EXHIBIT 10.1
AMENDMENT AND WAIVER NO. 6 TO THE LOAN DOCUMENTS
As of January 16, 2001
AMENDMENT AND WAIVER NO. 6 TO THE LOAN DOCUMENTS dated as of
January 16, 2001 to the Credit Agreement dated as of November 26, 1997 (as
amended and otherwise modified by Amendment and Waiver No. 1 dated as of January
23, 1998, Letter Waiver No. 2 dated as of April 9, 1998, Amendment No. 3 to the
Loan Documents dated as of May 26, 1998, Amendment and Waiver No. 4 to the Loan
Documents dated as of May 25, 1999 and Amendment No. 5 to the Loan Documents
dated as of April 7, 2000, the "Credit Agreement") among Desa International,
Inc., a Delaware corporation (the "Borrower"), Desa Holdings Corporation, a
Delaware corporation (the "Parent Guarantor"), the Lender Parties party thereto,
UBS Securities LLC, as a Co-Arranger and Documentation Agent thereunder, Banc of
America Securities LLC (formerly NationsBanc Montgomery Securities LLC), as a
Co-Arranger and Syndication Agent thereunder, and Bank of America, N.A.
(formerly NationsBank, N.A.), as Administrative Agent (the "Administrative
Agent") for the Lender Parties thereunder. 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 Parties agree
to amend the Credit Agreement in order to:
(a) permit the Borrower to extend the maturity under the
Childs Guaranteed Line of Credit to May 31, 2002; and
(b) amend the minimum Interest Coverage Ratio requirement for
the Measurement Period ending February 28, 2001.
(2) The Borrower has requested that the Lender Parties agree
to waive the Default under Section 6.01(c) of the Credit Agreement that has
occurred and is continuing as a result of the failure by the Parent Guarantor to
comply with the minimum Interest Coverage Ratio requirements set forth in
Section 5.04(c) of the Credit Agreement.
(3) The Lender Parties have indicated their willingness to
agree, among other things, to the amendments and waivers of the Credit Agreement
described above in Preliminary Statements (1) and (2) on the terms and subject
to the satisfaction of the conditions set forth herein.
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 Amendment No. 6
Effective Date (as hereinafter defined), hereby amended as follows:
(a) The definition of "Childs Guaranteed Line of Credit" set
forth in Section 1.01 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Childs Guaranteed Line of Credit" means the
unsecured line of credit to the Borrower from Bank of America,
N.A. (and/or its successors and assigns) in an aggregate
principal amount of up to $15,000,000 which line of credit has
a maturity date of May 31,
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2002 and all amounts outstanding from time to time under which
are unconditionally and irrevocably guaranteed by UBS Capital
LLC.
(b) Section 5.04(c) of the Credit Agreement is hereby amended
to change the Interest Coverage Ratio set forth opposite the date
February 2001 to 1.55:1.
SECTION 2. Waiver of Certain Provisions of the Credit
Agreement. The Default under Section 6.01(c) of the Credit Agreement that has
occurred and is continuing as a result of the failure of the Parent Guarantor to
maintain an Interest Coverage Ratio for the Measurement Period ended November
30, 2000 of 1.55:1 in accordance with Section 5.04(c) of the Credit Agreement
is, on and as of the Amendment No. 6 Effective Date, hereby waived by the Lender
Parties.
SECTION 3. Conditions of Effectiveness of this Amendment.
Section 1 of this Amendment shall become effective as of the first date (the
"Amendment No. 6 Effective Date") on which each of the following conditions
precedent shall have been satisfied:
(a) The Administrative Agent shall have received (i)
counterparts of this Amendment executed by the Borrower, the Parent
Guarantor and the Required Lenders or, as to any of the Lender Parties,
advice satisfactory to the Administrative Agent that such Lender Party
has executed this Amendment and (ii) the Consent attached hereto
executed by each of the Loan Parties.
(b) 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 this Amendment or any of the other transactions contemplated
hereby shall have been obtained (without the imposition of any
conditions that are not reasonably acceptable to the Required Lenders)
and shall remain in full force and effect; and no law, rule or
regulation shall be applicable in the reasonable judgment of the
Required Lenders that restrains, prevents or imposes materially adverse
conditions upon this Amendment or any of the other transactions
contemplated hereby.
(c) The representations and warranties contained in each of
the Loan Documents shall be correct in all material respects on and as
of the Amendment No. 6 Effective Date, 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 Amendment No. 6
Effective Date, in which case as of such specific date).
(d) No event shall have occurred and be continuing that
constitutes a Default, other than the Defaults waived pursuant to
Section 2 of this Amendment.
(e) All of the accrued fees and expenses of the Administrative
Agent and the Lender Parties (including the accrued fees and expenses
of counsel for the Administrative Agent) shall have been paid in full.
(f) The Borrower shall have paid to the Administrative Agent,
for the ratable account of each of the Appropriate Lenders that has
executed and delivered a counterpart of this Amendment to the
Administrative Agent prior to 12:00 Noon (New York City time) on
January 16, 2001, an amendment fee of 0.05% on the aggregate Term A
Commitments, Term B Commitments, Term C Commitments, Acquisition
Commitments and Working Capital Commitments of such Lender, it being
understood, that no amendment fee shall be payable by the
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Borrower for the account of any Lender if this Amendment has not been
approved prior to 12:00 Noon (New York City time) on January 16, 2001
by the Required Lenders.
(g) The Administrative Agent shall have received on or before
the Amendment No. 6 Effective Date the following, each dated such date
(unless otherwise specified), in form and substance satisfactory to the
Required Lenders (unless otherwise specified) and in sufficient copies
for each Lender Party:
(i) Certified copies of the resolutions of the Board
of Directors of the Borrower and the Parent Guarantor
approving this Amendment and all of the other amendments,
supplements and other modifications to the Loan Documents
being effected in connection with this Amendment, and of all
documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if
any, with respect to this Amendment and all of the other
amendments, supplements and other modifications to the Loan
Documents being effected in connection with this Amendment.
(ii) A certificate of the Borrower and the Parent
Guarantor, signed on behalf of the Borrower and the Parent
Guarantor, respectively, by its President or a Vice President
and its Secretary or any Assistant Secretary, dated the
Amendment No. 6 Effective Date (the statements made in which
certificate shall be true on and as of the Amendment No. 6
Effective Date), certifying as to (A) the absence of any
amendments to the charter of such Person since the date of the
Secretary of State's certificate referred to in Section
3.01(j)(iv) of the Credit Agreement, or any steps taken by the
board of directors (or persons performing similar functions)
or the shareholders of such Person to effect or authorize any
further amendment, supplement or other modification thereto;
(B) the accuracy and completeness of the bylaws of such Person
as in effect on the date on which the resolutions of the board
of directors (or persons performing similar functions) of such
Person referred to in clause (i) of this Section 2(g) were
adopted and on the Amendment No. 6 Effective Date (a copy of
which, if different from the bylaws of such Person delivered
to the Lender Parties on the date of the Initial Extension of
Credit, shall be attached to such certificate); (C) the due
incorporation and good standing of such Person as a
corporation organized under the laws of the jurisdiction of
its incorporation, and the absence of any proceeding (either
pending or contemplated) for the dissolution, liquidation or
other termination of the existence of such Person or any of
its Subsidiaries; (D) the accuracy in all material respects of
the representations and warranties made by such Person in the
Loan Documents to which it is or is to be a party as though
made on and as of the Amendment No. 6 Effective Date 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 Amendment No. 6 Effective Date,
in which case as of such specific date); and (E) the absence
of any event occurring and continuing that would constitute a
Default.
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and the Parent Guarantor certifying
the names and true signatures of the officers of the Borrower
or the Parent Guarantor authorized to sign this Amendment and
all of the other amendments, supplements and other
modifications to the Loan Documents being effected in
connection with this Amendment and the other documents to be
delivered hereunder.
(iv) Such financial, business and other information
regarding the Borrower and the Parent Guarantor and their
respective property, assets and businesses as the
Administrative Agent or the Lender Parties shall have
requested.
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(v) A favorable opinion of Sullivan & Worcester,
counsel for the Parent Guarantor and the Borrower, in form and
substance reasonably satisfactory to the Required Lenders.
(vi) Such other opinions, certificates, documents and
information as the Administrative Agent or the Required
Lenders 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 9.01 of the Credit Agreement, except that no amendment or
waiver of any provision of this Section 3, nor consent to any departure by the
Parent Guarantor or the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders.
SECTION 4. Reference to and Effect on the Loan Documents. (a)
On and after the Amendment No. 6 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 Notes and the other
Loan 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.
(b) The Credit Agreement, the Notes and each of the other Loan
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. Without limiting
the generality of the foregoing, the Collateral Documents and all of the
Collateral described therein do and shall continue to secure the payment of all
Obligations of the Loan Parties under and in respect of the Loan Documents, as
amended and otherwise modified by this Amendment.
(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 any Lender Party or any Agent under any of the
Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 5. Costs and Expenses. The Borrower hereby agrees to
pay, upon demand, all costs and expenses of the Administrative Agent (including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent) 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 9.04 of the Credit Agreement.
SECTION 6. 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 7. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.
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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/ Rick Simpson
Name: Rick Simpson
Title: Vice President
The Parent Guarantor
DESA HOLDINGS CORPORATION
By /s/ Rick Simpson
Name: Rick Simpson
Title: Vice President
The Agents
BANK OF AMERICA, N.A., in each of its
capacities as a Lender Party and as
Administrative Agent
By /s/ David H. Strickert
Name: David H. Strickert
Title: Principal
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The Lenders
BANK OF AMERICA, N.A.
By /s/ David H. Strickert
Name: David H. Strickert
Title: Principal
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UBS AG, STAMFORD BRANCH
By /s/ Wilfred V. Saint
Name: Wilfred V. Saint
Title: Associate Director -
Banking Products Services, US
By /s/ Lynne B. Alfarone
Name: Lynne B. Alfarone
Title: Associate Director -
Banking Products Services, US
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HELLER FINANCIAL, INC.
By /s/ K. Craig Gallehugh
Name: K. Craig Gallehugh
Title: Senior Vice President
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IMPERIAL BANK, CALIFORNIA
BANKING CORPORATION
By /s/ Ray Vadalma
Name: Ray Vadalma
Title: Senior Managing Director
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DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By /s/ James Jerz
Name: James Jerz
Title: Vice President
By /s/ Mark L. Staub
Name: Mark L. Staub
Title: A.T.
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FIRST SOURCE FINANCIAL LLP, by
FIRST SOURCE FINANCIAL, INC.
By /s/ Kathi J. Inorio
Name: Kathi J. Inorio
Title: Senior Vice President
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FLEET NATIONAL BANK
By /s/ Claire E. Keady
Name: Claire E. Keady
Title: Assistant Vice President
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GENERAL ELECTRIC CAPITAL
CORPORATION
By
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Name:
Title:
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NATIONAL CITY BANK
By
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Name:
Title:
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COMERICA BANK
By /s/ Kathleen M. Kasperek
Name: Kathleen M. Kasperek
Title: Assistant Vice President
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VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Darvin D. Pierce
Name: Darvin D. Pierce
Title: Principal
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SENIOR DEBT PORTFOLIO, by
BOSTON MANAGEMENT AND
RESEARCH, as Investment Advisor
By
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Name:
Title:
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MORGAN STANLEY DEAN WITTER PRIME
INCOME TRUST
By /s/ Peter Gewirtz
Name: Peter Gewirtz
Title: Vice President
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PILGRIM PRIME RATE TRUST
By /s/ Jason Groom
Name: Jason Groom
Title: Vice President
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BOEING CAPITAL CORPORATION
By /s/ JD Combs
Name: JD Combs
Title: Managing Director -
Commercial Finance Group
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ML CBO IV CAYMAN LTD.
By /s/ Todd Travers
Name: Todd Travers
Title: Senior Portfolio Manager
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BANK POLSKA KASA OPIEKI S.A.
By /s/ Barry W. Henry
Name: Barry W. Henry
Title: Vice President
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PARIBAS CAPITAL FUNDING LLC
By
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Name:
Title:
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CONSENT
Reference is made to (a) Amendment and Waiver No. 6 to the
Loan Documents dated as of January 16, 2001 (the "Amendment"; capitalized terms
not otherwise defined herein being used herein as defined in the Amendment and
in the Credit Agreement referred to therein), (b) the Credit Agreement dated as
of November 26, 1997 (as amended and otherwise modified by Amendment and Waiver
No. 1 dated as of January 23, 1998, Letter Waiver No. 2 dated as of April 9,
1998, Amendment No. 3 to the Loan Documents dated as of May 26, 1998, Amendment
and Waiver No. 4 to the Loan Documents dated as of May 25, 1999 and Amendment
No. 5 to the Loan Documents dated as of April 7, 2000, the "Credit Agreement")
among Desa International, Inc., a Delaware corporation, Desa Holdings
Corporation, a Delaware corporation, the Lender Parties party thereto, UBS
Securities LLC, as a Co-Arranger and Documentation Agent thereunder, Banc of
America Securities LLC (formerly NationsBanc Montgomery Securities LLC), as a
Co-Arranger and Syndication Agent thereunder, and Bank of America, N.A.
(formerly NationsBank, N.A.), as Administrative Agent (the "Administrative
Agent") for the Lender Parties thereunder, and (c) the other Loan Documents
referred to therein.
Each of the undersigned, in its capacity as (a) a Grantor
under the Security Agreement, (b) a Grantor under the Intellectual Property
Security Agreement, and/or (c) a Subsidiary Guarantor under the Subsidiary
Guaranty executed and delivered by such Subsidiary Guarantor, hereby consents to
the execution, delivery and performance of the Amendment and agrees that:
(A) each of the Security Agreement, the Intellectual Property
Security Agreement and the Subsidiary Guaranty to which it is a party
is, and shall continue to be, in full force and effect and is hereby in
all respects ratified and confirmed on the Amendment No. 6 Effective
Date, except that, on and after the Amendment No. 6 Effective Date,
each reference to "the Credit Agreement", "thereunder", "thereof",
"therein" 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 by the Amendment; and
(B) as of the Amendment No. 6 Effective Date, the Security
Agreement and the Intellectual Property Security Agreement to which it
is a party and all of the Collateral of such Person described therein
do, and shall continue to, secure the payment of all of the Secured
Obligations.
This Consent shall be governed by, and construed in accordance
with, the laws of the State of New York.
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Delivery of an executed counterpart of a signature page of
this Consent by telecopier shall be effective as the delivery of a manually
executed counterpart of this Consent.
DESA INTERNATIONAL, INC.
By
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Name:
Title:
DESA HOLDINGS CORPORATION
By
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Name:
Title:
[The schedules and exhibits to this agreement have been omitted and will be
supplementally filed with the Securities and Exchange Commission upon request.]
