EXHIBIT 10.2
EXECUTION COPY
AMENDMENT NO. 1 TO THE CREDIT AGREEMENT
As of July 28, 2000
AMENDMENT NO. 1 TO THE CREDIT AGREEMENT dated as of July 28, 2000 (this
"Amendment") to the Credit Agreement dated as of May 26, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
between Desa International, Inc., a Delaware corporation (the "Borrower"), and
Bank of America, N.A. (formerly NationsBank, N.A.), as Lender (the "Lender").
Capitalized terms not otherwise defined herein shall have the same meanings as
specified therefor in the Credit Agreement.
PRELIMINARY STATEMENTS
(1) The Borrower has requested that the Lender agree to amend the
Credit Agreement in order to:
(a) replace J.W. Childs Equity Partners, L.P., as the
Guarantor under the Credit Agreement, with UBS Capital LLC; and
(b) delete the condition precedent that the Guarantor have
Available Assets in excess of 105% of the aggregate principal amount of
all Loans.
(2) The Lender has indicated its willingness to agree, among other
things, to so amend the Credit Agreement and to so waive such requirement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. Amendments of Certain Provisions of the Credit Agreement.
The Credit Agreement is, upon the occurrence of the Effective Date (as
hereinafter defined), hereby amended as follows:
(a) The preamble to the Credit Agreement is hereby amended to
replace the name "NATIONSBANK, N.A." in the second line thereof with
the phrase "BANK OF AMERICA, N.A. (formerly NationsBank, N.A.)".
(b) Section 1.01 of the Credit Agreement is hereby amended to
(i) replace the phrase "and Amendment and Waiver No. 4 to the Loan
Documents dated as of May 21, 1999" in the fifth line thereof with the
phrase ", Amendment and Waiver No. 4 to the Loan Documents dated as of
May 21, 1999, Amendment No. 5 to the Loan Documents dated as of April
7, 2000 and as further amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with its terms", and
(ii) replace the name "NationsBank, N.A." in the ninth line thereof
with the phrase "Bank of America, N.A. (formerly NationsBank, N.A.)".
(c) The definition of "Available Assets" set forth in Section
1.01 of the Credit Agreement is hereby deleted in its entirety.
(d) The definition of "Base Rate" set forth in Section 1.01 of
the Credit Agreement is hereby amended to amend and restate clause (a)
thereof in its entirety to read as follows:
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"(a) the rate of interest announced publicly by Bank of
America, N.A., in New York, New York, from time to time, as
the Bank of America prime rate; and".
(e) The definition of "Guarantor" set forth in Section 1.01 of
the Credit Agreement is hereby amended to replace the phrase "J.W.
Childs Equity Partners, L.P., a Delaware limited partnership" with the
phrase "UBS Capital LLC, a Delaware limited liability company".
(f) The definition of "Termination Date" set forth in Section
1.01 of the Credit Agreement is hereby amended to replace the date "May
31, 2001" with the date " March 5, 2001".
(g) Section 3.02 of the Credit Agreement is hereby amended to
amend and restate clause (b) thereof in its entirety to read as
follows:
"(b) the Lender shall have received such approvals, opinions
or documents as it shall have reasonably requested.".
(h) Section 5.01 of the Credit Agreement is hereby amended by
adding a new Section 5.01(o) as follows:
"(o) the Guarantor shall cease to have in place an internal
credit line with its parent, UBS AG, pursuant to which the
Guarantor has at least $17,000,000 availability, specifically
reserved to support its obligations under the Guaranty.".
(i) Section 5.01 of the Credit Agreement is hereby amended by
adding a new Section 5.01(p) as follows:
"(p) the Guarantor shall be in breach of the covenant in
Section 8 of the Guaranty dated July 28, 2000 made by the
Guarantor, in favor of the Lender.".
(j) Section 6.01 of the Credit Agreement is hereby amended by
adding the following proviso at the end of Section 6.01 as follows:
", provided that, the Lender has agreed with the Guarantor
that it will not agree to a written amendment or waiver of any
provision of this Agreement without the written consent of the
Guarantor".
SECTION 2. Conditions of Effectiveness of this Amendment. Section 1 of
this Amendment shall become effective as of the first date (the "Effective
Date") on which each of the following conditions precedent shall have been
satisfied:
(a) The Lender shall have received a counterpart of this
Amendment duly executed by the Borrower.
(b) The Lender shall have received the Guaranty duly executed
by the Guarantor.
(c) All of the consents, approvals and authorizations of, and
notices and filings to or with, and other actions by, any governmental
or regulatory authority or any other Person necessary in connection
with any aspect of this Amendment or the Guaranty or any of the other
transactions contemplated hereby or thereby shall have been obtained
(without the imposition of any conditions that are not reasonably
acceptable to the Lender) and shall remain in full force and effect;
and no law, rule or regulation shall be applicable in the reasonable
judgment of the Lender
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that restrains, prevents or imposes materially adverse conditions upon
any aspect of this Amendment or the Guaranty or any of the other
transactions contemplated hereby or thereby.
(d) The representations and warranties contained in the Credit
Agreement and in the Guaranty shall be correct in all material respects
on and as of the Effective Date, before and after giving effect to the
Loan to be made on the date hereof and the application of proceeds
therefrom, as though made on and as of such date (other than any such
representations or warranties that, by their terms, refer to a specific
date other than the Effective Date, in which case as of such specific
date).
(e) No event shall have occurred and be continuing, or shall
result from the Loan to be made on the date hereof or the application
of the proceeds therefrom, that constitutes a Default.
(f) All of the accrued fees and expenses of the Lender
(including the accrued fees and expenses of counsel for the Lender)
shall have been paid in full.
(g) The Lender shall have received on or before the Effective
Date the following, each dated such date (unless otherwise specified),
in form and substance satisfactory to the Lenders:
(i) Certified copies of the resolutions of the Board
of Directors of the Borrower and of the Guarantor approving
this Amendment, the Guaranty and the transactions contemplated
hereby and thereby, and of all documents evidencing other
necessary corporate action and governmental and third party
approvals and consents, if any, with respect to this
Amendment, the Guaranty and the transactions contemplated
hereby and thereby.
(ii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and the Guarantor certifying the
names and true signatures of the officers of the Borrower or
the Guarantor authorized to sign this Amendment, the Guaranty
and the other documents to be delivered hereunder and
thereunder.
(iii) A Notice of Borrowing for the Loans to be made
on the date hereof.
(iv) A favorable opinion of internal counsel for the
Guarantor, in form and substance reasonably satisfactory to
the Lender.
(viii) Such other opinions, certificates, documents
and information as the Lender may reasonably request.
The effectiveness of this Amendment is further conditioned
upon the accuracy of all of the factual matters described herein. This
Amendment is subject to the provisions of Section 6.01 of the Credit
Agreement.
SECTION 3. Reference to and Effect on the LOC Documents. (a) On and
after the Effective Date, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the other LOC Documents to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement, as
amended and otherwise modified hereby.
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(b) The Credit Agreement, the Note and each of the other LOC
Documents, except to the extent of the amendments and other modifications
specifically provided above, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Lender under any of the LOC Documents, nor
constitute a waiver of any provision of any of the LOC Documents.
SECTION 4. Costs and Expenses. The Borrower hereby agrees to pay, upon
demand, all costs and expenses of the Lender (including, without limitation, the
reasonable fees and expenses of counsel for the Lender) in connection with the
preparation, execution, delivery, administration, syndication, modification and
amendment of this Amendment and the other documents, instruments and agreements
to be delivered hereunder, all in accordance with the terms of Section 6.04 of
the Credit Agreement.
SECTION 5. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed 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 a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
SECTION 6. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
The Borrower
DESA INTERNATIONAL, INC.
By /s/ Edward G. Patrick
Name: Edward G. Patrick
Title: Vice President
The Lender
BANK OF AMERICA, N.A.
By /s/ Michael D. McKay
Name: Michael D. McKay
Title: Managing Director
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Acknowledged by:
The Guarantor
UBS CAPITAL LLC
By /s/ Michael Greene
Name: Michael Greene
Title:
By /s/
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Name:
Title:
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