Exhibit ▇▇.▇▇
SECOND AMENDMENT AND WAIVER TO
AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment and Waiver to Amended and Restated Credit
Agreement (this "Amendment") effective as of the 19th day of April, 1999, among
ZENITH ELECTRONICS CORPORATION, a Delaware corporation (the "Borrower"), the
financial institutions listed on the signature pages hereof as Lenders (the
"Lenders"), CITIBANK, N.A., as issuing bank (the "Issuing Bank") and CITICORP
NORTH AMERICA, INC., as agent (the "Agent"),
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Issuing Bank and the Agent are
parties to that certain Amended and Restated Credit Agreement dated as of June
29, 1998 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"); and
WHEREAS, the Borrower's Subsidiaries, Zenco de Chihuahua, S.A. de C.V.
("Zenith Mexico") and Zenith Electronics Corporation of Texas ("Zenith Texas"),
desire to sell to ▇▇▇▇▇▇▇ International Manufacturing, Inc. and certain of its
subsidiaries (i) certain real property owned by Zenith Mexico located in
▇▇▇▇▇▇, Mexico (the "Plant"), (ii) certain television cabinet manufacturing
equipment owned by Zenith Mexico and/or Zenith Texas and located in Juarez,
Mexico (the "Cabinet Line Equipment"), and (iii) certain contracts, licenses and
permits, compute software, business records and other miscellaneous assets owned
by Zenith Mexico and/or Zenith Texas, located in Juarez, Mexico and relating to
the Plant and the Cabinet Line Equipment, in each case as more fully described
in the draft Purchase Agreement (the "Purchase Agreement") attached hereto as
Exhibit A (collectively, the "Juarez Assets"); and
WHEREAS, the purchase price for the Juarez Assets will be
approximately $23,750,000, subject to customary adjustments and deductions (the
"Purchase Price"), and approximately $1,000,000 of such Purchase Price will be
placed in escrow as required by the Purchase Agreement; and
WHEREAS, a percentage of the Juarez Assets constitute Equipment
leased pursuant to the Salomon Lease Transaction, and an equivalent percentage
of the Purchase Price will be delivered to LGE to be applied to reduce the
Subrogation Obligations owed to LGE (the "LGE Payment"); and
WHEREAS, the Borrower hereby represents and warrants to the Agent and
the Lenders that none of the Juarez Assets are Collateral of the Agent and the
Lenders; and
WHEREAS, in connection with or after the sale of the Juarez Assets,
the Borrower intends to liquidate Zenith Mexico; and
WHEREAS, the sale of the Juarez Assets by Zenith Mexico and Zenith
Texas is prohibited pursuant to Section 7.7(b) of the Credit Agreement, the LGE
Payment is prohibited pursuant to Section 7.18 of the Credit Agreement, and the
liquidation of Zenith Mexico may be prohibited pursuant to Section 7.7(a) of the
Credit Agreement; and
WHEREAS, the Borrower has requested that the Agent, the Issuing Bank,
and the Lenders waive the requirements of Section 7.7(a), Section 7.7(b) and
Section 7.18 of the Credit Agreement with respect to the liquidation of Zenith
Mexico, the sale of the Juarez Assets, and the making of the LGE Payment, on the
terms set forth herein; and
WHEREAS, the Borrower has also requested that the term of the Credit
Agreement be extended and that certain other provisions of the Credit Agreement
be amended; and
WHEREAS, the Agent, the Issuing Bank and the Lenders have agreed to
the requested waivers, extension and other amendments on the terms and
conditions set forth herein;
NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration paid by each party to the other, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1 Amendments to Article 1.
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(a) Article 1 of the Credit Agreement, Definitions, is hereby amended by
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deleting the definitions of "Available Letter of Credit Amount", "Letter of
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Credit Commitment" and "Maturity Date" set forth therein in their entirety and
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substituting the following, respectively, in their place:
""Available Letter of Credit Amount" shall mean, as of any
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particular time, an amount equal to the lesser of (a) $45,000,000, and
(b) the Available Commitment.
"Letter of Credit Commitment" shall mean the several obligations
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of the Issuing Banks to issue Letters of Credit in an aggregate face
amount from time to time not to exceed $45,000,000.
"Maturity Date" shall mean August 31, 1999, or such earlier date
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as payment of the Loans shall be due (whether by acceleration or
otherwise)."
(b) Article 1 of the Credit Agreement, Definitions, is hereby further
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amended by deleting clause (a) of the definition of "Borrowing Base" set forth
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therein in its entirety and substituting the following in its place:
"(a) (i)up to 80% of the remainder of Eligible Accounts less the
Warranty/Advertising Reserve, plus (ii) up to 50% of the aggregate
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undrawn face amount of Eligible Letters of Credit; plus"
----
(c) Article 1 of the Credit Agreement, Definitions, is hereby further
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amended by adding the following new definition of "Eligible Letter of Credit" in
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appropriate alphabetical order thereto:
"'Eligible Letter of Credit' shall mean a documentary letter of
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credit issued by an Issuing Bank on behalf of the Borrower from time
to time in accordance with Section 2.15 hereof to support the purchase
by the Borrower of first quality finished goods (which may include
color television picture tubes) Inventory in the ordinary course of
business and that provides that all draws thereunder must require (a)
presentation of
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customary documentation (including, as applicable, commercial
invoices, packing lists, certificates of origin, airway bills, customs
clearing documents, bills of exchange, bills of lading, dock warrants,
dock receipts, warehouse receipts or other documents of title) in form
and substance reasonably satisfactory to the Issuing Bank, and (b)
passage of title to such Inventory to the Borrower. Any such letter of
credit shall cease to be an "Eligible Letter of Credit" at such time
as the Inventory purchased thereunder becomes Eligible Inventory."
2 Amendments to Exhibits. Exhibit C to the Credit Agreement, "Form of
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Borrowing Base Certificate", is hereby deleted in its entirety and Exhibit C
attached hereto is substituted in its place.
3 Waiver. The Agent, the Issuing Bank and the Lenders hereby waive the
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provisions of (a) Section 7.7(a) of the Credit Agreement with respect to the
liquidation of Zenith Mexico, (b) Section 7.7(b) of the Credit Agreement with
respect to the sale of the Juarez Assets, and (c) Section 7.18 of the Credit
Agreement with respect to the making of the LGE Payment to reduce the
Subrogation Obligations; provided that (i) the sale of the Juarez Assets occurs
on terms substantially similar to the terms set forth in the Purchase Agreement,
(ii) the Borrower delivers to the Agent a copy of the closing statement and the
final documentation for the Juarez Assets sale promptly upon the consummation
thereof, and (iii) the aggregate amount of cash received by Zenith Texas and
Zenith Mexico for the Juarez Assets (net of reasonable and customary transaction
costs properly attributable to such transaction, including taxes and the LGE
Payment) shall on the date of such sale be distributed to the Borrower and paid
by the Borrower to the Lenders as a mandatory payment of the Revolving Loans.
The Commitment shall not be reduced by the amount of the mandatory payment due
hereunder.
4 No Other Amendment or Waiver. Except for the amendments and waiver
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expressly set forth above, the text of the Credit Agreement and all other Loan
Documents shall remain unchanged and in full force and effect. The Borrower
acknowledges and expressly agrees that the Lenders reserve the right to, and do
in fact, require strict compliance with all terms and provisions of the Credit
Agreement and the other Loan Documents.
5 Representations and Warranties. The Borrower hereby represents and
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warrants in favor of the Agent, the Issuing Bank, and each Lender, as follows:
(a) the Borrower has the corporate power and authority (i) to enter
into this Amendment, and (ii) to do all acts and things as are required or
contemplated hereunder to be done, observed and performed by it;
(b) this Amendment has been duly authorized, validly executed and
delivered by one or more authorized signatories of the Borrower, and
constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms;
(c) the execution and delivery of this Amendment and performance by
the Borrower under the Credit Agreement, as amended hereby, do not and will
not require the consent or approval of any regulatory authority or
governmental authority or agency having jurisdiction over the Borrower
which has not already been obtained, nor contravene or conflict with the
charter documents of the Borrower, or the provisions of any statute,
judgment, order, indenture, instrument, agreement or
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undertaking, to which the Borrower is a party or by which any of its
properties are or may become bound; and
(d) as of the date hereof, and after giving effect to this Amendment
(i) no Default or Event of Default exists under the Credit Agreement or is
caused by this Amendment, and (ii) each representation and warranty set
forth in Article 4 of the Credit Agreement is true and correct, except (x)
to the extent previously fulfilled in accordance with the terms of the
Credit Agreement, as amended hereby, and (y) to the extent specifically
relating to the Agreement Date.
6 Loan Document. This Amendment shall be deemed to be a Loan Document
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for all purposes.
7 Expenses. The Borrower agrees to pay all reasonable expenses of the
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Agent incurred in connection with this Amendment, including, without limitation,
all reasonable fees and expenses of counsel to the Agent.
8 Counterparts. This Amendment may be executed in multiple counterparts,
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each of which shall be deemed to be an original and all of which, taken
together, shall constitute one and the same agreement. Delivery of an executed
counterpart of this Amendment by facsimile transmission shall be as effective as
delivery of a manually executed counterpart hereof.
9 Governing Law. This Amendment shall be deemed to be made pursuant to
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the laws of the State of New York with respect to agreements made and to be
performed wholly in the State of New York, and shall be construed, interpreted,
performed and enforced in accordance therewith.
10 Definitions. All capitalized terms not otherwise defined herein shall
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have the meanings set forth in the Credit Agreement.
11 Effectiveness. This Amendment shall be effective as of the date first
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set forth above upon the Agent's receipt of (a)(i) an amendment fee (for the
account of the Lenders on a pro rata basis in accordance with their Commitment
Ratios) in the amount of one-eighth of one percent (0.125%) of the Commitment,
and (ii) a counterpart hereof duly executed by the Borrower and each of the
Lenders, and (b)(i) a duly executed copy of a Third Amendment to Note Agreement
which extends the maturity of the LGE Debt to August 31, 1999, (ii) a duly
executed fourth amendment to each Subordination Agreement, (iii) a Secretary's
Certificate attaching the resolutions of the Borrower's board of directors
approving this Amendment, and (iv) such other documents executed by the Borrower
as the Agent may reasonably require, in each case in form and substance
reasonably acceptable to the Agent.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment or
caused it to be executed by their duly authorized officers, effective as of the
day and year first written above.
BORROWER: ZENITH ELECTRONICS CORPORATION
By:______________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Senior Vice President and Chief Financial Officer
AGENT: CITICORP NORTH AMERICA, INC.
By:_______________________________________
Name:_John Podkowsky
Its: Managing Director
ISSUING BANK: CITIBANK, N.A.
By:_______________________________________
Name:_John Podkowsky
Its: Managing Director
LENDERS: CITICORP USA, INC.
By:_______________________________________
Name:_John Podkowsky
Its: Managing Director
BANK BOSTON, N.A.
By:_____________________________________________
Name:_Shawn ▇. ▇▇▇▇▇▇
Its: Vice President
▇▇▇▇▇▇ FINANCIAL, INC.
By:_____________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President
BNY FINANCIAL CORPORATION
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By:__________________________________________
Name:_Frank ▇▇▇▇▇▇▇▇
Its: Senior Vice President
FLEET BUSINESS CREDIT CORPORATION (f/k/a
Sanwa Business Credit Corporation)
By:___________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Vice President
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:___________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Senior Vice President
FOOTHILL CAPITAL CORPORATION
By:___________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Its: Vice President
Exhibit A - Purchase Agreement
Exhibit C- Form of Borrowing Base Certificate
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