SEVENTH AMENDMENT
THIS SEVENTH AMENDMENT (this "Seventh Amendment") is entered into as
of March 31, 1994, by and among MAGNETEK, INC., a Delaware corporation (the
"Company"), and the insurance companies and institutions listed on the signature
pages hereof (each, a "Purchaser" and collectively, the "Purchasers"). All
capitalized terms used herein and not otherwise defined shall have the
respective meanings provided for such terms in the Senior Note Purchase
Agreement referred to below.
RECITALS
WHEREAS, the Purchasers and the Company are parties to the Note
Purchase Agreement dated as of June 30, 1989, as amended by a First Amendment
thereto dated June 29, 1990, by a Second Amendment thereto dated as of
December 28, 1990, by a Third Amendment thereto dated as of February 27, 1991,
by a Fourth Amendment thereto dated as of September 11, 1991, by a Fifth
Amendment thereto dated as of September 30, 1991 and by a Sixth Amendment
thereto dated as of November 26, 1991 (as so amended, the "Senior Note Purchase
Agreement");
WHEREAS, the Company desires to amend certain provisions of the Senior
Note Purchase Agreement and has requested certain consents and waivers
thereunder, and
WHEREAS, the Purchasers agree to enter into this Seventh Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. AMENDMENTS TO SENIOR NOTE PURCHASE AGREEMENT.
(a) Section 7.7C of the Senior Note Purchase Agreement is hereby
amended to delete the period at the end of the sentence and to insert the
following additional language:
"; provided, however, that (w) for the fiscal quarter ending
March 31, 1994, the aforesaid ratio shall not be less than .8 to
1; (x) for the two fiscal quarters ending June 30, 1994, the
aforesaid ratio shall not be less than .88 to 1; (y) for the
three fiscal quarters ending September 30, 1994, the aforesaid
ratio shall not be less than .9 to 1; (z) for the four fiscal
quarters ending December 31, 1994, the aforesaid ratio shall not be
less than .92 to 1; and thereafter, at the last day of each fiscal
quarter ending on or after March 31, 1995, the aforesaid ratio shall
not be less than 1.50 to 1 for the period of four fiscal quarters
ending on such day."
(b) The following sentence shall be added at the end of the
definition of "CONSOLIDATED NET WORTH" in Section 8.2:
"Notwithstanding the foregoing, there shall be added to
Consolidated Net Worth, for purposes of calculating the amount
thereof at all times through and including the fiscal quarter
ending December 31, 1994, an amount equal to the difference, if
positive, between (i) the net, after-tax restructuring charge in
the amount of $42,156,000 incurred by the Company in the fiscal
quarter ended December 31, 1993 less (ii) the aggregate
cumulative amount of any net after-tax gain theretofore realized
by the Company in respect of dispositions of any of the
Subsidiaries or divisions selected by the Company as operations
for which divestiture is planned identified as such on Schedule l
attached hereto (collectively, the "Sold Businesses")."
(c) The definition of "Restricted Subsidiary" in Section 8.2 is
hereby amended by deleting in its entirety clause (a) thereof and substituting
in lieu thereof the following:
"(a) the depreciated book value of the total assets of all
Restricted Subsidiaries which at such time do not meet the
requirements of clause (ii)(x) of the foregoing subsection A
(collectively, the "Foreign Restricted Subsidiaries") shall
exceed 25% of Consolidated Total Assets or"
2. REDESIGNATION OF UNRESTRICTED SUBSIDIARIES. The Company and the
Purchasers hereby agree to the redesignation by the Company of all of its
Unrestricted Subsidiaries other than (i) MagneTek Leasing Corporation and
(ii) MagneTek Credit Corporation from "Unrestricted Subsidiaries" to "Restricted
Subsidiaries"; provided, however, that such redesignation shall not be effective
(A) prior to the effective date therefor indicated in the notice the Company
shall provide to the Purchasers and (B) unless and until, at the time thereof
and after giving effect thereto on a PRO FORMA basis (x) no Default or Event of
Default shall have occurred and be continuing or
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shall result from such redesignation and (y) the Company shall be in compliance
with the provisions of Sections 7.4B(3) and 7.5F as if the Funded Debt and Liens
of such newly Restricted Subsidiaries had been incurred on the date of such
redesignation. A list of all Subsidiaries which potentially may be so
redesignated as Restricted Subsidiaries is attached hereto as Schedule 2 to this
Seventh Amendment.
3. CERTAIN CONSENTS AND WAIVERS.
(a) The Purchasers hereby agree, notwithstanding any contrary
provision in Section 7.11 or 7.12 of the Senior Note Purchase Agreement, to the
disposition by the Company of the stock or assets of the Sold Businesses,
provided the net proceeds of each such disposition are applied as soon as is
reasonably practicable to the reduction of outstanding Debt of the Company under
(i) the Company's $200 Million Revolving Credit Agreement dated as of April 28,
1993 (the "Credit Agreement") or (ii) the Notes (in accordance with Section 4.2
of the Note Purchase Agreement), and in any event are so applied within two days
after receipt thereof, to the extent such proceeds are to be applied to repay
Debt outstanding under the Credit Agreement, and within 35 days after receipt
thereof, to the extent such proceeds are to be applied to prepay the Notes.
(b) To the extent the disposition of any Sold Business requires the
release of any Collateral, the Purchasers hereby agree and irrevocably consent
that such Collateral may be released without further action or consent by the
Purchasers, such consent and release to be effective only to the extent and at
such time as the Agent and the Banks under the Credit Agreement shall have
consented to such release. The Company agrees to notify the Purchasers promptly
following any such release.
(c) To the extent the sale of the Sold Businesses as described on
Schedule I or the redesignation of Unrestricted Subsidiaries necessitates such a
waiver, the Purchasers hereby grant any waiver necessitated by the provisions of
Section 7.8 (regarding change in the business of the Company and its Restricted
Subsidiaries).
4. ADDITIONAL INTEREST. In consideration of the amendments and
consents herein set forth and as a condition to the effectiveness hereof, the
Company will pay, ratably (based on the outstanding principal of the Notes held
by each Purchaser) to the Purchasers, a one-time additional interest payment in
the aggregate amount of $202,500. Additionally, from and after January 1, 1994,
the interest payable on the interest payment dates provided for in the Notes
shall be increased (in respect of all periods subsequent to December 31, 1993)
by .25% to a total of 11.45% per annum; provided, however, that in no
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event shall such additional .25% in interest be included in computing the
Maintenance Amount for any purpose hereunder including, without limitation, in
computing the amount payable in respect of any prepayment under Section 4.2 or
4.4 of the Note Purchase Agreement.
After the date hereof, any Note issued pursuant to Section 10 of the
Senior Note Purchase Agreement in substitution or exchange for any outstanding
note will be in such form as will reflect such increase in interest rate.
5. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Purchaser as follows:
(a) NO DEFAULTS. After giving effect hereto, no Default or Event of
Default shall have occurred and be continuing.
(b) POWER AND AUTHORITY. The Company has all requisite corporate
power and authority to execute and deliver this Seventh Amendment and to perform
the Senior Note Purchase Agreement and the Notes as amended hereby (the "Amended
Documents").
(c) ENFORCEABILITY. This Seventh Amendment has been duly executed
and delivered by the Company, and the Amended Documents constitute legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(d) NO CONFLICTS. The execution and delivery of this Seventh
Amendment and the performance of the Amended Documents do not and will not
(i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any capital stock issued by the
Company or any property of the Company under, any indenture, mortgage, deed of
trust, bank loan or credit agreement, corporate charter or by-laws, or any other
material agreement or instrument to which the Company is a party or by which any
of its properties may be bound, (ii) conflict with or result in a breach of any
of the terms, conditions or provisions of any Order of any court, arbitrator or
Governmental Body applicable to the Company, (iii) violate any provision of any
statute or other rule or regulation of any Governmental Body applicable to the
Company or (iv) require any waivers, consents or approvals by any creditors of
the Company.
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(e) GOVERNMENTAL AUTHORIZATIONS. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Body is required for the validity of the execution and delivery of this Seventh
Amendment or for the performance by the Company of the Amended Documents.
6. REFERENCES TO SENIOR NOTE PURCHASE AGREEMENT. From and after the
date of this Seventh Amendment, all references in the Senior Note Purchase
Agreement, as amended by this Seventh Amendment, shall be deemed to be
references to the Senior Note Purchase Agreement as amended by this Seventh
Amendment.
7. GENERAL.
(a) This Seventh Amendment (i) shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within such state, without giving effect to any
conflict of laws principles thereof, and (ii) may not be amended, modified or
supplemented, except as set forth in Section 12 of the Senior Note Purchase
Agreement.
(b) The Senior Note Purchase Agreement (as herein amended) is hereby
ratified and confirmed and shall continue in full force and effect in accordance
with their respective terms.
(c) The execution, delivery and effectiveness of this Seventh
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Purchaser under, nor of any provision of, the
Senior Note Purchase Agreement. This Seventh Amendment may be executed in any
number of counterparts (which may be by facsimile transmission) and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
(d) Without limiting the generality of Section 17.1 of the Senior
Note Purchase Agreement, the Company agrees to pay all reasonable expenses of
the Purchasers incident to the making and performance of this Seventh Amendment
(including, without limitation, the fees and disbursements of one special
outside counsel to the Purchasers, which shall be Milbank, Tweed, Hadley &
McCloy).
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IN WITNESS WHEREOF, the parties hereto have entered into this Seventh
Amendment by their duly authorized representatives, all as of the year and date
first above written.
TEACHERS INSURANCE AND MUTUAL TRUST LIFE INSURANCE
ANNUITY ASSOCIATION OF COMPANY
AMERICA
By: MIMLIC ASSET MANAGEMENT
By:_________________________ COMPANY
Name:_____________________
Title:____________________ By:_________________________
Name:_____________________
Title:____________________
THE EQUITABLE LIFE ASSURANCE EQUITABLE VARIABLE LIFE
SOCIETY OF THE UNITED INSURANCE COMPANY
STATES
By:_________________________ By:_________________________
Name:_____________________ Name:_____________________
Title:____________________ Title:____________________
MINNESOTA FIRE & CASUALTY ORIX USA CORPORATION
COMPANY
By: MIMLIC ASSET MANAGEMENT
COMPANY By:______________________
Name:__________________
By:______________________ Title:_________________
Name:__________________
Title:_________________
PRINCIPAL MUTUAL LIFE THE PENN INSURANCE AND
INSURANCE COMPANY ANNUITY COMPANY
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
By:________________________
Name:____________________
Title:___________________
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PRINCIPAL NATIONAL LIFE NICHIBOSHIN USA, INC.
INSURANCE COMPANY
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
By:________________________
Name:____________________
Title:___________________
LIFE INVESTORS INSURANCE AUSA LIFE INSURANCE COMPANY
COMPANY OF AMERICA
By:
By:________________________ Name:____________________
Name:____________________ Title:___________________
Title:___________________
VAULT & CO. THE MINNESOTA MUTUAL LIFE
INSURANCE COMPANY
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
GENERAL SERVICES LIFE KELLY & CO.
INSURANCE COMPANY
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
THE PENN MUTUAL LIFE
INSURANCE COMPANY
By:________________________
Name:____________________
Title:___________________
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APPROVED:
MAGNETEK, INC. MAGNETEK NATIONAL ELECTRIC
COIL, INC.
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
CENTURY ELECTRIC, INC. MAGNETEK CONTROLS, INC.
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
MAGNETEK ALS CORPORATION THE OHIO TRANSFORMER
CORPORATION
By:________________________ By:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
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SCHEDULE 1
(AMOUNTS IN MILLIONS $)
Proposed Divestitures FY 1993 Sales
--------------------- -------------
Component Transformers $ 38
RV Converters 16
Controls 31
Power Technology Systems 102
Electrical Services 98
Electrical Insulation 10
Medium Power Transformers 107
Large Custom Motors 32
----
Total $434
----
----
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SCHEDULE 2
SUBSIDIARIES WHICH MAY BE REDESIGNATED AS RESTRICTED SUBSIDIARIES
FRANCE
May & Christe France S.A.R.L. (a wholly-owned subsidiary of MagneTek May &
Christe GmbH)
GERMANY
Jovy-Atlas Specht Stromrichter GmbH (a wholly-owned subsidiary of MagneTek
Deteiligungsgesellschaft GmbH)
MagneTek Deteiligungsgesellschaft (Deutschland Holding) GmbH (a wholly-
owned subsidiary of MagneTek Europe N.V.)
MagneTek EuroAtlas GmbH (a wholly-owned subsidiary of MagneTek
Deteiligungsgesellschaft GmbH)
MagneTek Germann GmbH & Co. (a wholly-owned subsidiary of MagneTek
Deteiligungsgesellschaft GmbH)
MagneTek May & Christe GmbH (a wholly-owned subsidiary of MagneTek M & C
Electrotechnik GmbH)
MagneTek M & C Elektrotechnik GmbH (a 70% subsidiary of MagneTek
Deteiligungsgesellschaft (Deutschland Holding)) GmbH
Weltor GmbH (a wholly-owned subsidiary of MagneTek M & C Electrotechnik
GmbH)
ITALY
MagneTek Italia S.r.l.
MagneTek S.p.A. (a wholly-owned subsidiary of MagneTek Europe N.V.)
THE NETHERLANDS
MagneTek Europe N.V.
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UNITED KINGDOM
MagneTek Service (U.K.) Limited (a wholly-owned subsidiary of MagneTek
Europe N.V.)
Universal Electric Company (U.K.) Limited (a wholly-owned subsidiary of
MagneTek Service (U.K.) Limited)
Wortex (U.K.) Limited (a wholly-owned subsidiary of MagneTek Service (U.K.)
Limited)
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ADDENDUM TO THE SEVENTH AMENDMENT DATED
AS OF MARCH 31, 1994 (THE "AMENDMENT")
TO THE MAGNETEK, INC. 11.20% NOTE
Delete section 3(b) of the Amendment in its entirety, and insert the following
in its place:
To the extent the disposition of any Sold Business requires the release of any
lien on or security interest in any Collateral and/or the release of any
Guarantor from its obligations under the Limited Guaranty, the Purchasers hereby
agree and irrevocably consent that such release may be granted without further
action or consent by the Purchasers, such consent and release to be effective
only to the extent and at such time as the Agent and the Banks under the Credit
Agreement shall have consented to such release. The Company agrees to notify
the Purchasers promptly following any such release.
Acknowledged and consented to as of July 1, 1994.
TEACHERS INSURANCE AND EQUITABLE VARIABLE LIFE
ANNUITY ASSOCIATION OF AMERICA INSURANCE COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
THE EQUITABLE LIFE ASSURANCE MUTUAL TRUST LIFE INSURANCE
SOCIETY OF THE UNITED STATES COMPANY
BY: MIMLIC ASSET MANAGEMENT
COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
MINNESOTA FIRE & CASUALTY LIFE INVESTORS INSURANCE
COMPANY COMPANY OF AMERICA
BY: MIMLIC ASSET MANAGEMENT
COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
THE MINNESOTA MUTUAL LIFE BANKERS UNITED LIFE ASSURANCE
INSURANCE COMPANY COMPANY AS A SUCCESSOR TO:
GENERAL SERVICES LIFE
INSURANCE COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
PRINCIPAL MUTUAL LIFE FIRST AUSA LIFE INSURANCE
INSURANCE COMPANY COMPANY (FKA): AUSA LIFE
INSURANCE COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
BY:________________________
Name:____________________
Title:___________________
PRINCIPAL NATIONAL LIFE ORIX USA CORPORATION
INSURANCE COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
NICHIBOSHIN USA, INC. THE PENN INSURANCE AND
ANNUITY COMPANY
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
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VAULT & CO. KELLY & CO.
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK AS
TRUSTEE OF A COMMINGLED
PENSION TRUST:
BY:________________________ BY:________________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
THE PENN MUTUAL LIFE
INSURANCE COMPANY
BY:________________________
Name:____________________
Title:___________________
APPROVED:
MAGNETEK, INC. MAGNETEK NATIONAL ELECTRIC
COIL, INC.
BY:_________________________________ BY:_________________________________
Name: John P. Colling, Jr. Name: John P. Colling, Jr.
Title: Vice President & Treasurer Title: Vice President
CENTURY ELECTRIC, INC. MAGNETEK CONTROLS, INC.
BY:_________________________________ BY:_________________________________
Name: John P. Colling, Jr. Name: John P. Colling, Jr.
Title: Vice President Title: Vice President
MAGNETEK ALS CORPORATION THE OHIO TRANSFORMER
CORPORATION
BY:_________________________________ BY:_________________________________
Name: John P. Colling, Jr. Name: John P. Colling, Jr.
Title: Vice President Title: Vice President
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