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FIRST AMENDMENT AND MODIFICATION AGREEMENT
FIRST AMENDMENT AND MODIFICATION AGREEMENT dated as of February 21, 1997
(this "Amendment") by and among HADCO CORPORATION, a Massachusetts corporation
(the "Company"); the direct and indirect subsidiaries of the Company listed on
the signature pages hereto (collectively, the "Hadco Subsidiaries"); THE FIRST
NATIONAL BANK OF BOSTON individually; and THE FIRST NATIONAL BANK OF BOSTON, as
Agent (the "Agent") for the Banks, amending certain provisions of the Revolving
Credit Agreement dated as of January 8, 1997 (as amended and in effect from time
to time, the "Agreement") among the Company, the Banks and the Agent. Terms not
otherwise defined herein which are defined in the Agreement shall have the
respective meanings assigned to such terms in the Agreement.
WHEREAS, the Company has requested that the Agent and the Banks amend
certain provisions of the Agreement; and
WHEREAS, upon the terms and subject to the conditions contained herein, the
Agent and the Banks are willing to amend such provisions of the Credit
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements contained in the
Agreement, the other Loan Documents and this Amendment and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
sec.1. AMENDMENT TO AGREEMENT. With effect from the Effective Date (as
defined in ss.2 below), the Agreement shall be amended as follows'
sec.1.1. Section 1.1 of the Agreement is hereby amended by
changing the section referenced in the definition of "Agent's Side Letter" from
5.2 to 5.1.
sec.1.2. Section 1.1 of the Agreement is hereby further amended
by changing the section referenced in the definition of "Assignment and
Acceptance" from 20.1 to 19.1.
sec.1.3. Section 1.1 of the Agreement is hereby further amended
by changing the sections referenced in the definitions of "CERCLA",
"Environmental Laws", and "Hazardous Substances" from 7.18 to 7.17.
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sec.1.4. Section 1.1 of the Agreement is hereby further amended
by inserting the words "(and including any purchase, redemption, prepayment or
other retirement, in whole or in part, of the Subordinated Notes or any of
them)" between the words "capital stock" and ", of the Borrower" in line 6 of
the definition of "Distribution", and by inserting the following text at the end
of such definition:
"PROVIDED, HOWEVER, that (a) any issuances of common stock or other "junior
securities" (as such term is defined in Section 4.8 of the Indenture) of the
Borrower upon conversion of any of the Subordinated Notes in accordance with
their terms and the terms of the Indenture and (b) any payment by the Borrower
of cash in lieu of the issuance of fractional shares in connection with any such
conversion shall not be deemed to be "Distributions" hereunder."
sec.1.5. Section 1.1 of the Agreement is hereby further amended
by changing the word "account" referenced in line 5 of the definition of
"Earnings Before Interest and Taxes or EBIT" to "accounting".
sec.1.6. Section 1.1 of the Agreement is hereby amended by
deleting the definition of "Guarantors" in its entirety and substituting in lieu
thereof the following new definition:
"GUARANTORS. (i) Hadco Acquisition, which term shall refer immediately
following the consummation of the Merger to Zycon Corporation, a Delaware
corporation, being the survivor of the merger of Hadco Acquisition Corp. with
and into Zycon Corporation; (ii) immediately following the consummation of the
Merger, Zycon Alternate Circuits, Inc.; and (iii) any other direct or indirect
Subsidiary of the Borrower (other than Hadco FSC and Zycon Corp. SDN BHD)."
sec.1.7. Section 1.1 of the Agreement is hereby further amended
by inserting the following new definition in alphabetical order therein:
"INDENTURE. The Indenture between or to be between the Borrower and State
Street Bank and Trust Company, as Trustee, with respect to the Subordinated
Notes, substantially in the form of the draft dated February , 1997 previously
delivered to the Agent and each of the Banks, with such modifications as are
appropriate or necessary to complete such form (including without limitation,
changes to reflect the specific maturity date in 2004 or thereafter, the
interest payment dates, the record dates, the interest rate, the initial
conversion price, the redemption prices and such other terms as are related to
the "pricing" of the securities to be represented by the Subordinated Notes) and
such other changes as are either non-
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substantive or as shall have been approved by the Agent on behalf of the
Banks. The Indenture is to be entered into by the parties thereto as of the
closing of the issuance of the Subordinated Notes."
sec.1.8. Section 1.1 of the Agreement is hereby further amended
by changing the section referenced in the definition of "Permitted Acquisitions"
to from 9.5.1 to 9.5.2(c).
sec.1.9. Section 1.1 of the Agreement is hereby further amended
by inserting the following new definition in alphabetical order therein:
"SUBORDINATED NOTES. The Borrower's Convertible Subordinated Notes due 2004
or thereafter, in an aggregate principal amount of up to $138,000,000, issued or
to be issued under and pursuant to the Indenture."
sec.1.10. Section 2.3 of the Agreement is hereby amended by
inserting the words "or sec.9.1(l)" after the words "permitted by
sec.9.1(k)" in lines 2 and 16 thereof, deleting the words "in sec.9.1(k)(i)"
in line 6 thereof and substituting therefor the words "in sec.9.1(k) or
sec.9.1(l)(i)", inserting the word "cumulative" between the words "a" and
"maximum" in line 6 thereof, changing the section referenced in line 7 thereof
from 9.1(k)(ii) to 9.1(1)(ii), and changing the section referenced in the sixth
line from the end thereof from 2.3.2 to 2.3.
sec.1.11. Section 3.2 of the Agreement is hereby amended by
inserting the words "or sec.9.1(l)" after the words "permitted by
sec.9.1(k)" in line 2 thereof, deleting the words "in sec.9.1(k)(i)" in line
6 thereof and substituting therefor the words "in sec.9.1(k) or
sec.9.1(1)(i)", inserting the word "cumulative" between the words "a" and
"maximum" in line 7 thereof, and changing the section referenced in line 8
thereof from 9.1(k)(ii) to 9.1(l)(ii).
sec.1.12. Section 5.3 of the Agreement is hereby amended by
changing the phrase "records on each Bank" in line 12 thereof to "records of
each Bank".
sec.1.13. Section 8.4(d) of the Agreement is hereby amended by
inserting the word "by" after the word "filed" in line 3 of such subsection.
sec.1.14. Section 9.1 of the Agreement is hereby amended by
deleting subsections 9.1(k) and 9.1(1) in their entirety and inserting the
following new subsections 9.1(k), 9.1(l) and 9.1(m):
"(k) the Subordinated Notes;
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(1) so long as no Default or Event of Default shall have occurred
and be continuing or would occur as a result of the incurrence of any
thereof, unsecured Indebtedness of the Borrower or any of its
Subsidiaries up to an aggregate amount (the "ADDITIONAL AMOUNT") equal
to the sum of $175,000,000 LESS the outstanding aggregate principal
amount of the Subordinated Notes, if any. Such Indebtedness shall
consist of: (i) up to an amount equal to $150,000,000 LESS the
aggregate outstanding principal amount of the Subordinated Notes (but
not to exceed, when combined with amounts of Indebtedness incurred
pursuant to clause (ii) of this sec.9.1(l), the Additional Amount) of
Indebtedness which is expressly subordinated and made junior to the
payment and performance in full of the Obligations on terms and
conditions satisfactory to the Agent and the Majority Banks in their
sole and absolute discretion, and evidenced as subordinate by a
Subordination and Intercreditor Agreement or another written instrument
containing subordination provisions in form and substance satisfactory
to (in their sole and absolute discretion) and approved by the Agent
and the Majority Banks in writing; and (ii) up to $100,000,000 (but not
to exceed, when combined with amounts of Indebtedness incurred pursuant
to clause (i) of this sec.9.1(l), the Additional Amount) of
Indebtedness which may rank PARI PASSU with the Obligations; PROVIDED,
HOWEVER, that the terms of Indebtedness permitted pursuant to this
sec.9.1(l) shall include the following: (A) the maturity date of any
such Indebtedness occurs at least one hundred twenty (120) days
following the Revolving Credit Loan Maturity Date; (B) with respect to
subordinated Indebtedness described in clause (i) of this sec.9.1(l),
no principal, interest, fees or other amounts with respect thereto are
due and payable upon the occurrence and during the continuance of a
Default or Event of Default; (C) with respect to subordinated
Indebtedness described in clause (i) of this sec.9.1(1), no principal
or sinking fund payments are due prior to at least one hundred twenty
(120) days following the Revolving Credit Loan Maturity Date; (D) the
rate of interest and other fees applicable to such Indebtedness are, in
the reasonable judgment of the Agent and the Majority Banks, a market
rate for companies with the same or similar financial profile as the
Borrower; (E) the covenants, including affirmative, negative and
financial covenants, included therein are, in the reasonable judgment
of the Agent and the Majority Banks, less restrictive than the
covenants set forth in secs.8, 9 and 10 hereof and do not contain a
negative pledge on assets of the Borrower and the other Transaction
Parties (but may, with respect to PARI PASSU Indebtedness described in
clause (ii) of this sec.9.1(l), contain an "equal and ratable clause"
with respect to any collateral obtained by the Agent and the Banks);
(F) the terms and conditions of which may not be amended without the
prior written consent of the Agent and the Majority Banks;
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(G) default provisions with respect to which do not cross-default to
the Credit Agreement and the other Loan Documents, except that, with
respect to PARI PASSU Indebtedness described in clause (ii) of this
sec.9.1(l), such default provisions may cross-default to a Default or
Event of Default under sec.13.1(a) or (b), to the extent that any
such Default or Event of Default is not cured or waived within thirty
(30) days after the occurrence thereof; and (H) such other terms and
conditions as the Agent and the Majority Banks may reasonably require;
PROVIDED, FURTHER, that prior to the incurrence of any such
Indebtedness, the Borrower shall provide to the Agent and each of the
Banks PRO FORMA financial statements and compliance certificates in the
form of EXHIBIT C indicating that for the period from the date of the
incurrence of such Indebtedness until the Revolving Credit Loan
Maturity Date, no Default or Event of Default would result from the
incurrence of such Indebtedness; and
(m) Indebtedness not otherwise set forth in clauses (a) - (1) of
this sec.9.1 in an amount not to exceed $2,000,000 in the aggregate."
sec.1.15. Section 9.5.2 of the Agreement is hereby amended by
changing the word "writtent" in line 12 thereof to "written", deleting the
second "shall" in line 13 thereof, and changing the reference "Exhibit E-1" in
line 31 thereof to "Exhibit C".
sec.1.16. Section 9.9 of the Agreement is hereby amended by
adding the following at the end thereof:
"The Borrower will not, and will not permit the other parties thereto to, (i)
amend, modify or supplement the Subordinated Notes or the Indenture in any way
which would materially adversely affect the rights or interests of the Agent or
any of the Banks as holders of "Senior Indebtedness" or "Designated Senior
Indebtedness" thereunder, or (ii) enter into a supplemental indenture pursuant
to Sections 11.1(b) and 11.1(d) of the Indenture, unless in each case the form
of such proposed amendment, modification, supplement or supplemental indenture
shall have first been approved in writing by the Agent and the Majority Banks,
and, in the absence of such approval, in addition to and without limitation of
such other rights as the Agent and the Banks may have hereunder, no such
amendment, modification, supplement or supplemental indenture shall be effective
to modify the rights or interests of the Agent or any of the Banks as holders of
"Senior Indebtedness" or "Designated Senior Indebtedness" under the Indenture."
sec.1.17. The Agreement is hereby amended by inserting the
following new Section 9.12 therein:
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"9.12. DESIGNATION OF INDEBTEDNESS UNDER INDENTURE. The Borrower will not
designate, declare or identify any Indebtedness as "Designated Senior
Indebtedness" under and pursuant to the Indenture, unless the amount and terms
of such Designated Senior Indebtedness shall first have been approved by the
Agent and the Majority Banks in writing."
sec.1.18. Section 11.4 of the Agreement is hereby amended by
inserting the phrase "each Transaction Party" after the word "from" in line 2
thereof.
sec.1.19. Section 14 of the Agreement is hereby amended by
inserting the phrase "notify the Agent thereof and" prior to the phrase "make
such disposition" in line 23 thereof.
sec.1.20. Section 15.1(a) of the Agreement is hereby amended by
inserting the phrase "(including the approval by the Agent of the final form of
the Indenture as contemplated by the definition of the term "Indenture")
following the words "reasonably incident thereto" in line 4 thereof.
sec.1.21. The Agreement is hereby amended by deleting the portion
of Section 26 selected below, and substituting for the deleted text the
replacement text set forth below:
Delete the following: "Notwithstanding the foregoing, the rate of interest on
the Notes (other than interest accruing pursuant to sec.5.10.2 following the
effective date of any waiver by the Majority Banks of the Default or Event of
Default relating thereto), the term of the Notes, the amount of the Commitments
of the Banks, and the amount of commitment fee or Letter of Credit Fees
hereunder may not be changed without the written consent of the Borrower and the
written consent of each Bank affected thereby; the definition of Majority Banks
may not be amended without the written consent of all of the Banks;"
Replace with the following: "Notwithstanding the foregoing, the rate of interest
on the Notes (other than interest accruing pursuant to sec.5.10.2 following the
effective date of any waiver by the Majority Banks of the Default or Event of
Default relating thereto), the term of the Notes, the amount of the Commitments
of the Banks, and the amount of commitment fee or Letter of Credit Fees
hereunder may not be changed, and no scheduled date for the payment of
principal, interest or fees may be postponed or extended without the written
consent of the Borrower and the written consent of each Bank affected thereby;
the definition of Majority Banks and the terms of this Section 26 may not be
amended and no collateral or guaranty may be released without the written
consent of all of the Banks;"
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sec.1.22. Exhibit A (Form of Revolving Credit Note) of the
Agreement is hereby amended as follows:
(a) The second paragraph (section (a)) is amended by changing the words "the
date hereof" in lines 4 and 5 thereof to "January 8, 1997"; and
(b) The fourth paragraph (section (c)) is amended by changing the words
"Closing Date under the Credit Agreement" in line 2 thereof to "date hereof."
sec.1.23. Exhibit D (Form of Assignment and Acceptance) of the
Agreement is hereby amended as follows:
(a) Section 1 of the Assignment and Acceptance is amended by inserting the
text "(except for the specific representations in Section 2 hereof)" after the
words "without recourse to the Assignor" in line 4 thereof: and
(b) Section 2 of the Assignment and Acceptance is amended by adding the word
"and" prior to the phrase "the aggregate amount" in line 5 thereof, and by
adding the text "and that it has no knowledge that a Default or Event of Default
has occurred and is continuing" after the words "free and clear of any claim or
encumbrance" in lines 20-21 thereof.
sec.2. CONDITIONS TO EFFECTIVENESS. This Amendment shall be deemed to be
effective as of February 21, 1997 (the "Effective Date"), upon the Agent's
receipt of facsimile copies of original counterparts (to be followed promptly by
original counterparts) or original counterparts of this Amendment, duly executed
by each of the Company, the Hadco Subsidiaries, the Agent and The First National
Bank of Boston.
sec.3. REPRESENTATIONS AND WARRANTIES; NO DEFAULT; AUTHORIZATION. Each of
the Company and the Hadco Subsidiaries hereby represents and warrants to each of
the Agent and the Banks as follows:
(a) Each of the representations and warranties of the Company and
the Hadco Subsidiaries contained in the Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to or in
connection with the Agreement, the other Loan Documents or this
Amendment was true as of the date as of which it was made, and no
Default or Event of Default has occurred and is continuing as of the
date of this Amendment; and
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(b) This Amendment has been duly authorized, executed and delivered
by the Company and each of the Hadco Subsidiaries, and shall be in full
force and effect upon the satisfaction of the conditions set forth in
sec.2 hereof, and the agreements of the Company and each of the Hadco
Subsidiaries contained herein, in the Agreement as herein amended, or
in the other Loan Documents respectively, constitute the legal, valid
and binding obligations of the Company and each of the Hadco
Subsidiaries party hereto or thereto, enforceable against the Company
or such Hadco Subsidiary, in accordance with their respective terms,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
sec.4. RATIFICATION, ETC. Except as expressly amended hereby, the
Agreement, the other Loan Documents and all documents, instruments and
agreements related thereto are hereby ratified and confirmed in all respects and
shall continue in full force and effect. All references in the Agreement or such
other Loan Documents or in any related agreement or instrument to the Agreement
or such other Loan Documents shall hereafter refer to such agreements as amended
hereby, pursuant to the provisions of the Agreement.
sec.5. NO IMPLIED WAIVER, ETC. Except as expressly provided herein,
nothing contained herein shall constitute a waiver of, impair or otherwise
affect any of the Obligations, any other obligations of the Company or any of
the Hadco Subsidiaries or any right of the Agent or the Banks consequent
thereon. The waivers and consents provided herein are limited strictly to their
terms. Neither the Agent nor any of the Banks shall have any obligation to issue
any further waiver or consent with respect to the subject matter hereof or any
other matter.
sec.6. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
sec.7. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO CHOICE OR CONFLICTS OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
a document under seal as of the date first above written.
THE FIRST NATIONAL BANK
OF BOSTON, individually
and as Agent
By:
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Title:
HADCO CORPORATION
By:
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Title:
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Each of the undersigned hereby acknowledges the foregoing Amendment as of the
Effective Date and agrees that its obligations under the Guaranty will extend to
the Agreement, as so amended, and the other Loan Documents, as so amended.
ZYCON CORPORATION
By:
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Title:
ZYCON ALTERNATE CIRCUITS, INC.
By:
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Title:
