EXHIBIT 10.10
FIRST AMENDMENT
FIRST AMENDMENT (this "Amendment"), dated as of December 15,
1998, among Labtec, Inc. (formerly known as Labtec Enterprises, Inc.) (the
"Borrower"), the lending institutions party to the Credit Agreement referred to
below (each a "Bank" and, collectively, the "Banks"), and Bankers Trust Company,
as Agent (the "Agent"). All capitalized terms used herein and not otherwise
defined herein shall have the respective meanings provided such terms in the
Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Agent are party to a
Credit Agreement, dated as of October 7, 1997 (as amended, modified and
supplemented prior to the date hereof, the "Credit Agreement"); and
WHEREAS, the Borrower and the Banks have agreed to amend the
Credit Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, it is agreed:
1. In order to induce the Banks to enter into this Amendment,
the Borrower hereby agrees that at all times from and after the Amendment
Effective Date (as hereinafter defined), unless an increase is otherwise
consented to in writing by the Required Banks, the sum of (i) the aggregate
outstanding principal amount of Revolving Loans and Swingline Loans and (ii) the
Letter of Credit Outstandings shall not exceed the lesser of the Total Revolving
Loan Commitment and $7,500,000.
2. Section 8.08(a) of the Credit Agreement is hereby amended
by deleting the reference to "$2,200,000" appearing opposite the date March 31,
1999 in the table set forth therein and by inserting in lieu thereof a reference
to "2,900,000."
3. Section 8.09 of the Credit Agreement is hereby amended by
deleting the portion of the table set forth in such Section from September 30,
1998 through March 31, 1999 and inserting in lieu thereof the following:
"September 30, 1998 $5,800,000
December 31, 1998 $5,600,000
March 31, 1999 $5,500,000"
4. Section 8.10 of the Credit Agreement is hereby amended by
deleting the portion of the table set forth in such Section from September 30,
1998 through March 31, 1999 and inserting in lieu thereof the following:
"September 30, 1998 1.7:1.0
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December 31, 1998 1.7:1.0
March 31, 1999 1.7:1.0"
5. Each of the Banks hereby waives compliance by the Borrower
with Section 8.10 of the Credit Agreement solely for the Test Period ending June
30, 1998, and further waives any Default or Event of Default that may exist as a
result of the Borrower's failure to comply with such Section 8.10 for such Test
Period.
6. Section 8.11 of the Credit Agreement is hereby amended by
deleting the portion of the table set forth in such Section from December 31,
1998 through March 31, 1999 and inserting in lieu thereof the following:
"December 31, 1998 5.8:1.0
March 31, 1999 5.9:1.0"
7. Each of the parties hereto hereby agree that for all
purposes of the Credit Agreement, Consolidated EBIT referred to therein shall be
determined without giving effect to the charges for additions to reserves
identified on Schedule 1 hereto, provided that if such reserves are used in
periods following the time when such reserves are taken, then in such subsequent
periods consolidated EBIT shall be reduced by the amount of the reserves so
used.
8. In order to induce the Banks to enter into this Amendment,
the Borrower hereby agrees to pay, on the Amendment Effective Date, to the Agent
for the account of each Bank an amount equal to 1/4 of 1% of the sum of such
Bank's outstanding Term Loans and the Total Revolving Loan Commitment.
9. In order to induce the Banks to enter into this Amendment,
the Borrower hereby represents and warrants that (i) no Default or Event of
Default exists as of the Amendment Effective Date (as defined below) after
giving effect to this Amendment and (ii) on the Amendment Effective Date, both
before and after giving effect to this Amendment, all representations and
warranties contained in the Credit Agreement or in the other Credit Documents
are true and correct in all material respects.
10. This Amendment shall become effective on the date (the
"Amendment Effective Date") when the Required Banks and the Borrower shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the same to
the Agent at its Notice Office.
11. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
12. This Amendment may be executed in any number of
counterparts and by the
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different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Borrower and the Agent.
13. All references in the Credit Agreement and each of the
Credit Documents to the Credit Agreement shall be deemed to be references to the
Credit Agreement after giving effect to this Amendment.
14. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
hereof.
LABTEC ENTERPRISES, INC.
By: /s/ Rodger R. Krouse
-------------------------------
Name: Rodger R. Krouse
Title:
BANKERS TRUST COMPANY, individually
and as Agent
By: /s/ Mary Kay Coyle
-------------------------------
Name: Mary Kay Coyle
Title: Managing Director
LASALLE NATIONAL BANK
By:
-------------------------------
Name:
Title:
ARCHIMEDES FUNDING L.L.C
By: ING CAPITAL ADVISORS INC.,
as Collateral Manager
By: /s/ Michael D. Hatley
-------------------------------
Name: Michael D. Hatley
Title: Senior Vice President
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
-------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President
& Director
SCHEDULE I
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Charges to be excluded in computing Consolidated EBIT
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Amount/Description | Period in which taken |
------------------ | ---------------------- |
| |
$210,000 - Addition to Bad Debt Reserve | 3rd and/or 4th Quarter of 1998 |
$500,000 - Addition to Inventory Reserve | 3rd and/or 4th Quarter of 1998 |
$290,000 - Addition to Reserve for Credits and Allowances | 3rd and/or 4th Quarter of 1998 |
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