1
FOURTH AMENDMENT TO RESTATED CREDIT AGREEMENT
(and Security Agreement)
THIS DOCUMENT is entered into as of September 27, 1999, between
MAGNETEK, INC., a Delaware corporation ("BORROWER"), certain Lenders, BANK OF
AMERICA, N.A. (formerly NationsBank, N.A., and formerly NationsBank of Texas,
N.A., "AGENT"), as Agent for Lenders, and BANKERS TRUST COMPANY, CIBC INC.,
CREDIT LYONNAIS NEW YORK BRANCH, BANK ONE, N.A. (formerly The First National
Bank of Chicago), GENERAL ELECTRIC CAPITAL CORPORATION (assignee of The
Long-Term Credit Bank of Japan, Ltd.), and UNION BANK OF CALIFORNIA, N.A., as
Co-Agents for Lenders.
Borrower, Agent, Co-Agents, and Lenders are party to the Restated
Credit Agreement (as renewed, extended, and amended, the "CREDIT AGREEMENT")
dated as of June 20, 1997, providing for a $200,000,000 revolving credit
facility. Borrower, Agent, and Determining Lenders have agreed, upon the
following terms and conditions, to amend the Credit Agreement as described in
PARAGRAPH 2 below. Accordingly, for adequate and sufficient consideration,
Borrower, Agent, and Determining Lenders agree as follows:
1. TERMS AND REFERENCES. Unless otherwise stated in this document (A) terms
defined in the Credit Agreement have the same meanings when used in this
document and (B) references to "SECTIONS," "SCHEDULES," and "EXHIBITS" are to
the Credit Agreement's sections, schedules, and exhibits.
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is amended as follows:
(A) The following definitions in SECTION 1.1 are entirely amended
as follows:
APPLICABLE MARGIN means, for any day, the margin of
interest over the Base Rate, or the Eurodollar Rate, as the
case may be, that is applicable when the Base Rate or
Eurodollar Rate, as applicable, is determined under this
agreement.
(a) The Applicable Margin is subject to
adjustment (upwards or downwards, as appropriate)
based on the ratio of the Companies' Funded Debt to
EBITDA as stated in the table below.
(b) From September 27, 1999, through the
date that Agent receives the Current Financials and
Compliance Certificate for the fiscal quarter ending
October 3, 1999, the Applicable Margin is deemed to
be 1.500% for Eurodollar Rate Borrowings and 0.00%
for Base-Rate Borrowings, and the Applicable
Percentage is deemed to be 0.350%.
(c) From the date that Agent receives the
Current Financials and Compliance Certificate for
each of the fiscal quarters ending October 3, 1999,
January 2, 2000, and March 26, 2000, the Applicable
Margin may not be LESS THAN 1.500% for Eurodollar
Rate Borrowings and 0.00% for Base-Rate Borrowings,
and the Applicable Percentage may not be LESS THAN
0.350%;
FOURTH AMENDMENT
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PROVIDED, HOWEVER, that the Applicable Margin and
Applicable Percentage are subject to adjustment in
accordance with the tables below.
(d) After receipt of the Current Financials
and Compliance Certificate for the fiscal quarter
ending March 26, 2000, the Applicable Margin and
Applicable Percentage in effect at any time (whether
in the middle of an Interest Period or otherwise) are
based upon the ratio of the Companies' Funded Debt to
EBITDA as determined from the Current Financials and
related Compliance Certificate then most recently
received by Agent, effective as of the date received
by Agent.
(e) For purposes of the definitions of
APPLICABLE MARGIN and APPLICABLE PERCENTAGE, EBITDA
is calculated for the Companies' most
recently-completed-four-fiscal quarters, and Funded
Debt is determined as of the last day of that
four-fiscal-quarter period.
(f) If Borrower fails to timely furnish to
Agent any Financials and related Compliance
Certificate as required by this agreement, then the
maximum Applicable Margin and Applicable Percentage
apply from the date those Financials and related
Compliance Certificate are required to be delivered
and remain in effect until Borrower furnishes them to
Agent.
RATIO OF FUNDED DEBT TO EBITDA APPLICABLE APPLICABLE
MARGIN FOR MARGIN FOR
EURODOLLAR RATE BASE-RATE
BORROWINGS BORROWINGS
Less than or equal to 3.00 to 1.00, but greater 2.000% 0.500%
than 2.50 to 1.00
Less than or equal to 2.50 to 1.00, but greater 1.750% 0.250%
than 2.00 to 1.00
Less than or equal to 2.00 to 1.00, but greater 1.500% 0.00%
than 1.50 to 1.00
Less than or equal to 1.50 to 1.00, but greater 1.250% 0.00%
than 1.00 to 1.00
Less than or equal to 1.00 to 1.00 0.875% 0.00%
APPLICABLE PERCENTAGE means, subject to any
adjustment pursuant to the definition of Applicable Margin,
for any day, a commitment-fee percentage applicable under
SECTION 4.4, subject to adjustment (upwards or downwards, as
appropriate), based on the ratio of the Companies' Funded Debt
to EBITDA, as follows:
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APPLICABLE
RATIO OF FUNDED DEBT TO EBITDA PERCENTAGE
Less than or equal to 3.00 to 1.00, but greater than 2.50 0.450%
to 1.00
Less than or equal to 2.50 to 1.00, but greater than 2.00 0.400%
to 1.00
Less than or equal to 2.00 to 1.00, but greater than 1.50 0.350%
to 1.00
Less than or equal to 1.50 to 1.00, but greater than 1.00 0.300%
to 1.00
Less than or equal to 1.00 to 1.00 0.200%
EBITDA means:
(a) for any Person, for any period, and
without duplication, the SUM of (i) Net Income
(without regard to extraordinary items), PLUS (ii) to
the extent actually deducted in calculating Net
Income, Interest Expense, income Taxes, and
depreciation and amortization from continuing
operations, and (iii) MINUS or PLUS, respectively,
any net gains or losses from discontinued operations
that are not extraordinary items; and
(b) for purposes of calculating the
Companies' EBITDA for any four-quarter period, the
Companies' EBITDA for that period shall, to the
extent reflected in Financials acceptable to Agent,
include the EBITDA of any Person that became a
Subsidiary of Borrower or was merged with or
consolidated into Borrower during that period as if
it had been acquired, merged, or consolidated at the
beginning of that period.
LC means a commercial or standby letter of credit
issued for the account of Borrower by an Issuing Lender under
this agreement and under an LC Agreement.
(B) The clause "...on its face does not comply with the terms
of..." in SECTION 2.3(D) is changed to "...on its face does not substantially
comply with the terms of...".
(C) The penultimate sentence of SECTION 2.3(D) is amended by
adding the following clause at the end of that sentence:
as determined by a court of competent jurisdiction.
(D) The last sentence of SECTION 2.3(F) is entirely amended as
follows:
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FOURTH AMENDMENT
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Any action taken or omitted or to be taken by Agent, any
Co-Agent, or any Issuing Lender in connection with any LC if
taken or omitted in the absence of gross negligence or willful
misconduct (as determined by a court of competent
jurisdiction) shall not create for Agent, any Co-Agent, or
such Issuing Lender any resulting liability to any other
Lender or any Company.
(E) SECTION 5.5(C) is entirely amended as follows:
(c) Agent shall, upon Borrower's written request and
at Borrower's cost and expense, cause the Lender Liens on all
Collateral under SECTION 5.2 and 5.3 to be released upon
satisfaction of all of the following conditions precedent: (i)
The Release Event has occurred; (ii) for at least two
consecutive fiscal quarters ending immediately before the
requested release, the ratio of the Companies' Funded Debt (as
of the last day of those fiscal quarters) to EBITDA
(calculated only in respect of assets owned by the Companies
at the end of the applicable period) for the 12-month period
ending on those last days was LESS THAN 2.25 to 1.00; (iii)
Borrower has delivered its audited Financials and related
Compliance Certificate in accordance with SECTION 8.1(A) for
the fiscal year ending June 25, 2000; and (iv) no Default or
Potential Default then exists.
(F) SECTION 9.10 is entirely amended as follows:
9.10 DISTRIBUTIONS. No Restricted Company may
declare, make, or pay any Distribution EXCEPT (a)
Distributions paid in the form of additional equity that is
not mandatorily redeemable, (b) Distributions to any other
Restricted Company, and (iii) other Distributions by Borrower
SO LONG as immediately after giving effect to any such other
Distribution (i) no Default or Potential Default exists and
(ii) the total amount of all such other Distributions paid
during the period (A) beginning June 28, 1999, and ending upon
delivery of the Financials and Compliance Certificate for the
fiscal quarter ending January 2, 2000, as required by SECTION
8.1(B), does not exceed $60,000,000 and (B) beginning June 28,
1999, never exceeds $90,000,000.
(G) A new SECTION 9.18 is added as follows:
9.18 CAPITAL EXPENDITURES. No Company may make
expenditures for the acquisition, improvement, or replacement
of land, buildings, equipment, or other fixed or capital
assets or leaseholds (excluding expenditures properly
chargeable to repairs or maintenance) that total for all of
the Companies MORE THAN $10,000,000 during any of the three
fiscal quarters ending October 3, 1999, January 2, 2000, and
March 26, 2000; PROVIDED that allowable expenditures under
this section not utilized during the respective fiscal quarter
may be carried forward and utilized during the next succeeding
fiscal quarters.
(H) SECTION 10.1 is entirely amended as follows:
10.1 NET WORTH. The Companies' Net Worth, determined
as of the last day of each fiscal quarter of Borrower, to be
LESS than the SUM of (a) $175,000,000, PLUS (b) 50% of the
Companies' cumulative Net Income (without deduction for
losses) after
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June 25, 2000, PLUS (c) 75% of the net (I.E., gross less usual
and customary underwriting, placement, and other related costs
and expenses) proceeds of the issuance of any equity
securities by Borrower after the date of this agreement.
(I) SECTION 10.2 is entirely amended as follows:
10.2 DEBT/EBITDA. The RATIO of the Companies' Funded
Debt as of the last day of each fiscal quarter (commencing
with the quarter of Borrower ending October 3, 1999) TO EBITDA
(calculated only in respect of assets owned by the Companies
at the end of the applicable period) for the 12-month period
ending on that last day to EXCEED (i) after the Release Event
has occurred, the other conditions for the release of
Collateral have been satisfied, and Agent has released the
Collateral, 2.50 to 1.00 and (ii) otherwise, 3.00 to 1.00. For
purposes of this section, EBITDA shall exclude the $34,400,000
restructuring charge recorded in the fiscal quarter ending
June 28, 1999.
(J) SECTION 10.3 is entirely amended as follows:
10.3 INTEREST COVERAGE. The RATIO, determined as of
the last day of each fiscal quarter (commencing June 25, 2000)
of Borrower for the four quarters then ended of (a) the
DIFFERENCE of the Companies' EBITDA MINUS Capital Expenditures
TO (b) Interest Expense to be LESS THAN 3.50 to 1.00. For
purposes of calculating the Companies' Capital Expenditures
and Interest Expense for any four-quarter period, the
Companies' Capital Expenditures and Interest Expense for that
period shall, to the extent reflected in Financials acceptable
to Agent, include the Capital Expenditures and Interest of any
Person that became a Subsidiary of Borrower or was merged with
or consolidated into Borrower during that period as if it had
been acquired, merged, or consolidated at the beginning of
that period.
(K) A new SECTION 10.4 is added as follows:
10.4 CONSOLIDATED EBITDA. The Companies' EBITDA to be
LESS THAN (a) for the fiscal quarter ending October 3, 1999,
$11,500,000, (b) for the six-month period ending January 2,
2000, $24,000,000, and (c) for the nine-month period ending
March 26, 2000, $41,000,000.
(L) SCHEDULE 2.1 and EXHIBIT B-4 are amended in the forms of, and
all references in the Loan Documents to that schedule and exhibit are changed
to, the attached SECOND AMENDED SCHEDULE 2.1 and AMENDED EXHIBIT B-4,
respectively.
3. AMENDMENT TO SECURITY AGREEMENT. ANNEX 1 to the Security Agreement dated as
of March 31, 1995, between Borrower, certain of its Subsidiaries, and Agent, is
entirely amended in the form of, and all references to that annex in that
Security Agreement are changed to, the attached AMENDED ANNEX 1.
4. CONDITIONS PRECEDENT. PARAGRAPHS 2 and 3 above are not effective until Agent
receives (A) counterparts of this document executed by Borrower and Determining
Lenders, (B) an amendment fee to be paid to each Lender who has executed and
delivered to Agent a counterpart of this
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FOURTH AMENDMENT
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document by 5:00 p.m. Atlanta time on September 24, 1999, equal to 0.15% of that
Lender's Commitment, and (C) all other fees and expenses due and payable to
Agent under all Loan Documents.
5. RATIFICATIONS. Borrower (A) ratifies and confirms all provisions of the Loan
Documents as amended by this document, (B) ratifies and confirms that (except as
permitted by SECTION 5.5) all guaranties, assurances, and Liens granted,
conveyed, or assigned to Agent under the Loan Documents are not released,
reduced, or otherwise adversely affected by this document and continue to
guarantee, assure, and secure full payment and performance of the present and
future Obligation, and (C) agrees to perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record such additional documents and
certificates as Agent may request in order to create, perfect, preserve, and
protect those guaranties, assurances, and Liens.
6. REPRESENTATIONS. To induce Agent, Co-Agents, and Determining Lenders to enter
into this document, Borrower represents and warrants to Agent, Co-Agents, and
Determining Lenders that as of the date of this document (A) all representations
and warranties in the Loan Documents are true and correct in all material
respects except to the extent that any of them speak to a different specific
date or the facts on which any of them were based have been changed by
transactions contemplated or permitted by the Credit Agreement, and (B) no
Material Adverse Event, Default, or Potential Default exists.
7. EXPENSES. Borrower shall pay all costs, fees, and expenses paid or incurred
by Agent incident to this document, including, without limitation, the
reasonable fees and expenses of Agent's counsel in connection with the
negotiation, preparation, delivery, and execution of this document and any
release or other related documents.
8. MISCELLANEOUS. All references in the Loan Documents to the "Credit
Agreement" refer to the Credit Agreement as amended by this document. This
document is a "Loan Document" referred to in the Credit Agreement, and the
provisions relating to Loan Documents in SECTIONS 1 and 14 of the Credit
Agreement are incorporated in this document by reference. Except as specifically
amended by this document, the Credit Agreement is unchanged and continues in
full force and effect. This document may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts must be construed together to constitute one and the
same instrument. This document binds and inures to each of the undersigned and
their respective successors and permitted assigns, subject to the terms of the
Credit Agreement. THIS DOCUMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.
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FOURTH AMENDMENT
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EXECUTED as of the date first stated in this Fourth Amendment to
Restated Credit Agreement.
MAGNETEK, INC., as Borrower
By
---------------------------------------
John P. Colling, Jr., Vice President
and Treasurer
BANK OF AMERICA, N.A. (formerly NationsBank,
N.A., and formerly NationsBank of Texas, N.A.),
as Agent and a Lender
By
---------------------------------------
Nancy S. Goldman, Principal
BANKERS TRUST COMPANY, as a Co-Agent
and a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
CIBC INC., as a Co-Agent and a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
CREDIT LYONNAIS NEW YORK BRANCH, as a Co-Agent
and a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
BANK ONE, N.A. (formerly the First National
Bank of Chicago), as a Co-Agent and a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
(assignee of The Long-Term Credit Bank of
Japan, Ltd.), as a Co-Agent and a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
UNION BANK OF CALIFORNIA, N.A., as a Co-Agent
and a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
ARAB BANKING CORPORATION (B.S.C.), as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.,
as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
SIGNATURE PAGE
PAGE 1 OF 2
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FIRST UNION NATIONAL BANK, as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
FUJI BANK, LIMITED, ATLANTA AGENCY, as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
NATEXIS BANQUE (formerly Banque Francaise
du Commerce Exterieur), as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
SOCIETE GENERALE, SOUTHWEST AGENCY, as a Lender
By
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Name:
--------------------------------
Title:
--------------------------------
THE SUMITOMO BANK, LIMITED, as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
BANK HAPOALIM, (assignee, in part, of Societe
Generale, Southwest Agency), as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
CREDIT AGRICOLE INDOSUEZ (formerly Caisse
Nationale de Credit Agricole), as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
THE TOKAI BANK, LTD. NEW YORK BRANCH,
as a Lender
By
---------------------------------------
Name:
--------------------------------
Title:
--------------------------------
SIGNATURE PAGE
PAGE 2 OF 2