EXHIBIT 10.9
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of February 4, 2005
(this "Second Amendment"), is by and among DIRECTED ELECTRONICS, INC., a Florida
corporation (the "Borrower"), DEI HOLDINGS, INC., a Florida corporation
("Holdings"), those Domestic Subsidiaries of the Borrower party hereto (together
with Holdings, the "Guarantors"), the financial institutions party hereto
(collectively, the "Lenders"; and individually, a "Lender"), and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent").
WITNESSETH
WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative
Agent are parties to that certain Credit Agreement dated as of June 17, 2004 (as
previously amended and modified and as further amended, modified, supplemented
or restated from time to time, the "Credit Agreement"; capitalized terms used
herein shall have the meanings ascribed thereto in the Credit Agreement unless
otherwise defined herein);
WHEREAS, the Borrower has requested that the Lenders agree to reduce the
Applicable Percentage for the Term Loan in respect of both Alternate Base Rate
Loans and LIBOR Rate Loans (the "Pricing Reduction"); and
WHEREAS, the Lenders have agreed to the Pricing Reduction, subject to the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1
AMENDMENTS
1.1 NEW DEFINITION. Section 1.1 of the Credit Agreement is hereby amended
by adding the following new definition is the appropriate alphabetical location.
"Second Amendment Effective Date" shall mean February 4, 2005.
1.2 AMENDMENT TO APPLICABLE PERCENTAGE. The pricing grid in the definition
of Applicable Percentage set forth in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
LIBOR RATE
MARGIN FOR
REVOLVING ALTERNATE BASE
CONSOLIDATED TOTAL LOANS AND RATE MARGIN LIBOR RATE ALTERNATE BASE
LEVERAGE LETTER OF FOR REVOLVING MARGIN FOR TERM RATE MARGIN
LEVEL RATIO CREDIT FEE LOANS LOANS FOR TERM LOANS COMMITMENT FEE
----- ------------------ ---------- -------------- --------------- -------------- --------------
I < or = 3.00 to 1.0 2.75% 1.75% 3.25% 2.25% 0.375%
II > 3.00 to 1.0 but 3.00% 2.00% 3.25% 2.25% 0.50%
< or = 3.75 to 1.0
III > 3.75 to 1.0 but 3.25% 2.25% 3.25% 2.25% 0.50%
< or = 4.50 to 1.0
IV > 4.50 to 1.0 3.50% 2.50% 3.25% 2.25% 0.50%
1.3 CALL PROTECTION. The fourth sentence in Section 2.8(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
All prepayments under this Section 2.8(a) shall be subject to Section
2.17, but otherwise shall be made without premium or penalty; provided
that any refinancing of the outstanding Term Loan with the proceeds of a
replacement term loan to effect a reduction in the Applicable Margin for
the Term Loan prior to the first anniversary of the Second Amendment
Effective Date shall be made at 101% of par.
SECTION 2
CLOSING CONDITIONS
2.1 CLOSING CONDITIONS.
This Second Amendment shall be effective as of the date hereof upon
satisfaction of the following conditions precedent, in form and substance
reasonably acceptable to the Administrative Agent:
(a) Second Amendment. The Administrative Agent shall have received a
copy of this Second Amendment duly executed by each of the Loan Parties
and the Lenders.
(b) Fees. Receipt by the Administrative Agent of (i) all fees owing
to the Co-Lead Arrangers pursuant to that certain engagement letter
agreement dated January 21, 2005, addressed to the Borrower and signed by
the Co-Lead Arrangers and the Borrower, and (ii) all reasonable costs and
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Second Amendment, including, without
limitation, the reasonable fees and expenses of Xxxxx & Xxx Xxxxx PLLC
relating to the Second Amendment together with other fees and expenses
owing by the Borrower thereto outstanding prior to the date of this Second
Amendment.
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2.2 POST-CLOSING REQUIREMENTS. As soon as possible, and in any event no
later than ten (10) Business Days after the date of this Second Amendment (or
such later date as agreed to by the Administrative Agent in its sole
discretion), the Administrative Agent shall have received (i) a copy of the
Borrower's articles of incorporation certified by the Secretary of State of
Florida as of a recent date, (ii) a certificate of good standing, existence or
its equivalent certified as of a recent date by the Secretary of State of the
State of Florida, (iii) all stock certificates evidencing the capital stock of
the Borrower pledged to the Administrative Agent pursuant to the Pledge
Agreement, together with duly executed in blank undated stock powers attached
thereto, and (iv) a legal opinion from the Borrower's Florida counsel, in form
and substance reasonably satisfactory to the Administrative Agent.
SECTION 3
MISCELLANEOUS
3.1 AMENDED TERMS. The term "Credit Agreement" as used in each of the
Loan Documents, and all references therein to the Credit Agreement, shall
hereafter mean and refer to the Credit Agreement as amended by this Second
Amendment. Except as specifically amended or modified hereby or otherwise
agreed, the Credit Agreement is hereby ratified and confirmed and shall remain
in full force and effect according to its terms.
3.2 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES. Each of the Loan
Parties represents and warrants to the Lenders as follows:
(a) It has taken all necessary action to authorize the execution,
delivery and performance of this Second Amendment and it has full power,
authority and legal right to execute, deliver and perform this Second
Amendment.
(b) This Second Amendment has been duly executed and delivered by
such Person and constitutes such Person's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or
third party is required in connection with the execution, delivery or
performance by such Person of this Second Amendment.
(d) The execution, delivery and performance of and compliance with
the terms of this Second Amendment will not result in any violation of, or
be in conflict with, or constitute a default under, the terms of its
certificate of incorporation or by-laws, any other Requirement of Law
applicable to it or any agreement, indenture, lease, assignment or other
instrument to which it is a party or which is binding upon it or upon any
of its
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properties or assets, unless such violation could not reasonably be
expected to have a Material Adverse Effect, or, except pursuant to the
Loan Documents, result in the creation of any Lien upon any of its
properties or assets.
(e) The representations and warranties of such Person set forth in
each of the Loan Documents are, subject to the limitations set forth
therein, true and correct as of the date hereof (except for those which
expressly relate to an earlier date) and no Event of Default or Potential
Event of Default exists on the date hereof (after giving effect to this
Second Amendment).
3.3 REAFFIRMATION OF OBLIGATIONS.
(a) Directed Electronics, Inc., a Florida corporation (successor in
interest to Directed Electronics, Inc., a California corporation), hereby
ratifies the Credit Agreement (as amended by this Second Amendment) and
the other Loan Documents and acknowledges and reaffirms (a) that, as the
Borrower, it is bound by all terms of the Credit Agreement (as amended by
this Second Amendment) and the other Loan Documents applicable to it and
(b) that, as the Borrower, it is responsible for the observance and full
performance of the Obligations applicable it.
(b) Each Guarantor hereby ratifies the Credit Agreement (as amended
by this Second Amendment) and the other Loan Documents and acknowledges
and reaffirms (a) that it is bound by all terms of the Credit Agreement
(as amended by this Second Amendment) and the other Loan Documents
applicable to it and (b) that it is responsible for the observance and
full performance of the Obligations applicable to it.
3.4 LOAN DOCUMENT. This Second Amendment shall constitute a Loan
Document under the terms of the Credit Agreement.
3.5 ENTIRETY. This Second Amendment and the other Loan Documents embody
the entire agreement between the parties hereto and supersede all prior
agreements and understandings, oral or written, if any, relating to the subject
matter hereof.
3.6 COUNTERPARTS/TELECOPY. This Second Amendment may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts of this Second Amendment by telecopy or
electronic signature shall be effective as an original and shall constitute a
representation that an original shall be delivered.
3.7 GOVERNING LAW. This Second Amendment and the rights and obligations
of the parties under this Second Amendment shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York (including
Section 5-1401 of the General Obligations Law of the State of New York), without
regard to conflicts of laws principles.
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3.8 CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
The jurisdiction, services of process and waiver of jury trial provisions set
forth in Sections 10.17 and 10.18 of the Credit Agreement are hereby
incorporated by reference, mutatis mutandis.
3.9 FURTHER ASSURANCES. The Loan Parties agree to promptly take such
action, upon the request of the Administrative Agent, as is reasonably necessary
to carry out the intent of this Second Amendment.
[Signature Pages Follow]
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DIRECTED ELECTRONICS, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Second Amendment to be duly executed and delivered as of the date first
above written.
BORROWER: DIRECTED ELECTRONICS, INC.,
a Florida corporation
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: VP CFO
GUARANTORS: DEI HOLDINGS, INC.,
a Florida corporation
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: VP CFO
DEI HEADQUARTERS, INC.,
a Florida corporation
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: VP CFO
DIRECTED ELECTRONICS, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
ADMINISTRATIVE AGENT
AND LENDERS: WACHOVIA BANK, NATIONAL
ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
________________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
[signature pages continue]
AIB DEBT MANAGEMENT LIMITED,.
as a Lender
By: /s/ Xxxxxx Xxxx
----------------------------
Name: Xxxxxx Xxxx
Title: Vice President
Investment Advisor to
AIB Debt Management, Limited
By: /s/ Xxxxxx X'Xxxxxxx
----------------------------
Name: Xxxxxx X'Xxxxxxx
Title: Assistant Vice President
Investment Advisor to
AIB Debt Management, Limited
ALLSTATE LIFE INSURANCE COMPANY, as a Lender
By: /s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
AIMCO CDO SERIES 2000-A,
as a Lender
By: /s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
AIMCO CLO SERIES 2001-A,
as a Lender
By: /s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Signatory
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
ANTARES CAPITAL CORPORATION
as a Lender
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
JPMORGAN CHASE BANK, as trustee of the Antares
Funding Trust created under the Trust Agreement
Dated as of November 30, 1999.
By: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
NAVIGATOR CDO 2003, LTD
By Antares Asset Management Inc.,
as Collateral Manager
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Vice President
NAVIGATOR CDO 2004, LTD
By Antares Asset Management Inc.,
as Agent
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Vice President
APOLLO INVESTMENT MANAGEMENT, L.P.,
as a Lender
By: /s/ X. Xxxx
----------------------------
Name: X. Xxxx
Title: Vice President
APEX (IDM) CDO I, LTD.
BABSON CLO LTD. 2003-I
BABSON CLO LTD. 2004-I
BABSON CLO LTD. 2004-II
ELC (CAYMAN) LTD. 1999-II
ELC (CAYMAN) LTD. 1999-III
ELC (CAYMAN) LTD. 2000-I
SEABOARD CLO 2000 LTD.
XXXXX CLO LTD. 2000-I
SUFFIELD CLO, LIMITED
By: Babson Capital Management LLC as
Collateral Manager
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Managing Director
SIMSBURY CLO, LIMITED
By: Babson Capital Management LLC under delegated
Authority from Massachusetts Mutual Life Insurance
Company as Collateral Manager
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Managing Director
BLACKROCK GLOBAL FLOATING RATE INCOME TRUST
BLACKROCK SENIOR INCOME SERIES,
as a Lender
By: /s/ Xxx Xxxxxxx
----------------------------
Name: Xxx Xxxxxxx
Title: Authorized Signatory
CANYON CAPITAL CDO 2001-1, LTD.,
as a Lender
By: Canyon Capital Advisors LLC, a Delaware Limited Liability
Company, its Collateral Manager
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
CANYON CAPITAL CDO 2002-1, LTD.,
as a Lender
By: Canyon Capital Advisors LLC, a Delaware Limited Liability
Company, its Collateral Manager
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
CANYON CAPITAL CDO 2004-1, LTD.,
as a Lender
By: Canyon Capital Advisors LLC, a Delaware Limited Liability
Company, its Collateral Manager
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
CIBC INC.,
as a Lender
By: /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Executive Director
SPECIAL SITUATIONS OPPORTUNITY FUND I, LLC,
as a Lender
By: First Source Financial, Inc., its authorized agent
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
FRANKLIN XXXXXXXXX
as a Lender
By: /s/ Xxxxx Xxxx
----------------------------
Name: Xxxxx Xxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Duly Authorized Signatory
GSC PARTNERS CDO FUND IV, LIMITED
By: GSCP (NJ), L.P., as Collateral Manager
By: /s/ Xxxxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Authorized Signatory
GSC PARTNERS CDO FUND V, LIMITED
By: GSCP (NJ), L.P., as Collateral Manager
By: /s/ Xxxxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Authorized Signatory
1888 FUND, LTD.
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Fund Controller
GREEN LANE CLO LTD.
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Fund Controller
LFC2 LOAN FUNDING LLC, For Itself or as
Agent for Loan Funding Corp., THC, LTD.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: As Attorney-in-Fact
GULF STREAM-COMPASS CLO 2002-1 LTD.
By: Gulf Stream Asset Management LLC
As Collateral Manager,
As a Lender
By: /s/ Xxxxx X. Love
----------------------------
Name: Xxxxx X. Love
Title: Chief Credit Officer
GULF STREAM-COMPASS CLO 2003-1 LTD.
By: Gulf Stream Asset Management LLC
As Collateral Manager,
As a Lender
By: /s/ Xxxxx X. Love
----------------------------
Name: Xxxxx X. Love
Title: Chief Credit Officer
GULF STREAM-COMPASS CLO 2004-1 LTD.
By: Gulf Stream Asset Management LLC
As Collateral Manager,
As a Lender
By: /s/ Xxxxx X. Love
----------------------------
Name: Xxxxx X. Love
Title: Chief Credit Officer
FOX RIVER CLO, LTD.
as a Lender
By: /s/ Xxxx X. Senkprel
----------------------------
Name: Xxxx X. Senkprel
Title: Managing Director
PREMIUM LOAN TRUST I, LTD.
as an Investor
By: /s/ Xxxxxxx X. Xxx Xxxx
----------------------------
Name: Xxxxxxx X. Xxx Xxxx
Title: Managing Director
XXXXXXX XXXXX CAPITAL, A DIVISION OF XXXXXXX XXXXX
BUSINESS FINANCIAL SERVICES INC.,
as a Lender
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director, Team Leader
VENTURE CDO 2002, LIMITED,
as a Lender
By its investment advisor MJX Asset Management LLC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
VENTURE II CDO, LIMITED,
as a Lender
By its investment advisor MJX Asset Management LLC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
VENTURE III CDO, LIMITED,
as a Lender
By its investment advisor MJX Asset Management LLC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
VENTURE IV CDO, LIMITED,
as a Lender
By its investment advisor MJX Asset Management LLC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
VISTA LEVERAGED INCOME FUND,
as a Lender
By its investment advisor MJX Asset Management LLC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
BANK ONE HIGH YIELD
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Portfolio Manager
FOXE BASIN CLO 2003, LTD.
By Royal Bank of Canada as Collateral Manager
By: /s/ Xxx X. Xxxxxxx
----------------------------
Name: Xxx X. Xxxxxxx
Title: Authorized Signatory
XXXXXX STRAITS CLO 2004, LTD.
By Royal Bank of Canada as Collateral Manager
By: /s/ Xxx X. Xxxxxxx
----------------------------
Name: Xxx X. Xxxxxxx
Title: Authorized Signatory
GRANITE VENTURES I LTD.
By: Stone Tower Debt Advisors LLC,
as its Collateral Manager
By: /s/ W. Xxxxxxx Xxxxx
----------------------------
Name: W. Xxxxxxx Xxxxx
Title: Authorized Signatory
STONE TOWER CDO LTD.
By: Stone Tower Debt Advisors LLC,
as its Collateral Manager
By: /s/ W. Xxxxxxx Xxxxx
----------------------------
Name: W. Xxxxxxx Xxxxx
Title: Authorized Signatory
STONE TOWER CDO II LTD.
By: Stone Tower Debt Advisors LLC,
as its Collateral Manager
By: /s/ W. Xxxxxxx Xxxxx
----------------------------
Name: W. Xxxxxxx Xxxxx
Title: Authorized Signatory
WACHOVIA BANK, NATIONAL ASSOCIATION,
As a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.,
as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
