CONSENT AND AMENDMENT NO. 10
Dated as of June 30, 1995
to
RESTATED AND AMENDED CREDIT AGREEMENT
Dated as of July 27, 1992
This Consent and Amendment No. 10 ("Amendment") dated
as of June 30, 1995 is entered into among VSI Corporation, a
Delaware corporation ("VSI"), Fairchild Industries, Inc., a
Delaware corporation ("FII"), RHI Holdings, Inc., a Delaware
corporation ("RHI") and the undersigned "Senior Lenders" (as
defined in the Credit Agreement identified below). Capitalized
terms used herein without definition are used herein as defined
in the Credit Agreement.
PRELIMINARY STATEMENT. VSI, FII, RHI, the Senior
Lenders, the Agents, and the Administrative Agent are parties to
that certain Restated and Amended Credit Agreement dated as of
July 27, 1992, as amended (the "Credit Agreement"). VSI has
requested the amendment of the Credit Agreement in certain
respects as more particularly described in the letter dated
August 15, 1995, a copy of which is attached hereto as Exhibit 1
and made a part hereof (the "Amendment Request") and RHI, FII and
VSI have requested the consent of their respective Requisite
Senior Lenders to certain cash capital contributions to FII and
VSI and the use by VSI thereof for Consolidated Capital
Expenditures, as more particularly described in the Amendment
Request.
Subject to the terms and conditions stated herein, (i)
the undersigned Senior Lenders of VSI, FII and RHI comprising at
least the Requisite Senior Lenders of VSI, FII and RHI,
respectively, have agreed to further amend the Credit Agreement
as set forth in Section 1 hereof and (ii) the Senior Lenders of
FII comprising at least the Requisite Senior Lenders of FII, the
Senior Lender of RHI, and the Senior Lenders of VSI comprising at
least the Requisite Senior Lenders of VSI have agreed to consent
to certain matters as described in Section 2 hereof.
SECTION 1. Amendments to the Credit Agreement.
Effective as of June 30, 1995, subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the Credit
Agreement is hereby amended as follows:
1.1 Article IX is amended to add the following
provision at the end thereof:
SECTION 9.13 TFC/RHI Consolidated Liquidity. RHI
shall deliver to the Administrative Agent and the Senior Lenders,
within ten (10) days after the end of each fiscal quarter of each
Fiscal Year, commencing with the fiscal quarter ending on
December 31, 1995, an Officers' Certificate of RHI in the form
attached to Amendment No. 10 to this Agreement as Exhibit 2
setting forth the calculation of the sum of the amounts set forth
in Section 14.01(r) for such fiscal quarter.
1.2 Section 12.07 is amended to delete that portion of
the schedule of covenant test dates commencing with Fourth
Quarter, 1995 and ending with Fourth Quarter, 1996 in its
entirety and substitute the following therefor:
Fourth Quarter, 1995 60,000,000
First Quarter, 1996 60,000,000
Second Quarter, 1996 65,000,000
Third Quarter, 1996 70,000,000
Fourth Quarter, 1996 80,000,000
1.3 Section 14.01 is amended to add the following
provisions at the end thereof:
(q) Sale of Fairchild Communications Services Company;
Equity and Debt Offerings. VSI and/or Fairchild Communications
Services Company shall have failed to notify the Administrative
Agent in writing on or before October 31, 1995 that the
appropriate Borrower or Subsidiary of a Borrower has engaged one
or more investment bankers of recognized national standing with
respect to accomplishing and consummating an initial public
offering of equity securities and/or a public offering of debt
securities of Fairchild Communications Services Company, or a
Subsidiary of FII or VSI holding the equity securities or assets
of Fairchild Communications Services Company, and a public
offering of debt securities of a Subsidiary of FII or VSI holding
directly or indirectly those assets which comprise VSI's D-M-E
division.
(r) TFC/RHI Consolidated Liquidity. The sum, as of
any given date of determination, of (i) the amount of
consolidated Cash and Cash Equivalents of TFC and RHI plus (ii)
that portion of the VSI Directed Reduction Amount then available
for borrowing and permitted to be transferred or remitted to RHI
minus (iii) the amount of Cash and Cash Equivalents of TFC and
RHI which is then required to secure Contractual Obligations of
TFC or RHI (a) as of December 31, 1995 shall be less than
$30,000,000 or (b) as of March 31, 1996 or the last day of each
fiscal quarter of TFC thereafter shall be less than $10,000,000.
(s) VSI Default as to Publicly Held Indebtedness of
Affiliates. If such Borrower is VSI, (i) TFC shall fail to make
any payment when due on any Indebtedness of TFC owing with
respect to its (A) 12 1/4% Senior Subordinated Notes due 1996,
(B) 12% Intermediate Subordinated Debentures due 2001, (C) 13
1/8% Subordinated Debentures due 2006, or (D) 13% Junior
Subordinated Debentures due 2007, (ii) RHI shall fail to make any
payment when due on any Indebtedness of RHI owing with respect to
the Senior Subordinated Debentures, or (iii) FII shall fail to
make any payment when due on any Indebtedness of FII owing with
respect to the FII Senior Notes; or any breach, default or event
of default shall occur under any instrument, agreement or
indenture pertaining to any Indebtedness described in clause (i),
(ii), or (iii) above, if the effect thereof (with or without the
giving of notice or lapse of time or both) is to accelerate (as
distinguished from imposing a requirement to offer to purchase),
or permit the holder(s) of such Indebtedness to accelerate (as
distinguished from imposing a requirement to offer to purchase),
the maturity of any such Indebtedness.
SECTION 2. Consents.
2.1 The undersigned Senior Lender of RHI hereby
consents to RHI's cash contribution, in exchange for FII Series B
Preferred, to FII of the amount required, not to exceed $500,000,
by VSI to make the incremental Consolidated Capital Expenditures
referenced in the parenthetical exception to the provisions of
clause (i)(A) of the proviso at the end of Section 11.14 of the
Agreement and the undersigned Senior Lenders of FII hereby
consent to the contribution of such amount received by FII as
aforesaid to VSI as paid-in capital; provided that (i) such
amount received by VSI is used to make Consolidated Capital
Expenditures for the Fiscal Year ending in 1995 and (ii) the FII
Series B Preferred issued in exchange for such capital
contribution is pledged to secure the FII Senior Notes under the
Senior Note Collateral Documents.
2.2 The undersigned Senior Lenders of VSI hereby
consent to VSI's use of up to $500,000 received by VSI as a cash
contribution from FII to VSI's paid-in capital, as referenced in
Section 2.1 above, to make Consolidated Capital Expenditures for
the Fiscal Year ending in 1995 in excess of the amount that would
otherwise be permissible pursuant to clause (A) of the proviso
included in Section 11.14 of the Credit Agreement.
SECTION 3. Conditions Precedent to Effectiveness of
this Amendment. This Amendment shall become effective as of June
30, 1995 if, and only if, (i) the Administrative Agent shall have
received on or before September 15, 1995, (a) a facsimile or
original executed copy of this Amendment executed by RHI, FII,
VSI, and Senior Lenders comprising at least the Requisite Senior
Lenders of each of RHI, FII and VSI and (b) a facsimile or
original executed copy of a Reaffirmation Agreement and
Acknowledgment in the form attached hereto as Exhibit 3 executed
by the parties referenced therein and (ii) the Administrative
Agent shall have received on September 15, 1995, for the benefit
of each Senior Lender executing and delivering this Amendment on
or before such date, payment of a fee in the amount of one-
quarter of one percent (0.25%) of the sum of (a) the Facility G
Commitment of such Senior Lender plus (b) the outstanding
principal balance as of September 15, 1995 of the Series VII Term
Loans payable to such Senior Lender plus (c) the outstanding
principal balance as of September 15, 1995 of the Series VIII
Term Loans payable to such Senior Lender.
SECTION 4. Representations and Warranties. RHI, FII
and VSI hereby represent and warrant as follows:
4.1 This Amendment and the Credit Agreement as
previously executed and amended and as amended hereby constitute
legal, valid and binding obligations of RHI, FII and VSI and are
enforceable against RHI, FII and VSI in accordance with their
terms.
4.2 No Event of Default or Potential Event of Default
exists or would result from any of the transactions contemplated
by this Amendment.
4.3 Upon the effectiveness of this Amendment, RHI, FII
and VSI each hereby reaffirms all covenants, representations and
warranties made in the Credit Agreement to the extent the same
are not amended hereby and agrees that all such covenants,
representations and warranties shall be deemed to have been
remade as of the date this Amendment becomes effective (unless a
representation and warranty is stated to be given on and as of a
specific date, in which case such representation and warranty
shall be true, correct and complete as of such date).
SECTION 5. Reference to and Effect on the Credit
Agreement.
5.1 Upon the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import shall
mean and be a reference to the Credit Agreement, as amended
hereby, and each reference to the Credit Agreement in any other
document, instrument or agreement executed and/or delivered in
connection with the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended hereby.
5.2 Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed.
5.3 The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or
remedy of any Senior Lender or Agent or the Administrative Agent
under the Credit Agreement, the Notes or any of the other Loan
Documents, nor constitute a waiver of any provision contained
therein, except as specifically set forth herein.
SECTION 6. Execution in 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 to be an original and all
of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of this Amendment
by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION 7. Governing Law. This Amendment shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 8. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized as of the date first above written.
FAIRCHILD INDUSTRIES, INC.
By: Karen L. Schneckenburger
Title: Treasurer
VSI CORPORATION
By: Karen L. Schneckenburger
Title: Treasurer
RHI HOLDINGS, INC.
By: Karen L. Schneckenburger
Title: Treasurer
CITICORP NORTH AMERICA, INC.
By: Emily Rosensheck
Title: Vice President
BANK OF NOVA SCOTIA
By: A. S. Norsworthy
Title: Assistant Agent
NATIONSBANK, N.A.
By: John D. Mindnick
Title: Senior Vice President
GENERALE BANK NEW YORK
By: Eddie Matthews
By: F. Mauchant
Title: Senior Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, CHICAGO BRANCH
By: Brady S. Sadek
Title: Vice President & General
Manager
THE MITSUBISHI BANK, LIMITED
By: Toshinori Yagura
Title: General Manager
CANADIAN IMPERIAL BANK OF COMMERCE
By: Mary Kate Miller
Title: Authorized Signatory
PILGRIM PRIME RATE TRUST
By: Kathleen Lenarici
Title: Assistant Portfolio Manager
UNION BANK
By: Patrick M. Cassidy
Title: Vice President
WELLS FARGO BANK, N.A.
By: Linda Spradling
Title: Vice President
SENIOR DEBT PORTFOLIO
By: Jeffrey S. Garner
Title: Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
By: David Bouhl, F.V.P.
Title: Head of Corporate Banking
Chaicago
EXHIBIT 1
to Consent and Amendment No. 10
Dated as of June 30, 1995
AMENDMENT REQUEST
Attached
EXHIBIT 2
to Consent and Amendment No. 10
Dated as of June 30, 1995
FORM OF TFC/RHI CONSOLIDATED LIQUIDITY OFFICERS' CERTIFICATE
To: Citicorp North America, Inc.,
as Administrative Agent and
the Senior Lenders under the
Restated and Amended Credit
Agreement dated as of July 27, 1992
(the "Credit Agreement")
Dated: [insert date]
The undersigned hereby certifies that the calculation set
forth below evidencing compliance with Section 14.01(r) of the
Credit Agreement is complete and accurate as of the fiscal
quarter of The Fairchild Corporation ending on ________, 199_.
TFC/RHI consolidated Cash and
Cash Equivalents $____________
plus
Non-Restricted VSI Directed
Reduction Amount $____________
minus
Restricted Cash and Cash Equivalents
of TFC/RHI ($____________)
$_____________
_____________________
Name:
Title:
EXHIBIT 3
to Consent and Amendment No. 10
Dated as of June 30, 1995
FORM OF REAFFIRMATION AGREEMENT AND ACKNOWLEDGMENT
Attached
AMENDMEN.10 September 15, 1995