY
AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT, dated as of October 10, 2007 (this “Amendment”), is made
by and between ADVANCED CIRCUITS, INC., a Colorado corporation (the “Borrower”), and COMPASS GROUP
DIVERSIFIED HOLDINGS LLC, a Delaware limited liability company (together with its successors and
permitted assigns, the “Lender”).
RECITALS
A. Borrower and Lender are parties to that certain Credit Agreement, dated as of May 16, 2006
(the “Original Credit Agreement”).
B. Borrower has informed Lender of its desire to increase the Term A Loans outstanding by
$47,000,000 (the “Additional Term A Loan”) in order to fund a special distribution to the
shareholders of Compass AC Holdings, Inc. (“Holdings”), and Lender is willing to so increase the
Term A Loans outstanding subject to the terms and conditions provided herein.
C. The Borrower and the Lender wish to amend the Original Credit Agreement to effect such
amendments, modifications and changes as are hereinafter set forth, including those that are
necessary to provide for the Additional Term A Loan, subject, however to all the terms and
conditions contained herein (the Original Credit Agreement, as amended by this Amendment, being
herein referred to as the “Credit Agreement”).
D. Unless the context as used herein requires otherwise, capitalized terms used but not
defined herein shall have the meanings given to them in the Original Credit Agreement.
AGREEMENTS
In order to effect such amendments and in consideration of the premises, and subject to the
terms and conditions, set forth herein, the Borrower and the Lender hereby agree as follows:
1. Conditions Precedent to Closing. On or prior to the date hereof, each of the
following conditions precedent shall have been satisfied and thereafter this Amendment shall be
binding upon and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns. Borrower agrees that the failure to satisfy any of the conditions set
forth in this Amendment shall in no way affect or impair the obligations of Borrower or be
construed as a waiver by the Lender of any of the Lender’s rights under the Credit Agreement.
(a) The Lender shall have received each of the following:
i. this Amendment, duly authorized and executed by the Borrower;
ii. an Amended and Restated Promissory Note, dated the date hereof and
otherwise in the form attached hereto as Exhibit A, duly executed by
Borrower;
iii. an Acknowledgement and Confirmation of Grantors, dated as of the date
hereof and otherwise in the form attached hereto as Exhibit B, duly executed
by Holdings and Borrower;
iv. resolutions of the board of directors of Borrower approving and authorizing
the execution, delivery and performance by Borrower of this Amendment and the other
Loan Documents contemplated hereby and the borrowing of the Additional Term A Loan
for the purposes specified herein, and signature and incumbency certificates of the
officers of Borrower executing this Amendment and the other Loan Documents delivered
in connection herewith, all certified by Borrower’s secretary or assistant secretary
as being in full force and effect without modification;
v. such other agreements, documents, instruments and certificates as the Lender
may reasonably request; and
vi. in connection with the advance of the Additional Term A Loan, cash in the
amount of $705,000, being the additional commitment fee payable pursuant to Section
2.7.2 of the Credit Agreement.
(b) Borrower shall have duly and properly performed, complied with and observed each of
its covenants, agreements and obligations contained in this Amendment.
2. Amendments.
(a) Section 1.1 of the Original Credit Agreement is hereby amended by adding the
following defined terms:
Amendment Date means October 10, 2007.
Special Distributions means cash distributions on or after the Amendment Date from the
Borrower to Holdings in the amount of $47,000,000 and from Holdings to or for the benefit of the
shareholders of Holdings in the aggregate amount of $47,000,000.
(b) Section 1.1 of the Original Credit Agreement is hereby amended by replacing the
definitions of Guarantee and Collateral Agreement, Term A Loan Commitment, Term
A Loan Maturity Date, Term A Loans, Term B Loan Commitment, Term B Loan
Maturity Date and Termination Date in their entirety with the following defined terms:
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Guarantee and Collateral Agreement means the Guarantee and Collateral
Agreement, dated as of the Closing Date, by each Loan Party in favor of Lender, as
amended, restated or otherwise modified from time to time.
Term A Loan Commitment means, as of the Closing Date, $23,000,000 and,
on and after the Amendment Date, $54,562,500 plus such additional amounts, if any,
that Lender may, in its sole discretion, from time to time advance as Term A Loans
in connection with one or more Acquisitions; provided, however, that no such
additional Term A Loan Commitment shall exceed that amount which would result in
Borrower’s: (i) Senior Debt to EBITDA Ratio exceeding 3.0 to 1.0; or (ii) Total Debt
to EBITDA Ratio exceeding 4.0 to 1.0, with both such ratios calculated as of the
last day of the Fiscal Quarter immediately proceeding the Fiscal Quarter in which
such additional amount is to be advanced and on a pro forma basis based on EBITDA
for the Computation Period as if the applicable Acquisition had been consummated on
the calculation date, with such adjustments thereto as may be determined necessary
or appropriate by Lender.
Term A Loan Maturity Date means October 10, 2013 or such earlier date
on which the Commitments terminate pursuant to Section 8.
Term A Loans means the principal amount outstanding from time to time
of loans from Lender to Borrower pursuant to the Term A Loan Commitment.
Term B Loan Commitment means $14,000,000 plus, after the Closing Date,
such additional amounts, if any, that Lender may, in its sole discretion, from time
to time advance as Term B Loans in connection with one or more Acquisitions;
provided, however, that no such additional Term B Loan Commitment shall exceed that
amount which would result in Borrower’s Total Debt to EBITDA Ratio exceeding 4.0 to
1.0, with such ratio to be calculated as of the last day of the Fiscal Quarter
immediately proceeding the Fiscal Quarter in which such additional amount is to be
advanced and on a pro forma basis based on EBITDA for the Computation Period as if
the applicable Acquisition had been consummated on the calculation date, with such
adjustments thereto as may be determined necessary or appropriate by Lender.
Term B Loan Maturity Date means October 10, 2014 or such earlier date
on which the Commitments terminate pursuant to Section 8.
Termination Date means October 10, 2013 or such earlier date on which
the Revolving Loan Commitment terminates pursuant to Section 2.9 or
Section 8.
(c) Section 2.1.2 of the Original Credit Agreement is hereby amended and restated so
as to read in its entirety as follows:
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2.1.2 Term Loan Commitments.
Lender agrees to make (a) a Term A Loan to Borrower on the Closing Date in an
amount equal to $23,000,000 and, on the Amendment Date, in an amount equal to
$47,000,000, and (b) a Term B Loan to Borrower on the Closing Date in an amount
equal to $14,000,000. Except as expressly provided in this Section 2.1.2,
the Lender shall have no obligation to make Term Loans after the Closing Date. Term
Loans which are repaid or prepaid by Borrower, in whole or in part, may not be
re-borrowed.
(d) Section 2.10.2 of the Original Credit Agreement is hereby amended and restated so
as to read in its entirety as follows:
2.10.2 Term A Loans.
The Term A Loans shall be subject to annual amortization in the principal
amount of $2,728,125, with each such annualized amount being due and payable in
equal quarterly installments of $682,031.25 on the last day of each Fiscal Quarter,
commencing December 31, 2007 and continuing to the Term Loan A Maturity Date, on
which date the then outstanding Term A Loans shall be paid in full.
(e) The first sentence of Section 7.4 of the Original Credit Agreement is hereby
amended and restated so as to read in its entirety as follows:
7.4 Restricted Payments.
Not, and not permit any other Loan Party to, (a) make any dividend or other
distribution to any of its equity holders other than, on or after the Amendment
Date, the Special Distributions, (b) purchase or redeem any of its equity interests
or any warrants, options or other rights in respect thereof, (c) except for
Permitted Management Fees and Permitted Transaction Services Fees, pay any
management fees or similar fees to any of its equity holders or any Affiliate
thereof, (d) make any redemption, prepayment (whether mandatory or optional),
defeasance, repurchase or any other payment in respect of any Non-Senior Debt or (e)
set aside funds for any of the foregoing.
(f) Section 7.7 of the Original Credit Agreement is hereby amended and restated so as
to read in its entirety as follows:
7.7 Use of Proceeds.
Use the proceeds of the Loans solely to prepay or repay the Debt to be Repaid,
for working capital, for Capital Expenditures, to fund the Special Distributions and
for other general business purposes of Borrower and the Subsidiaries; and not use or
permit any proceeds of any Loan to be used, either directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any
Margin Stock.
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(g) Section 7.14.2 of the Original Credit Agreement is hereby amended and restated so
as to read in its entirety as follows:
7.14.2 Senior Debt to EBITDA Ratio.
Not permit the Senior Debt to EBITDA Ratio as of the last day of any
Computation Period to exceed 3.0:1.0; provided, however, that the applicable maximum
for the Computation Periods ending December 31, 2007, March 31, 2008, June 30, 2008
and September 30, 2008 shall be 3.5:1:0 rather than 3.0:1.0.
(h) ANNEX I of the Original Credit Agreement is hereby amended and restated so as to
read in its entirety as follows:
ANNEX I
Commitments and Pro Rata Shares
Commitments and Pro Rata Shares
| Revolving | ||||||||||||||||||||||||||||||||
| Commitment | Pro Rata | Term A Loan | Pro Rata | Term B Loan | Pro Rata | |||||||||||||||||||||||||||
| Lender | Amount | Share | Amounts | Share | Amounts | Share | ||||||||||||||||||||||||||
Compass Group Diversified Holdings LLC |
$ | 14,000,000 | 100 | % | $ | 54,562,500 | 100 | % | $ | 14,000,000 | 100 | % | ||||||||||||||||||||
TOTALS |
$ | 14,000,000 | 100 | % | $ | 54,562,500 | 100 | % | $ | 14,000,000 | 100 | % | ||||||||||||||||||||
3. Representations and Warranties. Borrower hereby represents and warrants to
the Lender that:
(a) the execution, delivery and performance by Borrower of this Amendment are within the
corporate powers of Borrower, have been duly authorized by all necessary company action and require
no action by or in respect of, or filing with, any governmental or regulatory body, agency or
official;
(b) this Amendment has been duly executed and delivered and constitutes the legal, valid and
binding obligation of Borrower enforceable in accordance with its terms, subject to the effects of
(i) bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditor’s
rights generally and (ii) general equitable principles (regardless of whether enforcement is sought
in equity or at law); and
(c) as of the date hereof, and after giving effect to this Amendment, all of the covenants,
representations and warranties of Borrower set forth in the Credit Agreement are true and correct
in all material respects, and no Event of Default under or within the meaning of the Credit
Agreement has occurred and is continuing.
4. Costs and Expenses. Borrower agrees to pay all reasonable costs, internal charges
and out-of-pocket expenses (including reasonable attorneys’ fees and costs) incurred by the Lender
in connection with the preparation, execution and enforcement of this Amendment.
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5. Governing Law. Each of the undersigned agrees that this Amendment and the rights
and obligations of all parties hereunder shall be governed by and construed under the substantive
laws of the State of New York, without reference to the conflict of laws principles of such state.
6. Headings. Section 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.
7. Counterparts. This Amendment may be executed by one or more of the parties hereto
on any number of separate counterparts and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
8. Entire Agreement, Modification, Benefit. The Credit Agreement shall constitute the
entire agreement of the Lender and the Borrower and no provision thereof (including of this
Amendment) may be modified, deleted or amended in any manner except by agreement in writing
executed by each of Lender and Borrower. Except to the extent modified by this Amendment, all of
the covenants, representations, warranties, conditions, agreements and other terms contained in the
Original Credit Agreement and the other Loan Documents shall be and remain in full force and effect
and the same are hereby ratified and confirmed as of the date hereof. All such terms of the
Original Credit Agreement, as amended by this Amendment, are and shall remain binding upon, inure
to the benefit of and be enforceable by the Lender and the Borrower and their respective successors
and assigns. In the event of any inconsistency or conflict between this Amendment and the Original
Credit Agreement, the covenants, representations, warranties, conditions, agreements and other
terms of this Amendment shall govern and control.
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The parties hereto have caused this Amendment to be duly executed and delivered by their duly
authorized officers as of the date first set forth above.
| ADVANCED CIRCUITS, INC., as Borrower |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | President | |||
| COMPASS GROUP DIVERSIFIED HOLDINGS LLC, as Lender |
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| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Chief Financial Officer | |||
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Exhibit A
Form of
Amended and Restated Promissory Note
Form of
Amended and Restated Promissory Note
| $82,562,500 | October 10, 2007 | |
| Westport, Connecticut |
The undersigned (“Borrower”), for value received, promises to pay to the order of
Compass Group Diversified Holdings LLC (“Lender”) at its principal office of 00 Xxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, the aggregate unpaid amount of all Loans made to Borrower by
Lender pursuant to the Credit Agreement referred to below, such principal amount to be payable on
the dates set forth in the Credit Agreement.
Borrower further promises to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such Loan is paid in full, payable at the rate(s) and at the time(s) set
forth in the Credit Agreement. Payments of both principal and interest are to be made in lawful
money of the United States of America.
This Note evidences indebtedness incurred under, and is subject to the terms and provisions
of, that certain Credit Agreement, dated as of May 16, 2006 and amended as of the date hereof (as
amended and as may be further amended or otherwise modified from time to time, the “Credit
Agreement”; terms not otherwise defined herein are used herein as defined in the Credit
Agreement), between Borrower and Compass Group Diversified Holdings LLC, as lender, to which Credit
Agreement reference is hereby made for a statement of the terms and provisions under which this
Note may or must be paid prior to its due date or its due date accelerated.
This Note evidences, in part, indebtedness of the undersigned previously evidenced by (i) that
certain Promissory Note dated May 16, 2006 in the original principal amount of $51,000,000 (the
“Prior Note”), which Prior Note is replaced by this Note; provided, however, that this Note shall
not be construed as evidence of repayment or readvance of the indebtedness evidenced by the Prior
Note, it being the intention of the undersigned, and, by its acceptance, Lender, that the
indebtedness evidenced by this Note includes the indebtedness evidenced by the Prior Note. This
Note shall not be construed as a novation or be construed in any manner as an extinguishment of the
obligations arising under the Prior Note or to affect the priority of the security interests, liens
or mortgages granted in connection with the Prior Note.
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Exhibit A-1
This Note is made under and governed by the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
| ADVANCED CIRCUITS, INC. | ||||
| By: | /s/ Xxxx Xxxxxx | |||
| Title: | President | |||
Exhibit A-2
Exhibit B
Form of
Acknowledgment and Confirmation of Grantors
Form of
Acknowledgment and Confirmation of Grantors
Each of the undersigned hereby acknowledges and confirms the terms of that certain Amendment
to Credit Agreement, dated as of the date hereof (the “Amendment”), between Advanced Circuits, Inc.
(“Borrower”) and Compass Group Diversified Holdings LLC (“Lender”). Each of the undersigned
further acknowledges and agrees that (i) the execution of the Amendment by Borrower, the advance of
additional Term A Loans pursuant thereto, and delivery of the Amendment to the Lender will not
adversely affect or impair any of its obligations to the Lender under that certain Guarantee and
Collateral Agreement dated as of May 16, 2006 among the Grantors party thereto and Lender (the
“Guaranty”), and (ii) the Guaranty is in full force and effect as of the date hereof and the same
is hereby ratified and confirmed.
Dated:
October 10, 2007
| COMPASS AC HOLDINGS, INC., as a Grantor |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Chief Financial Officer | |||
| ADVANCED CIRCUITS, INC., as a Grantor |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Title: | President | |||
Exhibit B-1
